Exhibit 10.2
                                                                    ------------


                                 NINTH AMENDMENT
                             TO DEBTOR-IN-POSSESSION
                      CREDIT AGREEMENT AND LIMITED CONSENT



         This NINTH AMENDMENT TO DEBTOR-IN-POSSESSION CREDIT AGREEMENT AND
LIMITED CONSENT (this "Amendment") is dated as of September 15, 2003 and entered
into by and among COVANTA ENERGY CORPORATION, a Delaware corporation
("Company"), and THE SUBSIDIARIES OF COMPANY LISTED ON THE SIGNATURE PAGES
HEREOF AS BORROWERS (collectively, Company and such Subsidiaries of Company are
"Borrowers" and each a "Borrower"), THE SUBSIDIARIES OF COMPANY LISTED ON THE
SIGNATURE PAGES HEREOF AS SUBSIDIARY GUARANTORS (collectively, the "Subsidiary
Guarantors"), THE LENDERS PARTY HERETO, BANK OF AMERICA, N.A., as Administrative
Agent for the Lenders ("Administrative Agent"), and DEUTSCHE BANK AG, NEW YORK
BRANCH, as Documentation Agent for the Lenders ("Documentation Agent"), and is
made with reference to that certain Debtor-in-Possession Credit Agreement dated
as of April 1, 2002, as amended by that certain First Amendment to
Debtor-in-Possession Credit Agreement and Security Agreement dated as of April
3, 2002, that certain Second Amendment to Debtor-in-Possession Credit Agreement
dated as of May 10, 2002, that certain Third Amendment and Limited Waiver to
Debtor-in-Possession Credit Agreement dated as of October 4, 2002, that certain
Fourth Amendment to Debtor-in-Possession Credit Agreement and Limited Consent
dated as of December 10, 2002, that certain Fifth Amendment to
Debtor-in-Possession Credit Agreement dated as of December 18, 2002, that
certain Sixth Amendment to Debtor-in-Possession Credit Agreement, Limited
Consent and Amendment to Security Agreement dated as of March 25, 2003, that
certain Seventh Amendment to Debtor-in-Possession Credit Agreement and Limited
Consent dated as of May 23, 2003 and that certain Eighth Amendment to
Debtor-in-Possession Credit Agreement and Limited Consent dated as of August 22,
2003 (as so amended, the "Credit Agreement"), by and among Borrowers, the
financial institutions parties thereto as Lenders, Documentation Agent and
Administrative Agent. Capitalized terms used herein without definition shall
have the same meanings herein as set forth in the Credit Agreement (as amended
by this Amendment).

                                    RECITALS

         WHEREAS, Borrowers and the undersigned Lenders desire to extend the
termination date of the credit facilities under the Credit Agreement and to make
certain other amendments to the Credit Agreement, subject to the terms and
conditions set forth below;

         NOW, THEREFORE, in consideration of the premises and agreements,
provisions and covenants herein contained, the parties hereto agree as follows:

         SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT AND LIMITED CONSENT

         1.1 Provisions Relating to Defined Terms.

               A. Subsection 1.1 of the Credit Agreement is hereby amended by
deleting the definitions of "Minimum Cumulative Consolidated Operating Income
Schedule" and "Monthly Budget" in their entirety and inserting the following new
definitions in the appropriate alphabetical order:

                  "Minimum Cumulative Consolidated Operating Income Schedule"
         has the meaning assigned to that term in subsection 6.1(xxi); provided,
         however, that the Minimum Cumulative Consolidated Operating Income
         Schedule shall be deemed supplemented (i) as of the Sixth Amendment
         Effective Date by the supplement thereto delivered to the Agents in
         accordance with Section 3.1 of the Sixth Amendment and (ii) by, and as
         of the date of delivery of, the supplement thereto delivered to the
         Agents in accordance with subsection 6.1(xxiv) of this Agreement.

