Covanta Holding Corp – ‘10-K’ for 12/31/03 – EX-10.29

On:  Monday, 3/15/04, at 4:56pm ET   ·   For:  12/31/03   ·   Accession #:  950123-4-3329   ·   File #:  1-06732

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                        155    891K 
 2: EX-3.2      Amended and Restated Bylaws                           13     52K 
 3: EX-4.18     Credit Agreement                                     164    671K 
 4: EX-4.19     Credit Agreement                                     175    682K 
 5: EX-4.20     Indenture                                            129    582K 
 6: EX-4.21     Indenture                                             89    410K 
 7: EX-4.24     Pledge Agreement                                      25     93K 
 8: EX-4.25     Intercreditor Agreement                               68    199K 
 9: EX-4.26     Intercreditor Agreement                               82    189K 
10: EX-4.27     Security Agreement                                    56    224K 
11: EX-4.28     Security Agreement                                    50    193K 
12: EX-4.29     Pledge Agreement                                      27     94K 
13: EX-4.30     Security and Pledge Agreement                         20     67K 
14: EX-4.31     Revolving Credit and Guaranty Agreement               85    326K 
15: EX-4.32     First Amendment to Revolving Credit Agreement          6     23K 
16: EX-4.33     Second Amendment to Revolving Credit and Guaranty     15     48K 
17: EX-4.34     Third Amendment to Revolving Credit and Guaranty       6     20K 
18: EX-4.35     Fourth Amendment to Revolving Credit and Guaranty      6     23K 
19: EX-4.36     First Preferred Fleet Mortgage                        42    141K 
20: EX-4.37     First Preferred Fleet Mortgage                        42    141K 
21: EX-4.38     First Preferred Fleet Mortgage                        42    141K 
22: EX-10.14    Separation and Termination Agreement                  12     56K 
23: EX-10.15    Separation and Termination Agreement                   4     23K 
24: EX-10.17    Release and Waiver of Employment                       9     41K 
25: EX-10.20    Engagement Letter                                      7     47K 
26: EX-10.25    Tax Sharing Agreement                                 14     50K 
27: EX-10.26    Corporate Services Reimbursement Agreement             6     31K 
28: EX-10.28    Credit Agreement                                     157    576K 
29: EX-10.29    Credit Agreement                                     132    576K 
30: EX-10.30    Management Services and Reimbursement Agreement       24     76K 
31: EX-23.1     Consent of Independent Accountants                     1     11K 
32: EX-31.1     Certificate of CEO                                     2±    15K 
33: EX-31.2     Certificate of CFO                                     2±    15K 
34: EX-32.1     Certificate of CEO                                     1     12K 
35: EX-32.2     Certificate of CFO                                     1     12K 

EX-10.29   —   Credit Agreement
Exhibit Table of Contents

EX-10.29
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                                                                   EXHIBIT 10.29

CREDIT AGREEMENT

DATED AS OF MARCH 10, 2004

 AMONG

COVANTA POWER INTERNATIONAL HOLDINGS, INC.

 AND

EACH OF ITS SUBSIDIARIES PARTY HERETO,

THE LENDERS LISTED HEREIN,
 AS LENDERS,

 DEUTSCHE BANK AG, NEW YORK BRANCH
 AS ADMINISTRATIVE AGENT

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SECTION 1.         DEFINITIONS..............................................................................   1 

         1.1   Certain Defined Terms........................................................................   1 

         1.2   Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement...........  30 

         1.3   Other Definitional Provisions and Rules of Construction......................................  31 

SECTION 2.         AMOUNTS AND TERMS OF COMMITMENTS AND LOANS...............................................  31 

         2.1   Commitments; Making of Loans; the Register; Optional Notes...................................  31 

         2.2   Interest on the Loans........................................................................  34 

         2.3   Fees.........................................................................................  36 

         2.4   Repayments, Prepayments and Reductions in Commitments; General                                    
               Provisions Regarding Payments; Application of Proceeds of Collateral and                          
               Payments Under CPIH Guaranty.................................................................  37 

         2.5   Use of Proceeds..............................................................................  41 

         2.6   Special Provisions Governing Eurodollar Rate Loans...........................................  42 

         2.7   Increased Costs; Taxes; Capital Adequacy.....................................................  44 

         2.8   Statement of Lenders; Obligation of Lenders to Mitigate......................................  47 

         2.9   Defaulting Lender............................................................................  48 

         2.10  Joint and Several Liability; Payment Indemnifications........................................  49 

         2.11  Rights of Subrogation, Contribution, Etc.....................................................  49 

SECTION 3.         CONDITIONS TO LOANS......................................................................  50 

         3.1   Conditions to Closing Date...................................................................  50 

         3.2   Conditions to All Loans......................................................................  59 

SECTION 4.         COMPANY'S REPRESENTATIONS AND WARRANTIES.................................................  60 

         4.1   Organization, Powers, Qualification, Good Standing, Business and Subsidiaries................  60 

         4.2   Authorization of Borrowing, etc..............................................................  61 

         4.3   Financial Condition..........................................................................  62 

         4.4   No Material Adverse Change; No Restricted Payments...........................................  63 

         4.5   Title to Properties; Liens; Real Property; Intellectual Property.............................  63 

         4.6   Litigation; Adverse Facts....................................................................  64 

         4.7   Payment of Taxes.............................................................................  64 

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         4.8   Performance of Agreements; Material Contracts................................................  64 

         4.9   Governmental Regulation......................................................................  65 

         4.10  Securities Activities........................................................................  65 

         4.11  Employee Benefit Plans.......................................................................  65 

         4.12  Certain Fees.................................................................................  66 

         4.13  Environmental Protection.....................................................................  67 

         4.14  Employee Matters.............................................................................  67 

         4.15  Matters Relating to Collateral...............................................................  67 

         4.16  Disclosure...................................................................................  68 

         4.17  Cash Management System.......................................................................  69 

         4.18  Matters Relating to Loan Parties.............................................................  69 

         4.19  Investigation................................................................................  70 

         4.20  Matters Relating to Bankruptcy Proceedings...................................................  70 

         4.21  Subordinated Indebtedness....................................................................  71 

         4.22  Reporting to IRS.............................................................................  71 

SECTION 5.         COMPANY'S AFFIRMATIVE COVENANTS..........................................................  71 

         5.1   Financial Statements and Other Reports.......................................................  71 

         5.2   Existence, etc...............................................................................  76 

         5.3   Payment of Taxes and Claims; Tax.............................................................  77 

         5.4   Maintenance of Properties; Insurance; Application of Net Insurance/ Condemnation Proceeds....  77 

         5.5   Inspection Rights; Lender Meeting............................................................  79 

         5.6   Compliance with Laws, etc....................................................................  80 

         5.7   Environmental Matters........................................................................  80 

         5.8   Execution of the Personal Property Collateral Documents After the Closing Date...............  82 

         5.9   Matters Relating to Real Property Collateral.................................................  82 

         5.10  Deposit Accounts; Repatriation of Foreign Cash...............................................  83 

         5.11  Further Assurances...........................................................................  83 

         5.12  Most Favored Nations Payments................................................................  85 

SECTION 6.         BORROWERS' NEGATIVE COVENANTS............................................................  85 

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         6.1   Indebtedness.................................................................................  85 

         6.2   Liens and Related Matters....................................................................  87 

         6.3   Investments; Acquisitions....................................................................  89 

         6.4   Contingent Obligations; Performance Guaranties...............................................  91 

         6.5   Restricted Payments..........................................................................  92 

         6.6   Financial Covenants..........................................................................  93 

         6.7   Restriction on Fundamental Changes; Asset Sales..............................................  93 

         6.8   Transactions with Shareholders and Affiliates................................................  95 

         6.9   Restriction on Leases........................................................................  96 

         6.10  [Intentionally Omitted]......................................................................  96 

         6.11  Conduct of Business..........................................................................  96 

         6.12  Amendments to Related Agreements, Debt Documentation and Organizational Documents............  96 

         6.13  End of Fiscal Years; Fiscal Quarters.........................................................  97 

         6.14  Amendment to Pension Plans...................................................................  98 

SECTION 7.         EVENTS OF DEFAULT........................................................................  98 

         7.1   Failure to Make Payments When Due............................................................  98 

         7.2   Default in Other Agreements..................................................................  98 

         7.3   Breach of Certain Covenants..................................................................  99 

         7.4   Breach of Warranty...........................................................................  99 

         7.5   Other Defaults Under Loan Documents..........................................................  99 

         7.6   Involuntary Bankruptcy; Appointment of Receiver, etc.........................................  99 

         7.7   Voluntary Bankruptcy; Appointment of Receiver, etc........................................... 100 

         7.8   Judgments and Attachments.................................................................... 100 

         7.9   Dissolution.................................................................................. 100 

         7.10  Employee Benefit Plans....................................................................... 100 

         7.11  Material Adverse Effect...................................................................... 101 

         7.12  Change in Control............................................................................ 101 

         7.13  Invalidity of Intercreditor Agreement; Failure of Security; Repudiation of Obligations....... 101 

         7.14  Termination of Material Contracts............................................................ 101 

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         7.15  Default under Existing IPP International Project Guaranties.................................. 102 

SECTION 8.         ADMINISTRATIVE AGENT..................................................................... 102 

         8.1   Appointment.................................................................................. 102 

         8.2   Powers and Duties; General Immunity.......................................................... 103 

         8.3   Independent Investigation by Lenders; No Responsibility For Appraisal of Creditworthiness.... 104 

         8.4   Right to Indemnity........................................................................... 105 

         8.5   Successor Agents............................................................................. 105 

         8.6   Collateral Documents and Intercreditor Agreement............................................. 105 

         8.7   Administrative Agent May File Proofs of Claim................................................ 106 

SECTION 9.         MISCELLANEOUS............................................................................ 107 

         9.1   Successors and Assigns; Assignments and Participations in Loans.............................. 107 

         9.2   Expenses..................................................................................... 110 

         9.3   Indemnity.................................................................................... 111 

         9.4   Set-Off...................................................................................... 112 

         9.5   Ratable Sharing.............................................................................. 112 

         9.6   Amendments and Waivers....................................................................... 113 

         9.7   Independence of Covenants.................................................................... 114 

         9.8   Notices; Effectiveness of Signatures......................................................... 114 

         9.9   Survival of Representations, Warranties and Agreements....................................... 115 

         9.10  Failure or Indulgence Not Waiver; Remedies Cumulative........................................ 115 

         9.11  Marshalling; Payments Set Aside.............................................................. 116 

         9.12  Severability................................................................................. 116 

         9.13  Obligations Several; Independent Nature of Lenders' Rights; Damage Waiver.................... 116 

         9.14  Release of Security Interest................................................................. 116 

         9.15  Headings..................................................................................... 117 

         9.16  Applicable Law............................................................................... 117 

         9.17  Construction of Agreement.................................................................... 117 

         9.18  Consent to Jurisdiction and Service of Process............................................... 117 

         9.19  Waiver of Jury Trial......................................................................... 118 

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9.20  Confidentiality.............................................................................. 119 

9.21  Release of Parties; Waivers.................................................................. 119 

9.22  No Fiduciary Duty............................................................................ 120 

9.23  Counterparts; Effectiveness.................................................................. 120 

9.24  No Third Party Beneficiaries................................................................. 121 

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EXHIBITS                                                                        

I.     FORM OF NOTE                                                       

II.     FORM OF COMPLIANCE CERTIFICATE                                      

III.     FORM OF ASSIGNMENT AGREEMENT                                         

IV.     FORM OF NOTICE OF BORROWING                                         

V.     FORM OF NOTICE OF CONVERSION/CONTINUATION                          

VI.     FORM OF OPINIONS OF LOAN PARTIES' COUNSEL                           

VII.     FORM OF SECURITY AGREEMENT                                           

VIII.     FORM OF CEA Stock Pledge AgREEMENT                                    

IX.     FORM OF INTERCREDITOR AGREEMENT                                     

X.     FORM OF MORTGAGE                                                   

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SCHEDULES                                                                       

1.1A              PRINCIPAL LEASE, SERVICE AND OPERATING AGREEMENTS   

1.1B              BUDGET                                              

2.1               LENDERS' COMMITMENTS AND PRO RATA SHARES            

3.1C              CORPORATE STRUCTURE                                 

3.1P              CASH MANAGEMENT SYSTEM                              

4.1               COMPANY AND SUBSIDIARIES                            

4.5B              REAL PROPERTY                                       

4.5C              INTELLECTUAL PROPERTY                               

4.6               LITIGATION                                          

4.8A              CERTAIN ALLEGED DEFAULTS                            

4.8C              MATERIAL CONTRACTS                                  

4.11              MATTERS RELATING TO EMPLOYEE BENEFIT PLANS          

4.13              ENVIRONMENTAL MATTERS                               

4.14              EMPLOYEE MATTERS (BATAAN)                           

6.1(v)            CERTAIN EXISTING INDEBTEDNESS                       

6.2               CERTAIN EXISTING LIENS                              

6.3(v)            CERTAIN EXISTING INVESTMENTS                        

6.4(iii)          CERTAIN EXISTING CONTINGENT OBLIGATIONS             

6.6E              STIPULATED ADJUSTED EBITDA                          

6.8               CERTAIN TRANSACTIONS WITH AFFILIATES                

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COVANTA POWER INTERNATIONAL HOLDINGS, INC.

CREDIT AGREEMENT

           This CREDIT AGREEMENT is dated as of March 10, 2004 and
entered into by and among COVANTA POWER INTERNATIONAL HOLDINGS, INC., a Delaware
corporation ("COMPANY" or "CPIH"); EACH OF COMPANY'S SUBSIDIARIES LISTED ON THE 
SIGNATURE PAGES HEREOF (each such Subsidiary and Company individually referred  
to herein as a "BORROWER" and, collectively (this and other capitalized terms   
used in the recitals hereto without definition being used as defined in         
subsection 1.1), on a joint and several basis, as "Borrowers"); THE PERSONS     
IDENTIFIED ON THE SIGNATURE PAGES HEREOF AS LENDERS (each individually referred 
to herein as a "LENDER" and collectively as "LENDERS"); DEUTSCHE BANK AG, NEW   
YORK BRANCH ("DEUTSCHE BANK"), as administrative agent for Lenders (in such     
capacity, "ADMINISTRATIVE AGENT" or "AGENT").                                   

 R E C I T A L S

            WHEREAS, on April 1, 2002 (the "PETITION DATE"), Covanta
Energy Corporation, a Delaware corporation ("COVANTA"), and certain of its      
Domestic Subsidiaries, including Borrowers (collectively, the "DEBTORS"), filed 
voluntary petitions for relief under the Bankruptcy Code with the United States 
Bankruptcy Court for the Southern District of New York (such proceedings being  
jointly administered under Case Nos. 02-40826 through 02-40949, 02-16322,       
03-13679 through 03-13685, and 03-13687 through 03-13709 are hereinafter        
referred to as the "CHAPTER 11 CASES"), and each Borrower has operated its      
businesses and managed its properties as a debtor-in-possession pursuant to     
Sections 1107 and 1108 of the Bankruptcy Code;                                  

            WHEREAS, the Debtors have proposed, their creditors have
approved, and the Bankruptcy Court has confirmed, the Plan of Reorganization;   

           WHEREAS, in connection with the Plan of Reorganization,
Borrowers have requested that certain of the Lenders provide priority secured   
credit facilities on a post-bankruptcy basis on the terms and conditions set    
forth herein;                                                                   

            NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Borrowers, Lenders and   
Administrative Agent agree as follows:                                          

SECTION 1.        DEFINITIONS                                                   

1.1      CERTAIN DEFINED TERMS.                               

             The following terms used in this Agreement shall have the
following meanings:                                                             

        "ADJUSTED EBITDA" means, for any period, (i) without
duplication, the aggregate amount derived by combining the amounts for such     
period of (a) "Operating income (loss)", plus (b) Net Depreciation and          
Amortization Expense, minus (ii) the amount (expressed as a positive number) for
such period of "Minority interests", as each such line item referred to in      
clause (i)(a) and clause (ii) is reflected in Company's consolidated statement  
of income prepared                                                              

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in conformity with GAAP and reported in a manner consistent with Company's      
reporting of such amount in its quarterly or annual report (as the case may be) 
on Form 10Q or 10K, respectively, prior to the Closing Date, whether such line  
items are so titled or otherwise titled.                                        

                "ADMINISTRATIVE AGENT" has the meaning assigned to that term
in the introduction to this Agreement and also means and includes any successor 
Administrative Agent appointed pursuant to subsection 8.5.                      

                 "AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with    
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or     
indirectly, of the power to direct or cause the direction of the management and 
policies of that Person (other than exclusively as a result of such Person's    
role as a senior executive of that Person or a Project manager or operator),    
whether through the ownership of voting securities or by contract or otherwise. 

        "AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor        
Administrative Agent appointed pursuant to subsection 8.5.                      

                 "AGGREGATE AMOUNTS DUE" has the meaning assigned to that term
in subsection 9.5.                                                              

                 "AGREEMENT" means this Credit Agreement dated as of March 10,
2004, as it may be amended, restated, supplemented or otherwise modified from   
time to time.                                                                   

                "APPROVED FUND" means a Fund that is administered or managed
by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an         
Affiliate of an entity that administers or manages a Lender.                    

                 "APPROVED PLAN OF REORGANIZATION" has the meaning assigned to
that term in subsection 3.1E.                                                   

                "ASSET SALE" means (A) the sale by CEA of any of the Capital
Stock of Company to any Person or (B) the sale by Company or any of its         
Subsidiaries to any Person of (i) any of the Capital Stock of any of Company's  
Subsidiaries, (ii) substantially all of the assets of any division or line of   
business of Company or any of its Subsidiaries, or (iii) any other assets       
(whether tangible or intangible) of Company or any of its Subsidiaries (other   
than (a) inventory sold in the ordinary course of business and (b) any such     
other assets to the extent that the aggregate value of such assets sold in any  
single transaction or related series of transactions is equal to $250,000 or    
less and the aggregate value of all such other assets since the Closing Date is 
equal to $1,000,000 or less, in each case so long as not less than 90% of the   
consideration received for such assets shall be cash); provided, however, that  
Asset Sales shall not include (1) any sale or discount, in each case without    
recourse, of accounts receivable arising in the ordinary course of business, but
only in connection with the compromise or collection thereof (provided, that    
sales and discounts of not more than $2,000,000 in face value of accounts       
receivable may be excluded from Asset Sales pursuant to this clause (1), and the
sole consideration received in                                                  

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connection with any such sale of accounts receivable shall be cash), (2) any    
sale or exchange of specific items of equipment, so long as the purpose of each 
such sale or exchange is to acquire (and results within 120 days of such sale or
exchange in the acquisition of) replacement items of equipment which are the    
functional equivalent of the item of equipment so sold or exchanged (provided,  
that any cash received in connection with any such sale or exchange that is not 
expended as part of such sale or exchange to obtain such replacement items of   
equipment, to the extent in excess of the amounts set forth in clause (b) of    
this definition, shall be deemed cash proceeds of an Asset Sale), (3) disposals 
of obsolete, worn out or surplus property in the ordinary course of business    
(provided, that not less than 75% of the consideration, if any, received in     
connection with any such disposal shall be cash, and any such cash received, to 
the extent in excess of the amounts set forth in clause (b) of this definition, 
shall be deemed cash proceeds of an Asset Sale), (4) any discount or compromise 
of notes or accounts receivable for less than the face value thereof, to the    
extent Company deems necessary in order to resolve disputes that occur in the   
ordinary course of business, or (5) any sale of shares in the Madurai Project   
Entity permitted under subsection 6.7(vi).                                      

           "ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit III annexed hereto.                           

          "ASSUMPTIONS" has the meaning assigned to that term in
subsection 4.11D.                                                               

          "AVAILABLE CASH" has the meaning given to that term in
subsection 2.4A(iii).                                                           

 "BANK OF AMERICA" means Bank of America, N.A.

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

               "BANKRUPTCY COURT" means the United States Bankruptcy Court
for the Southern District of New York and any other court properly exercising   
jurisdiction over any relevant Chapter 11 Case.                                 

               "BASE RATE" means, at any time, the higher of (i) the Prime
Rate or (ii) the rate which is 1/2 of 1% in excess of the Federal Funds         
Effective Rate. Any change in the Base Rate due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective on the effective date of    
such change.                                                                    

           "BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.        

             "BASE RATE MARGIN" means a per annum rate equal to 7.00%.

            "BORROWERS" has the meaning assigned to that term in the
introduction to this Agreement.                                                 

            "BUDGET" means (i) with respect to Fiscal Year 2004, the
budget delivered by Company to Lenders on or prior to the Closing Date pursuant 
to subsection 3.1G, setting forth projected cash receipts and expenditures for  
Company and its Subsidiaries for each calendar                                  

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month and each Fiscal Quarter from the Closing Date through December 31, 2004,  
and projected net cash flows for Company and its Subsidiaries for each Fiscal   
Year thereafter through December 31, 2007, as such budget may be supplemented   
pursuant to subsection 5.1(i), and (ii) with respect to each Fiscal Year after  
2004, the budget delivered by Company to Lenders pursuant to subsection         
5.1(xvi), setting forth projected cash receipts and expenditures for Company and
its Subsidiaries for each calendar month and Fiscal Quarter during such Fiscal  
Year and projected net cash flows for Company and its Subsidiaries for each     
Fiscal Year thereafter through December 31, 2007, as such budget may be         
supplemented pursuant to subsection 5.1(i).                                     

               "BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New York or is a
day on which banking institutions located in such state are authorized or       
required by law or other governmental action to close.                          

                 "CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet  
of that Person.                                                                 

           "CAPITAL STOCK" means the capital stock or other equity
interests of a Person.                                                          

                "CASH MANAGEMENT SYSTEM" means the cash management system of
Company and its Subsidiaries in the United States described in Schedule 3.1P    
annexed hereto, as such Cash Management System may be modified pursuant to      
subsection 5.10.                                                                

              "CASH ON HAND" means, as of any date of determination, the
aggregate amounts on deposit in the Cash Management System in the United States 
as of the close of business on the preceding Business Day.                      

         "CEA" means Covanta Energy Americas, Inc., a Delaware
corporation.                                                                    

           "CEA STOCK PLEDGE AGREEMENT" means the Pledge Agreement
executed and delivered by CEA on the Closing Date, substantially in the form of 
Exhibit VIII annexed hereto (it being understood that such Pledge Agreement     
shall contain a covenant requiring CEA to pay to Collateral Agent any proceeds  
received by it from or in connection with the sale of any of the common stock of
Company to any Person), as such Pledge Agreement may thereafter be amended,     
restated, supplemented or otherwise modified from time to time.                 

            "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et   
seq.), or any successor statute, and all implementing regulations promulgated   
thereunder.                                                                     

                  "CHANGE IN CONTROL" means the occurrence of any one or more of
the following: (i) DHC shall cease to own, directly, 80% or more of the         
outstanding Capital Stock of Covanta; (ii) Covanta shall cease to own, directly 
or indirectly, 100% of the outstanding Capital Stock of CEA; (iii) CEA shall    
cease to own, directly, 100% of the outstanding common stock of Company; or (iv)
the occurrence of a change in the composition of the Governing Body of          

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Company such that less than one of the members of such Governing Body is a      
Continuing Member.                                                              

               "CHAPTER 11 CASES" has the meaning assigned to that term in
the recitals to this Agreement.                                                 

                 "CLOSING DATE" means the date on which each of the conditions
described in subsection 3.1 have been satisfied or waived by Administrative     
Agent and Requisite Lenders (or such other Lenders as may be required under     
subsection 9.6).                                                                

               "COLLATERAL" means, collectively, all of the real, personal
and mixed property (including Capital Stock) in which Liens are purported to be 
granted pursuant to the Collateral Documents, as security for the Obligations.  

                "COLLATERAL AGENT" means Bank of America, in its capacity as
Collateral Agent under the Intercreditor Agreement and the Collateral Documents.

                "COLLATERAL DOCUMENTS" means the Security Agreement, the CEA
Stock Pledge Agreement, the Foreign Pledge Agreements, the Control Agreements,  
the Mortgages and all other instruments or documents (pursuant to which a Lien  
to secure all or any portion of the Obligations is purported or intended to be  
created, granted, evidenced or perfected) delivered from time to time by any    
Loan Party pursuant to this Agreement or any of the other Loan Documents, as    
such instruments and documents may be amended, restated, supplemented or        
otherwise modified from time to time.                                           

                  "COMMITMENT" means the commitment of a Lender to make Loans to
Borrowers pursuant to subsection 2.1A, and "COMMITMENTS" means such commitments 
of all Lenders in the aggregate.                                                

     "COMMITMENT FEE PERCENTAGE" means, on any date of
determination, a per annum rate equal to 0.50%.                                 

            "COMMODITIES AGREEMENT" means any long-term or forward
purchase contract or option contract to buy, sell or exchange commodities or    
similar agreement or arrangement to which Company or any of its Subsidiaries is 
a party unless, under the terms of such contract, option contract agreement or  
arrangement Company expects to make or take delivery of the commodities which   
are the subject thereof.                                                        

          "COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.                                                 

                "COMPETITOR" means any Person (and its Affiliates) primarily
engaged in the business of (i) the generation and sale of electricity or (ii)   
municipal waste management.                                                     

                 "COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit II annexed hereto.                                          

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                "CONFIRMATION ORDER" means the Findings of Fact, Conclusions
of Law and Order under 11 U.S.C. Section 1129 and Rule 3020 of the Federal Rules
of Bankruptcy Procedure Confirming Debtors' Second Joint Plan of Reorganization 
under Chapter 11 of the Bankruptcy Code entered by the Bankruptcy Court on March
5, 2004 in the Chapter 11 Cases, without modification, revision or amendment.   

               "CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period to the extent paid or payable in  
cash.                                                                           

                 "CONSOLIDATED FACILITIES CAPITAL EXPENDITURES" means, for any
period, the aggregate of all cash expenditures by Company and its Subsidiaries  
during that period that, in conformity with GAAP, would be included in          
"additions to property, plant or equipment" or comparable items reflected in the
consolidated statement of cash flows of Company and its Subsidiaries for that or
any other period.                                                               

              "CONSOLIDATED INTEREST EXPENSE" means, for any period, (i)
total interest expense, net of interest income, of Company and its Subsidiaries 
on a consolidated basis with respect to all outstanding Indebtedness of Company 
and its Subsidiaries to the extent such Indebtedness is or is required to be    
reflected on the consolidated balance sheet of Company and its Subsidiaries in  
conformity with GAAP, but excluding any Indebtedness consisting of Non Recourse 
Debt, and (ii) to the extent not included in the calculation of the amount      
described in clause (i), all commissions, discounts and other fees and charges  
owed with respect to letters of credit and bankers' acceptance financing and net
costs under Interest Rate Agreements, but excluding, however, from clauses (i)  
and (ii) any amounts referred to in subsection 2.3 payable to Administrative    
Agent and Lenders on or before the Closing Date.                                

          "CONSOLIDATED LEVERAGE RATIO" means, as at any date of
determination, the ratio of (a) Total Debt as at such date to (b) Adjusted      
EBITDA for the four-Fiscal Quarter period most recently ended prior to such     
date.                                                                           

                  "CONTINGENT OBLIGATION", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with  
respect to any Indebtedness, lease, dividend or other obligation of another if  
the primary purpose or intent thereof by the Person incurring the Contingent    
Obligation is to provide assurance to the obligee of such obligation of another 
that such obligation of another will be paid or discharged, or that any         
agreements relating thereto will be complied with, or that the holders of such  
obligation will be protected (in whole or in part) against loss in respect      
thereof, (ii) with respect to any letter of credit issued for the account of    
that Person or as to which that Person is otherwise liable for reimbursement of 
drawings, or (iii) under Hedge Agreements. Contingent Obligations shall include 
(a) the direct or indirect guaranty, endorsement (otherwise than for collection 
or deposit in the ordinary course of business), co-making, discounting with     
recourse or sale with recourse by such Person of the obligation of another, (b) 
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any      
liability of such Person for the obligation of another through any agreement    
(contingent or otherwise) (1) to purchase, repurchase or otherwise acquire such 
obligation or any security therefor, or to provide funds for the payment or     
discharge of such obligation (whether in the form of loans, advances, stock     
purchases, capital contributions or otherwise) or (2) to maintain the solvency  
or                                                                              

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any balance sheet item, level of income or financial condition of another if, in
the case of any agreement described under subclauses (1) or (2) of this         
sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the amount  
(if stated) of the obligation so guaranteed or otherwise supported or, if less, 
the amount to which such Contingent Obligation is specifically limited, or, if  
the amount of any Contingent Obligation is not stated or determinable, the      
maximum reasonably anticipated liability in respect thereof as determined by    
Company in good faith based upon reasonable assumptions. No obligations under   
Performance Guaranties shall constitute Contingent Obligations.                 

                "CONTINUING MEMBER" has the meaning assigned to that term in
the CPIH Term Loan Agreement.                                                   

                 "CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,   
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.                                

                "CONTROL AGREEMENT" means an agreement, satisfactory in form
and substance to Administrative Agent and executed by the financial institution 
or securities intermediary at which a Deposit Account or a Securities Account,  
as the case may be, is maintained, pursuant to which such financial institution 
or securities intermediary confirms and acknowledges Collateral Agent's security
interest in such account, and agrees that the financial institution or          
securities intermediary, as the case may be, will comply with instructions      
originated by Collateral Agent as to disposition of funds in such account,      
without further consent by Company or any Subsidiary, as such agreement may be  
amended, restated, supplemented or otherwise modified from time to time.        

          "CORPORATE SERVICES REIMBURSEMENT AGREEMENT" means the
corporate services reimbursement agreement entered into by DHC and Covanta on   
the Closing Date, as such agreement may be amended, restated, supplemented or   
otherwise modified from time to time.                                           

          "COVANTA" has the meaning assigned to such term in the
recitals to this Agreement.                                                     

         "CPIH" has the meaning assigned to that term in the
introduction to this Agreement.                                                 

              "CPIH TERM LOAN AGREEMENT" means (i) that certain credit
agreement dated as of the date hereof by and among Borrowers, as borrowers, and 
the other Persons listed on the signature pages thereof, as lenders, and (ii)   
any credit agreement entered into by Borrowers to refinance, replace, renew or  
extend, in whole or in part, the credit agreement referenced in clause (i) and  
the Indebtedness thereunder (provided, that (a) the terms of such credit        
agreement, such Indebtedness so refinanced, replaced, renewed or extended shall 
not be more disadvantageous to Company and its Subsidiaries and the Lenders (in 
a manner deemed material by Administrative Agent or Requisite Lenders so        
notifying Administrative Agent or Company)                                      

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than the CPIH Term Loan Agreement in effect on the Closing Date, (b) the        
aggregate amount of Indebtedness outstanding, and additional commitments to     
extend credit, if any, under the CPIH Term Loan Agreement as refinanced,        
replaced, renewed or extended, shall not exceed the aggregate amount of the     
commitments to extend credit in effect under the CPIH Term Loan Agreement on the
Closing Date, (c) the obligations under (and the Liens securing) such credit    
agreement as refinanced, replaced, renewed or extended shall be subject to the  
Intercreditor Agreement on terms substantively identical to the terms applicable
to the obligations in effect under the CPIH Term Loan Agreement on the Closing  
Date, and (d) Company shall provide to Agents reasonable prior advance written  
notice of such proposed refinancing, replacement, renewal or extension and      
copies of all material contracts or other agreements being entered into in      
connection therewith), in the case of clause (i) or (ii) as such credit         
agreement may be amended, restated, supplemented or otherwise modified from time
to time to the extent permitted under subsection 6.12.                          

            "CPIH TERM LOAN DOCUMENTS" means the "Loan Documents" as
defined in the CPIH Term Loan Agreement.                                        

                  "CPIH TERM LOAN LENDERS" means the "Lenders" as defined in the
CPIH Term Loan Agreement.                                                       

                  "CPIH TERM LOAN EXPOSURE" means, with respect to any CPIH Term
Loan Lender as of any date of determination, the aggregate outstanding principal
amount of the CPIH Term Loans of that CPIH Term Loan Lender.                    

              "CPIH TERM LOANS" means the loans made (or deemed made) by
CPIH Term Loan Lenders to Borrowers pursuant to subsection 2.1A of the CPIH Term
Loan Agreement.                                                                 

             "CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, or option contract to buy, sell or exchange currencies 
or other similar agreement or arrangement to which Company or any of its        
Subsidiaries is a party.                                                        

            "D.E. SHAW" means D.E. Shaw Laminar Portfolios, L.L.C. a
Delaware limited liability company.                                             

          "DEBTORS" has the meaning assigned to that term in the
recitals to this Agreement.                                                     

             "DEFAULTED LOAN" has the meaning assigned to that term in
subsection 2.9.                                                                 

             "DEFAULT EXCESS" has the meaning assigned to that term in
subsection 2.9.                                                                 

                "DEFAULTING LENDER" has the meaning assigned to that term in
subsection 2.9.                                                                 

             "DEFAULT PERIOD" has the meaning assigned to that term in
subsection 2.9.                                                                 

                "DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
similar account maintained with a Person engaged in the business of banking,    
including a savings bank, savings and loan association, credit union or trust   
company.                                                                        

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               "DETROIT L/CS" means the letters of credit issued under the
Detroit L/C Credit Agreement on the Closing Date.                               

                "DETROIT L/C CREDIT AGREEMENT" means (i) that certain credit
agreement dated as of the date hereof by and among Domestic Borrowers, as       
borrowers, the Detroit L/C Lenders, as lenders, and Bank of America and Deutsche
Bank, as agents for such lenders, and (ii) any credit agreement entered into by 
Domestic Borrowers to refinance, replace, renew or extend in whole or in part,  
the credit agreement referenced in clause (i) and the Indebtedness and letters  
of credit issued thereunder as permitted pursuant to the New L/C Facility       
Agreement, in each case as such credit agreement may be amended, restated,      
supplemented or otherwise modified from time to time.                           

                  "DETROIT L/C LENDERS" means the "Lenders" under and as defined
in the Detroit L/C Credit Agreement.                                            

                "DEUTSCHE BANK" has the meaning assigned to that term in the
introduction to this Agreement.                                                 

         "DHC" means Danielson Holding Corporation, a Delaware
corporation.                                                                    

               "DIP AGENTS" means the Persons identified as "Agents" under
the DIP Credit Agreement, in their capacities as agents for DIP Lenders under   
the DIP Credit Agreement.                                                       

                  "DIP CREDIT AGREEMENT" means that certain Debtor-In-Possession
Credit Agreement dated as April 1, 2002, by and among Covanta and certain of its
Subsidiaries, as debtors and debtors-in-possession, the financial institutions  
listed on the signature pages thereof, as lenders, and Bank of America and      
Deutsche Bank, as agents for such lenders, as such agreement is in effect       
immediately prior to the Closing Date.                                          

                "DIP CREDIT DOCUMENTS" means the "Loan Documents" as defined
in the DIP Credit Agreement.                                                    

                 "DIP LENDER" means each of the "Lenders" under the DIP Credit
Agreement on the Closing Date, in its capacity as a lender under the DIP Credit 
Agreement.                                                                      

                 "DISTRIBUTABLE CASH" has the meaning assigned to that term in
subsection 3.1T.                                                                

                  "DOLLARS" and the sign "$" mean the lawful money of the United
States.                                                                         

           "DOMESTIC BORROWERS" means Covanta and the Subsidiaries
thereof party from time to time to the Detroit L/C Credit Agreement and New L/C 
Facility Agreement.                                                             

        "DOMESTIC CASH EQUIVALENTS" means, as at any date of
determination, (i) marketable securities (a) issued or directly and             
unconditionally guaranteed as to interest and principal by the United States    
Government or (b) issued by any agency of the United States the obligations of  
which are backed by the full faith and credit of the United States, in each case
maturing within 30 days after such date; (ii) marketable direct obligations     
issued by any state of the United States or any political subdivision of any    
such state or any public instrumentality                                        

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thereof, in each case maturing within 30 days after such date and having, at the
time of the acquisition thereof, the highest rating obtainable from either      
Standard & Poor's ("S&P") or Moody's Investors Service, Inc. ("MOODY'S"); (iii) 
commercial paper maturing no more than 30 days from the date of creation thereof
and having, at the time of the acquisition thereof, a rating of at least "A-1"  
from S&P or at least "P-1" from Moody's; (iv) certificates of deposit or        
bankers' acceptances maturing within 30 days after such date and issued or      
accepted by any Lender or by any commercial bank organized under the laws of the
United States or any state thereof or the District of Columbia that (a) is at   
least "adequately capitalized" (as defined in the regulations of its primary    
Federal banking regulator) and (b) has Tier 1 capital (as defined in such       
regulations) of not less than $100,000,000; (v) shares of any money market      
mutual fund that (a) has at least 95% of its assets invested continuously in the
types of investments referred to in clauses (i) and (ii) above, (b) has net     
assets of not less than $500,000,000, and (c) has the highest rating obtainable 
from either S&P or Moody's; and (vi) such other securities as Company and       
Administrative Agent may agree on from time to time.                            

             "DOMESTIC LOAN DOCUMENTS" means the "Credit Documents" as
defined in each of the Detroit L/C Credit Agreement and New L/C Facility        
Agreement.                                                                      

              "DOMESTIC SUBSIDIARY" means any Subsidiary of any Borrower
that is incorporated or organized under the laws of the United States, any state
thereof or in the District of Columbia.                                         

          "ELIGIBLE ASSIGNEE" means (i) any Person that is (a) a
commercial bank organized under the laws of the United States or any state      
thereof, (b) a savings and loan association or savings bank organized under the 
laws of the United States or any state thereof, (c) a commercial bank organized 
under the laws of any other country or a political subdivision thereof, provided
that (1) such bank is acting through a branch or agency located in the United   
States or (2) such bank is organized under the laws of a country that is a      
member of the Organization for Economic Cooperation and Development or a        
political subdivision of such country, or (d) any other financial institution   
that extends credit or buys loans as one of its businesses; (ii) any Person that
is a Lender at the time of the relevant assignment; or (iii) any other Person   
designated as an Eligible Assignee pursuant to the prior written consent of     
Administrative Agent in their sole discretion; provided that neither Company nor
any Affiliate of Company nor any Competitor shall be an Eligible Assignee; and  
provided further that, in order to be an Eligible Assignee, a Person must have  
at the time of determination a long term senior unsecured debt rating of "A2" or
better from Moody's and/or "A" or better from S&P.                              

                "EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is maintained or contributed to by       
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.   

             "EMPLOYMENT AGREEMENTS" means those employment agreements
entered into on the Closing Date by Company with such Persons as Agent shall    
approve prior to the Closing Date, in each case providing for the exclusive     
employment of such Persons by Company and its Subsidiaries, in the form provided
to Administrative Agent pursuant to subsection 3.1C on or prior to the Closing  
Date.                                                                           

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                "ENFORCING LENDERS" has the meaning assigned to that term in
subsection 9.5B.                                                                

                 "ENVIRONMENTAL CLAIM" means any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order or other 
order or directive (conditional or otherwise), by any Government Authority or   
any other Person, arising (i) pursuant to or in connection with any actual or   
alleged violation of any Environmental Law, or (ii) in connection with any      
actual or alleged damage, injury, threat or harm to health, safety, natural     
resources or the environment.                                                   

            "ENVIRONMENTAL LAWS" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of any Government        
Authority relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage, transportation 
or disposal of Hazardous Materials, or (iii) occupational safety and health,    
industrial hygiene, land use or the protection of human, plant or animal health 
or welfare, in any manner applicable to Company or any of its Subsidiaries or   
any Facility.                                                                   

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

              "ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation that is a member of a controlled group of corporations within the   
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) that is a      
member of a group of trades or businesses under common control within the       
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning  
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any 
corporation described in clause (i) above or any trade or business described in 
clause (ii) above is a member.                                                  

           "ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with     
respect to any Pension Plan (excluding those for which the provision for 30-day 
notice to the PBGC has been waived by regulation) that would reasonably be      
expected to have a Material Adverse Effect; (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the    
Internal Revenue Code) or the imposition of a Lien on the property of Company or
any of its Subsidiaries pursuant to Section 412(n) of the Internal Revenue Code,
except any such failure or imposition attributable to an error made in good     
faith which results in the imposition of liability or a Lien on Company and its 
Subsidiaries and their respective ERISA Affiliates of an immaterial amount, so  
long as such error, failure and imposition are promptly corrected after         
discovery of such error by Company or any of its Subsidiaries, or the failure to
make by its due date a required installment of a material amount under Section  
412(m) of the Internal Revenue Code with respect to any Pension Plan or the     
failure to make any required contribution of a material amount to a             
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such 
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the  
withdrawal by Company, any of its Subsidiaries or any of their respective ERISA 
Affiliates from any Pension Plan with two or more contributing                  

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sponsors or the termination of any such Pension Plan resulting in material      
current liability of Company or any of its Subsidiaries pursuant to Section 4063
or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate   
any Pension Plan, or the occurrence of any event or condition would reasonably  
be expected to constitute grounds under Section 4042 of ERISA for the           
termination of, or the appointment of a trustee to administer, any Pension Plan;
(vi) the imposition of material current liability on Company, any of its        
Subsidiaries or any of their respective ERISA Affiliates pursuant to Section    
4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of  
ERISA; (vii) the withdrawal of Company, any of its Subsidiaries or any of their 
respective ERISA Affiliates in a complete or partial withdrawal (within the     
meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if it   
would reasonably be expected that Company or any of its Subsidiaries will incur 
material liability therefor (in excess of the contribution that would otherwise 
have been due absent such withdrawal), or the receipt by Company, any of its    
Subsidiaries or any of their respective ERISA Affiliates of notice from any     
Multiemployer Plan that it is in reorganization or insolvency pursuant to       
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA; (viii) the assertion of a material claim  
(other than routine claims for benefits) against any Employee Benefit Plan other
than a Multiemployer Plan or the assets thereof, or against Company, any of its 
Subsidiaries or any of their respective ERISA Affiliates in connection with any 
Employee Benefit Plan if such assertion or the liability with respect thereto   
would reasonably be expected to have a Material Adverse Effect; (ix) receipt    
from the Internal Revenue Service of notice of the failure of any Pension Plan  
(or any other Employee Benefit Plan intended to be qualified under Section      
401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the     
Internal Revenue Code, or of the failure of any trust forming part of any       
Pension Plan to qualify for exemption from taxation under Section 501(a) of the 
Internal Revenue Code, in either case if such failure would reasonably be       
expected to have a Material Adverse Effect; or (x) the imposition of a Lien on  
the property of Company or any of its Subsidiaries pursuant to Section          
401(a)(29) of the Internal Revenue Code or pursuant to ERISA with respect to any
Pension Plan.                                                                   

                "EURODOLLAR RATE" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum that is the higher of (x) the rate obtained by dividing (i) the rate per  
annum (rounded upward to the nearest 1/16 of one percent) that appears on the   
Dow Jones Markets (Telerate) page 3750 (or such other comparable page as may, in
the opinion of Administrative Agent, replace such page for the purpose of       
displaying such rate) with maturities comparable to such Interest Period as of  
approximately 10:00 a.m. (London time) on such Interest Rate Determination Date 
by (ii) a percentage equal to 100% minus the stated maximum rate of all reserve 
requirements (including any marginal, emergency, supplemental, special or other 
reserves) applicable on such Interest Rate Determination Date to any member bank
of the Federal Reserve System in respect of "Eurocurrency liabilities" as       
defined in Regulation D (or any successor category of liabilities under         
Regulation D); and (y) 2.00%.                                                   

                  "EURODOLLAR RATE LOANS" means Revolving Loans bearing interest
at rates determined by reference to the Eurodollar Rate as provided in          
subsection 2.2A.                                                                

            "EURODOLLAR RATE MARGIN" means a per annum rate equal to
8.00%.                                                                          

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               "EVENT OF DEFAULT" has the meaning assigned to that term in
Section 7.                                                                      

                "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.                           

