Document:

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                                                                 Exhibit 10.1(a)

                          Dated as of November 5, 2003

                              TERMINATION AGREEMENT

                                 by and between

                OGDEN FACILITY MANAGEMENT CORPORATION OF ANAHEIM

                                (as the Manager),

                           COVANTA ENERGY CORPORATION

                                       and

                         THE CITY OF ANAHEIM, CALIFORNIA

                       Cleary, Gottlieb, Steen & Hamilton
                                 1 Liberty Plaza
                               New York, NY 10006
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                                TABLE OF CONTENTS
                                                                            Page
                                   ARTICLE I
                                 DEFINED TERMS

Section 1.1   Definitions..................................................    6

Section 1.2   Certain Rules of Construction................................    6

                                   ARTICLE II
                    TERMINATION AND ASSIGNMENT OF CONTRACTS

Section 2.1   Terminations, Assignments and Transfers......................    7

Section 2.2   COPS Letter of Credit Payment................................    7

Section 2.3   Working Capital Adjustment...................................    7

Section 2.4   Contract Assumption and Rejection............................    9

Section 2.5   Amounts Due Under Executory Contracts;
              Cure Costs...................................................    9

Section 2.6   Assumed Liabilities..........................................    9

Section 2.7   Excluded Liabilities.........................................   10

Section 2.8   No Expansion of Third Party Rights...........................   10

Section 2.9   Transfer Taxes...............................................   10

                                  ARTICLE III
                             CONDITIONS TO CLOSING

Section 3.1   Conditions Precedent to Obligations  of Covanta
              Parties and the City.........................................   10

Section 3.2   Conditions Precedent to Obligations of the City..............   11

Section 3.3   Conditions Precedent to Obligations of the
              Covanta Parties..............................................   12

                                   ARTICLE IV
                                   THE CLOSING

Section 4.1   Closing......................................................   12

Section 4.2   Termination of Contracts At Closing..........................   13

Section 4.3   Other Closing Actions........................................   13

Section 4.4   Deliveries by the Manager at the Closing.....................   13

Section 4.5   Deliveries by the City at the Closing........................   13

Section 4.6   Payment to CSFB..............................................   13

                                    ARTICLE V
                  REPRESENTATIONS AND WARRANTIES OF THE MANAGER

Section 5.1   Organization, Standing and Authority.........................   14

Section 5.2   No Conflict; Required Filings and Consents...................   14

Section 5.3   Title To Assets..............................................   14

Section 5.4   Assigned Contracts...........................................   14

Section 5.5   Licenses and Permits:  Compliance with Laws..................   15

Section 5.6   No Other Assets..............................................   15

Section 5.7   Pending Actions..............................................   15

Section 5.8   Environmental Compliance.....................................   15

Section 5.9   Information True and Complete................................   15

Section 5.10  Employee Matters.............................................   15

Section 5.11  Compliance with Law..........................................   15

Section 5.12  Brokers......................................................   15

                                     Page 2
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                                   ARTICLE VI
                   REPRESENTATIONS AND WARRANTIES OF THE CITY

Section 6.1   Organization.................................................   16

Section 6.2   Authority....................................................   16

Section 6.3   Consents and Approvals.......................................   16

Section 6.4   No Violations................................................   16

Section 6.5   Brokers......................................................   16

                                   ARTICLE VII
                                    COVENANTS

Section 7.1   Bankruptcy Court Approval of Agreement.......................   17

Section 7.2   Conduct of Business by the Manager Pending the Closing.......   18

Section 7.3   Access and Information.......................................   18

Section 7.4   Notification.................................................   19

Section 7.5   No Inconsistent Action.......................................   19

Section 7.6   Satisfaction of Conditions...................................   19

Section 7.7   Filings......................................................   19

Section 7.8   Additional Matters and Further Assurances....................   19

Section 7.9   Employment Matters...........................................   19

Section 7.10  Maintenance of Books and Records.............................   20

Section 7.11  Survival of Representations and Warranties...................   20

Section 7.12  Disclaimer...................................................   20

                                  ARTICLE VIII
                                   TERMINATION

Section 8.1   Termination..................................................   21

Section 8.2   Procedure and Effect of Termination..........................   22

                                   ARTICLE IX
                               GENERAL PROVISIONS

Section 9.1   Notices......................................................   22

Section 9.2   Publicity....................................................   23

Section 9.3   Descriptive Headings.........................................   23

Section 9.4   Entire Agreement; Assignment.................................   23

Section 9.5   Governing Law................................................   24

Section 9.6   Expenses.....................................................   24

Section 9.7   Amendment....................................................   24

Section 9.8   Waiver.......................................................   24

Section 9.9   Counterparts; Effectiveness..................................   24

Section 9.10  Severability; Validity; Parties in Interest..................   24

Section 9.11  Representation...............................................   24

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                                TABLE OF CONTENTS

Annex A               Definitions                                  A-1
Annex B               Form of Mutual Release                       B-1

Schedule 1A           Transferred Assets                           S-1A
Schedule 2.1          Per se Rejected Contracts                    S-2.1
Schedule 2.3(a)-1     Form of Pre-Closing Statement                S-2.3(a)-1
Schedule 2.3(a)-2     Reference Balance Sheet                      S-2.3(a)-2
Schedule 2.3(c)       Form of Closing Statement                    S-2.3(c)
Schedule 2.4(a)       Manager's Executory Contracts
                      Eligible for Assignment                      S-2.4(a)
Schedule 2.4(c)       Post-petition Ordinary Course
                      Executory Contracts                          S-2.4(c)
Schedule 2.7          Excluded Liabilities                         S-2.7
Schedule 3.1(b)       Pre-Closing Regulatory Consents
                      and Filings                                  S-3.1(b)
Schedule 3.2(d)       Leasehold Restructuring                      S-3.2(d)
Schedule 3.2(i)       Agreements Requiring CSFB's
                      Release of the City                          S-3.2(i)
Schedule 3.3(b)       Agreements Requiring the Leasehold
                      Participants' Release of Manager             S-3.3(b)
Schedule 5.4          Consents to Transfer of Designated
                      Contracts                                    S-5.4
Schedule 7.9(c)       Terminated Employees                         S-7.9(c)

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                              TERMINATION AGREEMENT

         THIS TERMINATION AGREEMENT, dated as of November 5, 2003 (the
"Agreement"), is made by and between Covanta Energy Corporation, a Delaware
corporation ("Covanta"), Ogden Facility Management Corporation of Anaheim, a
California corporation ("OFM" or the "Manager" and together with Covanta, the
"Covanta Parties"), and the City of Anaheim, a municipality incorporated in the
State of California (the "City").

                                    RECITALS

         WHEREAS on April 1, 2002, the Covanta Parties filed in the United
States Bankruptcy Court for the Southern District of New York (the "Bankruptcy
Court") voluntary petitions for reorganization under chapter 11 of the
Bankruptcy Code and the Covanta Parties currently continue to operate their
businesses as debtors-in-possession pursuant to sections 1107 and 1108 of the
Bankruptcy Code;

         WHEREAS OFM manages the arena known as the Arrowhead Pond of Anaheim
located at 2695 East Katella Avenue in Anaheim, California (the "Facility")
pursuant to a 30-year exclusive Second Amended and Restated Arena Management
Agreement dated December 1, 1993 between OFM and the City, as amended or
supplemented from time to time (the "Management Agreement");

         WHEREAS pursuant to the Management Agreement, OFM has the obligation to
provide unlimited working capital to the Facility to assure that, in the event
of cash shortfalls, operating expenses and debt service (including payments of
both interest and principal on the Certificates of Participation, as defined
herein) are timely paid;

         WHEREAS Covanta has provided a guarantee of OFM's obligations under the
Management Agreement, including the obligation to provide unlimited working
capital;

         WHEREAS the Facility is beneficially owned by the City;

         WHEREAS the Facility is the home arena of the Mighty Ducks hockey team
of the National Hockey League pursuant to the Mighty Ducks Agreement, as defined
herein;

         WHEREAS the Parties had entered into a Facility financing agreement
pursuant to which Credit Suisse First Boston acting by and through its New York
branch ("CSFB") provided the COPS Letter of Credit in connection with the
issuance as of December 1, 1993 of Certificates of Participation in that certain
Lease Agreement between the City and the Anaheim Public Improvement Corporation,
a California non-profit corporation (such financing transaction, hereinafter the
"COPS Transaction"), and the Parties desire to fulfill and/or resolve any and
all obligations remaining from the COPS Transaction;

         WHEREAS as part of the COPS Transaction, the City, OFM and CSFB had
entered into a bank reimbursement agreement with respect to the COPS Letter of
Credit pursuant to which OFM has an obligation to reimburse CSFB in the event of
a draw upon the COPS Letter of Credit, and which obligation is a secured
obligation of Covanta under the Security Agreement dated as of March 14, 2001
among Covanta, certain of its subsidiaries, and Bank of America;

         WHEREAS the Parties had entered into a leasehold transaction with
respect to the Facility as of January 6, 1999 (the "Leasehold Transaction")
along with certain other parties (the "Leasehold Participants"), and the Parties
desire to stabilize the Leasehold Transaction and arrange for the release of the
Covanta Parties from all liabilities and obligations with respect to the
Leasehold Transaction;

                                     Page 5
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         WHEREAS the City and the Manager desire to terminate the Management
Agreement and the Manager desires to reject certain other executory contracts
pertaining to the Facility;

         WHEREAS Covanta desires to terminate its obligations under its
guarantee of OFM's obligations under the Management Agreement, including the
obligation to provide unlimited working capital to the Facility;

         WHEREAS the Manager desires to assume and assign to the City or its
designee certain executory contracts referred to herein as the Designated
Contracts (including the Mighty Ducks Agreement) together with certain
obligations and liabilities relating thereto, pursuant to the terms and
conditions of this Agreement;

         WHEREAS the Manager desires to abandon and transfer to the City certain
tangible and intangible assets as defined in Schedule 1A (the "Transferred
Assets");

         WHEREAS the Rejected Contracts will be rejected and the Designated
Contracts will be assumed and assigned pursuant to the terms of this Agreement
and the Approval Order, as defined herein;

         WHEREAS the City is considering appointing a new manager for the
Facility; and

         WHEREAS, the City has authorized execution of this Agreement by City
resolution;

         NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, and agreements set forth herein, the
Parties hereto agree as follows:

                                    ARTICLE I

                                  DEFINED TERMS

         Section 1.1 Definitions. As used in this Agreement, unless the context
otherwise requires, capitalized terms used in this Agreement shall have the
meanings set forth in Annex A hereto.

         Section 1.2 Certain Rules of Construction.

         (a) Any term defined herein in the singular form shall have a
comparable meaning when used in the plural form, and vice versa.

         (b) When used herein, the words "hereof", "herein" and "hereunder" and
words of similar import shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. References to the Recitals, Articles,
Sections, Schedules or Annexes shall refer respectively to the recitals,
articles, sections, schedules or annexes of this Agreement, unless otherwise
expressly provided.

         (c) When used herein, the terms "include", "includes" and "including"
are not limiting.

         (d) Unless the context requires otherwise, derivative forms of any term
defined herein shall have a comparable meaning to that of such term.

         (e) When a Party's consent is required hereunder, such Party's consent
may be granted or withheld in such Party's sole discretion, unless otherwise
specified.

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         (f) Any reference to an agreement hereunder shall refer to that
agreement as it may be amended or supplemented from time to time.

                                   ARTICLE II

                                 TERMINATION AND
                             ASSIGNMENT OF CONTRACTS

         Section 2.1 Terminations, Assignments and Transfers.

         (a) Subject to the terms and conditions herein set forth, at the
Closing, (i) the Parties shall by mutual agreement terminate the Management
Agreement and, except as provided in Section 2.3 herein, irrevocably,
definitively and unconditionally release each other from any and all obligations
or liabilities under or in connection therewith, in the form of the mutual
general release attached as Annex B (the "Mutual Release"), and (ii) the Manager
shall reject the Management Agreement. As soon as practicable after the Closing,
the Manager shall also reject all its executory contracts that have not become
Assigned Contracts (the "Rejected Contracts"), including all per se Rejected
Contracts, as listed on Schedule 2.1.

         (b) Subject to the terms and conditions herein set forth, at the
Closing, the Manager shall assume, assign and deliver to the City (or a City
Designee, as the case may be), and the City (or such City Designee) shall accept
from the Manager, all of the Manager's rights in and obligations under all of
the Assigned Contracts.

         (c) Subject to the terms and conditions herein set forth, at the
Closing, the Manager shall transfer, convey, and deliver to the City (or a City
Designee, as the case may be), and the City (or such City Designee) shall accept
from the Manager, all of the Manager's right and interest in, to and under all
of the Transferred Assets, wherever located, whether tangible or intangible, as
the same shall exist on the Closing Date, free and clear of all Liens except
Permitted Liens.

         Section 2.2 COPS Letter of Credit Payment. In consideration of the
releases contemplated in Section 3.1(e), the termination by mutual agreement of
the Management Agreement, the rejection of the Rejected Contracts, the
assignment of the Designated Contracts, the transfer of the Transferred Assets
and the Covanta Parties' performance of their obligations under this Agreement,
at the Closing, the City shall make a payment (the "Reimbursement Payment") to
CSFB, as partial reimbursement for the draw on the COPS Letter of Credit
referred to in Sections 3.1(e) and 4.6 herein, pursuant to the City's rights and
obligations under Article III of the Bank Agreement, equal to (x) the
Reimbursement Amount minus (y) an amount of $1,000,000 (the "Escrow") which
shall be deposited with an escrow agent selected by the Parties' mutual
agreement, and which shall be reserved exclusively for the true-up of the
Reimbursement Amount pursuant to Section 2.3 herein.

         Section 2.3 Working Capital Adjustment

         (a) At least 10 Business Days prior to the Closing, the Manager shall
prepare and deliver to the City an estimated statement of working capital for
the Facility as of the opening of business on the scheduled Closing Date in the
format of Schedule 2.3(a)-1 hereto (the "Pre-Closing Statement"). The
Pre-Closing Statement shall be prepared by the Manager in good faith on a basis
consistent in all material respects with the methods, principles, practices and
policies set forth in the Management Agreement and employed in the preparation
and presentation of the reference financial statements for the Facility as of
February 28, 2003, attached hereto as Schedule 2.3(a)-2 (the "Reference Balance
Sheet") (without regard to consummation of the transactions contemplated by this
Agreement or the Chapter 11 Cases).

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         (b) The Reimbursement Amount shall, immediately prior to the Closing,
be (A) increased by 100% of the amount, if any, by which the Net Working
Capital, as calculated based on the Pre-Closing Statement, is greater than $0.00
(zero dollars) or (B) decreased by 100% of the amount, if any, by which the Net
Working Capital, as calculated based on the Pre-Closing Statement, is less than
$0.00 (zero dollars).

         (c) Within 45 Business Days after the Closing, the City shall cause the
staff at the Facility to prepare and deliver to the Parties a statement of Net
Working Capital as of the opening of business on the Closing Date in the format
of Schedule 2.3(c) hereto (the "Closing Statement"). The Closing Statement shall
be prepared by the Facility staff in good faith on a basis consistent in all
material respects with the methods, principles, practices and policies employed
in the preparation and presentation of the Reference Balance Sheet (without
regard to consummation of the transactions contemplated by this Agreement or the
Chapter 11 Cases). The City shall cause the Parties to be given full access,
during regular business hours, to the Facility staff and Facility records to
monitor the preparation of the Closing Statement, and the City shall cause the
Facility staff as much as reasonably practicable to keep the Parties appraised
of its progress and findings with respect to the Closing Statement and its
preparation.

         (d) After receipt of the Closing Statement, the Parties shall have 15
Business Days to review it together with the work papers used in the preparation
thereof. Unless a Party delivers written notice to the other Parties on or prior
to the 15th Business Day after the notifying Party's receipt of the Closing
Statement stating that it has objections thereto, the Parties shall be deemed to
have accepted and agreed to the Closing Statement. The Parties shall not object
to any method, principle, practice or policy employed in the preparation of the
Closing Statement if such method, principle, practice or policy is consistent in
all material respects with that employed in the preparation and presentation of
the Reference Balance Sheet. If, however, a Party notifies the other Parties of
objections to the Closing Statement on or prior to the 15th Business Day after
the notifying Party's receipt of the Closing Statement, the Parties shall in
good faith attempt to resolve, within 10 Business Days (or such longer period as
the Parties may agree in writing) following such notice (the "Resolution
Period"), their differences with respect to such objections and any resolution
by them as to any disputed amounts shall be final, binding and conclusive. In so
doing, the Parties (sharing any fees and expenses equally) may engage a mutually
agreed-upon independent accounting firm experienced in audit projects to assist
such resolution by acting as a non-binding mediator.

         (e) Amounts relating to any working capital and other accounts set
forth in the Closing Statement remaining in dispute at the conclusion of the
Resolution Period shall be promptly submitted to the Independent Auditor for
resolution. The Independent Auditor shall render a decision within 30 calendar
days from referral of the dispute by either Party. The decision of the
Independent Auditor with respect to the Closing Statement and the determination
of the Net Working Capital shall be final and binding upon the Parties. The
Independent Auditor shall be retained at the Parties' equally shared expense.

