Document:

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                                                                    Exhibit 10.6
                                                                  EXECUTION COPY

                             INTERCREDITOR AGREEMENT

                           dated as of August 11, 2003

                                      among

                            WILMINGTON TRUST COMPANY
                  as Existing First Priority Corporate Trustee,

                                       and

                               JOHN M. BEESON, JR.
                 as Existing First Priority Individual Trustee,

                                       and

                       BANK ONE, NA (MAIN OFFICE CHICAGO)
                  as Existing First Priority Collateral Agent,

                                       and

                        WELLS FARGO BANK MINNESOTA, N.A.
                     as Second Priority Collateral Trustee,

                                       and

                              DYNEGY HOLDINGS INC.
          as a Grantor and other parties referred to herein as Grantors

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                                TABLE OF CONTENTS

                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.01. Certain Defined Terms............................................3
SECTION 1.02. Certain References...............................................7

                                   ARTICLE II

          SUBORDINATION AND RELATIVE PRIORITIES OF LIENS IN COLLATERAL

SECTION 2.01. Subordination and Relative Priorities of Security
              Interests and Liens..............................................8
SECTION 2.02. Rights in Collateral.............................................9
SECTION 2.03. Obligations Unconditional.......................................12
SECTION 2.04. Waiver of Claims................................................12
SECTION 2.05. Agreement by the Grantors.......................................13
SECTION 2.06. No Warranties, Etc..............................................13
SECTION 2.07. Reinstatement of First Priority Secured Obligations.............14
SECTION 2.08. Sharing Arrangements............................................14
SECTION 2.09. First Priority Collateral Parties as Bailees....................15
SECTION 2.10. Second Priority Secured Holders to be Subrogated to
                Rights of First Priority Secured Holders......................16
SECTION 2.11. Obligation of the Grantors Unconditional........................16
SECTION 2.12. Rights in NGL Assets.  .........................................16

                                   ARTICLE III

                                  MISCELLANEOUS

SECTION 3.01. Amendments, Supplements and Waivers.............................17
SECTION 3.02. Notices.........................................................19
SECTION 3.03. Headings........................................................19
SECTION 3.04. Severability....................................................19
SECTION 3.05. Binding Effect..................................................20
SECTION 3.06. Governing Law...................................................20
SECTION 3.07. Effectiveness...................................................20
SECTION 3.08. Reexecution of Agreement........................................20
SECTION 3.09. Third-Party Beneficiaries.......................................20
SECTION 3.10. Counterparts....................................................20
SECTION 3.11. Joinder. .......................................................20

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          INTERCREDITOR AGREEMENT, dated August 11, 2003 (said agreement, as
amended, amended and restated, supplemented or otherwise modified from time to
time, this "Agreement") by and among WILMINGTON TRUST COMPANY, a Delaware
banking corporation, not in its individual capacity but solely as corporate
trustee (together with any successor corporate trustee appointed pursuant to the
First Priority Collateral Trust Agreement (as hereinafter defined), the
"Existing First Priority Corporate Trustee"), JOHN M. BEESON, JR., an individual
residing in the State of Delaware, not in his individual capacity but solely as
individual trustee (together with any successor individual trustee appointed
pursuant to the First Priority Collateral Trust Agreement (referred to below),
the "Existing First Priority Individual Trustee"; and, together with the First
Priority Corporate Trustee, the "Existing First Priority Collateral Trustees")
the foregoing trustees being trustees for the Shared Secured Parties (as
referred to below), BANK ONE, NA (MAIN OFFICE CHICAGO) (together with any
successor collateral agent appointed pursuant to the First Priority Non-Shared
Security Agreement (referred to below), the "Existing First Priority Collateral
Agent") as collateral agent for the Non-Shared Secured Parties (as referred to
below), WELLS FARGO BANK MINNESOTA, N.A. not in its individual capacity but
solely as collateral trustee (together with any successor collateral trustee
appointed pursuant to the 2003 Second Lien Note Indenture, the "Second Priority
Collateral Trustee"), the foregoing trustee being the trustee for the 2003
Second Priority Secured Holders (as hereinafter defined), and DYNEGY HOLDINGS
INC. (the "Borrower") and the other Persons listed on the signature pages hereof
as additional grantors (together with the Borrower, collectively, the
"Grantors"). Certain capitalized terms used herein not otherwise defined in this
Agreement are used in this Agreement as defined in the Credit Agreement or the
First Priority Collateral Trust Agreement (as defined herein).

                             PRELIMINARY STATEMENTS:

          (1)  The Borrower entered into a Credit Agreement dated as of April 1,
2003, as amended by the First Amendment to the Credit Agreement dated as of May
15, 2003, the Second Amendment to the Credit Agreement dated as of June 27, 2003
and the Third Amendment to the Loan Documents dated as of July 15, 2003 (such
Credit Agreement, as so amended and as such agreement may hereafter be amended,
amended and restated, supplemented, replaced or otherwise modified from time to
time, being the "Credit Agreement"), with Dynegy Inc., as the parent guarantor
(the "Parent Guarantor"), Citibank, N.A. and Bank of America, N.A., as
administrative agents (the "Administrative Agents") for the Lenders, Bank One,
NA (Main Office Chicago), as Collateral Agent for the Lenders, and the various
banks, financial institutions and other lenders parties thereto (said banks,
financial institutions and other lenders being the "Senior Lenders").

          (2)  In order to induce the Lenders and the Administrative Agents to
enter into the Credit Agreement, the Grantors granted, pursuant to the terms of
(i) that certain Shared Security Agreement dated as of April 1, 2003 (said
agreement (including, without limitation, the schedules thereto), as amended,
amended and restated, supplemented, replaced or otherwise modified from time to
time, being the "First Priority Shared Security Agreement") made by the Shared
Grantors to the Existing First Priority Collateral Trustees and granting a
continuing first priority security interest in and to the Collateral to the
Existing First Priority Collateral Trustees for the benefit of the Shared
Secured Parties (as defined in the Credit Agreement) to secure the Senior
Secured Obligations and the Junior Secured Obligations (each as defined in the

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First Priority Collateral Trust Agreement), (ii) that certain Non-Shared
Security Agreement dated as of April 1, 2003 (said agreement (including, without
limitation, the schedules thereto), as amended, amended and restated,
supplemented, replaced or otherwise modified from time to time, being the "First
Priority Non-Shared Security Agreement", together with the First Priority Shared
Security Agreement, collectively, the "First Priority Security Agreements") made
by the Non-Shared Grantors to the Existing First Priority Collateral Agent and
granting a continuing first priority security interest in and to the Non-Shared
Collateral (as defined in the First Priority Non-Shared Security Agreement) for
the benefit of the Non-Shared Secured Parties to secure the Non-Shared Secured
Obligations and (iii) the Pre-Closing Mortgages and Post-Closing Mortgages (each
as defined in the Credit Agreement) delivered by the Shared Grantors to the
Existing First Priority Collateral Trustees to secure such Senior Secured
Obligations and Junior Secured Obligations (collectively, the "First Priority
Mortgages").

          (3)  The Borrower entered into an Indenture dated as of August 11,
2003 (said agreement, as amended, amended and restated, supplemented, replaced
or otherwise modified from time to time, being the "2003 Second Lien Note
Indenture") with Wilmington Trust Company, as indenture trustee (the "2003
Second Lien Note Trustee") in connection with the Borrower's issuance on August
11, 2003 of (i) floating rate second priority senior secured notes due 2008,
(ii) 9.875% second priority senior secured notes due 2010 and of (iii) 10.125%
second priority senior secured notes due 2013 (collectively, the "2003 Second
Lien Notes", and together with the 2003 Second Lien Note Indenture, the "2003
Second Lien Note Indenture Agreements").

          (4)  In order to induce the 2003 Second Lien Note Trustee to enter
into the 2003 Second Lien Note Indenture, the Grantors have agreed to grant,
pursuant to the terms of (i) that certain Second Lien Secured Security Agreement
dated as of August 11, 2003 (said agreement (including, without limitation, the
schedules thereto), as amended, amended and restated, supplemented, replaced or
otherwise modified from time to time, being the "Second Priority Shared Security
Agreement"), (ii) that certain Second Lien Non-Shared Security Agreement dated
as of August 11, 2003 (said agreement (including, without limitation, the
schedules thereto), as amended, amended and restated, supplemented, replaced or
otherwise modified from time to time, being the "Second Priority Non-Shared
Security Agreement", together with the Second Priority Shared Security
Agreement, collectively, the "Second Priority Security Agreements") and (iii)
those certain Second Priority Mortgages (as defined herein) made by the Grantors
(as such term is defined in the Second Priority Security Agreements) to the
Second Priority Collateral Trustee, as trustee under the 2003 Second Lien Note
Indenture, a continuing second priority security interest in and to the
collateral thereunder to the Second Priority Collateral Trustee for the ratable
benefit of the 2003 Second Lien Note Holders to secure the obligations of the
Borrower under the 2003 Second Lien Note Indenture.

          NOW, THEREFORE, in consideration of the premises and in order to
induce the First Priority Collateral Trustees to permit the Second Priority
Collateral Trustee to enter into the Second Priority Collateral Documents (as
defined herein), the parties hereto agree as follows:

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                                    ARTICLE I

                                   DEFINITIONS

          SECTION 1.01. Certain Defined Terms. The following terms shall have
the following meanings as used herein (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):

          "Eligible Priority Debt" means the indebtedness secured on a pari
passu basis with the Existing First Priority Secured Obligations (on all or part
of the Collateral) and permitted under the provisions of the Credit Agreement
(if in effect) and the 2003 Second Lien Note Indenture.

          "Eligible Priority Debt Agreement" means any agreement or instrument
(including any Eligible Priority Debt Collateral Documents) pursuant to which
any Eligible Priority Debt was incurred or issued and which governs such
Eligible Priority Debt.

          "Eligible Priority Debt Agreement Default" means the occurrence and
continuance of an event of default under the Eligible Priority Debt Agreements,
and as a result thereof, the Eligible Priority Debt Defaulted Party has the
right to declare all of the obligations of the Borrower under the Eligible
Priority Debt Agreements to be due and payable prior to the stated maturity
thereof.

          "Eligible Priority Debt Collateral Documents" means any Eligible
Priority Debt Agreements pursuant to which any Lien or security interest was
created or granted to secure Eligible Priority Debt Secured Obligations.

          "Eligible Priority Debt Collateral Parties" means any trustees, agents
or other persons to whom Liens were granted pursuant to any Eligible Priority
Debt Collateral Documents for the benefit of any Eligible Priority Debt Holders

          "Eligible Priority Debt Defaulted Party" means the Eligible Priority
Debt Representative or the percentage of Eligible Priority Debt Holders
specified in the Eligible Priority Debt Agreements that have the right
thereunder upon the occurrence and continuance of an event of default under such
Eligible Priority Debt Agreements (without the requirement that any further time
elapse) to declare all of the obligations of the Borrower under such Eligible
Priority Debt Agreements to be due and payable prior to the stated maturity
thereof.

          "Eligible Priority Debt Holders" means at any time the holders of
Eligible Priority Debt under the Eligible Priority Debt Agreements.

          "Eligible Priority Debt Representatives" means the representatives of
the Eligible Priority Debt Holders under the Eligible Priority Debt Agreements
including the Eligible Priority Debt Collateral Parties.

          "Eligible Priority Debt Secured Obligations" means all obligations
under the Eligible Priority Debt Agreements that are permitted under the Credit
Agreement (if in effect) and the 2003 Second Lien Note Indenture to be secured
by the Liens created under the Eligible

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Priority Debt Collateral Documents on a pari passu basis (on all or part of the
Collateral) with the Existing First Priority Secured Obligations so long as the
property and assets covered by such Liens also secure the Existing First
Priority Secured Obligations.

          "Existing First Priority Collateral Agent" has the meaning specified
in the recital of parties hereto.

          "Existing First Priority Collateral Documents" means the "Collateral
Documents" as defined in the Credit Agreement and any other collateral documents
executed in connection with the granting of security pursuant to the Credit
Agreement or the other Loan Documents (as defined in the Credit Agreement).

          "Existing First Priority Collateral Trustees" has the meaning
specified in the recital of parties hereto.

          "Existing First Priority Secured Obligations" means the "Secured
Obligations" as defined in the Credit Agreement.

          "First Priority Agreement Default" means (a) for so long as any
Existing First Priority Secured Obligations are secured by the Existing First
Priority Collateral Documents, any default under any Existing First Priority
Collateral Document and/or (b) at any time that the Eligible Priority Debt
Secured Obligations are secured by any Lien under the First Priority Collateral
Documents, an Eligible Priority Debt Agreement Default.

          "First Priority Collateral Documents" means, collectively, the
Existing First Priority Collateral Documents and the Eligible Priority Debt
Collateral Documents.

          "First Priority Collateral Parties" means, collectively, each of the
trustees, agents, representatives and persons referred to in the definition of
First Priority Controlling Collateral Parties.

          "First Priority Collateral Trust Agreement" means the Collateral Trust
and Intercreditor Agreement dated as of April 1, 2003 by the Shared Grantors to
the First Priority Collateral Trustees, as amended, amended and restated,
supplemented, replaced or otherwise modified from time to time.

          "First Priority Controlling Collateral Parties" means (a) until the
Existing First Priority Secured Obligations have been Paid in Full, the Existing
First Priority Collateral Trustees and the Existing First Priority Collateral
Agent, and (b) if the Existing First Priority Secured Obligations have been Paid
in Full and any Eligible Priority Debt Secured Obligations are outstanding, the
Required Eligible Priority Debt Collateral Parties.

          "First Priority Representatives" means at any time, collectively, (a)
the "Representatives" as defined in the First Priority Collateral Trust
Agreement and the First Priority Collateral Agent and (b) the Eligible Priority
Debt Representatives.

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          "First Priority Secured Agreements" means (a) the agreements and other
documents evidencing and governing the terms of the "Secured Obligations" as
defined in the First Priority Collateral Trust Agreement and (b) the Eligible
Priority Debt Agreements.

          "First Priority Secured Holders" means the Non-Shared Secured Parties,
the Shared Secured Parties (each as defined in the Credit Agreement) and the
Eligible Priority Debt Holders and Eligible Priority Debt Representatives.

          "First Priority Secured Obligations" means the (a) Shared Secured
Obligations (as defined in the Credit Agreement) and (b) Eligible Priority Debt
Secured Obligations.

          "Moody's" means Moody's Investor Services, Inc.

          "NGL Assets" has the meaning specified in the 2003 Second Lien Note
Indenture.

          "Other Indenture Debt" means the indebtedness secured on a parity
basis with the 2003 Second Lien Notes (on all or part of the Collateral) and
permitted under the provisions of the Credit Agreement (if in effect) and the
2003 Second Lien Note Indenture.

          "Other Indenture Debt Agreement" means any agreement or instrument
pursuant to which any Other Indenture Debt was incurred or issued and which
governs such Other Indenture Debt.

          "Other Indenture Debt Collateral Documents" means any Other Indenture
Debt Agreements pursuant to which any Lien or security interest was created or
granted to secure Other Indenture Debt Secured Obligations.

          "Other Indenture Debt Collateral Parties" means any trustees, agents
or other Persons to whom Liens were granted pursuant to any Other Indenture Debt
Collateral Documents for the benefit of Other Indenture Debt Holders.

          "Other Indenture Debt Holders" means at any time the registered
holders of Other Indenture Debt issued under any Other Indenture Debt Agreement.

          "Other Indenture Debt Representatives" means any representatives of
the Other Indenture Debt Holders under any Other Indenture Debt Agreement
including any Other Indenture Debt Collateral Parties.

          "Other Indenture Debt Secured Holders" means the Other Indenture Debt
Representatives and the Other Indenture Debt Holders.

          "Other Indenture Debt Secured Obligations" means all the obligations
under the Other Indenture Debt Agreements that are permitted under the Credit
Agreement (if in effect) to be secured by the Liens created under the Other
Indenture Debt Agreements so long as the property and assets covered by such
Liens also secure the Second Priority Secured Obligations.

          "Payment in Full" means (a) the payment in full in cash of (i) all
principal and interest in respect of the First Priority Secured Obligations and
(ii) all other valid First Priority

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Secured Obligations that are claimed within 30 days of the last date on which
all principal and interest in respect of the First Priority Secured Obligations
shall have been paid in full and (b) the termination in full of all commitments
in respect of the First Priority Secured Obligations. "Paid in Full" shall have
the correlative meaning.

          "Pledged Equity" means Collateral that consists of equity interests of
any Person.

          "Required Eligible Priority Debt Collateral Parties" means the
Required Eligible Priority Debt Representatives or the Required Eligible Debt
Holders.

          "Required Eligible Priority Debt Holders" means Eligible Priority Debt
Holders that own or hold more then 50% of all outstanding Eligible Priority
Debt.

          "Required Eligible Priority Debt Representatives" means the agents,
trustees and other representatives representing the Required Eligible Priority
Debt Holders.

          "Required Other Indenture Debt Collateral Parties" means the Required
Other Indenture Debt Representatives or the Required Other Indenture Debt
Holders.

          "Required Other Indenture Debt Holders" means Other Indenture Debt
Holders that own or hold more then 50% of all outstanding Other Indenture Debt.

          "Required Other Indenture Debt Representatives" any trustees, agents
or other representatives representing the Required Other Indenture Debt Holders.

          "Required Ratings" has the meaning specified in Section 2.02 hereto.

          "S&P" means Standard & Poor's Rating Group.

          "Second Lien Note Secured Obligations" means at any time any
obligations, whether matured or unmatured, contingent or liquidated, of each
Grantor arising out of or evidenced by the Second Priority Secured Agreements
(other than the Other Indenture Debt Secured Obligations), whether for
principal, interest, expenses, premiums, indemnities, fees or other amounts,
whether or not such obligations are due and payable at such time.

          "Second Priority Collateral Documents" means the Second Priority
Security Agreements, Second Priority Mortgages and the Other Indenture Debt
Collateral Documents.

          "Second Priority Collateral Parties" means the Second Priority
Collateral Trustee and the Other Indenture Debt Collateral Parties.

          "Second Priority Collateral Trustee" has the meaning specified in the
recital of parties hereto.

          "Second Priority Controlling Collateral Parties" means (a) until the
Second Lien Note Secured Obligations have been paid in full, the Second Priority
Collateral Trustee and (b) if any Other Indenture Debt Secured Obligations are
outstanding, the Required Other Indenture Debt Collateral Parties.

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          "Second Priority Mortgages" means the "Mortgages" as defined in the
2003 Second Lien Note Indenture.

          "Second Priority Representatives" means at any time, collectively, the
2003 Second Lien Note Trustee, as the representative hereunder for the 2003
Second Lien Note Holders and the Other Indenture Debt Representative, as the
representative hereunder for the Other Indenture Debt Holders, the Second
Priority Collateral Trustee and the Other Indenture Debt Collateral Parties.

          "Second Priority Secured Agreements" means, collectively, the 2003
Second Lien Note Indenture Agreements, the Other Indenture Debt Agreements and
each agreement or instrument delivered by the Grantors pursuant thereto
(including, without limitation, the Second Priority Collateral Documents).

          "Second Priority Secured Holders" means, at any time, the 2003 Second
Priority Secured Holders and the Other Indenture Debt Secured Holders.

          "Second Priority Secured Obligations" means (a) the Second Lien Note
Secured Obligations and (b) the Other Indenture Debt Secured Obligations.

          "Second Priority Security Agreements" has the meaning specified in the
Preliminary Statements.

          "2003 Second Lien Note Holders" means at any time the registered
holders of the 2003 Second Lien Notes issued under the 2003 Second Lien Note
Indenture.

          "2003 Second Lien Note Indenture" has the meaning specified in the
Preliminary Statements.

          "2003 Second Lien Note Indenture Defaulted Party" means the 2003
Second Lien Note Trustee or the percentage of 2003 Second Lien Note Holders
specified in the 2003 Second Lien Note Indenture that have the right thereunder
upon the occurrence and continuance of an Event of Default under the 2003 Second
Lien Note Indenture (without the requirement that any further time elapse) to
declare all of the Second Priority Secured Obligations of the Borrower under the
2003 Second Lien Note Indenture to be due and payable prior to the stated
maturity thereof.

          "2003 Second Lien Note Trustee" has the meaning specified in the
Preliminary Statements.

          "2003 Second Priority Secured Holders" means the Second Priority
Collateral Trustee, the 2003 Second Lien Note Trustee and the 2003 Second Lien
Note Holders.

          SECTION 1.02. Certain References. In this Agreement, the words
"hereof", "herein" and "hereunder", and words of similar import, shall refer to
this Agreement as a whole and not to any particular provision of this Agreement.
All section, schedule and exhibit

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                                        8

references set forth in this Agreement are, unless otherwise specified,
references to such section in, or schedule or exhibit to, this Agreement.

                                   ARTICLE II

          SUBORDINATION AND RELATIVE PRIORITIES OF LIENS IN COLLATERAL

          SECTION 2.01. Subordination and Relative Priorities of Security
Interests and Liens. Each of the Second Priority Collateral Parties, on behalf
of itself and each related Second Priority Representative and each related
Second Priority Secured Holder (i) acknowledges and agrees that each Grantor (x)
has granted a security interest in the Collateral owned by it (1) under the
First Priority Shared Collateral Documents to the First Priority Collateral
Parties, for the benefit of the First Priority Representatives and the First
Priority Secured Holders, and (2) under the First Priority Non-Shared Collateral
Documents to the Existing First Priority Collateral Agent for the benefit of
certain of the First Priority Secured Holders as described therein and (y) may
grant additional security interests to any of the First Priority Collateral
Parties for the benefit of the First Priority Secured Holders so long as such
Grantor also grants a second lien security interest in such Collateral (subject
to Section 2.12) to the Second Priority Collateral Parties for the benefit of
the Second Priority Secured Holders and such grant to the Second Priority
Collateral Parties is hereby consented to by the First Priority Secured Holders,
in each case, to secure certain of the First Priority Secured Obligations (as
described therein) and that such security interest is and shall be senior and
prior in all respects to the security interests in the Collateral granted to the
Second Priority Collateral Parties, for the benefit of the Second Priority
Secured Holders, under the Second Priority Collateral Documents; provided
however, that if granting a Lien with respect to the Replacement Assets (as
defined in the Indenture) or any property other than the NGL Assets requires the
consent of a third party, such Grantor will use all commercially reasonable
efforts to obtain such consent to grant such first priority security interests
and such second priority security interests and if such third party does not
consent to the granting of such first priority and second priority Liens, such
Grantor will not be required to provide such first priority and second priority
Liens, (ii) agrees that until Payment in Full of all First Priority Secured
Obligations, no Second Priority Secured Holder shall have any claim to or in
respect of Collateral that is subject to the security interests granted under
the First Priority Collateral Documents, or any proceeds of or realization on
such Collateral, on a parity with or prior to the claim of the First Priority
Secured Obligations, and (iii) subject to Section 2.12(a), agrees that
notwithstanding such security interest and any rights of the Second Priority
Secured Holders under the Second Priority Collateral Documents or otherwise, so
long as (1) any First Priority Secured Obligations are secured by a Lien under
the First Priority Collateral Documents and (2) the applicable Collateral is
subject to the security interests granted under the First Priority Collateral
Documents, none of the Second Priority Secured Holders shall have any right or
claim in respect of the exercise of rights and remedies of the First Priority
Collateral Parties, Existing First Priority Collateral Agent, First Priority
Representatives and the First Priority Secured Holders, whether under the First
Priority Collateral Documents or otherwise, in respect of the Collateral, nor
shall the First Priority Collateral Parties, the Existing First Priority
Collateral Agent, the First Priority Representatives or the First Priority
Secured Holders have any obligation regarding any such exercise or any other
obligation or duty in respect of the interests of the Second Priority Secured
Holders.