                "EXISTING DETROIT L/CS" means, collectively, (i) Irrevocable
Standby Letter of Credit Number SBY501806 issued by UBS Bank, in the available  
amount of $96,731,392.81 as of the Closing Date, for the benefit of PMCC Leasing
Corporation and Resource Recovery Business Trust - A, and (ii) Irrevocable      
Standby Letter of Credit Number SBY501835 issued by UBS Bank, in the available  
amount of $41,460,161.38 as of the Closing Date for the benefit of Aircraft     
Services Corporation and Resource Recovery Business Trust - B.                  

               "EXISTING INTERCREDITOR AGREEMENT" means the "Intercreditor
Agreement" as defined in the DIP Credit Agreement on the Closing Date, as such  
"Intercreditor Agreement" is in effect on the Closing Date.                     

          "EXISTING IPP INTERNATIONAL PROJECT GUARANTIES" means,
collectively, (i) the existing guaranty by Covanta Energy Group of the          
obligations of certain Subsidiaries of Company under certain agreements relating
to the Haripur Project, the Samalpatti Project and the Trezzo Project, (ii) the 
existing guaranty by Covanta Projects, Inc. of the obligations of certain       
Subsidiaries of Company under certain agreements relating to the Quezon Project,
and (iii) the existing guaranty by Covanta of certain Subsidiaries of Company   
under certain agreements relating to the Balaji/Madurai Project and the LICA    
Project, as each such guaranty may be amended, restated, supplemented or        
otherwise modified to the extent permitted hereunder.                           

               "FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or    
heretofore owned, leased, operated or used by any Borrower or any of its        
Subsidiaries, by any of their respective predecessors or by any Person who is an
Affiliate of Borrower or any of its Subsidiaries prior to the Closing Date.     

           "FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted 
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such 
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published   
for any day which is a Business Day, the average of the quotations for such day 
on such transactions received by Administrative Agent from three Federal funds  
brokers of recognized standing selected by Administrative Agent.                

           "FIFRA" means the Federal Insecticide, Fungicide, and
Rodenticide Act, as amended (7 U.S.C. Section 136 et seq.), or any successor    
statute, and all implementing regulations promulgated thereunder.               

                 "FIRST PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that (i) such 
Lien is perfected and has priority over any other Lien on such Collateral (other
than Liens permitted pursuant to subsections 6.2A(iii) through (vi)) and (ii)   
such Lien is the only Lien (other than Liens permitted pursuant to subsection   
6.2) to which such Collateral is subject.                                       

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               "FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.

          "FISCAL YEAR" means the fiscal year of Company and its
Subsidiaries ending on December 31st of each calendar year.                     

           "FLOOD HAZARD PROPERTY" means any real property that is
subject to a Mortgage and is located in an area designated by the Federal       
Emergency Management Agency as having special flood or mud slide hazards.       

       "FOREIGN CASH EQUIVALENTS" means, as at any date of
determination, (i) securities issued or directly and fully guaranteed by the    
government of the country within which an Investment by Company or any of its   
Subsidiaries has been or is being made and (ii) time deposits and certificates  
of deposit of commercial banks having offices in such country, in each case with
a long term unsecured debt rating of at least equal to (a) the rating of the    
relevant government, in the event that such government is rated below investment
grade by either Moody's or S&P, or when there is no Moody's or S&P rating of    
such government, (b) investment grade in the event that the relevant government 
is rated above investment grade by either Moody's or S&P, or (c) "A" or better  
to the extent that the relevant government is rated better than "A" by either   
Moody's or S&P, and (iii) such other securities as Company and Administrative   
Agent may agree on from time to time.                                           

             "FOREIGN PLEDGE AGREEMENT" means each pledge agreement or
similar instrument governed by the laws of a country other than the United      
States, executed on the Closing Date or from time to time thereafter in         
accordance with subsection 5.8 by Company or any Domestic Subsidiary that owns  
Capital Stock of one or more Foreign Subsidiaries organized in such country, in 
form and substance satisfactory to Collateral Agent, as such Foreign Pledge     
Agreement may be amended, restated, supplemented or otherwise modified from time
to time.                                                                        

                  "FOREIGN SUBSIDIARY" means any Subsidiary of any Borrower that
is not a Domestic Subsidiary.                                                   

                 "FUND" means any Person (other than a natural Person) that is
(or will be) engaged in making, purchasing, holding or otherwise investing in   
commercial loans and similar extensions of credit in the ordinary course of its 
business.                                                                       

        "FUNDING AND PAYMENT OFFICE" means (i) the office of
Administrative Agent located at 60 Wall Street, New York, NY 10005 or (ii) such 
other office of Administrative Agent as may from time to time hereafter be      
designated as such in a written notice delivered by Administrative Agent to     
Company and each Lender.                                                        

               "FUNDING BORROWER" has the meaning assigned to that term in
subsection 2.10C.                                                               

       "FUNDING DATE" means the date of funding of a Loan.

              "FUNDING DEFAULT" has the meaning assigned to that term in
subsection 2.9.                                                                 

               "GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, accounting principles generally accepted in
the United States set forth in opinions                                         

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and pronouncements of the Accounting Principles Board of the American Institute 
of Certified Public Accountants and statements and pronouncements of the        
Financial Accounting Standards Board or in such other statements by such other  
entity as are approved by the American Institute of Certified Public            
Accountants.                                                                    

                "GEOTHERMAL SALE" means (i) the sale or other disposition by
Covanta and its Subsidiaries of all or substantially all of their respective (1)
Capital Stock in Heber Geothermal Company, Heber Field Company and Second       
Imperial Geothermal Company, L.P., and (2) Capital Stock in non-debtor Affiliate
Mammoth-Pacific L.P., which entities own or lease geothermal plants and         
facilities in California (the "GEOTHERMAL BUSINESS"), and (ii) the assumption   
and/or assignment by Covanta and its Subsidiaries of certain contracts related  
to the Geothermal Business, in the case of both clauses (i) and (ii) occurring  
prior to or concurrently with the consummation of the Plan of Reorganization.   

               "GOVERNING BODY" means the board of directors or other body
having the power to direct or cause the direction of the management and policies
of a Person that is a corporation, partnership, trust or limited liability      
company.                                                                        

             "GOVERNMENT AUTHORITY" means any political subdivision or
department thereof, any other governmental or regulatory body, commission,      
central bank, board, bureau, organ or instrumentality or any court, in each case
whether federal, state, local or foreign.                                       

           "GOVERNMENTAL AUTHORIZATION" means any permit, license,
registration, authorization, plan, directive, consent, order or consent decree  
of or from, or notice to, any Government Authority.                             

             "GROSS RECEIPTS" means, in respect of any Asset Sale, the
total cash payments (including any cash received by way of deferred payment     
pursuant to, or by monetization of, a note receivable or otherwise, but only as 
and when so received) received from such Asset Sale minus any repayment of debt 
related to the assets sold in such Asset Sale which is made in connection       
therewith and is not prohibited under this Agreement.                           

             "HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of (a) "hazardous
wastes" or "mixed wastes" as defined in RCRA or in any other Environmental Law; 
(b) "hazardous substances", "pollutants" or "contaminants" as defined in CERCLA 
or in any other Environmental Law; (c) "chemical substances" or "mixtures" as   
defined in TSCA or any other substance which is tested pursuant to TSCA or any  
other Environmental Law, or the manufacture, processing, distribution, use or   
disposal of which is regulated or prohibited pursuant to TSCA or any other      
Environmental Law, including without limitation polychlorinated biphenyls and   
electrical equipment which contains any oil or dielectric fluid containing      
regulated concentrations of polychlorinated biphenyls; (d) "insecticides",      
"fungicides", "pesticides" or "rodenticides" as defined in FIFRA or any other   
Environmental Law; or (e) "infectious waste" or "biohazardous waste" as defined 
in any Environmental Law; (ii) asbestos or any asbestos-containing materials;   
(iii) urea formaldehyde foam insulation; (iv) any oil, petroleum, petroleum     
fraction or petroleum derived substance; (v) any drilling fluids, produced      
waters and other wastes associated with the exploration, development or         
production of crude oil, natural gas or geothermal resources; (vi) any flammable

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substances or explosives; (vii) any radioactive materials; and (viii) any other 
chemical, material or substance, exposure to which is prohibited, limited or    
regulated by any Government Authority or which may or could pose a hazard to the
health and safety of the owners, occupants or any Persons in the vicinity of any
Facility or to the indoor or outdoor environment.                               

           "HAZARDOUS MATERIALS ACTIVITY" means any past, current,
proposed or threatened activity, event or occurrence involving any Hazardous    
Materials, including the use, manufacture, possession, storage, holding,        
presence, existence, location, Release, threatened Release, discharge,          
placement, generation, transportation, processing, construction, treatment,     
abatement, removal, remediation, disposal, disposition or handling of any       
Hazardous Materials, and any corrective action or response action with respect  
to any of the foregoing.                                                        

               "HEDGE AGREEMENT" means (i) an Interest Rate Agreement or a
Currency Agreement designed to hedge against fluctuations in interest rates or  
currency values, respectively, or (ii) a forward agreement or arrangement       
designed to hedge against fluctuation in electricity rates pertaining to        
electricity produced by a Project so long as the contractual arrangements       
relating to such Project contemplate that Company or its Subsidiaries shall     
deliver such electricity to third parties.                                      

              "HIGH YIELD INDENTURE" means (i) the indenture pursuant to
which the High Yield Notes are issued and (ii) any replacement indenture entered
into in connection with a refinancing, renewal, replacement or extension of the 
High Yield Notes permitted under the Detroit L/C Credit Agreement and New L/C   
Facility Agreement, in each case as such indenture or replacement indenture may 
be amended, restated, supplemented or otherwise modified from time to time to   
the extent permitted under the Detroit L/C Credit Agreement.                    

              "HIGH YIELD NOTES" means (i) the $230,000,000 in aggregate
principal amount at maturity of 8.25% Senior Notes due 2010 of Covanta issued   
pursuant to the High Yield Indenture, and (ii) any Indebtedness incurred to     
refinance, renew, replace or extend the High Yield Notes permitted to be        
incurred under the Detroit L/C Credit Agreement; provided, that the initial     
principal amount (and issue price) of such High Yield Notes on the Closing Date 
shall be $205,000,000.                                                          

           "INDEBTEDNESS", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect  
to Capital Leases that is properly classified as a liability on a balance sheet 
in conformity with GAAP, (iii) notes payable and drafts accepted representing   
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of  
property or services received by such Person (excluding any such obligations    
incurred under ERISA), which purchase price is (a) due more than six months from
the date of incurrence of the obligation in respect thereof or (b) evidenced by 
a promissory note or similar written instrument, but excluding in either case   
current trade payables incurred in the ordinary course of business and payable  
in accordance with customary practices, (v) Synthetic Lease Obligations, and    
(vi) all indebtedness secured by any Lien on any property or asset owned by that
Person regardless of whether the indebtedness secured thereby shall have been   
assumed by that Person or is nonrecourse to the credit of that Person. Any      
obligations under Interest Rate Agreements and Currency Agreements (and Hedge   
Agreements that protect against fluctuation in electricity rates)               

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constitute (1) in the case of Hedge Agreements, Contingent Obligations, and (2) 
in all other cases, Investments, and in neither case constitute Indebtedness.   
For purposes of this Agreement, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such Person is a      
general partner or a joint venturer, unless the Indebtedness of such partnership
or joint venture is expressly Non Recourse Debt of such partnership or joint    
venture.                                                                        

              "INDEMNIFIED LIABILITIES" has the meaning assigned to that
term in subsection 9.3.                                                         

         "INDEMNITEE" has the meaning assigned to that term in
subsection 9.3.                                                                 

       "INSURANCE PREMIUM FINANCERS" means Persons who are
non-Affiliates of Company that advance insurance premiums for Company and its   
Subsidiaries pursuant to Insurance Premium Financing Arrangements.              

     "INSURANCE PREMIUM FINANCING ARRANGEMENTS" means,
collectively, such agreements as Company and its Subsidiaries shall enter into  
after the Closing Date with Insurance Premium Financers pursuant to which such  
Insurance Premium Financers shall advance insurance premiums for Company and its
Subsidiaries. Such Insurance Premium Financing Arrangements (i) shall provide   
for the benefit of such Insurance Premium Financers a security interest in no   
property of Company or any of its Subsidiaries other than gross unearned        
premiums for the insurance policies, (ii) shall not purport to prohibit any     
portion of the Liens created in favor of Collateral Agent (for the benefit of   
Secured Parties) pursuant to the Collateral Documents, and (iii) shall not      
contain any provision or contemplate any transaction prohibited by this         
Agreement and shall otherwise be in form and substance reasonably satisfactory  
to Agent.                                                                       

          "INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, software, know-how and processes used in or 
necessary for the conduct of the business of Borrowers and their Subsidiaries as
currently conducted that are material to the condition (financial or otherwise),
business or operations of Borrowers and their Subsidiaries, taken as a whole.   

                 "INTERCOMPANY MASTER NOTE" means a promissory note evidencing
Indebtedness of Company and each of its Subsidiaries which (a) to the extent the
Indebtedness evidenced thereby is owed to any Borrower, is pledged pursuant to  
the Collateral Documents, and (b) to the extent the Indebtedness evidenced      
thereby is owed by a Subsidiary of Company, is senior Indebtedness of such      
Subsidiary (except to the extent that requiring such Indebtedness to be senior  
would breach a contractual obligation binding on such Subsidiary), except that  
any such Indebtedness owed by any Borrower to any Subsidiary which is not a     
Borrower shall be subordinated in right of payment to the payment in full of the
Obligations pursuant to the terms of such note.                                 

              "INTERCREDITOR AGREEMENT" means that certain Intercreditor
Agreement executed and delivered on the Closing Date by Borrowers, CEA, Lenders,
Administrative Agent, Collateral Agent, CPIH Term Loan Lenders, the agents under
the CPIH Term Loan Documents, in the form of Exhibit IX annexed hereto, as it   
may thereafter be amended, restated, supplemented or otherwise modified from    
time to time.                                                                   

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              "INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, the last Business Day of each month, commencing on the first such    
date to occur after the Closing Date, and (ii) with respect to any Eurodollar   
Rate Loan, the last day of each Interest Period applicable to such Loan;        
provided that in the case of each Interest Period of longer than one month      
"Interest Payment Date" shall also include each date that is a multiple of one  
month after the commencement of such Interest Period.                           

              "INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.                                                                

          "INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other 
similar agreement or arrangement to which any Borrower or any of Subsidiary of  
any Borrower is a party.                                                        

                 "INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.                                                                         

              "INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any    
successor statute.                                                              

             "INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by Company or any of its Subsidiaries of, or of a beneficial  
interest in, any Securities of any other Person (including any Subsidiary of    
Company), (ii) any direct or indirect redemption, retirement, purchase or other 
acquisition for value, by any Subsidiary of Company from any Person other than  
Company or any of its Subsidiaries, of any equity Securities of such Subsidiary,
(iii) any direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar         
expenditures in the ordinary course of business) or capital contribution by     
Company or any of its Subsidiaries to any other Person, including all           
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales or services to that other Person in the      
ordinary course of business, (iv) Interest Rate Agreements or Currency          
Agreements not constituting Hedge Agreements, or (v) Commodities Agreements not 
constituting Hedge Agreements. The amount of any Investment shall be the        
original cost of such Investment plus the cost of all additions thereto, without
any adjustments for increases or decreases in value, or write-ups, write-downs  
or write-offs with respect to such Investment. No account receivable owed by a  
Person to Company or any of its Subsidiaries that on the relevant date of       
determination constitutes a current asset and arose from sales or services to   
such Person in the ordinary course of business shall constitute an Investment on
such date.                                                                      

              "INVESTOR PARTIES" means D.E. Shaw, SZ Investments, LLC, a
Delaware limited liability company, and Third Avenue Trust, on behalf of the    
Third Avenue Value Fund Series.                                                 

                  "IP COLLATERAL" means, collectively, the Intellectual Property
that constitutes Collateral.                                                    

                "IPP INTERNATIONAL BUSINESS" means the assets and operations
of the business of Covanta and its Subsidiaries referred to by Covanta as the   
"IPP International business" prior to the Closing Date, including the Haripur   
Project, the Samalpatti Project, the Trezzo Project, the Quezon Project, the    
Balaji/Madurai Project, the Linasa Project, the Don Pedro Project, the Rio      

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Volcan Project, the Bataan Project, the Magellan Project, the Linan Project, the
Huantai Project, the Yanjiang Project and the Island Power Project.             

               "JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form.     

            "LEASEHOLD PROPERTY" means any leasehold interest of any
Borrower as lessee under any lease of real property.                            

          "LENDER" and "LENDERS" means the Persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with    
their successors and permitted assigns pursuant to subsection 9.1.              

                 "LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or  
other title retention agreement, any lease in the nature thereof, and any       
agreement to give any security interest) and any option, trust or other         
preferential arrangement having the practical effect of any of the foregoing.   

            "LOAN" or "LOANS" means one or more of the Loans made by
Lenders pursuant to subsection 2.1A.                                            

         "LOAN DOCUMENTS" means this Agreement, the Notes, the
Collateral Documents, the Intercreditor Agreement and all amendments, waivers   
and consents relating thereto.                                                  

               "LOAN EXPOSURE" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Commitments, that     
Lender's Commitment, and (ii) after the termination of the Commitments, the     
aggregate outstanding principal amount of the Revolving Loans of that Lender.   

                  "LOAN PARTY" means each Borrower and CEA, and "LOAN PARTIES"
means all such Persons, collectively.                                           

                  "MADURAI PROJECT ENTITY" has the meaning assigned to that term
in subsection 6.7(vi).                                                          

              "MAGELLAN SUBSIDIARY" means Magellan Cogeneration, Inc., a
Philippines corporation.                                                        

               "MANAGEMENT SERVICES AND REIMBURSEMENT AGREEMENT" means the
management services and reimbursement agreement entered into by Company, Covanta
and certain of their respective Subsidiaries on the Closing Date, in form and   
substance satisfactory to the Agent, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted    
thereunder and under subsection 6.12.                                           

                   "MANDATORY PAYMENT" means any amount described in subsections
2.4A(iii)(a)-(e) to be applied as a prepayment of the Loans and/or the CPIH Term
Loans and/or a permanent reduction of the Commitments, as determined pursuant to
subsection 2.4A.                                                                

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           "MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in      
effect from time to time.                                                       

                 "MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or      
otherwise) or prospects of Borrowers, taken as a whole, or Company and its      
Subsidiaries, taken as a whole, or (ii) the impairment of the ability of Loan   
Parties taken as a whole to perform, or of Administrative Agent or Lenders to   
enforce, the Obligations.                                                       

          "MATERIAL CONTRACT" means (i) the principal service or
operating agreement, if any, with respect to each waste-to-energy Project and   
the principal power sales agreement, if any, with respect to each independent   
power plant Project to which Company or any of its Subsidiaries is a party, each
of which is in existence as of the Closing Date and is described on Schedule    
1.1A annexed hereto, and (ii) any other contract or other arrangement to which  
Company or any of its Subsidiaries is a party (other than the Loan Documents)   
for which breach, nonperformance, cancellation or failure to renew would        
reasonably be expected to have a Material Adverse Effect.                       

            "MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property
reasonably determined by Administrative Agent to be of material value as        
Collateral or of material importance to the operations of Company or any of its 
Subsidiaries.                                                                   

                "MATERIAL SUBSIDIARY" means, with respect to any Person, any
Subsidiary of such Person now existing or hereafter acquired or formed by such  
Person which, on a consolidated basis for such Subsidiary and all of its        
Subsidiaries, (i) for the most recent fiscal year of such Person accounted for  
more than 1% of the consolidated revenues of such Person and its Subsidiaries,  
(ii) as at the end of such fiscal year, was the owner of more than 1% of the    
consolidated assets of such Person and its Subsidiaries, or (iii) is capitalized
with more than $500,000 of equity.                                              

"MATURITY DATE" means March 10, 2007.       

                  "MORTGAGE" means (i) a security instrument (whether designated
as a deed of trust or a mortgage or by any similar title) executed and delivered
by any Loan Party, substantially in the form of Exhibit X annexed hereto or in  
such other form as may be approved by Administrative Agent in its sole          
discretion, in each case with such changes thereto as may be recommended by     
Administrative Agent's local counsel based on local laws or customary local     
mortgage or deed of trust practices, or (ii) at Administrative Agent's option,  
in the case of any real property or Material Leasehold Property that is the     
subject of subsection 5.9, an amendment to an existing Mortgage, in form        
satisfactory to Administrative Agent, in either case as such security instrument
or amendment may be amended, restated, supplemented or otherwise modified from  
time to time. "MORTGAGES" means all such instruments collectively, whether      
executed as of or subsequent to the Closing Date.                               

                  "MULTIEMPLOYER PLAN" means any Employee Benefit Plan that is a
"multiemployer plan" as defined in Section 3(37) of ERISA.                      

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              "NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, Gross Receipts received from such Asset Sale, net of any bona fide direct 
costs incurred in connection with such Asset Sale, including (i) income taxes   
reasonably estimated to be actually payable prior to the earlier of (a) the date
which is eighteen months from the date of such Asset Sale and (b) the Maturity  
Date as a result of any gain recognized in connection with such Asset Sale, (ii)
additional Taxes actually payable upon the closing of such Asset Sale (including
any transfer Taxes or Taxes on gross receipts), (iii) actual, reasonable and    
documented out-of-pocket fees and expenses (including reasonable legal fees,    
reasonable fees to advisors and severance costs that are due (pursuant to a     
Contractual Obligation, or written employment policy applicable to terminated   
employees generally, of Company or any of its Subsidiaries in effect prior to   
such Asset Sale or pursuant to applicable law) and payable immediately upon     
consummation of such Asset Sale to employees of Company and its Subsidiaries    
that are terminated as a result thereof) paid to Persons other than Company and 
its Subsidiaries and their respective Affiliates in connection with such Asset  
Sale (including fees necessary to obtain any required consents of such Persons  
to such Asset Sale), and (iv) payment of the outstanding principal amount of,   
premium or penalty, if any, and interest on any Indebtedness (other than Loans) 
that is (x) secured by a valid, enforceable and perfected Lien on the stock or  
assets in question that is permitted under subsection 6.2 and (y) required to be
repaid under the terms of such Indebtedness as a result of such Asset Sale      
(without duplication of amounts deducted in calculating the Gross Receipts from 
such Asset Sale) and is permitted to be paid under the Loan Documents.          

              "NET DEPRECIATION AND AMORTIZATION EXPENSE" means, for any
period, the sum (expressed as a positive number) of (i) "Depreciation" for such 
period plus (ii) "Amortization" for such period, as each such line item referred
to in clauses (i) and (ii) is reflected in Company's consolidated statement of  
cash flows prepared in conformity with GAAP and reported in a manner consistent 
with Company's reporting of such amount in its quarterly or annual report (as   
the case may be) on Form 10Q or 10K, respectively, prior to the Closing Date,   
whether such line items are so titled or otherwise titled.                      

               "NET INDEBTEDNESS PROCEEDS" means the cash proceeds (net of
underwriting discounts and commissions and other reasonable costs and expenses  
associated therewith (including reasonable legal fees and expenses)) from the   
incurrence of Indebtedness by Company or any of its Subsidiaries.               

                 "NET INSURANCE/CONDEMNATION PROCEEDS" means any cash payments
or proceeds received by Company or any of its Subsidiaries (i) under any        
business interruption or casualty insurance policy in respect of a covered loss 
thereunder or (ii) as a result of the taking of any assets of Company or any of 
its Subsidiaries by any Person pursuant to the power of eminent domain,         
condemnation or otherwise, or pursuant to a sale of any such assets to a        
purchaser with such power under threat of such a taking, in each case net of (a)
income taxes reasonably estimated to be actually payable prior to the earlier of
(1) the date which is eighteen months from the date of such receipt and (2) the 
Maturity Date as a result of the receipt of such payments of proceeds and (b)   
any actual, reasonable and documented out-of-pocket fees and expenses (including
reasonable legal fees, reasonable fees to advisors and severance costs that are 
due (pursuant to a Contractual Obligation, or written employment policy         
applicable to terminated employees generally, of Company or any of its          
Subsidiaries in effect prior to the event causing or                            

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relating to the payment referred to in clause (i) or (ii) above or pursuant to  
applicable law) and payable on or prior to the receipt of such payment or       
proceeds to employees of Company and its Subsidiaries that have been terminated 
as a result of the relevant loss, taking or sale) paid to Persons other than    
Company and its Subsidiaries and their respective Affiliates in connection with 
the relevant loss, taking or sale or the adjustment or settlement of any claims 
of Company or such Subsidiary in respect thereof; provided, however, that Net   
Insurance/Condemnation Proceeds shall be reduced in an amount equal to the      
amount of proceeds Subsidiaries of Company are legally bound or required,       
pursuant to agreements in effect on the Closing Date, or which were entered into
after the Closing Date with respect to the financing or acquisition of a        
Project, to use for purposes other than a Mandatory Payment.                    

              "NEW L/C FACILITY AGREEMENT" means (i) that certain credit
agreement dated as of the date hereof by and among the Domestic Borrowers, as   
borrowers, and the Investor Parties and the other financial institutions listed 
on the signature pages thereof, as lenders, and (ii) any credit agreement       
entered into by Domestic Borrowers to refinance, replace, renew or extend, in   
whole or in part, the credit agreement referenced in clause (i) and the         
Indebtedness and letters of credit issued thereunder as permitted under the     
Detroit L/C Credit Agreement, in each case as such credit agreement may be      
amended, restated, supplemented or otherwise modified from time to time.        

                 "9.25% DEBENTURES" means the "9.25% Debenture Claims" as such
term is defined in the Approved Plan of REORGANIZATION.                         

                "NON RECOURSE DEBT" means, with respect to any Subsidiary of
Company, Indebtedness of such Subsidiary with respect to which the recourse of  
the holder or obligee of such Indebtedness is limited to (i) assets associated  
with the Project (which in any event shall not include assets held by any       
Borrower other than a Borrower, if any, whose sole business is the ownership    
and/or operation of such Project and substantially all of whose assets are      
associated with such Project) in respect of which such Indebtedness was incurred
and/or (ii) such Subsidiary or the equity interests in such Subsidiary, but in  
the case of clause (ii) only if such Subsidiary's sole business is the ownership
and/or operation of such Project and substantially all of such Subsidiary's     
assets are associated with such Project.                                        

              "NON-US LENDER" means a Lender that is organized under the
laws of any jurisdiction other than the United States or any state or other     
political subdivision thereof.                                                  

          "NOTES" means any promissory notes of Borrowers issued
pursuant to subsection 2.1E to evidence the Loans of any Lenders, substantially 
in the form of Exhibit I annexed hereto, as they may be amended, restated,      
supplemented or otherwise modified from time to time.                           

                  "NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit IV annexed hereto.                                                   

      "NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit V annexed hereto.                          

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               "OBLIGATIONS" means all obligations of every nature of Loan
Parties under the Loan Documents, including any liability of such Loan Party on 
any claim arising out of or relating to the Loan Documents, whether or not the  
right to payment in respect of such claim is reduced to judgment, liquidated,   
unliquidated, fixed or contingent, matured, disputed, undisputed, legal,        
equitable, secured or unsecured, and whether or not such claim is discharged,   
stayed or otherwise affected by any bankruptcy, insolvency, reorganization or   
other similar proceeding. Without limiting the generality of the foregoing, the 
Obligations of the Loan Parties under the Loan Documents include (a) the        
obligation to pay principal, interest (including all interest which accrues     
after the commencement of any case or proceeding in bankruptcy after the        
insolvency of, or for the reorganization of, any Loan Party, whether or not     
allowed in such case or proceeding), charges, expenses, fees, attorneys' fees   
and disbursements, indemnities and other amounts payable by any Borrower and any
other Loan Party under any Loan Document and (b) the obligation to reimburse any
amount in respect of any of the foregoing that Agent or any Lender, in its sole 
discretion, may elect to pay or advance on behalf of such Borrower or other Loan
Party.                                                                          

                  "OFFICER" means the president, chief executive officer, a vice
president, chief financial officer, treasurer, general partner (if an           
individual), managing member (if an individual) or other individual appointed by
the Governing Body or the Organizational Documents of a corporation,            
partnership, trust or limited liability company to serve in a similar capacity  
as the foregoing.                                                               

                "OFFICER'S CERTIFICATE" means, as applied to any Person that
is a corporation, partnership, trust or limited liability company, a certificate
executed on behalf of such Person by one or more Officers of such Person or one 
or more Officers of a general partner or a managing member if such general      
partner or managing member is a corporation, partnership, trust or limited      
liability company; provided, that any Officer's Certificate delivered pursuant  
to subsection 2.4A(iii)(g) or 5.1(v) shall be executed by a senior financial    
officer of Company reasonably acceptable to Administrative Agent.               

             "ORGANIZATIONAL DOCUMENTS" means the documents (including
Bylaws, if applicable) pursuant to which a Person that is a corporation,        
partnership, trust or limited liability company is organized.                   

             "PARTICIPANT" means a purchaser of a participation in the
rights and obligations under this Agreement pursuant to subsection 9.1C.        

                "PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.                                                              

                "PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to section 412 of the Internal Revenue Code
or section 302 of ERISA.                                                        

              "PERFORMANCE GUARANTY" means any agreement entered into by
Company or any of its Subsidiaries under which Company or any such Subsidiary   
guarantees the performance of a Subsidiary of Company under a principal lease,  
service or operating agreement relating to a Project.                           

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               "PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien relating to or imposed in      
connection with any Environmental Claim, and any such Lien expressly prohibited 
by any applicable terms of any of the Collateral Documents):                    

                 (i)      Liens for taxes, assessments or governmental charges
 or claims the payment of which is not, at the time, required by
subsection 5.3;                                               

              (ii)     statutory Liens of landlords, statutory Liens and
        rights of set-off of banks, statutory Liens of carriers, warehousemen,
        mechanics, repairmen, workmen and materialmen, and other Liens imposed
      by law, in each case incurred in the ordinary course of business (a)
     for amounts not yet overdue or (b) for amounts that are overdue and
         that (in the case of any such amounts overdue for a period in excess of
       5 days) are being contested in good faith by appropriate proceedings,
       so long as (1) such reserves or other appropriate provisions, if any,
as shall be required by GAAP shall have been made for any such
      contested amounts, and (2) in the case of a Lien with respect to any
  portion of the Collateral, such contest proceedings conclusively
         operate to stay the sale of any portion of the Collateral on account of
such Lien;                                                    

            (iii)    Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,  
         unemployment insurance and other types of social security, or to secure
      the performance of tenders, statutory obligations, surety and appeal
         bonds, bids, leases, government contracts, trade contracts, performance
       and return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money), so long as no 
   foreclosure, sale or similar proceedings have been commenced with
respect to any portion of the Collateral on account thereof;  

                (iv)     any attachment or judgment Lien not constituting an
Event of Default under subsection 7.8;                        

            (v)      leases or subleases granted to third parties in
      accordance with any applicable terms of the Collateral Documents and
      not interfering in any material respect with the ordinary conduct of
      the business of Company or any of its Subsidiaries or resulting in a
        material diminution in the value of any Collateral as security for the
Secured Obligations;                                          

    (vi)     easements, rights-of-way, restrictions,
      encroachments, and other minor defects or irregularities in title to
       the real property of Company and its Subsidiaries, in each case which
         do not and will not interfere in any material respect with the ordinary
         conduct of the business of Company or any of its Subsidiaries or result
         in a material diminution in the value of any Collateral as security for
the Secured Obligations;                                      

               (vii)    any (a) interest or title of a lessor or sublessor
      under any lease not prohibited by this Agreement, (b) restriction or
        encumbrance that the interest or title of such lessor or sublessor may
      be subject to, or (c) subordination of the interest of the lessee or
       sublessee under such lease to any restriction or encumbrance referred
to in the                                                     

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    preceding clause (b), so long as the holder of such restriction or
        encumbrance agrees to recognize the rights of such lessee or sublessee
under such lease;                                             

               (viii)   Liens arising from filing UCC financing statements
relating solely to leases not prohibited by this Agreement;   

              (ix)     Liens in favor of customs and revenue authorities
   arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;                     

              (x)      any zoning or similar law or right reserved to or
        vested in any governmental office or agency to control or regulate the
use of any real property;                                     

               (xi)     Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
        reciprocal easement or similar agreements entered into in the ordinary
course of business of Company and its Subsidiaries; and       

                 (xii)    licenses of Intellectual Property granted by Company
       or any of its Subsidiaries in the ordinary course of business and not
      interfering in any material respect with the ordinary conduct of the
business of Company or such Subsidiary.                       

             Other Liens on assets of Borrowers and their Subsidiaries
permitted under this Agreement (which are not Permitted Encumbrances) are       
described in subsection 6.2A.                                                   

              "PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,    
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal, 
state or local, domestic or foreign, and including political subdivisions       
thereof) and agencies or other administrative or regulatory bodies thereof.     

                "PETITION DATE" has the meaning assigned to that term in the
recitals to this Agreement.                                                     

                 "PLAN OF REORGANIZATION" means the Debtors' Second Joint Plan
of Reorganization under Chapter 11 of the Bankruptcy Code as filed with the     
Bankruptcy Court on January 14, 2004 (and as revised and amended through March  
2, 2004), together with the Reorganization Plan Supplement to Debtors' Second   
Joint Plan of Reorganization filed with the Bankruptcy Court on February 18,    
2004 in connection therewith.                                                   

                  "PLEDGED COLLATERAL" means the "Pledged Collateral" as defined
in each of the Security Agreement and the CEA Stock Pledge Agreement.           

                 "POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.    

                 "PREPETITION CREDIT AGREEMENT" means the Revolving Credit and
Participation Agreement dated as of March 14, 2001, among Company, certain of   
its Subsidiaries, the                                                           

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financial institutions listed on the signature pages thereof, Deutsche Bank, as 
Documentation Agent, and Bank of America, as Administrative Agent, as amended,  
restated, supplemented or otherwise modified through the Closing Date and as it 
may hereafter be amended, restated, supplemented or otherwise modified.         

                "PREPETITION CREDIT DOCUMENTS" means all "Loan Documents" as
defined in the Prepetition Credit Agreement.                                    

         "PREPETITION LENDERS" means the Persons identified as
"Lenders" under the Prepetition Credit Agreement, in their capacities as lenders
under the Prepetition Credit Agreement, together with their successors and      
permitted assigns.                                                              

                "PREPETITION OBLIGATIONS" means all "Obligations" as defined
in the Prepetition Credit Agreement.                                            

                  "PREPETITION SECURED CLAIMS" means, collectively, the "Secured
Bank Claims" and the "9.25% Debenture Claims", as such terms are defined in the 
Approved Plan of Reorganization.                                                

            "PREPETITION UNSECURED CLAIMS" means "Parent and Holding
Company Unsecured Claims" that are "Allowed," as such terms are defined in the  
Approved Plan of Reorganization.                                                

                 "PRIME RATE" means the rate that Deutsche Bank announces from
time to time as its prime lending rate in effect for commercial borrowers in the
United States, as in effect from time to time. The Prime Rate is a reference    
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. Deutsche Bank or any other Lender may make commercial loans or 
other loans at rates of interest at, above or below the Prime Rate.             

             "PROCEEDINGS" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or           
arbitration.                                                                    

            "PROJECT" means any waste-to-energy facility, electrical
generation plant, cogeneration plant, water treatment facility or other facility
for the generation of electricity or engaged in another line of business in     
which Company and its Subsidiaries are permitted to be engaged hereunder for    
which a Subsidiary or Subsidiaries of Company was, is or will be (as the case   
may be) an owner, operator, manager or builder, and shall also mean any two or  
more of such plants or facilities in which an interest has been acquired in a   
single transaction, so long as such interest constitutes an existing Investment 
on the Closing Date permitted under this Agreement; provided, however, that a   
Project shall cease to be a Project of Company and its Subsidiaries at such time
that Company or any of its Subsidiaries ceases to have any existing or future   
rights or obligations (whether direct or indirect, contingent or matured)       
associated therewith.                                                           

        "PRO RATA SHARE" means with respect to all payments,
computations and other matters relating to the Commitment of any Lender or any  
Loans deemed made by any Lender, the percentage obtained by dividing (i) the    
Loan Exposure of that Lender by (ii) the aggregate Loan Exposure of all Lenders,
in any such case as the applicable percentage may be adjusted by                

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assignments permitted pursuant to subsection 9.1. The initial Pro Rata Share of 
each Lender is set forth opposite the name of that Lender in Schedule 2.1       
annexed hereto.                                                                 

                "PTO" means the United States Patent and Trademark Office or
any successor or substitute office in which filings are necessary or, in the    
opinion of Administrative Agent, desirable in order to create or perfect Liens  
on any IP Collateral.                                                           

               "PUHCA" has the meaning assigned to that term in subsection
4.9.                                                                            

               "PURPA" means the Public Utility Regulatory Policies Act of
1978, as amended.                                                               

               "RCRA" means the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Section 6901 et seq.), or any successor statute, and all     
implementing regulations promulgated thereunder.                                

                  "REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by any Borrower in any real property.                       

                 "RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been recorded in
all places necessary or desirable, in Administrative Agent's reasonable         
judgment, to give constructive notice of such Leasehold Property to third-party 
purchasers and encumbrancers of the affected real property. For purposes of this
definition, the term "RECORD DOCUMENT" means, with respect to any Leasehold     
Property, (a) the lease evidencing such Leasehold Property or a memorandum      
thereof, executed and acknowledged by the owner of the affected real property,  
as lessor, or (b) if such Leasehold Property was acquired or subleased from the 
holder of a Recorded Leasehold Interest, the applicable assignment or sublease  
document, executed and acknowledged by such holder, in each case in form        
sufficient to give such constructive notice upon recordation and otherwise in   
form reasonably satisfactory to Administrative Agent.                           

                  "REGISTER" has the meaning assigned to that term in subsection
2.1D.                                                                           

                "RELATED AGREEMENTS" means the CPIH Term Loan Documents, the
Management Services and Reimbursement Agreement, the Existing IPP International 
Project Guaranties, and the Tax Sharing Agreement, as such agreements and       
instruments may be amended, restated, supplemented or otherwise modified from   
time to time to the extent permitted under subsection 6.12.                     

              "RELEASE" means any releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,        
dumping, disposing, depositing or migrating of Hazardous Materials into the     
indoor or outdoor environment (including the abandonment, discarding or disposal
of any barrels, containers or other closed receptacles containing any Hazardous 
Materials), including the movement of any Hazardous Materials through the air,  
soil, surface water or groundwater.                                             

               "REQUISITE DIP LENDERS" means DIP Lenders having or holding
more than 50% of the aggregate credit exposure under the "Tranche A L/Cs" and   
the "Tranche B L/Cs" (as such terms are defined in the DIP Credit Agreement).   

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                 "REQUISITE LENDERS" means Lenders having or holding more than
50% of the aggregate Loan Exposure of all Lenders; provided, however, that prior
to the Closing Date, for purposes of this definition, the Loan Exposure of each 
Lender shall equal the original Commitment of such Lender on the Closing Date.  

        "RESTRICTED PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in    
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for  
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the       
surrender of, any outstanding warrants, options or other rights to acquire      
shares of any class of stock of Company now or hereafter outstanding, and (iv)  
any payment or prepayment of principal of, premium, if any, or interest on, or  
redemption, purchase, retirement, defeasance (including in-substance or legal   
defeasance), sinking fund or similar payment with respect to, any Indebtedness  
of Company and its Subsidiaries other than (a) the Obligations, (b) Indebtedness
owed by a Subsidiary to a Borrower, (c) payments under the CPIH Term Loan       
Agreement and (d) other amounts required to be paid under this Agreement.       

              "SECURED OBLIGATIONS" means the obligations secured by the
Collateral pursuant to the Collateral Documents.                                

               "SECURED PARTIES" means the "Secured Parties" as defined in
the Intercreditor Agreement.                                                    

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

                 "SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.                                   

              "SECURITIES ACCOUNT" means an account to which a financial
asset is or may be credited in accordance with an agreement under which the     
Person maintaining the account undertakes to treat the Person for whom the      
account is maintained as entitled to exercise the rights that comprise the      
financial asset.                                                                

                  "SECURITY AGREEMENT" means the Security Agreement executed and
delivered on the Closing Date by Borrowers, substantially in the form of Exhibit
VII annexed hereto, as such Security Agreement may thereafter be amended,       
restated, supplemented or otherwise modified from time to time.                 

               "SOLVENT" means, with respect to any Person, that as of the
date of determination, in light of all of the facts and circumstances existing  
at such time, (i) the then fair saleable value                                  

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of the property of such Person is (a) greater than the total amount of          
liabilities (including contingent liabilities) of such Person and (b) not less  
than the amount that will be required to pay the probable liabilities on such   
Person's then existing debts as they become absolute and due considering all    
financing alternatives and potential asset sales reasonably available to such   
Person; (ii) such Person's capital is not unreasonably small in relation to its 
business or any contemplated or undertaken transaction; and (iii) such Person   
does not intend to incur, or believe (nor should it reasonably believe) that it 
will incur, debts beyond its ability to pay such debts as they become due. For  
purposes of this definition, the amount of any contingent liability at any time 
shall be computed as the amount that, in light of all of the facts and          
circumstances existing at such time, represents the amount that can reasonably  
be expected to become an actual or matured liability.                           

        "SUBORDINATED INDEBTEDNESS" means, collectively, (i)
Indebtedness under the Unsecured Creditor Notes and the Unsecured Creditor Notes
Indenture and (ii) any other Indebtedness of Company or any of its Subsidiaries 
incurred from time to time and subordinated by its terms in right of payment to 
the Obligations.                                                                

       "SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, trust, limited liability company, association, joint  
venture or other business entity of which more than 50% of the total voting     
power of shares of stock or other ownership interests entitled (without regard  
to the occurrence of any contingency) to vote in the election of the members of 
the Governing Body is at the time owned or controlled, directly or indirectly,  
by that Person or one or more of the other Subsidiaries of that Person or a     
combination thereof. Unless otherwise specified herein or unless the context    
otherwise requires, any reference to a "Subsidiary" contained herein means a    
Subsidiary of Company.                                                          

                 "SYNTHETIC LEASE OBLIGATION" means the monetary obligation of
a Person under (i) a so-called synthetic, off-balance sheet or tax retention    
lease, or (ii) an agreement for the use or possession of property creating      
obligations that do not appear on the balance sheet of such Person but which,   
upon the insolvency or bankruptcy of such Person, would be characterized as the 
indebtedness of such Person (without regard to accounting treatment).           

           "TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever  
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,   
withheld or assessed, including interest, penalties, additions to tax and any   
similar liabilities with respect thereto; except that, in the case of a Lender, 
there shall be excluded franchise taxes and all taxes that are imposed on the   
overall income or profits of such Lender by the United States or by any other   
Government Authority under the laws of which Lender is organized or has its     
principal office or maintains its applicable lending office.                    

                  "TAX NOTE" has the meaning assigned to that term in subsection
3.1F(iv).                                                                       

           "TAX SHARING AGREEMENT" means the tax sharing agreement
entered into by DHC, Covanta and Company on the Closing Date, in form and       
substance satisfactory to the Administrative Agent, as such agreement may be    
amended, restated, supplemented or otherwise modified from time to time to the  
extent permitted under subsection 6.12.                                         

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                "TOTAL DEBT" means, as at any date of determination, (i) the
aggregate stated balance sheet amount of all Indebtedness of Company and its    
Subsidiaries, determined on a consolidated basis in accordance with GAAP, minus 
(ii) the amounts of "Current portion of project debt" and "Project Debt",       
whether such line items are so titled or otherwise titled, as such line items   
are or would be reflected in Company's consolidated balance sheet as at such    
date prepared in conformity with GAAP and reported in a manner consistent with  
Company's reporting of such amounts in its quarterly or annual report (as the   
case may be) on Form 10Q or 10K, respectively, prior to the Closing Date, minus 
(iii) any portion of Indebtedness of Company and its Subsidiaries under the Tax 
Sharing Agreement included in the amount described in clause (i) above.         