         (f) Once the Closing Statement is finalized in accordance with this
Section 2.3 (as so finalized, the "Final Closing Statement"), the Reimbursement
Amount shall be trued-up as set forth in this Section 2.3(f) to give effect to
the Net Working Capital as of the opening of business on the Closing Date. If
the Reimbursement Amount as adjusted pursuant to this Section 2.3(f) is less
than the Reimbursement Amount as adjusted pursuant to Section 2.3(b), the City
shall be allowed to withdraw from the Escrow an amount of cash equal to the
difference obtained by subtracting the Reimbursement Amount as adjusted pursuant
to this Section 2.3(f) from the Reimbursement Amount as adjusted pursuant to
Section 2.3(b), and the balance of the Escrow, if any, shall be paid to CSFB. If
the Reimbursement Amount as adjusted pursuant to this Section 2.3(f) is greater
than the Reimbursement Amount as adjusted pursuant to Section 2.3(b), the City

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shall release the Escrow to CSFB, and promptly pay to CSFB an amount of cash
equal to the difference obtained by subtracting the Reimbursement Amount as
adjusted pursuant to Section 2.3(b) from the Reimbursement Amount as adjusted
pursuant to this Section 2.3(f).

         (g) During the preparation of the Pre-Closing Statement and Closing
Statement and the period of any review or dispute within the contemplation of
this Section 2.3, the Parties shall (i) provide each other Party upon reasonable
advance request with full access for review and copying by the other Party, its
agents and representatives at all reasonable times, and in a manner so as not to
interfere unreasonably with the normal business operations of each Party, to all
relevant books, records, work papers, information and employees, and (ii)
cooperate fully with each other Party as necessary for the preparation,
calculation and reviews of the Pre-Closing Statement and Closing Statement or
for the contemplated resolution of any dispute between the Parties relating
thereto.

         Section 2.4 Contract Assumption and Rejection.

         (a) Schedule 2.4(a) is a list of the pre-petition executory contracts
related to the Facility, other than the Management Agreement, to which the
Manager is a party and that the City may choose to assume (the "Schedule 2.4(a)
Contracts"). The Manager shall make available to the City a copy of each of the
Schedule 2.4(a) Contracts no later than five Business Days from the date of this
Agreement. The City shall elect, as soon as practicable and in any event no
later than three Business Days prior to the date of the Approval Hearing, which
of the Schedule 2.4(a) Contracts the City wishes the Manager to assume and
assign to the City (or a City Designee) effective as of the Closing (the
"Designated Contracts"). It is understood that the Mighty Ducks Agreement shall
in any event be a Designated Contract and, subject to Bankruptcy Court approval,
be assumed and assigned to the City (or a City Designee) at Closing. All of the
Schedule 2.4(a) Contracts that are not Designated Contracts following the entry
of the Final Order shall be rejected as soon as practicable thereafter.

         (b) If after the date hereof, but prior to the Closing, any Party
becomes aware of any pre-petition executory contract related to the management
of the Facility not previously disclosed to the City during the due diligence
process, or if the Manager enters into any additional executory contract (each,
an "Undisclosed Contract"), the discovering Party shall immediately notify the
other Parties of such Undisclosed Contract, and the City may elect, no later
than five Business Days following such notification, to assume such Undisclosed
Contract, subject to Bankruptcy Court authorization. Any Undisclosed Contract
that the City elects to assume shall be a Designated Contract. Notwithstanding
the foregoing, if any Undisclosed Contract is entered into after the date of the
Approval Order and such Undisclosed Contract contains language allowing the
Manager to assign the contract to the City, then such contract may be assumed
and assigned without the entry of a Bankruptcy Court order.

         (c) All post-petition executory contracts related to the Facility that
were entered into by the Manager in the ordinary course of business consistent
with past practice and in accordance with the Management Agreement shall be
Designated Contracts and shall at the Closing be assigned to, and assumed by,
the City (or a City Designee). Schedule 2.4(c) contains a list of such
post-petition executory contracts through the date hereof that will be assumed.

         Section 2.5 Amounts Due Under Executory Contracts; Cure Costs. The City
shall be obligated to pay all liabilities under the Assigned Contracts as of the
Closing Date and thereafter, including all cure and reinstatement costs and
expenses pursuant to 11 U.S.C. ss.365 or otherwise, arising from the assignment,
assumption, or both, of the Assigned Contracts to the City (or a City Designee,
as the case may be) as set forth on Schedule 2.4(a) (the "Cure Costs").

         Section 2.6 Assumed Liabilities. Subject to the terms and conditions

                                     Page 9
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set forth in this Agreement, at the Closing, the City shall assume from the
Covanta Parties and thereafter pay, perform, or discharge, or cause a City
Designee to pay, perform, or discharge, in accordance with their terms and hold
the Covanta Parties harmless in respect of the following: (i) all Current
Liabilities as of the Closing Date; (ii) all payables, obligations and
liabilities with respect to, arising out of, or associated with the Assigned
Contracts arising on or after the Closing Date; (iii) all payables, obligations
and liabilities associated with the Transferred Assets, arising on or after the
Closing Date; (iv) liabilities and obligations pursuant to Section 7.9(b)
hereof; and (v) any Cure Costs. The liabilities to be assumed pursuant to the
preceding sentence shall be referred to herein as the "Assumed Liabilities".

         Section 2.7 Excluded Liabilities. Notwithstanding anything contained in
this Agreement to the contrary, except for the Assumed Liabilities, the City
shall not assume or be under an obligation to pay, discharge or perform, and
shall not be deemed to have assumed, or to have agreed to pay, discharge or
perform, as a result of the consummation of the transactions contemplated
herein, and shall not be liable for, any liability, claim, commitment, or
obligation of the Covanta Parties, disclosed or undisclosed, in particular,
without limitation, the liabilities as listed on Schedule 2.7 (the "Excluded
Liabilities").

         Section 2.8 No Expansion of Third Party Rights. The assumption by the
City or a City Designee of the Assumed Liabilities shall in no way expand the
rights or remedies of any third party against the City, such City Designee or
the Manager as compared to the rights and remedies which such third party would
have had against the Manager absent the Chapter 11 Cases, had the City or the
City Designee not assumed such liabilities. Without limiting the generality of
the preceding sentence, the assumption by the City or the City Designee of the
Assumed Liabilities shall not create any third-party beneficiary rights other
than with respect to the Person whose debt is assumed.

         Section 2.9 Transfer Taxes. Any sales, use, transfer or recording taxes
with respect to personal property due as a result of the transactions provided
for herein shall be borne and paid by the City. The Parties will reasonably
cooperate to minimize any such taxes.

                                   ARTICLE III

                              CONDITIONS TO CLOSING

         Section 3.1 Conditions Precedent to Obligations of Covanta Parties and
the City. The respective obligations of each Party to effect the transactions
contemplated by this Agreement shall be subject to the satisfaction of the
following conditions:

         (a) on or before December 22, 2003, the Approval Order, in form and
substance consistent with this Agreement, shall have been entered by the
Bankruptcy Court and such order shall not have been stayed, modified, reversed
or amended in any manner adverse to the City or the Covanta Parties, and shall
be final and unappealable;

         (b) the material regulatory consents and filings set out at Schedule
3.1(b) shall have been obtained or made;

         (c) no action, suit or proceeding (including any proceeding over which
the Bankruptcy Court has jurisdiction under 28 U.S.C. ss. 157(b) and (c)) shall
be pending by any Governmental Authority to enjoin, restrain, prohibit or obtain
substantial damages or significant equitable relief in respect of or related to
the transactions contemplated by this Agreement, or that would be reasonably
likely to prevent or make illegal the consummation of the transactions
contemplated by this Agreement;

                                    Page 10
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         (d) there shall not be in effect any Law of any Governmental Authority
of competent jurisdiction restraining, enjoining or otherwise preventing
consummation of the transactions contemplated by this Agreement; and

         (e) the COPS shall have been either repurchased in full, or repaid in
full, out of the proceeds from a draw on the COPS Letter of Credit and, subject
to receipt by CSFB of the Reimbursement Payment from the City, the Parties shall
have been released, by means of a written instrument in form and substance to
their reasonable satisfaction, of all of their respective obligations and
security interests granted to CSFB under the COPS Financing Documents, except
for CSFB's residual Reimbursement Claim against the Covanta Parties (giving
effect to the Reimbursement Amount), to be pursued in the Covanta Parties'
Chapter 11 cases. CSFB's release instrument shall confirm the credit of the
Reimbursement Amount against the Reimbursement Claim of CSFB against the Covanta
Parties.

         Section 3.2 Conditions Precedent to Obligations of the City. The
obligation of the City to effect the transactions contemplated by this Agreement
shall be subject to the satisfaction or waiver at or prior to the Closing Date
of the following additional conditions:

         (a) the representations and warranties of the Covanta Parties contained
in this Agreement qualified by materiality or Material Adverse Effect shall be
true and correct in all respects as of the Closing Date as if made on such date
(except for representations and warranties that relate to a specific date), and
all representations and warranties that are not so qualified shall be true and
correct with only such exceptions as, individually or in the aggregate, have not
had and would not reasonably be expected to have a Material Adverse Effect;

         (b) the City shall have completed the New City Financing;

         (c) from the date of this Agreement, no Leasehold Participant shall
have commenced any remedy under any of the Leasehold Documents due to any event
of default contained therein;

         (d) the Leasehold Transaction shall have been restructured
substantially in accordance with Schedule 3.2(d), pursuant to documents in form
and substance reasonably satisfactory to City;

         (e) the Manager shall have performed in all material respects the
covenants and obligations under this Agreement required to be performed by it at
or prior to the Closing Date, with only such exceptions as, individually or in
the aggregate, do not constitute and would not reasonably be expected to
constitute a Material Adverse Effect;

         (f) the City Council shall have taken all actions to approve, as
necessary, the transactions contemplated herein and all related transactions,
including the assumption and assignment of the Designated Contracts, the
restructuring of the Leasehold Transaction and the issuance of the New City
Financing;

         (g) since the signing date hereof, no Material Adverse Effect shall
have occurred or be reasonably expected to occur;

         (h) the Facility shall have been operated by the Manager from the
period after the date of this Agreement until the Closing Date in a manner
consistent with the Management Agreement;

         (i) CSFB shall have released the City and the Anaheim Public
Improvement Corporation from their obligations, and released its security
interests in the collateral pledged, under the COPS Financing Documents,
including, but not limited to, the documents listed in Schedule 3.2(i), in form
and substance to the City's reasonable satisfaction;

                                    Page 11
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         (j) Bank of America shall have released the City from its obligations
under the interest rate swap agreement between Bank of America and the City,
dated January 12, 1999, as amended, in form and substance to the City's
reasonable satisfaction; and

         (k) the Bank of New York Trust Company of California shall have
released the City, the Anaheim Public Improvement Corporation and the Covanta
Parties from their obligations, and released its security interests in the
collateral pledged, under the COPS Financing Documents, in form and substance to
the City's reasonable satisfaction.

         Section 3.3 Conditions Precedent to Obligations of the Covanta Parties.
The obligation of the Covanta Parties to effect the transactions contemplated by
this Agreement shall be subject to the satisfaction or waiver at or prior to the
Closing Date of the following additional conditions:

         (a) the representations and warranties of the City contained in this
Agreement qualified by materiality or Material Adverse Effect shall be true and
correct as of the Closing Date as if made on such date (except for
representations and warranties that relate to a specific date) and all
representations and warranties that are not so qualified shall be true and
correct with only such exceptions as, individually or in the aggregate, have not
had and would not reasonably be expected to have a Material Adverse Effect;

         (b) the Leasehold Participants shall have released the Covanta Parties
from their obligations under the Leasehold Documents, including the documents
listed in Schedule 3.3(b), in form and substance to the Covanta Parties'
reasonable satisfaction;

         (c) the Ogden Guaranty shall have been terminated, and the Covanta
Parties shall have been released from all obligations thereunder;

         (d) the City shall have withdrawn all proofs of claim it has filed in
the Bankruptcy Court against the Covanta Parties in their Chapter 11 Cases;

         (e) approval of the transactions contemplated in this Agreement by the
requisite DIP Lenders, as required by the DIP Financing;

         (f) the Leasehold Letters of Credit shall have been returned to
Covanta, undrawn, for cancellation; and

         (g) the City shall have performed in all material respects the
obligations under this Agreement required to be performed by the City at or
prior to the Closing Date.

                                   ARTICLE IV

                                   THE CLOSING

         Section 4.1 Closing. The consummation of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of the City
Manager of the City, or such other place at the Parties shall agree, at 10:00
a.m. California time, on the earlier of (i) the first Business Day after all the
conditions to the Closing set forth in Article 3 have been met or waived; (ii)
such other time, date, and place as shall be agreed upon by the Parties (the
date of the Closing being herein referred to as the "Closing Date") and (iii)
January 22, 2004. To the fullest extent practicable, the Closing shall occur
concurrently with the closing of the New City Financing unless otherwise agreed
by the City.

                                    Page 12
<PAGE>
         Section 4.2 Termination of Contracts At Closing.

         (a) At the Closing, the Management Agreement shall be deemed mutually
terminated by the Parties and shall be deemed rejected by the Manager. The City
and the Covanta Parties shall irrevocably, definitively and unconditionally
release each other from any and all obligations or liabilities under or in
connection therewith, and execute the Mutual Release.

         (b) At the Closing, all other Rejected Contracts shall be deemed
rejected.

         Section 4.3 Other Closing Actions.

         (a) At the Closing, Covanta and the City (or a City Designee, as the
case may be) shall sign assumption and assignment agreements, substantially
satisfactory to the Parties, with respect to the Assigned Contracts, which shall
necessarily include the Mighty Ducks Agreement.

         (b) At the Closing, all licenses, assignments or quitclaim deeds of
parking facilities and other transfer documents required to effectuate the
transaction described in this Agreement shall be executed and delivered.

         (c) At the Closing, the Parties shall sign and deliver the Mutual
Release.

         Section 4.4 Deliveries by the Manager at the Closing. At the Closing,
the Manager shall deliver to the City:

         (a) a general bill of sale and assignment, in form and substance
reasonably satisfactory to the City, with respect to the Transferred Assets to
be conveyed by the Manager at the Closing and any other documents reasonably
requested by the City so as to convey to the City or the City Designee good
title, free and clear of all Liens (other than Permitted Liens), to all of the
Manager's rights, title and interest in and to the Transferred Assets to be
conveyed at the Closing;

         (b) keys, security codes and pass cards to the Facility, and every lock
thereon in the Covanta Parties' possession;

         (c) effective control over software programs and databases, operating
systems, licenses, codes and related programs and services in use at the
Facility immediately prior to the Closing in connection with Facility operations
(including, but not limited to, booking, calendaring, and accounting programs);

         (d) all of the Manager's books and records, customer files and related
business records pertaining to the Facility and the Assigned Contracts,
including the originals of all Assigned Contracts, the originals of all permits
and warranties, and copies of all maintenance records and operating manuals in
the Covanta Parties' possession pertaining to the Facility and any personal
property included in the Assigned Contracts; and

         (e) such other instruments of transfer as are necessary or required to
transfer the Assigned Contracts, and all other documents, certificates,
instruments or writings reasonably requested by the City in connection herewith,
including, in particular, the release documents referred to in Sections 3.2(i),
(j) and (k), and the documents described in Section 4.3.

         Section 4.5 Deliveries by the City at the Closing. At the Closing, the
City shall deliver to the Covanta Parties such documents, instruments or
certificates as are required to be delivered to carry out the City's obligations
under this Agreement, or as the Covanta Parties or their counsel reasonably
request, including the documents described in Section 4.3.

         Section 4.6 Payment to CSFB. At the Closing, the City shall make the
Reimbursement Payment to CSFB, in accordance with the reimbursement provisions

                                    Page 13
<PAGE>
of Article III of the Bank Agreement and as instructed by CSFB, and post the
Escrow. CSFB's Reimbursement Claim shall be reduced by an amount equal to the
Reimbursement Amount. The receipt of the Reimbursement Payment and the reduction
of the Reimbursement Claim shall be formally acknowledged in writing by CSFB to
the City and the Covanta Parties, respectively.

                                    ARTICLE V

                  REPRESENTATIONS AND WARRANTIES OF THE MANAGER

         The Manager makes the following representations and warranties to the
City:

         Section 5.1 Organization, Standing and Authority. OFM is a corporation
duly organized, validly existing and in good standing under the Laws of its
jurisdiction of incorporation. Subject to compliance with applicable provisions
of the Bankruptcy Code, the Manager has all requisite corporate power and
authority to (i) carry on its business as it is now being conducted or presently
being proposed to be conducted, except where the failure to hold such corporate
authority or carry on its business would not constitute or be reasonably
expected to constitute a Material Adverse Effect and (ii) enter into the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by the Manager and the consummation by the Manager of the
transactions contemplated hereby have been duly authorized by all requisite
corporate actions. This Agreement has been duly and validly executed and
delivered by the Manager and (assuming this Agreement constitutes a valid and
binding obligation of the City) constitutes a valid and binding obligation of
the Manager in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other Laws affecting creditors'
rights generally from time to time in effect and to general equitable
principles.