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                                        9

          SECTION 2.02. Rights in Collateral. (a) Subject to the other
provisions set forth in Section 2.02(a), the parties hereto agree that, after
the date hereof and until the First Priority Secured Obligations are Paid in
Full, in no event shall any Second Priority Secured Holder have a Lien on or
security interest in any Collateral that is not subject to the first priority
lien of the First Priority Collateral Parties created under the First Priority
Collateral Documents with respect to such Collateral (other than, subject to the
provisions of Section 2.12, Collateral constituting NGL Assets). Notwithstanding
(i) anything to the contrary contained in any Second Priority Collateral
Document and irrespective of the time, order or method of attachment or
perfection of the security interests created by the First Priority Collateral
Documents or the Second Priority Collateral Documents, (ii) anything contained
in any filing or agreement to which the First Priority Representatives, First
Priority Collateral Parties, any First Priority Secured Holders, any Second
Priority Secured Holder or any other party hereto may be a party and (iii) the
rules for determining priority under the Uniform Commercial Code or any other
law governing the relative priorities of secured creditors, any security
interest in any Collateral pursuant to the First Priority Collateral Documents
has and shall have priority over any security interest in such Collateral
pursuant to the Second Priority Collateral Documents.

          (b)  Whether or not any bankruptcy proceeding or similar event or
proceeding has been commenced by or against any Grantor until the First Priority
Secured Obligations are Paid in Full, (i) the Second Priority Collateral Parties
will not (A) exercise or seek to exercise any rights or exercise any remedies
with respect to any Collateral that is subject to the security interests granted
under the First Priority Collateral Documents, (B) institute any action or
proceeding with respect to such rights or remedies with respect to any
Collateral (except as provided in Section 2.12), including without limitation,
any action of foreclosure, (C) contest, protest or object to any foreclosure
proceeding or action brought by the First Priority Collateral Parties or any
other exercise by the First Priority Collateral Parties of any rights and
remedies under any First Priority Collateral Documents relating to the
Collateral that is subject to the security interests granted under the First
Priority Collateral Documents, (D) object to the forbearance by the First
Priority Collateral Parties to the bringing or pursuing of any foreclosure
proceeding or action or any other exercise of any rights or remedies relating to
the Collateral that is subject to the security interests granted under the First
Priority Collateral Documents, (E) take or receive from the Grantors or any of
their Subsidiaries, directly or indirectly, in cash or other property or by set
off or in any other manner, the Collateral or any part thereof or proceeds
therefrom in satisfaction of the Second Priority Secured Obligations, (F)
contest or seek to invalidate any Liens or security interests securing the First
Priority Secured Obligations, or the perfection thereof, or the validity or
enforceability of this Agreement or (G) take or permit any action prejudicial to
or inconsistent with the priority position of the Lien on the Collateral to
secure the First Priority Secured Obligations over the Lien on the Collateral to
secure the Second Priority Secured Obligations and (ii) the First Priority
Collateral Parties shall have the exclusive right to enforce rights and exercise
remedies with respect to the Collateral that is subject to the security
interests granted under the First Priority Collateral Documents. Notwithstanding
the foregoing, the Second Priority Collateral Parties may enforce rights,
exercise remedies and take actions (A) without any condition or restriction
whatsoever, at any time after the Payment in Full of the First Priority Secured
Obligations, (B) as necessary to perfect a Lien upon any Collateral by any
method of perfection except through possession or control or (C) as necessary to
prove, preserve or protect (but not enforce) the Liens securing the Second
Priority Secured Obligations.

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                                       10

          (c)  In exercising rights and remedies with respect to the Collateral,
the First Priority Controlling Collateral Parties may enforce the provisions of
the First Priority Collateral Documents and exercise remedies thereunder, all in
such order and in such manner as they may determine in the exercise of their
sole and exclusive discretion (as between the First Priority Controlling
Collateral Parties, the First Priority Representatives and First Priority
Secured Holders, on the one hand, and the Second Priority Secured Holders, on
the other hand), including, without limitation, (i) the exercise of all rights
and remedies in respect of the Collateral and/or the First Priority Secured
Obligations, (ii) the enforcement or forbearance from enforcement of any Lien in
respect of the Collateral, (iii) the release, with or without consideration, of
the Collateral from the Liens of the First Priority Collateral Documents, (iv)
the exercise of rights and powers of a holder of shares of stock included in the
Collateral under the First Priority Collateral Documents, (v) the acceptance of
the Collateral in full or partial satisfaction of the First Priority Secured
Obligations and (vi) the exercise of all rights and remedies of a secured lender
under the Uniform Commercial Code or any similar Law of any applicable
jurisdiction.

          (d)  The parties further agree that:

               (i)   upon any Disposition of Collateral that is permitted by the
terms of the 2003 Second Lien Note Indenture such Collateral shall be
automatically and simultaneously released from the Lien created by the Second
Priority Collateral Documents;

               (ii)  upon any release by the First Priority Collateral Parties
of all or any portion of the Collateral (other than Pledged Equity so long as
any 2003 Second Lien Notes are outstanding) from the Liens under the First
Priority Collateral Documents, such Collateral shall also be automatically and
simultaneously released from the Lien created by the Second Priority Collateral
Documents; and

               (iii) so long as the 2003 Second Lien Notes are outstanding and
such 2003 Second Lien Notes are rated "Baa3" or better by Moodys and "BBB-" by
S&P (the "Required Ratings"), upon any release of all or any portion of the
Collateral (including Pledged Equity) from the Liens under the First Priority
Collateral Documents, such Collateral shall also be automatically and
simultaneously released from the Lien created by the Second Priority Collateral
Documents.

          The Second Priority Secured Parties agree at the expense of the
applicable Grantor to execute and deliver to the First Priority Controlling
Collateral Parties or the applicable Grantor(s) such termination statements,
releases and other documents and to take such further action as such First
Priority Controlling Collateral Parties or the applicable Grantor(s) may request
to effectively confirm such release.

          (e)  Without limiting the provisions of Section 2.02(d), if after the
occurrence and during the continuance of a First Priority Agreement Default, the
First Priority Controlling Collateral Trustees release their Lien in any part or
all of the Collateral in connection with (i) the sale, transfer or other
disposition thereof or (ii) the collection, or otherwise for the application, of
the proceeds thereof to the First Priority Secured Obligations, in each case
with respect to clauses (i) and (ii) in accordance with the First Priority
Collateral Documents, then, simultaneously with

<PAGE>

                                       11

such release, the Lien and security interest created pursuant to the First
Priority Collateral Documents to which the First Priority Controlling Collateral
Trustees are not a party and the Second Priority Collateral Documents in such
Collateral shall be automatically released, and upon any such release the First
Priority Collateral Parties and Second Priority Collateral Parties shall, with
respect to such First Priority Collateral Documents and Second Priority
Collateral Documents, as applicable, execute or cause to be executed such
release documents and instruments and shall take such further actions as the
First Priority Controlling Collateral Parties shall request; provided that no
such documents or instruments shall contain any representations or warranties
from, or allow any recourse to, any First Priority Collateral Parties or any
Second Priority Collateral Parties. Any action taken in accordance with this
Section 2.02(e) shall be effective notwithstanding the cessation of any First
Priority Agreement Default

          (f)  Each of the Second Priority Collateral Parties, for and on behalf
of the Second Priority Secured Holders, hereby irrevocably constitutes and
appoints the First Priority Collateral Parties and any officer or agent of the
First Priority Collateral Parties with full power of substitution, as their true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of each of the Second Priority Collateral Parties, for and on
behalf of the Second Priority Secured Holders, and in the name of each of the
Second Priority Collateral Parties, for and on behalf of the Second Priority
Secured Holders, or in the name of the First Priority Collateral Parties from
time to time in the discretion of the First Priority Collateral Parties for the
purpose of carrying out the terms of this paragraph, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of Section 2.02(d) and
(e), including, without limitation, any financing statements, endorsements,
assignments or other instruments of transfer or release; provided that no such
documents or instruments shall contain any representations or warranties from,
or allow any recourse to, any First Priority Collateral Parties or any Second
Priority Collateral Parties. The Eligible Priority Debt Representatives, for
themselves and on behalf of the Eligible Priority Debt Holders, hereby
irrevocably constitute and appoint the First Priority Collateral Trustees, the
First Priority Collateral Agent and any officer or agent of the First Priority
Collateral Trustees and the First Priority Collateral Agent, as the case may be,
with full power of substitution, as their true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of the Eligible
Priority Debt Representatives, for themselves and on behalf of the Eligible
Priority Debt Holders, and in the name of the Eligible Priority Debt
Representatives, for themselves and on behalf of the Eligible Priority Debt
Holders, or in the name of the First Priority Collateral Trustees or the First
Priority Collateral Agent, as the case may be, from time to time in the
discretion of the First Priority Collateral Trustees or the First Priority
Collateral Agent, as the case may be, for the purpose of carrying out the terms
of Section 2.02(d) and (e), to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this paragraph, including, without
limitation, any financing statements, endorsements, assignments or other
instruments of transfer or release; provided, that, no such documents or
instruments shall contain any representations or warranties from, or allow any
recourse to, any First Priority Collateral Parties or any Second Priority
Collateral Parties. Notwithstanding any such release by the Second Priority
Collateral Parties as contemplated in Section 2.02(e), it is understood that the
Lien of the Second Priority Collateral Parties in any proceeds realized from
such sale, transfer or other disposition shall, subject to the terms of this
Agreement and the other Second Priority Collateral Documents, continue (unless
such proceeds are applied to the payment of First Priority

<PAGE>

                                       12

Secured Obligations) and, following Payment in Full of the First Priority
Secured Obligations, any proceeds remaining from any such sale, transfer, other
disposition or collection shall, unless otherwise required by applicable Law, be
made available (and the Grantors hereby agree to take any and all actions
requested by the Second Priority Secured Controlling Collateral Parties
necessary to make such proceeds available) to the Second Priority Controlling
Collateral Parties for application against the Second Priority Secured
Obligations pursuant to the terms of this Agreement.

          (g)  In addition to the provisions set forth above in this Section
2.02, the parties hereto further agree that the Liens on any Collateral held by
the Second Priority Collateral Trustee and the Second Priority Secured Holders
shall be released in accordance with, and subject to the terms and conditions
set forth in the 2003 Second Lien Note Indenture.

          SECTION 2.03. Obligations Unconditional. The Second Priority
Collateral Parties acknowledge and agree on behalf of the Second Priority
Secured Holders to the relative priority as to the Collateral and the
application of the proceeds therefrom as provided herein and acknowledge and
agree that such priorities and the application of the proceeds from the
Collateral shall not be affected or impaired in any manner whatsoever including,
without limitation, on account of:

          (a)  any lack of validity or enforceability of any First Priority
     Secured Agreement or any Second Priority Secured Agreement;

          (b)  any change in the time, manner or place of payment of, or in any
     other term of, all or any of the First Priority Secured Obligations, the
     Second Priority Secured Obligations, or any amendment or waiver or other
     modification, whether by course of conduct or otherwise, of the terms of
     any First Priority Secured Agreement, the 2003 Second Lien Note Indenture,
     or any other Second Priority Secured Agreement;

          (c)  any exchange, release or nonperfection of any security interest
     in any Collateral, or any release, amendment, waiver or other modification,
     whether in writing or by course of conduct or otherwise, of all or any of
     the First Priority Secured Obligations, Second Priority Secured Obligations
     or any guarantee thereof;

          (d)  the actual date and time of execution delivery, recording, filing
     or perfection of any security interests created in the Collateral;

          (e)  the commencement of any bankruptcy or similar proceeding in
     respect of any Grantor; or

          (f)  any other circumstances (except payment or discharge in full)
     which otherwise might constitute a defense available to, or a discharge of,
     any Grantor in respect of the First Priority Secured Obligations, the
     Second Priority Secured Obligations or of any Second Priority Collateral
     Party in respect of this Agreement.

          SECTION 2.04. Waiver of Claims. To the maximum extent permitted by
law, each of the Second Priority Collateral Parties, for itself and each related
Second Priority Secured Holder, waives any claim it might have against the First
Priority Collateral Parties, the First

<PAGE>

                                       13

Priority Representatives or the First Priority Secured Holders with respect to,
or arising out of, any action or failure to act or any error of judgment or
negligence on the part of the First Priority Collateral Parties, the First
Priority Representatives, the First Priority Secured Holders or their respective
directors, officers, employees or agents with respect to any exercise of rights
or remedies under the First Priority Collateral Documents or any transaction
relating to the Collateral. Neither the First Priority Collateral Parties, any
First Priority Representative, any First Priority Secured Holder nor any of
their respective directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so, except to the extent arising out of the gross negligence or
willful misconduct of the First Priority Collateral Parties, any First Priority
Representative, any First Priority Secured Holders or such other Person, or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor, the Second Priority Collateral Parties, any
Second Priority Secured Holder or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.

          SECTION 2.05. Agreement by the Grantors. (a) Each Grantor hereby
agrees that it will not, and will not permit any of its Subsidiaries to take any
action in contravention of the provisions of this Agreement.

          (b)  So long as the Second Priority Secured Obligations are still
outstanding and the Second Priority Collateral Documents are still in effect, if
at any time the Collateral has been sold or otherwise disposed of (whether
pursuant to the exercise of remedies by the First Priority Collateral Parties or
otherwise) and the First Priority Collateral Parties hold cash proceeds that
would otherwise be paid to the applicable Grantor in accordance with the First
Priority Collateral Documents, each Grantor by its signature to this Agreement
irrevocably instructs the applicable First Priority Collateral Parties to turn
over any such remaining proceeds to the Second Priority Controlling Collateral
Parties for application to the Second Priority Secured Obligations upon the sale
or disposition of the Collateral as set forth in this Section 2.05(b).

          (c)  At any time that the First Priority Secured Obligations secured
by a Lien under the First Priority Collateral Documents are Paid in Full, if at
such time the First Priority Collateral Parties continue to hold any
certificates representing shares of stock or instruments of indebtedness
included in the Collateral or any other item of Collateral, each Grantor shall,
as of the date of this Agreement, instruct the applicable First Priority
Collateral Parties to turn over such certificates, instruments and other items
of Collateral directly to the Second Priority Controlling Collateral Parties to
be held by it under the Second Priority Collateral Documents upon the occurrence
of the events and circumstances set forth in this Section 2.05. In no event
shall the Second Priority Collateral Parties have any liability for the failure
of any First Priority Collateral Party to follow the instructions or directions
of the Grantors pursuant to this Section 2.05(c).

          SECTION 2.06. (a)  No Warranties, Etc. The Second Priority Collateral
Parties acknowledge and agree that (i) none of the First Priority Collateral
Parties, the First Priority Representatives or the First Priority Secured
Holders have made any representation or warranty herein or in the other Second
Priority Collateral Documents with respect to the validity, legality,
completeness, collectibility or enforceability of the First Priority Secured
Agreements and (ii) the First Priority Collateral Parties may manage the Liens
of the First Priority Secured Holders in the

<PAGE>

                                       14

Collateral without regard to any rights or interests that the Second Priority
Collateral Parties or the other Second Priority Secured Holders may have in the
Collateral.

          (b)  Waiver of Marshalling and Similar Rights. Each of the Second
Priority Collateral Parties for itself and on behalf of the Second Priority
Secured Holders agrees not to assert and hereby waive, to the fullest extent
permitted by applicable Law, any right to demand, request, plead or otherwise
assert, or otherwise claim the benefit of, any marshalling, appraisement,
valuation or other similar rights a junior secured creditor may have under
applicable Law.

          (c)  Waiver of Requirements. Each of the Second Priority Collateral
Parties hereby waives promptness, diligence, notice of acceptance and any other
notice with respect to this Agreement and any requirement that the First
Priority Collateral Parties, the First Priority Representatives or the First
Priority Secured Holders protect, secure, perfect or insure (i) any Lien under
the First Priority Collateral Documents or otherwise, (ii) any Collateral or
(iii) any other property subject thereto or exhaust any right or take any action
against the Grantors, or any of their Subsidiaries or any other Person or any
Collateral or any other collateral.

          (d)  No Liability of First Priority Collateral Parties. This Agreement
shall not create any agency relationship between the First Priority Collateral
Parties, on the one hand, and the Second Priority Collateral Parties, and/or the
Second Priority Secured Holders, on the other hand. The First Priority
Collateral Parties and their respective officers, directors, employees and
agents shall not be responsible, directly or indirectly, to the Second Priority
Collateral Parties, and/or the Second Priority Secured Holders for any action
taken or omitted by the First Priority Collateral Parties hereunder, or under
the First Priority Secured Agreements or otherwise, nor shall they be liable or
responsible for any loss, cost or expense suffered or incurred by the Second
Priority Collateral Parties, and/or the Second Priority Secured Holders, other
than any such loss, cost or expense found in a final non-appealable judgment by
a court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the First Priority Collateral Parties or their respective
officers, directors, employees or agents. Without limiting the generality of the
foregoing, the First Priority Collateral Parties or their respective officers,
directors, employees and agents make no representation or warranty herein and
shall not be deemed to have made any representation and warranty herein: (i) as
to the accuracy, validity, legality or enforceability of the First Priority
Secured Agreements, the Second Priority Secured Agreements or any report,
certificate, instrument or agreement delivered pursuant hereto or thereto or
(ii) as to the validity, sufficiency, perfection or value of the Collateral.

          SECTION 2.07. Reinstatement of First Priority Secured Obligations. The
First Priority Secured Obligations owed to each First Priority Secured Holder
under the First Priority Collateral Documents shall continue to be effective, or
to be reinstated, as the case may be, as to any payment in respect of any First
Priority Secured Obligation that is rescinded or must otherwise be returned by
an First Priority Secured Holder upon the occurrence or as a result of
applicable provisions of the Bankruptcy Code, all as though such payment has not
been made.

          SECTION 2.08. Sharing Arrangements. (a) Each of the Second Priority
Collateral Parties for themselves and on behalf of the related Second Priority
Secured Holders hereby agree that the provisions of the First Priority
Collateral Documents with respect to

<PAGE>

                                       15

allocations and distributions of proceeds of the Collateral shall prevail
notwithstanding any event or circumstance, including, without limitation, in the
event that, through the operation of any bankruptcy, reorganization, insolvency
or other laws or otherwise, any of the Liens of the First Priority Secured
Holders in the Collateral is avoided in whole or in part for any reason or is
enforced with respect to some, but not all, of the First Priority Secured
Obligations then outstanding.

          (b)  The Second Priority Collateral Parties and the Second Priority
Secured Holders agree that they shall not be entitled to benefit from any
avoidance action affecting or otherwise relating to any distribution or
allocation made in accordance with the First Priority Collateral Documents,
whether by preference or otherwise, it being understood and agreed that the
benefit of any such avoidance action otherwise allocable to them shall instead
be allocated and turned over for application in accordance with the priorities
set forth in the First Priority Collateral Documents.

          (c)  Until the First Priority Secured Obligations are Paid in Full,
the Collateral or proceeds thereof received in connection with the sale or other
disposition of, or collection on, such Collateral upon the exercise of remedies,
shall be applied to the First Priority Secured Obligations. Upon the Payment in
Full of the First Priority Secured Obligations, the First Priority Collateral
Parties shall deliver to the Second Priority Controlling Collateral Parties any
proceeds of Collateral held by them in the same form as received, with any
necessary endorsements or as a court of competent jurisdiction may otherwise
direct to be applied to the Second Priority Secured Obligations in such order as
specified in the relevant Second Priority Collateral Documents. In the event
that any payment or distribution shall be received by the Second Priority
Collateral Parties in a manner that is inconsistent with the provisions of any
First Priority Collateral Documents, such payment or distribution shall be
segregated and held in trust by the Second Priority Collateral Parties for the
benefit of, and shall be paid over or delivered to, the First Priority
Controlling Collateral Parties in the same form as received, with any necessary
endorsements or as a court of competent jurisdiction may otherwise direct, for
application to the First Priority Secured Obligations in accordance with the
First Priority Collateral Documents. Any of the First Priority Collateral
Parties is hereby authorized to make any such endorsements as agent for the
Second Priority Collateral Parties. This authorization is coupled with an
interest and is irrevocable.

          (d)  If the Second Priority Collateral Parties shall acquire by
indemnification, subrogation or otherwise (including pursuant to the Second
Priority Collateral Documents), any lien, estate, right or other interest in, or
possession or control of, any of the assets of any Grantor that would otherwise
constitute Collateral, that lien, estate, right or other interest shall be
subject to the relative priorities set forth herein.

          SECTION 2.09. First Priority Collateral Parties as Bailees. Subject to
Section 2.06(c) hereof, each of the First Priority Collateral Parties
acknowledge that, to the extent that the Collateral under the First Priority
Collateral Documents includes items (such as stock certificates, instruments,
cash or security entitlement) which are held in the possession of (or in the
case of cash or a security entitlement under the control of) the First Priority
Collateral Parties or a third party on their behalf, pursuant to the First
Priority Collateral Documents, such First Priority Collateral Parties are also
holding such items in their possession (or under their control)

<PAGE>

                                       16

as bailee of the Second Priority Collateral Parties solely for purposes of
perfecting the security interest of the Second Priority Collateral Parties in
such items; provided that nothing in this Section 2.09 shall require the First
Priority Collateral Parties to deliver any Collateral to the Second Priority
Collateral Parties until the First Priority Secured Obligations are Paid in
Full. Pursuant to Section 2.05(c), after Payment in Full of the First Priority
Secured Obligations, the Grantors shall instruct the applicable First Priority
Collateral Parties to deliver to the Second Priority Controlling Collateral
Parties all of the aforesaid items in the possession of such First Priority
Collateral Parties at such time.

