exv10w2



 





Exhibit 10.2



COVANTA POWER INTERNATIONAL HOLDINGS, INC.




FIRST AMENDMENT TO CREDIT AGREEMENT




               This FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of
April 20, 2004 and entered into by and among COVANTA POWER INTERNATIONAL
HOLDINGS, INC., 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”), WELLS FARGO BANK, N.A., as Debenture Disbursing Agent (the
“Debenture Disbursing Agent”), BANK OF AMERICA, N.A., as Administrative Agent
for the Lenders (“Administrative Agent”), and DEUTSCHE BANK SECURITIES, INC.,
as Documentation Agent for the Lenders (“Documentation Agent”), and is made
with reference to that certain Credit Agreement dated as of March 10, 2004 (the
“Credit Agreement”), by and among Company, the financial institutions
identified on the signature pages thereof as Lenders (the “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, Subsection 9.6 of the Credit Agreement permits Debenture
Disbursing Agent, Agents and Borrowers to amend any provision of subsection
9.25 of the Credit Agreement that only affects the rights and obligations of
Debenture Disbursing Agent without the concurrence of Lenders; and



               WHEREAS, Borrowers and Debenture Disbursing Agent desire to make certain
amendments to subsection 9.25, 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 SUBSECTION 9.25 OF THE CREDIT AGREEMENT







		
	      1.1 	Provisions Relating to Non-Confirming Holders and Disbursing Agents.





               A. Subsection 9.25A(i) of the Credit Agreement is hereby amended by
deleting subsection 9.25A(i) in its entirety and substituting the following
therefor:




     “(i) Notwithstanding anything in subsection 2.1A to the contrary, on
the Closing Date and the Determination Date, a portion of the Loans equal
to the percentage of all Loans reflected on Schedule 2.1 opposite the
name of the Allowed Class 6 Disbursing Agent shall be allocable to the
Allowed Class 6 Disbursing Agent subject the terms and conditions set
forth in this subsection 9.25, and a portion of the Loans equal to the
percentage of all Loans reflected on Schedule 2.1 opposite the name of
the Debenture Disbursing Agent shall be allocable to the Debenture
Disbursing Agent subject to the



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terms and conditions set forth in this subsection 9.25 (including
any adjustments as a result of any deemed assignments of such Loans by
the Debenture Disbursing Agent pursuant to this subsection 9.25).
Notwithstanding that the Loans referenced in the preceding sentence are
reflected on Schedule 2.1 as being allocable to Debenture Disbursing
Agent or Allowed Class 6 Disbursing Agent, as the case may be, none of
the Debenture Disbursing Agent, the Allowed Class 6 Disbursing Agent nor
any of the Non-Confirming Holders shall receive any Loans (and each of
such Loans and the status (and rights and obligations) of any such
Persons as a Lender or as a holder of Debenture Interests or Allowed
Class 6 Interests shall be suspended) until (a) in the case of the
Debenture Disbursing Agent and the Non-Confirming Holders with respect to
Debenture Interests, the Debenture Closing Date, or (b) in the case of
the Allowed Class 6 Disbursing Agent and the Non-Confirming Holders with
respect to Allowed Class 6 Interests, the Allowed Class 6 Closing Date;
provided, however, that the foregoing provisions of this sentence shall
cease to apply with respect to any Non-Confirming Holder that becomes a
Lender in accordance with clause (iii) of this subsection 9.25A. On the
Debenture Closing Date and the Determination Date (if the Debenture
Closing Date shall have occurred prior to the Determination Date), the
portion of the Loan allocable to the Debenture Disbursing Agent as
aforesaid, the delivery of which at such time remains suspended pursuant
to the preceding sentence, shall be registered in the name of the
Debenture Disbursing Agent; and on the Allowed Class 6 Closing Date and
the Determination Date (if the Allowed Class 6 Closing Date shall have
occurred prior to the Determination Date), the portion of the Loan
allocable to the Allowed Class 6 Disbursing Agent as aforesaid, the
delivery of which at such time remains suspended pursuant to the
preceding sentence, shall be registered in the name of the Allowed Class
6 Disbursing Agent. All Loans that would otherwise be distributed on the
Allowed Class 6 Closing Date or the Determination Date (if the Allowed
Class 6 Closing Date shall have occurred prior to the Determination Date)
on account of Allowed Class 6 Interests shall be held on such date by the
Allowed Class 6 Disbursing Agent; and all Loans that would otherwise be
distributed on the Debenture Closing Date or the Determination Date (if
the Debenture Closing Date shall have occurred prior to the Determination
Date) on account of 9.25% Debentures shall be held on such date by the
Debenture Disbursing Agent.”.