         Section 5.2 No Conflict; Required Filings and Consents. Assuming the
satisfaction of the conditions set forth in Article 3 and compliance with the
applicable requirements for consents, approvals, authorizations, permits or
filings referred to in this Section 5.2, no consent, approval, authorization or
permit of, or filing with or notification to, any Governmental Authority,
domestic or foreign, or of any other Person is required to be made or obtained
by the Manager in connection with the execution, delivery, and performance of
this Agreement and the consummation of the transactions contemplated hereby
except (i) approvals of the Bankruptcy Court, and (ii) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications would neither (x) prevent or materially delay the
consummation by the Manager of the transactions contemplated by this Agreement
nor (y) individually or in the aggregate, constitute nor be reasonably expected
to constitute a Material Adverse Effect.

         Section 5.3 Title To Assets. Upon entry and effectiveness of the Final
Order, the Manager (a) shall have the power and the right to sell, convey,
transfer, assign and deliver to the City the Designated Contracts and (b) on the
Closing Date shall sell, convey, transfer, assign and deliver the Designated
Contracts free and clear of all Liens, except for and subject to the Assumed
Liabilities and Permitted Liens.

         Section 5.4 Assigned Contracts. To the Manager's knowledge, the
Assigned Contracts are valid and enforceable in accordance with their terms,
subject to applicable bankruptcy, reorganization, moratorium, and similar Laws
affecting creditor's rights and remedies generally and subject, as to
enforceability, to general principles of equity. To the Manager's knowledge,
each of such contracts are in full force and effect and, other than as
previously disclosed, no event has occurred which with or without the giving of
notice or lapse of time, or both, would constitute a default thereunder. Other
than in connection with the commencement of the Chapter 11 Cases, entry of the

                                    Page 14
<PAGE>
Final Order and as set forth on Schedule 5.4 hereto, none of such contracts
requires the consent of any party to its assignment in connection with the
transactions contemplated hereby, or to the extent that consent is required,
such consent has not been withheld by any party. True and complete copies or
descriptions (as to oral contracts) of all executory contracts of the Manager
known and available to the Manager have been delivered or made available, or
will be made available within five Business Days from the date of this
Agreement, to the City.

         Section 5.5 Licenses and Permits: Compliance with Laws. To the
Manager's knowledge, the Manager has all licenses, permits and authorizations
necessary in order to operate and conduct its business involving the Facility,
the Designated Contracts and the Transferred Assets as presently conducted.

         Section 5.6 No Other Assets. To the Manager's knowledge, other than the
Transferred Assets and the assets which the City has advised the Manager it does
not wish to acquire, no furniture, fixtures, equipment or other personal
property, tangible or intangible, are in use by the Manager in the day-to-day
operation of the Facility.

         Section 5.7 Pending Actions. To the Manager's knowledge, there are no
actions or proceedings pending against the Manager that would, if adversely
determined, be likely to have a Material Adverse Effect with respect to the
Facility (including any notices of violation by the Occupational Safety and
Health Act or other applicable Law which have not been corrected as of the date
hereof).

         Section 5.8 Environmental Compliance. To the Manager's knowledge, there
is not (and as of the Closing Date there will not be, except as otherwise
disclosed in writing by the Manager to the City and accepted by the City in
writing) any written notice or order by the County of Orange, the State of
California or the federal government of the United States finding or alleging
that a violation of Law exists with respect to the Facility relating to
pollution or to protection of the environment.

         Section 5.9 Information True and Complete. All information, documents,
statements and instruments delivered by the Manager to the City pursuant to this
Agreement are, to the Manager's knowledge, true, complete, and accurate in all
material respects.

         Section 5.10 Employee Matters. Pursuant to Section 7.9, all wages,
salary and other compensation, commissions, bonuses, vacation pay,
reimbursements, federal, state and local income and payroll tax withholdings
(including FICA and FUTA), premiums for health insurance, workers' compensation
insurance and other benefits, withholdings and contributions to any disability,
pension benefit, 401(k) or unemployment compensation plans relating to any Arena
Employee (collectively the "Employee Compensation") in respect of periods
through the Closing Date have been or will be, as of the Closing Date, paid in
full, in compliance with applicable Law.

         Section 5.11 Compliance with Law. To the Manager's knowledge, in
performing its obligations under the Management Agreement, the Manager has
complied with all applicable Law in all material respects.

         Section 5.12 Brokers. No Person, other than Chilmark Partners, is
entitled to any brokerage, financial advisory, finder's or similar fee or
commission payable by the Covanta Parties in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Covanta Parties.

                                    Page 15
<PAGE>
                                   ARTICLE VI

                   REPRESENTATIONS AND WARRANTIES OF THE CITY

         The City makes the following representations to the Covanta Parties:

         Section 6.1 Organization. The City is a California charter city and
municipal corporation duly organized and established pursuant to the City
Charter and the Laws of the State of California and has the full power,
authority and legal right to conduct its business as presently conducted with
respect to the Facility, to own or hold under lease the property it purports to
own or hold under lease with respect to the Facility and to enter into and
perform its obligations under this Agreement.

         Section 6.2 Authority. Relative to this Agreement, the City has the
municipal power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution, delivery, and performance of this
Agreement by the City and the consummation by the City of the transactions
contemplated hereby have been duly authorized by all requisite City Council
actions and corporate actions. This Agreement has been duly and validly executed
and delivered by the City and (assuming this Agreement constitutes a valid and
binding obligation of the Covanta Parties) constitutes a valid and binding
agreement of the City, enforceable against the City in accordance with its
terms, subject to applicable bankruptcy, reorganization, insolvency, moratorium,
and other Laws affecting creditors' rights generally from time to time in effect
and to general equitable principles.

         Section 6.3 Consents and Approvals. Except for the consents
contemplated to be obtained in this Agreement, no consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, domestic or foreign, or of any other Person is required to be made or
obtained by the City in connection with the execution, delivery, and performance
by the City of this Agreement and the consummation by the City of the
transactions contemplated hereby.

         Section 6.4 No Violations. To the City's knowledge neither the
execution, delivery, or performance of this Agreement by the City, nor the
consummation by the City of the transactions contemplated hereby, nor compliance
by the City with any of the provisions hereof, will (a) conflict with or result
in any violations of any city ordinances of the City, (b) result in a violation
or breach of, or constitute (with or without due notice or lapse of time) a
default (or give rise to any right of termination, cancellation, acceleration,
vesting, payment, exercise, suspension, or revocation) under any of the terms,
conditions, or provisions of any note, bond, mortgage, deed of trust, security
interest, indenture, license, contract, agreement, plan, or other instrument or
obligation to which the City is a party or by which the City or the City's
properties or assets may be bound or affected, (c) violate any order, writ,
injunction, decree, statute, rule, or regulation applicable to the City or the
City's properties or assets, (d) result in the creation or imposition of any
encumbrance on any asset of the City, or (e) cause the suspension or revocation
of any permit, license, governmental authorization, consent, or approval
necessary for the City to conduct its business as currently conducted, except in
the case of clauses (b), (c), (d), and (e) for violations, breaches, defaults,
terminations, cancellations, accelerations, creations, impositions, suspensions,
or revocations that would not individually or in the aggregate have a Material
Adverse Effect.

         Section 6.5 Brokers. No Person is entitled to any brokerage, financial
advisory, finder's or similar fee or commission payable by the City in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the City.

                                    Page 16
<PAGE>
                                   ARTICLE VII

                                    COVENANTS

         Section 7.1 Bankruptcy Court Approval of Agreement

         (a) As promptly as practicable following the City Council approval of
this Agreement but in no event later than November 10, 2003, and subject to the
provisions of this Agreement, the Covanta Parties shall file a motion (the
"Approval Motion") with the Bankruptcy Court seeking entry of a Bankruptcy Court
order authorizing the consummation of the transactions contemplated in this
Agreement (the "Approval Order"), subject to higher or better offers. The
Covanta Parties shall provide a copy of the form of the Approval Motion and
Approval Order to the City for its review and comment prior to filing. Upon
filing, the Covanta Parties shall notify, as is required by the Bankruptcy Code,
all parties entitled to notice of the Approval Motion and/or the Approval Order,
as modified by orders in respect of notice which may be issued at any time and
from time to time by the Bankruptcy Court.

         (b) The Covanta Parties and the City agree to use their reasonable best
efforts to obtain entry of the Approval Order by the Bankruptcy Court pursuant
to the applicable provisions, including sections 363 and 365, of the Bankruptcy
Code. The Approval Order is expected to contain, among other provisions
reasonably requested by the City, the following provisions (it being understood
that certain of such provisions may be contained in either the findings of fact
or conclusions of Law to be made by the Bankruptcy Court as part of the Approval
Order):

           (i) the termination and rejection at the Closing of the Management
     Agreement;

          (ii) authorization for the rejection of the Rejected Contracts;

         (iii) authorization for the Manager's assumption and assignment of the
     Designated Contracts to the City or the City Designee pursuant to sections
     363 and 365 of the Bankruptcy Code;

          (iv) authorization for the Manager's assignment and transfer to the
     City or the City Designee all of the Manager's right, title and interest
     (including common law rights) to all of its Transferred Assets;

          (v) the transfers of the Assigned Contracts and the Transferred Assets
     by the Manager to the City or the City Designee are or will be legal, valid
     and effective transfers, free and clear of Liens, of the Assigned Contracts
     and the Transferred Assets;

          (vi) all Persons who are parties to the Assigned Contracts shall be
     enjoined from raising after the date of the assignment any uncured defaults
     under such contract;

         (vii) any Person that may have had the right to consent to the
     assignment of an Assigned Contract is deemed to have consented to such
     assignment as required by section 365(e)(2)(A)(ii) of the Bankruptcy Code
     if it fails to object to the assumption and assignment;

        (viii) the City is obligated to pay any Cure Costs payable to the
     other parties to the Assigned Contracts consistent with the terms of this
     Agreement;

          (ix) the Reimbursement Amount shall result in a reduction in the same
     amount of the Reimbursement Claim;

           (x) all Persons are enjoined from taking any action against the City,
     any of the City's affiliates (as they existed immediately prior to the
     Closing) or the City Designee to recover any claim or Excluded Liability
     which such Person has solely against the Manager or any of the Manager's
     affiliates (as they existed immediately following the Closing);

                                    Page 17
<PAGE>

          (xi) the transactions contemplated by this Agreement are undertaken by
     the City and the Covanta Parties at arms' length, without collusion and in
     good faith within the meaning of section 363(m) of the Bankruptcy Code, and
     such Parties are entitled to the protections of section 363(m) of the
     Bankruptcy Code;

         (xii) the order provides that any stay of orders authorizing the use,
     sale or lease of property or assumption of contracts as provided in Fed. R.
     Bankr. Proc. 6004(g) and/or Fed. R. Bankr. Proc. 6006(d) shall not apply to
     the Approval Order and that the Approval Order is immediately effective and
     enforceable; and

        (xiii) the Bankruptcy Court retains exclusive jurisdiction to interpret,
     construe and enforce the provisions of the Final Order in all respects,
     provided that in the event the Bankruptcy Court abstains from exercising or
     declines to exercise jurisdiction with respect to any matter provided for
     in this clause (xiii) or is without jurisdiction, such abstention, refusal
     or lack of jurisdiction shall have no effect upon and shall not control,
     prohibit or limit the exercise of jurisdiction of any other court having
     competent jurisdiction with respect to any such matter.

         (c) If the Approval Order or any other orders of the Bankruptcy Court
relating to this Agreement shall be appealed by any Person (or a petition for
certiorari or motion for rehearing or reargument shall be filed with respect
thereto), the Covanta Parties agree to take all steps as may be reasonable and
appropriate to defend against such appeal, petition or motion, and the City
agrees to cooperate in such efforts.

         Section 7.2 Conduct of Business by the Manager Pending the Closing.
From the date hereof until the date of the Closing the Manager shall operate the
Facility in accordance with the Management Agreement and shall not (i) sell,
transfer, or otherwise dispose of or encumber any material tangible or
intangible assets included in the Transferred Assets (other than under Permitted
Liens or in the provision of services in the ordinary course of business in
accordance with past practice or as permitted under the terms of the DIP
Financing); (ii) grant any increase in the compensation or benefits of any Arena
Employee (other than pursuant to the terms of any employee retention, incentive,
or severance plan approved by the Bankruptcy Court and delivered to City); or
(iii) without reasonably consulting with (or, with respect to post-petition
executory contracts on Schedule 2.4(c) with an annual cost of $40,000 or more,
without the approval of) the City, modify, cancel, reject or otherwise impair or
permit to lapse any of its executory contracts. The Manager shall be permitted
to cause Current Liabilities to Covanta or Covanta affiliates to be paid in
accordance with the provisions of the Management Agreement. The Manager shall,
to the fullest extent permitted by Law, inform the City of all important
developments and events in respect of the conduct of the Assigned Contracts.

         Section 7.3 Access and Information. The Manager shall afford to the
City, the City Designee (including its financial advisors, counsel and
accountants, in each case subject to a customary and appropriate confidentiality
agreement) and the City's financial advisors, legal counsel, accountants,
consultants, financing sources, and other authorized representatives reasonable
access during normal business hours throughout the period prior to the Closing
Date to all books, records, properties, and personnel of the Manager that
pertain to the Designated Contracts in a manner which is not disruptive to the
Manager's business operations, and, during such period, shall furnish as
promptly as practicable to the City any and all such information as the City may
reasonably request pertaining to the Designated Contracts.

                                    Page 18
<PAGE>
         Section 7.4 Notification.

         (a) Each Party shall promptly notify the other of any litigation,

arbitration or administrative proceeding pending or, to the relevant Party's
knowledge, threatened against such Party which challenges or, if adversely
determined could materially affect, the transactions contemplated hereby.

         (b) The Manager shall promptly provide written notice to the City of
any change in any of the information contained in the representations or
warranties made by the Covanta Parties in Article 5 or any of the Schedules
attached hereto and shall promptly furnish any information that the City may
reasonably request in relation to such change.

         Section 7.5 No Inconsistent Action. Neither the City nor the Covanta
Parties shall take any action that is materially inconsistent with its
obligations under this Agreement, except for (and as follows from) the Approval
Motion and except as approved by the Bankruptcy Court, and, until entry of the
Final Order, except as required under the Covanta Parties' fiduciary duties.

         Section 7.6 Satisfaction of Conditions. Prior to the Closing, each of
the Parties shall use commercially reasonable efforts with due diligence and in
good faith to promptly satisfy all the conditions precedent to the Closing set
out in Article 3 in order to expedite the consummation of the transactions
contemplated hereby.

         Section 7.7 Filings. As promptly as practicable after the execution of
this Agreement, each Party shall use its reasonable efforts to obtain, and to
co-operate with the other Parties in obtaining, the approvals and consents
referred to in Sections 3.1(a) and (b), and to take all reasonable actions to
avoid the entry of any order or decree by any Governmental Authority prohibiting
the consummation of the transactions contemplated hereby and shall furnish to
the other Parties all such information in its possession as may be necessary for
the completion of the notifications to be filed by the other Parties.

         Section 7.8 Additional Matters and Further Assurances.

         (a) Subject to the terms and conditions of this Agreement, each of the
parties hereto agrees to use all commercially reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper, or advisable under applicable Laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including using all commercially reasonable efforts to obtain all necessary
waivers, consents, and approvals required under this Agreement.

         (b) In addition to the provisions of this Agreement, from time to time
after the Closing Date, the Manager and the City will use all commercially
reasonable efforts to execute and deliver such other instruments of conveyance,
transfer or assumption, as the case may be, and take such other actions as may
be reasonably requested to implement more effectively, the conveyance and
transfer of the Assigned Contracts to the City and the assumption of the Assumed
Liabilities by the City.

         (c) The Manager and the City shall cooperate and take such actions as
may be reasonably requested by the other in order to effect an orderly transfer
of the Assigned Contracts and the Transferred Assets with a minimum of
disruption to the operations and employees of the businesses of the Parties.

         Section 7.9 Employment Matters.

         (a) The Covanta Parties shall have sole responsibility for (i) all
Employee Compensation due for any period prior to the Closing Date, and (ii)
"continuation coverage" benefits provided under group health plans to all
current or former Arena Employees and qualified beneficiaries relating thereto
for whom a qualifying event has occurred on or prior to the Closing Date. Terms
used in this subsection 7.9(a) and not otherwise defined herein shall have the
meanings ascribed to them under COBRA.

                                    Page 19
<PAGE>

         (b) OFM shall comply with all applicable notice and other requirements
under the federal Workers Adjustment and Retraining Notification Act (the "WARN
Act") and any similar state or local statute with respect to all Arena Employees
for the period to and including Closing, and the City shall comply with all
applicable notice and other requirements under the WARN Act and any similar
state or local statue with respect to all Arena Employees for the period after
the Closing.