          SECTION 2.10. Second Priority Secured Holders to be Subrogated to
Rights of First Priority Secured Holders. Subject to the Payment in Full of all
First Priority Secured Obligations, the Second Priority Secured Holders shall be
subrogated equally and ratably to the rights of the First Priority Secured
Holders to receive payments or distributions of assets of the Grantors
applicable to the First Priority Secured Obligations until all amounts owing on
the First Priority Secured Obligations shall be Paid in Full, and for the
purpose of such subrogation no payments or distributions to the First Priority
Secured Holders by or on behalf of any Grantor or by or on behalf of the Second
Priority Secured Holders by virtue of Article II of this Agreement which
otherwise would have been made to the Second Priority Secured Holders shall, as
among the Grantors, their creditors other than the First Priority Secured
Holders and the Second Priority Secured Holders, be deemed to be payment by any
Grantor to or on account of the First Priority Secured Obligations, it being
understood that the provisions of this Article II are intended solely for the
purpose of defining the relative rights of the Second Priority Secured Holders,
on the one hand, and the First Priority Secured Holders, on the other hand.

          SECTION 2.11. Obligation of the Grantors Unconditional. Nothing
contained in this Article II or elsewhere in this Agreement is intended to or
shall impair, as between the Grantors, their creditors other than the First
Priority Secured Holders and the Second Priority Secured Holders, the obligation
of the Grantors, which is absolute and unconditional, to pay the Second Priority
Secured Holders the principal of and interest on the Second Priority Secured
Obligations as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the Second
Priority Secured Holders and the creditors of the Grantors other than the First
Priority Secured Holders, nor shall anything herein or therein prevent the
Second Priority Collateral Parties or the Second Priority Secured Holders from
exercising all remedies otherwise permitted by applicable law upon default under
the Second Priority Secured Agreements or the Second Priority Collateral
Documents, subject to the rights, if any, under this Article II of the First
Priority Secured Holders.

          SECTION 2.12. Rights in NGL Assets. Notwithstanding anything in this
Agreement or in any Second Priority Collateral Document to the contrary, the
parties hereto agree that:

          (a)  (i) the priorities set forth in this Agreement in respect of the
NGL Assets that constitutes Collateral at any time on and after the date of this
Agreement and the rights and remedies of the First Priority Secured Holders in
respect of such Collateral shall apply without regard to whether or not any of
the First Priority Secured Holders are secured by such Collateral at the
relevant time (and if not so secured, the First Priority Secured Holders shall
be deemed to be secured by the NGL Assets solely for purposes of this Agreement
and the sharing provision

<PAGE>

                                       17

set forth in clause (ii) herein) and (ii) that any proceeds or distributions in
respect of the NGL Assets received by the Second Priority Secured Holders at any
time prior to the date on which the First Priority Secured Obligations have been
Paid in Full shall be held for the benefit of, and promptly turned over to, the
First Priority Collateral Parties in accordance with the terms hereof; provided,
that the Grantors acknowledge and agree that the Second Priority Secured Holders
shall have the rights set forth in Section 2.10;

          (b)  the Second Priority Collateral Parties will, at the direction of
the First Priority Controlling Collateral Trustees, and at the cost and expense
of the Grantors, (i) at any time that none of the First Priority Secured
Obligations are secured by the NGL Assets, exercise any rights or remedies with
respect to any Collateral that constitutes NGL Assets and take any other action
related thereto and (ii) institute any action or proceeding to effect or enforce
such rights and remedies, including without limitation any action of
foreclosure; and

          (c)  the aggregate amount of any Second Priority Secured Obligations
secured by Liens granted by the Borrower and the other Grantors on NGL Assets in
favor of the Second Priority Collateral Parties pursuant to the Second Priority
Collateral Documents shall not exceed an amount equal to (x) the maximum amount
permitted to be secured by the NGL Assets under the Indentures on the date of
the incurrence of such Second Priority Secured Obligations less (y) the amount
of all First Priority Secured Obligations and any previously incurred Second
Priority Secured Obligations secured by NGL Assets on such date, and such amount
shall be set forth in a certificate by a Responsible Officer of the Borrower
demonstrating the calculation thereof in reasonable detail.

                                   ARTICLE III

                                  MISCELLANEOUS

          SECTION 3.01. Amendments, Supplements and Waivers. (a) Except as set
forth in this Section 3.01, no amendment or waiver of any provision of this
Agreement, and no consent to any departure by the First Priority Collateral
Parties, the Second Priority Collateral Parties, the Borrower and any Grantor,
shall in any event be effective unless the same shall be in writing and signed
by First Priority Collateral Parties, the Second Priority Collateral Parties,
the Borrower or any Grantor, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it is
given. This Agreement contains a final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire agreement among the parties hereto with respect to
the subject matter hereof, superseding all prior oral or written understandings.

          (b)  The First Priority Collateral Parties and the Grantors may, at
any time and from time to time, without the consent of any Second Priority
Collateral Party or any Second Priority Secured Holder enter into amendments or
other written agreements supplemental to any First Priority Collateral Document
for the purpose of adding to, or deleting from, or waiving or consenting to any
departures from any provisions of, any First Priority Collateral Document or
changing in any manner the rights of the holders of the First Priority Secured
Obligations or the Grantors thereunder. Any amendment or waiver of, or any
consent under, any provision of any First Priority Collateral Document (except
to the extent that such amendment, waiver or consent,

<PAGE>

                                       18

would have the effect of releasing Collateral from the Liens securing Second
Priority Secured Obligations in violation of Article II or of releasing the
Pledged Equity at any time that the 2003 Second Lien Notes are outstanding and
do not have the Required Ratings) shall apply automatically to the comparable
provision of the comparable Second Priority Collateral Document without the
consent of or notice to any Second Priority Collateral Party or any Second
Priority Secured Holder and without any action by any Grantor or the Second
Priority Collateral Parties; provided that the Borrower has delivered to the
Second Priority Collateral Parties a certificate from an Authorized Officer
stating that such amendment, waiver or consent does not have the effect of
releasing Liens securing the Second Priority Secured Obligations in violation of
Article II or of releasing the Pledged Equity at any time that the 2003 Second
Lien Notes are outstanding and do not have the Required Ratings. The Borrower
shall promptly notify the Second Priority Collateral Parties of any amendment or
waiver of, or any consent under, any provision of any First Priority Collateral
Document that applies automatically to the comparable provision of the
comparable Second Priority Collateral Document, which notice shall include a
copy of such amendment, waiver or consent, as applicable, provided that the
failure to give such notice shall not affect the validity of such amendment or
waiver of, or consent under, either the First Priority Collateral Documents or
the First Priority Collateral Documents.

          (c)  The First Priority Collateral Parties and the Grantors may, at
any time and from time to time, without the consent of any Second Priority
Collateral Party or any Second Priority Secured Holder, enter into amendments or
other written agreements supplemental to any First Priority Collateral Document
for the purpose of granting to the First Priority Collateral Parties a first
priority security interest in additional assets of the Grantors to secure the
First Priority Secured Obligations. Any such amendment or written agreements
supplemental to any First Priority Collateral Document shall apply automatically
to the comparable Second Priority Collateral Document without the consent of or
notice to the Second Priority Collateral Party or any Second Priority Secured
Holder and without any action by any Grantor or the Second Priority Collateral
Parties, and effective upon delivery by any First Priority Representative to
each of the Second Priority Collateral Parties of written notice of such
amendment or other written supplemental agreement, the Second Priority
Collateral Parties shall automatically be granted a second priority security
interest in such additional assets of the Grantors to secure the Second Priority
Secured Obligations. The First Priority Secured Parties and the Grantors may
also, at any time and from time to time, without the consent of any Second
Priority Collateral Party or any Second Priority Secured Holder, amend or waive
provisions of this Agreement relating to or establishing rights among the First
Priority Secured Parties or the First Priority Secured Holders and the Grantors
so long as such amendment or waiver would not reasonably be expected to have a
material and adverse effect on any of the rights or obligations of the Second
Priority Secured Parties or Second Priority Secured Holders under this
Agreement; provided that notice of such amendment or waiver is delivered to the
Second Priority Collateral Parties. Without limiting the generality of the
foregoing sentences, if the Person(s) who would otherwise be First Priority
Controlling Collateral Parties hereunder shall agree with the Borrower to any
modification of the definition of First Priority Controlling Collateral Parties,
such modification shall be effective upon notice thereof to the other parties to
this Agreement.

          (d)  Without the prior written consent of the First Priority
Collateral Parties and the First Priority Representatives, no Second Priority
Collateral Document may be amended, supplemented or otherwise modified or
entered into to the extent such amendment, supplement

<PAGE>

                                       19

or modification, or the terms of any new Second Priority Collateral Document,
would be inconsistent with any of the terms of the First Priority Secured
Agreements. The Second Priority Collateral Parties agree that each Second
Priority Collateral Document shall include the following language:

          "Notwithstanding anything herein to the contrary, the lien and
security interest granted to the [Collateral Trustee] [Collateral Agent]
pursuant to this Agreement and the exercise of any right or remedy by such
[Collateral Trustee] [Collateral Agent] hereunder are subject to the provisions
of the Intercreditor Agreement, dated as of August [__], 2003 (the
"Intercreditor Agreement") among Wilmington Trust Company, as Existing First
Priority Corporate Trustee, John M. Beeson, Jr., as Existing First Priority
Individual Trustee, Bank One NA (Main Office Chicago), as Existing First
Priority Collateral Agent, the Collateral Trustee, and Dynegy Holdings Inc., as
a Grantor and other parties referred to therein as Grantors and such other
parties as may be added thereto from time to time in accordance with Section
3.11 thereof. In the event of any conflict between the terms of the
Intercreditor Agreement and this Agreement, the terms of the Intercreditor
Agreement shall govern.".

; provided, however, that if the jurisdiction in which any such Second Priority
Collateral Document shall be filed prohibits the inclusion of the language above
or would prevent a document containing such language to be recorded of record,
the First Priority Controlling Collateral Trustees and the applicable Second
Priority Collateral Parties agree to negotiate in good faith on replacement
language (or a document in lieu thereof) stating that the lien and security
interest granted under such Second Priority Collateral Document is subject to
the provisions of this Agreement prior to such Second Priority Collateral
Document being entered into.

          SECTION 3.02. Notices. All notices, requests, demands and other
communications provided for or permitted hereunder shall, unless otherwise
stated herein, be in writing (including telex and telecopy communications) and
shall be sent by mail (by registered or certified mail, return receipt
requested), overnight prepaid courier, telex, telecopier or hand delivery; if to
the Grantors, Existing First Priority Collateral Agent, Existing First Priority
Collateral Trustees and the Second Priority Collateral Trustee, to their
addresses specified on their respective signature pages hereto and as any party
added pursuant to Section 3.11, to their address specified in the joinder
agreement signed by them. All such notices, requests, demands and communications
shall be deemed to have been duly given or made, (i) when delivered by hand,
(ii) five Business Days after being deposited in the mail, postage prepaid,
(iii) the next Business Day if delivered by an overnight prepaid courier, (iv)
when telexed with answerback received, (v) when telecopied or (vi) when
published in The Wall Street Journal or such other publication.

          SECTION 3.03. Headings. Section, subsection and other headings used in
this Agreement are for convenience only and shall not affect the construction of
this Agreement.

          SECTION 3.04. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

<PAGE>

                                       20

          SECTION 3.05. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of each of the parties hereto and shall inure to the
benefit of the First Priority Representatives on behalf of the First Priority
Secured Holders and the Second Priority Representatives on behalf of the Second
Priority Secured Holders and their respective successors and assigns and nothing
herein or in any other First Priority Collateral Document or Second Priority
Collateral Document is intended or shall be construed to give any other Person
any right, remedy or claim under, to or in respect of this Agreement, any other
First Priority Collateral Document or the Collateral.

          SECTION 3.06. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, except as
otherwise required by mandatory provisions of law.

          SECTION 3.07. Effectiveness. This Agreement shall become effective on
the execution and delivery hereof and shall remain in effect so long as the
First Priority Collateral Trustees shall have any obligations hereunder.

          SECTION 3.08. Reexecution of Agreement. This Agreement shall be
reexecuted at any time and from time to time, at the request of the First
Priority Representative(s), with such changes in the form hereof (including,
without limitation, changes on the cover page and adding supplemental signatures
and notary statements) as may be necessary to comply with the filing or
recording requirements of any jurisdiction where this Agreement is to be filed.

          SECTION 3.09. Third-Party Beneficiaries. The First Priority Collateral
Parties, the First Priority Representatives and the other First Priority Secured
Holders are third-party beneficiaries to this Agreement and the other First
Priority Collateral Documents and may from time to time enforce their rights as
explicit beneficiaries hereunder pursuant to the terms and conditions of this
Agreement and the other First Priority Collateral Documents.

          SECTION 3.10. Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same instrument.

          SECTION 3.11. Joinder. The Borrower and each of the other Grantors
agrees that it shall not issue or incur any Eligible Priority Debt or Other
Indenture Debt unless, each Eligible Priority Debt Collateral Parties or the
Other Indenture Debt Collateral Parties, as the case may be, under the Eligible
Priority Debt Agreements or Other Indenture Debt Agreements, respectively,
becomes a party to this Agreement and each of the Eligible Priority Debt
Representatives or the Other Indenture Debt Representatives, as the case may be,
acknowledges and agrees thereto. Such Eligible Priority Debt Collateral Parties
or Other Indenture Debt Collateral Parties shall become party hereto by
executing a signature page to this Agreement. Upon such Eligible Priority Debt
Collateral Parties becoming a party to this Agreement, each such Person shall
have all the rights and obligations of the Eligible Priority Debt Collateral
Parties or Other Indenture Debt Collateral Parties, as the case may be, under
this Agreement.

<PAGE>

                                       21

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be duly executed by their respective officers thereunto
duly authorized as of the day and year first above written.

                                        WILMINGTON TRUST COMPANY, not in its
                                        individual capacity, but solely as
                                        Existing First Priority Corporate
                                        Trustee

                                        By:    /s/ Bruce L. Bisson
                                           -------------------------------------
                                           Title:

                                        Address: Rodney Square North
                                                 1100 North Market St.
                                                 Wilmington, DE 19890
                                                 Attn: Corporate Trust Division

                                        JOHN M. BEESON, JR., not in his
                                        individual capacity, but solely as
                                        Existing First Priority Individual
                                        Trustee

                                        By:    /s/ John M. Beeson, JR.
                                           -------------------------------------
                                        Title: Existing First Priority
                                               Individual Trustee

                                        Address: 1100 North Market St.
                                                 Rodney Square North
                                                 Wilmington, DE 19890-1600
                                                 Attn: Corporate Trust Division

                                        BANK ONE, NA (MAIN OFFICE CHICAGO), as
                                        Existing First Priority Collateral Agent

                                        By:  /s/ Janice Ott Rotunno
                                           -------------------------------------
                                           Title: Vice President

                                        Address: 1 Bank One Plaza
                                                 Suite IL1-0823
                                                 Chicago, IL 60670-0823
                                                 Attn: Ms. Janice Ott Rotunno

<PAGE>

                                       22

                                        WELLS FARGO BANK MINNESOTA, N.A., not in
                                        its individual capacity, but solely as
                                        Second Priority Collateral Trustee

                                        By:  /s/ Jeffery Rose
                                           -------------------------------------
                                           Title: Corporate Trust Officer

                                        Address: Corporate Trust Services
                                                 Sixth Street & Marquette Avenue
                                                 Minneapolis, MN 55479
                                                 Attn:  Jeffrey Rose

<PAGE>

                                       23

                                        ACKNOWLEDGED AND AGREED ON THE DATE
                                        HEREOF:

                                        DYNEGY HOLDINGS INC.

                                        By:  /s/ Charles C. Cook
                                           -------------------------------------
                                           Title: Assistant Treasurer

                                        Address: 1000 Louisiana Street,
                                                 Suite 5800
                                                 Houston, TX 77002-5050
                                                 Attn: Robert T. Ray
                                                       Carol Graebner

<PAGE>

                                       24

                                        DYNEGY POWER CORP.
                                        DPC II INC.
                                        DYNEGY ENGINEERING, INC.
                                        DYNEGY SERVICES, INC.
                                        DYNEGY POWER MANAGEMENT
                                        SERVICES, L.P.,
                                           By: Dynegy Services, Inc., its
                                           general partner
                                        CALCASIEU POWER, INC.
                                        DYNEGY OPERATING COMPANY
                                        DYNEGY PARTS AND TECHNICAL SERVICES,
                                        INC.
                                        DYNEGY POWER MANAGEMENT SERVICES, INC.
                                        HEP COGEN, INC.
                                        NORTHWAY COGEN, INC.
                                        DYNEGY POWER INVESTMENTS, INC.
                                        DYNEGY POWER SERVICES, INC.
                                        DYNEGY POWER NEVADA, INC.
                                        MICHIGAN COGEN, INC.
                                        MICHIGAN POWER, INC.
                                        MICHIGAN POWER HOLDINGS, INC.
                                        OCG COGEN, INC.
                                        OYSTER CREEK COGEN, INC.
                                        RRP COMPANY
                                        DPC COLOMBIA - OPON POWER RESOURCES
                                        COMPANY
                                        TERMO SANTANDER HOLDING, LLC
                                        RIVERSIDE GENERATION, INC.
                                        RIVERSIDE GENERATING COMPANY, L.L.C.
                                        ROLLING HILLS GENERATION, INC.
                                        DYNEGY RENAISSANCE POWER, INC.
                                        DYNEGY NORTHEAST GENERATION, INC.
                                        HUDSON POWER, L.L.C.
                                        DYNEGY MIDSTREAM GP, INC.
                                        DYNEGY MIDSTREAM SERVICES, LIMITED
                                        PARTNERSHIP
                                           By: Dynegy Midstream G.P., Inc., its
                                           general partner

                                        By:  /s/ Robert T. Ray
                                           -------------------------------------
                                                 Robert T. Ray
                                                 Sr. Vice President-Treasurer

<PAGE>

                                       25

                                        DYNEGY LIQUIDS MARKETING AND TRADE
                                        DYNEGY OPI, LLC
                                        DYNEGY NGL PIPELINE COMPANY, LLC
                                        DYNEGY INTRASTATE PIPELINE, LLC
                                        DYNEGY ENERGY PIPELINE COMPANY LLC
                                        DYNEGY UPPER HOLDINGS, L.L.C.
                                        DYNEGY HOLDING COMPANY, L.L.C.
                                        DMG ENTERPRISES, INC.
                                        HAVANA DOCK ENTERPRISES, LLC
                                        DMT HOLDINGS, INC.
                                        DMT G.P., L.L.C.
                                        DMT HOLDINGS, L.P.
                                        DYNEGY MARKETING AND TRADE
                                        DYNEGY COAL TRADING & TRANSPORTATION,
                                        L.L.C.
                                        NGC STORAGE, INC.
                                        BLACK THUNDER MEMBER, INC.
                                        ILLINOVA CORPORATION
                                        ILLINOVA GENERATING COMPANY
                                        IGC GRIMES COUNTY, INC.
                                        IGC GRIMES FRONTIER, INC.
                                        IPG FERNDALE, INC.
                                        IPG PARIS, INC.
                                        CHARTER OAK (PARIS) INC.
                                        ILLINOVA ENERGY PARTNERS, INC.
                                        PARISH POWER, INC.
                                        CALCASIEU POWER, LLC
                                        DELTA COGEN, INC.
                                        DYNEGY POWER HOLDINGS, INC.
                                        COGEN POWER, INC.
                                        COGEN POWER, L.P.
                                           By: CoGen Power, Inc., its general
                                               partner
                                        DYNEGY LIQUIDS G.P., L.L.C.
                                           By: Dynegy Midstream Services,
                                               Limited Partnership, its sole
                                               member
                                           By: Dynegy Midstream G.P., Inc.
                                               its general partner
                                        DYNEGY INC.

                                        By:  /s/ Robert T. Ray
                                           -------------------------------------
                                                 Robert T. Ray
                                                 Sr. Vice President-Treasurer

<PAGE>

                                       26

                                        MIDSTREAM BARGE COMPANY, L.L.C.
                                        DYNEGY REGULATED HOLDINGS, LLC

                                        By:  /s/ Robert T. Ray
                                           -------------------------------------
                                                 Robert T. Ray
                                                 Sr. Vice President-Treasurer

<PAGE>

                                       27

                                        BG HOLDINGS, INC.
                                        BLACK MOUNTAIN COGEN, INC.
                                        BLUEGRASS GENERATION, INC.
                                        BLUEGRASS GENERATION COMPANY, L.L.C.
                                        DYNEGY CABRILLO II LLC
                                        BLUE RIDGE GENERATION INC.
                                        BLUE RIDGE GENERATION LLC
                                        CHICKAHOMINY GENERATING COMPANY
                                        CHICKAHOMINY POWER, LLC
                                        FLORIDA MERCANTILE POWER, INC.
                                        PALMETTO POWER, L.L.C.
                                        GASIFICATION SERVICES, INC.
                                        GEORGIA MERCANTILE POWER, INC.
                                        HEARD COUNTY POWER, L.L.C.
                                        HART COUNTY IPP, INC.
                                        HARTWELL INDEPENDENT POWER
                                        PARTNERS, INC.
                                        HARTWELL POWER COMPANY
                                        DYNEGY DANSKAMMER, L.L.C.
                                        DYNEGY ROSETON, L.L.C.
                                        DYNEGY HUDSON POWER RETAIL, L.L.C.
                                        DYNEGY GLOBAL ENERGY, INC.
                                        DYNEGY BROADBAND MARKETING AND TRADE
                                        DYNEGY GP INC.
                                        DYNEGY TECHNOLOGY CAPITAL CORP.
                                        DYNEGY STRATEGIC INVESTMENTS, L.P.
                                           By: Dynegy Strategic Investments GP,
                                               L.L.C., its general partner
                                        DYNEGY STRATEGIC INVESTMENTS GP, L.L.C.
                                        RENAISSANCE POWER, L.L.C.
                                        ROLLING HILLS GENERATING, L.L.C.
                                        DYNEGY POWER MARKETING, INC.

                                        By:  /s/ Charles C. Cook
                                           -------------------------------------
                                                 Charles C. Cook
                                                 Vice President

<PAGE>

                                       28

                                        DYNEGY ENERGY SERVICES, INC.
                                        ILLINOIS POWER ENERGY, INC.
                                        DES NORTHEAST, INC.
                                        DEM GP, LLC
                                        DYNEGY ENERGY MARKETING, LP
                                           By: DEM GP, LLC, its general partner
                                        DYNEGY ADMINISTRATIVE SERVICES COMPANY
                                        NIPC, INC.
                                        DFS L.P., LLC
                                        DFS GENERAL PARTNER, LLC
                                        DYNEGY FINANCIAL SERVICES,
                                        LIMITED PARTNERSHIP
                                        DYNEGY CATLIN MEMBER, INC.
                                        DYNEGY MIDWEST GENERATION , INC.
                                        DYNEGY I.T., INC.
                                        CHESAPEAKE POWER, INC.
                                        JAMES RIVER ENERGY CORP.
                                        DPC POWER RESOURCES HOLDING COMPANY
                                        DRY CREEK POWER, INC.
                                        ROCKINGHAM POWER, L.L.C.
                                        DYNEGY POWER DEVELOPMENT COMPANY

                                        By:  /s/ Charles C. Cook
                                           -------------------------------------
                                                 Charles C. Cook
                                                 Vice President

<PAGE>

                                       29

                                        DYNEGY MANAGEMENT, INC.
                                        DMS LP, INC.
                                        DMT L.P., L.L.C.
                                        DYNEGY STRATEGIC INVESTMENTS LP, INC.
                                        DEM LP, LLC

                                        By:  /s/ Larry F. Altenbaumer
                                           -------------------------------------
                                                 Larry F. Altenbaumer
                                                 President<PAGE>

                                                                    Exhibit 10.7
                                                                  EXECUTION COPY

================================================================================

                      SECOND LIEN SHARED SECURITY AGREEMENT

                              Dated August 11, 2003

                                      From

                         The Grantors referred to herein

                                   as Grantors
                                   -----------

                                       to

                        Wells Fargo Bank Minnesota, N.A.