               "TOTAL UTILIZATION OF COMMITMENTS" means, as at any date of
determination, the aggregate principal amount of all outstanding Revolving      
Loans.                                                                          

         "TREASURY REGULATIONS" means the Treasury Regulations
promulgated under the Internal Revenue Code.                                    

             "TSCA" means the Toxic Substances Control Act of 1976, as
amended (15 U.S.C. Section 2601 et seq.), or any successor statute, and all     
implementing regulations promulgated thereunder.                                

"UBS BANK" means UBS AG, Stamford Branch.   

              "UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.            

       "UNITED STATES" means the United States of America.

               "UNSECURED CREDITOR NOTES" has the meaning assigned to that
term in subsection 3.1F(iv).                                                    

            "UNSECURED CREDITOR NOTES INDENTURE" means the Indenture
pursuant to which the Unsecured Creditor Notes are issued.                      

1.2      ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF
CALCULATIONS UNDER AGREEMENT.               

                 Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned  
to them in conformity with GAAP. Financial statements and other information     
required to be delivered by Company to Lenders pursuant to clauses (iii) and    
(iv) of subsection 5.1 shall be prepared in accordance with GAAP as in effect at
the time of such preparation (and delivered together with the reconciliation    
statements provided for in subsection 5.1(vi)). Except as otherwise permitted by
this Agreement, calculations in connection with the definitions, covenants and  
other provisions of this Agreement shall utilize GAAP as in effect on the date  
of determination, applied in a manner consistent with that used in preparing the
financial statements referred to in subsection 4.3. If at any time any change in
GAAP would affect the computation of any financial ratio or requirement set     
forth in any Loan Document, and Company, Administrative Agent or Requisite      
Lenders shall so request,                                                       

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Administrative Agent, Lenders and Company shall negotiate in good faith to amend
such ratio or requirement to preserve the original intent thereof in light of   
such change in GAAP (subject to the approval of Requisite Lenders); provided    
that, until so amended, such ratio or requirement shall continue to be computed 
in accordance with GAAP prior to such change therein and Company shall provide  
to Administrative Agent and Lenders reconciliation statements provided for in   
subsection 5.1(vi).                                                             

   1.3      OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.

              A. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the     
reference.                                                                      

             B. References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise      
specifically provided.                                                          

                 C. The use in any of the Loan Documents of the word "include"
or "including", when following any general statement, term or matter, shall not 
be construed to limit such statement, term or matter to the specific items or   
matters set forth immediately following such word or to similar items or        
matters, whether or not nonlimiting language (such as "without limitation" or   
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall     
within the broadest possible scope of such general statement, term or matter.   

SECTION 2.        AMOUNTS AND TERMS OF COMMITMENTS AND LOANS                    

      2.1      COMMITMENTS; MAKING OF LOANS; THE REGISTER; OPTIONAL NOTES.

               A. COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrowers  
herein set forth, each Lender severally agrees to lend to Borrowers, on a joint 
and several basis, from time to time during the period from the Closing Date to 
but excluding the Maturity Date an aggregate amount not exceeding its Pro Rata  
Share of the aggregate amount of the Commitments to be used for the purposes    
identified in subsection 2.5A. The original amount of each Lender's Commitment  
is set forth opposite its name on Schedule 2.1 annexed hereto and the aggregate 
original principal amount of the Commitments is $10,000,000; provided, however, 
that the Commitments of Lenders shall be adjusted to give effect to any         
assignments of the Commitments pursuant to subsection 9.1B and shall be reduced 
from time to time by the amount of any reductions thereto made pursuant to      
subsection 2.4. Each Lender's Commitment shall expire on the day before the     
Maturity Date and all Loans and all other amounts owed hereunder with respect to
the Loans and the Commitments shall be paid in full no later than the Maturity  
Date. Amounts borrowed under this subsection 2.1A may be repaid and reborrowed  
up to but excluding the Maturity Date. Anything contained in this Agreement to  
the contrary notwithstanding, in no event shall the Total Utilization of        
Commitments at any time exceed the Commitments then in effect.                  

                B. BORROWING MECHANICS. Loans made on any Funding Date shall
be in an aggregate minimum amount of $200,000 and integral multiples of $100,000
in excess of that amount (or, if the amount of the Commitments unfunded and     
available for borrowing is less than such aggregate minimum amount, an amount   
equal to the amount of the Commitments unfunded                                 

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and available for borrowing); provided that Loans made on any Funding Date as   
Eurodollar Rate Loans with a particular Interest Period shall be in an aggregate
minimum amount of $500,000 and integral multiples of $200,000 in excess of that 
amount. Whenever Borrowers desire that Lenders make Loans they shall deliver to 
Administrative Agent a Notice of Borrowing no later than 10:00 A.M. (New York   
City time) at least three Business Days in advance of the proposed Funding Date 
(in the case of a Eurodollar Rate Loan) or at least one Business Day in advance 
of the proposed Funding Date (in the case of a Base Rate Loan). Loans may be    
continued as or converted into Base Rate Loans and Eurodollar Rate Loans in the 
manner provided in subsection 2.2D. In lieu of delivering a Notice of Borrowing,
Borrowers may give Administrative Agent telephonic notice by the required time  
of any proposed borrowing under this subsection 2.1B; provided that such notice 
shall be promptly confirmed in writing by delivery of a duly executed Notice of 
Borrowing to Administrative Agent on or before the applicable Funding Date.     

               Neither Administrative Agent nor any Lender shall incur any
liability to any Borrower in acting upon any telephonic notice referred to above
that Administrative Agent believes in good faith to have been given by an       
Officer of a Borrower or for otherwise acting in good faith under this          
subsection 2.1B or under subsection 2.2D, and upon funding of Loans by Lenders, 
and upon conversion or continuation of the applicable basis for determining the 
interest rate with respect to any Loans pursuant to subsection 2.2D, in each    
case in accordance with this Agreement, pursuant to any such telephonic notice  
Borrowers shall have effected Loans or a conversion or continuation, as the case
may be, of Loans hereunder.                                                     

            Borrowers shall notify Administrative Agent prior to the
funding of any Loans in the event that any of the matters to which Borrowers are
required to certify in the applicable Notice of Borrowing is no longer true and 
correct as of the applicable Funding Date, and the acceptance by Borrowers of   
the proceeds of any Loans shall constitute a re-certification by Borrowers, as  
of the applicable Funding Date, as to the matters to which Borrowers are        
required to certify in the applicable Notice of Borrowing.                      

              Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Borrowing for, or a Notice of Conversion/Continuation for     
conversion to, or continuation of, a Eurodollar Rate Loan (or telephonic notice 
in lieu thereof) shall be irrevocable on and after the related Interest Rate    
Determination Date, and Borrowers shall be bound to make a borrowing or to      
effect a conversion or continuation in accordance therewith.                    

               Notwithstanding the foregoing provisions of this subsection
2.1B, no Eurodollar Rate Loans may be made and no Base Rate Loan may be         
converted into a Eurodollar Rate Loan until the third Business Day after the    
Closing Date.                                                                   

                  C. DISBURSEMENT OF FUNDS. All Loans under this Agreement shall
be made by Lenders simultaneously and proportionately to their respective Pro   
Rata Shares, it being understood that neither Administrative Agent nor any      
Lender shall be responsible for any default by any other Lender in that other   
Lender's obligation to make a Loan requested hereunder nor shall the Commitment 
of any Lender to make a Loan requested be increased or decreased as a result of 
a default by any other Lender in that other Lender's obligation to make a Loan  
requested hereunder. Promptly after receipt by Administrative Agent of a Notice 
of Borrowing                                                                    

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pursuant to subsection 2.1B (or telephonic notice in lieu thereof) or a notice  
deemed to be a Notice of Borrowing pursuant to subsection 2.1B, Administrative  
Agent shall notify each Lender of the proposed borrowing. Each such Lender shall
make the amount of its Loan available to Administrative Agent not later than    
12:00 Noon (New York City time) on the applicable Funding Date, in same day     
funds in Dollars, at the Funding and Payment Office. Upon satisfaction or waiver
of the conditions precedent specified in subsections 3.1 (in the case of Loans  
made on the Closing Date) and 3.2 (in the case of all Loans), Administrative    
Agent shall make the proceeds of such Loans available to Borrowers on the       
applicable Funding Date by causing an amount of same day funds in Dollars equal 
to the proceeds of all such Loans received by Administrative Agent from Lenders 
to be credited to the account of Borrowers at the Funding and Payment Office.   

               Unless Administrative Agent shall have been notified by any
Lender prior to a Funding Date that such Lender does not intend to make         
available to Administrative Agent the amount of such Lender's Loan requested on 
such Funding Date, Administrative Agent may assume that such Lender has made    
such amount available to Administrative Agent on such Funding Date and          
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Borrowers a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by   
such Lender, Administrative Agent shall be entitled to recover such             
corresponding amount on demand from such Lender together with interest thereon, 
for each day from such Funding Date until the date such amount is paid to       
Administrative Agent, at the customary rate set by Administrative Agent for the 
correction of errors among banks for three Business Days and thereafter at the  
Base Rate. If such Lender does not pay such corresponding amount forthwith upon 
Administrative Agent's demand therefor, Administrative Agent shall promptly     
notify Borrowers and Borrowers shall immediately pay such corresponding amount  
to Administrative Agent together with interest thereon, for each day from such  
Funding Date until the date such amount is paid to Administrative Agent, at the 
rate payable under this Agreement for Base Rate Loans. Nothing in this          
subsection 2.1C shall be deemed to relieve any Lender from its obligation to    
fulfill its Commitments hereunder or to prejudice any rights that Borrowers may 
have against any Lender as a result of any default by such Lender hereunder.    

           D. THE REGISTER. Administrative Agent, acting for these
purposes solely as an agent of Borrowers (it being acknowledged that            
Administrative Agent, in such capacity, and its officers, directors, employees, 
agent and affiliates shall constitute Indemnitees under subsection 9.3), shall  
maintain (and make available for inspection by Borrowers and Lenders upon       
reasonable prior notice at reasonable times) at its address referred to in      
subsection 9.8 a register for the recordation of, and shall record, the names   
and addresses of Lenders and the Commitment and Loans of each Lender from time  
to time (the "REGISTER"). Borrowers, Administrative Agent and Lenders shall deem
and treat the Persons listed as Lenders in the Register as the holders and      
owners of the corresponding Commitments and Loans listed therein for all        
purposes hereof; all amounts owed with respect to any Commitment or Loan shall  
be owed to the Lender listed in the Register as the owner thereof; and any      
request, authority or consent of any Person who, at the time of making such     
request or giving such authority or consent, is listed in the Register as a     
Lender shall be conclusive and binding on any subsequent holder, assignee or    
transferee of the corresponding Commitments or Loans. Each Lender shall record  
on its internal records the amount of its Loans and Commitments and each payment
in                                                                              

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respect hereof, and any such recordation shall be conclusive and binding on     
Borrowers, absent manifest error, subject to the entries in the Register, which 
shall, absent manifest error, govern in the event of any inconsistency with any 
Lender's records. Failure to make any recordation in the Register or in any     
Lender's records, or any error in such recordation, shall not affect any Loans  
or Commitments or any Obligations in respect of any Loans.                      

               E. OPTIONAL NOTES. If so requested by any Lender by written
notice to Company (with a copy to Administrative Agent) at least two Business   
Days prior to the Closing Date or at any time thereafter, Borrowers shall       
execute and deliver to such Lender (and/or, if applicable and if so specified in
such notice, to any Person who is an assignee of such Lender pursuant to        
subsection 9.1) on the Closing Date (or, if such notice is delivered after the  
date which is two Business Days prior to the Closing Date, promptly after       
Company's receipt of such notice) a promissory note or promissory notes to      
evidence such Lender's Loan, substantially in the form of Exhibit I annexed     
hereto, with appropriate insertions, including the principal amount of that     
Lender's Commitment.                                                            

2.2      INTEREST ON THE LOANS.                               

                 A. RATE OF INTEREST. Subject to the provisions of subsections
2.6 and 2.7, each Loan shall bear interest on the unpaid principal amount       
thereof from the date made until repayment in full at a rate determined by      
reference to the Base Rate or the Eurodollar Rate. The applicable basis for     
determining the rate of interest with respect to any Loan shall be selected by  
Borrowers initially at the time a Notice of Borrowing is given with respect to  
such Loan pursuant to subsection 2.2B (subject to the last sentence of          
subsection 2.1B), and the basis for determining the interest rate with respect  
to any Loan may be changed from time to time pursuant to subsection 2.2B        
(subject to the last sentence of subsection 2.1B). If on any day a Loan is      
outstanding with respect to which notice has not been delivered to              
Administrative Agent in accordance with the terms of this Agreement specifying  
the applicable basis for determining the rate of interest, then for that day    
that Loan shall bear interest determined by reference to the Base Rate. Subject 
to the provisions of subsections 2.2E, 2.2G and 2.7, the Loans shall bear       
interest through maturity as follows:                                           

                  (i)      if a Base Rate Loan, then at the sum of the Base Rate
plus the Base Rate Margin; or                                 

              (ii)     if a Eurodollar Rate Loan, then at the sum of the
Eurodollar Rate plus the Eurodollar Rate Margin.              

                B. INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, Borrowers may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an 
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall be
a one-, two-, three- or six-month period; provided that:                        

                (i)      the initial Interest Period for any Eurodollar Rate
         Loan shall commence on the Funding Date in respect of such Loan, in the
         case of a Loan initially made as a Eurodollar Rate Loan, or on the date
       specified in the applicable Notice of Conversion/Continuation, in the
case of a Loan converted to a Eurodollar Rate Loan;           

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           (ii)     in the case of immediately successive Interest
         Periods applicable to a Eurodollar Rate Loan continued as such pursuant
         to a Notice of Conversion/Continuation, each successive Interest Period
       shall commence on the day on which the next preceding Interest Period
expires;                                                      

                  (iii)    if an Interest Period would otherwise expire on a day
      that is not a Business Day, such Interest Period shall expire on the
     next succeeding Business Day; provided that, if any Interest Period
         would otherwise expire on a day that is not a Business Day but is a day
        of the month after which no further Business Day occurs in such month,
       such Interest Period shall expire on the next preceding Business Day;

                 (iv)     any Interest Period that begins on the last Business
        Day of a calendar month (or on a day for which there is no numerically
     corresponding day in the calendar month at the end of such Interest
      Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;                    

                  (v)      no Interest Period with respect to any portion of the
Loans shall extend beyond the Maturity Date in effect at the  
commencement of such Interest Period; and                     

              (vi)     there shall be no more than four Interest Periods
outstanding at any time.                                      

                 C. INTEREST PAYMENTS. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each Interest 
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the  
extent accrued on the amount being prepaid) and at maturity (including final    
maturity).                                                                      

               D. CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Borrowers shall have the option (i) to convert at any time all  
or any part of their outstanding Loans equal to $200,000 and integral multiples 
of $100,000 in excess of that amount from Loans bearing interest at a rate      
determined by reference to one basis to Loans bearing interest at a rate        
determined by reference to an alternative basis or (ii) upon the expiration of  
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $500,000 and integral multiples of $200,000 in    
excess of that amount as a Eurodollar Rate Loan; provided, however, that a      
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the         
expiration date of an Interest Period applicable thereto.                       

                  Borrowers shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York City time) at least one 
Business Day in advance of the proposed conversion date (in the case of a       
conversion to a Base Rate Loan) and at least three Business Days in advance of  
the proposed conversion/continuation date (in the case of a conversion to, or a 
continuation of, a Eurodollar Rate Loan). In lieu of delivering a Notice of     
Conversion/Continuation Borrowers may give Administrative Agent telephonic      
notice by the required time of any proposed conversion/continuation under this  
subsection 2.2D; provided that such notice shall be promptly confirmed in       
writing by delivery of a Notice of Conversion/Continuation to Administrative    
Agent on or before the proposed conversion/continuation date. Administrative    
Agent shall promptly notify each Lender of any Loan subject to the Notice of    
Conversion/Continuation.                                                        

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       E. DEFAULT RATE. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of all   
Loans and, to the extent permitted by applicable law, any interest payments     
thereon not paid when due and any fees and other amounts then due and payable   
hereunder, shall thereafter bear interest (including post petition interest in  
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)   
payable upon demand at a rate that is (i) in the case of Loans, 2.00% per annum 
in excess of (a) the interest rate otherwise payable under this Agreement for   
Base Rate Loans or (b) the interest rate otherwise payable under this Agreement 
with respect to such Loans, if such Loans are Eurodollar Rate Loans, the        
Interest Period in effect at the time of the relevant Event of Default has not  
yet expired, and such interest rate otherwise payable with respect to such Loans
is greater than the interest rate otherwise payable under this Agreement for    
Base Rate Loans, or (ii) in the case of fees and other amounts, 2.00% per annum 
in excess of the interest rate otherwise payable under this Agreement for Base  
Rate Loans. Payment or acceptance of the increased rates of interest provided   
for in this subsection 2.2E is not a permitted alternative to timely payment and
shall not constitute a waiver of any Event of Default or otherwise prejudice or 
limit any rights or remedies of Administrative Agent or any Lender.             

               F. COMPUTATION OF INTEREST. Interest on the Loans and other
amounts bearing interest with reference to the Base Rate shall be computed (i)  
in the case of Base Rate Loans and other amounts bearing interest with reference
to the Base Rate, on the basis of a 365-day or 366-day year, as the case may be,
and (ii) in the case of Eurodollar Rate Loans, on the basis of a 360-day year,  
in each case for the actual number of days elapsed in the period during which it
accrues. In computing interest on any Loan, the date of the making of such Loan 
or the first day of an Interest Period applicable to such Loan or, with respect 
to a Base Rate Loan being converted from a Eurodollar Rate Loan, the date of    
conversion of such Eurodollar Rate Loan to such Base Rate Loan, as the case may 
be, shall be included; and the date of payment of such Loan or the expiration   
date of an Interest Period applicable to such Loan or, with respect to a Base   
Rate Loan being converted to a Eurodollar Rate Loan, the date of conversion of  
such Base Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be  
excluded; provided that if a Loan is repaid on the same day on which it is made,
one day's interest shall be paid on that Loan.                                  

                G. MAXIMUM RATE. Notwithstanding the foregoing provisions of
this subsection 2.2, in no event shall the rate of interest payable by Borrowers
with respect to any Loan exceed the maximum rate of interest permitted to be    
charged under applicable law.                                                   

2.3      FEES.                              

        A. AGENCY FEE; FACILITY FEES. Borrowers, jointly and
severally, agree to pay to Administrative Agent (i) on the Closing Date and each
anniversary of the Closing Date (excluding the Maturity Date), for              
Administrative Agent's own account and in advance for the forthcoming year, an  
annual agency fee in an amount equal to $30,000 (which fee shall be fully earned
and non-refundable when due), and (ii) on the Closing Date, for distribution to 
each Lender, a facility fee in an amount equal to 2.0% of the Commitment of such
Lender as of the Closing Date.                                                  

                  B. COMMITMENT FEES. Borrowers, jointly and severally, agree to
pay to Administrative Agent, for distribution to each Revolving Lender in       
proportion to that Lender's                                                     

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Pro Rata Share of the Commitments, commitment fees for the period from and      
including the Closing Date to but excluding the Maturity Date equal to (i) the  
daily excess of the Commitments over the Total Utilization of Commitments,      
multiplied by (ii) the Commitment Fee Percentage then in effect, expressed as a 
daily rate. Such commitment fees shall be payable in arrears on and to (but     
excluding) the last day of each month and on the Maturity Date and computed on  
the basis of a 360-day year, for the actual number of days elapsed.             

                 C. OTHER FEES. Borrowers, jointly and severally, agree to pay
to Administrative Agent such fees in the amounts and at the times separately    
agreed upon between Company and Administrative Agent. All fees referenced in    
this subsection 2.3 shall be earned when payable and shall be non-refundable.   

         2.4      REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN COMMITMENTS; GENERAL
             PROVISIONS REGARDING PAYMENTS; APPLICATION OF PROCEEDS OF
COLLATERAL AND PAYMENTS UNDER CPIH GUARANTY.

 A. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS.

                (i)      Voluntary Prepayments. Borrowers may, upon not less
         than one Business Day's prior written or telephonic notice, in the case
of Base Rate Loans, and three Business Days' prior written or 
       telephonic notice, in the case of Eurodollar Rate Loans, in each case
         given to Administrative Agent by 12:00 Noon (New York City time) on the
         date required and, if given by telephone, promptly confirmed in writing
     to Administrative Agent, who will promptly notify each Lender whose
       Loans are to be prepaid of such prepayment, at any time and from time
        to time prepay any Loans on any Business Day in whole or in part in an
  aggregate minimum amount of $1,000,000 and integral multiples of
      $500,000 in excess of that amount (or, if the amount of the Loans is
        less than such aggregate minimum amount, an amount equal to the amount
       of the Loans); provided that voluntary prepayments of Eurodollar Rate
        Loans made on a date other than an Interest Payment Date applicable to
     such Loan shall be subject to breakage fees, costs and expenses, if
      any, in accordance with subsection 2.6D. Notice of prepayment having
         been given as aforesaid, the principal amount of the Loans specified in
 such notice shall become due and payable on the prepayment date
      specified therein. Any such voluntary prepayment shall be applied as
specified in subsection 2.4A(iv).                             

                (ii)     Voluntary Reductions of Commitments. Borrowers may,
   upon not less than one Business Day's prior written or telephonic
      notice confirmed in writing to Administrative Agent, at any time and
      from time to time, terminate in whole or permanently reduce in part,
    without premium or penalty, the Commitments in an amount up to the
        amount by which the Commitments exceed the aggregate Loans outstanding
      at the time of such proposed termination or reduction; provided that
     any such partial reduction of either the Commitments shall be in an
  aggregate minimum amount of $1,000,000 and integral multiples of
$1,000,000 in excess of that amount. Borrowers' notice to     
       Administrative Agent (who shall promptly notify each Revolving Lender
     of such notice) shall designate the date (which shall be a Business
     Day) of such termination or reduction and the amount of any partial
        reduction, and such termination or reduction of any of the Commitments
  shall be effective on the date specified in Company's notice and

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       shall reduce the Commitment of each Lender proportionately to its Pro
     Rata Share. No such voluntary reduction of the Commitments shall be
        permitted if such reduction would result in the Commitments being less
than the Total Utilization of Commitments.                    

                 (iii)    Mandatory Payments. Mandatory Payments shall be made
      in the amounts and under the circumstances set forth below, all such
Mandatory Payments to be applied as set forth below or as more
        specifically provided in subsection 2.4A(iv), except to the extent the
     Intercreditor Agreement requires application thereof in a different
     manner than as set forth in this subsection 2.4A(iii) or subsection
2.4A(iv):                                                     

                         (a)      Net Asset Sale Proceeds. No later than two
                days after the date of receipt by CEA, Company or any of its
                 Subsidiaries of any Net Asset Sale Proceeds in respect of any
            Asset Sale, Company shall make a Mandatory Payment in an
              aggregate amount equal to the remaining amount of such Net
Asset Sale Proceeds.                        

                      (b)      Net Insurance/Condemnation Proceeds. No
           later than the fifth Business Day following the date of
               receipt by Administrative Agent or by Company or any of its
                Subsidiaries of any Net Insurance/Condemnation Proceeds that
               are required to be used for a Mandatory Payment pursuant to
           the provisions of subsection 5.4C, Company shall make a
                Mandatory Payment in an aggregate amount equal to the amount
of such Net Insurance/Condemnation Proceeds.

                       (c)      Issuance of Indebtedness. On the date of
                 receipt of the Net Indebtedness Proceeds from the issuance of
                any Indebtedness of Company or any of its Subsidiaries after
                the Closing Date, other than Indebtedness permitted pursuant
             to subsections 6.1(i) through (vii), Company shall make a
              Mandatory Payment in an aggregate amount equal to such Net
Indebtedness Proceeds.                      

                      (d)      Tax Refunds. If after the Closing Date,
                Company or any of its Subsidiaries receives any payment of a
                  cash refund or rebate of any Tax, the Borrowers shall no later
               than the Business Day following the date of receipt of such
              refund or rebate make a Mandatory Payment in the amount of
        such Tax refund or rebate, except to the extent such
                application would constitute a material violation of a valid
                  Contractual Obligation in connection with a Project of Company
                or any of its Subsidiaries to remit such refund or rebate to
the client of such Project.                 

                          (e)      Excess Cash. If as of the last Business Day
            of any calendar month the sum of (1) Cash On Hand (after
              giving effect to the aggregate interest to be paid on such
            date pursuant to subsection 2.2C) plus (2) the aggregate
              Commitments minus (3) the Total Utilization of Commitments
                  (after giving effect to any voluntary repayment of outstanding
             Loans to be made on such date that are made on such date)
             exceeds $10,000,000, then Borrowers shall apply an amount
                equal to such excess (provided, that, in the event that such
        application would cause Cash On Hand to be less than
           $6,000,000, then such excess amount so applied shall be
               reduced such that Cash On Hand is not less than $6,000,000)
(the                                        

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           amount so applied as it may be adjusted pursuant to the
           foregoing proviso, "AVAILABLE CASH")) to the payment of
outstanding Term Loans.                     

               (f)      Prepayments Due to Reductions or
                  Restrictions of Commitments. Borrowers shall from time to time
                  prepay the Loans to the extent necessary to give effect to the
                  limitations set forth in the last sentence of subsection 2.1A.
               Without limiting the preceding sentence, if at any time and
            from time to time after the Closing Date the outstanding
                  principal amount of Loans shall exceed the Commitments then in
                effect Borrowers shall promptly prepay Loans in an aggregate
  amount equal to the amount of any such excess.

                    (g)      Calculations of Net Proceeds Amounts;
             Additional Prepayments and Reductions Based on Subsequent
             Calculations. Concurrently with the receipt of any amount
       which would require a Mandatory Payment pursuant to
            subsections 2.4A(iii)(a) - (e), Company shall deliver to
               Administrative Agent an Officer's Certificate demonstrating
                  the calculation of the amount of the applicable Net Asset Sale
      Proceeds, Net Insurance/Condemnation Proceeds, Net
                Indebtedness Proceeds, cash in the Cash Management System or
               Tax refund or rebate, as the case may be, that gave rise to
           such Mandatory Payment. In the event that Company shall
                  subsequently determine that the actual amount was greater than
               the amount set forth in such Officer's Certificate, Company
             shall promptly make an additional Mandatory Payment in an
                amount equal to the amount of such excess, and Company shall
             concurrently therewith deliver to Administrative Agent an
             Officer's Certificate demonstrating the derivation of the
additional amount resulting in such excess. 

(iv)     Application of Prepayments.        

                    (a)      Application of Prepayments. Except as
     provided in subsection 2.4C and to the extent the
                 Intercreditor Agreement requires application of any Mandatory
           Payment in a different manner than as set forth in this
                  sentence, (1) any voluntary prepayments pursuant to subsection
                2.4A(i) shall be applied to repay outstanding Loans, and (2)
      any Mandatory Payment made pursuant to subsections
                2.4A(iii)(a) - (d) shall be applied to repay Loans and/or to
         permanently reduce Commitments in accordance with the
                  provisions of the Intercreditor Agreement, and the application
              of Mandatory Payments to Loans and/or Commitments required
                 under the terms of the Intercreditor Agreement shall apply as
if set forth herein.                        

                      (b)      Application of Prepayments to Base Rate
                  Loans and Eurodollar Rate Loans. Any prepayment of Loans shall
                  be applied first to Base Rate Loans to the full extent thereof
                  before application to Eurodollar Rate Loans, in each case in a
                 manner which minimizes the amount of any payments required to
     be made by Borrowers pursuant to subsection 2.6D.

               (v)      Application of Payments to Principal and Interest.
   All payments in respect of the principal amount of any Loan shall
include payment of accrued interest on the                    

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       principal amount being repaid or prepaid, and all such payments (and,
  in any event, any payments in respect of any Loan on a date when
         interest is due and payable with respect to such Loan) shall be applied
to the payment of interest before application to principal.   

B. GENERAL PROVISIONS REGARDING PAYMENTS.   

                  (i)      Manner and Time of Payment. All payments by Borrowers
     of principal, interest, fees and other Obligations shall be made in
     Dollars in same day funds, without defense, setoff or counterclaim,
       free of any restriction or condition, and delivered to Administrative
         Agent not later than 12:00 Noon (New York City time) on the date due at
  the Funding and Payment Office for the account of Lenders; funds
         received by Administrative Agent after that time on such due date shall
 be deemed to have been paid by Borrowers on the next succeeding
       Business Day. Each Borrower hereby authorizes Administrative Agent to
        charge its accounts with Administrative Agent in order to cause timely
        payment to be made to Administrative Agent of all principal, interest,
    fees and expenses due hereunder (subject to sufficient funds being
        available in its accounts for that purpose). Anything contained herein
  to the contrary notwithstanding, Borrowers jointly and severally
  promise to repay all Loans when due in accordance with the terms
hereof.                                                       

               (ii)     Application of Payments to Principal and Interest.
   All payments in respect of the principal amount of any Loan shall
   include payment of accrued interest on the principal amount being
  repaid or prepaid, and all such payments (and, in any event, any
    payments in respect of any Loan on a date when interest is due and
       payable with respect to such Loan) shall be applied to the payment of
interest before application to principal.                     

             (iii)    Apportionment of Payments. Aggregate payments of
         principal and interest shall be apportioned among all outstanding Loans
         to which such payments relate, in each case proportionately to Lenders'
 respective Pro Rata Shares. Administrative Agent shall promptly
       distribute to each Lender, at its primary address set forth below its
        name on the appropriate signature page hereof or at such other address
     as such Lender may request, its Pro Rata Share of all such payments
  received by Administrative Agent and the commitment fees of such
   Lender, if any, when received by Administrative Agent pursuant to
  subsection 2.3. Notwithstanding the foregoing provisions of this
    subsection 2.4B(iii), if, pursuant to the provisions of subsection
    2.6C, any Notice of Conversion/Continuation is withdrawn as to any
         Affected Lender or if any Affected Lender makes Base Rate Loans in lieu
    of its Pro Rata Share of any Eurodollar Rate Loans, Administrative
   Agent shall give effect thereto in apportioning payments received
thereafter.                                                   

                  (iv)     Payments on Business Days. Whenever any payment to be
 made hereunder shall be stated to be due on a day that is not a
 Business Day, such payment shall be made on the next succeeding
  Business Day and such extension of time shall be included in the
       computation of the payment of interest hereunder or of the commitment
fees hereunder, as the case may be.                           

                (v)      Notation of Payment. Each Lender agrees that before
      disposing of any Note held by it, or any part thereof (other than by
granting participations therein), that                        

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         Lender will make a notation thereon of all Loans evidenced by that Note
       and all principal payments previously made thereon and of the date to
         which interest thereon has been paid; provided that the failure to make
        (or any error in the making of) a notation of any Loan made under such
       Note shall not limit or otherwise affect the Obligations of Borrowers
       hereunder or under such Note with respect to any Loan or any payments
of principal or interest on such Note.                        

               C. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS AFTER
EVENT OF DEFAULT. Except to the extent the Intercreditor Agreement requires     
application in a different manner than as set forth in this subsection 2.4C,    
upon the occurrence and during the continuation of an Event of Default, either  
if requested by Requisite Lenders or upon termination of the Commitments (a) all
Mandatory Payments or other payments received on account of the Obligations,    
whether from any Borrower, or otherwise, shall be applied by Administrative     
Agent against the Obligations and (b) all proceeds received by Administrative   
Agent in respect of any sale of, collection from, or other realization upon all 
or any part of the Collateral may, in the discretion of Administrative Agent, be
held by Administrative Agent as Collateral for, and/or (then or at any time     
thereafter) applied in full or in part by Administrative Agent against, the     
applicable Secured Obligations (as defined in the Collateral Documents), in each
case in the following order of priority:                                        

             (i)      to the payment of all costs and expenses of such
        sale, collection or other realization, all other expenses, liabilities
     and advances made or incurred by Administrative Agent in connection
       therewith, and all amounts for which Administrative Agent is entitled
   to compensation (including the fees described in subsection 2.3),
   reimbursement and indemnification under any Loan Document and all
         advances made by Administrative Agent thereunder for the account of the
     applicable Loan Party, and to the payment of all costs and expenses
      paid or incurred by Administrative Agent in connection with the Loan
        Documents, all in accordance with subsections 8.4, 9.2 and 9.3 and the
other terms of this Agreement and the Loan Documents;         

         (ii)     thereafter, to the extent of any excess such
         proceeds, to the payment of all Obligations, for the ratable benefit of
       the holders thereof (subject to the provisions of subsection 2.4B(ii)
hereof); and                                                  

         (iii)    thereafter, to the extent of any excess such
        proceeds, to the payment to or upon the order of such Loan Party or to
         whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.                            

2.5      USE OF PROCEEDS.                                     

           A. LOANS. The proceeds of any Loans shall be applied by
Borrowers to fund working capital requirements and general corporate purposes   
relating to Borrowers' post-Closing Date operations and other expenditures;     
provided that no portion of the Loans shall be used, directly or indirectly, to 
(a) finance or make any Restricted Payment or other payment or prepayment       
prohibited under subsection 6.5, or (b) make any payment or prepayment          
(including by way of an Investment) to any Person that is otherwise prohibited  
under this Agreement.                                                           

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Borrowers shall use the entire amount of the proceeds of each Loan in accordance
with this subsection 2.5A.                                                      

            B. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by any Borrower or any Subsidiary  
of any Borrower in any manner that might cause the borrowing or the application 
of such proceeds to violate Regulation U, Regulation T or Regulation X of the   
Board of Governors of the Federal Reserve System or any other regulation of such
Board or to violate the Exchange Act, in each case as in effect on the date or  
dates of such borrowing and such use of proceeds.                               

2.6      SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.  

                Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate 
Loans as to the matters covered:                                                

                  A. DETERMINATION OF APPLICABLE INTEREST RATE. On each Interest
Rate Determination Date, Administrative Agent shall determine in accordance with
the terms of this Agreement (which determination shall, absent manifest error,  
be conclusive and binding upon all parties) the interest rate that shall apply  
to the Eurodollar Rate Loans for which an interest rate is then being determined
for the applicable Interest Period and shall promptly give notice thereof (in   
writing or by telephone confirmed in writing) to Borrowers and each Lender.     

              B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the
event that Administrative Agent shall have determined (which determination shall
be conclusive and binding upon all parties hereto) on any Interest Rate         
Determination Date that by reason of circumstances affecting the interbank      
Eurodollar market adequate and fair means do not exist for ascertaining the     
interest rate applicable to such Loans on the basis provided for in the         
definition of Eurodollar Rate, Administrative Agent shall on such date give     
notice (by telefacsimile or by telephone confirmed in writing) to Borrowers and 
each Lender of such determination, whereupon (i) no Loans may be made as, or    
converted to, Eurodollar Rate Loans until such time as Administrative Agent     
notifies Borrowers and Lenders that the circumstances giving rise to such notice
no longer exist and (ii) any Notice of Borrowing or Notice of                   
Conversion/Continuation given by Borrowers with respect to the Loans in respect 
of which such determination was made shall be deemed to be for a Base Rate Loan.

                  C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In
the event that on any date any Lender shall have determined (which determination
shall be conclusive and binding upon all parties hereto but shall be made only  
after consultation with Borrowers and Administrative Agent) that the making,    
maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful
as a result of compliance by such Lender in good faith with any law, treaty,    
governmental rule, regulation, guideline or order (or would conflict with any   
such treaty, governmental rule, regulation, guideline or order not having the   
force of law even though the failure to comply therewith would not be unlawful) 
or (ii) has become impracticable, or would cause such Lender material hardship, 
as a result of contingencies occurring after the date of this Agreement which   
materially and adversely affect the interbank Eurodollar market or the position 
of such Lender in that market, then, and in any such event, such Lender shall be
an "AFFECTED                                                                    

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LENDER" and it shall on that day give notice (by telefacsimile or by telephone  
confirmed in writing) to Borrowers and Administrative Agent of such             
determination. Administrative Agent shall promptly notify each other Lender of  
the receipt of such notice. Thereafter (a) the obligation of the Affected Lender
to make Loans as, or to convert Loans to, Eurodollar Rate Loans shall be        
suspended until such notice shall be withdrawn by the Affected Lender, (b) to   
the extent such determination by the Affected Lender relates to a Eurodollar    
Rate Loan then being requested by Borrowers pursuant to a Notice of Borrowing or
a Notice of Conversion/Continuation, the Affected Lender shall make such Loan as
(or convert such Loan to, as the case may be) a Base Rate Loan, (c) the Affected
Lender's obligation to maintain its outstanding Eurodollar Rate Loans (the      
"AFFECTED LOANS") shall be terminated at the earlier to occur of the expiration 
of the Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into    
Base Rate Loans on the date of such termination. Notwithstanding the foregoing, 
to the extent a determination by an Affected Lender as described above relates  
to a Eurodollar Rate Loan then being requested by Borrowers pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, Borrowers shall have the   
option, subject to the provisions of subsection 2.6D, to rescind such Notice of 
Borrowing or Notice of Conversion/Continuation as to all Lenders by giving      
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice  
of its determination as described above. Administrative Agent shall promptly    
notify each other Lender of the receipt of such notice. Except as provided in   
the immediately preceding sentence, nothing in this subsection 2.6C shall affect
the obligation of any Lender other than an Affected Lender to make or maintain  
Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance with the  
terms of this Agreement.                                                        

                D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Borrowers shall, jointly and severally, compensate each Lender, upon   
written request by that Lender pursuant to subsection 2.6, for all reasonable   
losses, expenses and liabilities (including any interest paid by that Lender to 
lenders of funds borrowed by it to make or carry its Eurodollar Rate Loans and  
any loss, expense or liability sustained by that Lender in connection with the  
liquidation or re-employment of such funds) which that Lender may sustain: (i)  
if for any reason (other than a default by that Lender) a borrowing of any      
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of 
Borrowing or a telephonic request therefor, or a conversion to or continuation  
of any Eurodollar Rate Loan does not occur on a date specified therefor in a    
Notice of Conversion/Continuation or a telephonic request therefor, (ii) if any 
prepayment (including any prepayment or conversion occasioned by the            
circumstances described in subsection 2.6C) or other principal payment or any   
conversion of any of its Eurodollar Rate Loans occurs on a date prior to the    
last day of an Interest Period applicable to that Loan, (iii) if any prepayment 
of any of its Eurodollar Rate Loans is not made on any date specified in a      
notice of prepayment given by Borrowers, or (iv) as a consequence of any other  
default by Borrowers in the repayment of Eurodollar Rate Loans when required by 
the terms of this Agreement.                                                    

             E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.                    

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               F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection 2.6 and    
under subsection 2.7A shall be made as though that Lender had funded each of its
Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing      
interest at the rate obtained pursuant to clause (i) of the definition of       
Eurodollar Rate in an amount equal to the amount of such Eurodollar Rate Loan   
and having a maturity comparable to the relevant Interest Period, whether or not
its Eurodollar Rate Loans had been funded in such manner.                       

                G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence
of and during the continuation of a Potential Event of Default or an Event of   
Default, (i) Borrowers may not elect to have a Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest Period
then in effect for that Loan and (ii) subject to the provisions of subsection   
2.6D, any Notice of Borrowing or Notice of Conversion/Continuation given by     
Borrowers with respect to a requested borrowing or conversion/continuation that 
has not yet occurred shall be deemed to be for a Base Rate Loan or, if the      
conditions to making a Loan set forth in subsection 3.2 cannot then be          
satisfied, to be rescinded by Borrowers.                                        

2.7      INCREASED COSTS; TAXES; CAPITAL ADEQUACY.            

                  A. COMPENSATION FOR INCREASED COSTS. Subject to the provisions
of subsection 2.7B (which shall be controlling with respect to the matters      
covered thereby), in the event that any Lender shall determine (which           
determination shall, absent manifest error, be final and conclusive and binding 
upon all parties hereto) that any law, treaty or governmental rule, regulation  
or order, or any change therein or in the interpretation, administration or     
application thereof (including the introduction of any new law, treaty or       
governmental rule, regulation or order), or any determination of a court or     
other Government Authority, in each case that becomes effective after the date  
hereof, or compliance by such Lender with any guideline, request or directive   
issued or made after the date hereof by any central bank or other Government    
Authority (whether or not having the force of law):                             

              (i)      subjects such Lender to any additional Tax (other
         than any withholding tax with respect to which subsection 2.7B applies)
    with respect to this Agreement or any of its obligations hereunder
         (including with respect to maintaining any Commitment hereunder) or any
   payments to such Lender of principal, interest, fees or any other
amount payable hereunder;                                     

               (ii)     imposes, modifies or holds applicable any reserve,
special deposit, compulsory loan, insurance charge or similar 
         requirement against assets held by, or deposits or other liabilities in
 or for the account of, or advances or loans by, or other credit
       extended by, or any other acquisition of funds by, any office of such
        Lender (other than any such reserve or other requirements with respect
  to Eurodollar Rate Loans that are reflected in the definition of
Eurodollar Rate); or                                          

                 (iii)    imposes any other condition (other than with respect
       to Taxes) on or affecting such Lender or its obligations hereunder or
the interbank Eurodollar market;                              

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and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining its Loans or Commitments or to reduce   
any amount received or receivable by such Lender with respect thereto; then, in 
any such case, Borrowers shall promptly pay, on a joint and several basis, to   
such Lender, upon receipt of the statement referred to in subsection 2.8A, such 
additional amount or amounts (in the form of an increased rate of, or a         
different method of calculating, interest or otherwise as such Lender in its    
sole discretion shall determine) as may be necessary to compensate such Lender  
on an after-tax basis for any such increased cost or reduction in amounts       
received or receivable hereunder.                                               

B. TAXES.                                   

               (i)      Payments to Be Free and Clear. All sums payable by
      Borrowers under this Agreement and the other Loan Documents shall be
     paid free and clear of, and without any deduction or withholding on
         account of, any Tax imposed, levied, collected, withheld or assessed by
       or within the United States or any political subdivision in or of the
       United States or any other jurisdiction from or to which a payment is
        made by or on behalf of Borrowers or by any federation or organization
        of which the United States or any such jurisdiction is a member at the
time of payment.                                              

                  (ii)     Grossing-up of Payments. If any Borrower or any other
   Person is required by law to make any deduction or withholding on
      account of any such Tax from any sum paid or payable by Borrowers to
     Administrative Agent or any Lender under any of the Loan Documents:

                          (a)      Borrowers shall notify Administrative Agent
                 of any such requirement or any change in any such requirement
as soon as Borrowers become aware of it;    

                         (b)      Borrowers shall pay any such Tax when such
                Tax is due, such payment to be made (if the liability to pay
                 is imposed on any Borrower) for their own account or (if that
                liability is imposed on Administrative Agent or such Lender,
       as the case may be) on behalf of and in the name of
Administrative Agent or such Lender;        

                         (c)      the sum payable by Borrowers in respect of
           which the relevant deduction, withholding or payment is
                 required shall be increased to the extent necessary to ensure
            that, after the making of that deduction, withholding or
                 payment, Administrative Agent or such Lender, as the case may
                 be, receives on the due date a net sum equal to what it would
               have received had no such deduction, withholding or payment
been required or made; and                  

                       (d)      within 30 days after paying any sum from
            which any or all of them are required by law to make any
              deduction or withholding, and within 30 days after the due
           date of payment of any Tax which any or all of them are
                required by clause (b) above to pay, Borrowers shall deliver
              to Administrative Agent evidence satisfactory to the other
                  affected parties of such deduction, withholding or payment and
             of the remittance thereof to the relevant taxing or other
authority.                                  