         (c) No later than ten days before the Closing, the City (or City
Designee) shall offer employment to each Arena Employee, except for those
employees designated on Schedule 7.9(c) as "Terminated Employees". With respect
to each Arena Employee who accepts such employment as of the Closing, the City
(or the City Designee, if such employees are employed by the City Designee)
shall provide similar compensation and working hours as each such Arena Employee
enjoyed immediately prior to the Closing Date and shall maintain such similar
compensation and working hours for the 45-day period immediately following the
Closing Date. The City (or the City Designee, if such employees are employed by
the City Designee) shall also provide group health coverage to each Arena
Employee who accepts such employment as of the Closing Date and had group health
plan coverage immediately prior to the Closing Date, and shall maintain such
coverage for the 45-day period immediately following the Closing Date.

         Section 7.10 Maintenance of Books and Records. The Covanta Parties and
the City shall preserve until the fifth anniversary of the Closing Date (or,
with respect to OFM, until such time as OFM is liquidated) all records possessed
by such Party relating to the Assigned Contracts prior to the Closing Date.
After the Closing Date, where there is a legitimate purpose, such Party shall
provide the other Party with access, upon prior reasonable written request
specifying the need therefor, during regular business hours, to (i) the relevant
officers and employees of such Party and (ii) the books of account and records
of such Party, but, in each case, only to the extent relating to the Assigned
Contracts prior to the Closing Date, and the other Parties and its
representatives shall have the right to make copies of such books and records,
provided that the foregoing right of access shall not be exercisable in such a
manner as to interfere unreasonably with the normal operations and business of
such Party. Such records may nevertheless be destroyed by a Party if such Party
sends the other Parties written notice of its intent to destroy records,
specifying with reasonable particularity the contents of the records to be
destroyed. Such records may then be destroyed after the thirtieth day following
delivery of such notice unless the other Parties objects to the destruction, in
which case the Party seeking to destroy the records shall either agree to retain
such records or to deliver such records to the objecting Party.

         Section 7.11 Survival of Representations and Warranties. No
representations or warranties given by the Covanta Parties or by the City in
this Agreement or in any instrument delivered pursuant to this Agreement shall
survive beyond the Closing Date.

         Section 7.12 Disclaimer. In entering into this Agreement, the City:

         (a) acknowledges that, except for the specific representations and
warranties of the Covanta Parties contained herein, the Covanta Parties and any
of their directors, officers, employees, affiliates, controlling Persons,
agents, advisors or representatives, shall not make and shall not be deemed to
have made any representation or warranty, either express or implied, as to the
accuracy or completeness of any of the information (including any estimates,
projections, forecasts or other forward-looking information) provided or
otherwise made available to the City or any of its directors, officers,
employees, affiliates, controlling Persons, agents, advisors or representatives
(including in any management presentations, information or offering memorandum,
supplemental information or other materials or information with respect to any
of the above);

                                    Page 20
<PAGE>

         (b) agrees that the Covanta Parties and their directors, officers,
employees, affiliates, controlling Persons, agents, advisors or representatives
shall not have any liability or responsibility whatsoever to the City or any of
its directors, officers, employees, affiliates, controlling Persons, agents,
advisors or representatives on any basis in respect of the specific
representations and warranties of the Covanta Parties; and

         (c) has no knowledge of any breach of a representation or warranty of
the Covanta Parties made under this Agreement or of any material errors or
omissions as of the date hereof.

                                  ARTICLE VIII

                                   TERMINATION

         Section 8.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:

         (a) by mutual consent of the Covanta Parties and the City;

         (b) by either the Covanta Parties or the City (provided that any such
Party is not then in breach of any provision of this Agreement):

           (i) if the Closing has not occurred prior to January 22, 2004;

          (ii) if a Governmental Authority shall have issued an order, decree or
     ruling or taken any other action (which order, decree, ruling or action the
     Parties hereto shall use their reasonable best efforts to lift or reverse),
     in each case permanently restraining, enjoining or otherwise prohibiting
     the transactions contemplated by this Agreement and such order, decree,
     ruling or other action shall have become final and nonappealable; or

        (iii) if the Bankruptcy Court approves an alternative transaction that
     is considered "better and higher" to the Covanta Parties, from a financial
     perspective;

         (c) by the City (provided that the City is not then in breach of any
provision of this Agreement):

           (i) if the Approval Order shall not have become a Final Order by
     December 22, 2003;

          (ii) if either of the Covanta Parties shall be in breach or default
     with respect to the due and timely performance of any of its covenants or
     agreements contained herein, or if its representations or warranties
     contained in this Agreement shall have become inaccurate, if such default,
     breach or inaccuracy has not been cured (if capable of being cured) or
     waived within 15 days after written notice to such Covanta Party
     specifying, in reasonable detail, such claimed default, breach or
     inaccuracy and demanding its cure or satisfaction and such default, breach
     or misrepresentation would, if not cured, constitute or would reasonably be
     expected to constitute a Material Adverse Effect, provided that if and to
     the extent that a misrepresentation consists of the failure to provide
     information relative to certain facts, circumstances or matters, the
     provision of the information in question shall not constitute cure if the
     facts, circumstances or matters previously undisclosed, individually or in
     the aggregate, constitute or be reasonably expected to constitute a
     Material Adverse Effect and are not capable of cure and effectively cured
     within such 15-day period; or

                                    Page 21
<PAGE>
         (iii) if any of the conditions set forth in Sections 3.1 or 3.2 shall

     have become definitively incapable of fulfillment or cure and shall not
     have been waived by the City; and

         (d) by the Covanta Parties (provided that no Covanta Party is then in
breach of any provision of this Agreement):

           (i) if the City shall be in material default or material breach with
     respect to the due and timely performance of any of its covenants or
     agreements contained herein or if its representations or warranties
     contained in this Agreement shall have become inaccurate in any material
     respect if such default, breach or inaccuracy has not been cured (if
     capable of being cured) or waived within 15 days after written notice to
     the City specifying in reasonable detail such claimed default, breach or
     inaccuracy and demanding its cure or satisfaction; or

          (ii) if any of the conditions set forth in Sections 3.1 or 3.3 shall
     have become definitively incapable of fulfillment or cure and shall not
     have been waived by Covanta.

         Section 8.2 Procedure and Effect of Termination.

         (a) If this Agreement is terminated under Section 8.1, written notice
thereof shall forthwith be given to the other Parties to this Agreement and this
Agreement shall terminate (subject to the provisions of this Section 8.2) and
the transactions contemplated hereby shall be abandoned without further action
by any of the Parties hereto.

         (b) If this Agreement is terminated as provided herein, then:

           (i) upon request therefor each Party shall return all documents, work
     papers and other material of any other Party relating to the transactions
     contemplated hereby, whether obtained before or after the execution hereof,
     to the Party furnishing the same; and

          (ii) the Parties shall be released from future performance and no
     Party hereto shall have any liability or further obligation to any other
     Party resulting from such termination.

(c)      The provisions of Article 9 of this Agreement shall survive its
         termination.

                                   ARTICLE IX

                               GENERAL PROVISIONS

         Section 9.1 Notices. All notices, claims, demands, and other
communications hereunder shall be in writing and shall be deemed given upon (a)
confirmation of receipt of a facsimile transmission, (b) confirmed delivery by a
standard overnight carrier or when delivered by hand, or (c) the expiration of
five Business Days after the day when mailed by registered or certified mail
(postage prepaid, return receipt requested), addressed to the respective Parties
at the following addresses (or such other address for a Party as shall be
specified by like notice):

                                    Page 22
<PAGE>
(a) If to the City, to

                           200 South Anaheim Blvd.
                           Anaheim, CA  92805
                           Tel:  714-765-5165
                           Fax:  714-765-5164
                           Attn: David Morgan, City Manager

                           with copies to

                           The City of Anaheim
                           200 South Anaheim Blvd.
                           Anaheim, CA  92805
                           Tel:  714-765-5169
                           Fax:  714-765-5123
                           Attn: Jack White, City Attorney

                           Orrick, Herrington & Sutcliffe, LLP
                           777 South Figueroa Street
                           Suite 3200
                           Los Angeles, CA  90017-5855
                           Tel.: 213-612-2425
                           Fax:  213-612-2499
                           Attention: Eugene J. Carron, Esq.

                           Freeman, Freeman & Smiley, LLP
                           2 Park Plaza, Suite 1245
                           Irvine, CA  92614
                           Tel: 949-252-2708
                           Fax: 949-252-2776
                           Attention: Jill MacGregor Draffin, Esq.

                           and

(b) If to the Covanta Parties, to

                           Covanta Energy Corporation
                           40 Lane Road
                           Fairfield, NJ  07007
                           Tel: 973-882-9000
                           Fax: 973-882-7202
                           Attention: Jeffrey R. Horowitz

                           with copies to

                           Cleary, Gottlieb, Steen & Hamilton
                           1 Liberty Plaza
                           New York, NY
                           Tel: (212) 225-2000
                           Fax: (212) 225-3999
                           Attention: Deborah M. Buell, Esq.
                                      Filip Moerman, Esq.

                           Nixon Peabody LLP
                           401 9th Street, N.W., Suite 900
                           Washington, DC   20004-2128
                           Tel: 202-585-8392
                           Fax: 202-585-8080
                           Attention: William Andrews, Esq.

         Section 9.2 Publicity. No Party to this Agreement shall issue any press
release or other publicity concerning the proposed transaction without the prior
approval of the other Party, except as otherwise required by Law. Each Party
shall provide to the other Party a reasonable opportunity to review any press
release or other publicity prior to its issuance.

         Section 9.3 Descriptive Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

         Section 9.4 Entire Agreement; Assignment. This Agreement (including the
Annexes, Schedules and the other documents and instruments referred to herein)

                                    Page 23
<PAGE>

(a) constitutes the entire agreement and supersedes all other prior agreements
and understandings, both written and oral, among the Parties or any of them,
with respect to the subject matter hereof, including any transaction between or
among the Parties hereto, provided, however, that the terms of the
confidentiality agreement, if any, executed in connection with the City's
investigation and due diligence of the Designated Contracts shall survive
execution of this Agreement, and (b) shall not be assigned by operation of Law
or otherwise.

         Section 9.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of California without regard
to the rules of conflict of Laws of the State of California or any other
jurisdiction. Each of the Parties hereto irrevocably and unconditionally
consents to submit to the jurisdiction of the courts of the Southern District of
New York, including the Bankruptcy Court, for any litigation arising out of or
relating to this Agreement and the transactions contemplated thereby (and agrees
not to commence any litigation relating thereto except in such courts), waives
any objection to the laying of venue of any such litigation therein, and agrees
not to plead or claim that such litigation has been brought in an inconvenient
forum.

         Section 9.6 Expenses. Except as expressly provided herein, whether or
not the transactions contemplated by this Agreement are consummated, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated thereby shall be paid by the Party incurring such expenses. The
foregoing shall not affect the legal right, if any, that any Party hereto may
have to recover expenses from any other Party that breaches its obligations
hereunder.

         Section 9.7 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of all the Parties hereto.

         Section 9.8 Waiver. At any time prior to the Closing Date, the Parties
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other Parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a Party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such Party.

         Section 9.9 Counterparts; Effectiveness. This Agreement may be executed
in two or more counterparts, each of which shall be deemed to be an original but
all of which shall constitute one and the same agreement. This Agreement shall
become effective when each Party hereto shall have received counterparts thereof
signed by the other Parties hereto.

         Section 9.10 Severability; Validity; Parties in Interest. If any
provision of this Agreement or the application thereof to any Person or
circumstance is held invalid or unenforceable, the remainder of this Agreement,
and the application of such provision to other Persons or circumstances, shall
not be affected thereby, and to such end, the provisions of this Agreement are
agreed to be severable. Nothing in this Agreement, express or implied, is
intended to confer upon any Person not a party to this Agreement any rights or
remedies of any nature whatsoever under or by reason of this Agreement.

         Section 9.11 Representation. Covanta shall represent the Manager for
the purposes of this Agreement. Any notice given or communication made to the
City on behalf of the Manager by Covanta shall constitute effective notice or
communication to the City. Any notice given or communication made by the City to
Covanta shall constitute effective notice or communication to the Manager. Any
action, approval, or consent by Covanta under or with respect to this Agreement
shall bind both Covanta and the Manager. In connection with the transfer of the
Designated Contracts and the Transferred Assets to the City, Covanta shall act
as agent for any of its direct or indirect subsidiaries who is not a Party and
who has any interest in any of the Designated Contracts or the Transferred
Assets. Covanta represents that it has the authority to act on behalf of the
Manager as provided in this Section 9.11.

                         [SIGNATURES ON FOLLOWING PAGE]

                                    Page 24
<PAGE>

         IN WITNESS WHEREOF, the Covanta Parties and the City have caused this
Agreement to be executed on their behalf by their officers thereunto duly
authorized, as of the date first above written.

                               COVANTA ENERGY CORPORATION

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

                               OGDEN FACILITY MANAGEMENT CORPORATION OF ANAHEIM

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

                               CITY OF ANAHEIM, CALIFORNIA

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

Attest:

By:
     -----------------------------------------------
     Name:  Sheryll Schroeder
     Title: City Clerk

Approved as to Form:

By:
     -----------------------------------------------
     Name:  Jack L. White, Esq.
     Title: City Attorney

                                    Page 25
<PAGE>

                                    Annex A
                                    -------

                                  Definitions

         Unless otherwise defined herein, terms used herein shall have the
meanings set forth below:

         "Agreement" means this Termination Agreement, including all Annexes,
Exhibits and Schedules hereto, as the same may be amended from time to time in
accordance with its terms.

         "Approval Motion" shall have the meaning set forth in Section 7.1(a)
hereof.

         "Approval Hearing" shall mean the hearing before the Bankruptcy Court
to consider the Approval Motion, as such hearing may be adjourned or otherwise
continued.

         "Approval Order" shall have the meaning set forth in Section 7.1(a)
hereof.

         "Arena Employee" shall mean any Full-time or Part-time employee, as
such terms are defined under applicable federal and state employment Laws,
employed by the Manager as of the date hereof.

         "Assigned Contract" shall mean a Designated Contract that is assumed by
Manager and assigned to the City or a City Designee under Section 365 of the
Bankruptcy Code, as of the Closing.

         "Assumed Liabilities" shall have the meaning set forth in Section 2.6
hereof.

         "Bank Agreement" means the bank agreement dated December 1, 1993,
relating to the Certificates of Participation, between CSFB, OFM and the City,
as amended and supplemented from time to time.

         "Bankruptcy Code" shall mean title 11 of the United States Code,
sections 101-1330.

         "Bankruptcy Court" shall have the meaning set forth in the Recitals
hereof.

         "Business Day" means a day on which the major stock exchanges in the
United States are open for trading.

         "Certificates of Participation" and "COPS" mean the $126,500,000 City
of Anaheim Certificates of Participation Municipal Adjustable Rate Taxable
Securities (1993 Arena Financing Project) Evidencing Direct Undivided Fractional
Interests of the Owners Thereof in Lease Payments to be made by the City of
Anaheim, California, pursuant to that certain Lease Agreement with the Anaheim
Public Improvement Corporation, a California non-profit corporation, of which a
principal amount of $113,700,000 remains outstanding.

         "Chapter 11 Cases" means the cases commenced by the Covanta Parties on
April 1, 2002 under Chapter 11 of the Bankruptcy Code, pending in the Bankruptcy
Court under Docket No. 02-40826(CB), jointly administered.

         "City" shall have the meaning set forth in the Preamble hereof.

         "City Council" shall mean the governing body of the City.

                                      A-1
<PAGE>

         "City Designee" shall mean any entity, including any of the City's
direct or indirect subsidiaries that the City may appoint to (i) assume all or
certain Assigned Contracts or Assumed Liabilities, (ii) receive all or certain
Transferred Assets, or (iii) employ all or certain Arena Employees on the
Closing Date, and which does assume such Assigned Contracts and Assumed
Liabilities, receive such Transferred Assets, or employ such Arena Employees,
subject to satisfaction of the requirements of Section 365 of the Bankruptcy
Code including the provision of adequate assurances for future performance.

         "City Payable" shall mean an amount of $177,417.00.

         "Closing" shall have the meaning set forth in Section 4.1 hereof.

         "Closing Date" shall have the meaning set forth in Section 4.1 hereof.

         "Closing Statement" shall have the meaning set forth in Section 2.3(c)
hereof.

         "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended.

         "Contract" means any agreement, contract, commitment, or other binding
arrangement or understanding, whether written or oral.

         "COPS Letter of Credit" means the $127,975,833.33 letter of credit, as
periodically adjusted, issued by CSFB in favor of The Bank of New York, in
connection with the COPS Transaction.

         "COPS Financing Documents" shall have the meaning ascribed to it in the
glossary to the Leasehold Transaction documents.