                  "Monthly Budget" means, (i) prior to the Sixth Amendment
         Effective Date, the consolidated cash flow projections delivered by
         Borrowers to Agents pursuant to subsection 4.1F for each month ending
         during the Budget Period, setting forth on a line-item basis monthly
         anticipated cash receipts and disbursements, provided that, upon
         approval by Agents or Requisite Lenders, as the case may be, of any
         monthly cash flow projections delivered pursuant to subsection
         6.1(xix)(a) or pursuant to clause (iv) of the definition of "Final
         Borrowing Order", the Monthly Budget described in this clause (i) shall
         be deemed supplemented and/or restated with respect to the following
         month and each month thereafter in the Budget Period by the projections
         for each such month covered by such approved cash flow projections;
         (ii) on and after the Sixth Amendment Effective Date and prior to the
         Ninth Amendment Effective Date, the consolidated cash flow projections
         attached to the Sixth Amendment as Annex A (Exhibit XVI), setting forth
         on a line-item basis monthly anticipated cash receipts and
         disbursements; and (iii) on and after the Ninth Amendment Effective
         Date, the consolidated cash flow projections attached to the Ninth
         Amendment as Annex A (Exhibit XVI), setting forth on a line-item basis
         monthly anticipated cash receipts and disbursements.

               B. Subsection 1.1 of the Credit Agreement is hereby amended by
inserting the following new definitions in the appropriate alphabetical order:

                  "Amended Onondaga Service Agreement" means an amendment to or
         amendment and restatement of the operating or service agreement between
         Covanta Onondaga and OCRRA relating to the resource recovery facilities
         for the Onondaga Project, as in effect on the Ninth Amendment Effective
         Date, which amendment or amendment and restatement shall be in form and
         substance satisfactory to Agents and shall be substantially similar to
         the existing service agreement between Covanta Onondaga and OCRRA,
         except that such agreement between Covanta Onondaga and OCRRA shall
         provide, among other things, for (i) the Onondaga Project
         Restructuring, and (ii) a waiver by OCRRA of the obligation of Company
         and its Subsidiaries to provide credit enhancement for Covanta
         Onondaga's obligations.

                  "Covanta Onondaga" means Covanta Onondaga Limited Partnership,
         a Delaware limited partnership.

                  "Mizuho Letters of Credit" means (i) the Tranche B Letter of
         Credit issued by Mizuho Corporate Bank Ltd. (formerly known as Dai-Ichi
         Kangyo Bank) in the face amount of $7,520,423.00 immediately prior to
         the Ninth Amendment Effective Date and (ii) the Tranche B Letter of
         Credit issued by Mizuho Corporate Bank Ltd. (formerly known as Dai-Ichi
         Kangyo Bank) in the face amount of $14,951,617.00 immediately prior to
         the Ninth Amendment Effective Date.

                  "Ninth Amendment" means the Ninth Amendment to
         Debtor-In-Possession Credit Agreement and Limited Consent dated as of
         September 15, 2003.

                  "Ninth Amendment Effective Date" has the meaning assigned to
         that term in Section 4.5 of the Ninth Amendment.

                  "OCRRA" Onondaga County Resource Recovery Agency.

                  "Onondaga Project" means the waste-to-energy Project in
         Onondaga County, New York.

                  "Onondaga Project Bonds" means the $147,300,000 in principal
         amount of bonds issued by OCRRA relating to the Onondaga Project
         outstanding on the Ninth Amendment Effective Date.

                  "Onondaga Project Guaranty" means a performance guaranty,
         which guaranty shall be in form and substance satisfactory to Agents,
         by Company of Covanta Onondaga's obligations under the Amended Onondaga
         Service Agreement.

                  "Onondaga Project Restructuring" means, collectively, the
         transactions described in the term sheet attached to the Ninth
         Amendment as Annex B, including, without limitation, (i) the execution
         and delivery by Covanta Onondaga and OCRRA of the Amended Onondaga
         Service Agreement, (ii) the termination of the existing project
         guaranty for the Onondaga Project, (iii) the execution and delivery by
         Company of the Onondaga Project Guaranty, (iv) the refinancing of the
         Onondaga Project Bonds on substantially the terms set forth in such
         term sheet, including appropriate amendments to the mortgage and
         security agreement, facility lease agreement, and other financing
         agreements and instruments relating to the Onondaga Project to which
         Covanta Onondaga is a party, (v) the execution and delivery by OCRRA of
         a market rate agreement for the delivery of waste after the expiration
         of the Amended Service Agreement, (vi) the execution and delivery by
         Company and Covanta Onondaga of an agreement providing for the
         performance of operations and maintenance services for the period
         following expiration of the Amended Service Agreement, together with a
         limited guaranty from Company with respect to Covanta Onondaga's
         obligations thereunder, (vii) the termination of the existing tax
         indemnity agreement between, and Company's guaranty for the benefit of,
         the limited partners of Covanta Onondaga with respect to the
         obligations of Covanta Onondaga and its general partners relating to
         the Onondaga Project, (viii) the amendment of the Covanta Onondaga
         partnership agreement to, among other things, eliminate put rights of
         and the minimum cash support requirements to the limited partners, and
         modify the requirements relating to the distributions of net cash flow,
         (ix) the establishment by Covanta Onondaga of a major maintenance
         reserve account of up to $5.0 million for major maintenance funding
         through annual excess waste fees, (x) the agreement by OCRRA and the
         limited partners of Covanta Onondaga that Bankruptcy Court approval of
         the Onondaga Project Restructuring shall not create any priority claims
         against the bankruptcy estates of Company, Covanta Onondaga or any of
         their Affiliates, and (xi) the agreement by OCRRA and the limited
         partners of Covanta Onondaga to withdraw their respective prepetition
         and postpetition claims (to the extent arising on or before the closing
         of the Onondaga Project Restructuring) against Company, Covanta
         Onondaga and their Affiliates if the agreements relating to the
         Onondaga Project Restructuring are assumed by Company and Covanta
         Onondaga in the plan of reorganization in the Chapter 11 Cases, all
         such transactions occurring after the Ninth Amendment Effective Date
         and pursuant to documentation in form and substance satisfactory to
         Agents.