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             (iii)    Evidence of Exemption from U.S. Withholding Tax.

                           (a)      Each Lender that is organized under the laws
                 of any jurisdiction other than the United States or any state
                or other political subdivision thereof (for purposes of this
             subsection 2.7B(iii), a "NON-US LENDER") shall deliver to
           Administrative Agent and to Company, on or prior to the
          Closing Date (in the case of each Lender listed on the
             signature pages hereof) or on or prior to the date of the
                  Assignment Agreement pursuant to which it becomes a Lender (in
                  the case of each other Lender), and at such other times as may
                  be necessary in the determination of Company or Administrative
                  Agent (each in the reasonable exercise of its discretion), two
              original copies of Internal Revenue Service Form W-8BEN or
               W-8ECI (or any successor forms) properly completed and duly
                executed by such Lender, together with any other certificate
                 or statement of exemption required under the Internal Revenue
               Code or the regulations issued thereunder to establish that
               such Lender is not subject to United States withholding tax
           with respect to any payments to such Lender of interest
payable under any of the Loan Documents.    

                          (b)      Each Non-US Lender hereby agrees, from time
             to time after the initial delivery by such Lender of such
              forms, whenever a lapse in time or change in circumstances
         renders such forms, certificates or other evidence so
                  delivered obsolete or inaccurate in any material respect, that
                  such Lender shall promptly (1) deliver to Administrative Agent
                 and to Company two original copies of renewals, amendments or
              additional or successor forms, properly completed and duly
                executed by such Lender, together with any other certificate
             or statement of exemption required in order to confirm or
              establish that such Lender is not subject to United States
                 withholding tax with respect to payments to such Lender under
             the Loan Documents or (2) notify Administrative Agent and
       Company of its inability to deliver any such forms,
certificates or other evidence.             

                         (c)      Borrowers shall not be required to pay any
              additional amount to any Non-US Lender under clause (c) of
           subsection 2.7B(ii) if such Lender shall have failed to
            satisfy the requirements of clause (a) or (b)(1) of this
                 subsection 2.7B(iii); provided that if such Lender shall have
                satisfied the requirements of subsection 2.7B(iii)(a) on the
                date such Lender became a Lender, nothing in this subsection
               2.7B(iii)(c) shall relieve Borrowers of their obligation to
             pay any amounts pursuant to subsection 2.7B(ii)(c) in the
                event that, as a result of any change in any applicable law,
            treaty or governmental rule, regulation or order, or any
               change in the interpretation, administration or application
                  thereof, such Lender is no longer properly entitled to deliver
              forms, certificates or other evidence at a subsequent date
            establishing the fact that such Lender is not subject to
        withholding as described in subsection 2.7B(iii)(a).

             (iv)     Indemnity for Withheld Amounts. Borrowers hereby
         agree to indemnify Lenders and Administrative Agent for the full amount
  of any deduction or withholding on account of any Taxes imposed,
        levied, collected, withheld or assessed by or within the United States
      or any political subdivision in or of the United States or any other

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    jurisdiction from or to which a payment is made by or on behalf of
    Borrowers or by any federation or organization of which the United
    States or any such jurisdiction is a member at the time of payment
  (including any such Taxes imposed by any jurisdiction on amounts
        payable under this subsection 2.7B) that Borrowers are required to pay
       pursuant to subsection 2.7B(ii) but were paid by Administrative Agent
 or Lenders with respect to sums payable by Borrowers under this
     Agreement and the other Loan Documents and any liability (including
     penalties, interest and expenses) arising therefrom or with respect
        thereto. This indemnification shall be made promptly, and in any event
 within 10 days after, the relevant Lender or Agent makes demand
therefor in writing.                                          

            C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after the
date hereof of any law, rule or regulation (or any provision thereof) regarding 
capital adequacy, or any change therein or in the interpretation or             
administration thereof by any Government Authority charged with the             
interpretation or administration thereof, or compliance by any Lender with any  
guideline, request or directive regarding capital adequacy (whether or not      
having the force of law) of any such Government Authority, has or would have the
effect of reducing the rate of return on the capital of such Lender or any      
corporation controlling such Lender as a consequence of, or with reference to,  
such Lender's Loans, Commitments, or other Obligations to a level below that    
which such Lender or such controlling corporation could have achieved but for   
such adoption, effectiveness, phase-in, applicability, change or compliance     
(taking into consideration the policies of such Lender or such controlling      
corporation with regard to capital adequacy), then from time to time, within    
five Business Days after receipt by Borrowers from such Lender of the statement 
referred to in subsection 2.8A, Borrowers shall pay to such Lender such         
additional amount or amounts as will compensate such Lender or such controlling 
corporation on an after-tax basis for such reduction.                           

   2.8      STATEMENT OF LENDERS; OBLIGATION OF LENDERS TO MITIGATE.

       A. STATEMENTS. Each Lender claiming compensation or
reimbursement pursuant to subsection 2.6D, 2.7 or 2.8B shall deliver to Company 
(with a copy to Administrative Agent) a written statement, setting forth in     
reasonable detail the basis of the calculation of such compensation or          
reimbursement, which statement shall be conclusive and binding upon all parties 
hereto absent manifest error; provided that a Lender claiming compensation or   
reimbursement pursuant to subsection 2.7B(ii) due to circumstances in effect as 
of the Closing Date shall not be required to deliver more than one such         
statement to Borrowers or Administrative Agent, and such statement shall remain 
effective with respect to this Agreement until all Obligations have been paid in
full.                                                                           

          B. MITIGATION. Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering the  
Loans of such Lender becomes aware of the occurrence of an event or the         
existence of a condition that would cause such Lender to become an Affected     
Lender or that would entitle such Lender to receive payments under subsection   
2.7 (other than subsection 2.7B(ii)), it will use reasonable efforts to make,   
fund or maintain the Commitments of such Lender or the Loans of such Lender     
through another lending office of such Lender, if (i) as a result thereof the   
circumstances which would cause such Lender to be an Affected Lender would cease
to exist or the additional amounts which would otherwise                        

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be required to be paid to such Lender pursuant to subsection 2.7 would be       
materially reduced and (ii) as determined by such Lender in its sole discretion,
such action would not otherwise be disadvantageous to such Lender; provided that
such Lender will not be obligated to utilize such other lending office pursuant 
to this subsection 2.8B unless Borrowers agree to pay, on a joint and several   
basis, all incremental expenses incurred by such Lender as a result of utilizing
such other lending office as described above.                                   

2.9      DEFAULTING LENDER.                                   

                 Anything contained herein to the contrary notwithstanding, in
the event that any Lender (any such Lender being a "DEFAULTING LENDER") defaults
(a "FUNDING DEFAULT") in its obligation to fund any Loan (a "DEFAULTED LOAN") in
accordance with the terms of this Agreement, then (i) during any Default Period 
(as defined below) with respect to such Defaulting Lender, such Defaulting      
Lender shall not be deemed a "Lender" for purposes of voting on any matters     
(including the granting of any consents or waivers) with respect to any of the  
Loan Documents (provided, however, that nothing in this clause (i) shall be     
construed as permitting, without the consent of the relevant Defaulting Lender, 
a reduction in the principal amount of such Defaulting Lender's funded Loans or 
other outstanding funded Obligations, an increase in the amount of such Lender's
Commitment, or an extension of the Maturity Date), (ii) to the extent permitted 
by applicable law, until such time as the Default Excess (as defined below) with
respect to such Defaulting Lender shall have been reduced to zero, any payment  
of amounts with respect to the Loans shall be applied first, to amounts funded  
by Administrative Agent or other Lenders (together with unpaid interest accrued 
thereon) in lieu of such amounts required to be funded by Defaulting Lenders and
second, to the Loans of other Lenders (other than any other Defaulting Lenders) 
as if such Defaulting Lender (and any other Defaulting Lenders) had no Loans    
outstanding and the Loan Exposure of such Defaulting Lender were zero, (iii)    
such Defaulting Lender's Commitment, Loans and Pro Rata Share with respect      
thereto shall be excluded for purposes of calculating the commitment fee in     
respect of any day during any Default Period with respect to such Defaulting    
Lender, and such Defaulting Lender shall not be entitled to receive any such    
commitment fee with respect to such Defaulting Lender's Commitments in respect  
of any Default Period with respect to such Defaulting Lender, and (iv) the Total
Utilization of Commitments as at any date of determination shall be calculated  
as if such Defaulting Lender had funded all Defaulted Loans of such Defaulting  
Lender.                                                                         

               For purposes of this Agreement, (I) "DEFAULT PERIOD" means,
with respect to any Defaulting Lender, the period commencing on the date of the 
applicable Funding Default and ending on the earliest of the following dates:   
(A) the date on which all Commitments are cancelled or terminated and/or the    
Obligations are declared or become immediately due and payable, (B) the date on 
which (1) the Default Excess with respect to such Defaulting Lender shall have  
been reduced to zero (whether by the funding by such Defaulting Lender of any   
Defaulted Loans of such Defaulting Lender or by the non-pro rata application of 
any payments of amounts with respect to the Loans in accordance with the terms  
hereof or any combination thereof), and (2) such Defaulting Lender shall have   
delivered to Company and Administrative Agent a written reaffirmation of its    
intention to honor its obligations under this Agreement with respect to its     
Commitments, and (C) the date on which Company and Administrative Agent waive   
all Funding Defaults of such Defaulting Lender in writing, and (II) "DEFAULT    
EXCESS" means, with respect to any Defaulting Lender, the excess, if any, of (x)
such Defaulting Lender's                                                        

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applicable Pro Rata Share of the aggregate outstanding principal amount of Loans
of all Lenders (calculated as if all Defaulting Lenders (other than such        
Defaulting Lender) had funded all of their respective Defaulted Loans) over (y) 
the aggregate outstanding principal amount of Loans of such Defaulting Lender.  

               No Commitment of any Lender shall be increased or otherwise
affected, and, except as otherwise expressly provided in this subsection 2.9,   
performance by any Borrower of its obligations under this Agreement and the     
other Loan Documents shall not be excused or otherwise modified, as a result of 
any Funding Default or the operation of this subsection 2.9. The rights and     
remedies against a Defaulting Lender under this subsection 2.9 are in addition  
to other rights and remedies that Borrowers may have against such Defaulting    
Lender with respect to any Funding Default and that Administrative Agent or any 
Lender may have against such Defaulting Lender with respect to any Funding      
Default.                                                                        

 2.10     JOINT AND SEVERAL LIABILITY; PAYMENT INDEMNIFICATIONS.

                  A. JOINT AND SEVERAL OBLIGATIONS. All Obligations of Borrowers
under the Loan Documents shall be the joint and several Obligations of each     
Borrower.                                                                       

                 B. NO IMPAIRMENT OR RELEASE. The Obligations of and the Liens
granted by any Borrower under the Loan Documents shall not be impaired or       
released by any action or inaction on the part of Administrative Agent or any   
Lender with respect to any other Loan Party, including any action or inaction   
which would otherwise release a surety.                                         

            C. CONTRIBUTION RIGHTS. In order to provide for just and
equitable contribution among Borrowers if any payment is made by a Borrower (a  
"FUNDING BORROWER") in discharging any of the Obligations, that Funding Borrower
shall be entitled to a contribution from the other Borrowers for all payments,  
damages and expenses incurred by that Funding Borrower in discharging the       
Obligations, in the manner and to the extent required to allocate liabilities in
an equitable manner among Borrowers on the basis of the relative benefits       
received by Borrowers. If and to the extent that a Funding Borrower makes any   
payment to any Lender or any other Person in respect of the Obligations, any    
claim which said Funding Borrower may have against the other Borrowers by reason
thereof shall be subject and subordinate to the prior cash payment in full of   
the Obligations. The parties hereto acknowledge that the right to contribution  
hereunder shall constitute an asset of the party to which such contribution is  
owing and shall be subject to the Liens and security interests of Administrative
Agent. Notwithstanding any of the foregoing to the contrary, such contribution  
arrangements shall not limit in any manner the joint and several nature of the  
Obligations, limit, release or otherwise impair any rights of Administrative    
Agent or any Lender under the Loan Documents, or alter, limit or impair the     
obligation of each Borrower, which is absolute and unconditional, to repay the  
Obligations.                                                                    

2.11     RIGHTS OF SUBROGATION, CONTRIBUTION, ETC.            

             Except as prohibited under applicable law, Company hereby
waives any claim, right or remedy, direct or indirect, that Company now has or  
may hereafter have against any other Borrower or any guarantor of the           
Obligations in connection with this Agreement or the performance by Company of  
its obligations hereunder, in each case whether such claim, right or            

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remedy arises in equity, under contract, by statute, under common law or        
otherwise and including (a) any right of subrogation, reimbursement or          
indemnification that Company now has or may hereafter have against any other    
Borrower or any guarantor of the Obligations, (b) any right to enforce, or to   
participate in, any claim, right or remedy that Agent or Lender now has or may  
hereafter have against any other Borrower or any guarantor of the Obligations,  
and (c) any benefit of, and any right to participate in, any collateral or      
security now or hereafter held by Agent or Lender. In addition, until the       
Obligations shall have been indefeasibly paid in full and the Commitments shall 
have terminated, Company shall withhold exercise of any right of contribution   
Company may have against any other Borrower or Loan Party. Company further      
agrees that, to the extent the waiver or agreement to withhold the exercise of  
its rights of subrogation, reimbursement, indemnification and contribution as   
set forth herein is found by a court of competent jurisdiction to be void or    
voidable for any reason, any rights of subrogation, reimbursement or            
indemnification Company may have against any other Borrower or Loan Party or    
against any collateral or security shall be junior and subordinate to any rights
Agent or Lender may have against any other Borrower, to all right, title and    
interest Agent or Lender may have in any such collateral or security, and to any
right Agent or Lender may have against such Loan Party. If any amount shall be  
paid to Company on account of any such subrogation, reimbursement,              
indemnification or contribution rights at any time when all Obligations shall   
not have been paid in full, such amount shall be held in trust for              
Administrative Agent on behalf of Administrative Agent and Lenders and shall    
forthwith be paid over to Administrative Agent for the benefit of Administrative
Agent and Lenders to be credited and applied against the Obligations, whether   
matured or unmatured, in accordance with the terms hereof.                      

SECTION 3.        CONDITIONS TO LOANS                                           

                  The obligations of Lenders to make Loans hereunder are subject
to the satisfaction of the following conditions.                                

3.1      CONDITIONS TO CLOSING DATE.                          

               The obligations of Lenders with respect to their respective
Commitments and to make any Loans to be made on the Closing Date, are subject to
prior or concurrent satisfaction of the following conditions:                   

           A. LOAN PARTY DOCUMENTS. On or before the Closing Date,
Borrowers shall, and shall cause each other Loan Party to, deliver to Lenders   
(or to Administrative Agent with sufficient originally executed copies, where   
appropriate, for each Lender) the following with respect to Borrowers or such   
Loan Party, as the case may be, each, unless otherwise noted, dated the Closing 
Date:                                                                           

           (i)      Copies of the Organizational Documents of such
    Person, certified by the Secretary of State of its jurisdiction of
   organization or, if such document is of a type that may not be so
 certified, certified by the secretary or similar officer of the
       applicable Loan Party, together with a good standing certificate from
     the Secretary of State of its jurisdiction of organization and each
      other state in which such Person is qualified to do business and, to
         the extent generally available, a certificate or other evidence of good
     standing as to payment of any applicable franchise or similar taxes
from the appropriate                                          

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     taxing authority of each of such jurisdictions, each dated a recent
date prior to the Closing Date;                               

             (ii)     Resolutions of the Governing Body of such Person
      approving and authorizing the execution, delivery and performance of
       the Loan Documents to which it is a party certified as of the Closing
     Date by the secretary or similar officer of such Person as being in
full force and effect without modification or amendment;      

                  (iii)    Signature and incumbency certificates of the officers
     of such Person executing the Loan Documents to which it is a party;

              (iv)     Executed originals of the Loan Documents to which
such Person is a party; and                                   

             (v)      Such other documents as Administrative Agent may
reasonably request.                                           

                 B. FEES. Borrowers shall have paid out of Debtors' estates to
Administrative Agent, (i) for distribution (as appropriate) to Administrative   
Agent, the fees payable on the Closing Date referred to in subsection 2.3 and   
all reasonable and documented costs and expenses (including legal fees, due     
diligence fees, recordation expenses, other out-of-pocket expenses and taxes) of
Administrative Agent incurred in connection with the negotiation, preparation,  
recordation, execution and completion of the Loan Documents and the transactions
contemplated thereby, including such fees and expenses of O'Melveny & Myers LLP,
counsel to Administrative Agent, and Ernst & Young Corporate Finance LLC, and   
(ii) for distribution (as appropriate) to DIP Lenders and DIP Agents, all unpaid
interest and fees accrued under the DIP Credit Agreement on or before the       
Closing Date, and all reasonable and documented costs and expenses of DIP Agents
and DIP Lenders owed pursuant to subsection 10.2 of the DIP Credit Agreement.   
Borrowers shall have paid out of Debtors' estates to D.E. Shaw an arrangement   
fee of $450,000, unless Borrowers have previously paid out of Debtors' estates  
to D.E. Shaw the commitment fee required pursuant to the "Commitment Letter" (as
defined in the Order Pursuant to Section 363 of the Bankruptcy Code Authorizing 
Debtors to Enter into Letter Agreement with D.E. Shaw Laminar Portfolios, L.L.C.
as Additional New Lender and Make Certain Payments in Connection Therewith      
entered by the Bankruptcy Court on November 21, 2003).                          

              C. CORPORATE AND CAPITAL STRUCTURE; MANAGEMENT; OWNERSHIP.

                 (i)      Corporate Structure. DHC shall own all of the issued
    and outstanding Capital Stock of Covanta. CEA shall own all of the
issued and outstanding common stock of Company. The corporate 
         organizational structure of Company and its Subsidiaries on the Closing
         Date, after giving effect to the Approved Plan of Reorganization, shall
  be satisfactory to Requisite Lenders, shall be consistent in all
    material respects with the Approved Plan of Reorganization and the
Disclosure Statement related thereto.                         

                 (ii)     Capital Structure and Ownership. DHC shall have made
         a cash equity contribution to Covanta of not less than $30,000,000. The
        capital structure and ownership of Company and its Subsidiaries on the
Closing Date, after giving effect to the                      

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     Approved Plan of Reorganization, shall be satisfactory to Requisite
         Lenders, shall be consistent in all material respects with the Approved
      Plan of Reorganization and the Disclosure Statement related thereto.

           (iii)    Management. The Governing Bodies, officers and
      management structure of Covanta, Company and its Subsidiaries on the
Closing Date, after giving effect to the Approved Plan of     
      Reorganization, shall be satisfactory to Requisite Lenders, shall be
consistent in all material respects with the Approved Plan of 
       Reorganization and the Disclosure Statement related thereto and shall
     be as set forth on Schedule 3.1C annexed hereto. Lenders shall have
       received copies of, and Requisite Lenders shall be satisfied with the
form and substance of, the Employment Agreements and any other
      employment agreements with and any incentive arrangements for senior
management of Company and its Subsidiaries.                   

                 D. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Company shall have delivered to Administrative Agent an Officer's Certificate,  
in form and substance satisfactory to Administrative Agent, to the effect that  
the representations and warranties in Section 4 are true, correct and complete  
in all material respects on and as of the Closing Date to the same extent as    
though made on and as of that date (or, to the extent such representations and  
warranties specifically relate to an earlier date, that such representations and
warranties were true, correct and complete in all material respects on and as of
such earlier date) and that Borrowers shall have performed in all material      
respects all agreements and satisfied all conditions which this Agreement       
provides shall be performed or satisfied by it on or before the Closing Date.   

               E. PLAN OF REORGANIZATION; CONFIRMATION ORDER; DISCHARGE OF
EXISTING CREDIT FACILITIES.                                                     

               (i)      Plan of Reorganization. The Plan of Reorganization
        and all amendments, modifications, revisions and restatements thereof,
if any, shall have been approved by the creditors of Borrowers
      (including the DIP Lenders and the Prepetition Lenders) in requisite
       number and percentage, and confirmed by the Bankruptcy Court pursuant
      to the Confirmation Order and delivered to Administrative Agent (the
"APPROVED PLAN OF REORGANIZATION"). Except as set forth in    
modifications filed with the Bankruptcy Court and approved by 
Administrative Agent, there shall have been no modifications, 
amendments, revisions or restatements of the Approved Plan of 
        Reorganization. Any representation and warranty made by Covanta or any
     of its Subsidiaries in the Approved Plan of Reorganization shall be
         accurate, true, correct and complete in all material respects as of the
         Closing Date. The Approved Plan of Reorganization (a) shall provide for
    the payments on the Closing Date described in subsection 3.1T, the
      corporate reorganization described in subsection 3.1S, the making of
  the Loans under this Agreement and the Indebtedness described in
     subsection 3.1F; and (b) upon satisfaction of all conditions to the
       effectiveness of this Agreement, shall become effective in accordance
      with its terms without waiver of any condition to such effectiveness
   that, in Administrative Agent's reasonable judgment, is material.

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                  (ii)     Confirmation Order. The Confirmation Order shall have
   been delivered to Lenders, shall address the matters set forth in
subsections 3.1F, 3.1S and 3.1T, the making of the Loans and  
        Commitments under this Agreement and the terms hereof and the granting
       of all Liens and consents required under this Agreement and the other
       Loan Documents and otherwise be in form and substance satisfactory to
      Requisite Lenders. The Confirmation Order shall be in full force and
         effect and no portion thereof shall have been stayed pending any appeal
      or petition for review or for rehearing, not less than 11 days shall
       have elapsed since entry of the Confirmation Order and Administrative
       Agent shall have received evidence satisfactory to each demonstrating
        such facts. Debtors' Second Joint Plan of Liquidation under Chapter 11
        of the Bankruptcy Code and the Liquidation Plan Supplement to Debtors'
         Second Joint Plan of Liquidation, as filed with the Bankruptcy Court on
        December 18, 2003 and February 18, 2004, respectively, and as amended,
        supplemented or otherwise modified from time to time thereafter to the
  extent permitted under the DIP Credit Agreement, shall have been
    confirmed by the Bankruptcy Court pursuant to an order in form and
substance satisfactory to Requisite Lenders.                  

            (iii)    Approval of Fees Related to Exit Financing. The
     Bankruptcy Court order approving the fees payable to Administrative
     Agent and the Lenders described in subsection 3.1B shall be in full
   force and effect, without modification or amendment except to the
extent approved by Administrative Agent.                      

                (iv)     Material Contracts. The terms and conditions of any
        Material Contracts to be entered into by the Borrowers or any of their
       Subsidiaries pursuant to the Approved Plan of Reorganization shall be
in form and substance satisfactory to Requisite Lenders and   
Administrative Agent.                                         

 F. MATTERS RELATING TO EXISTING INDEBTEDNESS.

            (i)      Termination of DIP Credit Agreement and Related
        Liens. (a) Indebtedness consisting of funded amounts outstanding under
        the DIP Credit Agreement on the Closing Date shall have been repaid in
     full in cash, (b) all undrawn "Tranche A L/Cs" and "Tranche B L/Cs"
       under the DIP Credit Agreement (other than the Existing Detroit L/Cs)
      shall be replaced (or any further drawings thereunder shall be fully
        supported pursuant to arrangements satisfactory to DIP Lenders and the
  issuers thereof) with letters of credit issued under the New L/C
     Facility Agreement, (c) the Existing Detroit L/Cs shall be replaced
         with letters of credit issued under the Detroit L/C Credit Agreement as
       the Detroit L/Cs, (d) each letter of credit (if any) issued or deemed
       issued under the DIP Credit Agreement other than the "Tranche A L/Cs"
      and "Tranche B L/Cs" shall have been cash collateralized pursuant to
      arrangements reasonably satisfactory to the issuer of such letter of
   credit, or cancelled and returned undrawn, or reimbursed, (e) all
      commitments to lend or make other extensions of credit under the DIP
        Credit Agreement shall have terminated (except that the participations
        of DIP Lenders purchased in the letters of credit, if any, referred to
in clause (d) above shall continue), and (f) all documents or 
     instruments necessary to release all Liens securing Indebtedness or
     other obligations of Borrowers and their Subsidiaries under the DIP
       Credit Agreement shall have been delivered to Administrative Agent to
the extent required by Administrative Agent.                  

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               (ii)     Termination of Prepetition Credit Agreement, 9.25%
        Debentures and Related Liens. (a) Indebtedness consisting of the 9.25%
         Debentures and the Prepetition Obligations on the Closing Date shall be
       satisfied by application of the High Yield Notes and the Loans and by
      application of Cash On Hand of Borrowers (as described in subsection
      3.1T), and (b) all documents or instruments necessary to release all
         Liens securing Indebtedness or other obligations of Borrowers and their
   Subsidiaries under the Prepetition Credit Agreement and the 9.25%
     Debentures shall have been delivered to Administrative Agent to the
extent required by Administrative Agent.                      

                (iii)    Domestic Facilities. Indebtedness under the Detroit
         L/C Credit Agreement, the New L/C Facility Agreement and the High Yield
        Notes shall be secured as set forth in the Domestic Loan Documents and
    High Yield Indenture and shall be non-recourse to the Borrowers or
      their assets. The Domestic Loan Documents, High Yield Notes and High
       Yield Indenture shall be in full force and effect, the "Closing Date"
      as defined in each of the Domestic Loan Documents, High Yield Notes,
     and High Yield Indenture shall have occurred, and the Domestic Loan
      Documents, High Yield Notes and High Yield Indenture and shall be in
form and substance satisfactory to Requisite Lenders.         

               (iv)     Existing Indebtedness to Remain Outstanding. After
        giving effect to the Approved Plan of Reorganization, the Indebtedness
        of Domestic Borrowers and Borrowers (other than Indebtedness under the
     Loan Documents, the Domestic Loan Documents, and the CPIH Term Loan
   Documents) shall consist of (a) $205,000,000 in aggregate initial
         principal amount of High Yield Notes, (b) a note issued by Covanta in a
principal amount not to exceed $35,000,000 (the "TAX NOTE"),  
        representing the back tax liability of Covanta and its Subsidiaries as
of the Closing Date, which Tax Note shall be unsecured and    
    unguarantied, shall have a final maturity date of 6 years from the
   Closing Date, shall bear interest payable in arrears at a rate no
       greater than 7.5% per annum, and shall amortize on a 30-year schedule
       for the first 5 years after the issuance thereof with the balance due
        at maturity, (c) "Class 6 Unsecured Notes" (as defined in the Approved
         Plan of Reorganization) in the aggregate principal amount of $4,000,000
   and subordinated notes issued by Covanta (the "UNSECURED CREDITOR
 NOTES") in an aggregate principal amount equal to the amount of
        "Operating Company Unsecured Claims" that are "Allowed" (as such terms
      are defined in the Approved Plan of Reorganization), which Unsecured
        Creditor Notes shall be unsecured and unguarantied, shall have a final
     maturity date of 8 years from the Closing Date, shall bear interest
        payable in arrears at a rate no greater than 7.5% per annum, and shall
       amortize in an amount not to exceed $3,900,000 annually commencing on
      the second anniversary of the Closing Date with the remainder due at
    final maturity, (d) outstanding Indebtedness described in Schedule
        6.1(v) annexed hereto, and (e) Indebtedness under the CEA Stock Pledge
         Agreement. The terms and conditions of all such Indebtedness (including
         payment terms, covenants, representations and warranties, defaults and,
    in the case of the Unsecured Creditor Notes, payment subordination
     provisions), and the definitive documentation therefor, shall be in
form and in substance satisfactory to Requisite Lenders.      

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                 (v)      Related Agreements in Full Force and Effect. Lenders
        shall have received a fully executed or conformed copy of the Domestic
        Loan Documents, CPIH Term Loan Documents, the High Yield Indenture and
 the High Yield Notes, the Management Services and Reimbursement
    Agreement, the Corporate Services Reimbursement Agreement, the Tax
  Note, the Unsecured Creditor Notes, the Unsecured Creditor Notes
      Indenture, the Employment Agreement, the Intercreditor Agreement and
   any documents executed in connection therewith, each such Related
   Agreement, the Domestic Loan Documents, the High Yield Notes, the
        Unsecured Creditor Notes, the Employment Agreements, the Intercreditor
  Agreement, the High Yield Indenture, the Management Services and
         Reimbursement Agreement, the Corporate Services Reimbursement Agreement
       and the Unsecured Creditor Notes Indenture shall be in full force and
       effect and no provision thereof shall have been modified or waived in
any respect determined by either Agent to be material.        

                  G. FINANCIAL STATEMENTS; PROJECTIONS. On or before the Closing
Date, Lenders shall have received (i) the audited consolidated financial        
statements of Covanta and its Subsidiaries for the Fiscal Year ended December   
31, 2002 delivered pursuant to clause (i) of subsection 4.1G of the Domestic    
Credit Agreement, (ii) the unaudited consolidated financial statements of       
Covanta and its Subsidiaries for the Fiscal Quarters ended March 31, 2003, June 
30, 2003 and September 30, 2003 delivered pursuant to clause (ii) of subsection 
4.1G of the Domestic Credit Agreement, and (iii) financial statements with      
respect to Company and its Subsidiaries derived from the financial statements   
described in clauses (i) and (ii) above in form satisfactory to Administrative  
Agent, all in reasonable detail and (in the case of the financial statements    
described in clause (iii)) certified by the chief executive officer or chief    
financial officer of Company that they fairly present, in all material respects,
the financial condition of Company and its Subsidiaries as of the dates         
indicated and the results of their operations and their cash flows for the      
periods indicated, subject to changes resulting from audit and normal year-end  
adjustments. Company shall have delivered to Administrative Agent and Lenders   
such projected financial statements as Administrative Agent may reasonably      
request for the period from the Closing Date through December 31, 2007,         
including the budget of monthly and quarterly cash receipts and expenditures for
Fiscal Year 2004 and annual net cash flow for Fiscal Years 2005, 2006 and 2007  
attached hereto as Schedule 1.1B, which budget and other projections shall be   
satisfactory to Administrative Agent and Requisite Lenders and shall be         
accompanied by a certificate from the chief executive officer or chief financial
officer of Company certifying that they are based upon good faith estimates and 
assumptions believed by Company to be reasonable at the time made.              

               H. SOLVENCY ASSURANCES. On the Closing Date, Administrative
Agent and Lenders shall have received an Officer's Certificate from Covanta     
dated the Closing Date, substantially in the form delivered under subsection    
4.1H of the Domestic Credit Agreement and with appropriate attachments,         
demonstrating that, after giving effect to the consummation of the transactions 
contemplated by the Domestic Loan Documents, Domestic Borrowers, taken as a     
whole, and Covanta will be Solvent.                                             

              I. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders shall have
received originally executed copies of one or more favorable written opinions of
(a) Cleary, Gottlieb, Steen & Hamilton, (b) LeBoeuf, Lamb, Greene & McRae, (c)  
Morris, James, Hitchens & Williams LLP                                          

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and (d) Nixon Peabody, LLP, counsel for Borrowers, in form and substance        
reasonably satisfactory to Administrative Agent and their counsel, dated as of  
the Closing Date and setting forth substantially the matters in the opinions    
designated in Exhibit VI annexed hereto and as to such other matters as         
Administrative Agent acting on behalf of Lenders may reasonably request (this   
Agreement constituting a written request by Borrowers to such counsel to deliver
such opinions to Administrative Agent and Lenders).                             

                 J. OPINIONS OF COUNSEL DELIVERED UNDER RELATED AGREEMENTS AND
OTHER DOCUMENTS. Administrative Agent and its counsel shall have received copies
of the opinions of counsel delivered to the parties under the Related           
Agreements, the Domestic Loan Documents, the High Yield Note, the High Yield    
Indenture, the Unsecured Creditor Notes and the Unsecured Creditor Notes        
Indenture, and Borrowers shall have made reasonable efforts to obtain from each 
such counsel letters authorizing Lenders to rely on such opinions to the same   
extent as though such opinions were addressed to Lenders.                       

             K. EVIDENCE OF INSURANCE. Administrative Agent shall have
received a certificate from Covanta's insurance broker or other evidence        
satisfactory to it that all insurance required to be maintained pursuant to     
subsection 5.4 is in full force and effect and that Collateral Agent and/or     
Administrative Agent on behalf of Lenders has been named as additional insured  
and/or loss payee thereunder to the extent required under subsection 5.4.       

                  L. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS. Covanta
and its Subsidiaries shall have obtained all Governmental Authorizations and all
consents of other Persons, in each case that are necessary or advisable in      
connection with the transactions contemplated by the Loan Documents and the     
continued operation of the business conducted by Covanta, Company and its       
Subsidiaries in substantially the same manner as conducted prior to the Closing 
Date. Each such Governmental Authorization or consent shall be in full force and
effect, except in a case where the failure to obtain or maintain a Governmental 
Authorization or consent, either individually or in the aggregate, should not   
reasonably be expected to have a Material Adverse Effect. Administrative Agent  
shall have received an Officer's Certificate of Company in form and substance   
reasonably satisfactory to Administrative Agent certifying as to the foregoing  
matters and any other evidence reasonably requested by Administrative Agent in  
support thereof. All applicable waiting periods shall have expired without any  
action being taken or threatened by any competent authority that would restrain,
prevent or otherwise impose adverse conditions on the transactions contemplated 
by the Loan Documents or the financing thereof. No action, request for stay,    
petition for review or rehearing, reconsideration, or appeal with respect to any
of the foregoing shall be pending, and the time for any applicable Government   
Authority to take action to set aside its consent on its own motion shall have  
expired.                                                                        

         M. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY.
Administrative Agent shall have received evidence satisfactory to it that Loan  
Parties shall have taken or caused to be taken all such actions, executed and   
delivered or caused to be executed and delivered all such agreements, documents 
and instruments, and made or caused to be made all such filings and recordings  
(other than the filing or recording of items described in clauses (ii) and (iii)
below) that Administrative Agent may reasonably request in order to evidence, in
favor of Collateral Agent, for the benefit of Secured Parties, a valid and      
perfected security interest in the entire                                       

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personal and mixed property Collateral, with the priority set forth in the      
Collateral Documents (it being understood that such actions by CEA shall relate 
solely to its pledge of the common stock of Company). Such actions shall include
the following:                                                                  

            (i)      Stock Certificates and Instruments. Delivery to
   Collateral Agent of (a) certificates (which certificates shall be
         accompanied by irrevocable undated stock powers, duly endorsed in blank
       and otherwise satisfactory in form and substance to Collateral Agent)
       representing all capital stock included in the Collateral and (b) all
promissory notes or other instruments (duly endorsed, where   
       appropriate, in a manner satisfactory to Collateral Agent) evidencing
any Collateral;                                               

          (ii)     Lien Searches and UCC Termination Statements.
        Delivery to Collateral Agent of (a) the results of a recent search, by
 a Person satisfactory to Collateral Agent, of all effective UCC
        financing statements and fixture filings and all judgment and tax lien
        filings which may have been made with respect to any personal or mixed
        property of any Borrower and of all effective UCC financing statements
       which may have been made with respect to Capital Stock of Company, in
       each case, together with copies of all such filings disclosed by such
 search, and (b) UCC termination statements duly executed by all
         applicable Persons for filing in all applicable jurisdictions as may be
  necessary to terminate any effective UCC financing statements or
         fixture filings disclosed in such search (other than any such financing
       statements or fixture filings in respect of Liens permitted to remain
outstanding pursuant to the terms of this Agreement);         

          (iii)    UCC Financing Statements and Fixture Filings.
     Delivery to Collateral Agent of UCC financing statements and, where
         appropriate, fixture filings, duly executed by each applicable Borrower
    with respect to all personal and mixed property Collateral of such
     Borrower and by CEA with respect to the common stock of Company, in
      each case, for filing in all jurisdictions as may be necessary or in
   the opinion of Collateral Agent desirable to perfect the security
   interests in favor of Collateral Agent created in such Collateral
pursuant to the Collateral Documents;                         

                (iv)     PTO Cover Sheets, Etc. Delivery to Collateral Agent
        of all cover sheets or other documents or instruments Collateral Agent
      may reasonably request to be filed with the PTO in order to evidence
         Liens in favor of Collateral Agent in respect of any IP Collateral; and

                (v)      Control Agreements. Delivery to Collateral Agent of
     Control Agreements with financial institutions and other Persons in
   order to perfect Liens in respect of Deposit Accounts, Securities
     Accounts and other Collateral pursuant to the Collateral Documents;

N. [INTENTIONALLY OMITTED].                 

               O. NO MATERIAL ADVERSE CHANGE. Administrative Agent (in its
sole discretion) shall be satisfied that there has been no material adverse     
change (other than as disclosed in reports delivered pursuant to subsection     
6.1(i) of the DIP Credit Agreement) since December 31, 2002 in the business,    
property, assets, operations, financial condition or prospects of Company       

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and its Subsidiaries taken as a whole, and Company shall have delivered to      
Administrative Agent an Officer's Certificate to the foregoing effect.          

            P. CASH MANAGEMENT SYSTEM. The cash management system of
Company and its Subsidiaries shall be as set forth on Schedule 3.1P annexed     
hereto.                                                                         

Q. [INTENTIONALLY OMITTED].                 

          R. GEOTHERMAL SALE. Covanta shall have consummated the
Geothermal Sale on terms and conditions and pursuant to documentation in form   
and substance satisfactory to the Requisite DIP Lenders.                        

               S. COMPANY REORGANIZATION. On the Closing Date, (i) Covanta
shall own, directly or indirectly, 100% of the outstanding Capital Stock of CEA,
(ii) CEA shall own 100% of the outstanding common stock of Company, which shall 
own the Capital Stock of all Persons (including Persons holding the equity      
interests in other Persons) holding the assets and operations of the IPP        
International Business to the extent described in the Approved Plan of          
Reorganization and the Disclosure Statement related thereto, (ii) all relevant  
operating and administrative expenses associated with the IPP International     
Business shall be transferred into Company in accordance with the Management    
Services and Reimbursement Agreement, and (iii) not less than $5,000,000 of cash
for working capital shall have been transferred from Covanta and its            
Subsidiaries (other than Borrowers) to the Borrowers as an equity contribution. 

              T. DISTRIBUTION. All unrestricted Cash On Hand (including,
without limitation, net sale proceeds from the Geothermal Sale) of Covanta and  
its Subsidiaries remaining prior to the equity contribution referred to in      
subsection 3.1C(ii) but after (i) the transfer of working capital amounts to    
Company as described in subsection 3.1S, (ii) the payment of the fees referred  
to in subsection 3.1B, (iii) the disposition of those letters of credit referred
to in subsection 3.1F(i)(c), (iv) the payment of allowed administrative         
expenses, (v) the reimbursement of reasonable accrued fees and expenses of DHC  
not to exceed $4,000,000 in the aggregate and reasonable accrued fees and       
expenses of D.E. Shaw not to exceed $350,000 in the aggregate, and (vi) payment 
of funded outstanding obligations under the DIP Credit Agreement (if any) and   
(without duplication of clauses (i) through (vi)) the payment of other "Exit    
Costs" (as defined in the Approved Reorganization Plan), subject to an amount of
cash (which amount shall be determined in accordance with terms set forth in the
draft Plan of Reorganization attached (on the date of execution thereof) to the 
Investment and Purchase Agreement dated as of December 2, 2003 between DHC and  
Covanta) (plus reserves required to address timing issues associated with the   
Geothermal Sale and emergence from the Chapter 11 Cases (in an aggregate amount 
satisfactory to the DIP Lenders)) to be retained in the Cash Management System  
in the United States by Covanta and its Subsidiaries (collectively, such Cash On
Hand, net of such transferred amount, such payments and reimbursements, such    
retained amount and such reserves, is referred to herein as "DISTRIBUTABLE      
CASH"), shall have been distributed as follows: first, to the extent of the     
first $60,000,000 of such Distributable Cash, for the benefit of the holders of 
Prepetition Secured Claims that are Detroit L/C Lenders on the Closing Date, on 
account of their allowed pre-petition exposure, in accordance with the          
Approved Plan of Reorganization second, to the extent of the next $7,200,000 of 
such Distributable Cash, for the benefit of the holders of Prepetition Secured  
Claims, on account of any remaining allowed pre-Petition Date exposure, in      
accordance with the                                                             

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Approved Plan of Reorganization, and third, to the extent of 25% of any         
remaining Distributable Cash, to Covanta, and to the extent of the remaining    
75%, for the benefit of the holders of Prepetition Secured Claims, on account of
any remaining allowed pre-Petition Date exposure, in accordance with the        
Approved Plan of Reorganization.                                                

           U. NOL AVAILABILITY. Covanta, its independent advisers,
Administrative Agent and Administrative Agent's counsel shall have determined to
their respective sole satisfaction that the net operating losses disclosed to   
Administrative Agent and Lenders prior to the Closing Date as being held by DHC 
are available and accessible to Covanta and its Subsidiaries.                   

                 V. LITIGATION. On the Closing Date, there shall be no action,
suit, investigation, litigation or proceeding pending or threatened in any court
or before any arbitrator or governmental instrumentality that purports to affect
the Approved Plan of Reorganization, any of the Loan Documents, any of the      
Domestic Loan Documents, the High Yield Notes or the High Yield Indenture that  
could reasonably be expected to have a Material Adverse Effect or a material    
adverse effect on the Approved Plan of Reorganization, or any of the Loan       
Documents, or any of the Domestic Loan Documents.                               

         W. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions            
contemplated hereby and all documents incidental thereto not previously found   
acceptable by Administrative Agent, acting on behalf of Lenders, and their      
counsel shall be satisfactory in form and substance to Administrative Agent and 
such counsel, and Administrative Agent and such counsel shall have received all 
such counterpart originals or certified copies of such documents as             
Administrative Agent may reasonably request.                                    