         "COPS Transaction" shall have the meaning set forth in the Recitals
hereof.

         "Covanta" shall have the meaning set forth in the Preamble hereof.

         "Covanta Parties" shall have the meaning as set forth in the Preamble
hereof.

         "CSFB" shall have the meaning set forth in the Recitals hereof.

         "Cure Costs" means any amounts payable as contemplated in Section 2.5
hereof.

         "Current Assets" shall mean cash, consigned tickets, net accounts
receivable, prepaid expenses (including, but not limited to, prepaid insurance),
prepaid Disney commissions and other assets, as set forth on Schedule 2.3(a)-1.

         "Current Liabilities" shall mean accounts payable (excluding all
accounts payable that arose, or relate to periods, prior to April 1, 2002, but
including the City Payable and possessory interest tax payable), accrued
expenses, unearned ticket revenue, unearned premium revenue and other current
liabilities, as set forth in, and derived from Schedule 2.3(a)-1.

         "Designated Contracts" shall have the meaning set forth in Section
2.4(a) hereof.

         "DIP Financing" shall mean the credit facility entered into between
Covanta, OFM and their related subsidiaries who have filed for bankruptcy
protection and certain financial institutions pursuant to the
Debtor-In-Possession Credit Agreement dated April 1, 2002.

         "DIP Lenders" shall mean the Lenders under the DIP Financing, as

                                      A-2
<PAGE>

defined therein.

         "Dollars" or "$" means dollars of the United States of America.

         "Employee Compensation" shall have the meaning set forth in Section
5.10 hereof.

         "Escrow" shall have the meaning set forth in section 2.2 hereof.

         "Excluded Liabilities" shall have the meaning set forth in Section 2.7
hereof.

         "Facility" shall have the meaning set forth in the Recitals hereof.

         "FICA" shall mean the taxes imposed by the U.S. Internal Revenue
Service on employees and employers under the Federal Insurance Contributions
Act.

         "Final Closing Statement" shall have the meaning set forth in Section
2.3(f) hereof.

         "Final Order" means the version of the Approval Order that shall have
become final and entered by the Bankruptcy Court as contemplated by Section 7.1
hereof.

         "FUTA" shall mean the taxes imposed by the U.S. Internal Revenue
Service on employers under the Federal Unemployment Tax Act.

         "Governmental Authority" means any federal, state, local or foreign
government or any subdivision, agency, instrumentality, authority, department,
commission, board or bureau thereof, provided, in each case, that the relevant
action in any given circumstance has the force of Law, or any federal, state,
local or foreign court, tribunal or arbitrator of competent jurisdiction
(including the Bankruptcy Court).

         "Independent Auditor" shall mean PricewaterhouseCoopers or another
independent auditor with arbitration experience mutually agreeable to the
Parties.

         "Law" means any provision of any foreign, federal, state or local law,
statute, ordinance, charter, constitution, treaty, code, rule, regulation or
guidelines (including those of self-regulatory organizations such as the New
York Stock Exchange and the National Association of Securities Dealers, Inc.).

         "Leasehold Documents" shall mean the Operative Documents as defined in
the glossary to the Leasehold Transaction documents.

         "Leasehold Letters of Credit" shall mean the Debt Letter of Credit and
the Equity Letter of Credit collectively, each as defined in the Leasehold
Documents.

         "Leasehold Participants" shall have the meaning set forth in the
Recitals hereof.

         "Leasehold Transaction" shall have the meaning set forth in the
Recitals hereof.

          "Liability" means any debt, liability or obligation of any nature,
whether secured, unsecured, recourse, nonrecourse, liquidated, unliquidated,
accrued, absolute, fixed, contingent, ascertained, unascertained, known, unknown
or otherwise.

         "Lien" means any security, interest, lien, charge, mortgage, deed,

                                      A-3
<PAGE>

assignment, pledge, hypothecation, claim, encumbrance, easement, restriction or
interest of another Person of any kind or nature.

          "Management Agreement" shall have the meaning set forth in the
Recitals hereof.

         "Manager" shall have the meaning set forth in the Preamble hereof.

         "Material Adverse Effect" means (a) any event, change, conditions or
matters in respect of the Designated Contracts that, individually or in the
aggregate, result in or would be reasonably expected to result in a material
adverse effect on the business, results of operations, assets, condition
(financial or otherwise) of the Designated Contracts taken as a whole, excluding
any such effect to the extent resulting from or arising in connection with (i)
the filing of the Chapter 11 Cases, (ii) macro-economic changes or general
market-related changes unless the Designated Contracts are affected by such
changes in a manner that is substantially disproportionate when compared with
competitive or peer businesses, or (iii) the conditions of the Facility that are
commonly referred to by the Parties as the "chilled pipes issue"; or (b) any
events, conditions or matters that would have a material adverse effect on the
legality, validity or enforceability of this Agreement and the agreements and
instruments to be entered into in connection herewith, the consummation of the
transactions contemplated hereby, or the realization of the rights and remedies
hereunder.

         "Mighty Ducks Agreement" shall mean the agreement dated February 24,
1993 between OFM and Anaheim Sports, Inc., formerly Disney Sports Enterprises
Inc., as amended or supplemented as follows:

               1.   March 31, 1993 First Amendment between OFM and Anaheim
                    Sports, Inc.

               2.   June 15, 1993 Letter regarding the Use of Complimentary
                    Suites and Club Seats, from Tony Tavares to Brad Mayne.

               3.   September 15, 1993 Standard Operating Procedures (as may be
                    modified from time to time), pursuant to Section 16(c) of
                    the Mighty Ducks Agreement.

               4.   July 2, 1994 Letter Agreement regarding the Bronze Club Seat
                    Program, from Brad Mayne to Andy Roundtree.

               5.   April 29, 1999 Letter Agreement regarding All-Event Silver
                    Club "West" Seats and Revitalized Sports Pack, from Spencer
                    Neumann to Tim Ryan.

               6.   May 26, 1999 Letter Agreement regarding the sale and
                    packaging of seats in Sections 310-317, from Spencer Neumann
                    to Tim Ryan.

               7.   July 12, 1999 Letter Agreement regarding
                    Advertising/Sponsorship Issues, from Rick Schlesinger to Tim
                    Ryan.

               8.   October 15, 2001 Letter Agreement regarding Licensing of
                    Luxury Boxes, from Larry Cohen to Tim Ryan.

               9.   March 7, 2002 Letter regarding the Benchmark Standard from
                    Rick Schlesinger to Tim Ryan.

               10.  August 14, 2001 Letter Agreement regarding
                    Advertising/Sponsorship engaging The Cabana Group LLC as
                    agent, from Rick Schlesinger to Tim Ryan.

                                      A-4
<PAGE>

               11.  February 10, 2003 Agreement regarding Licensing of Luxury
                    Boxes, from Bruce Carter to Tim Ryan.

               12.  August 27, 2003 Letter Agreement regarding LED Purchase and
                    Revenue Sharing, from Al Coates to Tim Ryan.

         "Mutual Release" shall have the meaning set forth in Section 2.1(a)
hereof.

         "Net Working Capital" shall mean Current Assets minus Current
Liabilities.

         "New City Financing" shall mean the bond issue in an estimated
principal amount of no more than $45,000,000.00, to be carried out pursuant to
the following documents:

               1.   Amended and Restated Lease Agreement dated as of December 1,
                    2003 by and between the Anaheim Public Financing Authority,
                    a public entity of the State of California (the"
                    Authority"), as lessor, and the City, as lessee, as the same
                    may be amended and supplemented;

               2.   Amended and Restated Site and Facility Lease dated as of
                    December 1, 2003 by and between the City, as lessor, and the
                    Authority, as lessee, as the same may be amended and
                    supplemented; and

               3.   Indenture of Trust dated as of December 1, 2003 by and
                    between the Authority and BNY Western Trust Company, as the
                    same may be amended and supplemented.

          "OFM" shall have the meaning set forth in the Preamble hereof.

         "Ogden Agreement" shall mean the Ogden Agreement related to the
Leasehold Transaction, as such agreement is defined in the glossary to the
Leasehold Transaction.

         "Ogden Guaranty" shall mean the Ogden Guaranty related to the Leasehold
Transaction, as such agreement is defined in the glossary to the Leasehold
Transaction.

         "Participation Agreement" shall mean the Participation Agreement
related to the Leasehold Transaction, as such agreement is defined in the
glossary to the Leasehold Transaction.

         "Party" or "Parties" are those Persons listed in the first paragraph of
this Agreement.

         "Permitted Liens" means any non-material Liens on non-material
Designated Contracts and Liens that will be released before or on Closing.

         "Person" means any corporation, partnership, joint venture, limited
liability company, organization, entity, authority or individual.

         "Pre-Closing Statement" shall have the meaning set forth in Section
2.3(a) hereof.

         "Reference Balance Sheet" shall have the meaning set forth in Section
2.3(a) hereof.

         "Reimbursement Amount" shall mean $40,000,000, subject to adjustment as
provided in Section 2.3 hereof.

                                      A-5
<PAGE>

         "Reimbursement Claim" shall mean the claim CSFB has against the Covanta
Parties resulting from a draw on the COPS Letter of Credit, pursuant to Section
III.B of the Bank Agreement.

         "Reimbursement Payment" shall have the meaning set forth in Section 2.2
hereof.

         "Rejected Contracts" shall have the meaning set forth in Section 2.1(a)
hereof.

         "Resolution Period" shall have the meaning set forth in Section 2.3(d)
hereof.

         "Schedule 2.4(a) Contracts" shall have the meaning set forth in Section
2.4(a) hereof.

         "Schedules" means the schedules hereto.

         "Taxes" means all taxes, charges, fees, duties, levies or other
assessments, including income, gross receipts, net proceeds, ad valorem,
turnover, real and personal property (tangible and intangible), sales, use,
franchise, excise, value added, license, payroll, unemployment, environmental,
customs duties, capital stock, disability, stamp, leasing, lease, user,
transfer, fuel, excess profits, occupational and interest equalization, windfall
profits, severance and employees' income withholding and Social Security taxes
imposed by the United States or any other country or by any state, municipality,
subdivision or instrumentality of the United States or of any other country or
by any other tax authority, including all applicable penalties and interest, and
such term shall include any interest, penalties or additions to tax attributable
to such Taxes.

         "Terminated Employees" shall have the meaning set forth in Section
7.9(b) hereof.

         "Transferred Assets" shall have the meaning set forth in the Recitals
hereof.

         "Undisclosed Contract" shall have the meaning set forth in Section
2.4(b) hereof.

         "WARN Act" shall have the meaning set forth in Section 7.9(b) hereof.

                                      A-6
<PAGE>

                                    Annex B
                                    -------

                             Form of Mutual Release

         This Management Agreement Mutual Release dated as of December o, 2003
(the "Release"), is made by and between Covanta Energy Corporation, a Delaware
corporation ("Covanta"), Ogden Facility Management Corporation of Anaheim, a
California corporation (the "Manager" and together with Covanta, the "Covanta
Parties"), the City of Anaheim, a municipality incorporated in the State of
California (the "City"), and Anaheim Public Improvement Corporation, a
California corporation (together with the City, the "City Parties".

         Reference is made to the Second Amended and Restated Arena Management
Agreement dated December 1, 1993 between the Manager and the City, as amended or
supplemented from time to time (the "Management Agreement"), the Termination
Agreement dated as of November 5, 2003 by and between the Covanta Parties and
the City (the "Termination Agreement"), and the Final Order entered by the
Bankruptcy Court approving the transactions contemplated in the Termination
Agreement, dated as of December [4], 2003.

         All capitalized terms not defined herein shall have the meaning
attributed to them in the Termination Agreement.

         Pursuant to Section 4.2(a) of the Termination Agreement, the Covanta
Parties and the City have terminated the Management Agreement effective as of
the date hereof. As required under the terms of the Termination Agreement, the
Covanta Parties and the City Parties hereby enter into this Release, and release
each other irrevocably, definitively and unconditionally from any and all
obligations or liabilities, known or unknown, actual or contingent, under or in
connection with the Management Agreement (excluding the Termination Agreement).
Each of the Covanta Parties and the City Parties hereby waives and relinquishes
any rights, benefits and claims, known or unknown, actual or contingent, it may
have against the other Party under the Management Agreement (excluding the
Termination Agreement).

         Furthermore, each of the Covanta Parties and the City Parties
acknowledges that it is familiar with Section 1542 of the Civil Code of the
State of California, which provides as follows:

          "A general release does not extend to claims which the creditor does
     not know or suspect to exist in his favor at the time of executing the
     release, which if known by him must have materially affected his settlement
     with the debtor."

         Each of the Covanta Parties and the City Parties waives and
relinquishes any and all rights and benefits which it may have under, or which
may be conferred upon it by, the provisions of Section 1542 of the California
Civil Code, to the fullest extent that it may lawfully waive such rights or
benefits pertaining to the subject matter of this agreement.

         Each of the parties hereto shall execute from time to time any other
agreements or documents as may be necessary to give effect to this Release. All
terms of this Release shall necessarily also apply to any and all of the Covanta
Parties' and the City's officials (whether elected or appointed), directors,
employees, and agents and their respective successors and assigns.

         IN WITNESS WHEREOF, the Covanta Parties and the City Parties have
caused this Release to be executed on their behalf by their officers thereunto
duly authorized, as of the date first above written.

COVANTA ENERGY CORPORATION                      CITY OF ANAHEIM, CALIFORNIA

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

                                                Attest:
                                                       -------------------------
                                                Name:  Sheryll Schroeder
                                                Title: City Clerk

                                                Approved as to Form:
                                                                    ------------

                                                Name:  Jack L. White, Esq.
                                                Title: City Attorney

OGDEN FACILITY MANAGEMENT                       ANAHEIM PUBLIC IMPROVEMENT
     CORPORATION OF ANAHEIM                          CORPORATION

By:                                             By:
     -----------------------------------           -----------------------------

     Name:                                      Name:
     Title:                                     Title

                                      B-1
<PAGE>

                                  Schedule 1A
                                  -----------

                               Transferred Assets

Equipment

1.  All security cameras
2.  Basketball goals
3.  Currency counter
4.  Fire alarm covers
5.  Security clock
6.  Radios
7.  GTE customer network
8.  Adjustable chrome racks
9.  Contractor saws / blades
10. Roller hockey
11. All parking radios
12. All photocopiers
13. Vomitory curtains
14. Janitorial supplies
15. Cyber lights
16. All computer equipment and software licenses

Furniture and Fixtures

1.  All stage curtains
2.  All modular panel systems
3.  All vomitory curtains
4.  Tile for bathroom repairs
5.  Television monitor
6.  All televisions and cabinets
7.  Credenza
8.  Soccer offices
9.  Partitions for soccer offices
10. All office furniture
11. All storage cabinets

<PAGE>

                                  Schedule 2.1
                                  ------------

                            Per se Rejected Contracts

1.  Management Agreement.

2.  Arena Concessions Agreement between OFM and Aramark Entertainment, Inc.
    (f/k/a Ogden Entertainment, Inc.), dated April 1, 1993, as amended and
    supplemented from time to time.

3.  Booking Agreement between OFM and Nederlander Anaheim, Inc., dated
    November 13, 2000.

4.  Stage work contract between Hirsh Entertainment Group (a/k/a L.A. Stagecall)
    and OFM, originally dated June 1, 1996, and as amended from time to time.