                  "Onondaga Project Restructuring Conditions" means,
         collectively, (i) the consummation of the Onondaga Project
         Restructuring, (ii) delivery by Company to Agents of an Officer's
         Certificate certifying that the requirements of the Onondaga Project
         Restructuring set forth in clauses (i) through (xi) of the definition
         of "Onondaga Project Restructuring" have been met and that Covanta
         Onondaga and Company have no outstanding or further obligations to
         OCRRA under the agreement described in clause (ii) of such definition,
         and (iii) delivery to Agents of written evidence, in form and substance
         satisfactory to Agents, of the agreements by OCRRA and the limited
         partners of Covanta Onondaga described in clauses (x) and (xi) of the
         definition of "Onondaga Project Restructuring".

                  "Onondaga Project Restructuring Liens" means Liens to be
         granted by Covanta Onondaga on the major maintenance reserve account
         described in clause (ix) of the definition of "Onondaga Project
         Restructuring", to secure major capital replacement and repair
         obligations with respect to the Onondaga Project.

               C. The definition of "Stated Maturity Date" in subsection 1.1 of
the Credit Agreement is hereby amended by inserting at the end thereof the
following sentence:

         "On and as of the Ninth Amendment Effective Date, the Stated Maturity
         Date shall be deemed to have been extended to April 1, 2004 pursuant to
         the second proviso to the first sentence of this definition.".

                  1.2 Provisions Relating to Tranche B Letters of Credit.

                  Subsection 3.1A of the Credit Agreement is hereby amended by
         adding at the end thereof the following new paragraph (iv):

                  "(iv) Mizuho Letters of Credit. Notwithstanding anything
         contained herein to the contrary, after the Ninth Amendment Effective
         Date (1) each of the Mizuho Letters of Credit shall be replaced with a
         standby letter of credit issued by BofA, in an identical face amount
         and on substantially identical terms to the relevant replaced Mizuho
         Letter of Credit, except that the maturity of each such replacement
         letter of credit shall be March 31, 2004, (2) each such letter of
         credit issued by BofA shall constitute, upon the issuance thereof, a
         Tranche B Letter of Credit for all purposes of this Agreement and the
         Loan Documents and shall be deemed by Borrowers and Lenders to be a
         renewal and extension of the relevant Mizuho Letter of Credit replaced
         thereby and a "deemed issuance" of a Tranche B Letter of Credit
         pursuant to subsection 3.1A(ii) of the Credit Agreement, and (3) BofA
         shall be the Issuing Lender with respect to each such Tranche B Letter
         of Credit and Borrowers shall be deemed to have requested that such
         Issuing Lender issue such Tranche B Letter of Credit to replace the
         Mizuho Letters of Credit.".

         1.3 Provisions Relating to Affirmative Covenants.

                  Subsection 6.1 of the Credit Agreement is hereby amended by
(i) deleting the "and" at the end of clause (xxii) thereof, (ii) deleting the
"." at the end of clause (xxiii) thereof and substituting therefor "; and", and
(iii) adding at the end thereof the following new clause (xxiv):

                  "(xxiv) On or before September 30, 2003, Borrowers shall have
         delivered to Agents (A) projected financial statements for Company and
         its Subsidiaries for the fourth Fiscal Quarter of 2003 and the first
         Fiscal Quarter of 2004, such projected financial statements to (i) be
         prepared on a consolidated and consolidating basis in accordance with
         GAAP, (ii) be in form and substance reasonably satisfactory to Agents,
         and (iii) contain projections of cash flows for each such period and
         such other financial information and projections for such periods as
         Agents may reasonably request, and (B) a supplement to the Minimum
         Cumulative Consolidated Operating Income Schedule satisfactory in form
         and substance to Agents.".