               Each Lender, by delivering to Administrative Agent a signed
counterpart to this Agreement, shall be deemed (unless such Lender indicates    
otherwise in writing to Administrative Agent and Company) to have acknowledged  
receipt of, and to have consented to, approved and be satisfied with, the       
documents, agreements, instruments or information which require approval,       
consent or satisfaction of the Lenders or Requisite Lenders, as applicable, in  
order for the conditions precedent contained in this subsection 3.1 to be       
satisfied.                                                                      

                  Notwithstanding anything in this Section 3 to the contrary, it
is understood and agreed that the conditions of subsection 3.1A(i) shall be     
deemed satisfied notwithstanding failure to deliver all of the certificates or  
other evidence of good standing described in subsection 3.1A(i), so long as (i) 
Administrative Agent is notified which certificates or other evidence shall not 
have been delivered and, in its sole discretion, agrees that such certificates  
or other evidence may be delivered with respect to the relevant Persons after   
the Closing Date, (ii) failure to deliver all of the certificates or other      
evidence of good standing described in subsection 3.1A(i) on or prior to the    
date which is 60 days after the Closing Date shall constitute an immediate Event
of Default on such date.                                                        

3.2      CONDITIONS TO ALL LOANS.                             

                 The obligations of Lenders to make Loans on each Funding Date
are subject to the following further conditions precedent:                      

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           A. Administrative Agent shall have received before that
Funding Date, in accordance with the provisions of subsection 2.1B, an          
originally executed Notice of Borrowing, in each case signed by a duly          
authorized Officer of Borrowers.                                                

B. As of that Funding Date:                 

                (i)      The representations and warranties contained herein
        and in the other Loan Documents shall be true, correct and complete in
         all material respects on and as of that Funding Date to the same extent
  as though made on and as of that date, except to the extent such
        representations and warranties specifically relate to an earlier date,
         in which case such representations and warranties shall have been true,
         correct and complete in all material respects on and as of such earlier
date;                                                         

              (ii)     No event shall have occurred and be continuing or
     would result from the consummation of the borrowing contemplated by
         such Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;                                   

                 (iii)    Each Loan Party shall have performed in all material
 respects all agreements and satisfied all conditions which this
       Agreement provides shall be performed or satisfied by it on or before
that Funding Date;                                            

              (iv)     No order, judgment or decree of any arbitrator or
        Government Authority (including the Bankruptcy Court) shall purport to
         enjoin or restrain any Lender from making the Loans to be made by it on
that Funding Date;                                            

               (v)      After giving effect to the proposed borrowing, the
      aggregate principal amount of all outstanding Loans shall not exceed
the Commitments then in effect;                               

                 (vi)     Company shall have delivered to Administrative Agent
         an Officer's Certificate (together with such supporting calculations as
      Administrative Agent may reasonably request) certifying that, before
    and after giving effect to the contemplated application of amounts
       proposed to be borrowed, Company and its Subsidiaries shall be in pro
forma compliance with subsection 6.6; and                     

                  (vii)    The aggregate amount of Cash On Hand shall not exceed
$2,000,000.                                                   

SECTION 4.        COMPANY'S REPRESENTATIONS AND WARRANTIES                      

                  In order to induce Lenders to enter into this Agreement and to
make the Loans, Borrowers represent and warrant to each Lender, on the date of  
this Agreement, on the Closing Date and on each Funding Date, that the following
statements are true, correct and complete:                                      

       4.1      ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS
AND SUBSIDIARIES.                           

                 A. ORGANIZATION AND POWERS. Each Loan Party is a corporation,
partnership, trust or limited liability company duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization as      
specified in Schedule 4.1 annexed hereto. Each Loan                             

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Party has all requisite power and authority to own and operate its properties,  
to carry on its business as now conducted and as proposed to be conducted, to   
enter into the Loan Documents to which it is a party and to carry out the       
transactions contemplated thereby. Each Loan Party is in compliance with all    
material terms of its Organizational Documents.                                 

          B. QUALIFICATION AND GOOD STANDING. Each Loan Party is
qualified to do business and in good standing in every jurisdiction necessary to
carry out its business and operations, except in jurisdictions where the failure
to be so qualified or in good standing has not had and could not reasonably be  
expected to have a Material Adverse Effect.                                     

            C. CONDUCT OF BUSINESS. Company and its Subsidiaries are
engaged only in the businesses permitted to be engaged in pursuant to subsection
6.11.                                                                           

                 D. SUBSIDIARIES. All of the Subsidiaries of Company as of the
Closing Date and their jurisdictions of organization are identified in Schedule 
4.1 annexed hereto. The Capital Stock of Company and each of its Subsidiaries   
identified in Schedule 4.1 annexed hereto is duly authorized, validly issued,   
fully paid and nonassessable and none of such Capital Stock constitutes Margin  
Stock. CEA, Company and each of its Subsidiaries identified in Schedule 4.1     
annexed hereto is a corporation, partnership, trust or limited liability company
duly organized, validly existing and in good standing under the laws of its     
respective jurisdiction of organization set forth therein, has all requisite    
power and authority to own and operate its properties and to carry on its       
business as now conducted and as proposed to be conducted, and is qualified to  
do business and in good standing in every jurisdiction necessary to carry out   
its business and operations, in each case except where failure to be so         
qualified or in good standing or a lack of such power and authority has not had 
and could not reasonably be expected to have a Material Adverse Effect. Schedule
4.1 annexed hereto correctly sets forth, as of the Closing Date, the ownership  
interest of CEA, Company and each of its Subsidiaries in Company and each of its
Subsidiaries identified therein.                                                

4.2      AUTHORIZATION OF BORROWING, ETC.                     

              A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents have been duly authorized by all necessary    
action on the part of each Loan Party that is a party thereto.                  

              B. NO CONFLICT. The execution, delivery and performance by
Loan Parties of the Loan Documents to which they are parties and the            
consummation of the transactions contemplated by the Loan Documents do not and  
will not (i) violate any provision of any law or any governmental rule or       
regulation applicable to CEA, Company or any of its Subsidiaries, the           
Organizational Documents of CEA, Company or any of its Subsidiaries or any      
order, judgment or decree of any court or other Government Authority binding on 
CEA, Company or any of its Subsidiaries, (ii) conflict with, result in a breach 
of or constitute (with due notice or lapse of time or both) a default under any 
Contractual Obligation of CEA, Company or any of its Subsidiaries, (iii) result 
in or require the creation or imposition of any Lien upon any of the properties 
or assets of Covanta or any of its Subsidiaries (other than any Liens created   
under any of the Loan Documents in favor of Collateral Agent on behalf of       
Secured Parties), or (iv) require any approval of stockholders or any approval  
or consent of any Person under any Contractual                                  

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Obligation of Covanta or any of its Subsidiaries, except for (x) such approvals 
or consents which will be obtained on or before the Closing Date and disclosed  
in writing to Lenders.                                                          

         C. GOVERNMENTAL CONSENTS. The execution, delivery and
performance by Loan Parties of the Loan Documents to which they are parties and 
the consummation of the transactions contemplated by the Loan Documents do not  
and will not require any Governmental Authorization, except for the entry of the
Confirmation Order and except for filings expressly contemplated by the Loan    
Documents and those Governmental Authorizations which have been obtained.       

              D. BINDING OBLIGATION. Each of the Loan Documents has been
duly executed and delivered by each Loan Party that is a party thereto and is   
the legally valid and binding obligation of such Loan Party, enforceable against
such Loan Party in accordance with its respective terms, except as may be       
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws   
relating to or limiting creditors' rights generally or by equitable principles  
relating to enforceability.                                                     

             E. RESTRICTIONS ON TRANSFER. There are no restrictions on
Company or any of its Subsidiaries which prohibit or otherwise restrict the     
transfer of cash or other assets from one Borrower to another, other than (i)   
prohibitions or restrictions existing under or by reason of (a) this Agreement  
and the other Loan Documents, (b) applicable law, (c) customary non-assignment  
provisions entered into in the ordinary course of business and consistent with  
past practices, and (d) any documents or instruments governing the terms of any 
Indebtedness or other obligations secured by Liens permitted by subsection 6.2A,
provided that such prohibitions or restrictions apply only to the assets subject
to such Liens, and (ii) restrictions described in clauses (a) through (d) of    
subsection 6.2D.                                                                

4.3      FINANCIAL CONDITION.                                 

            Company has heretofore delivered to Lenders, pursuant to
subsection 3.1G, (i) statements of income, balance sheets and statements of cash
flows with respect to Company and its Subsidiaries for the Fiscal Year ended    
December 31, 2002 and (ii) statements of income, balance sheets and statements  
of cash flows with respect to Company and its Subsidiaries for the Fiscal       
Quarters ended March 31, 2003, June 30, 2003 and September 30, 2003. All such   
statements were prepared in conformity with GAAP and fairly present, in all     
material respects, the financial position (on a consolidated and, where         
applicable, consolidating basis) of the entities described in such financial    
statements as at the respective dates thereof and the results of operations and 
cash flows (on a consolidated and, where applicable, consolidating basis) of the
entities described therein for each of the periods then ended, subject, in the  
case of any such unaudited financial statements, to changes resulting from audit
and normal year-end adjustments. No Borrower has, as of the Closing Date, any   
Contingent Obligation, contingent liability or unusual long-term commitment that
is not reflected in the foregoing financial statements or the notes thereto and,
as of any date subsequent to the Closing Date, is not reflected in the most     
recent financial statements delivered to Lenders pursuant to subsection 5.1 or  
the notes thereto (other than (a) those liabilities reflected on the Schedules  
to this Agreement and (b) Performance Guaranties and Contingent Obligations that
are permitted to be incurred under subsection 6.4)                              

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and that, in any such case, is material in relation to the business, operations,
properties, assets or financial condition of Company or any of its Subsidiaries 
taken as a whole.                                                               

4.4      NO MATERIAL ADVERSE CHANGE; NO RESTRICTED PAYMENTS.  

            Since December 31, 2002, no event or change has occurred
(other than as disclosed in reports delivered pursuant to subsection 6.1(i) of  
the DIP Credit Agreement) that has resulted in or evidences, either in any case 
or in the aggregate, a Material Adverse Effect. Since the Petition Date, neither
Company nor any of its Subsidiaries has directly or indirectly declared,        
ordered, paid or made, or set apart any sum or property for, any Restricted     
Payment or agreed to do so except (i) as permitted by subsection 6.5, and (ii)  
as was permitted by subsection 7.5 of the DIP Credit Agreement.                 

  4.5      TITLE TO PROPERTIES; LIENS; REAL PROPERTY; INTELLECTUAL
PROPERTY.                                   

               A. TITLE TO PROPERTIES; LIENS. Company and its Subsidiaries
have (i) good, sufficient and legal title to (in the case of fee interests in   
real property), (ii) valid leasehold interests in (in the case of leasehold     
interests in real or personal property), or (iii) good title to (in the case of 
all other personal property), all of their respective material properties and   
assets reflected in the financial statements referred to in subsection 4.3 or in
the most recent financial statements delivered pursuant to subsection 5.1, in   
each case except for assets disposed of since the date of such financial        
statements in the ordinary course of business or as otherwise permitted under   
subsection 6.7. Except as permitted by this Agreement, all such properties and  
assets are free and clear of Liens.                                             

           B. REAL PROPERTY. As of the Closing Date, Schedule 4.5B
annexed hereto contains a true, accurate and complete list of (i) all fee       
interests in any Real Property Assets and (ii) all leases, subleases or         
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting each Real Property Asset,      
regardless of whether a Borrower is the landlord or tenant (whether directly or 
as an assignee or successor in interest) under such lease, sublease or          
assignment. As of the Closing Date, except as specified in Schedule 4.5B annexed
hereto, each agreement listed in clause (ii) of the immediately preceding       
sentence is in full force and effect and no Borrower has knowledge of any       
material default that has occurred and is continuing thereunder, and each such  
agreement constitutes the legally valid and binding obligation of each          
applicable Borrower, enforceable against such Borrower in accordance with its   
terms, except as enforcement may be limited by bankruptcy, insolvency,          
reorganization, moratorium or similar laws relating to or limiting creditors'   
rights generally or by equitable principles.                                    

              C. INTELLECTUAL PROPERTY. As of the Closing Date, Schedule
4.5C annexed hereto contains a true, accurate and complete list of all material 
Intellectual Property. Each of Company and its Subsidiaries owns or has the     
right to use all material Intellectual Property used in the conduct of its      
business, and none of such Intellectual Property conflicts with a right of any  
other Person to the extent such conflict could reasonably be expect to result in
a Material Adverse Effect.                                                      

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4.6      LITIGATION; ADVERSE FACTS.                           

                 Except as set forth in Schedule 4.6 annexed hereto, there are
no Proceedings (whether or not purportedly on behalf of Company or any of its   
Subsidiaries) at law or in equity, or before or by any court or other Government
Authority (including any Environmental Claims) that are pending or, to the      
knowledge of any Borrower, threatened against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries and that,    
individually or in the aggregate, could reasonably be expected to result in a   
Material Adverse Effect. Neither Company nor any of its Subsidiaries (i) is in  
violation of any applicable laws (including Environmental Laws) that,           
individually or in the aggregate (together with all such Proceedings with       
respect to substantially similar or related matters), would reasonably be       
expected to result in a Material Adverse Effect, or (ii) is subject to or in    
default with respect to any final judgments, writs, injunctions, decrees, rules 
or regulations of any court or other Government Authority that, individually or 
in the aggregate, could reasonably be expected to result in a Material Adverse  
Effect.                                                                         

4.7      PAYMENT OF TAXES.                                    

                  Except to the extent permitted by subsection 5.3, all material
tax returns and reports of Company and its Subsidiaries required to be filed by 
any of them have been timely filed, and all taxes shown on such tax returns to  
be due and payable (other than taxes represented by the Tax Note) and all       
assessments, fees and other governmental charges upon Company and its           
Subsidiaries and upon their respective properties, assets, income, businesses   
and franchises that are due and payable have been paid when due and payable. No 
Borrower knows of any proposed tax assessment against Company or any of its     
Subsidiaries, that Company or its Subsidiaries dispute or disagree with, that is
not being actively contested by Company or such Subsidiary in good faith and by 
appropriate proceedings; provided that such reserves or other appropriate       
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.                                                      

4.8      PERFORMANCE OF AGREEMENTS; MATERIAL CONTRACTS.       

                 A. Except as set forth on Schedule 4.8A annexed hereto, after
giving effect to the Approved Plan of Reorganization, neither Company nor any of
its Subsidiaries is in default in the performance, observance or fulfillment of 
any of the obligations, covenants or conditions contained in any of its         
Contractual Obligations, and no condition exists that, with the giving of notice
or the lapse of time or both, would constitute such a default except where the  
consequences, direct or indirect, of such default or defaults, if any, could not
reasonably be expected to have a Material Adverse Effect.                       

                B. Neither Company nor any of its Subsidiaries is a party to
or is otherwise subject to (i) any agreements or instruments, the performance of
which, in the ordinary course, would reasonably be expected to result in a      
Material Adverse Effect, or (ii) any charter or other internal restrictions     
which, individually or in the aggregate, could reasonably be expected to result 
in a Material Adverse Effect.                                                   

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                  C. Schedule 4.8C contains a true, correct and complete list of
all the Material Contracts in effect on the Closing Date after giving effect to 
the Approved Plan of Reorganization.                                            

4.9      GOVERNMENTAL REGULATION.                             

             Neither Company nor any of its Subsidiaries is subject to
regulation under (i) the Public Utility Holding Company Act of 1935 ("PUHCA")   
(other than as an "exempt wholesale generator" or as a "foreign utility         
company", as such terms are defined in PUHCA), (ii) the Federal Power Act (other
than as a "qualifying small power production facility", as such term is defined 
in PURPA), (iii) the Interstate Commerce Act, (iv) the Investment Company Act of
1940, or (v) any other federal or state statute or regulation which may limit   
its ability to incur Indebtedness or which may otherwise render all or any      
portion of the Obligations unenforceable.                                       

4.10     SECURITIES ACTIVITIES.                               

             A. Neither CEA nor Company nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of  
extending credit for the purpose of purchasing or carrying any Margin Stock.    

                  B. Following the application of the proceeds of each Loan, not
more than 25% of the value of the assets (either of Company only or of Company  
and its Subsidiaries on a consolidated basis) subject to the provisions of      
subsection 6.2 or 6.7 or subject to any restriction contained in any agreement  
or instrument, between Company and any Lender or any Affiliate of any Lender,   
relating to Indebtedness and within the scope of subsection 7.2, will be Margin 
Stock.                                                                          

4.11     EMPLOYEE BENEFIT PLANS.                              

             A. Company, each of its Subsidiaries and, with respect to
Pension Plans and Multiemployer Plans, each of their respective ERISA Affiliates
are in material compliance with all applicable provisions and requirements of   
ERISA, the regulations and published interpretations thereunder and other       
applicable law with respect to each Employee Benefit Plan, and have performed   
all of their material obligations under each Employee Benefit Plan. Company and 
each of its Subsidiaries are in material compliance with all applicable laws and
orders of foreign Government Authorities with respect to each of its pension    
plans and employee benefit plans for foreign employees, and have performed all  
of their material obligations under each such pension plan and employee benefit 
plan. Each Employee Benefit Plan that is intended to qualify under Section      
401(a) of the Internal Revenue Code has received, or has timely taken all action
necessary to receive, a favorable determination letter from the Internal Revenue
Service to such effect and no event has occurred (other than the enactment of   
legislation for which the remedial amendment period has not expired) that would 
reasonably be expected to affect adversely such Plan's qualification.           

               B. No ERISA Event has occurred or is reasonably expected to
occur.                                                                          

               C. Except to the extent required under Section 4980B of the
Internal Revenue Code or except as set forth in Schedule 4.11 annexed hereto or 
in the financial statements                                                     

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delivered to Lenders pursuant to subsection 3.1 or 5.1 hereof, as applicable, no
Employee Benefit Plan provides health or welfare benefits (through the purchase 
of insurance or otherwise) for any retired or former employee of Company or any 
of its Subsidiaries.                                                            

              D. As of January 1 of each year (based on, with respect to
each Pension Plan, the actuarial valuation as of such January 1, or if no such  
valuation was performed as of such January 1 but was performed within the       
preceding 12 months, the date as of which the valuation was so performed), the  
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of    
ERISA, but determined on the basis of the actuarial assumptions used for funding
purposes with respect to a Pension Plan (as set forth in Section 412 of the     
Internal Revenue Code, including where applicable, the interest rate assumptions
set forth in Section 412(l) of the Internal Revenue Code)), in the aggregate for
all Pension Plans (excluding for purposes of such computation any Pension Plans 
with respect to which assets exceed benefit liabilities), does not exceed (i)   
$20,000,000, in the event the applicable law (including statutorily prescribed  
actuarial assumptions) used in determining such unfunded benefit liabilities    
(the "ASSUMPTIONS") is generally as favorable as the Assumptions used in the    
2003 plan year valuations with respect to such Pension Plans, or (ii)           
$26,000,000 in the event the Assumptions are generally less favorable than the  
Assumptions used in the 2003 plan year valuations with respect to such Pension  
Plans.                                                                          

          E. To each Borrower's knowledge, as of the most recent
valuation date for each Multiemployer Plan for which the actuarial report (or an
estimate provided pursuant to Section 4221(e) of ERISA) is reasonably available 
to Company, the potential withdrawal liability of Company, its Subsidiaries and 
their respective ERISA Affiliates for a complete withdrawal from such           
Multiemployer Plan (within the meaning of Section 4203 of ERISA), when          
aggregated with the potential liability for a complete withdrawal from all other
Multiemployer Plans for which such actuarial report (or an estimate provided    
pursuant to Section 4221(e) of ERISA) is reasonably available to Company, based 
on the information contained in such reports, would not reasonably be expected  
to exceed $7,500,000.                                                           

            F. Neither Company nor any Subsidiary has incurred or is
reasonably expected to incur any material liability pursuant to Title IV of     
ERISA with respect to any employee benefit plan of an entity that was formerly  
an ERISA Affiliate of Company or any of its Subsidiaries or with respect to any 
employee benefit plan that was previously maintained by Company or any of its   
Subsidiaries.                                                                   

4.12     CERTAIN FEES.                                        

                  No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby, and   
each Borrower hereby indemnifies Lenders against, and agrees that it will hold  
Lenders harmless from, any claim, demand or liability for any such broker's or  
finder's fees alleged to have been incurred in connection herewith or therewith 
and any expenses (including reasonable fees, expenses and disbursements of      
counsel) arising in connection with any such claim, demand or liability.        

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4.13     ENVIRONMENTAL PROTECTION.                            

           A. Except as set forth in Schedule 4.13 annexed hereto,
neither Company nor any of its Subsidiaries nor any of their respective         
Facilities or operations are subject to any outstanding written order, consent  
decree or settlement agreement with any Person relating to (a) any Environmental
Law, (b) any Environmental Claim, or (c) any Hazardous Materials Activity that, 
individually or in the aggregate, could reasonably be expected to have a        
Material Adverse Effect or impose liability on any Lender or Agent;             

           B. Except as set forth in Schedule 4.13 annexed hereto,
neither Covanta nor any of its Subsidiaries has received any letter or request  
for information under Section 104 of CERCLA or any comparable state law         
regarding any condition, occurrence or activity that could reasonably be        
expected to form the basis of an Environmental Claim against Company or any of  
its Subsidiaries that, individually or in the aggregate, could reasonably be    
expected to have a Material Adverse Effect or impose liability on any Lender or 
Agent;                                                                          

                 C. Except as set forth in Schedule 4.13 annexed hereto, there
are and, to Company's knowledge, have been no conditions, occurrences, or       
Hazardous Materials Activities that could reasonably be expected to form the    
basis of an Environmental Claim against Company or any of its Subsidiaries that,
individually or in the aggregate, could reasonably be expected to have a        
Material Adverse Effect or impose liability on any Lender or Agent;             

               D. Except as set forth in Schedule 4.13 annexed hereto, (i)
neither Covanta nor any of its Subsidiaries nor, to Company's knowledge, any    
predecessor of Covanta or any of its Subsidiaries has filed any notice under any
Environmental Law indicating past or present treatment of Hazardous Materials at
any Facility, (ii) none of Company's or any of its Subsidiaries' Facilities     
constitute facilities for the treatment, storage or disposal of Hazardous       
Materials under RCRA or any state equivalent, and (iii) none of Company's or any
of its Subsidiaries' operations involves the generation, transportation,        
treatment, storage or disposal of hazardous waste in violation of RCRA or any   
state equivalent that, individually or in the aggregate, could reasonably be    
expected to have a Material Adverse Effect or impose liability on any Lender or 
Agent; and                                                                      

              E. Compliance with all current requirements pursuant to or
under Environmental Laws would not, individually or in the aggregate, be        
reasonably expected to have a Material Adverse Effect or impose liability on any
Lender or Agent.                                                                

4.14     EMPLOYEE MATTERS.                                    

            Except as described in Schedule 4.14 annexed hereto with
respect to the Bataan Project, there is no strike or work stoppage in existence 
or threatened involving Company or any of its Subsidiaries that would reasonably
be expected to have a Material Adverse Effect.                                  

4.15     MATTERS RELATING TO COLLATERAL.                      

                A. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution
and delivery of the Collateral Documents by Loan Parties, together with (x) the 
actions taken on or prior to the date hereof pursuant to subsections 3.1M, 3.1N,
5.8, 5.9 and 5.11 and (y) the delivery to                                       

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Collateral Agent of any Pledged Collateral of the Loan Parties not delivered to 
Collateral Agent at the time of execution and delivery of the applicable        
Collateral Document (all of which Pledged Collateral has been so delivered) are 
effective to create in favor of Collateral Agent, for the benefit of Secured    
Parties, a Lien on all of the Collateral of the Loan Parties (which Lien has    
priority over any other Lien on such Collateral, subject to Permitted           
Encumbrances and Liens permitted under subsection 6.2A), and all filings and    
other actions necessary or desirable to perfect and maintain the perfection and 
such priority of such Liens have been duly made or taken and remain in full     
force and effect, other than the filing of any UCC financing statements         
delivered to Collateral Agent for filing (but not yet filed) and the periodic   
filing of UCC continuation statements in respect of UCC financing statements    
filed by or on behalf of Collateral Agent.                                      

                 B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or
other action by, and no notice to or filing with, any Government Authority is   
required for either (i) the pledge or grant by any Loan Party of the Liens      
purported to be created in favor of Collateral Agent pursuant to any of the     
Collateral Documents or (ii) the exercise by Collateral Agent of any rights or  
remedies in respect of any Collateral (whether specifically granted or created  
pursuant to any of the Collateral Documents or created or provided for by       
applicable law), except (a) for filings or recordings contemplated by subsection
4.15A, (b) as may be required, in connection with the disposition of any Pledged
Collateral, by laws generally affecting the offering and sale of securities, and
(c) authorizations and approvals in respect of the exercise of rights or        
remedies as to any collateral of any Loan Party which is subject to regulation  
under the Federal Power Act pursuant to Section 210(e)(2) of PURPA.             

              C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have
been filed in favor of Collateral Agent as contemplated by subsection 4.15A and 
to evidence Liens permitted pursuant to subsection 6.2, (i) no effective UCC    
financing statement, fixture filing or other instrument similar in effect       
covering all or any part of the Collateral is on file in any filing or recording
office, and (ii) no effective filing covering all or any part of the IP         
Collateral is on file in the PTO.                                               

               D. MARGIN REGULATIONS. The pledge of the Pledged Collateral
pursuant to the Collateral Documents does not violate Regulation T, U or X of   
the Board of Governors of the Federal Reserve System.                           

                 E. INFORMATION REGARDING COLLATERAL. All information supplied
to Collateral Agent or Administrative Agent by any Loan Party (including its    
officers, employees, agents, advisors, representatives or counsel) with respect 
to any of the Collateral (in each case taken as a whole with respect to any     
particular Collateral) is accurate and complete in all material respects.       

4.16     DISCLOSURE.                                          

          No representation or warranty of Company or any of its
Subsidiaries contained in any Loan Document or in any other certificate or      
written statement (excluding the projections, pro forma financial statements and
forward looking statements contained therein and the estimates contained in such
projections, pro forma financial statements and forward looking statements)     
furnished to Lenders by Covanta or any of its Subsidiaries, including any such  

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Person's officers, employees, agents, advisors, representatives or counsel, for 
use in connection with the transactions contemplated by this Agreement,         
contained as of the date such representation or warranty was made any untrue    
statement of a material fact or omitted to state a material fact necessary in   
order to make the statements contained herein or therein not misleading in any  
material respect in light of the circumstances in which the same were made and  
in light of such representations and warranties and all such prior              
representations and warranties, taken as a whole. Any projections and pro forma 
financial information contained in such materials are based upon good faith     
estimates and assumptions believed by each Borrower to be reasonable at the time
made, it being recognized by Lenders that such projections as to future events  
are subject to significant business, economic, regulatory and competitive       
uncertainties and contingencies, and, accordingly, no assurances are given and  
no representations or warranties are made by Company or any of its Subsidiaries 
that any of the estimates and assumptions are correct, that the projections will
be achieved or that the forward looking statements expressed in such information
will correspond to actual results.                                              

4.17     CASH MANAGEMENT SYSTEM.                              

                The summary of the Cash Management System attached hereto as
Schedule 3.1P is accurate and complete in all material respects as of the       
Closing Date and does not omit to state any material fact necessary to make the 
statements set forth therein not misleading. No Borrower has any Deposit Account
which is not described in Schedule 3.1P other than Deposit Accounts permitted to
be owned after the Closing Date pursuant to subsection 5.10. There has been no  
change to the Cash Management System since the Closing Date except such changes 
as are permitted under subsection 5.10 and such other changes as have been      
disclosed to Lenders in writing and approved by Administrative Agent.           

4.18     MATTERS RELATING TO LOAN PARTIES.                    

                A. LOAN PARTIES. Neither Company nor any of its Subsidiaries
owns any interest in any Domestic Subsidiary which is not a Borrower.           

               B. DOMESTIC SUBSIDIARY ASSETS. Each Domestic Subsidiary has
granted a Lien in favor of Collateral Agent on substantially all of its property
pursuant to the Collateral Documents.                                           

              C. DOMESTIC SUBSIDIARY CAPITAL STOCK. The Capital Stock of
each Domestic Subsidiary which is directly owned by any Loan Party has been     
pledged to Collateral Agent pursuant to the Collateral Documents, except for the
Capital Stock of those Domestic Subsidiaries (other than Borrowers) (i) which is
subject to a Lien permitted under subsection 6.2A securing Indebtedness         
permitted under subsection 6.1, or (ii) the pledge of which would constitute a  
material violation of (a) a valid and enforceable Contractual Obligation in     
favor of or for the benefit of a Person other than Company or any of its        
Subsidiaries and their respective Affiliates for which the required consents    
have not been obtained or (b) applicable law affecting such Loan Party or such  
Domestic Subsidiary.                                                            

                 D. FOREIGN SUBSIDIARY CAPITAL STOCK. 65% of the Capital Stock
of each Foreign Subsidiary which is a Material Subsidiary and is directly owned 
by Borrowers (or such                                                           

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lesser percentage as is owned by Borrowers ) has been pledged to Administrative 
Agent pursuant to the Collateral Documents except for the Capital Stock of those
Foreign Subsidiaries the pledge of which would constitute a material violation  
of (a) a valid and enforceable Contractual Obligation in favor of or for the    
benefit of a Person other than Company or any of its Subsidiaries and their     
respective Affiliates for which the required consents have not been obtained or 
(b) applicable law affecting such Borrower or such Foreign Subsidiary.          

             E. COMPANY CAPITAL STOCK. The outstanding common stock of
Company has been pledged to Collateral Agent pursuant to the CEA Stock Pledge   
Agreement. No Contractual Obligations are in effect which would be violated by a
pledge of the common stock of Company pursuant to the CEA Stock Pledge          
Agreement.                                                                      

              Notwithstanding the foregoing, the failure to grant a Lien
after the Closing Date on assets of Company and its Subsidiaries or to pledge   
Capital Stock of a Subsidiary shall not constitute a breach of the              
representations and warranties contained in subsections 4.18B, 4.18C and 4.18D  
above on any date after the Closing Date if, at the time of the making of such  
representation or warranty on any such date, Borrowers are not otherwise in     
default of their obligations under subsection 5.8 and have commenced and are    
diligently pursuing appropriate actions to create such Lien or pledge to the    
extent such Lien or pledge is required under such subsection; provided, however,
that nothing in this sentence shall be construed as waiving any of the          
conditions contained in subsection 3.1.                                         

4.19     INVESTIGATION.                                       

        All obligations in existence immediately after the Closing Date (other
than obligations that do not, in the aggregate, exceed $2,000,000) to extend    
credit or credit support or obtain the extension of credit or credit support or 
to make investments or expenditures with respect to existing or future Projects 
of any Borrower or any Subsidiary of any Borrower that are contained in         
Contractual Obligations or of which Borrowers are otherwise aware have been     
disclosed to Administrative Agent and the DIP Lenders prior to the Closing Date.
Borrowers have made such inquiry and investigation as is necessary to enable    
Borrowers to make the representation contained in the preceding sentence.       

4.20     MATTERS RELATING TO BANKRUPTCY PROCEEDINGS.          

                 A. PLAN OF REORGANIZATION. As of the Closing Date, there have
been no material modifications, amendments revisions or restatements of the     
Approved Plan of Reorganization. Any representation and warranty made by Covanta
or any of its Subsidiaries in the Approved Plan of Reorganization is accurate,  
true and correct in all material respects as of the Closing Date (or, to the    
extent such representations and warranties specifically relate to an earlier    
date, that such representations and warranties were accurate, true and correct  
in all material respects as of such earlier date).                              

                  B. CONFIRMATION ORDER. The Confirmation Order has been entered
by the Bankruptcy Court at least 11 days prior to the Closing Date. The         
Confirmation Order has not been stayed pending any appeal or petition for review
or for rehearing.                                                               

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4.21     SUBORDINATED INDEBTEDNESS.                           

          The Obligations constitute senior indebtedness that is
entitled to the benefits of the subordination provisions, if any, of all        
Indebtedness of Company and its Subsidiaries under the Unsecured Creditor Notes.

4.22     REPORTING TO IRS.                                    

          Company does not intend to treat the Loans and related
transactions as being a "reportable transaction" (within the meaning of Treasury
Regulation section 1.6011-4). In the event Company determines to take any action
inconsistent with such intention, it will promptly notify Administrative Agent  
thereof. Company acknowledges that one or more Lenders may treat their Loans as 
part of a transaction that is subject to Treasury Regulation section 1.6011-4 or
section 301.6112-1, and Administrative Agent and such Lender or Lenders, as     
applicable, may file such IRS forms or maintain such lists and other records as 
they may determine is required by such Treasury Regulations.                    

SECTION 5.        COMPANY'S AFFIRMATIVE COVENANTS                               

            Borrowers covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all   
Obligations, unless Requisite Lenders shall otherwise give prior written        
consent, Borrowers shall perform, and shall cause each of their Subsidiaries to 
perform, all covenants in this Section 5.                                       

5.1      FINANCIAL STATEMENTS AND OTHER REPORTS.              

               Borrowers will maintain, and cause each of their respective
Subsidiaries to maintain, a system of accounting established and administered in
accordance with sound business practices to permit preparation of financial     
statements in conformity with GAAP. Borrowers will deliver to Administrative    
Agent (and, except as expressly provided below, promptly after receipt thereof  
Administrative Agent will deliver a copy to each Lender):                       

                 (i)      Budget Report; Budget and Asset Sale Update: as soon
      as available and in any event no later than the 15th Business Day of
         each month commencing with the 15th Business Day of April 2004, (a) for
 the month most recently ended, a report in form satisfactory to
Administrative Agent reflecting the actual cash receipts and  
       disbursements of Company and its Subsidiaries for the preceding month
        with respect to each line item described in the Budget for the current
         Fiscal Year and the percentage and dollar variance of such amounts from
         the projected amounts therefor set forth in (x) such Budget and (y) the
        Budget for the current Fiscal Year as delivered pursuant to subsection
  5.1(xvi), accompanied by an Officer's Certificate from the chief
     financial officer of Company certifying that such report accurately
         presents, in all material respects, cash receipts and cash expenditures
  of Company and its Subsidiaries for the periods indicated, (b) a
      supplement to the Budget for the current Fiscal Year, in the form of
      such Budget, reflecting projected cash receipts and disbursements of
     Company and its Subsidiaries for each month and each Fiscal Quarter
     remaining in the current Fiscal Year with respect to each line item
       described in such Budget, which supplement shall be accompanied by an
   Officer's Certificate from the chief financial officer of Company
certifying that the                                           

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    projections contained in such supplement are based upon good faith
       estimates and assumptions believed by Company to be reasonable at the
     time made, and (c) a report on all Asset Sales consummated prior to
     such date, describing in reasonable detail the properties sold, the
      consideration received and the expenses deducted from Gross Receipts
         therefor to calculate Net Asset Sale Proceeds, together with a progress
   report in reasonable detail describing efforts being made to sell
         additional assets of Company and its Subsidiaries (such progress report
      described in this clause (c) to be provided solely to Administrative
Agent);                                                       

                  (ii)     Events of Default, etc.: promptly upon any Officer of
Company obtaining knowledge (a) of any condition or event that
   constitutes an Event of Default or Potential Event of Default, or
    becoming aware that any Lender has given any notice (other than to
   Administrative Agent) or taken any other action with respect to a
      claimed Event of Default or Potential Event of Default, (b) that any
      Person has given any notice to Company or any of its Subsidiaries or
      taken any other action with respect to a claimed default or event or
 condition of the type referred to in subsection 7.2, (c) of any
        condition or event that would be required to be disclosed in a current
        report filed by Company with the Securities and Exchange Commission on
  Form 8-K if Company were required to file such reports under the
        Exchange Act, or (d) of the occurrence of any event or change that has
         caused or evidences, either in any case or in the aggregate, a Material
    Adverse Effect, an Officer's Certificate specifying the nature and
       period of existence of such condition, event or change, or specifying
       the notice given or action taken by any such Person and the nature of
     such claimed Event of Default, Potential Event of Default, default,
      event or condition, and what action Company has taken, is taking and
proposes to take with respect thereto;                        

                  (iii)    Quarterly Financials: as soon as available and in any
      event within 45 days after the end of each of the first three Fiscal
         Quarters of each Fiscal Year, the consolidated balance sheet of Company
   and its Subsidiaries as at the end of such Fiscal Quarter and the
related consolidated statement of income of Company and its   
   Subsidiaries for such Fiscal Quarter and the related consolidated
      statements of stockholders' equity and cash flows of Company and its
    Subsidiaries for the period from the beginning of the then current
      Fiscal Year to the end of such Fiscal Quarter, setting forth in each
case in comparative form the corresponding figures for the    
      corresponding periods of the previous Fiscal Year, all in reasonable
     detail and certified by the chief financial officer of Company that
        they fairly present, in all material respects, the financial condition
   of Company and its Subsidiaries as at the dates indicated and the
  results of their operations and their cash flows for the periods
        indicated, subject to changes resulting from audit and normal year-end
 adjustments; provided, however, that so long as Covanta files a
quarterly report on Form 10Q with the Securities and Exchange 
      Commission for any Fiscal Quarter containing consolidating financial
 statements for Company and its Subsidiaries, Borrowers shall be
    required to deliver a copy of such quarterly report in lieu of the
financial statements described in this subsection 5.1(iii);   

                 (iv)     Year-End Financials: as soon as available and in any
 event within 90 days after the end of each Fiscal Year, (a) the
      consolidated balance sheet of Company and its Subsidiaries as at the
end of such Fiscal Year and the related consolidated and      

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         consolidating statements of income, stockholders' equity and cash flows
        of Company and its Subsidiaries for such Fiscal Year, setting forth in
 each case in comparative form the corresponding figures for the
     previous Fiscal Year, all in reasonable detail and certified by the
     chief financial officer of Company that they fairly present, in all
material respects, the financial condition of Company and its 
 Subsidiaries as at the dates indicated and the results of their
       operations and their cash flows for the periods indicated, and (b) an
     audit report thereon of independent certified public accountants of
      recognized national standing selected by Company and satisfactory to
      Administrative Agent, which report shall (with respect to the audits
   for all Fiscal Years after 2003) be unqualified, shall express no
         doubts, assumptions or qualifications concerning the ability of Company
      and its Subsidiaries to continue as a going concern, and shall (with
       respect to the audits for all Fiscal Years including 2003) state that
       in the opinion of such certified public accountants such consolidated
    financial statements fairly present, in all material respects, the
       consolidated financial position of Company and its Subsidiaries as at
        the dates indicated and the results of their operations and their cash
      flows for the periods indicated in conformity with GAAP and that the
audit by such accountants in connection with such consolidated
financial statements has been made in accordance with auditing
       standards generally accepted in the United States; provided, however,
     that so long as Covanta files an annual report on Form 10K with the
       Securities and Exchange Commission containing consolidating financial
 statements for Company and its Subsidiaries, Borrowers shall be
 required to deliver a copy of such annual report in lieu of the
financial statements described in clause (a);                 

                 (v)      Compliance Certificates: together with each delivery
     of financial statements of Company and its Subsidiaries pursuant to
    subdivisions (iii) and (iv) above, (a) an Officer's Certificate of
  Company stating that the signers have reviewed the terms of this
        Agreement and have made, or caused to be made under their supervision,
    a review in reasonable detail of the transactions and condition of
      Company and its Subsidiaries during the accounting period covered by
      such financial statements and that such review has not disclosed the
        existence during or at the end of such accounting period, and that the
       signers do not have knowledge of the existence as at the date of such
      Officer's Certificate, of any condition or event that constitutes an
 Event of Default or Potential Event of Default, or, if any such
        condition or event existed or exists, specifying the nature and period
       of existence thereof and what action Company has taken, is taking and
     proposes to take with respect thereto; (b) a Compliance Certificate
        demonstrating in reasonable detail compliance during and at the end of
      the applicable accounting periods with the restrictions contained in
         Section 6, in each case to the extent compliance with such restrictions
  is required to be tested at the end of the applicable accounting
         period; and (c) a certificate of the chief financial officer of Company
       stating that Company and its Subsidiaries have transferred to Deposit
         Accounts of Company located in the United States in the Cash Management
         System all funds of Company and its Subsidiaries on deposit in accounts
       located outside the United States that are required to be transferred
pursuant to subsection 5.10B;                                 

                  (vi)     Reconciliation Statements: other than the fresh start
       adjustments required under SOP 90-7, if, as a result of any change in
       accounting principles and policies from those used in the preparation
of the audited financial statements referred to in            

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      subsection 4.3, the consolidated financial statements of Company and
      its Subsidiaries delivered pursuant to subdivisions (iii) or (iv) of
  this subsection 5.1 will differ in any material respect from the
  consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting
     principles and policies been made, then (a) together with the first
        delivery of financial statements pursuant to subdivision (iii) or (iv)
      of this subsection 5.1 following such change, consolidated financial
       statements of Company and its Subsidiaries for (y) the current Fiscal
       Year to the effective date of such change and (z) the two full Fiscal
     Years immediately preceding the Fiscal Year in which such change is
        made, in each case prepared on a pro forma basis as if such change had
         been in effect during such periods, and (b) together with each delivery
       of financial statements pursuant to subdivision (iii) or (iv) of this
subsection 5.1 following such change, if required pursuant to 
        subsection 1.2, a written statement of the chief accounting officer or
  chief financial officer of Company setting forth the differences
        (including any differences that would affect any calculations relating
     to the financial covenants set forth in subsection 6.6) which would
      have resulted if such financial statements had been prepared without
giving effect to such change;                                 

           (vii)    Accountants' Certification: together with each
  delivery of consolidated financial statements of Company and its
         Subsidiaries pursuant to subdivision (iv) above, a written statement by
        the independent certified public accountants giving the report thereon
    stating that in connection with their audit, nothing came to their
     attention that caused them to believe that Company failed to comply
        with the terms, provisions or conditions of subsection 6.6, insofar as
        they relate to financial and accounting matters, or, if such a failure
         to comply has come to their attention, specifying the nature and period
   of existence thereof (it being understood that their audit is not
     directed primarily toward obtaining knowledge of non-compliance and
       that such accountants shall not be liable by reason of any failure to
         obtain knowledge of any such non-compliance that would not be disclosed
in the course of their audit);                                

                 (viii)   Accountants' Reports: promptly upon request of Agent
         (unless restricted by applicable professional standards), copies of all
reports submitted to Company by independent certified public  
         accountants in connection with each annual, interim or special audit of
       the financial statements of Company and its Subsidiaries made by such
         accountants, including any comment letter submitted by such accountants
to management in connection with their annual audit;          

                (ix)     SEC Filings and Press Releases: promptly upon their
      becoming available, copies of (a) all financial statements, reports,
  notices and proxy statements sent or made available generally by
        Company to its security holders or by any Subsidiary of Company to its
       security holders other than Company or another Subsidiary of Company,
      (b) all regular and periodic reports and all registration statements
      (other than on Form S-8 or a similar form) and prospectuses, if any,
 filed by Covanta or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any
 governmental or private regulatory authority, and (c) all press
      releases and other statements made available generally by Covanta or
        any of its Subsidiaries to the public concerning material developments
in the business of Company or any of its Subsidiaries;        

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               (x)      Litigation or Other Proceedings: (a) promptly upon
       any officer of Company obtaining knowledge of (1) the institution of,
         or non-frivolous threat of, any Proceeding against or affecting Company
     or any of its Subsidiaries or any property of Company or any of its
        Subsidiaries not previously disclosed in writing by Company to Lenders
        or (2) any material development in any Proceeding that, in the case of
both clauses (1) and (2):                                     

                        (I)      if adversely determined, has a reasonable
                         possibility after giving effect to the coverage and
                           policy limits of insurance policies issued to Company
                       and its Subsidiaries of giving rise to a Material
Adverse Effect; or        

                       (II)     seeks to enjoin or otherwise prevent the
                          consummation of, or to recover any damages or obtain
                           relief as a result of, or to contest or challenge the
                  legality, validity or enforceability of, the
       transactions contemplated hereby;

       written notice thereof together with such other information as may be
        reasonably available to Company to enable Lenders and their counsel to
         evaluate such matters; and (b) within twenty days after the end of each
    Fiscal Quarter, a schedule of all Proceedings involving an alleged
       liability of, or claims against or affecting, an Borrower equal to or
       greater than $1,000,000, and promptly after request by Administrative
Agent such other information as may be reasonably requested by
        Administrative Agent to enable Administrative Agent and its counsel to
evaluate any of such Proceedings;                             

          (xi)     ERISA Events: with reasonable promptness upon
      becoming aware of the occurrence of or forthcoming occurrence of (a)
       any ERISA Event or (b) any event that would constitute an ERISA Event
    but for the requirements (in order for such event to constitute an
      ERISA Event) that a Lien or liability imposed as a result thereof be
      material, that the error giving rise thereto be in bad faith, and/or
      that such event would reasonably be expected to result in a Material
      Adverse Effect, a written notice specifying the nature thereof, what
    action Company, any of its Subsidiaries or any of their respective
        ERISA Affiliates has taken, is taking or proposes to take with respect
       thereto and, when known, any action taken or threatened in writing by
        the Internal Revenue Service, the Department of Labor or the PBGC with
respect thereto;                                              

                 (xii)    ERISA Notices: with reasonable promptness, copies of
        (a) all notices received by Company, any of its Subsidiaries or any of
     their respective ERISA Affiliates from a Multiemployer Plan sponsor
      concerning an ERISA Event; and (b) copies of such other documents or
       governmental reports or filings relating to any Employee Benefit Plan
        as Administrative Agent shall reasonably request (it being agreed that
    commencing on the Closing Date, on an annual basis Borrowers shall
     request information from each Multiemployer Plan in accordance with
       section 4221 of ERISA to determine the potential withdrawal liability
        of Company, its Subsidiaries and their respective ERISA Affiliates for
a complete withdrawal from such Multiemployer Plan);          

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                 (xiii)   Insurance: as soon as practicable after any material
         change in insurance coverage maintained by Company and its Subsidiaries
   notice thereof to Administrative Agent specifying the changes and
reasons therefor;                                             

                (xiv)    Governing Body: with reasonable promptness, written
notice of any change in the Governing Body of Company;        

                  (xv)     Material Contracts: promptly, and in any event within
       10 Business Days after any Material Contract of Company or any of its
      Subsidiaries is terminated or amended in a manner that is materially
       adverse to Company or such Subsidiary, as the case may be, or any new
        Material Contract is entered into, a written statement describing such
        event with copies of such material amendments or new contracts, and an
explanation of any actions being taken with respect thereto;  

              (xvi)    Budget: no later than the 15th day of December of
    each year commencing with December 15, 2004, a budget for the next
     Fiscal Year, in the form of the Budget for the current Fiscal Year,
         reflecting (a) projected cash receipts and disbursements of Company and
     its Subsidiaries for each month and each Fiscal Quarter in the next
 Fiscal Year and (b) projected net cash flows of Company and its
      Subsidiaries for each Fiscal Year following the next Fiscal Year and
         ending with 2007, in each case with respect to each line item described
  in the Budget for the current Fiscal Year, which budget shall be
  accompanied by an Officer's Certificate from the chief financial
      officer of Company certifying that the projections contained in such
        budget are based upon good faith estimates and assumptions believed by
Company to be reasonable at the time made;                    

                (xvii)   Other Information: with reasonable promptness, such
  other information and data with respect to Company or any of its
        Subsidiaries as from time to time may be reasonably requested by Agent
        or Requisite Lenders (or by any Lender so long as such request is made
 through Administrative Agent (and Administrative Agent shall be
  required to request from Borrowers any such information and data
reasonably requested by a Lender)); and                       

               (xviii)  Notices from Holders of Subordinated Indebtedness:
promptly, upon receipt, copies of all notices from holders of 
       Subordinated Indebtedness or a trustee, agent or other representative
of such a holder.                                             

5.2      EXISTENCE, ETC.                                      

               Except as permitted under subsection 6.7, Company will, and
will cause each of its Subsidiaries to, at all times preserve and keep in full  
force and effect its existence and all rights and franchises material to its    
business; provided, however that neither Company nor any of its Subsidiaries    
shall be required to preserve the existence of any such Subsidiary or any such  
right or franchise if the management or Governing Body of Company or such       
Subsidiary shall determine that the preservation thereof is no longer desirable 
in the conduct of the business of Company or such Subsidiary, as the case may   
be, and the loss thereof could not reasonably be expected to have a Material    
Adverse Effect.                                                                 

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5.3      PAYMENT OF TAXES AND CLAIMS; TAX.                    