5.  Personnel Services contract between Staff Pro Inc. and OFM, dated
    November 30, 2001.

<PAGE>

                               Schedule 2.3(a)-1
                               -----------------

                         Form of Pre-Closing Statement

<TABLE>
<S>                                                             <C>
    Current Assets
    ---------------
     Cash                                                       $ o
     Consigned Tickets                                            o
     Accounts Receivable, net                                     o
     Prepaid Expenses                                             o
     Prepaid Disney Commissions                                   o
     Other Assets                                                 o
                                                                ---
      Total Current Assets                                      $ o
</TABLE>

    Current Liabilities
    --------------------
     Accounts Payable (excluding all accounts payable that arose prior to April
    1, 2002 but including the City Payable and posessory interest tax payable)
    and Accrued Expenses $o
<TABLE>
<S>                                                              <C>
     Unearned Ticket Revenue                                      o
     Unearned Premium Revenue                                     o
     Other Current Liabilities                                    o
                                                                 ---
      Total Current Liabilities                                  $o
</TABLE>

<PAGE>

                                Schedule 2.3(a)-2
                                -----------------

                             Reference Balance Sheet

<TABLE>
<CAPTION>
                                         Unaudited
                                          February
                                        2003 Actual
                                        -----------
<S>                                     <C>
Assets
------
Current Assets
 Cash                                    $ 9,432
 Consigned Tickets                            47
 Accounts Receivable, net                  1,757
 Prepaid Expenses                            186
 Prepaid Disney Commissions                2,301
 Other Assets                                200
                                         -------
  Total Current Assets                   $13,923
Fixed Assets
 Parking Lot Rights                      $ 2,827
 Leasehold Improvements (net)                 44
 Furniture, Fixtures, and Equipment           --
                                         -------
  Total Fixed Assets                     $ 2,871
                                         -------
Total Assets                             $16,794
                                         =======
</TABLE>

<PAGE>

                               Schedule 2.3(a)-2
                               -----------------

                     (Reference Balance Sheet - continued)

<TABLE>
<CAPTION>
                                             Unaudited
                                             February
                                            2003 Actual
                                            -----------
<S>                                         <C>
Liabilities
Current Liabilities
 Accounts Payable (excluding all
accounts payable that arose prior
to April 1, 2002 but including the
City Payable and posessory interest
tax payable) and Accrued Expenses            $  1,404

 Due to Affiliates                              5,311

 Interest Payable                               3,359

 Finance Charges Payable                        1,394

 Working Capital Payable                        2,547

 Working Capital Interest Payable                  18

 Unearned Ticket Revenue                        5,286

 Unearned Premium Revenue                       5,048

 Other Current Liabilities                        110
                                             --------
  Total Current Liabilities                  $ 24,477

 Repairs and Maintenance Fund                $   (186)

 City Shortfall Account                         7,500

 Manager Shortfall Payable                     23,215

 City Shortfall - Parking Lot                   1,926

 Manager Shortfall - Parking Lot                1,926

 LT Working Capital Interest Payable            2,084
                                             --------
  Long-Term Liabilities                      $ 36,465

Total Liabilities                            $ 60,942

Retained Earnings                            $(44,148)

                                             --------
Total Liabilities and Retained Earnings      $ 16,794
                                             ========
</TABLE>

<PAGE>

                                Schedule 2.3(c)
                                ---------------

                           Form of Closing Statement

<TABLE>
<S>                                                                 <C>
       Current Assets
        Cash                                                        $o
        Consigned Tickets                                            o
        Accounts Receivable, net                                     o
        Prepaid Expenses                                             o
        Prepaid Disney Commissions                                   o
        Other Assets                                                 o
                                                                    --
         Total Current Assets                                       $o
</TABLE>

       Current Liabilities
        Accounts Payable (excluding all accounts payable that arose prior to
       April 1, 2002 but including the City Payable and posessory interest tax
       payable) and Accrued Expenses                                $o
        Unearned Ticket Revenue                                      o
        Unearned Premium Revenue                                     o
        Other Current Liabilities                                    o
                                                                    --
         Total Current Liabilities                                  $o

<PAGE>

                                Schedule 2.4(a)
                                ---------------

             Manager's Executory Contracts Eligible for Assignment

<TABLE>
License Contracts:
Counter Party/Name of Contract                                                  Date of Execution    Cure costs
<S>                                                                             <C>                  <C>
1.       City of Anaheim (County Sheriff Lot Sublicense Agreement)                  14-Jun-03           $0.00
2.       City of Anaheim (17-Acre Sublicense Agreement)                               1993              $0.00
3.       City of Anaheim (Amendment to Sublicense Agreement)                        6-Jun-95            $0.00
4.       Lewis R. & Judith E. Schmid (Katella Maintenance Yard Letter
                                           Agreement)                               1-May-95            $0.00
5.       Lewis R. & Judith E. Schmid (Sub-Sublease Agreement)                       1-May-95            $0.00

<Caption>
Operational Contracts:
Counter Party/Name of Contract                                                  Date of Execution    Cure costs
<S>                                                                             <C>                  <C>
1.       GTE Customer Networks Inc. (now Verizon)                                   13-Nov-92           $0.00
2.       GTE Customer Networks Inc. (now Verizon)                                   12-Dec-92           $0.00
3.       Ticketmaster (and amendments)                                              24-Dec-92           $0.00
4.       Mighty Ducks Agreement                                                     24-Feb-93           $0.00
  a.     First Amendment to Letter Agreement                                        31-Mar-93
  b.     Letter Agreement re:  Use of Complimentary Suites and
                  Club Seats                                                        15-Jun-93
  c.     Standard Operating Procedures for Mighty Ducks Agreement
                  (with City of Anaheim Endorsement )                               7-Dec-93
  d.     Letter Agreement re:  Bronze Club Seat Program                             2-Jul-94
  e.     Letter Agreement re:  Sports Pack Seats                                    29-Apr-99
  f.     Letter Agreement re:  Sports Pack Seats                                    26-May-99
  g.     Letter Agreement re:  Advertising/Sponsorship Issues                       12 Jul-99
  h.     Letter Agreement re:  The Cabana Group LLC                                14 Aug- 01
  i.     Letter Agreement re:  Licensing of Luxury Boxes                            15-Oct-01
  j.     Letter Agreement re:  Benchmark Standard (The Staples Center)              7-Mar-02
  k.     Letter Agreement re:  Licensing of Luxury Boxes                            10-Feb-03
  l.     Letter Agreement re: LED Purchase and Revenue Sharing                      2-Jul-03
5.       Consent, Traffic and Parking and Non-Disturbance and Attornment
         Agreement (as amended)                                                     26-Feb-93           $0.00
6.       Dover Elevator Company                                                     1-Jun-94            $0.00
7.       South Shore Building Services Inc                                          24-Apr-97           $0.00
8.       Loomis, Fargo & Co                                                         1-Nov-97            $0.00
9.       Standard American Sweeping                                                 1-Aug-98            $0.00
10.      AT&T                                                                       20-Aug-98           $0.00
11.      City of Anaheim (Douglass St. Guard Railing Encroachment Agreement)        1-Oct-98            $0.00
12.      National Mobile Television                                                 1-Oct-98            $0.00
13.      Non-Disturbance and Attornment Agreement (LILO)                            6-Jan-99            $0.00
14.      JMG Security                                                               19-Feb-99           $0.00
15.      Radical Entertainment                                                      6-Apr-99            $0.00
16.      IKON Solutions                                                             22-May-99           $0.00
17.      Adelphia Cable (cf. Sponsorship Agreement)                                 31-Aug-99           $0.00
18.      PCS Internet Inc                                                           1-Oct-00            $0.00
19.      Ford Motor Credit Corp (vehicle lease)                                     20-Nov-00           $0.00
20.      Electronic Arts                                                            4-Apr-01            $0.00
21.      ArenaNetwork                                                               6-Apr-01            $0.00
22.      Automobile Club of Southern California                                     1-Aug-01            $0.00
23.      Sony Computer Entertainment                                                1-Aug-01            $0.00
24.      Mike Milidonis                                                             27-Aug-01           $0.00
25.      Air Conditioning Automation                                                1-Sep-01            $0.00
</Table>

<PAGE>

                                Schedule 2.4(a)
                                ---------------

      (Manager's Executory Contracts Eligible for Assignment - continued)

<Table>
<Caption>
Event Contracts:
Counter Party/Name of Contract                                                  Date of Execution    Cure Costs
<S>                                                                             <C>                  <C>
1.       Irvin Feld and Kenneth Feld Productions as amended
            (Ringling Bros. Circus) [under renegotiation]                           4-Jun-93            $0.00
2.       Ringling Bros.- Barnum & Bailey Combined Shows Inc.-Lease Agreement,
         as amended. (Disney on Ice)                                                29-Nov-93           $0.00
3.       Ringling Bros.- Barnum & Bailey Combined Shows Inc.-Lease Agreement,
         as amended. (Disney on Ice)                                                7-Feb-00            $0.00

<Caption>
Sponsorship Contracts:
Counter Party/Name of Contract                                                  Date of Execution    Cure costs
<S>                                                                             <C>                  <C>
1.       Ticket Master with Amendments (cf. Operation Contracts)                    24-Dec-92           $0.00
2.       Adelphia Cable Sponsorship (cf. Operational Contracts)                     31-Aug-99           $0.00
3.       J&J Snack Foods                                                            1-Mar-01            $0.00

<Caption>
Seat Agreements:
Counter Party/Name of Contract                                                  Date of Execution    Cure costs
<S>                                                                             <C>                  <C>
1.       Anaheim Hilton & Towers (Seat Agreement)                                   1-Jun-99            $0.00
2.       Dr. Richard Fukumoto (Seat Agreement)                                      1-Jun-99            $0.00
3.       Fortifiber Corporation (Seat Agreement)                                    1-Jun-99            $0.00
4.       Joe's Garage (Seat Agreement)                                              1-Jun-99            $0.00
5.       Kihong Kwon (Seat Agreement)                                               1-Jun-99            $0.00
6.       L.E. Duncan (Seat Agreement)                                               1-Jun-99            $0.00
7.       Osterkamp Trucking  (Seat Agreement)                                       1-Jun-99            $0.00
8.       Platinum Capital Group  (Seat Agreement)                                   1-Jun-99            $0.00
9.       Stanwall Corp  (Seat Agreement)                                            1-Jun-99            $0.00
10.      Turelk Inc  (Seat Agreement)                                               1-Jun-99            $0.00
11.      Revenue Enhancement Group  (Seat Agreement)                                16-Jun-99           $0.00
12.      John Oden/Mike Steger  (Seat Agreement)                                    1-Jul-99            $0.00
13.      Gabriel Container Co  (Seat Agreement)                                     1-Aug-99            $0.00
14.      Adelphia (Part of sponsorship agreement)                                   31-Aug-99           $0.00
15.      Tom's Truck Center  (Seat Agreement)                                       31-Aug-99           $0.00
16.      Word & Brown  (Seat Agreement)                                             1-Jan-00            $0.00
17.      Hanson Aggregates  (Seat Agreement)                                        16-Jun-00           $0.00
18.      Anaheim Marriott  (Seat Agreement)                                         19-Jun-00           $0.00
19.      Ed Ruzak & Assoc.  (Seat Agreement)                                        19-Jun-00           $0.00
20.      Ivan Turpin, MD                                                            19-Jun-00           $0.00
21.      Shugart (Seat Agreement)                                                   19-Jun-00           $0.00
22.      Walter Froemke (Seat Agreement)                                            19-Jun-00           $0.00
23.      Jax Market  (Seat Agreement)                                               19-Jun-00           $0.00
24.      American Bolt  (Seat Agreement)                                            19-Jul-00           $0.00
25.      Stainless Steel Fabricators  (Seat Agreement)                              20-Jul-00           $0.00
26.      Sully Miller  (Seat Agreement)                                             1-Aug-00            $0.00
27.      Air Control Systems  (Seat Agreement)                                      12-Sep-00           $0.00
28.      Robert Mondavi Winery  (Seat Agreement)                                    1-Oct-00            $0.00
29.      Part of AD Coca-Cola  (Seat Agreement)                                     23-Oct-00           $0.00
30.      Gavina & Sons  (Seat Agreement)                                            7-Nov-00            $0.00
31.      Clement Calvillo  (Seat Agreement)                                         1-Jan-01            $0.00
32.      Kelloggs Company  (Seat Agreement)                                         4-Apr-01            $0.00
33.      Universal Alloy Corporation  (Seat Agreement)                              16-Jun-01           $0.00
34.      Bill Podlich (Seat Agreement)                                              19-Jun-01           $0.00
35.      Mark Morena  (Seat Agreement)                                              19-Jun-01           $0.00
36.      Patrick Burns  (Seat Agreement)                                            19-Jun-01           $0.00
37.      Southern Wine & Spirits  (Seat Agreement)                                  19-Jun-01           $0.00
38.      Spicers Paper Company  (Seat Agreement)                                    19-Jun-01           $0.00
39.      Universal Health Services  (Seat Agreement)                                19-Jun-01           $0.00
40.      V and M Restoration Inc.  (Seat Agreement)                                 19-Jun-01           $0.00
41.      Elma Payton  (Seat Agreement)                                              1-Jul-01            $0.00
42.      College Hospital Costa Mesa  (Seat Agreement)                              1-Jul-01            $0.00
43.      Rick Gaulden  (Seat Agreement)                                             1-Jul-01            $0.00
44.      Ringler Associates  (Seat Agreement)                                       1-Jul-01            $0.00
45.      St. Johns Knits Inc  (Seat Agreement)                                      1-Jul-01            $0.00
46.      The Traut & Aitken Law Firm  (Seat Agreement)                              1-Jul-01            $0.00
47.      Trilogy Financial Services Inc  (Seat Agreement)                           2-Jul-01            $0.00
48.      Southern California Gas Co  (Seat Agreement)                               16-Jul-01           $0.00
49.      Alco Magazine Dist  (Seat Agreement)                                       1-Aug-01            $0.00
50.      Mission Foods  (Seat Agreement)                                            1-Aug-01            $0.00
51.      Montebello Container Co  (Seat Agreement)                                  1-Aug-01            $0.00
52.      Pasternack Enterprises  (Seat Agreement)                                   1-Aug-01            $0.00
53.      Boeing Company  (Seat Agreement)                                           1-Sep-01            $0.00
54.      Chicago Title Company  (Seat Agreement)                                    1-Sep-01            $0.00
55.      Weyerhaeuser  (Seat Agreement)                                             1-Sep-01            $0.00
56.      Part of AD Anheuser-Busch, Inc  (Seat Agreement)                           1-Oct-01            $0.00
57.      Jim Hicks  (Seat Agreement)                                                1-Oct-01            $0.00
58.      Michaelson Connor & Bouling  (Seat Agreement)                              1-Nov-01            $0.00
59.      Advantage Sales & Marketing  (Seat Agreement)                              1-Jan-02            $0.00
60.      Manheim Auctions  (Seat Agreement)                                         1-Jan-02            $0.00
61.      San Diego Erosion Control  (Seat Agreement)                                1-Jan-02            $0.00
62.      TruGreen LandCare  (Seat Agreement)                                        1-Jan-02            $0.00
63.      Beech Street Corp.  (Seat Agreement)                                       28-Jan-02           $0.00
64.      Frize Corporation (Seat Agreement)                                         1-Mar-02            $0.00
65.      Kaiser Permanente  (Seat Agreement)                                        1-Mar-02            $0.00
</Table>

<PAGE>

                                Schedule 2.4(a)
                                ---------------

      (Manager's Executory Contracts Eligible for Assignment - continued)

<Table>
<Caption>
Suite Agreements:
Counter Party/Name of Contract                                                  Date of Execution   Cure costs
<S>                                                                             <C>                  <C>
66.      Arrowhead (Part of sponsorship agreement)                                  23-Sep-96           $0.00
67.      William Pochirowski (Suite Agreement)                                      24-Apr-97           $0.00
68.      Irvine Medical (Suite Agreement)                                           1-Aug-98            $0.00
69.      Pacific Care  (Suite Agreement)                                            16-Jun-99           $0.00
70.      Remedytemp, Inc. (Suite Agreement)                                         16-Jun-99           $0.00
71.      Beckman Coulter (Suite Agreement)                                          19-Jun-99           $0.00
72.      Dr. Michael Cornfield, DPM, Linda Bauermeister,
         Stephanie Kurz (Suite Agreement)                                           1-Aug-99            $0.00
73.      Gordon Automotive Group (Suite Agreement)                                  22-Mar-00           $0.00
74.      Alan Jarrick, Jon Feder, Alliance Imaging,
         Robert Benson (Suite Agreement)                                            22-May-00           $0.00
75.      IMPAC Funding Corporation (Suite Agreement)                                1-Jun-00            $0.00
76.      Nederlander (Suite Agreement)                                              5-Jun-00            $0.00
77.      E.T. Horn Company (Suite Agreement)                                        16-Jun-00           $0.00
78.      T. Randall Bryan (Suite Agreement)                                         19-Jun-00           $0.00
79.      Adams Steel and Kinsbursky Brothers (Suite Agreement)                      29-Jul-00           $0.00
80.      FCB Southern California, Outdoor Dimensions, American Racing,
             Glenn Miller Films, New Homes Magazine, DGWB Advertising,
             Liberty Capital Management (Suite Agreement)                           1-Aug-00            $0.00
81.      Del Taco (Suite Agreement)                                                 1-Sep-00            $0.00
82.      The Heritage Escrow Company (Suite Agreement)                              13-Nov-00           $0.00
83.      Emery, Inc (Suite Agreement)                                               20-Nov-00           $0.00
84.      Tarsadia (Suite Agreement)                                                 15-Mar-01           $0.00
85.      Marriott Vacation Club International (Suite Agreement)                     1-Apr-01            $0.00
86.      Onyx Acceptance Corporation (Suite Agreement)                              1-Apr-01            $0.00
87.      County Financial Services (Suite Agreement)                                16-Jun-01           $0.00
88.      Kwikset (Suite Agreement)                                                  16-Jun-01           $0.00
89.      Golden State Foods (Suite Agreement)                                       17-Jun-01           $0.00
90.      Fisher Printing, Inc. and Smurfit Newsprint (Suite Agreement)              18-Jun-01           $0.00
91.      Perricone Insurance (Suite Agreement)                                      19-Jun-01           $0.00
92.      People's Choice Home Loan (Suite Agreement)                                6-Jul-01            $0.00
93.      Straub Distribution Company (Suite Agreement)                              1-Aug-01            $0.00
1.       Ganis Credit Corporation (Suite Agreement)                                 1-Sep-01            $0.00
94.      Toshiba America Information Systems, Inc (Suite Agreement)                 1-Oct-01            $0.00
95.      UPS (Part of sponsorship)                                                  1-Oct-01            $0.00
96.      Class Leasing (Suite Agreement)                                            1-Nov-01            $0.00
97.      Ameriquest Mortgage Company (Suite Agreement)                              1-Mar-02            $0.00
98.      City of Anaheim (Suite Agreement)                                             N/A              $0.00
99.      City of Anaheim (Suite Agreement)                                             N/A              $0.00
100.     Ogden Facility Management (Suite Agreement)                                   N/A              $0.00
</Table>
* - OFM not party to contract.