                              as Collateral Trustee
                              ---------------------

================================================================================

                  Dynegy Second Lien Shared Security Agreement

<PAGE>

                          T A B L E  O F  C O N T E N T S
                          - - - - -  - -  - - - - - - - -

Section                                                                     Page

Section 1.  Definitions; Other Interpretive Provisions ....................... 3

Section 2.  Grant of Security ............................................... 12

Section 3.  Security for Obligations ........................................ 16

Section 4.  Grantors Remain Liable .......................................... 17

Section 5.  Delivery and Control of Security Collateral ..................... 17

Section 6.  Maintaining the Account Collateral .............................. 19

Section 7.  Maintaining Electronic Chattel Paper, Transferable
             Records and Letter-of-Credit Rights and Giving
             Notice of Commercial Tort Claims ............................... 21

Section 8.  Representations and Warranties .................................. 21

Section 9.  Further Assurances .............................................. 24

Section 10. Post-Closing Changes; Bailees; Collections on
             Receivables and Related Contracts .............................. 25

Section 11. As to Intellectual Property Collateral .......................... 26

Section 12. Voting Rights; Dividends; Etc. .................................. 27

Section 13. As to Letter-of-Credit Rights ................................... 28

Section 14. Transfers and Other Liens; Additional Shares .................... 29

Section 15. Collateral Trustee Appointed Attorney-in-Fact ................... 29

Section 16. Collateral Trustee May Perform .................................. 30

Section 17. The Collateral Trustee's Duties ................................. 30

Section 18. Remedies ........................................................ 30

Section 19. Indemnity and Expenses .......................................... 32

Section 20. Amendments; Waivers; Additional Grantors; Etc. .................. 33

Section 21. Notices, Etc. ................................................... 33

Section 22. Continuing Security Interest .................................... 34

Section 23. Release; Termination ............................................ 35

Section 24. Security Interest Absolute ...................................... 35

                  Dynegy Second Lien Shared Security Agreement

<PAGE>

                                       ii

Section 25. Execution in Counterparts ....................................... 36

Section 26. The Mortgages ................................................... 36

Section 27. Collateral in the State of Louisiana ............................ 36

Section 28. Governing Law ................................................... 37

Section 29. Submission to Jurisdiction and Waiver ........................... 37

Section 30. Intercreditor Agreement ......................................... 38

Schedules
---------

Schedule I       -   Location, Chief Executive Office, Place Where Agreements
                     Are Maintained, Type Of Organization, Jurisdiction Of
                     Organization And Organizational Identification Number
Schedule II      -   Pledged Equity, Pledged Debt, Securities Accounts and
                     Commodity Accounts
Schedule II-A    -   Equity not to Be Pledged
Schedule III     -   Changes in Name, Location, Etc.
Schedule IV      -   Account Collateral (Designated Accounts)
Schedule V       -   Account Collateral not Subject to Account Control Agreement
Schedule VI      -   Commercial Tort Claims

Exhibits
--------

Exhibit A        -   Form of Second Lien Shared Security Agreement Supplement
Exhibit B        -   Form of Account Control Agreement (Deposit Account/
                     Securities Account)
Exhibit C        -   Form of Securities Account Control Agreement
Exhibit D        -   Form of Commodity Account Control Agreement
Exhibit E        -   Form of Intellectual Property Second Lien Shared Security
                     Agreement
Exhibit F        -   Form of Intellectual Property Second Lien Shared Security
                     Agreement Supplement
Exhibit G        -   Form of Consent to Assignment of Letter of Credit Rights

                  Dynegy Second Lien Shared Security Agreement

<PAGE>

                      SECOND LIEN SHARED SECURITY AGREEMENT

          SECOND LIEN SHARED SECURITY AGREEMENT dated August 11, 2003 (this
"Second Lien Shared Security Agreement") made by Dynegy Holdings Inc., a
Delaware corporation ( "DHI"), the other Persons listed on the signature pages
hereof (the "Initial Grantors") and the Additional Grantors (as defined in
Section 20) (DHI, Initial Grantors and the Additional Grantors being,
collectively, the "Grantors"), to Wells Fargo Bank Minnesota, N.A., (with its
successors in such capacity, the "Collateral Trustee") for the benefit of the
Secured Parties (as defined below).

          PRELIMINARY STATEMENTS.

          (1)  DHI and the guarantors named therein have entered into an
Indenture, dated as of the date hereof (the "Indenture") with Wilmington Trust
Company, as Trustee (in such capacity, the "Trustee") and the Collateral Trustee
pursuant to which it is issuing, as of the date hereof, (i) $225,000,000 of
Second Priority Senior Secured Floating Rate Notes due 2008, (ii) $525,000,000
of 9.875% Second Priority Senior Secured Notes due 2010, (iii) $700,000,000 of
10.125% Second Priority Senior Secured Notes due 2013 and (iv) may, from time to
time, issue additional notes in accordance with the provisions of the Indenture
(collectively, the "Notes").

          (2)  DHI has entered into a Credit Agreement dated as of April 1, 2003
with Dynegy Inc., as the parent guarantor (the "Parent Guarantor"), the other
guarantor parties thereto, Citibank, N.A. and Bank of America, N.A., as
administrative agents, the other lender parties thereto, Citibank, N.A., as
payment agent, Bank One, NA (main office Chicago), as L/C Issuer, Bank One, NA
(main office Chicago), as collateral agent (together with successors in such
capacity, the "First Priority Collateral Agent"), Salomon Smith Barney, Inc.,
Banc of America Securities LLC and Bank One, NA (main office Chicago), as
co-lead arrangers, and Salomon Smith Barney, Inc. and Banc of America Securities
LLC, as book running managers (said Agreement, as it may hereafter be amended,
amended and restated, supplemented, replaced, refinanced or otherwise modified
from time to time, being the "Credit Agreement").

          (3)  DHI is the guarantor under that certain Guaranty dated August 7,
2000 (the "CoGen Guaranty") in favor of the Guaranteed Parties (as defined
therein) (the "CoGen Guaranteed Parties") pursuant to which it guaranteed
certain of the obligations of CoGen Lyondell, Inc. under the Operative Documents
referred to in that certain Participation Agreement dated August 7, 2000, among
CoGen Lyondell, Inc., as the Lessee, Dynegy Holdings Inc., as Guarantor,
Operating Lessor Limited Company, as the Lessor, Four Winds Funding Corp., as
Tranche A Lender, Tranche B Lender and Conduit, the Certificate Holders and the
Liquidity Banks party thereto, and Commerzbank AG, New York Branch, as
Administrative Agent and Lease Arranger (the CoGen Guaranty together with such
Operative Documents and any amendments, supplements, replacements, restatements
and refinancings thereof being referred to herein as the "CoGen Facility").

          (4)  DHI is the guarantor under those certain Guaranties dated March
10, 2000 and June 28, 2002 (the "Riverside Guaranties") in favor of the
Guaranteed Parties and the Lenders, respectively (each as defined therein) (the
"Riverside Guaranteed Parties") pursuant to which it

                  Dynegy Second Lien Shared Security Agreement

<PAGE>

                                      2

guaranteed certain of the obligations of Riverside Generating Company, L.L.C.
under the Operative Documents referred to in that certain Participation
Agreement, dated March 10, 2000, among Riverside Generating Company, L.L.C., as
the Lessee and Construction Agent, Dynegy Holdings Inc., as Guarantor, Lawrence
County Riverside Trust 2000, as the Lessor, Atlantic Asset Securitization Corp.,
as Tranche A Lender, the Liquidity Purchasers, the Tranche B Lenders and the
Certificate Holder party thereto, Commerzbank AG, New York and Grand Cayman
Branches, as Syndication Agent, Credit Agricole Indosuez, as Documentation
Agent, and Canadian Imperial Bank of Commerce, Bayerische Landesbank
Girozentrale and KBC Bank N.V., as Co-Agents, and Credit Lyonnais New York
Branch, as Administrative Agent and Lead Arranger (together with any amendments,
supplements, replacements, restatements and refinancings thereof, collectively,
the "Riverside Facility").

          (5)  DHI is party to that certain Amended and Restated Performance
Agreement, effective as of March 27, 2001 (as heretofore amended, the "Alpha
Guaranty"), in favor of ABG Gas Supply, L.L.C. pursuant to which it guaranteed
the obligations of (i) DMT Supply LP under that certain Amended and Restated
Natural Gas Purchase Agreement dated as of March 27, 2001 and (ii) Dynegy
Marketing & Trade under that certain Nomination Agreement dated as of March 27,
2000 (the Alpha Guaranty and the documents referred to in clauses (i) and (ii),
together with any amendments, supplements, replacements, restatements and
refinancings thereof, are collectively referred to herein as the "Alpha
Facility").

          (6)  DHI is party to that certain Collateral Trust and Intercreditor
Agreement dated April 1, 2003 (as such agreement may be amended, supplemented,
replaced or otherwise modified hereafter from time to time, the "Collateral
Trust Agreement") with the Grantors, Wilmington Trust Company, a Delaware
banking corporation (not in its individual capacity, but solely as corporate
trustee, together with any successor corporate trustee appointed pursuant to
Article VII of the Collateral Trust Agreement, the "First Priority Corporate
Trustee") and John M. Beeson, Jr., an individual residing in the State of
Delaware, not in his individual capacity but solely as individual trustee
(together with any successor individual trustee appointed pursuant to Article
VII of the Collateral Trust Agreement, the "First Priority Individual Trustee";
and, together with the Corporate Trustee, the "First Priority Collateral
Trustees").

          (7) Pursuant to the Credit Agreement and in order to satisfy certain
conditions in the Alpha Guaranty, the CoGen Guaranty and the Riverside
Guaranties, the Grantors and the First Priority Collateral Trustees entered into
a Shared Security Agreement, dated April 1, 2003 (together with any amendments,
supplements, replacements and restatements thereof, the "First Priority Shared
Security Agreement"), in order to grant to the First Priority Collateral
Trustees for the ratable benefit of the Shared Secured Parties (as defined in
the Credit Agreement) a security interest in the Shared Collateral.

          (8)  The First Priority Collateral Trustees agreed, pursuant to the
terms of the Collateral Trust Agreement, to accept the pledge and assignment,
and the grant of a security interest, under the First Priority Shared Security
Agreement as security for the Priority Lien Obligations.

          (9)  Pursuant to the Credit Agreement and the Indenture, the Grantors,
the First Priority Collateral Trustees, the First Priority Collateral Agent and
the Collateral Trustee have

                  Dynegy Second Lien Shared Security Agreement

<PAGE>

                                       3

agreed to enter into an Intercreditor Agreement, dated as of the date hereof (as
such agreement may be amended, amended and restated, supplemented, replaced or
otherwise modified hereafter from time to time the "Intercreditor Agreement").

          (10) The Collateral Trustee has agreed, pursuant to the terms of the
Indenture and the Intercreditor Agreement, to accept the pledge and assignment,
and the grant of a security interest, under this Second Lien Shared Security
Agreement as security for the Parity Lien Obligations.

          (11) Each Grantor is the owner of the Initial Pledged Equity set forth
opposite such Grantor's name on and as otherwise described in Part I of Schedule
II hereto and issued by the Persons named therein and of the Initial Pledged
Debt set forth (to the extent the same is evidenced by instruments) opposite
such Grantor's name on and as otherwise described in Part II of Schedule II
hereto and issued by the Obligors named therein.

          (12) Each Grantor has Pledged Security Entitlements with respect to
all the Pledged Financial Assets credited from time to time to such Grantor, as
set forth opposite such Grantor's name on and as otherwise described in Part III
of Schedule II hereto.

          (13) Each Grantor has rights in and to the Pledged Commodity Contracts
carried from time to time in such Grantor's Commodities Accounts, set forth
opposite such Grantor's name on and as otherwise described in Part IV of
Schedule II hereto.

          (14) Each Grantor has opened Other Deposit Accounts with banks, in the
name of such Grantor and subject to the terms of this Second Lien Shared
Security Agreement, as described in Schedule IV hereto.

          (15) It is a condition precedent to the Trustee entering into the
Indenture that the Grantors shall have granted the assignment and security
interest and made the pledge and assignment contemplated by this Second Lien
Shared Security Agreement.

          (16) Each Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by this Second Lien Shared Security
Agreement.

          NOW, THEREFORE, in consideration of the premises and in order to
induce the Trustee to enter into the Indenture and the holders of the Notes to
purchase the Notes, each Grantor hereby agrees with the Collateral Trustee for
the ratable benefit of the Secured Parties as follows:

          Section 1.  Definitions; Other Interpretive Provisions. The
interpretive provisions set forth in Section 1.04 of the Indenture are
incorporated by reference herein. Terms defined in the Indenture or the
Intercreditor Agreement and not otherwise defined in this Second Lien Shared
Security Agreement are used in this Second Lien Shared Security Agreement as
defined in the Indenture or the Intercreditor Agreement. The terms incorporated
by reference to the Credit Agreement are defined as used in the Credit Agreement
as in effect as of the date hereof. Further, unless otherwise defined in this
Second Lien Shared Security Agreement, the Indenture or the Intercreditor
Agreement, terms defined in Article 8 or 9 of the UCC and/or in the Federal Book
Entry Regulations are used in this Second Lien Shared Security Agreement as such
terms

                  Dynegy Second Lien Shared Security Agreement

<PAGE>

                                       4

are defined in such Article 8 or 9 and/or the Federal Book Entry Regulations. As
used in this Second Lien Shared Security Agreement the following terms shall
have the meanings set forth below:

          "Account Collateral" means, collectively, the following:

               (a)  the Other Deposit Accounts and all funds and financial
          assets from time to time credited thereto (including, without
          limitation, all Cash Equivalents), all interest, dividends,
          distributions, cash, instruments and other property from time to time
          received, receivable or otherwise distributed in respect of or in
          exchange for any or all of such funds and financial assets, and all
          certificates and instruments, if any, from time to time representing
          or evidencing the Cash Collateral Accounts and the Other Deposit
          Accounts;

               (b)  all promissory notes, certificates of deposit, deposit
          accounts, checks and other instruments from time to time delivered to
          or otherwise possessed by the Collateral Trustee for or on behalf of
          any Grantor, including, without limitation, those delivered or
          possessed in substitution for or in addition to any or all of the then
          existing Account Collateral; and

               (c)  all interest, dividends, distributions, cash, instruments
          and other property from time to time received, receivable or otherwise
          distributed in respect of or in exchange for any or all of the then
          existing Account Collateral.

          "Account Control Agreement" has the meaning specified in Section 6(a).

          "Additional Grantor" has the meaning specified in Section 20(b).

          "Additional Provisions" has the meaning specified in the definition of
     "Federal Book Entry Regulations" set forth herein.

          "After-Acquired Intellectual Property" has the meaning specified in
     Section 11(b).

          "Agreement Collateral" means the Assigned Agreements, including,
     without limitation, (a) all rights of any Grantor to receive moneys due and
     to become due under or pursuant to the Assigned Agreements, (b) any rights
     of such Grantor to receive proceeds of any insurance, indemnity, warranty
     or guaranty with respect to the Assigned Agreements, (c) claims of any
     Grantor for damages arising out of or for breach of or default under the
     Assigned Agreements and (d) the right of any Grantor to terminate the
     Assigned Agreements, to perform thereunder and to compel performance and
     otherwise exercise all remedies thereunder.

          "Alpha Facility" has the meaning specified in Preliminary Statement
     (5).

          "Alpha Guaranty" has the meaning specified in Preliminary Statement
     (5).

                  Dynegy Second Lien Shared Security Agreement

<PAGE>

                                       5

          "Assigned Agreements" means, collectively, each of the contracts and
     agreements to which any Grantor is now or may hereafter become a party, in
     each case as such contracts and agreements may be amended, amended and
     restated, supplemented or otherwise modified from time to time, to the
     extent permitted by the Indenture.

          "CoGen Facility" has the meaning specified in Preliminary Statement
     (3).

          "CoGen Guaranteed Parties" has the meaning specified in Preliminary
     Statement (3).

          "CoGen Guaranty" has the meaning specified in Preliminary Statement
     (3).

          "Collateral Trust Agreement" has the meaning specified in Preliminary
     Statement (6).

          "Collateral Trustee" has the meaning specified in the recital of the
     parties hereto.

          "Commercial Tort Claims Collateral" means all commercial tort claims
     described in Schedule VI hereto, provided, however, that any commercial
     tort claim shall not be included in the "Commercial Tort Claims Collateral"
     to the extent, but only to the extent, that the assignment thereof or grant
     of a security interest therein would violate any effective or enforceable
     provision of applicable law.

          "Commodity Account Control Agreement" has the meaning specified in
     Section 5(d).

          "Commodity Accounts" means those commodities accounts of each Grantor
     as described in Part IV of Schedule II hereto.

          "Computer Software" means all computer software, programs and
     databases (including, without limitation, source code, object code and all
     related applications and data files), firmware and documentation and
     materials relating thereto, together with any and all maintenance rights,
     service rights, programming rights, hosting rights, test rights,
     improvement rights, renewal rights and indemnification rights and any
     substitutions, replacements, improvements, error corrections, updates and
     new versions of any of the foregoing.

          "Consent to Assignment of Letter of Credit Rights" means an agreement
     in substantially the form of the Consent to Assignment of Letter of Credit
     Rights attached hereto as Exhibit G or otherwise in form and substance
     reasonably satisfactory to the Collateral Trustee.

          "Copyrights" means all copyrights, including, without limitation,
     copyrights in Computer Software (as hereinafter defined), internet web
     sites and the content thereof, whether registered or unregistered.

          "Credit Agreement" has the meaning specified in Preliminary Statement
     (2).

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          "Designated Accounts" means any Account Collateral that constitutes:
     (a) any deposit accounts listed in Schedule IV hereto and the funds
     credited to any such deposit accounts, and (b) any securities accounts and
     any financial assets that are credited to any such securities accounts.

          "DHI" has the meaning specified in the recital of the parties hereto.

          "Equipment" means all equipment in all of its forms, including,
     without limitation, all machinery, tools, motor vehicles, vessels,
     aircraft, furniture and fixtures, and all parts thereof and all accessions
     thereto and all software related thereto, including, without limitation,
     software that is embedded in and is part of the equipment.

          "Excluded Agreements" has the meaning specified in paragraph (ii) in
     the "notwithstanding" clause at the end of Section 2.

          "Excluded Authorizations" has the meaning specified in paragraph (iii)
     of the "notwithstanding" clause at the end of Section 2.

          "Excluded Equity" has the meaning specified in paragraph (v) of the
     "notwithstanding" clause at the end of Section 2.

          "Excluded Shared Collateral" means any Shared Collateral that, under
     the provisions of paragraph (i) of the "notwithstanding" clause at the end
     of Section 2, is to be excluded from the lien and security interest granted
     by any Grantor under clauses (a) through (j) of Section 2.

          "Federal Book Entry Regulations" means (a) the federal regulations
     contained in Subpart B ("Treasury/Reserve Automated Debt Entry System
     (TRADES)") governing book-entry securities consisting of U.S. Treasury
     bonds, notes and bills and Subpart D ("Additional Provisions") of 31 C.F.R.
     Part 357, 31 C.F.R. Section 357.2, Section 357.10 through Section 357.14
     and Section 357.41 through Section 357.44 and (b) to the extent
     substantially identical to the federal regulations referred to in clause
     (a) above (as in effect from time to time), the federal regulations
     governing other book-entry securities.

          "First Priority Collateral Agent" has the meaning specified in
     Preliminary Statement (2).

          "First Priority Collateral Trustees" has the meaning specified in
     Preliminary Statement (6).

          "First Priority Controlling Collateral Parties" has the meaning
     specified in the Intercreditor Agreement.

          "First Priority Corporate Trustee" has the meaning specified in
     Preliminary Statement (6).

          "First Priority Individual Trustee" has the meaning specified in
     Preliminary Statement (6).

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          "First Priority Lien Satisfaction Date" means the first date on which
     the Priority Lien Obligations are Paid in Full.

          "First Priority Shared Security Agreement" has the meaning specified
     in Preliminary Statement (7).

          "Grantors" has the meaning specified in the recital of the parties
     hereto.

          "Indemnified Party" has the meaning specified in Section 19.

          "Indenture" has the meaning specified in Preliminary Statement (1).

          "Indenture Documents" means the Indenture, the Notes, the Mortgages,
     this Second Lien Shared Security Agreement, the Second Lien Non-Shared
     Security Agreement and the Intercreditor Agreement.

          "Initial Grantors" has the meaning specified in the recital of the
     parties hereto.

          "Initial Pledged Debt" means the indebtedness described in Part II of
     Schedule II hereto.

          "Initial Pledged Equity" means the shares of stock or other Equity
     Interests as described in Part I of Schedule II hereto.

          "Intellectual Property Collateral" means, collectively, the following:
     (a) all Patents; (b) all Trademarks; (c) all Copyrights; (d) all Computer
     Software; (e) all Trade Secrets and all other intellectual, industrial and
     intangible property of any type, including, without limitation, industrial
     designs and mask works; (f) all registrations and applications for
     registration for any of the foregoing, together with all reissues,
     divisions, continuations, continuations-in-part, extensions, renewals and
     reexaminations thereof; (g) all tangible embodiments of the foregoing, all
     rights in the foregoing provided by international treaties or conventions,
     all rights corresponding thereto throughout the world and all other rights
     of any kind whatsoever of any Grantor accruing thereunder or pertaining
     thereto; (h) all agreements, permits, consents, orders and franchises
     relating to the license, development, use or disclosure of any of the
     foregoing to which any Grantor, now or hereafter, is a party or a
     beneficiary ("IP Agreements"); and (i) any and all claims for damages and
     injunctive relief for past, present and future infringement, dilution,
     misappropriation, violation, misuse or breach with respect to any of the
     foregoing, with the right, but not the obligation, to sue for and collect,
     or otherwise recover, such damages.

          "Intellectual Property Second Lien Shared Security Agreement" has the
     meaning specified in Section 11(a).

          "Intercreditor Agreement" has the meaning specified in Preliminary
     Statement (9).