                A. Company will, and will cause each of its Subsidiaries to,
pay all taxes, assessments and other governmental charges imposed upon it or any
of its properties or assets or in respect of any of its income, businesses or   
franchises before any material penalty accrues thereon, and all claims          
(including claims for labor, services, materials and supplies) for material sums
that have become due and payable and that by law have or may become a Lien upon 
any of its properties or assets, prior to the time when any penalty or fine     
shall be incurred with respect thereto; provided that no such tax, assessment,  
charge or claim need be paid if it is being contested in good faith by          
appropriate proceedings promptly instituted and diligently conducted, so long as
(i) such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor and (ii) in the case of a    
tax, assessment, charge or claim which has or may become a Lien against any of  
the Collateral, such proceedings conclusively operate to stay the sale of any   
portion of the Collateral to satisfy such charge or claim.                      

              B. Borrowers will not file or consent to the filing of any
consolidated income tax return with any Person (other than Company or any of its
Subsidiaries).                                                                  

   5.4      MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
INSURANCE/ CONDEMNATION PROCEEDS.           

              A. MAINTENANCE OF PROPERTIES. Company will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good repair, 
working order and condition, ordinary wear and tear excepted, all material      
properties used or useful in the business of Company and its Subsidiaries       
(including all Intellectual Property) and from time to time will make or cause  
to be made all appropriate repairs, renewals and replacements thereof, except   
that Company and its Subsidiaries shall not be required to perform the foregoing
obligations (i) with respect to Subsidiaries or assets to which Persons other   
than Company and its Subsidiaries have recourse under Non Recourse Debt owed to 
such Persons or (ii) to the extent that failure to perform such obligations     
would not reasonably be expected to have a Material Adverse Effect.             

                  B. INSURANCE. Company will maintain or cause to be maintained,
with financially sound and reputable insurers, such public liability insurance, 
third party property damage insurance, business interruption insurance and      
casualty insurance with respect to liabilities, losses or damage in respect of  
the assets, properties and businesses of Company and its Subsidiaries as may    
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such   
amounts (giving effect to self-insurance), with such deductibles, covering such 
risks and otherwise on such terms and conditions as shall be customary for      
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Company will maintain or cause to be maintained (i) flood     
insurance with respect to each Flood Hazard Property that is located in a       
community that participates in the National Flood Insurance Program, in each    
case in compliance with any applicable regulations of the Board of Governors of 
the Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in  
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory to Administrative Agent in its commercially reasonable             

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judgment. Unless prohibited by contractual or other legal requirement, such     
policy of insurance shall (a) name Collateral Agent for the benefit of Secured  
Parties as an additional insured thereunder as its interests may appear and (b) 
in the case of each business interruption and casualty insurance policy, contain
a loss payable clause or endorsement, satisfactory in form and substance to     
Administrative Agent, that names Collateral Agent for the benefit of Secured    
Parties as the loss payee thereunder for any covered loss in excess of          
$1,000,000 and provides for at least 30 days prior written notice to Collateral 
Agent of any modification or cancellation of such policy. As soon as practicable
after the Closing Date, Company shall deliver to Administrative Agent a         
certificate from Borrowers' insurance broker(s) or other evidence satisfactory  
to it that all insurance required to be maintained pursuant to this subsection  
5.4 is in full force and effect and that Collateral Agent on behalf of Secured  
Parties has been named as additional insured and/or loss payee thereunder to the
extent required under this subsection 5.4.                                      

          C. APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.

             (i)      Business Interruption Insurance. Upon receipt by
 Company or any of its Subsidiaries of any business interruption
      insurance proceeds constituting Net Insurance/Condemnation Proceeds,
        (a) so long as no Event of Default or Potential Event of Default shall
        have occurred and be continuing, Company or such Subsidiary may retain
        and apply such Net Insurance/Condemnation Proceeds for working capital
         purposes or any other purposes not prohibited under this Agreement, and
     (b) if an Event of Default or Potential Event of Default shall have
         occurred and be continuing, Company shall apply an amount equal to such
     Net Insurance/Condemnation Proceeds as provided in subsection 2.4A.

            (ii)     Net Insurance/Condemnation Proceeds Received by
        Company. Upon receipt by Company or any of its Subsidiaries of any Net
       Insurance/Condemnation Proceeds other than from business interruption
     insurance, (a) so long as no Event of Default or Potential Event of
        Default shall have occurred and be continuing, Company shall, or shall
         cause one or more of its Subsidiaries to, promptly and diligently apply
        such Net Insurance/Condemnation Proceeds to pay or reimburse the costs
     of repairing, restoring or replacing the assets in respect of which
   such Net Insurance/Condemnation Proceeds were received or, to the
      extent not so applied, as provided in subsection 2.4A, and (b) if an
        Event of Default or Potential Event of Default shall have occurred and
         be continuing (unless Company is otherwise required to use funds by law
or contract), Company shall apply an amount equal to such Net 
 Insurance/Condemnation Proceeds as provided in subsection 2.4A.

            (iii)    Net Insurance/Condemnation Proceeds Received by
Administrative Agent or Collateral Agent. Upon receipt by     
      Administrative Agent or Collateral Agent, as the case may be, of any
      Net Insurance/Condemnation Proceeds as loss payee, (a) if and to the
extent Company would have been required to apply such Net     
    Insurance/Condemnation Proceeds (if it had received them directly)
      Administrative Agent or Collateral Agent, as the case may be, shall,
         and Company hereby authorizes Administrative Agent or Collateral Agent,
        as the case may be, to, apply such Net Insurance/Condemnation Proceeds
     as provided in subsection 2.4A, and (b) to the extent the foregoing
        clause (a) does not apply Administrative Agent or Collateral Agent, as
the case may be, shall                                        

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      deliver such Net Insurance/Condemnation Proceeds to Company, and (1)
       Company and its Subsidiaries may retain and apply any portion thereof
      that is business interruption insurance proceeds for working capital
        purposes or any other purposes not prohibited under this Agreement and
       (2) Company shall, or shall cause one or more of its Subsidiaries to,
      promptly apply such Net Insurance/Condemnation Proceeds that are not
     business interruption insurance proceeds to the costs of repairing,
 restoring, or replacing the assets in respect of which such Net
       Insurance/Condemnation Proceeds were received; provided, however that
    if at any time Administrative Agent reasonably determines (A) that
   Company or such Subsidiary is not proceeding diligently with such
        repair, restoration or replacement or that such repair, restoration or
      replacement cannot be completed within 180 days after the receipt by
      Administrative Agent or Collateral Agent, as the case may be of such
         Net Insurance/Condemnation Proceeds, Administrative Agent or Collateral
 Agent, as the case may be, shall, and Company hereby authorizes
         Administrative Agent or Collateral Agent, as the case may be, to, apply
    such Net Insurance/Condemnation Proceeds as provided in subsection
2.4A.                                                         

                Notwithstanding the foregoing, no Net Insurance/Condemnation
Proceeds shall be required to be applied as provided in subsection 2.4A to the  
extent such application would constitute a material violation of (1) a valid    
Contractual Obligation (in effect on the Closing Date or arising under the      
documentation for Non Recourse Debt permitted to be incurred under this         
Agreement) in favor of or for the benefit of a Person other than Company or any 
of its Subsidiaries or their respective Affiliates for which the required       
consents have not been obtained or (2) applicable law affecting Company and its 
Subsidiaries. Notwithstanding anything in this Agreement to the contrary, in the
event of any conflict or inconsistency between subsection 5.4C and the terms of 
the Intercreditor Agreement, the terms of the Intercreditor Agreement shall     
prevail.                                                                        

5.5      INSPECTION RIGHTS; LENDER MEETING.                   

                  A. INSPECTION RIGHTS. Borrowers shall, and shall cause each of
their respective Subsidiaries to, permit any authorized representatives         
designated by any Lender, at such Lender's expense, to visit and inspect any of 
the properties of such Borrower or of any of its Subsidiaries, to inspect, copy 
and take extracts from its and their financial and accounting records, and to   
discuss its and their affairs, finances and accounts with its and their officers
and independent public accountants (provided that Company may, if it so chooses,
be present at or participate in any such discussion), all upon reasonable notice
and at such reasonable times during normal business hours and as often as may   
reasonably be requested; provided that, at any time after the occurrence and    
during the continuance of an Event of Default, Borrowers shall, and shall cause 
each of their respective Subsidiaries to, permit such additional visits,        
inspections, and audits as Administrative Agent or Requisite Lenders may deem   
necessary or advisable, at any time from time to time, all at Borrowers'        
expense.                                                                        

        B. LENDER MEETING. Company will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of          
Administrative Agent and Lenders once during each Fiscal Year to be held at     
Company's corporate offices (or at such other location as may be agreed to by   
Company and Administrative Agent) at such time as may be agreed to by Company   
and Administrative Agent.                                                       

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5.6      COMPLIANCE WITH LAWS, ETC.                           

         Borrowers shall comply, and shall cause each of their
Subsidiaries to comply, with the requirements of all applicable laws, rules,    
regulations and orders of any Government Authority (including all Environmental 
Laws), noncompliance with which could reasonably be expected to cause,          
individually or in the aggregate, a Material Adverse Effect.                    

5.7      ENVIRONMENTAL MATTERS.                               

        A. ENVIRONMENTAL DISCLOSURE. Company will deliver to
Administrative Agent:                                                           

         (i)      Environmental Audits and Reports. As soon as
    practicable following receipt thereof, copies of all environmental
       audits, investigations, analyses and reports of any kind or character
         (excluding writings which are protected by attorney-client privilege or
      the work-product doctrine or confidential self-evaluative writings),
        whether prepared by personnel of Company or any of its Subsidiaries or
   by independent consultants, governmental authorities or any other
   Persons, with respect to significant environmental matters at any
      Facility that, individually or in the aggregate, could reasonably be
        expected to result in a Material Adverse Effect or impose liability on
       any Lender or Agent or with respect to any Environmental Claims that,
   individually or in the aggregate, could reasonably be expected to
       result in a Material Adverse Effect or impose liability on any Lender
or Agent;                                                     

               (ii)     Notice of Certain Releases, Remedial Actions, Etc.
    Promptly upon the occurrence thereof, written notice describing in
  reasonable detail (a) any Release required to be reported to any
     federal, state or local governmental or regulatory agency under any
         applicable Environmental Laws that could reasonably be expected to have
       a Material Adverse Effect or impose liability on any Lender or Agent,
 (b) any remedial action taken by Company or any other Person in
     response to (1) any Hazardous Materials Activities the existence of
which could reasonably be expected to result in one or more   
  Environmental Claims having, individually or in the aggregate, a
       Material Adverse Effect or imposing liability on any Lender or Agent,
         or (2) any Environmental Claims that, individually or in the aggregate,
        could reasonably be expected to result in a Material Adverse Effect or
impose liability on any Lender or Agent;                      

           (iii)    Written Communications Regarding Environmental
        Claims, Releases, Etc. As soon as practicable following the sending or
      receipt thereof by Company or any of its Subsidiaries, a copy of any
        and all written communications (excluding writings which are protected
by attorney-client privilege or the work-product doctrine or  
 confidential self-evaluative writings), with respect to (a) the
   commencement or the threat to commence a proceeding regarding any
    Environmental Claims that, individually or in the aggregate, could
         reasonably be expected to result in a Material Adverse Effect or impose
  liability on any Lender or Agent, (b) any Release required to be
    reported to any federal, state or local governmental or regulatory
     agency that could reasonably be expected to have a Material Adverse
        Effect or impose liability on any Lender or Agent, and (c) any request
        for information from any governmental agency that suggests such agency
    is investigating whether Company or any of its Subsidiaries may be
potentially responsible for any                               

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        Hazardous Materials Activity that could reasonably be expected to have
       a Material Adverse Effect or impose liability on any Lender or Agent;

      (iv)     Notice of Certain Proposed Actions Having
      Environmental Impact. Prompt written notice describing in reasonable
      detail (a) any proposed acquisition of stock, assets, or property by
         Company or any of its Subsidiaries that could reasonably be expected to
 (1) expose Company or any of its Subsidiaries to, or result in,
 Environmental Claims that could reasonably be expected to have,
       individually or in the aggregate, a Material Adverse Effect or impose
       liability on any Lender or Agent or (2) affect the ability of Company
     or any of its Subsidiaries to maintain in full force and effect all
       Governmental Authorizations required under any Environmental Laws for
 their respective operations except to the extent the failure to
   maintain such Governmental Authorizations could not reasonably be
       expected to have a Material Adverse Effect or impose liability on any
       Lender or Agent and (b) any proposed action to be taken by Company or
       any of its Subsidiaries to commence manufacturing or other industrial
   operations or to modify current operations in a manner that could
         reasonably be expected to subject Company or any of its Subsidiaries to
         any additional obligations or requirements under any Environmental Laws
   that could reasonably be expected to have, individually or in the
        aggregate, a Material Adverse Effect or impose liability on any Lender
or Agent; and                                                 

              (v)      Certain Communications. With respect to documents
       which would have been required to be provided to Administrative Agent
       pursuant to paragraph (i) or (iii) but for the parenthetical in those
  paragraphs, Company shall promptly upon receiving such documents
      provide a list identifying generally the documents not disclosed and
       summarizing the information contained in such documents to the extent
        consistent with not waiving any privilege with respect thereto. If the
       privilege prevents Company from summarizing the information contained
        in such documents Company (a) shall nevertheless advise Administrative
      Agent that a matter, the nature of which cannot be disclosed without
      waiving the applicable privilege, exists with respect to a specified
         Facility or Environmental Claim that, individually or in the aggregate,
         could reasonably be expected to result in a Material Adverse Effect and
   (b) shall provide such other information to Administrative Agent,
         consistent with not waving the privilege, that Administrative Agent may
reasonably request.                                           

           B. COMPANY'S ACTIONS REGARDING ENVIRONMENTAL CLAIMS AND
VIOLATIONS OF ENVIRONMENTAL LAWS. Company shall promptly take, and shall cause  
each of its Subsidiaries promptly to take, any and all actions necessary to (i) 
cure any violation of applicable Environmental Laws by Company or its           
Subsidiaries that could reasonably be expected to have, individually or in the  
aggregate, a Material Adverse Effect and (ii) make an appropriate response to   
any Environmental Claim against Company or any of its Subsidiaries and discharge
any obligations it may have to any Person thereunder where failure to do so     
could reasonably be expected to have, individually or in the aggregate, a       
Material Adverse Effect (except if Company and its Subsidiaries do not have     
standing to contest or respond to such Environmental Claim); provided, however, 
that Company may, without breaching the requirements of this subsection 5.7B,   
contest an alleged violation of Environmental Laws or an Environmental Claim in 
good faith by appropriate proceedings promptly instituted and diligently        
conducted so long as                                                            

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during such contest the failure to cure such violation or to respond to such    
Environmental Claim or discharge the obligations thereunder could not reasonably
be expected to result in a Material Adverse Effect.                             

        5.8      EXECUTION OF THE PERSONAL PROPERTY COLLATERAL DOCUMENTS AFTER
THE CLOSING DATE.                           

                 A. FOREIGN PLEDGE AGREEMENTS. As soon as practicable (but not
more than 90 days, unless rendered impracticable by events or by action or      
inaction of foreign Governmental Authorities in each case beyond the control of 
Borrowers (as determined in the reasonable judgment of Administrative Agent))   
after the Closing Date (to the extent not completed on or prior to the Closing  
Date), Borrowers shall cause Foreign Pledge Agreements to be executed and       
delivered to Administrative Agent with respect to 65% of the Capital Stock of   
all Foreign Subsidiaries which are Material Subsidiaries and are directly owned 
by any Borrower (other than to the extent a pledge of such Capital Stock under  
the Collateral Documents would constitute a material violation of (1) a valid   
Contractual Obligation in favor of or for the benefit of a Person other than    
Company or any of its Subsidiaries for which the required consents have not been
obtained or (2) applicable law affecting such Borrower or such Foreign          
Subsidiary), shall take all such other actions under the laws of such           
jurisdictions as Administrative Agent may deem necessary or advisable to perfect
or otherwise protect the Liens purported to be created in such Capital Stock    
under the Collateral Documents, and shall deliver to Administrative Agent an    
opinion of counsel (which counsel shall be reasonably satisfactory to           
Administrative Agent) under the laws of each jurisdiction in which (i) any      
Borrower holding stock of the relevant Foreign Subsidiary is organized with     
respect to the due authorization, execution and delivery of such Foreign Pledge 
Agreement by such Borrower, and (ii) such Foreign Subsidiary is organized with  
respect to customary matters regarding enforceability, validity and perfection  
of such pledge.                                                                 

              B. RELEASE OF RESTRICTIONS. Borrowers shall use their good
faith, commercially reasonable efforts to obtain all necessary consents from all
Persons in whose favor or for whose benefit Contractual Obligations are in      
effect which would be violated by a pledge of the Capital Stock of any          
Subsidiary of a Borrower. The foregoing efforts shall be exercised so as to     
obtain such consents as soon as practicable but no later than 90 days after the 
Closing Date.                                                                   

5.9      MATTERS RELATING TO REAL PROPERTY COLLATERAL.        

          From and after the Closing Date, in the event that any
Borrower acquires any fee interest in real property or any Material Leasehold   
Property, such Borrower shall, as soon as practicable after such Person acquires
such real property or Material Leasehold Property, execute, acknowledge, file,  
record, do and deliver all and any further acts, deeds, conveyances, mortgages, 
hypothecations, pledges, charges, assignments, financing statements and         
continuations thereof, notices of assignment, transfers, certificates,          
assurances and other instruments, opinions, appraisals, title insurance and     
environmental reports as Administrative Agent may reasonably request to perfect 
and maintain the Liens created by the Collateral Documents, including, without  
limitation, deliver to Collateral Agent in proper form for recording in all     
appropriate places in all applicable jurisdictions, encumbering the interest of 
such Borrower in such mortgaged property; and such opinions, appraisal,         
documents, title                                                                

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insurance, environmental reports and other documents as Administrative Agent may
reasonably request, in each case in form and substance reasonably satisfactory  
to Administrative Agent, and to assure, convey, assign, transfer and confirm    
unto Collateral Agent, for the benefit of the Secured Parties, the property and 
rights thereby conveyed and assigned or intended to now or hereafter be conveyed
or assigned or that any Borrower may be or may hereafter become bound to convey 
or to assign to Administrative Agent.                                           

5.10     DEPOSIT ACCOUNTS; REPATRIATION OF FOREIGN CASH.      

                  A. DOMESTIC DEPOSIT ACCOUNTS. Borrowers shall, and shall cause
each of their Subsidiaries to, maintain the Cash Management System as described 
in Schedule 3.1P, as said Schedule 3.1P may be supplemented from time to time   
pursuant to clause (c) below, and Company and its Subsidiaries shall not open or
close Deposit Accounts in the United States or make other changes to the Cash   
Management System in the United States without the written consent of           
Administrative Agent, except that Company and its Subsidiaries may open and     
maintain funds in Deposit Accounts with Collateral Agent or other depository    
institutions after the Closing Date so long as (a) concurrently with the opening
of any such account with a depository institution other than Collateral Agent,  
Borrowers shall deliver to Administrative Agent a Control Agreement with respect
to such account (unless after giving effect to such opening Borrowers would not 
be in breach of the requirement set forth in clause (b)), (b) the aggregate     
amount on deposit at any time in all Deposit Accounts in the United States      
maintained with depository institutions other than Collateral Agent for which   
Control Agreements have not been delivered to Administrative Agent shall not    
exceed $50,000, and (c) concurrently with the opening of any such account,      
Borrowers shall deliver to Administrative Agent a written notice setting forth  
the account number and the name of the relevant depository institution (it being
understood that such written notice shall be deemed to supplement Schedule 3.1P 
annexed hereto for all purposes of this Agreement) and, if applicable, the      
Project to which such account relates and the primary purpose of such account.  

                B. REPATRIATION OF FOREIGN CASH. At all times Company shall,
and shall cause each of its Subsidiaries to, transfer to Deposit Accounts of    
Company located in the United States in the Cash Management System all funds of 
Company and its Subsidiaries on deposit in accounts located outside the United  
States that can be so transferred, to the extent such transfer (i) would not    
constitute a violation of (a) a valid Contractual Obligation in favor of or for 
the benefit of a Person other than Company or any of its Subsidiaries for which 
the required consents have not been obtained or (b) applicable law affecting the
relevant Foreign Subsidiary or Project, and (ii) would not result in material   
adverse tax liabilities for Company and its Subsidiaries; provided, however,    
that Company and its Subsidiaries may maintain funds that would otherwise be    
required to be transferred pursuant to the foregoing provision so long as (1)   
such funds so maintained are applied to working capital, capital expenditure,   
maintenance, operation, payroll and other liquidity requirements in the ordinary
course of business and (2) the aggregate amount of such funds so maintained at  
any time does not exceed $2,000,000 in the aggregate.                           

5.11     FURTHER ASSURANCES.                                  

                  A. ASSURANCES. Without expense or cost to Administrative Agent
or Lenders, each Borrower shall from time to time hereafter execute,            
acknowledge, file, record, do and                                               

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deliver all and any further acts, deeds, conveyances, mortgages, deeds of trust,
deeds to secure debt, security agreements, hypothecations, pledges, charges,    
assignments, financing statements and continuations thereof, notices of         
assignment, transfers, certificates, assurances and other instruments as        
Administrative Agent may from time to time reasonably request and that do not   
involve a material expansion of Borrowers' obligations or liabilities hereunder 
in order to carry out more effectively the purposes of this Agreement, the other
Loan Documents and the Confirmation Order, including to subject any Collateral, 
intended to now or hereafter be covered, to the Liens created by the Collateral 
Documents and the Confirmation Order, to perfect and maintain such Liens, and to
assure, convey, assign, transfer and confirm unto Collateral Agent the property 
and rights thereby conveyed and assigned or intended to now or hereafter be     
conveyed or assigned or that any Borrower may be or may hereafter become bound  
to convey or to assign to Collateral Agent or for carrying out the intention of 
or facilitating the performance of the terms of this Agreement, any other Loan  
Documents or the Confirmation Order, registering or recording this Agreement or 
any other Loan Document. Without limiting the generality of the foregoing,      
Borrowers shall deliver to Collateral Agent, promptly upon receipt thereof, all 
instruments received by Borrowers after the Closing Date and take all actions   
and execute all documents necessary or reasonably requested by Collateral Agent 
to perfect Collateral Agent's Liens in any such instrument or any other         
Investment acquired by any Borrower.                                            

            B. FILING AND RECORDING OBLIGATIONS. Each Borrower shall
jointly and severally pay all filing, registration and recording fees and all   
expenses incident to the execution and acknowledgement of any Mortgage or other 
Loan Document, including any instrument of further assurance described in       
subsection 5.11A, and shall pay all mortgage recording taxes, transfer taxes,   
general intangibles taxes and governmental stamp and other taxes, duties,       
imposts, assessments and charges arising out of or in connection with the       
execution, delivery, filing, recording or registration of any Mortgage or other 
Loan Document, including any instrument of further assurance described in       
subsection 5.11A, or by reason of its interest in, or measured by amounts       
payable under, the Notes, the Mortgages or any other Loan Document, including   
any instrument of further assurance described in subsection 5.11A, (excluding   
income, franchise and doing business Taxes), and shall pay all stamp Taxes and  
other Taxes required to be paid on the Notes or any other Loan Document;        
provided, however, that such Borrower may contest in good faith and through     
appropriate proceedings, any such Taxes, duties, imposts, assessments and       
charges; provided further, however, that such Borrower shall pay all such Taxes,
duties, imposts and charges when due to the appropriate taxing authority during 
the pendency of any such proceedings if required to do so to stay enforcement   
thereof. If any Borrower fails to make any of the payments described in the     
preceding sentence within 10 days after notice thereof from Administrative Agent
(or such shorter period as is necessary to protect the loss of or diminution in 
value of any Collateral by reason of tax foreclosure or otherwise, as determined
by Administrative Agent) accompanied by documentation verifying the nature and  
amount of such payments, Administrative Agent may (but shall not be obligated   
to) pay the amount due and Borrowers shall jointly and severally reimburse all  
amounts in accordance with the terms hereof.                                    

                C. COSTS OF DEFENDING AND UPHOLDING THE LIEN. Administrative
Agent may, upon at least five days' prior notice to Borrowers, (i) appear in and
defend any action or proceeding, in the name and on behalf of Agent, Lenders or 
any Borrower, in which Agent or any Lender is named or which Administrative     
Agent in its sole discretion determines is reasonably likely to materially      
adversely affect any Mortgaged Property, any other Collateral,                  

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any Mortgage, the Lien thereof or any other Loan Document and (ii) institute any
action or proceeding which Administrative Agent reasonably determines should be 
instituted to protect the interest or rights of Administrative Agent and Lenders
in any Mortgaged Property or other Collateral or under this Agreement or any    
other Loan Document. Borrowers, jointly and severally, agree that all reasonable
costs and expenses expended or otherwise incurred pursuant to this subsection   
(including reasonable attorneys' fees and disbursements) by Administrative Agent
shall be paid pursuant to subsection 9.2 hereof.                                

5.12     MOST FAVORED NATIONS PAYMENTS.                       

        Company shall, and shall cause each of its Subsidiaries to, extend any
fees or pricing increases, to the extent such fees or pricing increases are the 
direct obligation of Company or its Subsidiaries, resulting from the amendment, 
waiver or modification, after the Closing Date, of the CPIH Term Loan Documents,
on an equivalent basis (based in the case of fees on the respective amounts of  
Loan Exposure outstanding (on one hand) and the credit exposure under the CPIH  
Term Loan Documents (on the other hand)) to the Lenders regardless of whether a 
particular Lender has participated in or consented to a corresponding amendment,
waiver or modification (if any) of the Loan Documents, and any such payment of  
equivalent fees shall be paid in cash concurrently with the fees giving rise to 
such equivalent fees.                                                           

SECTION 6.        BORROWERS' NEGATIVE COVENANTS                                 

            Borrowers covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all   
Obligations unless Requisite Lenders shall otherwise give prior written consent,
Borrowers shall perform, and shall cause each of their Subsidiaries to perform, 
all covenants in this Section 6.                                                

6.1      INDEBTEDNESS.                                        

              Borrowers shall not, and shall not permit their respective
Subsidiaries to, directly or indirectly, create, incur or assume, or otherwise  
become or remain directly or indirectly liable with respect to, any             
Indebtedness, except:                                                           

                (i)      Borrowers may become and remain liable with respect
        to the Obligations and obligations under the CPIH Term Loan Agreement;

               (ii)     Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations and Performance 
Guaranties permitted by subsection 6.4 and, upon any matured  
         obligations actually arising pursuant thereto, any Indebtedness created
as a result thereof;                                          

                (iii)    Borrowers may become and remain liable with respect
to Indebtedness to any other Borrowers; provided that all such
         intercompany Indebtedness shall be evidenced by the Intercompany Master
Note;                                                         

                 (iv)     Subsidiaries of Company may, after the Closing Date,
         become and remain liable with respect to Indebtedness to Company or any
        Subsidiary of Company so long as the proceeds of such Indebtedness are
applied to Investments permitted under subsection             

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 6.3(vi) to be made by Company or any of its Subsidiaries in the
     Subsidiaries incurring such Indebtedness; provided that (a) no such
    Indebtedness may be incurred to make capital expenditures if after
        giving effect to such expenditures Borrowers would not be in pro forma
       compliance with subsection 6.6D, and (b) any such Indebtedness to any
Borrower shall be evidenced by the Intercompany Master Note;  

             (v)      Company and its Subsidiaries, as applicable, may
       remain liable with respect to Indebtedness outstanding on the Closing
Date and described in Schedule 6.1(v);                        

                 (vi)     Subsidiaries of Company may become and remain liable
with respect to Indebtedness consisting of a converted equity 
Investment by Company or another Subsidiary of Company in such
  Subsidiaries, provided that the underlying equity Investment was
permitted under this Agreement at the time of such conversion;

            (vii)    Any Subsidiary of Company may become and remain
     liable with respect to Indebtedness incurred to refinance, replace,
       renew or extend, in whole or in part, Indebtedness of such Subsidiary
         permitted to remain outstanding under subsection 6.1(v); provided, that
  in each case (a) the terms (excluding the interest rate and fees
         payable with respect thereto, so long as such interest and fees on such
        Indebtedness are not borne directly or indirectly by Company or any of
     its Subsidiaries, whether through an offset to or deduction against
       service or operating agreement fees to Company or its Subsidiaries or
     otherwise) of such Indebtedness as refinanced, replaced, renewed or
   extended, taken as a whole (considering the economic benefits and
      disadvantages to Company and its Subsidiaries from such refinancing,
         replacement, renewal or extension, as well as the economic benefits and
       disadvantages to Company and its Subsidiaries of the Project to which
      such Indebtedness relates), shall not be more disadvantageous in any
       material respect to Company and its Subsidiaries and the Lenders than
        the Indebtedness so refinanced, replaced, renewed or extended, (b) the
       principal amount of the Indebtedness as refinanced, replaced, renewed
  or extended shall not exceed 110% of the principal amount of the
     Indebtedness so refinanced, replaced, renewed or extended (provided
        that such limitation shall not apply with respect to Indebtedness that
    an existing client (if such client is a Government Authority) of a
       Project undertakes to service through the principal lease, service or
   operating agreement of the applicable Project), (c) no obligee or
       beneficiary of such Indebtedness after such refinancing, replacement,
     renewal or extension shall have greater recourse to Persons for the
payment or collection of such Indebtedness than the oblige or 
     beneficiary of the Indebtedness so refinanced, replaced, renewed or
     extended had immediately prior to such transaction, and (d) Company
        shall provide to Administrative Agent reasonable prior advance written
        notice of such proposed refinancing, replacement, renewal or extension
        and copies of all material contracts or other agreements being entered
into in connection therewith;                                 

                 (viii)   Company may become and remain liable with respect to
   Indebtedness consisting solely of its obligations under Insurance
       Premium Financing Arrangements, which obligations shall not exceed at
any time $5,000,000 in the aggregate;                         

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                (ix)     Borrowers may become and remain liable with respect
    their obligations to pay for services rendered to them and certain
       payments made by Covanta and its Subsidiaries (other than Company and
  its Subsidiaries), in each case under and in accordance with the
Management Services and Reimbursement Agreement; and          

                (x)      Company and its Subsidiaries may, after the Closing
    Date, become and remain liable with respect to Indebtedness to any
        Subsidiary so long as the proceeds of such Indebtedness are applied to
        make Investments permitted under subsection 6.3(ix); provided that all
       such intercompany Indebtedness shall be evidenced by the Intercompany
Master Note.                                                  

6.2      LIENS AND RELATED MATTERS.                           

               A. PROHIBITION ON LIENS. Borrowers shall not, and shall not
permit their respective Subsidiaries to, directly or indirectly, create, incur, 
assume or permit to exist any Lien on or with respect to any property or asset  
of any kind (including any document or instrument in respect of goods or        
accounts receivable) of Borrowers or any of their respective Subsidiaries,      
whether now owned or hereafter acquired, or any income or profits therefrom, or 
file or authorize the filing of, or permit to remain in effect, any effective   
financing statement or other similar notice of any Lien with respect to any such
property, asset, income or profits under the UCC or under any similar recording 
or notice statute, except:                                                      

(i)      Permitted Encumbrances;            

           (ii)     subject to the provisions of the Intercreditor
         Agreement, Liens granted pursuant to the Collateral Documents to secure
        the Obligations, the obligations of Borrowers under the CPIH Term Loan
        Agreement and the obligations to the cash management bank with respect
to the Cash Management System;                                

                (iii)    Liens existing on the Closing Date and described in
Schedule 6.2 annexed hereto;                                  

            (iv)     Liens on assets of Company or any Subsidiary of
   Company securing refinancing Indebtedness permitted by subsection
6.1(vii), provided that in each case the Liens securing such  
    refinancing Indebtedness shall attach only to the assets that were
  subject to Liens securing the Indebtedness so refinanced and, if
   applicable, assets the acquisition of which was financed with the
   proceeds of such refinancing Indebtedness permitted by subsection
6.1(vii);                                                     

                (v)      Liens on cash collateral of Subsidiaries of Company
       securing Contingent Obligations permitted under subsection 6.4(v), so
      long as such cash is provided from funds that would not otherwise be
         available (due to prohibitions in the underlying agreements relating to
     Projects) for making dividends and distributions to Company and its
other Subsidiaries;                                           

         (vi)     Liens on cash collateral of Company securing
      insurance deductibles or self-insurance retentions required by third
party insurers in connection with insurance                   

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     arrangements entered into by Company and its Subsidiaries with such
insurers in compliance with subsection 5.4B;                  

                  (vii)    Liens securing debt service reserve funds, completion
obligations and similar accounts and obligations (other than  
        Indebtedness) of Subsidiaries of Company to Persons other than Company
      and its Subsidiaries and their respective Affiliates, so long as (a)
     each such obligation is associated with a Project, (b) such Lien is
        limited to (1) assets associated with such Project (which in any event
     shall not include assets held by any Borrower other than a Borrower
       whose sole business is the ownership and/or operation of such Project
         and substantially all of whose assets are associated with such Project)
        and/or (2) the equity interests in such Subsidiary, but in the case of
     clause (2) only if such Subsidiary's sole business is the ownership
and/or operation of such Project and substantially all of such
    Subsidiary's assets are associated with such Project, and (c) such
obligation is otherwise permitted under this Agreement;       

                  (viii)   Liens created pursuant to Insurance Premium Financing
        Arrangements otherwise permitted under this Agreement, so long as such
Liens attach only to gross unearned premiums for the insurance
policies;                                                     

                (ix)     Liens on cash collateral of Subsidiaries of Company
        securing Contingent Obligations permitted under subsection 6.4(iv), so
      long as such cash is provided from funds that would not otherwise be
         available (due to prohibitions in the underlying agreements relating to
     Projects) for making dividends and distributions to Company and its
other Subsidiaries; and                                       

               (x)      Other Liens on assets of any Subsidiary of Company
        securing Indebtedness in an aggregate amount not exceeding $1,000,000.

                  B. EQUITABLE LIEN IN FAVOR OF LENDERS. If any Borrowers or any
of its Subsidiaries shall create or assume any Lien upon any of its properties  
or assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 6.2A and Liens created or assumed on properties or 
assets on which First Priority Liens created under the Collateral Documents are 
attached and perfected at the time of such creation or assumption, the Borrowers
hereby agree that (i) they will be deemed to have automatically and without     
further action secured the Obligations with such Lien equally and ratably with  
any and all other Indebtedness, Contingent Obligations or any other obligations 
or debt (as defined in the Bankruptcy Code) secured thereby, and (ii) they shall
take or cause to be taken such actions as Administrative Agent or Requisite     
Lenders deem necessary or advisable to evidence such equal and ratable Lien;    
provided that, notwithstanding the foregoing, this covenant shall not be        
construed as a consent by Requisite Lenders to the creation or assumption of any
such Lien not permitted by the provisions of subsection 6.2A, and the creation  
or assumption of any such Lien not permitted by the provisions of subsection    
6.2A shall constitute an Event of Default.                                      

                  C. NO FURTHER NEGATIVE PLEDGES. Neither Company nor any of its
Subsidiaries shall enter into any agreement (other than this Agreement, the Loan
Documents and the CPIH Term Loan Documents) on or after the Closing Date        
prohibiting the creation or assumption of any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, except                         

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with respect to (i) specific property encumbered by a Lien permitted hereunder  
to secure payment of particular Indebtedness permitted to be incurred under     
subsection 6.1(vii) (but only to the extent that the Indebtedness being         
refinanced was subject to a negative pledge on the same assets), or by a Lien   
permitted under subsection 6.2A(v), 6.2A(vi), 6.2A(vii) or 6.2A(ix), or by a    
Lien permitted under subsection 6.2A(x) to the extent such Lien secures         
obligations incurred to finance the acquisition of such specific property, (ii) 
specific property to be sold pursuant to an executed agreement with respect to  
an Asset Sale which is permitted hereunder, (iii) specific property that is     
leased pursuant to a lease permitted hereunder, and (iv) provisions in the      
principal lease, service and operating agreements pertaining to Projects, or the
partnership and financing agreements relating to Projects, so long as in each   
case such lease, service, operating, partnership or financing agreement is an   
extension, renewal or replacement of such agreement in effect as of the Closing 
Date, is otherwise permitted to be entered into hereunder and contains no more  
restrictive provisions relating to prohibiting the creation or assumption of any
Lien upon the properties or assets of the relevant Subsidiary than the lease,   
service, operating, partnership or financing agreement so extended, renewed or  
replaced.                                                                       

                D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR
OTHER SUBSIDIARIES. Company will not, and will not permit any of its            
Subsidiaries to, create or otherwise cause or suffer to exist or become         
effective any consensual encumbrance or restriction of any kind on the ability  
of any such Subsidiary to (i) pay dividends or make any other distributions on  
any of such Subsidiary's capital stock owned by Company or any other Subsidiary 
of Company, (ii) repay or prepay any Indebtedness owed by such Subsidiary to    
Company or any other Subsidiary of Company, (iii) make loans or advances to     
Company or any other Subsidiary of Company, or (iv) transfer any of its property
or assets to Company or any other Subsidiary of Company, except (a) as provided 
in this Agreement or the other Loan Documents, (b) those encumbrances or        
restrictions applicable to Subsidiaries of Company to the extent created under  
documentation in existence on the Closing Date or under the CPIH Term Documents,
(c) as may be provided in an executed agreement with respect to an Asset Sale   
which is permitted hereunder, and (d) provisions in the principal lease, service
or operating agreements, partnership agreements and financing agreements        
pertaining to Projects, so long as such lease, service or operating agreements, 
partnership agreements and financing agreements are extensions, renewals or     
replacements of such agreements in effect as of the Closing Date, are otherwise 
permitted to be entered into hereunder and in each case contain no more         
restrictive provisions relating to the ability of the relevant Subsidiary to    
take the actions described in clauses (i) through (iv) than the agreement so    
extended, renewed or replaced.                                                  

6.3      INVESTMENTS; ACQUISITIONS.                           

              Borrowers shall not, and shall not permit their respective
Subsidiaries to, directly or indirectly, make or own any Investment in any      
Person, including any Joint Venture, or acquire, by purchase or otherwise, all  
or substantially all the business, property or fixed assets of, or capital stock
or other ownership interest of any Person, or any division or line of business  
of any Person except:                                                           

               (i)      Company and its Domestic Subsidiaries may make and
         own Investments in Domestic Cash Equivalents and in such investments as
         are permitted or imposed under the terms of any cash collateral or debt
service reserve agreement (including pursuant to              

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   the terms of any Project bond indenture) permitted hereunder; and
        Company's Foreign Subsidiaries may make and own Investments in Foreign
 Cash Equivalents to the extent permitted under subsection 5.10;

         (ii)     Borrowers may make and own additional equity
        Investments in other Borrowers, so long as no such Investment shall be
       made by one Borrower in another Borrower if (a) the latter is subject
       to restrictions of the type described in subsection 6.2D more adverse
    than restrictions of such type that are applicable to the Borrower
    making such Investment, or (b) such Investment shall result in the
     obligee or beneficiary of any Indebtedness or Contingent Obligation
        (other than the Obligations) having greater recourse to assets for the
     payment or collection of such Indebtedness or Contingent Obligation
than such obligee or beneficiary had immediately prior to such
Investment;                                                   

               (iii)    Company and its Subsidiaries may make intercompany
loans to the extent permitted under subsection 6.1(iii);      

               (iv)     Company and its Subsidiaries may make Consolidated
Facilities Capital Expenditures permitted by subsection 6.6D; 

                 (v)      Company and its Subsidiaries may continue to own the
         Investments owned by them on the Closing Date and described in Schedule
6.3(v) annexed hereto;                                        

                (vi)     (a) Company may make and own Investments consisting
of intercompany loans to its Subsidiaries (to the extent such 
    Subsidiaries are in existence on the Closing Date) in an aggregate
    amount not in excess of $1,000,000 outstanding at any time and (b)
      Subsidiaries may make and own Investments consisting of intercompany
loans to other Subsidiaries (in each case to the extent such  
    Subsidiaries are in existence on the Closing Date), so long as the
proceeds of such loans are applied to working capital, capital
   expenditure, maintenance and payroll requirements in the ordinary
      course of business of such Subsidiaries (provided that the aggregate
      amount of loans outstanding pursuant to this clause (b) shall not at
any time exceed $2,000,000);                                  

                 (vii)    Borrowers and their Subsidiaries may own Investments
       in the form of non-cash consideration received in connection with (a)
   Asset Sales permitted under subsection 6.7(iii) or 6.7(iv) or (b)
      settlements of disputes, to the extent such settlements occur in the
ordinary course of business;                                  

                  (viii)   Subject to the Intercreditor Agreement, Borrowers may
         make payments under the Management Services and Reimbursement Agreement
      to the extent contractually obligated pursuant to the terms thereof;
and                                                           

          (ix)     Company and its Subsidiaries may make and own
    Investments consisting of cash equity contributions made after the
        Closing Date (a) in the aggregate amount of approximately $360,000 (it
        being understood that such amount is the approximate Dollar equivalent
         of an estimate as of November 15, 2003 of the required foreign currency
     contribution, and thus may change based on fluctuations in currency
        exchange rates) in the Madurai Project, (b) in an aggregate amount not
       to exceed $130,000 in the Samalpatti Project, and (c) in an aggregate
amount not to exceed $1,600,000 in the Trezzo waste-to-       

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    energy Project, in each case so long as (1) such contributions are
    required to be made pursuant to the terms of a binding Contractual
     Obligation of Company and its Subsidiaries in effect on the Closing
       Date, and (2) any Capital Stock resulting from such contributions and
        held directly by any Borrower shall be pledged as Collateral under the
Collateral Documents.                                         

6.4      CONTINGENT OBLIGATIONS; PERFORMANCE GUARANTIES.      

      Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with 
respect to any Contingent Obligation or Performance Guaranty, and shall not     
create or become or remain liable with respect to any obligation to incur a     
subsequent Contingent Obligation or to post cash collateral to secure any       
obligation, except:                                                             

            (i)      Borrowers may become and remain liable (a) with
      respect to Contingent Obligations in respect of the Obligations, and
 (b) with respect to Contingent Obligations under the Management
Services and Reimbursement Agreement;                         

               (ii)     Company and its Subsidiaries may become and remain
       liable with respect to Contingent Obligations in respect of customary
and appropriate indemnification and purchase price adjustment 
       obligations incurred in connection with Asset Sales or other sales of
     assets to the extent such Asset Sales and sales are permitted under
this Agreement;                                               

             (iii)    Company and its Subsidiaries, as applicable, may
        become and remain liable with respect to (a) Contingent Obligations in
  existence on the Closing Date and described in Schedule 6.4(iii)
       annexed hereto, and (b) Contingent Obligations replacing, renewing or
         extending Contingent Obligations described in clause (a); provided that
       no such replacement, renewed or extended Contingent Obligation, taken
      as a whole, shall be more disadvantageous in any material respect to
 Company and its Subsidiaries than the Contingent Obligations so
replaced, renewed or extended;                                

               (iv)     Company and its Subsidiaries may become and remain
       liable with respect to Contingent Obligations consisting of long-term
    or forward purchase contracts and option contracts to buy, sell or
         exchange commodities and similar agreements or arrangements, so long as
such contracts, agreements or arrangements do not constitute  
Commodities Agreements;                                       

               (v)      Company and its Subsidiaries may become and remain
  liable with respect to Contingent Obligations constituting Hedge
Agreements;                                                   

               (vi)     Company and its Subsidiaries may become and remain
   liable with respect to usual and customary Contingent Obligations
     incurred in connection with insurance deductibles or self-insurance
retentions required by third party insurers in connection with
     insurance arrangements entered into by Company and its Subsidiaries
with such insurers in compliance with subsection 5.4B; and    

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               (vii)    Company and its Subsidiaries may become and remain
    liable with respect to Contingent Obligations under the Management
Services and Reimbursement Agreement.                         