Mighty Ducks Hockey Club, Anaheim
Sports, Inc., or Ogden Entertainment
Services, Inc. is signatory.

<PAGE>

                                 Schedule 2.4(c)
                                 ---------------

                Post-Petition Ordinary Course Executory Contracts

<TABLE>
<Caption>
Operational Contracts:
Counter Party/Name of Contract                                                           Date of Execution
<S>                                                                                      <C>
1.       KCAL (Fight Night)                                                                  26-Feb-02
2.       LA Times (cf. Sponsorship contract)                                                 17-Mar-03
3.       XBOX (Microsoft)                                                                    14-Nov-02
4.       Event Medical Services                                                              21-Jan-03
5.       Orange County Register Advertising Dollar Volume Contract                           30-Jan-03
6.       Gerard Sports Marketing, LLC                                                        1-Mar-03
7.       DBS Photography Inc                                                                 1-Apr-03
8.       KCAL (Fight Night) - extends previous contract                                      28-Jul-02
9.       Moreno Valley Lawn Maintenance                                                      10-Jun-03
10.      SBC                                                                                 3-Oct-03

<Caption>
Miscellaneous
Counter Party/Name of Contract                                                           Date of Execution
<S>                                                                                      <C>
1.       Pacific Insurance Company, Ltd. (Earth Movement and Flood Insurance,
         Policy # ZG 0024108)                                                                8-Oct-03
2.       ACE American Insurance Company (Workers Compensation Insurance,
         General Liability Insurance, Auto Insurance, Binder # 10102003)                     20-Oct-03
3.       Zurich North America (Property Damage and Business Income Insurance)
            (Policy # ERP 9376595-00                                                         20-Oct-03
4.       Westchester Surplus Lines Insurance Co. (Earth Movement and Flood Insurance,
             Policy # I2 06 53 70 A)                                                         20-Oct-03

<Caption>
Event Contracts:
Counter Party/Name of Contract                                                           Date of Execution
<S>                                                                                      <C>
1.       Tom Collins Enterprises Inc                                                         1-Jul-02
2.       John Wooden Classic                                                                 10-Dec-02
3.       Orange County Register, Event/venue agreement                                       1-Mar-03
4.       World Wrestling Entertainment                                                       5-Sep-03

<Caption>
Sponsorship Contracts:
Counter Party/Name of Contract                                                           Date of Execution
<S>                                                                                      <C>
1.       K&D Graphics                                                                        1-Dec-02
2.       LA Times (cf. Operational contract)                                                 17-Mar-03
3.       Moreno Valley Lawn Maintenance (cf. Operational Contract)                           10-Jun-03
4.       Burke Williams Day Spa                                                              27-Jun-03
5.       HOOTERS Restaurant (Fight Night)                                                    4-Aug-03
6.       Freedom Orange County Information                                                   1-Oct-03
</Table>
<PAGE>

                                 Schedule 2.4(c)
                                 ---------------

        (Post-Petition Ordinary Course Executory Contracts - continued)

<Table>
<Caption>
Seat Agreements:
Counter Party/Name of Contract                                                           Date of Execution
<S>                                                                                      <C>
1.       James & Leslie Davidson  (Seat Agreement)                                           1-May-02
2.       Mike Thompson RV  (Seat Agreement)                                                  1-May-02
3.       Pam Doodridge  (Seat Agreement)                                                     1-May-02
4.       Bordier's Nursery  (Seat Agreement)                                                 1-Jun-02
5.       Dr. Allan Sheridan  (Seat Agreement)                                                5-Jun-02
6.       Apria Health Care  (Seat Agreement)                                                 19-Jun-02
7.       B.C. I. Framing & Drywall (Seat Agreement)                                          19-Jun-02
8.       Claim Jumper Restaurant  (Seat Agreement)                                           19-Jun-02
9.       D. M. Steele  (Seat Agreement)                                                      19-Jun-02
10.      Johnson-Peltier  (Seat Agreement)                                                   19-Jun-02
11.      Lyle Parks Jr  (Seat Agreement)                                                     19-Jun-02
12.      Ram Mudiyam  (Seat Agreement)                                                       19-Jun-02
13.      VIP Transport (Seat Agreement)                                                      19-Jun-02
14.      Williams Medical Company  (Seat Agreement)                                          19-Jun-02
15.      Gary Hendricks/Intertate Specialty  (Seat Agreement)                                1-Jul-02
16.      Harbor Distributing LLC  (Seat Agreement)                                           1-Jul-02
17.      Information Technology RES  (Seat Agreement)                                        1-Jul-02
18.      Dow Diversified Inc  (Seat Agreement)                                               2-Jul-02
19.      Kenwood USA Corp  (Seat Agreement)                                                  2-Jul-02
20.      Dio Ross Publications  (Seat Agreement)                                             2-Jul-02
21.      Sunstone Systems Int'ls  (Seat Agreement)                                           19-Jul-02
22.      CAM Steel Company Inc  (Seat Agreement)                                             1-Aug-02
23.      Hawaiian Air Corp  (Seat Agreement)                                                 1-Aug-02
24.      Heritage Foods  (Seat Agreement)                                                    1-Aug-02
25.      Jeffrey Elumba  (Seat Agreement)                                                    1-Aug-02
26.      Ruth Kane  (Seat Agreement)                                                         1-Aug-02
27.      Trans Marine Navigation  (Seat Agreement)                                           1-Aug-02
28.      Chapman Western Medical Center SA  (Seat Agreement)                                 1-Aug-02
29.      Western Tube & Conduit  (Seat Agreement)                                            1-Aug-02
30.      John A. McLuckey (Seat Agreement)                                                   1-Aug-02
31.      FT Valley Regional Hospital  (Seat Agreement)                                       15-Aug-02
32.      Aire Masters Air Conditioning  (Seat Agreement)                                     1-Sep-02
33.      Disneyland Resort  (Seat Agreement)                                                 1-Sep-02
34.      Eastwood Insurance  (Seat Agreement)                                                1-Sep-02
35.      Michael Lisa Trucking Inc.  (Seat Agreement)                                        16-Sep-02
36.      Full Spectrum Inc.  (Seat Agreement)                                                17-Sep-02
37.      Quality Container Company  (Seat Agreement)                                         17-Sep-02
38.      Lance Capel (Seat Agreement)                                                        1-Oct-02
39.      Pacific World Corporation  (Seat Agreement)                                         1-Oct-02
40.      Richard Rodriguez & Warren Parchan  (Seat Agreement)                                1-Oct-02
41.      Searing Industries  (Seat Agreement)                                                1-Oct-02
42.      Southern California Gas Co  (Seat Agreement)                                        1-Oct-02
43.      Superior Metal Shapes  (Seat Agreement)                                             9-Oct-02
44.      City National Bank  (Seat Agreement)                                                1-Nov-02
45.      Educational Consulting Service  (Seat Agreement)                                    1-Nov-02
46.      Hyosung  (Seat Agreement)                                                           1-Nov-02
47.      Part of AD LG Mobile Phones  (Seat Agreement)                                       22-Nov-02
48.      Aetna US Healthcare  (Seat Agreement)                                               1-Dec-02
49.      Reliance Steel & Aluminum  (Seat Agreement)                                         1-Jan-03
50.      William Lyon Homes (Seat Agreement)                                                 1-Jan-03
51.      Gilead Sciences, Inc.  (Seat Agreement)                                             1-Feb-03
52.      Southern California Digital Systems  (Seat Agreement)                               1-Feb-03
53.      LA Times (Part of sponsorship agreement)                                            17-Mar-03
54.      KPMG (Seat Agreement)                                                               1-May-03
55.      Mitsubishi NEC (Seat Agreement)                                                     1-May-03
56.      Northrop Grumman (Seat Agreement)                                                   1-May-03
57.      Preferred Framing (Seat Agreement)                                                  1-May-03
58.      Chapel Funding Corporation (Seat Agreement)                                         31-May-03
59.      Unilever (Seat Agreement)                                                           19-Jun-03
60.      Lloyd W. Holland (Seat Agreement)                                                   1-Jul-03
61.      Sasco (Seat Agreement)                                                              1-Jul-03
62.      Independent Capital Marketing (Seat Agreement)                                      2-Jul-03
63.      Sares Regional Group (Seat Agreement)                                               16-Jul-03
64.      Jeff Usher (Seat Agreement)                                                         1-Aug-03
65.      Miller Brewing Company (Seat Agreement)                                             13-Aug-03
66.      Barron Harley (Seat Agreement)                                                      1-Sep-03
67.      Bill Hunt (Seat Agreement)                                                          1-Sep-03
68.      Fairchild Fasteners (Seat Agreement)                                                1-Sep-03
69.      Pacific Transformer Corporation (Seat Agreement)                                    1-Sep-03
70.      Transit Marketing Group (Seat Agreement)                                            1-Sep-03
71.      SBC (Seat Agreement)                                                                15-Sep-03
72.      Amcor Sunclipse North America (Seat Agreement)                                      17-Sep-03
73.      Pacific Care Dental & Vision (Seat Agreement)                                       22-Sep-03
74.      GES Exposition Services (Seat Agreement)                                            1-Oct-03
75.      Kevin Crampton (Seat Agreement)                                                     1-Oct-03
76.      LA Chemical / Shepard Bros. (Seat Agreement)                                        1-Oct-03
77.      ND Industries (Seat Agreement)                                                      1-Oct-03
78.      Orange County Optometric Group (Seat Agreement)                                     1-Oct-03
79.      John O'Neil (Seat Agreement)                                                        1-Nov-03
80.      New Homes Magazine (Seat Agreement)                                                 1-Nov-03
81.      ABC Radio Group (Seat Agreement)                                                    Date N/A
82.      Bank of the West (Seat Agreement)                                                   Date N/A
83.      CDX Communications (Seat Agreement)                                                 Date N/A
84.      Don Pickler (Seat Agreement)                                                        Date N/A
85.      E-Systems Design GST (Seat Agreement)                                               Date N/A
86.      Hugo Neu-Proler (Seat Agreement)                                                    Date N/A
87.      Independent Capital Management (Seat Agreement)                                     Date N/A
88.      Investors Business Daily (Seat Agreement)                                           Date N/A
89.      James E. Hudson (Seat Agreement)                                                    Date N/A
90.      Jim Steffens (Seat Agreement)                                                       Date N/A
91.      Lithographix (Seat Agreement)                                                       Date N/A
92.      Media Networks (Seat Agreement)                                                     Date N/A
93.      Miro Knezvic (Seat Agreement)                                                       Date N/A
94.      OC Business Journal                                                                 Date N/A
95.      Paul Folino / Kathy Cole (Seat Agreement)                                           Date N/A
96.      Scher Tire (Seat Agreement)                                                         Date N/A
97.      The Business Press (Seat Agreement)                                                 Date N/A
98.      Toyota-Davielson Advertising (Seat Agreement)                                       Date N/A
99.      Trend Offset Printing (Seat Agreement)                                              Date N/A
</Table>

<PAGE>

                                Schedule 2.4(c)
                                ---------------

        (Post-Petition Ordinary Course Executory Contracts - continued)

<Table>
<Caption>
Suite Agreements:
Counter Party/Name of Contract                                                           Date of Execution
<S>                                                                                      <C>
1.       Toshiba America Business Solutions (Suite Agreement)                                5-Apr-02
2.       First American Title (Suite Agreement)                                              1-May-02
3.       Talbot Insurance & Financial Services (Suite Agreement)                             7-Jun-02
4.       F & A Cheese Company (Suite Agreement)                                              1-Jul-02
5.       John Ginger Masonry, Inc. (Suite Agreement)                                         1-Aug-02
6.       Wells Fargo Bank, N. A. (Suite Agreement)                                           7-Aug-02
7.       C R & R (Suite Agreement)                                                           1-Sep-02
8.       Manheim Auctions (Suite Agreement)                                                  1-Sep-02
9.       William Gross (Suite Agreement)                                                     1-Sep-02
10.      World Variety Produce Inc & Harold & Wendy Rothman (Suite Agreement)                1-Sep-02
11.      Cablerep, Inc (Suite Agreement)                                                     1-Oct-02
12.       National Title (Suite Agreement)                                                   1-Oct-02
13.      Marc Spirizzi (Suite Agreement)                                                     8-Nov-02
14.      K & D Graphics (Part of sponsorship agreement)                                      1-Dec-02
15.      Brown-Forman Spirits (Suite Agreement)                                              1-Mar-03
16.      Price Communications (Suite Agreement)                                              20-Apr-03
17.      Model Finance (Suite Agreement)                                                     1-May-03
18.      PC Mall Services (Suite Agreement)                                                  8-May-03
19.      WFS Financial (Suite Agreement)                                                     27-Mar-03
20.      Douglas Nissan of Huntington Beach (Suite Agreement)                                14-May-03
21.      Lobel, Friedman and Reisner (Suite Agreement)                                       1-Jun-03
22.      Fun at Arena (Suite Agreement)                                                      15-Jun-03
23.      Vince Taormina (Suite Agreement)                                                    15-Jun-03
24.      LSI (Suite Agreement)                                                               1-Aug-03
25.      The Concierge Advantage (Suite Agreement)                                           1-Oct-03
26.      Brad Bradley (Suite Agreement)                                                      Date N/A
27.      David Wilson (Suite Agreement)                                                      Date N/A
28.      John Hartley (Suite Agreement)                                                      Date N/A
29.      KCAL TV (part of contract) (Suite Agreement)                                        Date N/A
30.      Kim Megonigal (Suite Agreement)                                                     Date N/A
31.      Marc Kaplan (Suite Agreement)                                                       Date N/A
32.      SBC (Suite Agreement)                                                               Date N/A
33.      Taormina Industries (Suite Agreement)                                               Date N/A
34.      Ticketmaster (Suite Agreement)                                                      Date N/A
</Table>

* - OFM not party to contract.
Mighty Ducks Hockey Club, Anaheim
Sports, Inc., or Ogden Entertainment
Services, Inc. is signatory.

<PAGE>

                                  Schedule 2.7
                                  ------------

                              Excluded Liabilities

None.

<PAGE>

                                Schedule 3.1(b)
                                ---------------

                  Pre-Closing Regulatory Consents and Filings

None.

<PAGE>

                                 Schedule 3.2(d)
                                 ---------------

                             Leasehold Restructuring

1.   Senior Debt: The existing COPs (approximately $115 MM outstanding principal
     amount) will be repaid and replaced by new bonds (the "Refunding Bonds") in
     a principal amount not to exceed $45 MM.

2.   UBC: The City will grant a lien on net Pond revenues as security for the
     City's obligations under the Operative Documents in replacement of the
     requirement for the Equity Letter of Credit and in exchange for the
     existing undrawn Equity Letter of Credit.

3.   AIG: A replacement Acceptable Debt Letter of Credit to be issued by West LB
     will be provided to AIG in the stated amount from time-to-time specified in
     Schedule IV to the Participation Agreement (currently $2,072,193.54 and
     declining annually thereafter) in exchange for the undrawn existing Debt
     Letter of Credit. No letter of credit fee will be payable in respect of the
     replacement Debt Letter of Credit. The replacement Debt Letter of Credit
     will automatically renew annually until January 2, 2019, unless the then
     applicable stated amount has been paid in full. A failure to renew will
     constitute a drawing event under the replacement Debt Letter of Credit.

4.   Bank of America: Bank of America will release its claims against the City
     in connection with the COPs swap arrangements.

5.   Priority of Net Pond Revenues: A lien junior to the lien of the equity
     investor (UBC) on net Pond revenues will be pledged as security for the
     other payment obligations owed to AIG; further subordinate liens support
     the Refunding Bonds and then the reimbursement obligations of the City and
     the City Designee arising from issuance of the replacement Debt Letter of
     Credit.

6.   Closing Schedule: City Council approval is anticipated on or about November
     4, 2003. Definitive documentation will be executed shortly thereafter.
     Closing is expected to occur on or about December 17, 2003.

7.   Leasehold Documentation A new "Omnibus Agreement" among the parties to the
     Leasehold Transaction reflects the restructuring referenced above, and new
     agreements will be substituted for the Management Agreement and the City
     and Manager Pledge Agreements. The participation of Ogden Facility
     Management Corporation of Anaheim ("OFM") and Covanta Energy Corporation
     will be terminated and the new manager will be substituted therefor. OFM
     and Covanta will be released from all of their obligations contained in the
     Operative Documents. The City's obligations under the Operative Documents
     will remain limited to net Pond revenue.