         1.4 Provisions Relating to Negative Covenants.

               A. Subsection 7.2A of the Credit Agreement is hereby amended by
(i) deleting the "and" at the end of clause (x) thereof, (ii) deleting the "."
at the end of clause (xi) thereof and substituting therefor "; and", and (iii)
adding at the end thereof the following new clause (xii):

                  "(xii) Company and Covanta Onondaga may enter into an
         agreement to grant the Onondaga Project Restructuring Liens, so long as
         (a) such agreement is entered into concurrently with the consummation
         of the Onondaga Project Restructuring and (b) the Onondaga Project
         Restructuring Conditions are satisfied.".

               B. Subsection 7.4 of the Credit Agreement is hereby further
amended by (i) deleting the "and" at the end of clause (vi) thereof, (ii)
deleting the "." at the end of clause (vii) thereof and substituting therefor ";
and", and (iii) adding at the end thereof the following new clause (viii):

                  "(viii) Company may become and remain liable with respect to
         the Onondaga Project Guaranty concurrently with the consummation of the
         Onondaga Project Restructuring, so long as the Onondaga Project
         Restructuring Conditions are satisfied.".

               C. Subsection 7.14A of the Credit Agreement is hereby amended by
adding immediately after the end of the last sentence thereof the following new
sentence:

                  "Nothing in this subsection 7.14A shall prohibit Company and
         its Subsidiaries from consummating the Onondaga Project Restructuring,
         so long as the Onondaga Project Restructuring Conditions are
         satisfied.".

         1.5 Provisions Relating to Events of Default.

               A. Subsection 8.6 of the Credit Agreement is hereby amended by
inserting immediately prior to the ")" at the end of the last parenthetical
phrase contained therein the following:

         "; and provided, further, however, that neither the consummation of the
         Onondaga Project Restructuring nor the filing of any motion,
         application or other petition to effect any order or consent to
         consummate the Onondaga Project Restructuring shall constitute an Event
         of Default under this subsection 8.6 so long as the Onondaga Project
         Restructuring Conditions are satisfied".

               B. Subsection 8.15 of the Credit Agreement is hereby amended by
inserting immediately prior to the ")" at the end of the last parenthetical
phrase contained therein the following:

         "; and provided, further, however, that the consummation of the
         Onondaga Project Restructuring shall not constitute an Event of Default
         under this subsection 8.15 so long as the Onondaga Project
         Restructuring Conditions are satisfied".

         1.6 Exhibits to the Credit Agreement.

                  Exhibit XVI to the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor a new Exhibit XVI, in the
form attached hereto as Annex A.

         1.7 Limited Consents.

               A. The undersigned Lenders hereby consent to extending the Stated
Maturity Date to April 1, 2004, as requested by Company and as reflected in this
Amendment. The consent set forth in this paragraph shall be limited precisely as
written and is provided solely for the purpose of permitting the aforementioned
extension of the Stated Maturity Date, and this consent does not constitute, nor
should it be construed as, a consent to any other extension of the Stated
Maturity Date in any other instance, or as a waiver of compliance by Borrowers
with respect to any term, provision or condition of the Credit Agreement or any
other instrument or agreement referred to therein.

               B. The undersigned Lenders hereby ratify, confirm and approve all
actions taken by Administrative Agent and Issuing Lenders to extend or permit
the extension of the Tranche A Letters of Credit and Tranche B Letters of Credit
described on Annex C attached hereto to the respective dates set forth on such
Annex. The ratification, confirmation and approval set forth in this paragraph
shall be limited precisely as written, and this ratification, confirmation and
approval does not constitute, nor should it be construed as, a waiver of
compliance by Borrowers or Lenders with respect to (i) subsection 3.1A(i) or
3.1A(ii) of the Credit Agreement except to the extent of the extensions
expressly ratified, confirmed and approved in this paragraph, (ii) subsection
3.1A(i) or 3.1A(ii) of the Credit Agreement in any other instance, or (iii) any
other term, provision or condition of the Credit Agreement or any other
instrument or agreement referred to therein.