6.5      RESTRICTED PAYMENTS.                                 

              Borrowers shall not, and shall not permit their respective
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart 
any sum for any Restricted Payment; provided, however, that (i) Subsidiaries of 
Company may make payments of principal, interest and other amounts in respect of
Indebtedness permitted under subsections 6.1(v) and 6.1(vii) related to         
Projects, in accordance with the terms of, and only to the extent required by,  
the indentures or other agreements pursuant to which such Indebtedness was      
issued, as such indentures or other agreements may be amended from time to time 
to the extent permitted hereunder, provided, however, that during the           
continuance of an Event of Default, notwithstanding anything to the contrary in 
this Agreement, neither Company nor any Subsidiary shall fund, contribute or    
otherwise advance amounts for payment of Indebtedness permitted under           
subsections 6.1(v) and 6.1(vii) related to Projects unless it has an irrevocable
Contractual Obligation to make such payments; (ii) so long as no Event of       
Default shall have occurred and be continuing, Subsidiaries of Company may, at  
the time Indebtedness is refinanced or replaced as permitted under subsection   
6.1 by other Indebtedness permitted under such subsection, pay principal,       
accrued interest and other amounts owing on such refinanced Indebtedness at such
time, provided that such payments may be made with respect to Non Recourse Debt 
during the continuance of an Event of Default so long as such payments are from 
the proceeds of Non Recourse Debt permitted to be incurred hereunder and such   
proceeds are required to be applied to make such payments under a binding       
Contractual Obligation to a third party; (iii) Company and its Subsidiaries may 
pay any fees required to be paid to the Administrative Agent and Lenders        
hereunder; and (iv) Company and its Subsidiaries may make payments under and in 
accordance with the terms of, and only to the extent required by, the Management
Services and Reimbursement Agreement and the Tax Sharing Agreement.             

                In addition, in any case where a Borrower or Subsidiary is a
Joint Venture, Borrowers shall not, and shall not permit their respective       
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart 
any sum for (a) any dividend or other distribution, direct or indirect, on      
account of any shares of Capital Stock of such Joint Venture held by Persons    
other than Borrowers or any Subsidiaries of Borrowers, except a dividend payable
solely in shares of that class of stock to the holders of that class, (b) any   
redemption, retirement, sinking fund or similar payment, purchase or other      
acquisition for value, direct or indirect, of any shares of Capital Stock of    
such Joint Venture held by Persons other than Borrowers or any Subsidiaries of  
Borrowers, or (c) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of Capital Stock
of such Joint Venture held by Persons other than Borrowers or any Subsidiaries  
of Borrowers, except in each case to the extent the relevant action described in
clause (a), (b) or (c) is required pursuant to a binding Contractual Obligation 
in effect as of the Closing Date or pursuant to an extension, renewal or        
replacement of such a Contractual Obligation so long as such extension, renewal 
or replacement is otherwise permitted to be entered into hereunder and contains 
provisions no less favorable to Company and its Subsidiaries than the relevant  
Contractual Obligations so extended, renewed or replaced.                       

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6.6      FINANCIAL COVENANTS.                                 

                A. MINIMUM INTEREST COVERAGE RATIO. Company shall not permit
the ratio of (i) Adjusted EBITDA to (ii) Consolidated Cash Interest Expense, in 
each case for any four-Fiscal Quarter period ending at the end of any Fiscal    
Quarter commencing after March 31, 2004 to be less than 3.00:1.00.              

             B. MAXIMUM CONSOLIDATED LEVERAGE RATIO. Company shall not
permit the Consolidated Leverage Ratio as at any date on or after June 30, 2004 
to exceed 5.00:1.00.                                                            

C. [INTENTIONALLY OMITTED].                 

              D. CONSOLIDATED FACILITIES CAPITAL EXPENDITURES. Borrowers
shall not, and shall not permit their respective Subsidiaries to, make or incur 
Consolidated Facilities Capital Expenditures after the Closing Date if the      
aggregate amount of such expenditures financed by contributions, loans or       
advances from Company would exceed $1,000,000 in the aggregate.                 

                  E. CERTAIN CALCULATIONS. Notwithstanding any provision of this
Agreement to the contrary, (i) for purposes of calculating Adjusted EBITDA for  
any four-Fiscal Quarter period ending prior to the first Fiscal Quarter of 2005,
Adjusted EBITDA for the third and fourth Fiscal Quarters of 2003 and the first  
Fiscal Quarter of 2004 shall be deemed to be equal to the correlative amounts   
set forth opposite such Fiscal Quarters on Schedule 6.6E annexed hereto; and    
(ii) for purposes of determining compliance with subsection 6.6A for any        
four-Fiscal Quarter period ending prior to the last Fiscal Quarter of 2004,     
Consolidated Cash Interest Expense shall equal the product of (a) actual        
Consolidated Cash Interest Expense during the period from the Closing Date to   
the end of such four-Fiscal Quarter period multiplied by (b) the ratio of (1)   
365 divided by (2) the number of days in such period.                           

6.7      RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES.     

              Borrowers shall not, and shall not permit their respective
Subsidiaries to, alter the legal form of organization of Company or any of its  
Subsidiaries, or enter into any transaction of merger or consolidation, or      
liquidate, wind-up or dissolve itself (or suffer any liquidation or             
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),     
transfer or otherwise dispose of (including by discount or compromise), in one  
transaction or a series of transactions, all or any part of its business,       
property or assets (including its notes or receivables and Capital Stock of a   
Subsidiary, whether newly issued or outstanding) or its interests in or claims  
against any Project, in each case whether now owned or hereafter acquired,      
except:                                                                         

                (i)      any Borrower may be merged with or into a Borrower,
    or be liquidated, wound up or dissolved, or all or any part of its
         business, property or assets may be conveyed, sold, leased, transferred
or otherwise disposed of, in one transaction or a series of   
       transactions, to a Borrower; provided that, no such transaction shall
        result in the obligee or beneficiary of any Indebtedness or Contingent
    Obligation (other than the Obligations) having greater recourse to
         assets or Persons for the payment or collection of such Indebtedness or
        Contingent Obligation than such obligee or beneficiary had immediately
prior to such transaction;                                    

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                 (ii)     any Subsidiary of Company that is not a Borrower may
      be merged with or into any other Subsidiary of Company that is not a
       Borrower, or be liquidated, wound up or dissolved, or all or any part
    of its business, property or assets may be conveyed, sold, leased,
         transferred or otherwise disposed of, in one transaction or a series of
      transactions, to another Subsidiary that is not a Borrower; provided
   further, that, no such transaction shall result in the obligee or
      beneficiary of any Indebtedness or Contingent Obligation (other than
       the Obligations) having greater recourse to assets or Persons for the
     payment or collection of such Indebtedness or Contingent Obligation
than such obligee or beneficiary had immediately prior to such
transaction;                                                  

               (iii)    Company and its Subsidiaries may sell or otherwise
       dispose of assets in transactions that do not constitute Asset Sales;
         provided that the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof;       

               (iv)     Company and its Subsidiaries may make Asset Sales,
       provided that (a) the consideration received for such assets shall be
       in an amount at least equal to the fair market value thereof; (b) not
less than 90% of the consideration received (other than any   
      consideration consisting of the assumption of liabilities related to
         such assets) in any such Asset Sale shall be cash (it being agreed that
        cash the receipt of which may by the relevant terms of such Asset Sale
         be deferred more than six months after the date of consummation of such
     Asset Sale shall not be considered cash for purposes of this clause
   (b)); (c) not more than 10% of the cash consideration received by
       Company and its Subsidiaries in any such Asset Sale shall be received
     after the date of consummation of such Asset Sale; (d) any non-cash
consideration received shall be reasonably satisfactory to    
     Administrative Agent; (e) the principal documentation for each such
   Asset Sale shall have been delivered in advance to Administrative
       Agent; (f) upon consummation of each such Asset Sale, neither Company
  nor any of its Subsidiaries shall have any debts or obligations,
         contingent or otherwise, relating to the sold entities or assets (other
than customary indemnification obligations and purchase price 
      adjustment obligations incurred in connection with such Asset Sale);
         (g) any Indebtedness in relation to such assets shall be repaid and the
  related letters of credit shall be cancelled and returned to the
      issuers thereof; (h) any Asset Sale or series of related Asset Sales
(1) in which the consideration to be received (other than the 
        assumption of liabilities related to such assets) exceeds $15,000,0000
       shall require the prior written consent of the Requisite Lenders, (2)
      of the Quezon Project or involving any assets or property comprising
         the Quezon Project shall require the prior written consent of Requisite
       Lenders and (3) in which the consideration to be received (other than
the assumption of liabilities related to such assets) exceeds 
      $5,000,000 shall require the delivery no later than 30 days prior to
      the consummation of such Asset Sale or Asset Sales of an independent
         appraisal of the fair market value of such assets subject thereto which
appraisal shall be performed by an appraiser satisfactory to  
         Administrative Agent and shall be in form and substance satisfactory in
 all respects to Administrative Agent and (i) the Net Asset Sale
        Proceeds of such Asset Sales shall be applied as Mandatory Payments to
the extent required under subsection 2.4A;                    

           (v)      Any Subsidiary of Company may, if its Board of
     Directors determines that doing so is in the best interests of such
Subsidiary, change its legal form of organization             

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         to a limited liability company, a corporation or a limited partnership;
         provided that (a) (1) if such Subsidiary is a Borrower, such Subsidiary
       shall have executed such documents as Administrative Agent reasonably
         deems necessary to ensure that such Subsidiary continues to be bound as
         a Borrower under the Loan Documents after such change and (2) if all or
       any portion of the equity interests of such Subsidiary are subject to
        Liens created under the Collateral Documents prior to such change, the
  same percentage of the equity interests of such Subsidiary shall
      continue to be subject to Liens under the Collateral Documents after
     such change, with such Liens being of equal or higher priority than
       before such change and, if perfected prior to such change, perfected,
   and (b) Company and its Subsidiaries shall have complied with the
     provisions of the Collateral Documents applicable to such change of
legal form; and                                               

        (vi)     Covanta Energy India (Balaji) Ltd. may sell
    approximately 372,860 shares held by it on the Closing Date in the
     Madurai Project entity, Madurai Power Corp. Pvt. Ltd. (the "MADURAI
   PROJECT ENTITY"), to the Indian local partner with respect to the
      Madurai Project for approximately $575,000 (it being understood that
       such amount is the approximate Dollar equivalent of an estimate as of
       November 15, 2003 of the proceeds from such sale, and thus may change
       based on fluctuations in currency exchange rates), to the extent such
        local partner requires such sale so that such local partner will hold,
 after giving effect to such sale, up to 25.2% of the issued and
outstanding Capital Stock of the Madurai Project Entity.      

6.8      TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.       

      Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, enter into or permit to exist any      
transaction (including the purchase, sale, lease or exchange of any property or 
the rendering of any service) with any holder of 5% or more of any class of     
equity Securities of Company or with any Affiliate of Company or of any such    
holder, on terms that are less favorable to Company or that Subsidiary, as the  
case may be, than those that might be obtained at the time from Persons who are 
not such a holder or Affiliate; provided that the foregoing restriction shall   
not apply to (i) any Indebtedness permitted under subsection 6.1 among Company  
and its Subsidiaries or among Subsidiaries of Company, (ii) reasonable and      
customary salaries and fees paid to current officers and members of the         
Governing Bodies of Company and its Subsidiaries, provided that such salary and 
fee arrangements are entered into at arms' length and on terms that are no less 
favorable to Company or that Subsidiary, as the case may be, than those that    
would have been obtained at the relevant time from Persons who are not such a   
holder or Affiliate, (iii) reasonable and customary indemnifications and        
insurance arrangements for the benefit of Persons that are officers or members  
of the Governing Bodies of Company and its Subsidiaries on or after the Closing 
Date, whether such Persons are current or former officers or members at the time
such indemnifications or arrangements are entered into, provided that such      
indemnifications and arrangements are entered into at arms' length and on terms 
that are no less favorable to Company or that Subsidiary, as the case may be,   
than those that would have been obtained at the relevant time from Persons who  
are not such a holder or Affiliate, (iv) the Employment Agreements in effect on 
the Closing Date, and any other employment agreements or benefits arrangements  
entered into on or after the Closing Date by Company and its Subsidiaries with  
employees at arms' length and on terms that are no less favorable to Company or 
that Subsidiary, as the case                                                    

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may be, than those that would have been obtained at the relevant time from      
Persons who are not such a holder or Affiliate, (v) payments (and other         
transactions) made in accordance with the terms of the Management Services and  
Reimbursement Agreement, the Tax Sharing Agreement and the other Related        
Agreements, (vi) transactions occurring on the Closing Date and described on    
Schedule 6.8 annexed hereto, (vii) services rendered by certain Subsidiaries for
the benefit of other Subsidiaries pursuant to the terms of the intercompany     
service agreements described on Schedule 6.8 annexed hereto, and (viii) the     
payment of reasonable legal fees and expenses incurred by law firms in which    
Directors of Company are affiliated for services rendered to Company and its    
Subsidiaries.                                                                   

6.9      RESTRICTION ON LEASES.                               

          Borrowers shall not, and shall not permit any of their
Subsidiaries to, become liable in any way, whether directly by assignment or as 
a guarantor or other surety, for the obligations of the lessee under any lease  
for equipment (other than intercompany leases between Borrowers), unless,       
immediately after giving effect to the incurrence of liability with respect to  
such lease, the aggregate amount of all rents paid or payable by Company and its
Subsidiaries on a consolidated basis under all such leases entered into after   
the Closing Date at the time in effect during the then current Fiscal Year or   
any future period of 12 consecutive calendar months shall not exceed $1,000,000;
provided, however, that this subsection 6.9 shall not prohibit Company or its   
Subsidiaries from incurring obligations pursuant to the renewal, extension or   
replacement of leases in effect at the Closing Date so long as such leases as   
renewed, extended or replaced are not more disadvantageous in any material      
respect to Company and its Subsidiaries and the Lenders than the leases so      
renewed, extended or replaced.                                                  

6.10     [INTENTIONALLY OMITTED].                             

6.11     CONDUCT OF BUSINESS.                                 

                 From and after the Closing Date, Company shall not, and shall
not permit any of its Subsidiaries, to engage in any business other than the    
energy and waste management businesses of the type in which they are engaged on 
the Closing Date and other activities to the extent incidental or reasonably    
related to such businesses.                                                     

   6.12     AMENDMENTS TO RELATED AGREEMENTS, DEBT DOCUMENTATION AND
ORGANIZATIONAL DOCUMENTS.                   

      Company shall not, and shall not permit any of its
Subsidiaries to, amend, restate, modify or waive (or make any payment consistent
with an amendment, restatement, modification or waiver of) any material         
provision of any of (i) the Management Services and Reimbursement Agreement or  
the other Related Agreements (other than the CPIH Term Loan Documents), in each 
case if the effect of such amendment, restatement, modification or waiver,      
together with all other amendments, restatements, modifications or waivers made,
(a) is to impose additional material obligations on, or confer additional       
material rights to the holders thereof (or to other obligees with respect       
thereto) against, Company or any of its Subsidiaries, or (b) is otherwise       
adverse to the interests of the Lenders in a manner deemed material in the      
judgment of Administrative Agent or Requisite Lenders so notifying Agent or     
Company; (ii) the                                                               

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Organizational Documents of Company and its Subsidiaries, if the effect of such 
amendment, restatement, modification or waiver, together with all other         
amendments, restatements, modifications or waivers made, is adverse to the      
interests of the Lenders in a manner deemed material in the judgment of         
Administrative Agent or Requisite Lenders; (iii) the Subordinated Indebtedness, 
if the effect thereof would be to (a) change to earlier dates the dates on which
any payments of principal or interest are due thereon, (b) increase the interest
rate, or the portion thereof payable on a current basis in cash, applicable     
thereto, (c) change any event of default with respect thereto in any manner     
adverse to the interests of the Lenders, (d) change the redemption, prepayment  
or defeasance provisions thereof, (e) change the subordination provisions       
thereof (or of any guaranty thereof or intercreditor arrangement with respect   
thereto), (f) change any collateral therefor (other than to release such        
collateral), or (g) change any other term or provision thereof, if the effect of
such change, together with all other changes made, is to increase materially the
obligations of the obligor thereunder or to confer any additional rights on the 
holders of such Indebtedness that would be materially adverse (in the judgment  
of Administrative Agent or Requisite Lenders so notifying Agent or Company) to  
Company, Administrative Agent or the Lenders, without the prior written consent 
of Requisite Lenders; (iv) the principal documents relating to Non Recourse Debt
with respect to a Project if such amendment, restatement, modification or       
waiver, together with all other amendments, restatements, modifications and     
waivers made, would reasonably be expected to have a Material Adverse Effect or 
(v) the CPIH Term Loan Documents, unless (a) the terms of the CPIH Term Loan    
Documents as so amended, restated, modified or waived are not more              
disadvantageous to Company and its Subsidiaries and the Lenders (in a manner    
deemed material by Administrative Agent or Requisite Lenders so notifying       
Administrative Agent or Company) than the CPIH Term Loan Documents in effect on 
the Closing Date (it being understood and agreed that any amendment,            
restatement, modification or waiver having the effect of increasing the amount  
of, or reducing, delaying or waiving any otherwise required reduction in the    
amount of, any commitment to extend loans under the CPIH Term Loan Documents    
shall be deemed to be more disadvantageous for purposes of this clause (a)      
without further notice or other action by Agent or Requisite Lenders), (b) the  
aggregate amount of Indebtedness outstanding, and additional commitments to     
extend credit, if any, under the CPIH Term Loan Documents as so amended,        
restated, modified or waived, do not exceed the aggregate amount of the         
commitments to extend credit in effect under the CPIH Term Loan Documents on the
Closing Date, (c) the obligations under (and the Liens securing) such CPIH Term 
Loan Documents as so amended, restated, modified or waived are subject to the   
Intercreditor Agreement on terms substantively identical to the terms applicable
to the obligations in effect under the CPIH Term Loan Documents on the Closing  
Date, and (d) Company provides to Administrative Agent reasonable prior advance 
written notice of such proposed amendment, restatement, modification or waiver  
and copies of all material contracts or other agreements being entered into in  
connection therewith).                                                          

6.13     END OF FISCAL YEARS; FISCAL QUARTERS.                

      Company shall not, and shall not permit any of its
Subsidiaries to change the end of the Fiscal Year of Company or any of its      
Subsidiaries from December 31st.                                                

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6.14     AMENDMENT TO PENSION PLANS.                          

                  Borrowers shall not amend or modify any Pension Plan after the
Closing Date in any manner that results in or would reasonably be expected to   
result in an increase in the amount of unfunded benefit liabilities (as such    
unfunded benefit liabilities are determined in accordance with subsection 4.11D 
hereof), unless such amendment or modification is required under applicable law.

SECTION 7.        EVENTS OF DEFAULT                                             

           If any of the following conditions or events ("EVENT OF
DEFAULT") shall occur:                                                          

7.1      FAILURE TO MAKE PAYMENTS WHEN DUE.                   

               Failure by Borrowers to pay any installment of principal of
any Loan when due, whether at stated maturity, by acceleration, by notice of    
voluntary prepayment, by mandatory prepayment or otherwise; failure by Borrowers
to pay any Mandatory Payment when due; or failure by Borrowers to pay any       
interest or any fee or any other amount due under this Agreement within five    
days after the date due; or                                                     

7.2      DEFAULT IN OTHER AGREEMENTS.                         

                 (i)      Failure of Company or any of its Subsidiaries (other
   than the Magellan Subsidiary) to pay when due any principal of or
         interest on or any other amount payable in respect of (a) the CPIH Term
      Loan Documents, (b) Management Services and Reimbursement Agreement,
    (c) any one or more items of Indebtedness (other than Indebtedness
    referred to in subsection 7.1 or in clause (a) above or clause (d)
     below) or Contingent Obligations or Performance Guaranties, in each
        case in the principal amount of $2,000,000 or more, individually or in
       the aggregate, or (d) Non Recourse Debt of Subsidiaries of Company in
    the principal amount of $6,000,000 or more, individually or in the
        aggregate (provided that Non Recourse Debt incurred in connection with
        one or more Projects to which less than $2,000,000 in the aggregate of
         the operating income of Company and its Subsidiaries (on a consolidated
      basis) is attributable for the 12-month period immediately preceding
        the failure to pay such interest, principal or other amounts shall not
        be considered Indebtedness or Non Recourse Debt solely for purposes of
   this clause (d)), in each case beyond the end of any grace period
provided therefor; or                                         

       (ii)     breach or default by Company or any of its
      Subsidiaries with respect to any other material term of (a) the CPIH
         Term Loan Documents or Management Services and Reimbursement Agreement,
         (b) one or more items of Indebtedness (other than Non Recourse Debt) or
         Contingent Obligations in the individual or aggregate principal amounts
      referred to in clause (i) above or (c) any loan agreement, mortgage,
       indenture or other agreement relating to such item(s) of Indebtedness
         or Contingent Obligation(s), if the effect of such breach or default is
      to cause, or to permit the holder or holders of that Indebtedness or
    Contingent Obligation(s) (or a trustee on behalf of such holder or
     holders) to cause, that Indebtedness or Contingent Obligation(s) to
become or be declared                                         

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        due and payable prior to its stated maturity or the stated maturity of
   any underlying obligation, as the case may be (upon the giving or
receiving of notice, lapse of time, both, or otherwise), or   

7.3      BREACH OF CERTAIN COVENANTS.                         

                 Failure of any Borrower to perform or comply with any term or
condition contained in subsection 2.5 or 5.2 or Section 6 of this Agreement; or 

7.4      BREACH OF WARRANTY.                                  

                  Any representation, warranty, certification or other statement
made by CEA or Company or any of its Subsidiaries in any Loan Document or in any
statement or certificate at any time given by CEA or Company or any of its      
Subsidiaries in writing pursuant hereto or thereto or in connection herewith or 
therewith shall be false in any material respect on the date as of which made;  
or                                                                              

7.5      OTHER DEFAULTS UNDER LOAN DOCUMENTS.                 

         Any Loan Party shall default in the performance of or
compliance with any term contained in this Agreement or any of the other Loan   
Documents, other than any such term referred to in any other subsection of this 
Section 7, and such default shall not have been remedied or waived within 30    
days after the earlier of (i) an Officer of Company or such Loan Party becoming 
aware of such default or (ii) receipt by Company or such Loan Party of notice   
from Administrative Agent or any Lender of such default; or                     

7.6      INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.

              (i)      A court having jurisdiction in the premises shall
        enter a decree or order for relief in respect of CEA or Company or any
of its Subsidiaries (other than the Magellan Subsidiary) in an
involuntary case under the Bankruptcy Code or under any other 
      applicable bankruptcy, insolvency or similar law now or hereafter in
   effect, which decree or order is not stayed; or any other similar
       relief shall be granted under any applicable federal or state law; or

                  (ii)     an involuntary case shall be commenced against CEA or
         Company or any of its Subsidiaries (other than the Magellan Subsidiary)
     under the Bankruptcy Code or under any other applicable bankruptcy,
      insolvency or similar law now or hereafter in effect; or a decree or
order of a court having jurisdiction in the premises for the  
         appointment of a receiver, liquidator, sequestrator, trustee, custodian
      or other officer having similar powers over CEA or Company or any of
         its Subsidiaries (other than the Magellan Subsidiary), or over all or a
     substantial part of its property, shall have been entered; or there
         shall have occurred the involuntary appointment of an interim receiver,
         trustee or other custodian of CEA or Company or any of its Subsidiaries
       (other than the Magellan Subsidiary) for all or a substantial part of
        its property; or a warrant of attachment, execution or similar process
        shall have been issued against any substantial part of the property of
CEA or Company or any of its Subsidiaries (other than the     

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        Magellan Subsidiary), and any such event described in this clause (ii)
       shall continue for 60 days unless dismissed, bonded or discharged; or

7.7      VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.  

                  (i)      CEA or Company or any of its Subsidiaries (other than
      the Magellan Subsidiary) shall have an order for relief entered with
         respect to it or commence a voluntary case under the Bankruptcy Code or
         under any other applicable bankruptcy, insolvency or similar law now or
    hereafter in effect, or shall consent to the entry of an order for
       relief in an involuntary case, or to the conversion of an involuntary
       case to a voluntary case, under any such law, or shall consent to the
     appointment of or taking possession by a receiver, trustee or other
    custodian for all or a substantial part of its property; or CEA or
         Company or any of its Subsidiaries (other than the Magellan Subsidiary)
shall make any assignment for the benefit of creditors; or    

                  (ii)     CEA or Company or any of its Subsidiaries (other than
       the Magellan Subsidiary) shall be unable, or shall fail generally, or
      shall admit in writing its inability, to pay its debts as such debts
         become due; or the Governing Body of Company or any of its Subsidiaries
       (other than the Magellan Subsidiary) (or any committee thereof) shall
       adopt any resolution or otherwise authorize any action to approve any
        of the actions referred to in clause (i) above or this clause (ii); or

7.8      JUDGMENTS AND ATTACHMENTS.                           

                Any money judgment, writ or warrant of attachment or similar
process involving (a) in any individual case an amount in excess of $2,000,000  
or (b) in the aggregate at any time an amount in excess of $2,000,000 (in either
case not adequately covered by insurance as to which a solvent and unaffiliated 
insurance company has acknowledged coverage) shall be entered or filed against  
Company or any of its Subsidiaries (other than the Magellan Subsidiary) or any  
of their respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 60 days (or in any event later than five days prior to 
the date of any proposed sale thereunder); or                                   

7.9      DISSOLUTION.                                         

                 Any order, judgment or decree shall be entered against CEA or
Company or any of its Material Subsidiaries decreeing the dissolution or split  
up of CEA or Company or that Subsidiary and such order shall remain undischarged
or unstayed for a period in excess of 30 days; or                               

7.10     EMPLOYEE BENEFIT PLANS.                              

                There shall occur one or more ERISA Events that individually
or in the aggregate result in or are reasonably be expected to result in        
liability of Company, any of its Subsidiaries or any of their respective ERISA  
Affiliates in excess of $5,000,000 during the term of this Agreement; or there  
shall exist as of January 1 of any year (based on, with respect to each Pension 
Plan, the actuarial valuation as of such January 1, or if no such valuation was 
performed as of such January 1 but was performed within the preceding 12 months,
the date as of which the                                                        

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valuation was so performed), unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA, but determined on the basis of the actuarial assumptions  
used for funding purposes with respect to a Pension Plan (as set forth in       
Section 412 of the Internal Revenue Code, including where applicable, the       
interest rate assumptions set forth in Section 412(l) of the Internal Revenue   
Code)), in the aggregate for all Pension Plans (excluding for purposes of such  
computation any Pension Plans with respect to which assets exceed benefit       
liabilities), in excess of (i) $20,000,000 in the event the Assumptions are     
generally as favorable as the Assumptions used in the 2003 plan year valuations 
with respect to such Pension Plans, or (ii) $26,000,000 in the event the        
Assumptions are generally less favorable than the Assumptions used in the 2003  
plan year valuations with respect to such Pension Plans; or                     

7.11     MATERIAL ADVERSE EFFECT.                             

          Any event or change shall occur after the date of this
Agreement that has caused or evidences, either in any case or in the aggregate, 
a Material Adverse Effect; or                                                   

7.12     CHANGE IN CONTROL.                                   

A Change in Control shall have occurred; or 

      7.13     INVALIDITY OF INTERCREDITOR AGREEMENT; FAILURE OF SECURITY;
REPUDIATION OF OBLIGATIONS.                 

                 At any time after the execution and delivery thereof, (i) the
Intercreditor Agreement for any reason, other than the satisfaction in full of  
all Obligations, shall cease to be in full force and effect (other than in      
accordance with its terms) or shall be declared to be null and void, (ii) any   
Collateral Document (with respect to the obligations thereunder of CEA, Company 
or any Material Subsidiary of Company) shall cease to be in full force and      
effect (other than by reason of a release of Collateral thereunder in accordance
with the terms hereof or thereof, the satisfaction in full of the Secured       
Obligations or any other termination of such Collateral Document in accordance  
with the terms hereof or thereof) or shall be declared null and void, or        
Collateral Agent shall not have or shall cease to have a valid and perfected    
Lien (with the priority set forth in subsection 4.15A) in any Collateral        
purported to be covered thereby, in each case for any reason other than the     
failure of Collateral Agent or any Lender to take any action within its control,
or (iii) any Loan Party shall contest the validity or enforceability of any Loan
Document in writing or deny in writing that it has any further liability,       
including with respect to future advances by Lenders, under any Loan Document to
which it is a party; or                                                         

7.14     TERMINATION OF MATERIAL CONTRACTS.                   

                Any Material Contract of the type described in clause (i) of
the definition of Material Contract, or any power purchase agreement to which   
Company or any of its Subsidiaries is a party relating to a Project (other than 
the power purchase agreement relating to the Magellan Project unless the        
termination of such agreement would result in a Material Adverse Effect), shall 
be terminated by Company or any of its Subsidiaries or by the counterparty or   
counterparties thereto, if such termination is enforceable by Company, such     
Subsidiary, or such counterparty or counterparties, unless such Material        
Contract is replaced within ten (10) days after such termination with a contract
that is reasonably acceptable to the                                            

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Requisite Lenders and on substantially the same economic terms as the relevant  
Material Contract being terminated; or                                          

       7.15     DEFAULT UNDER EXISTING IPP INTERNATIONAL PROJECT GUARANTIES.

                 Failure by Covanta or any of its Subsidiaries to pay when due
any principal of, interest on or any other amount payable in respect of any     
Existing IPP International Project Guaranty (other than the failure to pay      
amounts that are being actively contested by such Person in good faith by       
appropriate proceedings, so long as the beneficiary of such Existing IPP        
International Project Guaranty has not exercised any remedy against Company or  
any of its Subsidiaries thereunder, under applicable law or otherwise as a      
result of such failure:                                                         

THEN (i) upon the occurrence of any Event of Default described in subsection 7.6
or 7.7, each of (a) the unpaid principal amount of and accrued interest on the  
Loans, and (b) all other Obligations shall automatically become immediately due 
and payable, without presentment, demand, protest or other requirements of any  
kind, all of which are hereby expressly waived by each Borrower, and the        
obligation of each Lender to make any Loan shall thereupon terminate, and (ii)  
upon the occurrence and during the continuation of any other Event of Default,  
Administrative Agent shall, upon the written request or with the written consent
of Requisite Lenders, by written notice to Borrowers, declare all or any portion
of the amounts described in clauses (a) through (c) above to be, and the same   
shall forthwith become, immediately due and payable, and the obligation of each 
Lender to make any Loan hereunder shall thereupon terminate.                    

               Any amounts described in clause (b) above, when received by
Collateral Agent, shall be held by Collateral Agent pursuant to the terms of the
Security Agreement and shall be applied as therein provided (subject to the     
terms of the Intercreditor Agreement).                                          

                 Further upon the occurrence and during the continuance of any
Event of Default, subject to the Intercreditor Agreement, Administrative Agent  
and Collateral Agent may, and upon the written request of Requisite Lenders     
shall, (i) exercise all rights and remedies of Administrative Agent or          
Collateral Agent set forth in any of the Collateral Documents, in addition to   
all rights and remedies allowed by, the United States and of any state thereof, 
including but not limited to the UCC, and (ii) revoke Borrowers' rights to use  
cash collateral in which Administrative Agent or Collateral Agent has an        
interest. The enumeration of the foregoing rights and remedies is not intended  
to be exhaustive and the exercise of any right or remedy shall not preclude the 
exercise of any other rights or remedies, all of which shall be cumulative and  
not alternative.                                                                

SECTION 8.        ADMINISTRATIVE AGENT                                          

8.1      APPOINTMENT.                                         

            A. APPOINTMENT OF ADMINISTRATIVE AGENT. Deutsche Bank is
hereby appointed Administrative Agent under the other Loan Documents. Each      
Lender hereby authorizes each Agent to act as its agent in accordance with the  
terms of this Agreement and the other Loan Documents. Each Agent agrees to act  
upon the express conditions contained in this Agreement and the other Loan      
Documents, as applicable. The provisions of this Section 8 are solely for the   

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benefit of Administrative Agent and Lenders and no Loan Party shall have rights 
as a third party beneficiary of any of the provisions thereof. In performing its
functions and duties under this Agreement, Administrative Agent (other than as  
provided in subsection 2.1C) shall act solely as an agent of Lenders and does   
not assume and shall not be deemed to have assumed any obligation towards or    
relationship of agency or trust with or for any Borrower or any other Loan      
Party.                                                                          

           B. CONTROL. Each Lender and Administrative Agent hereby
appoint each other Lender as agent for the purpose of perfecting Collateral     
Agent's security interest in assets that, in accordance with the UCC, can be    
perfected by possession or control.                                             

8.2      POWERS AND DUTIES; GENERAL IMMUNITY.                 

        A. POWERS; DUTIES SPECIFIED. Each Lender irrevocably
authorizes each Agent to take such action on such Lender's behalf and to        
exercise such powers, rights and remedies hereunder and under the other Loan    
Documents as are specifically delegated or granted to such Agent by the terms   
hereof and thereof, together with such powers, rights and remedies as are       
reasonably incidental thereto. An Agent shall have only those duties and        
responsibilities that are expressly specified in this Agreement and the other   
Loan Documents. Each Agent may exercise such powers, rights and remedies and    
perform such duties by or through its Affiliates, agents or employees. No Agent 
shall have, by reason of this Agreement or any of the other Loan Documents, a   
fiduciary relationship in respect of any Lender or any Borrower; and nothing in 
this Agreement or any of the other Loan Documents, expressed or implied, is     
intended to or shall be so construed as to impose upon Agent any obligations in 
respect of this Agreement or any of the other Loan Documents except as expressly
set forth herein or therein.                                                    

               B. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,        
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or         
statements made herein or therein or made in any written or oral statements or  
in any financial or other statements, instruments, reports or certificates or   
any other documents furnished or made by such Agent to Lenders or by or on      
behalf of any Borrower to such Agent or any Lender in connection with the Loan  
Documents and the transactions contemplated thereby or for the financial        
condition or business affairs of Borrowers or any other Person liable for the   
payment of any Obligations, nor shall such Agent be required to ascertain or    
inquire as to the performance or observance of any of the terms, conditions,    
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or as to the existence or possible      
existence of any Event of Default or Potential Event of Default. Anything       
contained in this Agreement to the contrary notwithstanding, Administrative     
Agent shall not have any liability arising from confirmations of the amount of  
outstanding Loans or the component amounts thereof.                             

               C. EXCULPATORY PROVISIONS. No Agent or any of its officers,
directors, employees or agents shall be liable to Lenders for any action taken  
or omitted by such Agent under or in connection with any of the Loan Documents  
except to the extent caused by such Agent's gross negligence or willful         
misconduct. An Agent shall be entitled to refrain from any act or the taking of 
any action (including the failure to take an action) in connection with this    

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Agreement or any of the other Loan Documents or from the exercise of any power, 
discretion or authority vested in it hereunder or thereunder unless and until   
such Agent shall have received instructions in respect thereof from Requisite   
Lenders (or such other Lenders as may be required to give such instructions     
under subsection 9.6) and, upon receipt of such instructions from Requisite     
Lenders (or such other Lenders, as the case may be), such Agent shall be        
entitled to act or (where so instructed) refrain from acting, or to exercise    
such power, discretion or authority, in accordance with such instructions.      
Without prejudice to the generality of the foregoing, (i) each Agent shall be   
entitled to rely, and shall be fully protected in relying, upon any             
communication, instrument or document believed by it to be genuine and correct  
and to have been signed or sent by the proper person or persons, and shall be   
entitled to rely and shall be protected in relying on opinions and judgments of 
attorneys (who may be attorneys for Company and its Subsidiaries), accountants, 
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against Agent as a result of such Agent     
acting or (where so instructed) refraining from acting under this Agreement or  
any of the other Loan Documents in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions     
under subsection 9.6).                                                          

                 D. ADMINISTRATIVE AGENT ENTITLED TO ACT AS LENDER. The agency
hereby created shall in no way impair or affect any of the rights and powers of,
or impose any duties or obligations upon, Agent in its individual capacity as a 
Lender hereunder. With respect to its participation in the Loans, Agent shall   
have the same rights and powers hereunder as any other Lender and may exercise  
the same as though it were not performing the duties and functions delegated to 
it hereunder, and the term "Lender" or "Lenders" or any similar term shall,     
unless the context clearly otherwise indicates, include each Agent in its       
individual capacity. An Agent and its Affiliates may accept deposits from, lend 
money to, acquire equity interests in and generally engage in any kind of       
commercial banking, investment banking, trust, financial advisory or other      
business with Company or any of its Affiliates as if it were not performing the 
duties specified herein, and may accept fees and other consideration from any   
Borrower for services in connection with this Agreement and otherwise without   
having to account for the same to Lenders. The Lenders acknowledge that,        
pursuant to such activities, Deutsche Bank or its respective Affiliates may     
receive information regarding a Borrower or its Affiliates (including           
information that may be subject to confidentiality obligations in favor of such 
Borrower or such Affiliate) and acknowledge that Administrative Agent shall be  
under no obligation to provide such information to them.                        

      8.3      INDEPENDENT INVESTIGATION BY LENDERS; NO RESPONSIBILITY FOR
APPRAISAL OF CREDITWORTHINESS.              

           Each Lender agrees that it has made its own independent
investigation of the financial condition and affairs of Company and its         
Subsidiaries in connection with the making of the Loans hereunder and that it   
has made and shall continue to make its own appraisal of the creditworthiness of
Company and its Subsidiaries. No Agent shall have any duty or responsibility,   
either initially or on a continuing basis, to make any such investigation or any
such appraisal on behalf of Lenders or to provide any Lender with any credit or 
other information with respect thereto, whether coming into its possession      
before the making of the Loans or at any time or times thereafter, and no Agent 
shall have any responsibility with respect to the accuracy of or the            
completeness of any information provided to Lenders.                            

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8.4      RIGHT TO INDEMNITY.                                  

               Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify Administrative Agent and the officers, directors, employees,
agents, attorneys, professional advisors and affiliates of each of them to the  
extent that any such Person shall not have been reimbursed by Borrowers, for and
against any and all liabilities, obligations, losses, damages, penalties,       
actions, judgments, suits, costs, expenses (including counsel fees and          
disbursements and fees and disbursements of any financial advisor engaged by    
Administrative Agent) or disbursements of any kind or nature whatsoever which   
may be imposed on, incurred by or asserted against Agent or and other such      
Persons in exercising the powers, rights and remedies of Agent or performing    
duties of Agent hereunder or under the other Loan Documents or otherwise in its 
capacity as Agent in any way relating to or arising out of this Agreement or the
other Loan Documents; provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,  
suits, costs, expenses or disbursements of Agent resulting from such Agent's    
gross negligence or willful misconduct. If any indemnity furnished to Agent or  
any other such Person for any purpose shall, in the opinion of such Agent, be   
insufficient or become impaired, such Agent may call for additional indemnity   
and cease, or not commence, to do the acts indemnified against until such       
additional indemnity is furnished.                                              

8.5      SUCCESSOR AGENTS.                                    

                 Agent may resign at any time by giving 30 days' prior written
notice thereof to Lenders and Borrowers, and Agent may be removed at any time   
with or without cause by an instrument or concurrent instruments in writing     
delivered to Borrowers and Agent and signed by Requisite Lenders. Upon any such 
notice of resignation or any such removal, Requisite Lenders shall have the     
right, upon five Business Days' notice to Borrowers, to appoint a successor to  
Agent. If, within 30 days after the date of the Agent's notice of its intention 
to resign, no successor to Agent shall have been so appointed by Requisite      
Lenders, then the Agent's resignation shall become effective on such date       
without the need for any further action and the Lenders shall be deemed to have 
been appointed as successor to Agent hereunder and shall thereafter perform all 
the duties of the Agent hereunder and/or under any other Loan Document until the
appointment by Requisite Lenders of some other successor to Agent. Upon the     
acceptance of any appointment as Agent hereunder by a successor to Agent,       
including, the Lenders as successor to Agent (who shall be deemed to have       
accepted such appointment pursuant to this subsection 8.5), such successor to   
Agent shall thereupon succeed to and become vested with all the rights, powers, 
privileges and duties of the retiring or removed Agent and the retiring or      
removed Agent shall be discharged from its duties and obligations under this    
Agreement. After any retiring or removed Agent's resignation or removal         
hereunder as Agent, the provisions of this Section 8 shall inure to its benefit 
as to any actions taken or omitted to be taken by it while it was Agent under   
this Agreement and the other Loan Documents.                                    