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          "Inventory" means all inventory in all of its forms, including,
     without limitation, (a) all raw materials, work in process, finished goods
     and materials used or consumed in the manufacture, production, preparation
     or shipping thereof, (b) goods in which any Grantor has an interest in mass
     or a joint or other interest or right of any kind, and (c) goods that are
     returned to or repossessed or stopped in transit by any Grantor), and all
     accessions thereto and products thereof and documents therefor, and all
     software related thereto, including, without limitation, software that is
     embedded in and is part of the inventory, provided, however, that goods in
     which any Grantor has an interest or right as consignee shall be excluded
     from the definition of "Inventory".

          "IP Agreements" has the meaning specified in the definition of the
     term "Intellectual Property Collateral" herein.

          "IP Second Lien Shared Security Agreement Supplement" has the meaning
     specified in Section 11(b).

          "Knowledge" means, in the case of the knowledge of a Grantor, the best
     knowledge of such Grantor's executive officers after due inquiry and
     investigation.

          "Mortgages" means each deed of trust, trust deed, mortgage, leasehold
     mortgage and leasehold deed of trust delivered by a Grantor pursuant to the
     Indenture or any instrument evidencing Parity Lien Obligations.

          "Netting Agreements" has the meaning set forth in Section 1.01 of the
     Credit Agreement.

          "Notes" has the meaning specified in Preliminary Statement (1).

          "Obligors" means any Person obligated on an account, chattel paper,
     instrument, or general intangible.

          "Other Deposit Accounts" means those deposit accounts with banks
     opened by each Grantor, as described in Schedule IV and Schedule V hereto.

          "Paid in Full" means (a) the payment in full in cash of (i) all
     principal and interest in respect of the Priority Lien Obligations and (ii)
     all other valid Priority Lien Obligations that are claimed within 30 days
     of the last date on which all principal and interest in respect of the
     Priority Lien Obligations shall have been paid in full and (b) the
     termination in full of all commitments in respect of the Priority Lien
     Obligations. "Payment in Full" shall have the correlative meaning.

          "Parent Guarantor" has the meaning set forth in Preliminary Statement
     (2).

          "Patents" means all patents, patent applications, utility models and
     statutory invention registrations, all inventions claimed or disclosed
     therein and all improvements thereto.

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          "Permitted Collateral" means any of the following property: (a)
     Receivables (together with all general intangibles, and payment intangibles
     related thereto or arising therefrom and all proceeds and products of any
     of the foregoing), (b) cash and short-term investments, and (c) all
     dividends, interest, distributions, and other proceeds from time to time
     received, receivable or otherwise distributed in respect of, or in exchange
     for, any or all of the foregoing.

          "Permitted Contracts" has the meaning set forth in Section 1.01 of the
     Credit Agreement.

          "Pledged Account Banks" has the meaning specified in Section 6(a).

          "Pledged Commodity Contracts" means the commodity contracts carried
     from time to time in each Grantor's Commodity Account.

          "Pledged Debt" has the meaning specified in the definition of the term
     "Security Collateral" herein.

          "Pledged Equity" has the meaning specified in the definition of the
     term "Security Collateral" herein.

          "Pledged Financial Assets" means the financial assets credited from
     time to time to each Grantor's Securities Accounts.

          "Pledged Security Entitlements" means each Grantor's security
     entitlements with respect to the Pledged Financial Assets credited from
     time to time to such Grantor's Securities Accounts.

          "Receivables" means, to the extent the same are not referred to in
     Sections 2(d), 2(e) and 2(f) herein, all accounts (including, without
     limitation, receivables under Permitted Contracts or Netting Agreements),
     chattel paper (including, without limitation, tangible chattel paper and
     electronic chattel paper), instruments (including, without limitation,
     promissory notes), deposit accounts, letter-of-credit rights, general
     intangibles (including, without limitation, payment intangibles) and other
     obligations of any kind, whether or not arising out of or in connection
     with the sale or lease of goods or the rendering of services and whether or
     not earned by performance, and all rights now or hereafter existing in and
     to all supporting obligations and in and to all security agreements,
     mortgages, Liens, leases, letters of credit and other contracts securing or
     otherwise relating to the foregoing property (any and all such supporting
     obligations, security agreements, mortgages, Liens, leases, letters of
     credit and other contracts being referred to herein as the "Related
     Contracts").

          "Required Regulatory Approvals" has the meaning specified in Section
     8(g).

          "Related Contracts" has the meaning specified in the definition of the
     term "Receivables" herein.

          "Riverside Facility" has the meaning specified in Preliminary
     Statement (4).

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                                       10

          "Riverside Guaranteed Parties" has the meaning specified in
     Preliminary Statement (4).

          "Riverside Guaranties" has the meaning specified in Preliminary
     Statement (4).

          "Second Lien Non-Shared Security Agreement" has the meaning specified
     in the Intercreditor Agreement.

          "Second Lien Shared Security Agreement" has the meaning specified in
     the recital of the parties hereto.

          "Second Lien Shared Security Agreement Supplement" has the meaning
     specified in Section 20(c).

          "Second Preferred Fleet Mortgage" means the Second Preferred Fleet
     Mortgage dated as of August 11, 2003 by Midstream Barge Company, L.L.C. in
     favor of the Collateral Trustee, as the same may be amended, amended and
     restated, supplemented, replaced or otherwise modified from time to time in
     accordance with the Indenture and the Intercreditor Agreement.

          "Secured Parties" means each of the Collateral Trustee, the Trustee,
     the holders of any Note, the holders of any other Parity Lien Obligations
     and any other Second Priority Collateral Party.

          "Securities Account Control Agreement" has the meaning specified in
     Section 5(c).

          "Securities Accounts" means those securities accounts of each Grantor
     as described in Part III of Schedule II hereto.

          "Security Collateral" means, collectively, the following:

               (a)  the Initial Pledged Equity and the certificates, if any,
          representing the Initial Pledged Equity, and all dividends,
          distributions, return of capital, cash, instruments and other property
          from time to time received, receivable or otherwise distributed in
          respect of or in exchange for any or all of the Initial Pledged Equity
          and all subscription warrants, rights or options issued thereon or
          with respect thereto;

               (b)  the Initial Pledged Debt and the instruments, if any,
          evidencing the Initial Pledged Debt, and all interest, cash,
          instruments and other property from time to time received, receivable
          or otherwise distributed in respect of or in exchange for any or all
          of the Initial Pledged Debt;

               (c)  all additional shares of stock and other Equity Interests of
          or in any issuer of the Initial Pledged Equity or any successor entity
          from time to time acquired by any Grantor in any manner and all
          additional shares of stock or Equity Interests of or in any new direct
          Subsidiary of any Grantor formed or

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                                       11

          acquired by any Grantor in any manner after the date of this Second
          Lien Shared Security Agreement (such shares and other Equity
          Interests, together with the Initial Pledged Equity, being the
          "Pledged Equity"), and the certificates, if any, representing such
          additional shares or other Equity Interests, and all dividends,
          distributions, return of capital, cash, instruments and other property
          from time to time received, receivable or otherwise distributed in
          respect of or in exchange for any or all of such shares or other
          Equity Interests and all subscription warrants, rights or options
          issued thereon or with respect thereto;

               (d)  all additional indebtedness from time to time owed to any
          Grantor (such indebtedness, together with the Initial Pledged Debt,
          being the "Pledged Debt") and the instruments, if any, evidencing such
          indebtedness, and all interest, cash, instruments and other property
          from time to time received, receivable or otherwise distributed in
          respect of or in exchange for any or all of such indebtedness;

               (e)  the Securities Account, all Pledged Security Entitlements
          with respect to all Pledged Financial Assets from time to time
          credited to the Securities Account, and all Pledged Financial Assets,
          and all dividends, distributions, return of capital, interest, cash,
          instruments and other property from time to time received, receivable
          or otherwise distributed in respect of or in exchange for any or all
          of such Pledged Security Entitlements or such Pledged Financial Assets
          and all subscription warrants, rights or options issued thereon or
          with respect thereto;

               (f)  the Commodities Account, all Pledged Commodity Contracts
          from time to time carried in the Commodities Account, and all value,
          cash, instruments and other property from time to time received,
          receivable or otherwise distributed in respect of or in exchange for
          any or all of such Pledged Commodity Contracts; and

               (g)  all other investment property (including, without
          limitation, all (i) securities, whether certificated or
          uncertificated, (ii) security entitlements, (iii) securities accounts,
          (iv) commodity contracts and (v) commodity accounts) in which any
          Grantor has now, or acquires from time to time hereafter, any right,
          title or interest in any manner, and the certificates or instruments,
          if any, representing or evidencing such investment property, and all
          dividends, distributions, return of capital, interest, distributions,
          value, cash, instruments and other property from time to time
          received, receivable or otherwise distributed in respect of or in
          exchange for any or all of such investment property and all
          subscription warrants, rights or options issued thereon or with
          respect thereto.

          "Security Control Agreements" has the meaning specified in Section
     5(d).

          "Shared Collateral" has the meaning specified in the first paragraph
     of Section 2.

          "Shared Collateral Documents" has the meaning set forth in Section
     1.01 of the Intercreditor Agreement.

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                                       12

          "Subagent" has the meaning specified in Section 17(b).

          "Trademarks" means all trademarks, service marks, domain names, trade
     dress, logos, designs, slogans, trade names, business names, corporate
     names and other source identifiers, whether registered or unregistered
     (provided that no security interest shall be granted in United States
     intent-to-use trademark applications to the extent that, and solely during
     the period in which, the grant of a security interest therein would impair
     the validity or enforceability of such intent-to-use trademark applications
     under applicable federal law), together, in each case, with the goodwill
     symbolized thereby.

          "Trade Secrets" means all confidential and proprietary information,
     including, without limitation, know-how, trade secrets, manufacturing and
     production processes and techniques, inventions, research and development
     information, databases and data, including, without limitation, technical
     data, financial, marketing and business data, pricing and cost information,
     business and marketing plans and customer and supplier lists and
     information.

          "Trustee" has the meaning specified in Preliminary Statement (1).

          "UCC" means the Uniform Commercial Code as in effect, from time to
     time, in the State of New York; provided that, if perfection or the effect
     of perfection or non-perfection or the priority of any security interest in
     any Collateral is governed by the Uniform Commercial Code as in effect in a
     jurisdiction other than the State of New York, "UCC" means the Uniform
     Commercial Code as in effect from time to time in such other jurisdiction
     for purposes of the provisions hereof relating to such perfection, effect
     of perfection or non-perfection or priority.

          "UETA" means the Uniform Electronic Transactions Act, as in effect in
     any relevant jurisdiction.

          Section 2.  Grant of Security. Each Grantor hereby grants to the
Collateral Trustee, in each case, in trust pursuant to the Indenture for the
ratable benefit of the Secured Parties, a security interest in, such Grantor's
right, title and interest in and to the following, in each case, as to each type
of property described below, whether now owned or hereafter acquired by such
Grantor, wherever located, and whether now or hereafter existing or arising
(collectively, the "Shared Collateral"):

          (a)  all Equipment;

          (b)  all Inventory;

          (c)  all Receivables and all Related Contracts;

          (d)  the Security Collateral;

          (e)  the Agreement Collateral;

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                                       13

          (f)  the Account Collateral;

          (g)  the Intellectual Property Collateral;

          (h)  all Commercial Tort Claims Collateral;

          (i)  all books and records (including, without limitation, customer
     lists, credit files, printouts and other computer output materials and
     records) of such Grantor pertaining to any of the Shared Collateral; and

          (j)  all proceeds of, collateral for, income, royalties and other
     payments now or hereafter due and payable with respect to, and supporting
     obligations relating to, any and all of the Shared Collateral (including,
     without limitation, proceeds, collateral and supporting obligations that
     constitute property of the types described in clauses (a) through (i) of
     this Section 2 and this clause (j)) and, to the extent not otherwise
     included, all (A) payments under insurance (whether or not the Collateral
     Trustee is the loss payee thereof), or any indemnity, warranty or guaranty,
     payable by reason of loss or damage to or otherwise with respect to any of
     the foregoing Shared Collateral, (B) tort claims, including, without
     limitation, all commercial tort claims and (C) cash.

          Notwithstanding anything to the contrary contained in this Section 2,
the following property shall be excluded from the lien and security interest
granted hereunder (and shall, as applicable, not be included as "Shared
Collateral", "Equipment", "Inventory", "Receivables", "Related Contracts",
"Security Collateral", "Agreement Collateral", "Account Collateral",
"Intellectual Property Collateral", "Commercial Tort Claims Collateral",
"Assigned Agreements", "Pledged Equity" or "Pledged Debt" for the purposes
hereof):

          (i)    any Shared Collateral constituting property that is the subject
     of or relating to any contract, agreement or other document to which any
     Grantor is a party on the date hereof or any similar contract, agreement or
     other document entered into by such Grantor after the date hereof shall, in
     each case, be excluded from the lien and security interest created by such
     Grantor under this Section 2 to the extent (but only to the extent) that
     the assignment thereof, or the creation of a lien and security interest
     therein, would constitute a breach of the terms of such contract, agreement
     or other document, or would cause a default or event of default under the
     terms of such contract, agreement or other document, or would permit any
     party to such contract, agreement or other document to terminate any
     material contract right arising under any such contract agreement or other
     document or to exercise any put, call, right of refusal, purchase option or
     other similar right, or would permit any party to such contract, agreement
     or other document to terminate such contract, agreement or other document;
     provided, however, that any of the Excluded Shared Collateral shall
     automatically cease to be excluded from this Section 2 at such time as (x)
     the prohibition of assignment or of the creation of a lien and security
     interest in such Excluded Shared Collateral is no longer in effect or is
     rendered ineffective as a matter of law or (y) the applicable Grantor has
     obtained the consent of the other parties to such agreement to the
     assignment of, or creation of a lien and security interest in, such
     Excluded Shared Collateral (which consent such Grantor shall not be
     required to obtain hereunder, except upon a request of the Collateral
     Trustee after the occurrence and during

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                                       14

     the continuance of an Event of Default following the First Priority Lien
     Satisfaction Date) or (z) the breach, default, event of default or any
     other conditions otherwise giving rise to the exclusion of such property
     under this clause (i) shall cease to exist;

          (ii)   any contract, agreement or other document (and any contract
     rights arising thereunder) to which any of the Grantors is a party on the
     date hereof and any similar contract or agreement entered into by any
     Grantor after the date hereof, in each case, shall be excluded from the
     lien and security interest granted by such Grantor under this Section 2 to
     the extent (but only to the extent) that the assignment thereof, or the
     creation of a lien and security interest therein, would constitute a breach
     of the terms of such contract, agreement or other document to which any of
     the Grantors may now or hereafter be a party or to which any Grantor may
     now or hereafter be subject, or would cause a default or event of default
     under the terms of such contract, agreement or other document, or would
     permit any party to such contract, agreement or other document to terminate
     any material contract right arising under any such contract agreement or
     other document or to exercise any put, call, right of refusal, purchase
     option or other similar right, or would permit any party to such contract,
     agreement or other document to terminate such contract, agreement or other
     document (all such contracts, agreements and other documents being the
     "Excluded Agreements"); provided, however, that (x) except as set forth in
     clause (iv) below, the exclusion from the lien and security interest
     granted by such Grantor hereunder of any contract rights of any of the
     Grantors under one or more of the Excluded Agreements shall not limit,
     restrict or impair the grant by such Grantor of the lien and security
     interest in any accounts or receivables arising under any such Excluded
     Agreement or any payments due or to become due thereunder, and (y) any of
     the Excluded Agreements shall automatically cease to be excluded from this
     Section 2 at such time as, (A) the prohibition of assignment or of the
     creation of a lien and security interest in such agreement is no longer in
     effect or is rendered ineffective as a matter of law or (B) the applicable
     Grantor has obtained the consent of the other parties to such agreement to
     the assignment of, or creation of a lien and security interest in, the
     contract rights of such Grantor thereunder (which consent such Grantor
     shall not be required to obtain hereunder, except upon a request of the
     Collateral Trustee after the occurrence and during the continuance of an
     Event of Default following the First Priority Lien Satisfaction Date);

          (iii)  any license, permit or authorization from any Governmental
     Authority (as defined in the Credit Agreement) in favor of any Grantor
     shall be excluded from the lien and security interest granted by such
     Grantor under this Section 2 to the extent (but only to the extent) that
     the assignment thereof or the creation of a lien and security interest
     therein would constitute a breach of or a default or event of default under
     the terms of such license, permit or authorization or would require any
     separate license, permit or authorization or would otherwise terminate such
     license, permit or authorization (all of the licenses, permits and
     authorizations referred to herein being the "Excluded Authorizations");
     provided, however, that any of the Excluded Authorizations shall cease to
     be excluded from this Section 2 at such time as (x) the prohibition of
     assignment or of the creation of a lien and security interest in such
     license, permit or authorization is no longer in effect or is rendered
     ineffective as a matter of law or (y) the applicable Grantor has obtained
     the consent of the applicable Governmental Authority (as defined in the

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                                       15

     Credit Agreement) to the assignment of, or creation of a lien and security
     interest in, such license, permit or authorization of such Grantor (which
     consent such Grantor shall not be required to obtain hereunder, except upon
     a request of the Collateral Trustee after the occurrence and during the
     continuance of an Event of Default following the First Priority Lien
     Satisfaction Date);

          (iv)   any Permitted Collateral of any Grantor from time to time
     pledged, assigned, conveyed or transferred, or against which any right of
     set-off is granted or in which a Lien or security interest is granted, by
     such Grantor under any Permitted Contract or Netting Agreement shall be
     excluded from the lien and security interest granted by such Grantor under
     this Section 2. To the extent any such lien and security interest is deemed
     to be granted pursuant to this Agreement in such Permitted Collateral
     hereunder notwithstanding the exclusion contemplated hereby, such lien and
     security interest shall ipso facto immediately and automatically terminate,
     without any further action by any Person, upon any such pledge, assignment,
     conveyance, transfer, grant of such right of set-off or grant of such Lien
     and security interest, provided, however, that any such Permitted
     Collateral shall cease to be excluded from this Section 2 at such time as
     (x) the Permitted Contract or Netting Agreement, as the case may be,
     related thereto is terminated and the setoff rights, Lien and security
     interest granted in such Permitted Collateral are terminated or (y) the
     applicable Grantor has obtained the consent of the applicable Counterparty
     (as defined in the Credit Agreement) to such Permitted Contracts or Netting
     Agreements to the assignment of, or creation of a lien and security
     interest in such Permitted Collateral hereunder (which consent such Grantor
     shall not be required to obtain hereunder, except upon a request of the
     Collateral Trustee after the occurrence and during the continuance of an
     Event of Default following the First Priority Lien Satisfaction Date);

          (v)    as to each Grantor, any outstanding voting stock of any entity
     that is a controlled foreign corporation under Section 957 of the Internal
     Revenue Code (or any successor provision thereto), except for voting stock
     consisting of no more than 66% of the outstanding voting stock of such
     entity (any such stock being the "Excluded Equity");

          (vi)   any property or accounts (including without limitation, coal,
     power, energy, other energy related products, natural gas, natural gas
     liquids, condensate, and sulfur, and including any other products resulting
     from generating, gas gathering, processing, fractionating and refining,
     marketed by any Grantor on behalf of third parties and the proceeds derived
     therefrom pursuant to processing agreements and/or marketing arrangements),
     to the extent (but only to the extent) that any Grantor manages, maintains
     or markets such property on behalf of a third party, including, without
     limitation, any Shared Collateral maintained, managed or marketed by any
     Grantor for a joint venture in which third parties participate or on behalf
     of third parties;

          (vii)  any policy of insurance, provided, however, that proceeds of
     insurance shall be included as Shared Collateral to the extent the security
     interest granted hereby in the goods covered by such insurance would
     continue in accordance with Section 9-315 of the UCC; and

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          (viii) the shares of stock or such other Equity Interests owned by and
     set forth opposite any relevant Grantor's name on Schedule II-A hereto;

provided, however, that any proceeds received by any Grantor from the
disposition of Excluded Shared Collateral, Excluded Authorizations, Excluded
Equity and any other property excluded under clauses (i) through (viii) above
shall constitute Shared Collateral unless any assets or property constituting
such proceeds are themselves subject to the exclusions set forth in clauses (i)
through (viii) above.

          Section 3.  Security for Obligations. (a) Subject to the provisions of
Sections 3(b) below, this Second Lien Shared Security Agreement secures, in the
case of each Grantor, the payment of all Parity Lien Obligations, whether direct
or indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, fees, premiums, penalties, indemnifications, contract
causes of action, costs, expenses or otherwise. Without limiting the generality
of the foregoing, this Second Lien Shared Security Agreement secures, as to each
Grantor, the payment of all amounts that constitute part of the Parity Lien
Obligations and would be owed by such Grantor to any Secured Party but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving a Grantor.

          (b)  Notwithstanding anything to the contrary set forth in this Second
Lien Shared Security Agreement or any other Indenture Document, any Shared
Collateral that constitutes NGL Assets (as defined in the Indenture) shall
secure any Parity Lien Obligations in an aggregate amount not to exceed (i) the
maximum amount permitted to be secured by the NGL Assets under the 1996
Indenture on the date of incurrence of such Parity Lien Obligations (without
taking into account any First Priority Secured Obligations and Parity Lien
Obligations secured by the NGL Assets prior to the date of such incurrence) less
(ii) the amount of all First Priority Secured Obligations and previously
incurred Parity Lien Obligations secured by NGL Assets on such date, as such
amount shall be set forth in an officers certificate of DHI demonstrating the
calculation thereof in reasonable detail. If Parity Lien Obligations are
incurred on more than one occasion such Parity Lien Obligations shall be treated
as separate tranches each independently secured by the maximum amount permitted
under this clause (b) and each tranche shall share proceeds from any realization
on any such collateral on a ratable basis.

          (c)  Notwithstanding anything to the contrary contained herein, it is
agreed that, with respect to the Parent Guarantor, the "Shared Collateral" shall
include only the Parent Guarantor's right, title and interest to the following,
in each case, whether now owned or hereafter acquired by the Parent Guarantor,
and whether now or hereafter existing or arising:

          (i)   the Initial Pledged Equity set forth opposite the Parent
     Guarantor's name on and otherwise described in Part I of Schedule II hereto
     and issued by DHI and BG Holdings, Inc., respectively, and the
     certificates, if any, representing such Initial Pledged Equity, and all
     dividends, distributions, return of capital, cash, instruments and other
     property from time to time received, receivable or otherwise distributed in
     respect of or in exchange for any or all of such Initial

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     Pledged Equity and all subscription warrants, rights or options issued
     thereon or with respect thereto;

          (ii)  all additional shares of stock and other Equity Interests of or
     in DHI, BG Holdings, Inc. or any successor entity (such shares and other
     Equity Interests, together with the Initial Pledged Equity, being part of
     the Pledged Equity), and the certificates, if any, representing such
     additional shares or other Equity Interests, and all dividends,
     distributions, return of capital, cash, instruments and other property from
     time to time received, receivable or otherwise distributed in respect of or
     in exchange for any or all of such shares or other Equity Interests and all
     subscription warrants, rights or options issued thereon or with respect
     thereto; and

          (iii) all proceeds of, collateral for, income, royalties and other
     payments now or hereafter due and payable with respect to, and supporting
     obligations relating to, any and all of the foregoing.