               C. Each of the undersigned Lenders hereby approves of and
consents to the Company's application to the Bankruptcy Court for authority to
make an amendment to the Final Borrowing Order to release existing escrowed
partnership distributions of Covanta Onondaga in connection with the Onondaga
Project Restructuring. The consent set forth in this paragraph shall be limited
precisely as written, and this consent does not constitute, nor should it be
construed as, a consent to any other application to amend, modify or waive any
provision of the Final Borrowing Order in any other instance, or as a waiver of
compliance by Borrowers with respect to any term, provision or condition of the
Credit Agreement or any other instrument or agreement referred to therein.

               D. Nothing herein shall be deemed to prejudice any right, remedy
or privilege that any Agent or any Lender may now have or may have in the future
under or in connection with the Credit Agreement or the Amended Agreement (as
defined below).

        SECTION 2. BORROWER'S REPRESENTATIONS AND WARRANTIES

                  In order to induce the Lenders to enter into this Amendment
and to amend the Credit Agreement in the manner provided herein, Borrowers
represent and warrant to each Lender that the following statements are true,
correct and complete:

         2.1 Corporate Power and Authority. Subject to compliance with
the Final Borrowing Order and any applicable provisions of the Bankruptcy Code,
each Loan Party has all requisite corporate power and authority to enter into
this Amendment and to carry out the transactions contemplated by, and perform
its obligations under, the Credit Agreement as amended by this Amendment (the
"Amended Agreement").

         2.2 Authorization of Agreements. The execution and delivery of this
Amendment has been duly authorized by all necessary corporate action on the part
of each Loan Party and the performance of the Amended Agreement has been duly
authorized by all necessary corporate action on the part of each Loan Party.

         2.3 No Conflict. The execution and delivery by each Loan Party of this
Amendment and the performance by each Borrower of the Amended Agreement do not
and will not (i) violate any provision of any law or any governmental rule or
regulation applicable to Company or any of its Subsidiaries, the Organizational
Documents of Company or any of its Subsidiaries or any order, judgment or decree
of any court or other Government Authority binding on 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
(which Contractual Obligation is enforceable on a post-Petition Date basis) of
Company or any of its Subsidiaries or an applicable order of the Bankruptcy
Court, (iii) result in or require the creation or imposition of any Lien upon
any of the properties or assets of Company or any of its Subsidiaries, or (iv)
require any approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of Company or any of its Subsidiaries.

         2.4 Governmental Consents. The execution and delivery by each Loan
Party of this Amendment and the performance by each Loan Party of the Amended
Agreement do not and will not require any Governmental Authorization.

         2.5 Binding Obligation. This Amendment has been duly executed and
delivered by each Loan Party, and each of this Amendment and the Amended
Agreement is the legally valid and binding obligations of each Loan Party
enforceable against each 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.

         2.6 Incorporation of Representations and Warranties From Credit
Agreement. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Ninth Amendment Effective 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 they were
true, correct and complete in all material respects on and as of such earlier
date.

         2.7 Notice to Committee. Notice of this Amendment has been given to and
received by counsel to the official committee of unsecured creditors in the
Chapter 11 Cases and the informal committee of holders of Company's 9.25%
Debentures.

         2.8 Absence of Default. As of the date hereof after giving effect
hereto, there exists no Event of Default or Potential Event of Default under the
Credit Agreement.

         SECTION 3. ACKNOWLEDGEMENT AND CONSENT

                  Each Borrower and Subsidiary Guarantor hereby (i) acknowledges
that such Loan Party has read this Amendment and consents to the terms hereof
and hereby confirms and agrees that, notwithstanding the effectiveness of this
Amendment, the obligations of such Loan Party under each of the Loan Documents
to which such Loan Party is a party shall not be impaired and each of the Loan
Documents to which such Loan Party is a party are, and shall continue to be, in
full force and effect and are hereby confirmed and ratified in all respects,
(ii) ratifies and confirms the effectiveness of the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment, the
Sixth Amendment, the Seventh Amendment and the Eighth Amendment in all respects,
and (iii) confirms that the provisions of the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment, the
Sixth Amendment, the Seventh Amendment and the Eighth Amendment are binding on
each of the Borrowers.

         SECTION 4. MISCELLANEOUS

         4.1 Reference to and Effect on the Credit Agreement and the Other Loan
Documents.

               A. On and after the Ninth Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement, and each
reference in the other Loan Documents to the "Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement shall mean
and be a reference to the Credit Agreement as amended by this Amendment.