               B. Subsection 9.25A(iii) of the Credit Agreement is hereby amended by
deleting subsection 9.25A(iii) in its entirety and substituting the following
therefor:




     “(iii) Each Non-Confirming Holder shall hold a Debenture Interest or
an Allowed Class 6 Interest, as applicable, and shall not be deemed a
Lender for any purpose under this Agreement, except that a Non-Confirming
Holder may elect to become a Lender solely with respect to its Debenture
Interest by executing and delivering to Administrative Agent and the
Debenture Disbursing Agent a Lender Acknowledgement and satisfying the
other applicable requirements for becoming a Lender set forth in this
subsection 9.25; provided, that a Non-Confirming Holder shall not be
permitted at any time to become a Lender with respect to its Allowed
Class 6 Interest, and a Non-Confirming Holder may not execute and deliver
to Administrative Agent a Lender Acknowledgement with respect to the
Debenture Interest held by it except during the following periods: (a)
the 45-day period commencing with the Closing Date, (b) the 30-day period
after the date of delivery to the Debenture Disbursing Agent



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of any notice
described in clause (v) of this subsection 9.25A, and
(c) solely in the case of a Non-Confirming Holder who is not a
Non-Confirming Holder as of the Debenture Closing Date, the 30-day period
after such Non-Confirming Holder validly receives a Debenture Interest by
assignment or purchase from another Non-Confirming Holder. Each Lender
Acknowledgement shall apply with respect to all Debenture Interests of
such Non-Confirming Holder, and upon receipt by Administrative Agent of
such executed Lender Acknowledgement (together with, if such
Non-Confirming Holder was not a Non-Confirming Holder on the Debenture
Closing Date, a representation that such Non-Confirming Holder is an
Eligible Assignee and payment of a processing and recordation fee to
Administrative Agent of $5,000 (in addition to any fee payable to the
Debenture Disbursing Agent)), any forms, certificates or other evidence
with respect to United States federal income tax withholding matters that
an assignee of Loans would be required to deliver to Administrative Agent
pursuant to subsection 9.1B(i), and the ratable portion of the Agent
Indemnification Amount (if any) owed with respect to the Loans to be
deemed assigned by the Debenture Disbursing Agent to such Non-Confirming
Holder, Administrative Agent shall accept such Lender Acknowledgment, the
Debenture Disbursing Agent shall confirm to Administrative Agent the
amount of the Debenture Interest held by such Non-Confirming Holder, such
Non-Confirming Holder shall cease to be a Non-Confirming Holder and shall
thereupon become a Lender for all purposes under the Loan Documents
holding a Loan and Commitment in amounts equal to the amounts so
confirmed by the Debenture Disbursing Agent, the Debenture Disbursing
Agent shall be deemed to have assigned such Loan and Commitment to such
Lender on such date for all purposes of this Agreement, and
Administrative Agent shall record such assignment information in the
Register.”.



               C. Subsection 9.25A(v) of the Credit Agreement is hereby amended by
deleting subsection 9.25A(v) in its entirety and substituting the following
therefor:




     “(v) Borrowers shall notify Administrative Agent and the Debenture
Disbursing Agent in writing not less than 30 days prior to seeking any
amendment, waiver or other modification to the Loan Documents that would
require the approval or concurrence of all Lenders. Any notice provided
pursuant to this clause (v) shall be provided by facsimile transmission
and shall be deemed to have been given upon receipt of such facsimile by
Administrative Agent and the Debenture Disbursing Agent in complete and
legible form. Promptly after receipt of such notice, the Debenture
Disbursing Agent shall notify the relevant Non-Confirming Holders on the
register maintained by the Debenture Disbursing Agent promptly in
accordance with its procedures established for such purposes. No such
amendment, waiver or modification shall be deemed to be effective prior
to the expiration of such 30-day period.”.



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	      1.2 	Provisions Relating to Definitions.





               Subsection 9.25B of the Credit Agreement is hereby amended by deleting the
definitions of “Debenture Disbursing Agent”, “Disbursing Agent” and “Debenture
Interest”, and substituting therefore the following, which shall be inserted in
proper alphabetical order:




          “Debenture Disbursing Agent” means Wells Fargo Bank, N.A., in its
capacity as disbursing agent for Covanta for the benefit of the holders
of the 9.25% Debentures under the Approved Plan of Reorganization, the
Confirmation Order, the Debenture Disbursing Agent Authorization Order
and the disbursing agreement relating thereto to be entered into on or
after the Closing Date.