          It is further acknowledged and agreed that (x) the Parent Guarantor is
signing this Second Lien Shared Security Agreement solely for the purpose of
granting a security interest in the foregoing property, (y) the security
interests granted by the Parent Guarantor hereunder shall not cover any property
of the Parent Guarantor other than the foregoing property, and (z) any
representations, warranties, covenants, and agreements made by the Parent
Guarantor herein shall relate only to the foregoing property.

          Section 4.  Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor's Shared Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Second Lien Shared Security Agreement had not been executed,
(b) the exercise by the Collateral Trustee of any of the rights hereunder shall
not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Shared Collateral and (c) none of the
Collateral Trustee or any Secured Party shall have any obligation or liability
under the contracts and agreements included in the Shared Collateral by reason
of this Second Lien Shared Security Agreement or any other Indenture Document,
nor shall any of the Collateral Trustee or any Secured Party be obligated to
perform any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder or
thereunder.

          Section 5.  Delivery and Control of Security Collateral. (a) Subject
to Section 5(h), with respect to any certificates or instruments representing or
evidencing Security Collateral (other than Permitted Investments), to the extent
that any relevant Grantor has Knowledge of the existence of such certificates
and instruments, such certificates and instruments shall be delivered to and
held by or on behalf of the Collateral Trustee pursuant to this Second Lien
Shared Security Agreement and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance reasonably satisfactory to the
Collateral Trustee. After the occurrence and during the continuance of an Event
of Default following the First Priority Lien Satisfaction Date, the Collateral
Trustee shall have the right, at any time in its discretion and with

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notice to DHI, to transfer to or to register in the name of the Collateral
Trustee or any of its nominees any or all of the Security Collateral, subject
only to the revocable rights specified in Section 13(a), provided, however, that
the failure to deliver any such notice to DHI shall not affect the validity of
such actions of the Collateral Trustee. In addition, after the occurrence and
during the continuance of an Event of Default and subject to the Intercreditor
Agreement, the Collateral Trustee shall have the right at any time to exchange
certificates or instruments representing or evidencing Security Collateral for
certificates or instruments of smaller or larger denominations.

          (b)  Subject to Section 5(h), with respect to any Security Collateral
in which any Grantor has any right, title or interest and that constitutes an
uncertificated security, to the extent that such Grantor has Knowledge of the
existence of such uncertificated securities, such Grantor will cause the issuer
thereof either (at such Grantor's election) (i) to register the Collateral
Trustee as the registered owner of such security or (ii) to agree in an
authenticated record with such Grantor and the Collateral Trustee that such
issuer will comply with instructions with respect to such security originated by
the Collateral Trustee without further consent of such Grantor, such
authenticated record to be in form and substance reasonably satisfactory to the
Collateral Trustee provided, however, that the Collateral Trustee agrees that it
will not deliver any such instructions to such issuer except upon the occurrence
and during the continuance of an Event of Default. With respect to any Security
Collateral in which any Grantor has any right, title or interest and that is not
an uncertificated security, upon the request of the Collateral Trustee after the
occurrence and during the continuance of an Event of Default following the First
Priority Lien Satisfaction Date, such Grantor will notify each such issuer of
Pledged Equity that such Pledged Equity is subject to the security interest
granted hereunder.

          (c)  Subject to Section 5(h), with respect to any Security Collateral
in which any Grantor has any right, title or interest and that constitutes a
security entitlement in which the Collateral Trustee is not the entitlement
holder, to the extent that such Grantor has Knowledge of the existence of such
security entitlements, such Grantor will cause the securities intermediary with
respect to such security entitlement either (at such Grantor's election) (i) to
identify in its records the Collateral Trustee as the entitlement holders of
such security entitlement against such securities intermediary or (ii) to agree
in an authenticated record with such Grantor and the Collateral Trustee that
such securities intermediary will comply with entitlement orders (that is,
notifications communicated to such securities intermediary directing transfer or
redemption of the financial asset to which such Grantor has a security
entitlement) originated by the Collateral Trustee without further consent of
such Grantor, such authenticated record to be in substantially the form of
Exhibit C hereto or otherwise in form and substance reasonably satisfactory to
the Collateral Trustee (such agreement being a "Securities Account Control
Agreement").

          (d)  Subject to Section 5(h), with respect to any Security Collateral
in which any Grantor has any right, title or interest and that constitutes a
commodity contract, to the extent that such Grantor has Knowledge of the
existence of such commodity contracts, such Grantor shall cause the commodity
intermediary with respect to such commodity contract to agree in an
authenticated record with such Grantor and the Collateral Trustee that such
commodity intermediary will apply any value distributed on account of such
commodity contract as directed by the Collateral Trustee without further consent
of such Grantor, such authenticated record to be in substantially the form of
Exhibit D hereto or otherwise in form and substance reasonably

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satisfactory to the Collateral Trustee (such agreement being a "Commodity
Account Control Agreement", and all such authenticated records, together with
all Securities Account Control Agreements being, collectively, "Security Control
Agreements").

          (e)  No Grantor will change or add any securities intermediary or
commodity intermediary that maintains any securities account or commodity
account in which any of the Shared Collateral is credited or carried, or change
or add any such securities account or commodity account, in each case without
first complying with the above provisions of this Section 5 in order to perfect
the security interest granted hereunder in such Shared Collateral. For the
avoidance of doubt, the provisions of this Section 5(e) shall not apply to any
securities account or commodity account that any Grantor manages or maintains on
behalf of third parties, such as securities accounts and commodity accounts
maintained or managed by any Grantor for a joint venture in which third parties
participate.

          (f)  Upon the request of the Collateral Trustee upon the occurrence
and during the continuance of an Event of Default following the First Priority
Lien Satisfaction Date, such Grantor will notify each such issuer of Pledged
Debt that such Pledged Debt is subject to the security interest granted
hereunder.

          (g)  To the extent that any of the Shared Collateral constituting
money or any of the Account Collateral or any Security Collateral is subject to
a Permitted Lien and such Permitted Lien has been perfected through control (as
such term is used in Sections 9-104 and 9-106 of the UCC) or possession,
perfection through possession or control of the security interest created
hereunder shall not be required.

          (h)  Notwithstanding anything to the contrary set forth in this
Section 5 or any other provision of this Second Lien Shared Security Agreement,
until the First Priority Lien Satisfaction Date, Grantors shall not be required
to (i) take any of the actions required under Sections 5(a) through 5(d) herein
or (ii) take any other actions with respect to any Collateral that would violate
or be inconsistent with the terms of the Intercreditor Agreement or the First
Priority Shared Security Agreement. Subject to the terms of the Intercreditor
Agreement, the Grantors shall comply with the provisions set forth in Sections 5
and 9 of the First Priority Shared Security Agreement until the First Priority
Lien Satisfaction Date. Under the terms of Section 2.09 of the Intercreditor
Agreement, the First Priority Collateral Parties have agreed to act as bailees
on behalf of the Collateral Trustee in respect of certain Collateral on the
terms and conditions set forth therein.

          Section 6.  Maintaining the Account Collateral. Following the First
Priority Lien Satisfaction Date and so long as any Parity Lien Obligations
(other than indemnification obligations that are not yet due and payable) which
are accrued and payable shall remain unpaid and unsatisfied and subject to the
Intercreditor Agreement:

          (a)  Each Grantor will maintain all Designated Accounts only with the
     Collateral Trustee or with banks (the "Pledged Account Banks") that have
     agreed, in a record authenticated by the Grantor, the Collateral Trustee
     and the Pledged Account Banks, to (i) comply with instructions originated
     by the Collateral Trustee (as set forth in the Account Control Agreement)
     directing the disposition of funds in the Designated

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     Accounts without the further consent of the Grantor and (ii) waive or
     subordinate (other than as agreed between any Pledged Account Bank and the
     Collateral Trustee) in favor of the Collateral Trustee all claims of the
     Pledged Account Banks (including, without limitation, claims by way of a
     security interest, lien or right of setoff or right of recoupment) to the
     Account Collateral, which authenticated record shall be substantially in
     the form of Exhibit B hereto, or shall otherwise be in form and substance
     reasonably satisfactory to the Collateral Trustee (the "Account Control
     Agreement"); provided, however, this Section 6(a) shall not apply to Other
     Deposit Accounts listed in Schedule V hereto, as such Schedule may be
     updated from time to time.

          (b)  Subject in all respects to the provisions of Section 5(g) hereof,
     each Grantor agrees that it will not add any bank that maintains a deposit
     account for such Grantor or open any new deposit account with any then
     existing Pledged Account Bank unless (i) the Collateral Trustee shall have
     received at least 10 days' prior written notice of such additional bank or
     such new deposit account and (ii) the Collateral Trustee shall have
     received, in the case of a bank or Pledged Account Bank that is not the
     Collateral Trustee, an Account Control Agreement authenticated by such new
     bank and such Grantor, or a supplement to an existing Account Control
     Agreement with such then existing Pledged Account Bank, covering such new
     deposit account (and, upon the receipt by the Collateral Trustee of such
     Account Control Agreement or supplement, Schedule IV hereto shall be
     automatically amended to include such Other Deposit Account). Each Grantor
     may terminate any bank as a Pledged Account Bank or terminate any
     Designated Account, if it gives the Collateral Trustee at least 10 days'
     prior written notice of such termination (and, upon such termination,
     Schedule IV hereto shall be automatically amended to delete such Pledged
     Account Bank and Other Deposit Account without any additional formal
     actions or agreements). For the avoidance of doubt, the provisions of this
     Section 6(b) shall not apply to any deposit account that any Grantor
     manages or maintains on behalf of third parties, such as deposit accounts
     maintained or managed by any Grantor for a joint venture in which third
     parties participate.

          (c)  Subject in all respects to the provisions of Section 5(g) hereof,
     upon any termination by a Grantor of any Other Deposit Account by such
     Grantor, or any Pledged Account Bank with respect thereto, such Grantor
     will promptly (i) either (at such Grantor's election), (A) comply with the
     provisions regarding the opening of new deposit accounts as set forth in
     the first sentence of Section 6(b) or (B) subject to the restrictions set
     forth in Section 6(f), transfer all funds and property held in such
     terminated Other Deposit Account to another Other Deposit Account listed in
     Schedule IV and (ii) notify all Obligors that were making payments to such
     Other Deposit Account to make all future payments to another Other Deposit
     Account listed in Schedule IV hereto, in each case so that the Collateral
     Trustee shall have a continuously perfected security interest in such
     Designated Accounts. Subject in all respects to the provisions of Section
     5(g) hereof, after the occurrence and during the continuance of an Event of
     Default following the First Priority Lien Satisfaction Date, each Grantor
     agrees to terminate any or all Account Collateral and Account Control
     Agreements upon request by the Collateral Trustee.

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          (d)  Upon the occurrence and during the continuance of an Event of
     Default following the First Priority Lien Satisfaction Date, the Collateral
     Trustee shall have sole right to direct the disposition of funds with
     respect to each of the Designated Accounts.

          (e)  Following the First Priority Lien Satisfaction Date, the
     Collateral Trustee may, at any time after notice to DHI (provided, however,
     that the failure to give any such notice to DHI shall not affect the
     validity of any action taken by the Collateral Trustee pursuant to the
     provisions of this Section 6(e)), but without consent from the Grantor,
     transfer, or direct the transfer of, funds from the Designated Accounts to
     satisfy the Grantor's obligations under this Second Lien Shared Security
     Agreement if (A) a payment default in respect of principal under this
     Second Lien Shared Security Agreement shall have occurred and be continuing
     for a period greater than or equal to three Business Days, or (B) a payment
     default in respect of any amount other than principal due under this Second
     Lien Shared Security Agreement shall have occurred and be continuing for a
     period greater than or equal to five Business Days, or (C) an acceleration
     of the Parity Lien Debt shall have occurred and be continuing.

          (f)  Each of the Grantors agrees that at no time shall the aggregate
     amount on deposit in the Other Deposit Accounts listed in Schedule V hereto
     (other than any Other Deposit Account that is subject to a Permitted Lien)
     exceed $20,000,000.

          Section 7.  Maintaining Electronic Chattel Paper, Transferable Records
and Letter-of-Credit Rights and Giving Notice of Commercial Tort Claims. So long
as any Parity Lien Obligations (other than indemnification obligations that are
not yet due and payable) which are accrued and payable shall remain unsatisfied:

          (a)  Following the First Priority Lien Satisfaction Date, each Grantor
     will maintain all (i) electronic chattel paper (to the extent that such
     Grantor has Knowledge of the existence of such electronic chattel paper) so
     that the Collateral Trustee have control of the electronic chattel paper in
     the manner specified in Section 9-105 of the UCC and (ii) all transferable
     records (to the extent that such Grantor has Knowledge of the existence of
     such transferable records) so that the Collateral Trustee have control of
     the transferable records in the manner specified in Section 16 of the UETA;
     and

          (b)  Each Grantor will immediately give notice to the Collateral
     Trustee of any material commercial tort claim that may arise in the future
     and will immediately execute or otherwise authenticate a supplement to this
     Second Lien Shared Security Agreement, and otherwise take all necessary
     action, to subject such material commercial tort claim to the security
     interest created under this Second Lien Shared Security Agreement provided,
     however, that any commercial tort claim shall not be covered by the
     provisions of this Section 7(b) to the extent, but only to the extent, that
     the assignment thereof or grant of a security interest therein would
     violate any effective or enforceable provision of applicable law.

          Section 8.  Representations and Warranties. Each Grantor represents
and warrants as follows:

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          (a)  As of the date hereof, such Grantor's exact legal name, which is
     sufficient in accordance with Section 9-503(a) of the UCC, is correctly set
     forth in Schedule I hereto. With respect to each Grantor that is not a
     "registered organization" as such term is defined in Section 9-102 of the
     UCC, such Grantor has its chief executive office in the state or
     jurisdiction set forth in Schedule I hereto. Within the five years
     preceding the execution of this Second Lien Shared Security Agreement, the
     information set forth in Schedule I hereto with respect to such Grantor is
     true and accurate in all respects, except to the extent that failure of
     such information to be true and accurate could not reasonably be expected
     to result in a Material Adverse Effect (as defined in the Credit
     Agreement). To the Knowledge of such Grantor, such Grantor has not
     previously changed its name, the location of its chief executive office,
     type of organization, jurisdiction of organization or organizational
     identification number (if such Grantor, now or has been organized in a
     jurisdiction that requires the organizational number of a debtor to be
     identified on the relevant financing statement in order to create a
     perfected second priority security interest) from those set forth in
     Schedule I hereto except as disclosed in Schedule III hereto.

          (b)  Subject to Section 5(h), all Security Collateral consisting of
     certificated securities and instruments (other than Permitted Investments),
     have to the Knowledge of the relevant Grantor been delivered to the
     Collateral Trustee. Subject to Section 5(h), to the Knowledge of the
     relevant Grantor, none of the Receivables or Agreement Collateral is
     evidenced by a promissory note or other instrument that has not been
     delivered to the Collateral Trustee.

          (c)  Such Grantor is the legal and beneficial owner of the Shared
     Collateral of such Grantor free and clear of any Lien, claim, option or
     right of others, except for Permitted Liens or the security interest
     created under this Second Lien Shared Security Agreement. No effective
     financing statement or other instrument similar in effect covering all or
     any part of such Shared Collateral or listing such Grantor or any trade
     name of such Grantor as debtor is on file in any recording office, except
     (i) such as may have been filed in favor of the First Priority Controlling
     Collateral Parties relating to the First Priority Shared Secured Agreement,
     (ii) such as may have been filed in favor of the Collateral Trustee
     relating to this Second Lien Shared Security Agreement or (iii) as
     otherwise permitted under the Indenture.

          (d)  Subject to Section 5(h), with respect to the Pledged Equity that
     is an uncertificated security, to the extent that such Grantor has
     Knowledge of the existence of any such uncertificated securities, such
     Grantor has caused the issuer thereof either (at such Grantor's election)
     (i) to register the Collateral Trustee as the registered owner of such
     security or (ii) to agree in an authenticated record with such Grantor and
     the Collateral Trustee that such issuer will comply with instructions with
     respect to such security originated by the Collateral Trustee without
     further consent of such Grantor provided, however, that the Collateral
     Trustee agrees that they will not deliver any such instructions to such
     issuer except upon the occurrence and during the continuance of an Event of
     Default. If such Grantor is an issuer of Pledged Equity, such Grantor
     confirms that it has received notice of such security interest. Subject to
     Section 5(h), with respect to all Security Collateral consisting of
     certificated securities and instruments, to the

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                                       23

     extent that the relevant Grantor has Knowledge of the existence of such
     certificated securities and instruments, all such certificated securities
     and instruments have been delivered to the Collateral Trustee.

          (e)  The Initial Pledged Equity pledged by such Grantor constitutes
     the percentage of the issued and outstanding Equity Interests of the
     issuers thereof indicated on Schedule II hereto.

          (f)  Subject in all respects to the provisions of Section 5(g) hereof,
     to the Knowledge of the relevant Grantor, such Grantor has no deposit
     accounts, other than the Account Collateral listed on Schedule IV hereto,
     as such Schedule IV may be amended from time to time pursuant to Section
     6(b), and to the Knowledge of the relevant Grantor, legal, binding and
     enforceable Account Control Agreements with the First Priority Controlling
     Collateral Parties are in effect for each deposit account that constitutes
     Account Collateral (other than Account Collateral consisting of deposit
     accounts maintained with the First Priority Controlling Collateral
     Parties), except to the extent such Account Control Agreements are not
     required by Sections 5(g) or 6(a). For the avoidance of doubt, the
     representations and warranties in this Section 8(f) do not apply with
     respect to any deposit account that any Grantor manages or maintains on
     behalf of third parties, such as deposit accounts maintained or managed by
     any Grantor for a joint venture in which third parties participate.

          (g)  Except for the consent of the First Priority Collateral Trustees
     which has been obtained and subject in all respects to the provisions of
     Sections 5(g) and 5(h) hereof, to the Knowledge of the relevant Grantor,
     all filings and other actions (including without limitation, (A) actions
     necessary to obtain control of Shared Collateral as provided in Sections
     9-104, 9-105 and 9-106 of the UCC and Section 16 of UETA and (B) actions
     necessary to perfect the Collateral Trustee's security interest with
     respect to Shared Collateral constituting certificated securities or
     instruments) (excluding (X) notices to state regulators in the State of
     North Carolina and (Y) approvals of the New York State Public Service
     Commission that may be required in connection with the creation or
     perfection of a Lien on any Shared Collateral (the "Required Regulatory
     Approvals") which the applicable Grantor will use all commercially
     reasonable efforts to obtain as promptly as reasonably practicable after
     the date hereof) necessary to perfect the security interest in the Shared
     Collateral of such Grantor created under this Second Lien Shared Security
     Agreement have been duly made or taken and are in full force and effect,
     and this Second Lien Shared Security Agreement creates in favor of the
     Collateral Trustee for the benefit of the Secured Parties a valid and,
     together with such filings and other actions, perfected security interest
     in the Shared Collateral of such Grantor, securing the payment of the
     Parity Lien Obligations except, in each case, (i) as is otherwise permitted
     pursuant to the express provisions of this Second Lien Shared Security
     Agreement, (ii) for Permitted Liens and (iii) where the Required Regulatory
     Approvals must be obtained.

          (h)  To the Knowledge of the relevant Grantor, the Grantor has no
     commercial tort claims other than those listed in Schedule VI hereto.

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          Section 9.  Further Assurances. (a) Subject to Section 5(h) and the
Intercreditor Agreement, each Grantor agrees that from time to time, at the
expense of such Grantor, such Grantor will promptly execute and deliver, or
otherwise authenticate, all further instruments and documents, and take all
further action that (to the Knowledge of such Grantor) may be necessary, or that
the Collateral Trustee reasonably may request, in order to perfect and protect
any pledge, assignment or security interest granted or purported to be granted
by such Grantor hereunder or to enable the Collateral Trustee to exercise and
enforce its rights and remedies hereunder with respect to any Shared Collateral
of such Grantor. Without limiting the generality of the foregoing, each Grantor
will promptly with respect to Shared Collateral of such Grantor and subject to
the Indenture, Section 5(h) hereof and the Intercreditor Agreement (and the
right of the First Priority Controlling Collateral Parties to have such actions
taken for their benefit): (i) if any such Shared Collateral shall be evidenced
by a promissory note or other instrument or chattel paper and if such Grantor
has Knowledge of the existence of any such promissory notes, instruments, or
chattel paper, deliver and pledge to the Collateral Trustee hereunder such note
or instrument or chattel paper duly indorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance reasonably
satisfactory to the Collateral Trustee; (ii) execute or authenticate and file
such financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary, or as the Collateral Trustee
reasonably may request, in order to perfect and preserve the security interest
granted or purported to be granted by such Grantor hereunder; (iii) with respect
to any certificates representing Security Collateral that constitutes
certificated securities, to the extent that the relevant Grantor has Knowledge
of the existence of such certificates, deliver and pledge to the Collateral
Trustee for ratable benefit of the Secured Parties certificates representing
Security Collateral that constitutes certificated securities, accompanied by
undated stock or bond powers executed in blank; (iv) subject in all respects to
the provisions of Section 5(g) hereof, with respect to any Shared Collateral
consisting of deposit accounts, electronic chattel paper, investment property or
transferable records, to the extent that the relevant Grantor has Knowledge of
the existence of such deposit accounts, electronic chattel paper, investment
property or transferable records, take all action necessary to ensure that the
Collateral Trustee has control of Shared Collateral consisting of deposit
accounts, electronic chattel paper, investment property and transferable records
as provided in Sections 9-104, 9-105 and 9-106 of the UCC and in Section 16 of
UETA; (v) upon the occurrence and during the continuance of an Event of Default,
at the request of the Collateral Trustee, take all action to ensure that the
Collateral Trustee's security interest is noted on any certificate of title
related to any Shared Collateral evidenced by a certificate of title; and (vi)
deliver to the Collateral Trustee evidence that all other action that the
Collateral Trustee may deem reasonably necessary in order to perfect and protect
the security interest created by such Grantor under this Second Lien Shared
Security Agreement has been taken.

          (b)  Each Grantor hereby authorizes the Collateral Trustee to file one
or more financing and continuation statements, and amendments thereto, relating
to all or any part of the Shared Collateral of such Grantor without the
signature of such Grantor where permitted by law. A photocopy or other
reproduction of this Second Lien Shared Security Agreement or any financing
statement covering the Shared Collateral or any part thereof shall be sufficient
as a financing statement where permitted by law. Each Grantor ratifies its
authorization for the Collateral Trustee to have filed such financing
statements, continuation statements or amendments filed prior to the date
hereof.