               B. Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed.

               C. The execution, delivery and performance of this Amendment
shall not constitute a waiver of any provision of, or operate as a waiver of any
right, power or remedy of any Agent or any Lender under, the Credit Agreement or
any of the other Loan Documents.

         4.2 Fees and Expenses. Each Borrower acknowledges that all costs, fees
and expenses as described in subsection 10.2 of the Credit Agreement incurred by
Administrative Agent, Documentation Agent or the Lenders and their respective
counsel (including, without limitation, O'Melveny & Myers LLP and Ernst & Young
Corporate Finance LLC) with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of Borrowers.

         4.3 Headings. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.

         4.4 Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

         4.5 Counterparts; Effectiveness. This Amendment 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 Amendment shall become effective upon the first date on
which all of the following conditions precedent shall have been satisfied (the
date of satisfaction of such conditions being referred to herein as the "Ninth
Amendment Effective Date"): (i) Borrower, each Subsidiary Guarantor, and Lenders
constituting Requisite Lenders and Supermajority Tranche A Lenders shall have
each executed a counterpart hereof; (ii) Company and Administrative Agent shall
have received written or telephonic notification of such execution and
authorization of delivery of such counterparts; and (iii) Company shall have
paid in full all outstanding statements for fees and expenses of O'Melveny &
Myers LLP and Ernst & Young Corporate Finance LLC, to the extent submitted to
Company prior to 5:00 p.m. (New York City time) on September 12, 2003.

                [Remainder of this page intentionally left blank]

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.


BORROWERS:

                           COVANTA ENERGY CORPORATION


                           By:
                               --------------------------------------
                               Scott Mackin
                               Authorized Officer


                           Each of the entities named on Schedule A annexed
                           hereto, as Borrowers


                           By:
                               --------------------------------------
                               Timothy Simpson
                               Authorized Officer


                           Each of the entities named on Schedule B annexed
                           hereto, as Borrowers


                           By:
                               --------------------------------------
                               Scott Mackin
                               Authorized Officer



SUBSIDIARY GUARANTORS:

                           Each of the entities named on Schedule C annexed
                           hereto, as Subsidiary Guarantors


                           By:
                               --------------------------------------
                               Timothy Simpson
                               Authorized Officer



AGENTS AND LENDERS:

                           BANK OF AMERICA, N.A.,
                           as Administrative Agent and Co-Arranger and as a
                           Lender


                           By:
                               --------------------------------------
                               Henry Yu
                               Managing Director



                           DEUTSCHE BANK AG, NEW YORK BRANCH,
                           as Documentation Agent and Co-Arranger and as a
                           Lender


                           By:
                               --------------------------------------
                                Keith C. Braun
                                Director


                           By:
                               --------------------------------------
                               Mark B. Cohen, Managing Director
                               Head of Workout



                           BAYERISCHE HYPO-UND VEREINSBANK AG,
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES,
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           CREDIT LYONNAIS NEW YORK BRANCH,
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           WACHOVIA BANK, NATIONAL ASSOCIATION,
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           HSBC BANK USA,
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           IIB BANK LTD, IFSC BRANCH,
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           JPMORGAN CHASE BANK
                           (formerly known as The Chase Manhattan Bank),
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           LANDESBANK HESSEN-THURINGEN GIROZENTRALE,
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           MERRILL LYNCH, PIERCE & SMITH, INCORPORATED,
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           BANC OF AMERICA SECURITIES LLC, as
                           Agent for BANK OF AMERICA, N.A., as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           SPECIAL SITUATIONS INVESTING GROUP,
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           SUNTRUST BANK,
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           THE BANK OF NEW YORK,
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           THE BANK OF NOVA SCOTIA,
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           UBS AG, STAMFORD BRANCH,
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           U.S. BANK NATIONAL ASSOCIATION
                           (formerly known as Firstar Bank, N.A.),
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           WESTLB AG (formerly known as Westdeutsche Landesbank
                           Girozentrale), NEW YORK BRANCH, as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:


                           By:
                               --------------------------------------
                               Name:
                               Title:



                           BEAR STEARNS & CO. INC.,
                           as a Lender


                           By:
                               --------------------------------------
                               Name:
                               Title:


<PAGE>
                                   Schedule A
                                 Other Borrowers