          “Debenture Interest” means, with respect to any Non-Confirming
Holder, the claim or right to payment in respect of the 9.25% Debentures
of such Non-Confirming Holder in any Loan distributed to the Debenture
Disbursing Agent; provided, however, that any Debenture Interest shall
cease to be a Debenture Interest at such time that the Non-Confirming
Holder with respect thereto shall become a Lender in accordance with
subsection 9.25.




          “Disbursing Agent” means either Debenture Disbursing Agent or
Allowed Class 6 Disbursing Agent, and “Disbursing Agents” means each of
them.





		
	      1.3 	Provisions Relating to Authority; Execution and Delivery of the Loan Documents.





               Subsection 9.25C of the Credit Agreement is hereby amended by deleting
subsection 9.25C in its entirety and substituting the following therefor:




     “C. Execution and Delivery; Authority. The Debenture Disbursing
Agent is executing and delivering this Agreement and the Intercreditor
Agreement in its capacity as the disbursing agent for Covanta for the
benefit of the Non-Confirming Holders on account of the 9.25% Debentures
under the Approved Plan of Reorganization, the Confirmation Order and
pursuant to the Debenture Disbursing Agent Authorization Order. The
Allowed Class 6 Disbursing Agent is executing and delivering this
Agreement and the Intercreditor Agreement as the agent for the
Non-Confirming Holders holding Loans originally representing Allowed
Class 6 Claims under the Approved Plan of Reorganization and the
Confirmation Order.”.





		
	      SECTION 2. 	BORROWER’S REPRESENTATIONS AND WARRANTIES





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



     2.1 Corporate Power and Authority. Each Borrower has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated



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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 Borrower and the performance of the Amended Agreement has been
duly authorized by all necessary corporate action on the part of each Borrower.



     2.3 No Conflict. The execution and delivery by each Borrower 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 Borrower of
this Amendment and the performance by each Borrower 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 Borrower, and each of this Amendment and the Amended
Agreement is the legally valid and binding obligation of each Borrower
enforceable against each Borrower 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.



     SECTION 3. CONDITIONS TO EFFECTIVENESS



               This Amendment shall become effective upon (i) receipt by Administrative
Agent and Company of written or telefacsimile notice that each of Company, the
other Borrowers, Debenture Disbursing Agent, Administrative Agent and
Documentation Agent has executed this Amendment and authorized its delivery,
and (ii) execution and delivery by Debenture Disbursing Agent of counterparts
to the Credit Agreement and the Intercreditor Agreement in the form attached
hereto as Annex A.





		
	      SECTION 4. 	ACKNOWLEDGEMENT AND CONSENT





               Each Borrower hereby acknowledges that such Borrower 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
Borrower under each of the Loan Documents to which such Borrower is a party
shall not be impaired and each of



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the Loan Documents to which such Borrower is a party are, and shall
continue to be, in full force and effect and are hereby confirmed and ratified
in all respects.





		
	      SECTION 5. 	MISCELLANEOUS







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





               A. On and after the effective date of this Amendment, 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 (the “Amended
Agreement”).



               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.



     5.2 Fees and Expenses. Each Borrower acknowledges that all costs, fees
and expenses as described in subsection 9.2 of the Credit Agreement incurred by
Administrative Agent, Documentation Agent 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.



     5.3 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.



     5.4 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 THAT WOULD REQUIRE
APPLICATION OF ANOTHER LAW.



     5.5 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.



[Remainder of this page intentionally left blank]




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EXECUTION


               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 POWER INTERNATIONAL HOLDINGS, INC.,

 	 
	 	By:  	/s/ Ashish Sarkar
 	 
	 	 	Name:  	Ashish Sarkar 	 
	 	 	Title:  	Authorized Officer 	 
	 
	 	COVANTA POWER DEVELOPMENT, INC.

COVANTA POWER DEVELOPMENT OF BOLIVIA, INC.

COVANTA WASTE TO ENERGY OF ITALY, INC.