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          (c)  Each Grantor will furnish to the Collateral Trustee from time to
time statements and schedules further identifying and describing the Shared
Collateral of such Grantor and such other reports in connection with such Shared
Collateral as the Collateral Trustee may reasonably request, all in reasonable
detail.

          Section 10. Post-Closing Changes; Bailees; Collections on Receivables
and Related Contracts. (a) No Grantor will change its name, type of
organization, jurisdiction of organization, organizational identification number
(if such Grantor is organized in a jurisdiction that requires the organizational
number of a debtor to be identified on a financing statement in order to create
a perfected second priority security interest) or location of its chief
executive office (in the case only of a Grantor that is not a "registered
organization", as such term is defined in Section 9-102 of the UCC) from those
set forth in Section 8(a) of this Second Lien Shared Security Agreement without
first giving at least 30 days' prior written notice to the Collateral Trustee
and taking all action required by the Collateral Trustee for the purpose of
perfecting or protecting the security interest granted by this Second Lien
Shared Security Agreement. Except with respect to security agreements related to
Permitted Liens, no Grantor will become bound by a security agreement
authenticated by another Person (determined as provided in Section 9-203(d) of
the UCC) without giving the Collateral Trustee 30 days' prior written notice
thereof and taking all action required by the Collateral Trustee to ensure that
the perfection and second priority nature of the Collateral Trustee's security
interest in the Shared Collateral will be maintained. If any Grantor that is
organized in a jurisdiction that requires the organizational number of a debtor
to be identified on a relevant financing statement in order to create a
perfected second priority security interest does not have an organizational
identification number and later obtains one, it will forthwith notify the
Collateral Trustee of such organizational identification number.

          (b)  If any Shared Collateral constituting goods of any Grantor is, to
the Knowledge of such Grantor, at any time in the possession or control of a
warehouseman, bailee or agent, or if the Collateral Trustee so requests, such
Grantor will (i) notify such warehouseman, bailee or agent of the security
interest created hereunder and under the First Priority Shared Security
Agreement, (ii) instruct such warehouseman, bailee or agent to hold all such
Shared Collateral solely for the Collateral Trustee's account subject (A) to the
Intercreditor Agreement (and the prior rights of the First Priority Controlling
Collateral Parties on behalf of the holders of the First Priority Obligations)
and (B) after the First Priority Lien Satisfaction Date, to the Collateral
Trustee's instructions (which shall permit such Shared Collateral to be removed
by such Grantor in the ordinary course of business until the Collateral Trustee
notifies such warehouseman, bailee or agent that an Event of Default has
occurred and is continuing), (iii) use commercially reasonable efforts, to cause
such warehouseman, bailee or agent to authenticate a record acknowledging that
it holds possession of such Shared Collateral for the applicable First Priority
Controlling Collateral Parties' and Collateral Trustee's benefit and shall,
after the First Priority Lien Satisfaction Date, act solely on the instructions
of the Collateral Trustee without the further consent of the Grantor or any
other Person; provided, however, that the Collateral Trustee agrees that it will
not deliver any such instructions to such issuer except upon the occurrence and
during the continuance of an Event of Default following the First Priority Lien
Satisfaction Date, and (iv) make such authenticated record available to the
Collateral Trustee.

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          (c)  Except as otherwise provided in this subsection (c), each Grantor
will continue to collect, at its own expense, all amounts due or to become due
such Grantor under the Assigned Agreements, Receivables and Related Contracts.
In connection with such collections, such Grantor may take (and, at the
Collateral Trustee's direction given after the occurrence and during the
continuance of an Event of Default following the First Priority Lien
Satisfaction Date, will take) such action as such Grantor or the Collateral
Trustee may deem necessary to enforce collection of the Assigned Agreements,
Receivables and Related Contracts; provided, however, that the Collateral
Trustee shall have the right at any time, upon the occurrence and during the
continuance of an Event of Default following the First Priority Lien
Satisfaction Date, and upon written notice to such Grantor of its intention to
do so, to notify the Obligors under any Receivables and Related Contracts of the
assignment of such Receivables and Related Contracts to the Collateral Trustee
and to direct such Obligors to make payment of all amounts due or to become due
to such Grantor thereunder directly to the Collateral Trustee and, upon such
notification and at the expense of such Grantor, to enforce collection of any
such Receivables and Related Contracts, to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as such
Grantor might have done, and to otherwise exercise all rights with respect to
such Receivables and Related Contracts, including, without limitation, those set
forth set forth in Section 9-607 of the UCC. After receipt by any Grantor of the
notice from the Collateral Trustee referred to in the proviso to the preceding
sentence, (i) all amounts and proceeds (including, without limitation,
instruments) received by such Grantor in respect of the Receivables and Related
Contracts of such Grantor shall be received in trust for the benefit of the
Collateral Trustee hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Collateral Trustee in the same
form as so received (with any necessary indorsement) to be applied as provided
in the Intercreditor Agreement and (ii) such Grantor will not adjust, settle or
compromise the amount or payment of any Receivable or amount due on any Related
Contract, release wholly or partly any Obligor thereof, or allow any credit or
discount thereon except in the ordinary course of such Grantor's business. For
the avoidance of doubt, none of the provisions of this Section 10(c) shall apply
with respect to any Property that is excluded from the lien and security
interest granted hereunder pursuant to the provisions of paragraphs (i), (ii),
(iii), (iv), (v), (vi), (vii) or (viii) of the "notwithstanding" clause at the
end of Section 2, including, but not limited to, Excluded Shared Collateral,
Excluded Authorizations, Permitted Collateral or Excluded Equity.

          Section 11. As to Intellectual Property Collateral. (a) With
respect to its material Intellectual Property Collateral, each Grantor agrees,
upon the request of the Collateral Trustee, to execute or otherwise authenticate
an agreement in substantially the form set forth in Exhibit E hereto or
otherwise in form and substance reasonably satisfactory to the Collateral
Trustee (an "Intellectual Property Second Lien Shared Security Agreement"), for
recording the security interest granted hereunder to the Collateral Trustee in
such Intellectual Property Collateral with the U.S. Patent and Trademark Office,
the U.S. Copyright Office and any other governmental authorities necessary to
perfect the security interest hereunder in such material Intellectual Property
Collateral; provided that such Intellectual Property Collateral is granted to
the First Priority Controlling Collateral Parties.

          (b)  Each Grantor agrees that should it obtain an ownership interest
in any item of the type set forth in Section 2(g) that is not on the date hereof
a part of the Intellectual Property Collateral ("After-Acquired Intellectual
Property") (i) the provisions of this Second Lien Shared

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Security Agreement shall automatically apply thereto, and (ii) any such
After-Acquired Intellectual Property and, in the case of trademarks, the
goodwill symbolized thereby, shall automatically become part of the Intellectual
Property Collateral subject to the terms and conditions of this Second Lien
Shared Security Agreement with respect thereto; provided that such Intellectual
Property Collateral is granted to the First Priority Controlling Collateral
Parties. At the end of each fiscal quarter of DHI, each Grantor shall give
written notice to the Collateral Trustee identifying any material After-Acquired
Intellectual Property acquired during such fiscal quarter, and upon the request
of the Collateral Trustee, such Grantor shall execute and deliver to the
Collateral Trustee with such written notice, or otherwise authenticate, an
agreement substantially in the form of Exhibit F hereto or otherwise in form and
substance reasonably satisfactory to the Collateral Trustee (an "IP Second Lien
Shared Security Agreement Supplement") covering such material After-Acquired
Intellectual Property which IP Second Lien Shared Security Agreement Supplement
shall be recorded with the U.S. Patent and Trademark Office, the U.S. Copyright
Office and any other governmental authorities necessary to perfect the security
interest hereunder in such material After-Acquired Intellectual Property;
provided that such Intellectual Property Collateral is granted to the First
Priority Controlling Collateral Parties.

          Section 12. Voting Rights; Dividends; Etc. (a) So long as no Event of
Default shall have occurred and be continuing:

          (i)   Each Grantor shall be entitled to exercise any and all voting
     and other consensual rights pertaining to the Security Collateral of such
     Grantor or any part thereof for any purpose; provided however, that such
     Grantor will not exercise or refrain from exercising any such right if such
     action could reasonably be expected to result in a Material Adverse Effect
     (as defined in the Credit Agreement).

          (ii)  Each Grantor shall be entitled to receive and retain any and all
     dividends, interest and other distributions paid in respect of the Security
     Collateral of such Grantor if and to the extent that the payment thereof is
     not otherwise prohibited by the terms of this Second Lien Shared Security
     Agreement; provided, however, that any and all dividends, interest and
     other distributions paid or payable other than in cash in respect of, and
     instruments and other property received, receivable or otherwise
     distributed in respect of, or in exchange for, any Security Collateral
     shall be, and shall be forthwith delivered to the First Priority
     Controlling Collateral Parties, or following the First Priority Lien
     Satisfaction Date, the Collateral Trustee to hold as, Security Collateral
     and shall, if received by such Grantor, be received in trust for the
     benefit of the Collateral Trustee, be segregated from the other property or
     funds of such Grantor and be forthwith delivered to the Collateral Trustee
     as Security Collateral in the same form as so received (with any necessary
     indorsement).

          (iii) Following the First Priority Lien Satisfaction Date, the
     Collateral Trustee will execute and deliver (or cause to be executed and
     delivered) to each Grantor all such proxies and other instruments as such
     Grantor may reasonably request for the purpose of enabling such Grantor to
     exercise the voting and other rights that it is entitled to exercise
     pursuant to paragraph (i) above and to receive the dividends or interest
     payments that it is authorized to receive and retain pursuant to paragraph
     (ii) above.

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          (b)  Upon the occurrence and during the continuance of an Event of
Default, subject to the Intercreditor Agreement and notice to DHI (provided that
the failure to give any such notice shall not affect the validity of any of the
following actions taken by the Collateral Trustee):

          (i)   All rights of each Grantor (x) to exercise or refrain from
     exercising the voting and other consensual rights that it would otherwise
     be entitled to exercise pursuant to Section 12(a)(i) shall, upon notice to
     such Grantor by the First Priority Controlling Collateral Parties, or
     following the First Priority Lien Satisfaction Date, the Collateral
     Trustee, cease and (y) to receive the dividends, interest and other
     distributions that it would otherwise be authorized to receive and retain
     pursuant to Section 12(a)(ii) shall automatically cease, and all such
     rights shall thereupon become vested in the First Priority Controlling
     Collateral Parties, or following the First Priority Lien Satisfaction Date,
     the Collateral Trustee, who shall thereupon have the sole right to exercise
     or refrain from exercising such voting and other consensual rights and to
     receive and hold as collateral such dividends, interest and other
     distributions.

          (ii)  All dividends, interest and other distributions that are
     received by any Grantor contrary to the provisions of paragraph (i) of this
     Section 12(b) shall be received in trust for the benefit of the Collateral
     Trustee, shall be segregated from other funds of such Grantor and shall be
     forthwith paid over to the First Priority Controlling Collateral Parties,
     or following the First Priority Lien Satisfaction Date, the Collateral
     Trustee as collateral in the same form as so received (with any necessary
     indorsement).

          (iii) Following the First Priority Lien Satisfaction Date, the
     Collateral Trustee shall be authorized to send to each Securities
     Intermediary or Commodity Intermediary as defined in and under any Security
     Control Agreement a Notice of Exclusive Control as defined in and under
     such Security Control Agreement.

          Section 13. As to Letter-of-Credit Rights. (a) Each Grantor, by
granting a security interest in its Receivables consisting of letter-of-credit
rights to the Collateral Trustee, intends to (and hereby does) assign to the
Collateral Trustee its rights (including its contingent rights) to the proceeds
of all Related Contracts consisting of letters of credit of which it is or
hereafter becomes a beneficiary or assignee, subject to the prior rights of the
First Priority Controlling Collateral Parties therein for the benefit of the
holders of the First Priority Obligations. Following the First Priority Lien
Satisfaction Date and upon the request of the Collateral Trustee after the
occurrence and during the continuance of an Event of Default and subject to the
Intercreditor Agreement, each Grantor will promptly use its commercially
reasonable efforts to cause the issuer of each letter of credit and each
nominated person (if any) with respect thereto to consent to such assignment of
the proceeds thereof in a Consent to Assignment of Letter of Credit Rights.

          (b)  Upon the occurrence and during the continuance of an Event of
Default following the First Priority Lien Satisfaction Date, each Grantor will,
promptly upon request by the Collateral Trustee, (i) notify (and such Grantor
hereby authorizes the Collateral Trustees to notify) the issuer and each
nominated person with respect to each of the Related Contracts consisting of
letters of credit that the proceeds thereof have been assigned to the Collateral

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Trustee hereunder and any payments due or to become due in respect thereof are
to be made directly to the Collateral Trustee or its designee.

          (c)  With respect to any Securities Account Control Agreement,
Commodity Accounts Control Agreement, Account Control Agreement or Consent to
Assignment of Letter of Credit Rights, the Collateral Trustee agrees that it
will not issue any entitlement orders or other directions, instructions or
notifications thereunder with respect to the disposition or transfer of any
Shared Collateral therein addressed or blocking any Grantor's ability to deal
with any such Shared Collateral, except upon the occurrence and during the
continuance of an Event of Default following the First Priority Lien
Satisfaction Date. The Collateral Trustee further agrees that, upon its issuance
of any such entitlement orders, directions, instructions or notifications, it
will promptly provide a copy thereof to the relevant Grantor.

          Section 14. Transfers and Other Liens; Additional Shares. (a) Each
Grantor agrees that it will not (i) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Shared Collateral, other than
sales, assignments and other dispositions of Shared Collateral, and options
relating to Shared Collateral, permitted under the terms of the Indenture and
Intercreditor Agreement or (ii) create or suffer to exist any Lien upon or with
respect to any of the Shared Collateral of such Grantor except for the pledge,
assignment and security interest created under this Second Lien Shared Security
Agreement and Liens permitted under the Indenture.

          (b)  Each Grantor agrees that it will pledge hereunder, promptly upon
its acquisition (directly or indirectly) thereof, any and all additional Equity
Interests or other securities that are issued by any Grantor and are Pledged
Equity.

          Section 15. Collateral Trustee Appointed Attorney-in-Fact. Subject to
the Indenture and the Intercreditor Agreement, each Grantor hereby irrevocably
appoints the Collateral Trustee such Grantor's attorney-in-fact, with full
authority in the place and stead of such Grantor and in the name of such Grantor
or otherwise, from time to time, upon the occurrence and during the continuance
of an Event of Default following the First Priority Lien Satisfaction Date, in
the Collateral Trustee's discretion, to take any action and to execute any
instrument that the Collateral Trustee may deem necessary or advisable to
accomplish the purposes of this Second Lien Shared Security Agreement,
including, without limitation:

          (a)  to obtain and adjust insurance required to be paid to the
     Collateral Trustee pursuant to the provisions of the Indenture,

          (b)  to ask for, demand, collect, sue for, recover, compromise,
     receive and give acquittance and receipts for moneys due and to become due
     under or in respect of any of the Shared Collateral,

          (c)  to receive, indorse and collect any drafts or other instruments,
     documents and chattel paper, in connection with clause (a) or (b) above,
     and

          (d)  to file any claims or take any action or institute any
     proceedings that the Collateral Trustee may deem necessary or desirable for
     the collection of any of the Shared Collateral or otherwise to enforce
     compliance with the terms and conditions of

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     any Assigned Agreement or the rights of the Collateral Trustee with respect
     to any of the Shared Collateral.

          Section 16. Collateral Trustee May Perform. Subject to the
Intercreditor Agreement, if any Grantor fails to perform any agreement contained
herein, the Collateral Trustee may, but without any obligation to do so and
without notice, themselves perform, or cause performance of, such agreement, and
the expenses of the Collateral Trustee incurred in connection therewith shall be
payable by such Grantor under Section 19.

          Section 17. The Collateral Trustee's Duties. (a) The powers conferred
on the Collateral Trustee hereunder are solely to protect the Shared Secured
Parties' interest in the Shared Collateral and shall not impose any duty upon
them to exercise any such powers. Except for the safe custody of any Shared
Collateral in its possession and the accounting for moneys actually received by
them hereunder, the Collateral Trustee shall have no duty as to any Shared
Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Shared Collateral, whether or not any Secured Party has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any Shared
Collateral. The Collateral Trustee shall be deemed to have exercised reasonable
care in the custody and preservation of any Shared Collateral in its possession
if such Shared Collateral is accorded treatment substantially equal to that
which it accords its own property.

          (b)  Anything contained herein to the contrary notwithstanding, the
Collateral Trustee may from time to time, when the Collateral Trustee deems it
to be necessary, appoint one or more subagents (each a "Subagent") for the
Collateral Trustee hereunder with respect to all or any part of the Shared
Collateral, subject to Section 11.02 of the Indenture. In the event that the
Collateral Trustee so appoints any Subagent with respect to any Shared
Collateral, (i) the assignment and pledge of such Shared Collateral and the
security interest granted in such Shared Collateral by each Grantor hereunder
shall be deemed for purposes of this Second Lien Shared Security Agreement to
have been made to such Subagent, in addition to the Collateral Trustee, for the
ratable benefit of the Secured Parties, as security for the Parity Lien
Obligations of such Grantor, (ii) such Subagent shall automatically be vested,
in addition to the Collateral Trustee, with all rights, powers, privileges,
interests and remedies of the Collateral Trustee hereunder with respect to such
Shared Collateral, and (iii) the term "Collateral Trustee," when used herein in
relation to any rights, powers, privileges, interests and remedies of the
Collateral Trustee with respect to such Shared Collateral, shall include such
Subagent; provided, however, that no such Subagent shall be authorized to take
any action with respect to any such Shared Collateral unless and except to the
extent expressly authorized in writing by the Collateral Trustee and permitted
by the Intercreditor Agreement.

          Section 18. Remedies. If any Event of Default shall have occurred and
be continuing and subject to the Intercreditor Agreement:

          (a)  The Collateral Trustee may exercise in respect of the Shared
     Collateral, in addition to other rights and remedies provided for herein or
     otherwise available to it, all the rights and remedies of a secured party
     upon default under the UCC (whether or not the UCC applies to the affected
     Shared Collateral) and also may: (i) require each Grantor

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     to, and each Grantor hereby agrees that it will at its expense and upon
     request of the Collateral Trustee forthwith, assemble all or part of the
     Shared Collateral as directed by the Collateral Trustee and make it
     available to the Collateral Trustee at a place and time to be designated by
     the Collateral Trustee that is reasonably convenient to all parties; (ii)
     without notice except as specified below, sell the Shared Collateral or any
     part thereof in one or more parcels at public or private sale, at any of
     the Collateral Trustee's offices or elsewhere, for cash, on credit or for
     future delivery, and upon such other terms as the Collateral Trustee may
     deem commercially reasonable; (iii) to the fullest extent permitted by
     applicable law and by contracts with third parties, and subject to any
     applicable safety requirements at any such premises, occupy any premises
     owned or leased by any of the Grantors where the Shared Collateral or any
     part thereof is assembled or located for a reasonable period in order to
     effectuate their rights and remedies hereunder or under law, without
     obligation to such Grantor in respect of such occupation; and (iv) exercise
     any and all rights and remedies of any of the Grantors under or in
     connection with the Shared Collateral, or otherwise in respect of the
     Shared Collateral, including, without limitation, (A) any and all rights of
     such Grantor to demand or otherwise require payment of any amount under, or
     performance of any provision of, the Assigned Agreements, the Receivables,
     the Related Contracts and the other Shared Collateral, (B) withdraw, or
     cause or direct the withdrawal, of all funds with respect to the Account
     Collateral and (C) exercise all other rights and remedies with respect to
     the Assigned Agreements, the Receivables, the Related Contracts and the
     other Shared Collateral, including, without limitation, those set forth in
     Section 9-607 of the UCC. Each Grantor agrees that, to the extent notice of
     sale shall be required by law, at least ten 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
     Trustee shall not be obligated to make any sale of Shared Collateral
     regardless of notice of sale having been given. The Collateral Trustee 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.

          (b)  Any cash held by or on behalf of the Collateral Trustee and all
     cash proceeds received by or on behalf of the Collateral Trustee in respect
     of any sale of, collection from, or other realization upon all or any part
     of the Shared Collateral may, in the discretion of the Collateral Trustee,
     be held by the Collateral Trustee as collateral for, and/or then or at any
     time thereafter applied (after payment of any amounts payable to the
     Collateral Trustee pursuant to Section 19) in whole or in part by the
     Collateral Trustee for the ratable benefit of the Secured Parties against,
     all or any part of the Parity Lien Obligations, in accordance with the
     terms of the Intercreditor Agreement.

          (c)  All payments received by any Grantor under or in connection with
     any Assigned Agreement or otherwise in respect of the Shared Collateral
     shall be received in trust for the benefit of the Collateral Trustee, shall
     be segregated from other funds of such Grantor and shall be forthwith paid
     over to the First Priority Controlling Collateral Parties, or following the
     First Priority Lien Satisfaction Date, the Collateral Trustee in the same
     form as so received (with any necessary endorsement).

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          (d)  The Collateral Trustee may, without notice to any Grantor except
     as required by law and at any time or from time to time, charge, set-off
     and otherwise apply all or any part of the Parity Lien Obligations against
     any funds held with respect to the Account Collateral or in any other
     deposit account.

          (e)  In the event of any sale or other disposition of any of the
     Intellectual Property Collateral of any Grantor, the goodwill symbolized by
     any Trademarks subject to such sale or other disposition shall be included
     therein, and such Grantor shall supply to the Collateral Trustee or their
     designee such Grantor's know-how and expertise, and documents and things
     relating to any Intellectual Property Collateral subject to such sale or
     other disposition, and such Grantor's customer lists and other records and
     documents relating to such Intellectual Property Collateral and to the
     manufacture, distribution, advertising and sale of products and services of
     such Grantor.

          Section 19. Indemnity and Expenses. (a) Each Grantor agrees to
indemnify, defend and save and hold harmless the Collateral Trustee and each
Secured Party and each of their affiliates and their respective officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against, and shall pay on demand, any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or
resulting from this Second Lien Shared Security Agreement (including, without
limitation, enforcement of this Second Lien Shared Security Agreement), except
to the extent such claim, damage, loss, liability or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
The provisions of this Section 19(a) shall survive the termination of this
Agreement.

          (b)  Each Grantor will upon demand pay to the Collateral Trustee the
amount of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of their counsel and of any experts and agents,
that the Collateral Trustee may incur in connection with (i) the administration
of this Second Lien Shared Security Agreement, (ii) the custody, preservation,
use or operation of, or the sale of, collection from or other realization upon,
any of the Shared Collateral of such Grantor, (iii) the exercise or enforcement
of any of the rights of the Collateral Trustee, the Secured Parties hereunder or
(iv) the failure by such Grantor to perform or observe any of the provisions
hereof.