8.6      COLLATERAL DOCUMENTS AND INTERCREDITOR AGREEMENT.    

                  Each Lender hereby further authorizes Administrative Agent, on
behalf of and for the benefit of Lenders, to enter into and to be the agent for 
and representative of Lenders under the Intercreditor Agreement, and each Lender
agrees to be bound by the terms of the                                          

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Intercreditor Agreement; provided that Administrative Agent shall not (i) enter 
into or consent to any material amendment, modification, termination or waiver  
of any provision contained in the Intercreditor Agreement or (ii) release any   
Collateral (except as otherwise expressly permitted or required pursuant to the 
terms of this Agreement or the applicable Collateral Document), in each case    
without the prior consent of Requisite Lenders (or, if required pursuant to     
subsection 9.6, all Lenders). Anything contained in any of the Loan Documents to
the contrary notwithstanding, each Borrower, Administrative Agent and each      
Lender hereby agree that (1) no Lender shall have any right individually to     
realize upon any of the Collateral under any Collateral Document, it being      
understood and agreed that all powers, rights and remedies under the Collateral 
Documents may be exercised solely by Collateral Agent for the benefit of Lenders
in accordance with the terms thereof and of the Intercreditor Agreement, and (2)
in the event of a foreclosure by Collateral Agent on any of the Collateral      
pursuant to a public or private sale, Administrative Agent or any Lender may be 
the purchaser of any or all of such Collateral at any such sale and             
Administrative Agent, as agent for and representative of Lenders (but not any   
Lender or Lenders in its or their respective individual capacities unless       
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the  
purpose of bidding and making settlement or payment of the purchase price for   
all or any portion of the Collateral sold at any such public sale, to use and   
apply any of the Obligations as a credit on account of the purchase price for   
any Collateral payable by Administrative Agent at such sale.                    

8.7      ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.       

            In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to Company or any of the Subsidiaries of     
Company, Administrative Agent (irrespective of whether the principal of any Loan
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether Administrative Agent shall have made any demand on  
Borrowers) shall be entitled and empowered, by intervention in such proceeding  
or otherwise                                                                    

              (i)      to file and prove a claim for the whole amount of
         principal and interest owing and unpaid in respect of the Loans and any
    other Obligations that are owing and unpaid and to file such other
       papers or documents as may be necessary or advisable in order to have
         the claims of Lenders and Administrative Agent (including any claim for
      the reasonable compensation, expenses, disbursements and advances of
       Lenders and Administrative Agent and their agents and counsel and all
      other amounts due Lenders and Administrative Agent under subsections
2.3 and 9.2) allowed in such judicial proceeding, and         

                (ii)     to collect and receive any moneys or other property
     payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or     
other similar official in any such judicial proceeding is hereby authorized by  
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to   
Lenders, to pay to Administrative Agent any amount due for the reasonable       
compensation, expenses, disbursements and advances of Administrative Agent and  

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their agents and counsel, and any other amounts due Administrative Agent under  
subsections 2.3 and 9.2.                                                        

         Nothing herein contained shall be deemed to authorize
Administrative Agent to authorize or consent to or accept or adopt on behalf of 
any Lender any plan of reorganization, arrangement, adjustment or composition   
affecting the Obligations or the rights of any Lenders or to authorize          
Administrative Agent to vote in respect of the claim of any Lender in any such  
proceeding.                                                                     

SECTION 9.        MISCELLANEOUS                                                 

    9.1      SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS IN
LOANS.                                      

                A. GENERAL. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the       
benefit of the parties hereto and the successors and assigns of Lenders (it     
being understood that Lenders' rights of assignment are subject to the further  
provisions of this subsection 9.1). Neither any Borrower's rights or obligations
hereunder nor any interest therein may be assigned or delegated by any Borrower 
without the prior written consent of all Lenders (and any attempted assignment  
or transfer by any Borrower without such consent shall be null and void).       
Nothing in this Agreement, expressed or implied, shall be construed to confer   
upon any Person (other than the parties hereto, their respective successors and 
assigns permitted hereby and, to the extent expressly contemplated hereby, the  
Affiliates of each of Administrative Agent and Lenders) any legal or equitable  
right, remedy or claim under or by reason of this Agreement. No Lender shall be 
permitted to assign any portion of its rights or obligations hereunder to any   
other Person if, upon giving effect to such assignment, Borrowers would be      
obligated to pay such assignee amounts greater than the amounts, if any, which  
Borrowers would have been required to pay such assigning Lender under subsection
2.6 or 2.7 if such assignment did not occur.                                    

B. ASSIGNMENTS.                             

             (i)      Amounts and Terms of Assignments. Any Lender may
    assign to one or more Eligible Assignees all or any portion of its
       rights and obligations under this Agreement; provided that (a) except
        (1) in the case of an assignment of the entire remaining amount of the
       assigning Lender's rights and obligations under this Agreement or (2)
         in the case of an assignment to a Lender or an Affiliate of a Lender or
         an Approved Fund of a Lender, the aggregate amount of the Loan Exposure
of the assigning Lender and the assignee subject to each such 
         assignment shall not be less than $5,000,000, determined as of the date
       the Assignment Agreement with respect to such assignment is delivered
 to Administrative Agent or, if a trade date is specified in the
    Assignment Agreement, as of such trade date, unless Administrative
        Agent otherwise consents, such consent not to be unreasonably withheld
  or delayed, (b) the parties to each assignment shall execute and
        deliver to Administrative Agent an Assignment Agreement, together with
        a processing and recordation fee of $5,000, and the Eligible Assignee,
        if it shall not be a Lender prior to such assignment, shall deliver to
       Administrative Agent a counterpart to the Intercreditor Agreement and
       such documents and information reasonably requested by Administrative
      Agent, including such forms, certificates or other evidence, if any,

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         with respect to United States federal income tax withholding matters as
         the assignee under such Assignment Agreement may be required to deliver
       to Administrative Agent pursuant to subsection 2.6B(iii), and no such
assignment shall be effective unless and until such Assignment
   Agreement is accepted by Administrative Agent and recorded in the
        Register as provided in subsection 9.1B(ii), (c) except in the case of
  an assignment to another Lender, Administrative Agent shall have
        consented thereto (which consent shall not be unreasonably withheld or
    delayed (it being understood that nothing in this clause (c) shall
         affect the requirement that the relevant assignee meet the requirements
 in the definition of Eligible Assignee and any other applicable
         requirements of this Agreement)), and (d) no assignment by a Defaulting
         Lender shall be permitted unless such Defaulting Lender or assignee has
    funded such Defaulting Lender's defaulted funding obligations with
       respect to Loans. Upon such execution, delivery and consent, from and
      after the effective date specified in such Assignment Agreement, (x)
         the assignee thereunder shall be a party hereto and, to the extent that
       rights and obligations hereunder have been assigned to it pursuant to
       such Assignment Agreement, shall have the rights and obligations of a
Lender hereunder, (y) the assignee shall be a party to the    
        Intercreditor Agreement and, to the extent that rights and obligations
       have been assigned to it pursuant to such Assignment Agreement, shall
      have the rights and obligations of a "Creditor Party" thereunder (as
  such term is defined in the Intercreditor Agreement) and (z) the
  assigning Lender thereunder shall, to the extent that rights and
 obligations hereunder have been assigned by it pursuant to such
    Assignment Agreement, relinquish its rights (other than any rights
        which survive the termination of this Agreement under subsection 9.9B)
   and be released from its obligations under this Agreement and the
      Intercreditor Agreement (and, in the case of an Assignment Agreement
       covering all or the remaining portion of an assigning Lender's rights
       and obligations under this Agreement, such Lender shall cease to be a
   party hereto but shall continue to be entitled to the benefits of
       subsection 9.9). The assigning Lender of any Commitments and/or Loans
 shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its Notes, if any, to    
       Administrative Agent for cancellation, and thereupon new Notes shall,
if so requested by the assignee and/or the assigning Lender in
      accordance with subsection 2.1D, be issued to the assignee and/or to
      the assigning Lender, substantially in the form of Exhibit I annexed
         hereto, as the case may be, with appropriate insertions, to reflect the
       new outstanding Loans, as the case may be, of the assignee and/or the
 assigning Lender. Other than as provided in subsection 9.5, any
        assignment or transfer by a Lender of rights or obligations under this
   Agreement that does not comply with this subsection 9.1B shall be
      treated for purposes of this Agreement as a sale by such Lender of a
 participation in such rights and obligations in accordance with
       subsection 9.1C. Except as otherwise provided in this subsection 9.1,
      no Lender shall, as between Borrowers and such Lender, or as between
 Administrative Agent and such Lender, be relieved of any of its
       obligations hereunder as a result of any sale, assignment or transfer
  of, or any granting of participations in, all or any part of its
     Commitments or Loans, or the other Obligations owed to such Lender.

               (ii)     Acceptance by Administrative Agent; Recordation in
      Register. Upon its receipt of an Assignment Agreement executed by an
      assigning Lender and an assignee representing that it is an Eligible
Assignee and the processing and recordation fee referred to in
       subsection 9.1B(i) and any forms, certificates or other evidence with
respect                                                       

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   to United States federal income tax withholding matters that such
         assignee may be required to deliver to Administrative Agent pursuant to
     subsection 2.6B(iii), Administrative Agent shall, if Administrative
        Agent has consented to the assignment evidenced thereby (to the extent
      such consent is required pursuant to subsection 9.1B(i)), (a) accept
 such Assignment Agreement by executing a counterpart thereof as
        provided therein (which acceptance shall evidence any required consent
         of Administrative Agent to such assignment), (b) record the information
       contained therein in the Register, and (c) give prompt notice thereof
to Company. Administrative Agent shall maintain a copy of each
     Assignment Agreement delivered to and accepted by it as provided in
this subsection 9.1B(ii).                                     

                 C. PARTICIPATIONS. Any Lender may, without the consent of, or
notice to, any Borrower or Administrative Agent, sell participations to one or  
more Persons (other than a natural Person or any Borrower or any of its         
Affiliates) in all or a portion of such Lender's rights and/or obligations under
this Agreement; provided that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the 
other parties hereto for the performance of such obligations and (iii)          
Borrowers, Administrative Agent and Lenders shall continue to deal solely and   
directly with such Lender in connection with such Lender's rights and           
obligations under this Agreement. Any agreement or instrument pursuant to which 
a Lender sells such a participation shall provide that such Lender shall retain 
the sole right to enforce this Agreement and to approve any amendment,          
modification or waiver of any provision of this Agreement; provided that such   
agreement or instrument may provide that such Lender will not, without the      
consent of the Participant, agree to any amendment, modification or waiver      
directly affecting (i) the extension of the Maturity Date or (ii) a reduction of
the principal amount of or the rate of interest payable on any Loan allocated to
such participation. Subject to the further provisions of this subsection 9.1C,  
each Borrower agrees that each Participant shall be entitled to the benefits of 
subsection 2.6 to the same extent as if it were a Lender and had acquired its   
interest by assignment pursuant to subsection 9.1B. To the extent permitted by  
law, each Participant also shall be entitled to the benefits of subsection 9.4  
as though it were a Lender; provided that such Participant agrees to be subject 
to subsection 9.5 as though it were a Lender. A Participant shall not be        
entitled to receive any greater payment under subsection 2.6 than the applicable
Lender would have been entitled to receive with respect to the participation    
sold to such Participant unless the sale of the participation to such           
Participant is made with Borrowers' prior written consent. A Participant that   
would be a Non-US Lender if it were a Lender shall not be entitled to the       
benefits of subsection 2.6.                                                     

                 D. PLEDGES AND ASSIGNMENTS. Any Lender may at any time pledge
or assign a security interest in all or any portion of its Loans, and the other 
Obligations owed to such Lender, to secure obligations of such Lender, including
any pledge or assignment to secure obligations to any Federal Reserve Bank;     
provided that (i) no Lender shall be relieved of any of its obligations         
hereunder as a result of any such assignment or pledge and (ii) in no event     
shall any assignee or pledgee be considered to be a "Lender" or be entitled to  
require the assigning Lender to take or omit to take any action hereunder.      

           E. INFORMATION. Each Lender may furnish any information
concerning Company and its Subsidiaries in the possession of that Lender from   
time to time to assignees and participants (including prospective assignees and 
participants), subject to subsection 9.20.                                      

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                 F. AGREEMENTS OF LENDERS. Each Lender listed on the signature
pages hereof hereby agrees, and each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree, (i) that it is an Eligible 
Assignee described in clause (i) of the definition thereof; (ii) that it has    
experience and expertise in the making of or purchasing loans such as the Loans;
and (iii) that it will make or purchase Loans for its own account in the        
ordinary course of its business and without a view to distribution of such Loans
within the meaning of the Securities Act or the Exchange Act or other federal   
securities laws (it being understood that, subject to the provisions of this    
subsection 9.1, the disposition of such Loans or any interests therein shall at 
all times remain within its exclusive control).                                 

               G. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this 
subsection 9.1, any Lender may assign and pledge all or any portion of the Loans
or any other Obligations owed to such Lender hereunder, and its one or more     
Notes to any Federal Reserve Bank as collateral security pursuant to Regulation 
A of the Board of Governors of the Federal Reserve System and any operating     
circular issued by such Federal Reserve Bank; provided that (i) no Lender shall,
as between Company and such Lender, be relieved of any of its obligations       
hereunder as a result of any such assignment and pledge and (ii) in no event    
shall such Federal Reserve Bank be considered to be a "Lender" or be entitled to
require the assigning Lender to take or omit to take any action hereunder.      

9.2      EXPENSES.                                            

                Whether or not the transactions contemplated hereby shall be
consummated, Borrowers agree, jointly and severally, to pay promptly (i) all the
actual and reasonable costs and expenses of negotiation, preparation and        
execution of the Loan Documents and any consents, amendments, waivers or other  
modifications thereto; (ii) all the costs of furnishing all opinions by counsel 
for Loan Parties (including any opinions requested by Administrative Agent or   
Lenders as to any legal matters arising hereunder) and of Borrowers' performance
of and compliance with all agreements and conditions on their part to be        
performed or complied with under this Agreement and the other Loan Documents    
including with respect to confirming compliance with environmental and insurance
requirements; (iii) the reasonable fees, expenses and disbursements of advisors 
and counsel to Administrative Agent (including O'Melveny & Myers LLP, counsel to
Administrative Agent, and Ernst & Young Corporate Finance LLC) in connection    
with the negotiation, preparation, execution, interpretation or administration  
of the Loan Documents and any proposed consents, amendments, waivers or other   
modifications thereto and any other documents or matters requested by any       
Borrower; (iv) all the actual costs and reasonable expenses of creating and     
perfecting Liens in favor of Collateral Agent on behalf of Secured Parties      
pursuant to any Collateral Document, including filing and recording fees,       
expenses and taxes, stamp or documentary taxes, search fees, title insurance    
premiums, and reasonable fees, expenses and disbursements of counsel to         
Administrative Agent and Collateral Agent and of counsel providing any opinions 
that Administrative Agent or Requisite Lenders may request in respect of the    
Collateral Documents or the Liens created pursuant thereto; (v) all the actual  
costs and reasonable fees, expenses and disbursements of any auditors,          
accountants or appraisers and any environmental or other consultants, advisors  
and agents (including Ernst & Young Corporate Finance LLC) employed or retained 
by Administrative Agent or their counsel; (vi) all the actual costs and         
reasonable expenses incurred in connection with the custody or                  

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preservation of any of the Collateral; (vii) all other actual and reasonable    
costs and expenses incurred by Administrative Agent in connection with the      
syndication of the Commitments; and (viii) all the actual costs and reasonable  
expenses, including reasonable attorneys' fees and costs of settlement, incurred
by Administrative Agent and Lenders in enforcing any Obligations of or in       
collecting any payments due from any Loan Party hereunder or under the other    
Loan Documents (including in connection with the sale of, collection from, or   
other realization upon any of the Collateral) or in connection with any         
refinancing or restructuring of the credit arrangements provided under this     
Agreement in the nature of a "work-out" or pursuant to the Chapter 11 Cases or  
any other insolvency or bankruptcy proceedings.                                 

9.3      INDEMNITY.                                           

                 In addition to the payment of expenses pursuant to subsection
9.2, whether or not the transactions contemplated hereby shall be consummated,  
Borrowers jointly and severally agree to defend (subject to Indemnitees'        
selection of counsel), indemnify, pay and hold harmless Administrative Agent and
Lenders, and the officers, directors, employees, agents and affiliates of       
Administrative Agent and Lenders (collectively called the "INDEMNITEES"), from  
and against any and all Indemnified Liabilities (as hereinafter defined);       
provided that Borrowers shall not have any obligation to any Indemnitee         
hereunder with respect to any Indemnified Liabilities to the extent such        
Indemnified Liabilities arise solely from the gross negligence or willful       
misconduct of that Indemnitee as determined by a final judgment of a court of   
competent jurisdiction.                                                         

                  As used herein, "INDEMNIFIED LIABILITIES" means, collectively,
any and all liabilities, obligations, losses, damages (including natural        
resource damages), penalties, actions, judgments, suits, claims (including      
Environmental Claims), costs (including the costs of any investigation, study,  
sampling, testing, abatement, cleanup, removal, remediation or other response   
action necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever          
(including the reasonable fees and disbursements of counsel for Indemnitees in  
connection with any investigative, administrative or judicial proceeding        
commenced or threatened by any Person, whether or not any such Indemnitee shall 
be designated as a party or a potential party thereto, and any fees or expenses 
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect  
or consequential and whether based on any federal, state or foreign laws,       
statutes, rules or regulations (including securities and commercial laws,       
statutes, rules or regulations and Environmental Laws), on common law or        
equitable cause or on contract or otherwise, that may be imposed on, incurred   
by, or asserted against any such Indemnitee, in any manner relating to or       
arising out of (i) this Agreement or the other Loan Documents and the Chapter 11
Cases (it being understood that such Indemnified Liabilities arising out of the 
Chapter 11 Cases shall apply solely to Indemnitiees in their capacities as      
Administrative Agent and Lenders or officers, directors, employees, agents and  
affiliates of Administrative Agent or Lenders, and not in any other capacities) 
or the transactions contemplated hereby or thereby (including Lenders' agreement
to make the Loans hereunder or the use or intended use of the proceeds thereof, 
or any enforcement of any of the Loan Documents (including any sale of,         
collection from, or other realization upon any of the Collateral), (ii) the     
statements contained in the commitment letter delivered by any Lender with      
respect thereto, or (iii) any Environmental Claim or any Hazardous Materials    
Activity relating to or arising from, directly or indirectly, any past or       
present activity, operation, land ownership, or practice of Company or any of   
its Subsidiaries.                                                               

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                 To the extent that the undertakings to defend, indemnify, pay
and hold harmless set forth in this subsection 9.3 may be unenforceable in whole
or in part because they are violative of any law or public policy, Borrowers    
shall contribute the maximum portion that they are permitted to pay and satisfy 
under applicable law to the payment and satisfaction of all Indemnified         
Liabilities incurred by Indemnitees or any of them.                             

9.4      SET-OFF.                                             

            In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the        
occurrence and during the continuance of any Event of Default each Lender is    
hereby authorized by each Borrower at any time or from time to time, without    
notice to any Borrower or to any other Person, any such notice being hereby     
expressly waived, to set off and to appropriate and to apply any and all        
deposits (general or special, including Indebtedness evidenced by certificates  
of deposit, whether matured or unmatured, but not including trust accounts) and 
any other Indebtedness at any time held or owing by that Lender or any Affiliate
of such Lender to or for the credit or the account of any Borrower or any other 
Loan Party against and on account of the obligations and liabilities of any     
Borrower or any other Loan Party to that Lender (or any Affiliate of such       
Lender) or to any other Lender (or any Affiliate of any other Lender) under this
Agreement, and the other Loan Documents, including all claims of any nature or  
description arising out of or connected with this Agreement, or any other Loan  
Document, irrespective of whether or not (i) Agent or any Lender shall have made
any demand hereunder or (ii) the principal of or the interest on the Loans or   
any other amounts due hereunder shall have become due and payable pursuant to   
Section 7 and although said obligations and liabilities, or any of them, may be 
contingent or unmatured. Each Borrower hereby further grants to Administrative  
Agent and each Lender a security interest in all deposits and accounts          
maintained with Administrative Agent or such Lender as security for the         
Obligations.                                                                    

9.5      RATABLE SHARING.                                     

          A. Subject at all times to their obligations under the
Intercreditor Agreement, Lenders hereby agree among themselves that if any of   
them shall, whether by voluntary or involuntary payment or mandatory payment    
(other than a payment or prepayment of Loans made and applied in accordance with
the terms of this Agreement), by realization upon security, through the exercise
of any right of set-off or banker's lien, by counterclaim or cross action or by 
the enforcement of any right under the Loan Documents or otherwise, or as       
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code, receive payment or reduction of a proportion of the aggregate amount of   
principal, interest, amounts payable in respect of Loans, fees and other amounts
then due and owing to that Lender hereunder or under the other Loan Documents   
with respect to Obligations (collectively, the "AGGREGATE AMOUNTS DUE" to such  
Lender) that is greater than the proportion received by any other Lender in     
respect of the Aggregate Amounts Due to such other Lender, then the Lender      
receiving such proportionately greater payment shall, unless such               
proportionately greater payment is required by the terms of this Agreement (i)  
notify Administrative Agent and each other Lender of the receipt of such payment
and (ii) apply a portion of such payment to purchase assignments (which it shall
be deemed to have purchased from each seller of an assignment simultaneously    
upon the receipt by such seller of its portion of such payment) of the Aggregate
Amounts Due to the other Lenders                                                

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so that all such recoveries of Aggregate Amounts Due shall be shared by all     
Lenders in proportion to the Aggregate Amounts Due to them; provided that if all
or part of such proportionately greater payment received by such purchasing     
Lender is thereafter recovered from such Lender, those purchases shall be       
rescinded and the purchase prices paid for such assignments shall be returned to
such purchasing Lender ratably to the extent of such recovery, but without      
interest. Each Borrower expressly consents to the foregoing arrangement and     
agrees that any purchaser of an assignment so purchased may exercise any and all
rights of a Lender as to such assignment as fully as if that Lender had complied
with the provisions of subsection 9.1B with respect to such assignment. In order
to further evidence such assignment (and without prejudice to the effectiveness 
of the assignment provisions set forth above), each purchasing Lender and each  
selling Lender agree to enter into an assignment agreement at the request of a  
selling Lender or a purchasing Lender, as the case may be, in form and substance
reasonably satisfactory to each such Lender and to Administrative Agent.        

            B. COSTS OF COLLECTION. Notwithstanding anything in this
subsection 9.5 to the contrary, in the event any one or more Lenders (for       
purposes of this subsection 9.5B, "ENFORCING LENDERS") receives any amounts that
are subject to the sharing provisions of subsection 9.5A as a result of such    
Enforcing Lender or Enforcing Lenders, but not Administrative Agent or all      
Lenders, commencing Proceedings to recover such amounts, no Lender that is not  
an Enforcing Lender shall be entitled to the benefits of subsection 9.5A with   
respect to the amounts received by such Enforcing Lenders (i) unless and until  
such Lender has paid its Pro Rata Share of the out-of-pocket costs and expenses 
(including legal fees and expenses of counsel to such Enforcing Lenders)        
incurred by such Enforcing Lenders in connection with such Proceedings or (ii)  
in any greater amount at any time than such Lender would be entitled to receive 
under such subsections if all Lenders paid their Pro Rata Shares of such costs  
and expenses.                                                                   

9.6      AMENDMENTS AND WAIVERS.                              

            No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes or the Loan Documents, and no       
consent to any departure by any Borrower therefrom, shall in any event be       
effective without the written concurrence of Requisite Lenders; provided that no
such amendment, modification, termination, waiver or consent shall, without the 
consent of: (a) each Lender with Obligations directly affected (whose consent   
shall be required for any such amendment, modification, termination or waiver in
addition to that of Requisite Lenders) (1) reduce the principal amount of any   
Loan, (2) increase the maximum aggregate amount of such Lender's Commitment, (3)
postpone the scheduled final maturity date of the Loans, (4) postpone the date  
on which any interest or any fees are payable, (5) decrease the interest rate   
borne by any Loan (other than any waiver of any increase in the interest rate   
applicable to any of the Loans pursuant to subsection 2.2C) or the amount of any
fees payable hereunder, or (6) change in any manner or waive the provisions     
contained in subsection 7.1; (b) each Lender, (1) change in any manner the      
definition of "Pro Rata Share" or the definition of "Requisite Lenders" (except 
for any changes resulting solely from an increase in Commitments approved by    
Requisite Lenders), (2) change in any manner any provision of this Agreement    
that, by its terms, expressly requires the approval or concurrence of all       
Lenders, (3) release any Lien granted in favor of Administrative Agent or       
Collateral Agent with respect to all or substantially all of the Collateral     
(except that such Lien may be released on all or substantially all Collateral to
the extent such release is required in connection with an Asset Sale or Asset   
Sales permitted                                                                 

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under this Agreement), or release any substantial portion of Borrowers from     
their obligations under this Agreement (except that all or any number of        
Borrowers may be released from such obligations to the extent such release is   
required in connection with an Asset Sale or Asset Sales permitted under this   
Agreement), or (4) change in any manner or waive the provisions contained in    
subsection 9.6; (c) Administrative Agent, change in any manner the definition of
"Eligible Assignee"; and (d) Administrative Agent, affect the rights or duties  
of Administrative Agent (in its capacity as Administrative Agent) under this    
Agreement or any other Loan Document.                                           

               In addition, (i) no amendment, modification, termination or
waiver of any provision of any Note shall be effective without the written      
concurrence of the Lender which is the holder of that Note; and (ii) no         
amendment, modification, termination or waiver of any provision of Section 9 or 
of any other provision of this Agreement which, by its terms, expressly requires
the approval or concurrence of Administrative Agent shall be effective without  
the written concurrence of Administrative Agent, as the case may be.            
Administrative Agent may, but shall have no obligation to, with the concurrence 
of any Lender, execute amendments, modifications, waivers or consents on behalf 
of that Lender. Any waiver or consent shall be effective only in the specific   
instance and for the specific purpose for which it was given. No notice to or   
demand on any Borrower or Borrowers in any case shall entitle any Borrower or   
Borrowers to any other or further notice or demand in similar or other          
circumstances. Any amendment, modification, termination, waiver or consent      
effected in accordance with this subsection 9.6 shall be binding upon each      
Lender at the time outstanding, each future Lender and, if signed by Borrowers, 
on Borrowers. Administrative Agent agrees that promptly after the effectiveness 
of any amendment, termination, supplement, waiver or other modification of this 
Agreement it shall provide, or cause to be provided, to each Lender a copy      
thereof to the extent such a copy is available to Administrative Agent.         

9.7      INDEPENDENCE OF COVENANTS.                           

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

9.8      NOTICES; EFFECTIVENESS OF SIGNATURES.                

                Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, or sent by telefacsimile or United States mail or 
courier service or (subject to the following paragraphs in this subsection 9.8) 
electronic mail and shall be deemed to have been given (a) when delivered in    
person or by courier service, (b) upon receipt of telefacsimile in complete and 
legible form, (c) three Business Days after depositing it in the United States  
mail with postage prepaid and properly addressed, or (d) in the case of         
communications delivered by electronic mail to the extent provided in the       
following paragraph, as provided pursuant to such paragraph; provided that      
notices to Administrative Agent shall not be effective until received. For the  
purposes hereof, the address of each party hereto shall be as set forth under   
such party's name on the signature pages hereof or (i) as to Company and        
Administrative Agent, such other address as                                     

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shall be designated by such Person in a written notice delivered to the other   
parties hereto and (ii) as to each other party, such other address as shall be  
designated by such party in a written notice delivered to Administrative Agent. 

                 Notices and other communications to the Lenders hereunder may
be delivered or furnished by electronic communication (including e-mail and     
Internet or intranet websites) pursuant to procedures approved by Administrative
Agent, provided that the foregoing shall not apply to notices to any Lender     
pursuant to Section 2 hereof if such Lender has notified Administrative Agent   
that it is incapable of receiving notices under such Section by electronic      
communication. Administrative Agent or any Borrower may, in its discretion,     
agree to accept notices and other communications to it hereunder by electronic  
communications pursuant to procedures approved by it, provided that approval of 
such procedures may be limited to particular notices or communications.         

              Loan Documents and notices under the Loan Documents may be
transmitted and/or signed by telefacsimile. The effectiveness of any such       
documents and signatures shall, subject to applicable law, have the same force  
and effect as an original copy with manual signatures and shall be binding on   
all Loan Parties, Administrative Agent and Lenders. Administrative Agent may    
also require that any such documents and signature be confirmed by a            
manually-signed copy thereof; provided, however, that the failure to request or 
deliver any such manually-signed copy shall not affect the effectiveness of any 
facsimile document or signature.                                                

  9.9      SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

                 A. All representations, warranties and agreements made herein
or in any other Loan Document shall survive the execution and delivery of this  
Agreement and the making of the Loans hereunder.                                

               B. Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of Borrowers set forth in subsections 2.6,  
9.2, 9.3, 9.4, 9.19 and 9.20 and the agreements of Lenders set forth in         
subsections 8.2C, 8.4, 9.5, 9.19 and 9.20 shall survive the payment of the      
Loans, and the termination of this Agreement (and the benefits to a Lender of   
such agreements of Borrowers shall survive such Lender's ceasing to be a party  
hereto pursuant to subsection 9.1B).                                            

 9.10     FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.

                 No failure or delay on the part of Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan     
Document shall impair such power, right or privilege or be construed to be a    
waiver of any default or acquiescence therein, nor shall any single or partial  
exercise of any such power, right or privilege preclude other or further        
exercise thereof or of any other power, right or privilege. All rights and      
remedies existing under this Agreement and the other Loan Documents are         
cumulative to, and not exclusive of, any rights or remedies otherwise available.

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9.11     MARSHALLING; PAYMENTS SET ASIDE.                     

                 Neither Agent nor any Lender shall be under any obligation to
marshal any assets in favor of Company or any other party or against or in      
payment of any or all of the Obligations. To the extent that Company makes a    
payment or payments to Administrative Agent or Lenders (or to Administrative    
Agent for the benefit of Lenders), or Administrative Agent or Lenders enforce   
any security interests or exercise their rights of setoff, and such payment or  
payments or the proceeds of such enforcement or setoff or any part thereof are  
subsequently invalidated, declared to be fraudulent or preferential, set aside  
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable     
cause, then, to the extent of such recovery, the obligation or part thereof     
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as  
if such payment or payments had not been made or such enforcement or setoff had 
not occurred.                                                                   

9.12     SEVERABILITY.                                        

                  In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the   
validity, legality and enforceability of the remaining provisions or            
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.                                 

      9.13     OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS;
DAMAGE WAIVER.                              

                  The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender     
hereunder. Nothing contained herein or in any other Loan Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute      
Lenders, or Lenders and Company, as a partnership, an association, a Joint      
Venture or any other kind of entity. The amounts payable at any time hereunder  
to each Lender shall be a separate and independent debt, and each Lender shall  
be entitled to protect and enforce its rights arising out of this Agreement and 
it shall not be necessary for any other Lender to be joined as an additional    
party in any proceeding for such purpose.                                       

           To the extent permitted by law, each Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of   
liability, for special, indirect, consequential or punitive damages (as opposed 
to direct or actual damages) arising out of, in connection with or as a result  
of this Agreement, any other Loan Document, any transaction contemplated by the 
Loan Documents, any Loan or the use of proceeds thereof.                        

9.14     RELEASE OF SECURITY INTEREST .                       

                 Upon the proposed sale or other disposition of any Collateral
that is permitted by this Agreement and the Intercreditor Agreement or, subject 
to the Intercreditor Agreement, to which Requisite Lenders have otherwise       
consented, for which a Loan Party desires to obtain a security interest release 
from Collateral Agent, such Loan Party shall deliver to Administrative Agent and
Collateral Agent an Officer's Certificate (i) stating that the Collateral       
subject to such                                                                 

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disposition is being sold or otherwise disposed of in compliance with the terms 
hereof and of the Loan Documents and (ii) specifying the Collateral being sold  
or otherwise disposed of in the proposed transaction. Upon the receipt of such  
Officer's Certificate, Collateral Agent shall, at such Loan Party's expense, so 
long as Collateral Agent (a) believes in good faith that the facts stated in    
such Officer's Certificate are true and correct and (b), if the sale or other   
disposition of such item of Collateral constitutes an Asset Sale, shall have    
received evidence satisfactory to it that arrangements satisfactory to it have  
been made for delivery of the Net Asset Sale Proceeds if and as required by     
subsection 2.4, execute and deliver such releases of its security interest in   
such Collateral, as may be reasonably requested by such Loan Party. In the event
of any conflict or inconsistency between this subsection 9.14 and the terms of  
the Intercreditor Agreement, the terms of the Intercreditor Agreement shall     
prevail.                                                                        

9.15     HEADINGS.                                            

                  Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.             

9.16     APPLICABLE LAW.                                      

                THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER OR ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE GOVERNED BY, 
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF   
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT     
WOULD REQUIRE APPLICATION OF ANOTHER LAW.                                       

9.17     CONSTRUCTION OF AGREEMENT.                           

            Each of the parties hereto acknowledges that it has been
represented by counsel in the negotiation and documentation of the terms of this
Agreement, that it has had full and fair opportunity to review and revise the   
terms of this Agreement, and that this Agreement has been drafted jointly by all
of the parties hereto. Accordingly, each of the parties hereto acknowledges and 
agrees that the terms of this Agreement shall not be construed against or in    
favor of another party.                                                         

9.18     CONSENT TO JURISDICTION AND SERVICE OF PROCESS.      

                 ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY BORROWER ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY         
OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF         
COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK (AS ANY AGENT, 
AGENTS, LENDER OR LENDERS BRINGING SUCH ACTION MAY ELECT IN ITS OR THEIR SOLE   
DISCRETION). BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH BORROWER, FOR     
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY                       

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   (I)      ACCEPTS (AND SUBMITS TO) GENERALLY AND
         UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;

        (II)     WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

           (III)    AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
     PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
 MAIL, RETURN RECEIPT REQUESTED, TO SUCH BORROWER AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SUBSECTION 9.8;                   

                  (IV)     AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE
         IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH BORROWER IN ANY
        SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT;                         

                  (V)      AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS
      IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST
SUCH BORROWER IN THE COURTS OF ANY OTHER JURISDICTION; AND    

               (VI)     AGREES THAT THE PROVISIONS OF THIS SUBSECTION 9.18
        RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO
       THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.                                  

9.19     WAIVER OF JURY TRIAL.                                

                EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY      
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this   
waiver is intended to be all-encompassing of any and all disputes that may be   
filed in any court and that relate to the subject matter of this transaction,   
including contract claims, tort claims, breach of duty claims and all other     
common law and statutory claims. Each party hereto acknowledges that this waiver
is a material inducement to enter into a business relationship, that each has   
already relied on this waiver in entering into this Agreement, and that each    
will continue to rely on this waiver in their related future dealings. Each     
party hereto further warrants and represents that it has reviewed this waiver   
with its legal counsel and that it knowingly and voluntarily waives its jury    
trial rights following consultation with legal counsel. THIS WAIVER IS          
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING    
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
9.19 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS,                                                      

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RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER    
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS    
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a    
written consent to a trial by the court.                                        

9.20     CONFIDENTIALITY.                                     

              Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement that has been identified as      
confidential by Company in accordance with such Lender's customary procedures   
for handling confidential information of this nature and in accordance with safe
and sound banking practices, it being understood and agreed by Borrowers that in
any event a Lender may make (a) disclosures to Affiliates and professional      
advisors of such Lender, (b) disclosures reasonably required by (i) any bona    
fide assignee, transferee or participant in connection with the contemplated    
assignment or transfer by such Lender of any Loans or any participations        
therein, or (ii) any direct or indirect contractual counterparties in swap      
agreements or such contractual counterparties' professional advisors provided   
that such assignee, transferee, participant, contractual counterparty or        
professional advisor agrees to keep such information confidential to the same   
extent required of Lenders hereunder, (c) disclosures to any court or tribunal  
(whether or not pursuant to subpoena) in connection with any action arising out 
of or related to this Agreement, or (d) disclosures required or requested by any
Government Authority or representative thereof or pursuant to legal process;    
provided that, unless specifically prohibited by applicable law or court order, 
each Lender shall notify Company of any request by any Government Authority or  
representative thereof (other than any such request in connection with any      
examination of such Lender by such Government Authority) for disclosure of any  
such non-public information prior to disclosure of such information; and        
provided, further that in no event shall any Lender be obligated or required to 
return any materials furnished by Company or any of its Subsidiaries.           

                Notwithstanding anything herein to the contrary, information
required to be treated as confidential by reason of the foregoing shall not     
include, and Administrative Agent, each Lender and the respective Affiliates of 
each of the foregoing (and the respective partners, directors, officers,        
employees, agents, advisors and other representatives of each of the foregoing  
and their respective Affiliates) (collectively, the "LENDER PARTIES") may       
disclose to any and all Persons, without limitation of any kind, (x) any        
information with respect to United States federal and state income tax treatment
and United States federal income tax structure of the transactions contemplated 
hereby and any facts that may be relevant to understanding such tax treatment,  
which facts shall not include for this purpose the names of the parties or any  
other Person named herein, or information that would permit identification of   
the parties or such other Persons, or any pricing terms or other non-public     
business or financial information that is unrelated to such tax treatment or    
facts, and (y) all materials of any kind (including opinions or other tax       
analyses) relating to such tax treatment or facts that are provided to any of   
the Lender Parties.                                                             

9.21     RELEASE OF PARTIES; WAIVERS.                         

         A. Each Borrower, on behalf of itself and each of its
Subsidiaries (collectively, the "RELEASORS"), hereby releases, remises, acquits 
and forever discharges each Agent, each Lender (in its capacity as a Lender     
hereunder and as a lender, collateral agent or depository and                   

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in any other capacity under or in connection with the Prepetition Credit        
Documents or the DIP Credit Documents), each other Prepetition Lender and DIP   
Lender (in its capacity as a lender, collateral agent or depository and in any  
other capacity under or in connection with the Prepetition Credit Documents or  
the DIP Credit Documents), and each of their respective employees, agents,      
representatives, consultants, attorneys, fiduciaries, servants, officers,       
directors, partners, predecessors, successors and assigns, subsidiary           
corporations, parent corporations, related corporate divisions, participants and
assigns (all of the foregoing hereinafter called the "RELEASED PARTIES"), from  
any and all actions and causes of action, judgments, executions, suits, debts,  
claims, demands, liabilities, obligations, setoffs, recoupments, counterclaims, 
defenses, damages and expenses of any and every character, known or unknown,    
suspected or unsuspected, direct and/or indirect, at law or in equity, of       
whatsoever kind or nature, whether heretofore or hereafter arising, for or      
because of any matter or things done, omitted or suffered to be done by any of  
the Released Parties prior to and including the date of execution hereof, and in
any way directly or indirectly arising out of or in any way connected to this   
Agreement, any of the other Loan Documents, the Prepetition Credit Documents,   
and DIP Credit Documents or the administration or enforcement of any of such    
documents (all of the foregoing hereinafter called the "RELEASED MATTERS"). Each
Releasor acknowledges that the agreements in this subsection are intended to be 
in full satisfaction of all or any alleged injuries or damages suffered or      
incurred by such Releasor arising in connection with the Released Matters and   
constitute a complete waiver of any right of setoff or recoupment, counterclaim 
or defense of any nature whatsoever which arose prior to the Closing Date to    
payment or performance of the Obligations. Each Releasor represents and warrants
that it has no knowledge of any claim by it against the Released Parties or of  
any facts, or acts or omissions of the Released Parties which on the date hereof
would be the basis of a claim by the Releasors against the Released Parties     
which is not released hereby. Each Releasor represents and warrants that it has 
not purported to transfer, assign, pledge or otherwise convey any of its right, 
title or interest in any Released Matter to any other person or entity and that 
the foregoing constitutes a full and complete release of all Released Matters.  
Releasors have granted this release freely, and voluntarily and without duress. 

9.22     NO FIDUCIARY DUTY.                                   

                No Agent nor any Lender has or shall have, by reason of this
Agreement or any of the Loan Documents, a fiduciary relationship in respect of, 
or a fiduciary duty to, any Borrower, Borrowers, any other Loan Party or Loan   
Parties, and the relationship between Administrative Agent and Lenders, on one  
hand, and each Borrower, on the other hand, in connection herewith or therewith 
is solely that of debtor and creditor.                                          

9.23     COUNTERPARTS; EFFECTIVENESS.                         

           This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of   
counterparts and by different parties hereto in separate counterparts, each of  
which when so executed and delivered shall be deemed an original, but all such  
counterparts together shall constitute but one and the same instrument;         
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to  
the same document. This                                                         

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Agreement shall become effective upon the execution of a counterpart hereof by  
each of the parties hereto.                                                     

9.24     NO THIRD PARTY BENEFICIARIES                         

           Nothing in this Agreement, express or implied, shall be
construed to confer upon any Person (other than the parties hereto, their       
respective successors and assigns permitted hereby and, to the extent expressly 
contemplated hereby, the Indemnitees and Released Parties related to            
Administrative Agent, and Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.                                           

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

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BORROWERS:        

         COVANTA POWER INTERNATIONAL
           HOLDINGS, INC., as a Borrower

                         By: _______________________________________
             Name:  Ashish D. Sarkar
                Title:  Authorized Officer

          Notice Address for Borrower:
                          c/o Covanta Energy Corporation
        40 Lane Road
               Fairfield, NJ 07007
                    Attn: Timothy J. Simpson

             COVANTA POWER DEVELOPMENT, INC.
          COVANTA POWER DEVELOPMENT OF
 BOLIVIA, INC.
                    COVANTA WASTE TO ENERGY OF ITALY, INC.
            OPI QUEZON, INC., as Borrowers

                         By: _______________________________________
            Name:  Anthony Orlando
                Title:  Authorized Officer

          Notice Address for Borrower:
                          c/o Covanta Energy Corporation
        40 Lane Road
               Fairfield, NJ 07007
                    Attn: Timothy J. Simpson

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               DEUTSCHE BANK AG, NEW YORK BRANCH
              By:  DB Service New Jersey, Inc.
                as Administrative Agent and Lender

                         By: _______________________________________
Name:     
Title:    

                         By: _______________________________________
Name:     
Title:    

     Notice Address:
                                 Attention:  Troy Ennico
                                           Deutsche Bank AG, New York Branch
                        60 Wall Street
                            New York, NY 10005

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K’ Filing		Date		First		Last			Other Filings
		12/31/07		12		63			10-K
		3/10/07		28
		12/31/04		12					10-K,  10-K/A
		12/15/04		84					8-K
		6/30/04		101					10-Q
		3/31/04		101					10-Q,  10-Q/A
Filed on:		3/15/04
		3/10/04		1		10			8-K,  8-K/A
		3/5/04		14
		3/2/04		33
		2/18/04		33		61
		1/14/04		33
For Period End:		12/31/03							10-K/A
		12/18/03		61
		12/2/03		66					4,  8-K,  8-K/A
		11/21/03		59
		11/15/03		98		103
		9/30/03		63		70			10-Q
		6/30/03		63		70			10-Q
		3/31/03		63		70
		12/31/02		63		71			8-K
		4/1/02		9		17			10-K
		3/14/01		33
									List all Filings