OPI QUEZON, INC.,

 	 
	 	By:  	/s/ Ashish Sarkar
 	 
	 	 	Name:  	Ashish Sarkar 	 
	 	 	Title:  	Authorized Officer 	 
	 





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AGENTS AND LENDERS:


	 	 	 	 	 
	 	BANK OF AMERICA, N.A.,

as Administrative Agent and Co-Arranger

 	 
	 	By:  	/s/ Henry Y. Yu
 	 
	 	 	Name:  	Henry Y. Yu 	 
	 	 	Title:  	Managing Director 	 
	 





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	 	DEUTSCHE BANK SECURITIES, INC.,

as Documentation Agent and Co-Arranger

 	 
	 	By:  	/s/
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	                              /s/
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




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DEBENTURE DISBURSING AGENT:


	 	 	 	 	 
	 	WELLS FARGO BANK, N.A., as Debenture

Disbursing Agent

 	 
	 	By:  	/s/
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 





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Annex A



ACKNOWLEDGMENT AND COUNTERPART




     ACKNOWLEDGMENT
AND COUNTERPART (this “Counterpart”), dated as of April 20,
2004 is entered into in connection with the Credit Agreement dated as of March
10, 2004 (said Credit Agreement, as it may heretofore have been and as it may
hereafter be further amended, restated, supplemented or otherwise modified from
time to time being the “Credit Agreement”; capitalized terms used herein not
otherwise defined herein shall have the meanings ascribed therein), by and
among Covanta Power International Holdings, Inc. (“Company”) and the
Subsidiaries of Company listed on the signature pages thereof, as Borrowers;
certain Persons listed on the signature pages thereof as Lenders (together with
any other lenders that subsequently become party thereto, the “Lenders”); Bank
of America, N.A., as administrative agent for Lenders, and Deutsche Bank
Securities, Inc., as documentation agent for Lenders. The undersigned, by
executing and delivering this Counterpart, hereby acknowledges and agrees (a)
that upon acceptance of this Counterpart by Administrative Agent it shall
become party to the Credit Agreement as “Debenture Disbursing Agent” in
accordance with the terms thereof and shall have the rights and obligations of
Debenture Disbursing Agent under the Credit Agreement, (b) that it shall be
bound by all of the terms of the Credit Agreement as Debenture Disbursing
Agent, and (c) that this Counterpart may be attached to the Credit Agreement.
The undersigned hereby further agrees that the address and facsimile number of
the undersigned for notice purposes pursuant to subsection 9.8 of the Credit
Agreement shall be as set forth below or such shall be designated by the
undersigned in a written notice delivered to Administrative Agent.


	 	 	 	 	 
	 	WELLS FARGO BANK, N.A.,

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	

	 	 
	 	 	Notice Address: 	 	 	 
	 





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ACKNOWLEDGMENT AND COUNTERPART




     ACKNOWLEDGMENT
AND COUNTERPART (this “Counterpart”), dated as of April 20,
2004 is entered into in connection with the Intercreditor Agreement dated as of
March 10, 2004 (said Intercreditor Agreement, as it may heretofore have been
and as it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time being the “Intercreditor
Agreement”; capitalized
terms used herein not otherwise defined herein shall have the meanings ascribed
therein), by and among Covanta Power International Holdings, Inc. (“Company”)
and the Subsidiaries of Company listed on the signature pages thereof, as
Borrowers; Covanta Energy Americas, Inc.; certain Persons listed on the
signature pages thereof as Term Loan Lenders (together with any other lenders
that subsequently become party thereto, the “Term Loan Lenders”); certain
financial institutions listed on the signature pages thereof as Revolver
Lenders; Deutsche Bank AG, New York Branch, as administrative agent for
Revolver Lenders; Bank of America, N.A., as administrative agent for Term Loan
Lenders, as collateral agent, and cash management bank; Deutsche Bank
Securities, Inc., as documentation agent for Term Loan Lenders; the companies
listed on the signature pages thereof as Management Services and Reimbursement
Agreement Beneficiaries; the companies listed on the signature pages thereof as
Management Services and Reimbursement Agreement Obligors; U.S. Bank National
Association, as agent for the holders of the Prepetition Unsecured Claims
Participation Interest, and U.S. Bank National Association, as Allowed Class 6
Disbursing Agent. The undersigned, by executing and delivering this
Counterpart, hereby acknowledges and agrees (a) that upon acceptance of this
Counterpart by Administrative Agent it shall become party to the Intercreditor
Agreement as “Debenture Disbursing Agent” in accordance with the terms thereof
and shall have the rights and obligations of Debenture Disbursing Agent under
the Intercreditor Agreement, (b) that it shall be bound by all of the terms of
the Intercreditor Agreement as Debenture Disbursing Agent, and (c) that this
Counterpart may be attached to the Intercreditor Agreement. The undersigned
hereby further agrees that the address and facsimile number of the undersigned
for notice purposes pursuant to Section 7.1(a) of the Intercreditor Agreement
shall be initially as set forth below.


	 	 	 	 	 
	 	WELLS FARGO BANK, N.A.,

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	

	 	 
	 	 	Notice Address: 	 	 	 
	 





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