          (c)  EACH GRANTOR ACKNOWLEDGES THAT THIS SECOND LIEN SHARED SECURITY
AGREEMENT AND OTHER TRANSACTION DOCUMENTS CONTAIN PROVISIONS RELEASING EACH
INDEMNIFIED PARTY FROM LIABILITY AND/OR INDEMNIFYING AND HOLDING HARMLESS EACH
INDEMNIFIED PARTY FOR, AMONG OTHER THINGS, INDEMNIFIED PARTY'S OWN NEGLIGENCE.
EACH GRANTOR AGREES THAT THE RELEASE AND/OR INDEMNITY PROVISIONS CONTAINED IN
THESE DOCUMENTS ARE CAPTIONED TO CLEARLY IDENTIFY THE RELEASE AND/OR INDEMNITY
PROVISIONS AND, THEREFORE, ARE SO CONSPICUOUS THAT EACH GRANTOR HAS FAIR NOTICE
OF THE EXISTENCE AND CONTENTS OF SUCH PROVISIONS. EACH GRANTOR HEREBY WAIVES ANY
DEFENSES IT MIGHT ASSERT AGAINST

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EACH INDEMNIFIED PARTY BASED ON THE HOLDING OF THE TEXAS SUPREME COURT IN ETHYL
CORP. v. DANIEL CONST. CO., 725 S.W.2d 705 (Tex. 1987), PAGE PETROLEUM, INC., et
al. V. DRESSER INDUSTRIES, INC., et al., 853 S.W.2d 505 (Tex. 1993), AND QUORUM
HEALTH RESOURCES, L.L.C. v. MAVERICK COUNTY HOSPITAL DISTRICT et al., 308 F.3rd
451 (5th Cir. 2002) AND ANY RELATED CASE LAW HOLDINGS.

          Section 20. Amendments; Waivers; Additional Grantors; Etc. (a) Subject
to the terms of the Indenture and the Intercreditor Agreement and clause (b)
below, no amendment or waiver of any provision of this Second Lien Shared
Security Agreement, and no consent to any departure by any Grantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Collateral Trustee and DHI and otherwise shall comply with the provisions
of Section 3.01 of the Intercreditor Agreement, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No failure on the part of the Collateral Trustee or any other
Secured Party to exercise, and no delay in exercising any right hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right.

          (b)  This Second Lien Shared Security Agreement shall be automatically
amended or waived without further action under the conditions set forth in the
Intercreditor Agreement. In the event of any such amendment, the Collateral
Trustee upon the request of any Grantor or any First Priority Secured Party will
enter into an instrument confirming such amendment or waiver.

          (c)  Upon the execution and delivery, or authentication, by any Person
of a security agreement supplement in substantially the form of Exhibit A hereto
(each a "Second Lien Shared Security Agreement Supplement"), (i) such Person
shall be referred to as an "Additional Grantor" and shall be and become a
Grantor hereunder, and each reference in this Second Lien Shared Security
Agreement to "Grantor" shall also mean and be a reference to such Additional
Grantor, and each reference in this Second Lien Shared Security Agreement to
"Shared Collateral" shall also mean and be a reference to the Shared Collateral
of such Additional Grantor, and (ii) the supplemental schedules I-VI attached to
each Second Lien Shared Security Agreement Supplement shall be incorporated into
and become a part of and supplement Schedules I-VI, respectively, hereto, and
the Collateral Trustee may attach such supplemental schedules to such Schedules;
and each reference to such Schedules shall mean and be a reference to such
Schedules as supplemented pursuant to each Second Lien Shared Security Agreement
Supplement.

          Section 21. Notices, Etc. (a) Unless otherwise expressly provided
herein, all notices and other communications provided for hereunder or any other
Shared Collateral Document shall be in writing (including by facsimile
transmission). All such written notices shall be mailed, faxed or delivered to
the applicable address, facsimile number or (subject to Section 21(c))
electronic mail address, as follows:

          (i)   as to the Collateral Trustee, addressed to its address specified
     in the Indenture;

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          (ii)  as to any Grantor, addressed to it at its address shown on
     Schedule I hereto; and

          (iii) as to any party, at such other address as shall be designated by
     such party in a written notice to the other parties.

          All such notices and other communications shall be deemed to be given
or made upon the earlier to occur of (i) actual receipt by the relevant party
hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on
behalf of the relevant party hereto; (B) if delivered by mail, four Business
Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile,
when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of Section
21(c)), when delivered. In no event shall a voicemail message be effective as a
notice, communication or confirmation hereunder.

          (b)  Any amendment or waiver of any provision of this Second Lien
Shared Security Agreement or of any Second Lien Shared Security Agreement
Supplement or Schedule hereto may be transmitted and/or signed by facsimile. The
effectiveness of any such documents and signatures shall, subject to applicable
law, have the same force and effect as manually signed originals and shall be
binding on all parties thereto. The Collateral Trustee may also require that any
such documents and signatures be confirmed by a manually signed original
thereof; provided, however, that the failure to request or deliver the same
shall not limit the effectiveness of any facsimile document or signature.

          (c)  Electronic mail and Internet and intranet websites may be used
only to distribute routine communications and to distribute Shared Collateral
Documents for execution by the parties thereto, and may not be used for any
other purpose.

          (d)  The Collateral Trustee shall be entitled to rely and act upon any
notices purportedly given by or on behalf of any Grantor even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. Each Grantor shall indemnify the Collateral Trustee from all losses,
costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of any Grantor. All telephonic
notices to and other communications with the Collateral Trustee may be recorded
by the Collateral Trustee, and each of the parties hereto hereby consents to
such recording.

          Section 22. Continuing Security Interest. This Second Lien Shared
Security Agreement shall create a continuing security interest in the Shared
Collateral and shall (a) remain in full force and effect until all of the Shared
Collateral is released, and this Second Lien Shared Security Agreement is
terminated in accordance with the terms of this Second Lien Shared Security
Agreement and the Indenture, (b) be binding upon each Grantor, its successors
and assigns and (c) inure, together with the rights and remedies of the
Collateral Trustee hereunder, to the benefit of the Collateral Trustee and on
behalf of the Secured Parties and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), any holder
of the Notes may assign or otherwise transfer all or any portion of its Notes to
any

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                                       35

other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such holder of the Notes herein or
otherwise, in each case as provided in Section 2.06 of the Indenture.

          Section 23. Release; Termination. The Collateral Trustee shall release
all or any portion of the Shared Collateral solely on terms and subject to the
conditions set forth in, or as required by, Article 2 of the Intercreditor
Agreement or Section 12.04 of the Indenture. Upon request (and at the expense)
of any Grantor, the Collateral Trustee will execute and deliver such instruments
of release as such Grantor may reasonably request to evidence any such release.

          Section 24. Security Interest Absolute. The obligations of each
Grantor under this Second Lien Shared Security Agreement are independent of the
Parity Lien Obligations or any other Obligations of any other Grantor under or
in respect of this Second Lien Shared Security Agreement, and a separate action
or actions may be brought and prosecuted against each Grantor to enforce this
Second Lien Shared Security Agreement, irrespective of whether any action is
brought against such Grantor or any other Grantor or whether such Grantor or any
other Grantor is joined in any such action or actions. All rights of the
Collateral Trustee and the other Secured Parties and the pledge, assignment and
security interest hereunder, and all obligations of each Grantor hereunder,
shall to the fullest extent permitted under applicable law, be irrevocable,
absolute and unconditional irrespective of, and to the fullest extent permitted
under applicable law, each Grantor hereby irrevocably waives (to the maximum
extent permitted by applicable law) any defenses it may now have or may
hereafter acquire in any way relating to, any or all of the following:

          (a)  any lack of validity or enforceability of this Second Lien Shared
     Security Agreement or any other agreement or instrument relating thereto;

          (b)  any change in the time, manner or place of payment of, or in any
     other term of, all or any of the Parity Lien Obligations or any other
     Obligations of any other Grantor under or in respect of this Second Lien
     Shared Security Agreement or any other amendment or waiver of or any
     consent to any departure from this Second Lien Shared Security Agreement,
     including, without limitation, any increase in the Parity Lien Obligations
     resulting from the extension of additional credit to any Grantor or any of
     its Subsidiaries or otherwise;

          (c)  any taking, exchange, release or non-perfection of any Shared
     Collateral or any other collateral, or any taking, release or amendment or
     waiver of or consent to departure from any guaranty, for all or any of the
     Parity Lien Obligations;

          (d)  any manner of application of any Shared Collateral or any other
     collateral, or proceeds thereof, to all or any of the Parity Lien
     Obligations, or any manner of sale or other disposition of any Shared
     Collateral or any other collateral for all or any of the Parity Lien
     Obligations or any other Obligations of any other Grantor under or in
     respect of this Second Lien Shared Security Agreement or any other assets
     of any Grantor or any of its Subsidiaries;

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                                       36

          (e)  any change, restructuring or termination of the corporate
     structure or existence of any Grantor or any of its Subsidiaries;

          (f)  any failure of any Secured Party to disclose to any Grantor any
     information relating to the business, condition (financial or otherwise),
     operations, performance, assets, nature of assets, liabilities or prospects
     of any other Grantor now or hereafter known to such Secured Party (each
     Grantor waiving any duty on the part of the Secured Parties to disclose
     such information);

          (g)  the failure of any other Person to execute this Second Lien
     Shared Security Agreement or any other Shared Collateral Document, guaranty
     or agreement or the release or reduction of liability of any Grantor or
     other grantor or surety with respect to the Parity Lien Obligations; or

          (h)  any other circumstance (including, without limitation, any
     statute of limitations) or any existence of or reliance on any
     representation by any Secured Party that might otherwise constitute a
     defense available to, or a discharge of, such Grantor or any other Grantor
     or a third party grantor of a security interest.

To the fullest extent permitted under applicable law, this Second Lien Shared
Security Agreement shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Parity Lien Obligations is
rescinded or must otherwise be returned by the Collateral Trustee or any Secured
Party or by any other Person upon the insolvency, bankruptcy or reorganization
of any Grantor or otherwise, all as though such payment had not been made.

          Section 25. Execution in Counterparts. This Second Lien Shared
Security Agreement may be executed in any number of 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. Delivery of an executed
counterpart of a signature page to this Second Lien Shared Security Agreement by
telecopier shall be effective as delivery of an original executed counterpart of
this Second Lien Shared Security Agreement.

          Section 26. The Mortgages. In the event that any of the Shared
Collateral hereunder is also subject to a valid and enforceable Lien under the
terms of any Mortgage or the Second Preferred Fleet Mortgage and the terms of
such Mortgage or Second Preferred Fleet Mortgage are inconsistent with the terms
of this Second Lien Shared Security Agreement, then with respect to such Shared
Collateral, the terms of such Mortgage or such Second Preferred Fleet Mortgage
shall be controlling in the case of fixtures and real estate leases, letting and
licenses of, and contracts and agreements relating to the lease of, real
property, and the terms of this Second Lien Shared Security Agreement shall be
controlling in the case of all other Shared Collateral.

          Section 27. Collateral in the State of Louisiana. (a) As to all Shared
Collateral now or hereafter located in the State of Louisiana, or as to which
the laws of the State of Louisiana may now be or hereafter become applicable,
each Grantor hereby acknowledges the Parity Lien Obligations, whether now
existing or to arise hereafter, and confesses judgment thereon if the Parity
Lien Obligations are not paid at maturity, and does by these presents

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                                       37

consent, agree and stipulate that if any portion of the Parity Lien Obligations
is not promptly and fully paid when due, the Parity Lien Obligations shall, at
the option of the Collateral Trustee and subject to the Intercreditor Agreement,
become immediately due and payable and it shall be lawful for the Collateral
Trustee, without making a demand and without notice or putting in default, the
same being hereby expressly waived, to cause all and singular the Shared
Collateral to be seized and sold by executory process, without appraisement
(appraisement being hereby expressly waived), either in its entirety or in lots
or parcels, as the Collateral Trustee may determine, to the highest bidder for
cash, or on such terms as plaintiff in such proceedings may direct.

          (b)  To the fullest extent permitted under applicable law, each
Grantor hereby expressly waives: (a) the benefit of appraisement, as provided in
Articles 2332, 2336, 2723 and 2724, Louisiana Code of Civil Procedure, and all
other laws conferring the same; (b) the demand and three (3) days delay accorded
by Articles 2639 and 2721, Louisiana Code of Civil Procedure; (c) the notice of
seizure required by Articles 2293 and 2721, Louisiana Code of Civil Procedure;
(d) the three (3) days delay provided by Articles 2331 and 2722, Louisiana Code
of Civil Procedure; and (e) the benefit of the other provisions of Articles
2331, 2722 and 2723, Louisiana Code of Civil Procedure, and the benefit of any
other Articles or laws relating to rights of appraisement, notice, or delay not
specifically mentioned above; and, to the fullest extent permitted under
applicable law, each Grantor expressly agrees to the immediate seizure of the
Shared Collateral in the event of suit hereon.

          (c)  Each Grantor acknowledges that the Collateral Trustee shall have
all rights to appointment of a keeper in connection with any action to foreclose
the lien hereof, all in accordance with La. R.S. 9:5136 et seq. The Court before
which the proceedings are pending shall determine the keeper's fees, and the
payment of such fees shall constitute a portion of the Parity Lien Obligations
secured by the lien hereof.

          (d)  This Section 27 shall in no way affect or be deemed a waiver of
the provisions of Section 28 or Section 29.

          Section 28. Governing Law. This Second Lien Shared Security Agreement
shall be governed by, and construed in accordance with, the laws of the State of
New York.

          Section 29. Submission to Jurisdiction and Waiver. (a) Each Grantor
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States sitting in New York City, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this Second
Lien Shared Security Agreement and the other Indenture Documents to which it is
or is to be a party, or for recognition or enforcement of any judgment, and each
Grantor hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in any such New
York State court or, to the extent permitted by law, in such federal court. Each
Grantor agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Second Lien Shared Security
Agreement shall affect any right that any party may otherwise have to bring any
action

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                                       38

or proceeding relating to this Second Lien Shared Security Agreement in the
courts of any jurisdiction.

          (b)  Each Grantor irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Second Lien Shared Security Agreement to
which it is or is to be a party in any New York State or federal court. Each
Grantor hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such suit, action or
proceeding in any such court.

          (c)  EACH GRANTOR HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS SECOND LIEN SHARED SECURITY AGREEMENT, THE LOANS OR THE ACTIONS
OF ANY BANKS IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.

          Section 30. Intercreditor Agreement. Notwithstanding anything in this
Second Lien Shared Security Agreement to the contrary, the Lien and security
interest granted to the Collateral Trustee pursuant to this Second Lien Shared
Security Agreement and the exercise of any right or remedy by the Collateral
Trustee hereunder are subject to the provisions of the Intercreditor Agreement.
In the event of any conflict between the terms of the Intercreditor Agreement
and this Second Lien Shared Security Agreement, the terms of the Intercreditor
Agreement shall govern.

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                                       39

          IN WITNESS WHEREOF, the parties hereto have executed this Second Lien
Shared Security Agreement to be effective as provided herein.

                                        DYNEGY HOLDINGS INC.

                                        By:  /s/ Charles C. Cook
                                           -------------------------------------
                                        Name:  Charles C. Cook
                                             -----------------------------------
                                        Title: Assistant Treasurer
                                              ----------------------------------

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                                       40

                                        DYNEGY POWER CORP.
                                        DPC II INC.
                                        DYNEGY ENGINEERING, INC.
                                        DYNEGY SERVICES, INC.
                                        DYNEGY POWER MANAGEMENT
                                        SERVICES, L.P.,
                                            By: Dynegy Services, Inc., its
                                                general partner
                                        CALCASIEU POWER, INC.
                                        DYNEGY OPERATING COMPANY
                                        DYNEGY PARTS AND TECHNICAL SERVICES,
                                        INC.
                                        DYNEGY POWER MANAGEMENT SERVICES, INC.
                                        HEP COGEN, INC.
                                        NORTHWAY COGEN, INC.
                                        DYNEGY POWER INVESTMENTS, INC.
                                        DYNEGY POWER SERVICES, INC.
                                        DYNEGY POWER NEVADA, INC.
                                        MICHIGAN COGEN, INC.
                                        MICHIGAN POWER, INC.
                                        MICHIGAN POWER HOLDINGS, INC.
                                        OCG COGEN, INC.
                                        OYSTER CREEK COGEN, INC.
                                        PORT ARTHUR COGEN, INC.
                                        RRP COMPANY
                                        DPC COLOMBIA - OPON POWER RESOURCES
                                        COMPANY
                                        TERMO SANTANDER HOLDING, LLC
                                        RIVERSIDE GENERATION, INC.
                                        RIVERSIDE GENERATING COMPANY, L.L.C.
                                        ROLLING HILLS GENERATION, INC.
                                        DYNEGY RENAISSANCE POWER, INC.
                                        DYNEGY NORTHEAST GENERATION, INC.
                                        HUDSON POWER, L.L.C.
                                        DYNEGY MIDSTREAM GP, INC.
                                        DYNEGY MIDSTREAM SERVICES, LIMITED
                                        PARTNERSHIP
                                           By: Dynegy Midstream G.P., Inc.,
                                               its general partner

                                        By:  /s/ Robert T. Ray
                                           -------------------------------------
                                            Robert T. Ray
                                            Sr. Vice President-Treasurer

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                                       41

                                        DYNEGY LIQUIDS MARKETING AND TRADE
                                        DYNEGY OPI, LLC
                                        DYNEGY NGL PIPELINE COMPANY, LLC
                                        DYNEGY INTRASTATE PIPELINE, LLC
                                        DYNEGY ENERGY PIPELINE COMPANY LLC
                                        DYNEGY UPPER HOLDINGS, L.L.C.
                                        DYNEGY HOLDING COMPANY, L.L.C.
                                        DMG ENTERPRISES, INC.
                                        HAVANA DOCK ENTERPRISES, LLC
                                        DMT HOLDINGS, INC.
                                        DMT G.P., L.L.C.
                                        DMT HOLDINGS, L.P.
                                        DYNEGY MARKETING AND TRADE
                                        DYNEGY COAL TRADING & TRANSPORTATION,
                                        L.L.C.
                                        NGC STORAGE, INC.
                                        BLACK THUNDER MEMBER, INC.
                                        PARISH POWER, INC.
                                        CALCASIEU POWER, LLC
                                        DELTA COGEN, INC.
                                        DYNEGY POWER HOLDINGS, INC.
                                        COGEN POWER, INC.
                                        COGEN POWER, L.P.
                                          By: CoGen Power, Inc., its general
                                              partner
                                        DYNEGY LIQUIDS G.P., L.L.C.
                                          By: Dynegy Midstream Services,
                                              Limited Partnership, its sole
                                              member
                                          By: Dynegy Midstream G.P., Inc.
                                              its general partner
                                        DYNEGY INC.

                                        By:  /s/ Robert T. Ray
                                           -------------------------------------
                                            Robert T. Ray
                                            Sr. Vice President-Treasurer

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                                       42

                                        MIDSTREAM BARGE COMPANY, L.L.C.
                                        DYNEGY REGULATED HOLDINGS, LLC

                                        By:  /s/ Robert T. Ray
                                           -------------------------------------
                                            Robert T. Ray
                                            Vice President-Treasurer

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                                       43

                                        BG HOLDINGS, INC.
                                        BLACK MOUNTAIN COGEN, INC.
                                        BLUEGRASS GENERATION, INC.
                                        BLUEGRASS GENERATION COMPANY, L.L.C.
                                        DYNEGY CABRILLO II LLC
                                        BLUE RIDGE GENERATION INC.
                                        BLUE RIDGE GENERATION LLC
                                        CHICKAHOMINY GENERATING COMPANY
                                        CHICKAHOMINY POWER, LLC
                                        FLORIDA MERCANTILE POWER, INC.
                                        PALMETTO POWER, L.L.C.
                                        GASIFICATION SERVICES, INC.
                                        GEORGIA MERCANTILE POWER, INC.
                                        HEARD COUNTY POWER, L.L.C.
                                        HART COUNTY IPP, INC.
                                        HARTWELL INDEPENDENT POWER PARTNERS,
                                        INC.
                                        HARTWELL POWER COMPANY
                                        DYNEGY DANSKAMMER, L.L.C.
                                        DYNEGY ROSETON, L.L.C.
                                        DYNEGY HUDSON POWER RETAIL, L.L.C.
                                        DYNEGY GLOBAL ENERGY, INC.
                                        DYNEGY BROADBAND MARKETING AND TRADE
                                        DYNEGY GP INC.
                                        DYNEGY TECHNOLOGY CAPITAL CORP.
                                        DYNEGY STRATEGIC INVESTMENTS, L.P.
                                          By: Dynegy Strategic Investments GP,
                                              L.L.C., its general partner
                                        DYNEGY STRATEGIC INVESTMENTS GP, L.L.C.
                                        RENAISSANCE POWER, L.L.C.
                                        ROLLING HILLS GENERATING, L.L.C.
                                        DYNEGY POWER MARKETING, INC.

                                        By:  /s/ Charles C. Cook
                                           -------------------------------------
                                            Charles C. Cook
                                            Vice President

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                                       44

                                        DYNEGY ENERGY SERVICES, INC.
                                        ILLINOIS POWER ENERGY, INC.
                                        DES NORTHEAST, INC.
                                        DEM GP, LLC
                                        DYNEGY ENERGY MARKETING, LP
                                          By: DEM GP, LLC, its general partner
                                        DYNEGY ADMINISTRATIVE SERVICES COMPANY
                                        NIPC, INC.
                                        DFS L.P., LLC
                                        DFS GENERAL PARTNER, LLC
                                        DYNEGY FINANCIAL SERVICES, LIMITED
                                        PARTNERSHIP
                                        DYNEGY CATLIN MEMBER, INC.
                                        DYNEGY MIDWEST GENERATION , INC.
                                        DYNEGY I.T., INC.
                                        CHESAPEAKE POWER, INC.
                                        JAMES RIVER ENERGY CORP.
                                        DPC POWER RESOURCES HOLDING COMPANY
                                        DRY CREEK POWER, INC.
                                        ROCKINGHAM POWER, L.L.C.
                                        DYNEGY POWER DEVELOPMENT COMPANY

                                        By:  /s/ Charles C. Cook
                                           -------------------------------------
                                            Charles C. Cook
                                            Vice President

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                                       45

                                        DYNEGY MANAGEMENT, INC.
                                        DMS LP, INC.
                                        DMT L.P., L.L.C.
                                        DYNEGY STRATEGIC INVESTMENTS LP, INC.
                                        DEM LP, LLC

                                        By:  /s/ Larry F. Altenbaumer
                                           -------------------------------------
                                            Larry F. Altenbaumer
                                            President

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                                       46

Acknowledged on the date hereof by:

WELLS FARGO BANK MINNESOTA, N.A.,
as Collateral Trustee

By:  /s/ Jeffery Rose
   -------------------------------------
   Name:  Jeffery Rose
   Title: Corporate Trust Officer

                Dynegy Second Lien Shared Security Agreement

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