1.  AMOR 14 Corp.
2.  Covanta Acquisition, Inc.
3.  Covanta Alexandria/Arlington, Inc.
4.  Covanta Babylon, Inc. 5. Covanta Bessemer, Inc.
6.  Covanta Bristol, Inc.
7.  Covanta Cunningham Environmental Support, Inc.
8.  Covanta Energy Americas, Inc.
9.  Covanta Energy Construction, Inc.
10. Covanta Energy Resource Corp.
11. Covanta Energy Sao Jeronimo, Inc.
12. Covanta Energy Services, Inc.
13. Covanta Energy West, Inc.
14. Covanta Engineering Services, Inc.
15. Covanta Fairfax, Inc.
16. Covanta Financial Services, Inc.
17. Covanta Geothermal Operations Holdings, Inc.
18. Covanta Geothermal Operations, Inc.
19. Covanta Heber Field Energy, Inc.
20. Covanta Hennepin Energy Resource Co., L.P.
21. Covanta Hillsborough, Inc.
22. Covanta Honolulu Resource Recovery Venture
23. Covanta Huntington Limited Partnership
24. Covanta Huntington Resource Recovery One Corp.
25. Covanta Huntington Resource Recovery Seven Corp.
26. Covanta Huntington, Inc.
27. Covanta Huntsville, Inc.
28. Covanta Hydro Energy, Inc.
29. Covanta Hydro Operations West, Inc.
30. Covanta Hydro Operations, Inc.
31. Covanta Imperial Power Services, Inc.
32. Covanta Indianapolis, Inc.
33. Covanta Kent, Inc.
34. Covanta Key Largo, Inc.
35. Covanta Lake, Inc.
36. Covanta Lancaster, Inc.
37. Covanta Lee, Inc.
38. Covanta Long Island, Inc.
39. Covanta Marion Land Corp.
40. Covanta Marion, Inc.
41. Covanta Mid-Conn., Inc.
42. Covanta Montgomery, Inc.
43. Covanta New Martinsville Hydro-Operations Corp.
44. Covanta Northwest Puerto Rico, Inc.
45. Covanta Oahu Waste Energy Recovery, Inc.
46. Covanta Oil & Gas, Inc.
47. Covanta Onondaga Five Corp.
48. Covanta Onondaga Four Corp.
49. Covanta Onondaga Limited Partnership
50. Covanta Onondaga Operations, Inc.
51. Covanta Onondaga Three Corp.
52. Covanta Onondaga Two Corp.
53. Covanta Onondaga, Inc.
54. Ogden Services Corporation
55. Covanta Operations of Union LLC
56. Covanta OPW Associates, Inc.
57. Covanta OPWH, Inc.
58. Covanta Pasco, Inc.
59. Covanta Plant Services of New Jersey, Inc.
60. Covanta Power Development of Bolivia, Inc.
61. Covanta Power Development, Inc.
62. Covanta Power Equity Corp.
63. Covanta Projects of Hawaii, Inc.
64. Covanta Projects of Wallingford, LP
65. Covanta RRS Holdings, Inc.
66. Covanta Secure Services USA, Inc.
67. Covanta Secure Services, Inc.
68. Covanta SIGC Energy II, Inc.
69. Covanta SIGC Energy, Inc.
70. Covanta SIGC Geothermal Operations, Inc.
71. Covanta Stanislaus, Inc.
72. Covanta Systems, Inc.
73. Covanta Tampa Bay, Inc.
74. Covanta Tulsa, Inc.
75. Covanta Union, Inc.
76. Covanta Wallingford Associates, Inc.
77. Covanta Warren Energy Resources Co., LP
78. Covanta Waste Solutions, Inc.
79. Covanta Waste to Energy of Italy, Inc.
80. Covanta Waste to Energy, Inc.
81. Covanta Water Holdings, Inc.
82. Covanta Water Systems, Inc.
83. Covanta Water Treatment Services, Inc.
84. DSS Environmental, Inc.
85. ERC Energy II, Inc.
86. ERC Energy, Inc.
87. Heber Field Company
88. Heber Field Energy II, Inc.
89. Heber Geothermal Company
90. Heber Loan Partners
91. Ogden Environmental & Energy Services Co., Inc.
92. OPI Quezon, Inc.
93. Second Imperial Geothermal Co., L.P.
94. Three Mountain Operations, Inc.
95. Three Mountain Power LLC

<PAGE>

                                   Schedule B
                                 Other Borrowers

1.  Alpine Food Products, Inc.
2.  BDC Liquidating Corp.
3.  Bouldin Development Corp.
4.  Covanta Energy Group, Inc.
5.  Covanta Energy International, Inc.
6.  Covanta Equity of Alexandria/Arlington, Inc.
7.  Covanta Equity of Stanislaus, Inc.
8.  Covanta Power International Holdings, Inc.
9.  Covanta Projects, Inc.
10. Doggie Diner, Inc.
11. Gulf Coast Catering Company, Inc.
12. J.R. Jacks Construction Corp.
13. Lenzar Electro-Optics, Inc.
14. Logistics Operations, Inc.
15. Offshore Food Service, Inc.
16. OFS Equity of Alexandria/Arlington, Inc.
17. OFS Equity of Babylon, Inc.
18. OFS Equity of Delaware, Inc.
19. OFS Equity of Huntington, Inc.
20. OFS Equity of Indianapolis, Inc.
21. OFS Equity of Stanislaus, Inc.
22. Ogden Allied Abatement & Decontamination Service, Inc.
23. Ogden Allied Maintenance Corp.
24. Ogden Allied Payroll Services, Inc.
25. Ogden Attractions, Inc.
26. Ogden Aviation Distributing Corp.
27. Ogden Aviation Fueling Company of Virginia, Inc.
28. Ogden Aviation Security Services of Indiana, Inc.
29. Ogden Aviation Service Company of Colorado, Inc.
30. Ogden Aviation Service Company of Pennsylvania, Inc.
31. Ogden Aviation Service International Corporation
32. Ogden Aviation Terminal Services, Inc.
33. Ogden Aviation, Inc.
34. Ogden Cargo Spain, Inc.
35. Ogden Central and South America, Inc.
36. Ogden Cisco, Inc.
37. Ogden Communications, Inc. 38. Ogden Constructors, Inc.
39. Ogden Facility Holdings, Inc.
40. Ogden Facility Management Corporation of Anaheim
41. Ogden Facility Management Corporation of West Virginia
42. Ogden Film and Theatre, Inc.
43. Ogden Firehole Entertainment Corp.
44. Ogden Food Service Corporation of Milwaukee, Inc.
45. Ogden International Europe, Inc.
46. Ogden Leisure, Inc.
47. Ogden Management Services, Inc.
48. Ogden New York Services, Inc.
49. Ogden Pipeline Service Corporation
50. Ogden Support Services, Inc.
51. Ogden Technology Services Corporation
52. Ogden Transition Corporation
53. PA Aviation Fuel Holdings, Inc.
54. Philadelphia Fuel Facilities Corporation

<PAGE>

                                   Schedule C
                              Subsidiary Guarantors

1.  Covanta Haverhill Properties, Inc.
2.  Covanta Haverhill, Inc.
3.  Covanta Omega Lease, Inc.
4.  Haverhill Power, Inc.
5.  LMI, Inc.
6.  Michigan Waste Energy, Inc.

<PAGE>

                                     Annex A
                                   Exhibit XVI

                                  See attached.

<PAGE>


                                     Annex B
                         Onondaga Project Restructuring

                                  See attached.

<PAGE>


                                     Annex C
    Extension of Tranche A Letters of Credit and Tranche B Letters of Credit


<TABLE>
----------------------------------------------------------------------------------------------------------------------
                                                          Current       Extended
                                                         Expiration    Expiration
   Project/Purpose         Type              Amount         Date           Date        Issuing Lender      Tranche
----------------------------------------------------------------------------------------------------------------------
<S>                      <C>              <C>            <C>           <C>           <C>                   <C>
Workers Compensation     Standby          $7,520,423.00    10/1/03        3/31/04    DKB (to be extended      B
                                                                                     by Bank of America)
----------------------------------------------------------------------------------------------------------------------
Workers Compensation     Standby         $14,951,617.00    10/1/03        3/31/04    DKB (to be extended      B
                                                                                     by Bank of America)
----------------------------------------------------------------------------------------------------------------------
Fairfax                  Performance        $900,000.00    09/30/03       3/31/04    SunTrust                 B
----------------------------------------------------------------------------------------------------------------------
Hennepin Step-Up         Standby          $1,491,839.06    9/30/03        3/31/04    Bank of America          A
----------------------------------------------------------------------------------------------------------------------
Workers' Compensation    Standby          $2,600,000.00    9/30/03        3/31/04    Bank of America          A
----------------------------------------------------------------------------------------------------------------------
Haripur                  Standby            $676,500.00    9/30/03        3/31/04    Bank of America          A
----------------------------------------------------------------------------------------------------------------------
</TABLE>