<PAGE>

                                Schedule 3.2(i)
                                ---------------

                Agreements Requiring CSFB's Release of the City

COPS Financing Documents (as such documents are defined in the Leasehold
Documents):
1.  Management Agreement
2.  Guaranty Agreement
3.  Consent to Assignment
4.  Pledge & Security Agreement (of OFM as Pledgor)
5.  Pledge & Security Agreement (of City as Pledgor)
6.  Bank Agreement
7.  Site and Facility Lease
8.  Lease Agreement
9.  City Assignment Agreement
10. Corporation Assignment Agreement
11. Non-Disturbance and Attornment Agreement

<PAGE>

                                Schedule 3.3(b)
                                ---------------

    Agreements Requiring the Leasehold Participants' Release of the Manager

Leasehold Documents:
1.  Participation Agreement
2.  Ogden Agreement

3.  Guaranty Agreement (Ogden Guaranty)
4.  Debt Letter of Credit and Reimbursement Agreement
5.  Equity Letter of Credit and Reimbursement Agreement
6.  Manager Debt Pledge Agreement
7.  Manager Equity Pledge Agreement

<PAGE>

                                  Schedule 5.4
                                  ------------

                  Consents to Transfer of Designated Contracts

None.

<PAGE>

                                Schedule 7.9(c)
                                ---------------

                              Terminated Employees

None.<PAGE>
                                                                 Exhibit 10.1(b)

                      OWNERSHIP INTEREST PURCHASE AGREEMENT

                                  By and among

         COVANTA HEBER FIELD ENERGY, INC., HEBER FIELD ENERGY II, INC.,
           ERC ENERGY, INC., ERC ENERGY II, INC., HEBER LOAN PARTNERS,
   COVANTA POWER PACIFIC, INC. PACIFIC GEOTHERMAL CO., MAMMOTH GEOTHERMAL CO.,
          AMOR 14 CORPORATION, COVANTA SIGC ENERGY II, INC. AND COVANTA
                              ENERGY AMERICAS, INC.

                                 (the "Sellers")

                                       and

                           COVANTA ENERGY CORPORATION

                                   ("Covanta")

                                       and

               ORHEBER 1 INC., ORHEBER 2 INC., ORHEBER 3 INC. AND
                                 ORMAMMOTH INC.

                                 (the "Buyers")

                   Providing for the purchase and sale of the
                            partnership interests of

                HEBER GEOTHERMAL COMPANY AND HEBER FIELD COMPANY,

                              and the interests of

            COVANTA SIGC ENERGY, INC., COVANTA SIGC ENERGY II, INC.,
                PACIFIC GEOTHERMAL CO. AND MAMMOTH GEOTHERMAL CO.

                                   dated as of

                                November 21, 2003
<PAGE>
                             SCHEDULES AND EXHIBITS

Schedules

3.3(a)        Assumed Contracts
3.3(b)        Assumed and Assigned Contracts
3.3(c)        Assigned Contracts
4.4           Officers and Directors
4.5           Bank Accounts, Safe Deposit Boxes and Powers of Attorney
4.9           Changes or Events
4.10          Assets and Permitted Encumbrances
4.11          Real Property Agreements
4.12          Firm Operation Dates
4.13          Material Contracts
4.14          No Conflicts
4.15          Permits
4.18          Litigation
4.21          Transactions with Related Parties
4.24          Tax Returns
4.25          Insurance
4.26          Environmental Matters
7.5           Form of Opinion of Counsel
7.7           Consents Required for Closing
7.9           Title Policies
12.1          On Site Employees and O+M Contracts
13.5          Purchase Price Allocation

Exhibits

Exhibit A         Plan and Confirmation Order
Exhibit B         Heber Settlement
Exhibit C         Working Capital Methodology
Exhibit D         Form of Escrow Agreement
Exhibit E         Bidding Procedures Motion, Bidding Procedures Order,
                  Sale Motion and Sale Order

                                     Page 1
<PAGE>
                      OWNERSHIP INTEREST PURCHASE AGREEMENT

         THIS OWNERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement") is dated
as of the 21st day of November, 2003, by and among Covanta Heber Field Energy,
Inc. ("HFC One Seller"), Heber Field Energy II, Inc. ("HFC Two Seller"), Heber
Loan Partners ("HGC One Seller"), ERC Energy, Inc. ("HGC Two Seller"), ERC
Energy II, Inc. ("HGC Three Seller"), Covanta Power Pacific, Inc. ("Mammoth
Seller"), Pacific Geothermal Co. ("MP One Sub"), Mammoth Geothermal Co. ("MP Two
Sub"), Amor 14 Corporation ("Amor"), Covanta SIGC Energy II, Inc. ("SIGC Two
Sub"), Covanta Energy Americas, Inc. ("SIGC Seller") (individually a "Seller"
and collectively, the "Sellers"), Covanta Energy Corporation ("Covanta") and
OrHeber 2 Inc. ("HFC/HGC One Buyer"), OrHeber 3 Inc. ("HFC/HGC Two Buyer"),
OrMammoth Inc. ("Mammoth Buyer"), OrHeber 1 Inc. ("SIGC Buyer") (individually a
"Buyer" and collectively, the "Buyers").

                                    RECITALS

         WHEREAS, on April 1, 2002, the Debtors filed their respective voluntary
petitions for relief pursuant to Chapter 11 of Title 11 of the United States
Code, 11 U.S.C.ss.ss. 101 et seq. (as amended, the "Bankruptcy Code"), in the
United States Bankruptcy Court for the Southern District of New York (the
"Bankruptcy Court") (collectively, the "Bankruptcy Cases");

         WHEREAS, the Mammoth Seller owns a 100% interest in each of MP One Sub
and MP Two Sub, which respectively own a 1% limited partnership interest and a
49% general partnership interest in Mammoth-Pacific, L.P., a California limited
partnership (such partnership, the "MP Project Company") (such interests of the
Mammoth Seller in the MP One Sub and the MP Two Sub are collectively referred to
as the "MP Interests");

         WHEREAS, the MP Project Company owns a nominal 40 Megawatt ("MW")
geothermal electric power plant (comprised of three geothermal plants) located
near Mammoth Lakes, California (the "MP Project");

         WHEREAS, the SIGC Seller owns a 100% interest in each of Covanta SIGC
Energy, Inc. ("SIGC One Sub") and SIGC Two Sub, SIGC One Sub owns, through its
wholly-owned subsidiary Amor, a 74.999% general partnership interest and a
0.001% limited partnership interest and the SIGC Two Sub owns a 24.999% general

                                     Page 2
<PAGE>
partnership interest and a 0.001% limited partnership interest in Second
Imperial Geothermal Company, L.P., a California limited partnership (the "SIGC
Project Company") (such interests of the SIGC Seller in SIGC One Sub and SIGC
Two Sub are collectively referred to as the "SIGC Interests");

         WHEREAS, the SIGC Project Company leases a nominal 48 MW geothermal
electric power plant located in Heber, California (the "SIGC Project");

         WHEREAS, the HGC One Seller owns a 99% general partnership interest,
the HGC Two Seller owns a 0.5% general partnership interest and the HGC Three
Seller owns a 0.5% general partnership interest in Heber Geothermal Company, a
California general partnership ("HGC Project Company") (such interests of the
HGC One Seller, HGC Two Seller and the HGC Three Seller in the HGC Project
Company are collectively referred to as the "HGC Interests");

         WHEREAS, the HGC Project Company owns a nominal 52 MW geothermal
electric power plant located in Heber, California (the "HGC Project");

         WHEREAS, the HFC One Seller owns a 50% general partnership interest and
the HFC Two Seller owns a 50% general partnership interest in Heber Field
Company, a California general partnership ("HFC Project Company") (such
interests of the HFC One Seller and the HFC Two Seller in the HFC Project
Company are collectively referred to as the "HFC Interests");

         WHEREAS, the HFC Project Company owns a geothermal fluid facility
located in Heber, California (the "HFC Project");

         WHEREAS, the SIGC Operator operates the SIGC Project, the HGC Operator
operates the HGC Project, the HFC Operator operates the HFC Project and MP
Operator operates the MP Project;

         WHEREAS, each of the Sellers identified above desires to sell the
Interests owned by it to Buyers in accordance with the terms of this Agreement,
and the Buyers desire to purchase such Interests, upon the terms and subject to
the conditions contained in this Agreement;

         WHEREAS, in connection with the transactions contemplated by this
Agreement, the Debtors desire to either (a) dismiss the Bankruptcy Cases with
respect to the SIGC One Sub, the SIGC Two Sub, Amor, SIGC Project Company, the
HGC Project Company and the HFC Project Company or (b) cause the Reorganizing
Heber Debtors to reorganize pursuant to a plan of reorganization under the
Bankruptcy Code; and

         NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, Buyers and Sellers agree as follows:

      1. DEFINITIONS. Capitalized terms used herein shall have the meanings
set forth below:

         "Actions" shall mean any action, order, writ, injunction, judgment,
decree, suit, litigation, arbitration, mediation, administrative or other
proceeding or investigation.

         "Affidavit of Service" shall have the meaning set forth in Section
7.11.

         "Affiliate" means, with respect to any Person, any other Person: (a)
directly or indirectly controlling, controlled by, or under common control with,
such Person; (b) directly or indirectly owning or holding any equity interest or
other economic interest or benefit in such Person in excess of five percent
(5%); or (c) in which such Person directly or indirectly controls any voting
stock or other equity interest in excess of five percent (5%). For purposes of
this definition, "control" (including with correlative meanings, the terms

                                     Page 3
<PAGE>
"controlling," "controlled by," and "under common control with") means the
possession directly or indirectly of the power to direct or cause the direction
of the management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.

         "Agreement" shall have the meaning set forth in the title paragraph of
this Agreement.

         "Approval Order" shall mean the Sale Order or the Confirmation Order,
as determined by the Sellers in consultation with the Buyers.

         "Assets" shall mean any and all rights, title and interests of each
Project Company in and to properties, assets and rights of any kind, whether
tangible or intangible, real or personal, used or useful in connection with the
operation of its Business including, without limitation, any and all contractual
rights of such Project Company to generate, transmit and sell electrical output
or, in the case of the HFC Project Company, the production and sale of
geothermal fluid.

         "Bidding Procedures Motion" shall have the meaning set forth in Section
6.1(b).

         "Bidding Procedures Order" shall have the meaning set forth in Section
6.1(b).

         "Business" shall mean (i) with respect to each of the MP Project
Company, the SIGC Project Company and the HGC Project Company the generation and
sale of electrical output pursuant to the Power Purchase Agreements entered into
by each such Project Company, (ii) with respect to the HFC Project Company, the
production and sale of geothermal fluid and (iii) with respect to the Debtor
Operators and the MP Operator, the maintenance and operation of the Projects.

         "Buyer" and "Buyers" shall have the respective meanings set forth in
the title paragraph of this Agreement.

         "Buyer Default Termination" shall have the meaning set forth in Section
10.1(b).

         "Confirmation Order" shall mean the order of the Bankruptcy Court
confirming the Plan, a copy which is attached hereto as Exhibit A - Part I.

         "Closing" shall have the meaning set forth in Section 3.1.

         "Closing Date" shall have the meaning set forth in Section 3.1.

         "Closing Instruments" shall mean all other agreements, instruments and
other documents to be executed and delivered by the Buyers or the Sellers in
connection with this Agreement.

         "Closing Working Capital" shall mean an amount equal to the Working
Capital determined as of the opening of business on the Closing Date.

         "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

         "Confidentiality Agreement" means (a) the Confidentiality Agreement
between ORMAT Nevada, Inc. and Salomon Smith Barney, Inc. (on behalf of Covanta
Energy Corporation), dated January 11, 2003, and (b) the Amendment to
Confidentiality Agreement between ORMAT Nevada, Inc. and Covanta Energy
Corporation, dated August 14, 2003.

         "Contested Taxes" shall have the meaning set forth in Section 13.3.

                                    Page 4
<PAGE>
         "Contracts" shall mean all agreements, contracts, leases (including the
Real Property Agreements), purchase orders, undertakings, covenants not to
compete, employment agreements, confidentiality agreements, licenses,
instruments, obligations and commitments, to which any Project Company is a
party or by which any Project Company, the Business or any Assets of the Project
Companies are bound.

         "Court Order" shall mean any judgment, decision, consent decree,
injunction, ruling or order of any federal, state or local court or governmental
agency, department or authority that is binding on any Person or its property
under applicable law.

         "Current Liabilities" shall mean, as of the Closing Date and for any
Project Company or Holding Company, the aggregate amount of current liabilities
including accounts payable, current portion of long-term debt and accrued
expenses, as used in the computation of Working Capital in the Working Capital
Methodology, including, without duplication, the pro rata share of all property
Taxes payable by such Project Company for the period in 2003 prior to the
Closing Date and, without duplication, proper accruals for cure costs payable in
connection with the assumption of the Scheduled Contracts pursuant to this
Agreement and the Approval Order.

         "Debtor Project Company" shall mean each of the SIGC Project Company,
the HFC Project Company and the HGC Project Company.

         "Debtor Operators" shall mean the HFC Operator, the HGC Operator and
the SIGC Operator.

         "Debtors" shall mean Covanta and certain of its Affiliates that are
debtors and debtors-in-possession in the Bankruptcy Cases.

         "Default" shall mean (a) a breach of or default under any Contract, (b)
the occurrence of an event that with the passage of time or the giving of notice
or both would constitute a breach of or default under any Contract, or (c) the
occurrence of an event that with or without the passage of time or the giving of
notice or both would give rise to a right of termination, renegotiation or
acceleration under any Contract.

         "Deposit" shall have the meaning set forth in Section 2.3.

         "DIP Agreement" shall mean the Debtor-in-Possession Credit Agreement
dated as of April 1, 2002, by and among Covanta and its subsidiaries listed on
the signature pages thereof as Borrowers, its subsidiaries listed on the
signature pages thereof as Subsidiary Guarantors, the financial institutions
parties thereto as Lenders, Bank of America, N.A., as Administrative Agent for
the Lenders, and Deutsche Bank AG, New York Branch, as Documentation Agent for
the Lenders, as amended.

         "DIP Security Agreement" shall mean the Security Agreement, dated as of
April 1, 2002, by and among Covanta, Bank of America, N.A. as Agent and the
other parties named therein, as amended from time to time.

         "Disclosure Statement" means the disclosure statement, including all
exhibits, appendices and attachments thereto, filed in connection with the Plan,
as such statement may be amended or supplemented from time to time.

         "Employee Benefit Plan" shall mean any employee benefit plan within the
meaning of Section 3(3) of ERISA that (a) is maintained for employees of any
Person or any of its ERISA Affiliates or (b) has at any time within the six (6)
years preceding the date of this Agreement been maintained for the employees of
such Person or any current or former ERISA Affiliate, as well as any
Multiemployer Plan under ERISA.

                                     Page 5
<PAGE>
         "Encumbrance" shall mean any lien, pledge, option, charge, easement,
security interest, deed of trust, mortgage, right-of-way, encroachment, building
or use restriction, conditional sales agreement, encumbrance or other similar
right of any third party, including, without limitation, any lien of any
contractor or supplier, whether voluntarily incurred or arising by operation of
law, and shall include any agreement or obligation to give or grant any lien,
pledge, option, charge, easement, security interest, deed of trust, mortgage,
right-of-way, encroachment, building or use restriction, conditional sales
agreement, encumbrance or other similar right in the future, and any contingent
sale or other title retention agreement or lease in the nature thereof.

         "Environmental Conditions" shall have the meaning set forth in Section
4.26.

         "Environmental Laws" shall have the meaning set forth in Section 4.26.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute and all rules and
regulations promulgated thereunder.

         "ERISA Affiliate" shall mean any Person that is a member of a group
that is under common control with any other Person, which together with such
other Person is treated as a single employer within the meaning of Section
414(b) or (c) of the Code.

         "Escrow Agent" shall have the meaning set forth in Section 2.3.

         "FERC" means the Federal Energy Regulatory Commission or any successor
agency thereto.

         "GECC" shall mean General Electric Capital Corporation.

         "GECC Liens" shall mean Encumbrances in respect of the SIGC Project in
favor of GECC or its Affiliates or nominees, including the U.S. Trust Company of
California, N.A., as set forth in Schedule 4.10.

         "Governmental Person" shall mean the United States, any state, any
county, or any other political subdivision in which any portion of a Project is
located, and any other political subdivision, agency, authority, board, bureau,
commission, court, department, or instrumentality exercising jurisdiction over
any Seller, any Interest, any Project Company or any Project.

         "Hazardous Substance" shall have the meaning set forth in Section 4.26.

         "Heber Resource Leases" shall mean the leases set forth in Schedule
4.11 in connection with the leased geothermal resource available to the HFC
Project.

         "Heber Settlement" shall mean the settlement of disputes regarding
certain Heber Resource Leases substantially in accordance with the terms and
conditions set forth in the letter of intent dated June 2, 2003, attached as
Exhibit B.

         "HGC/HFC Liens" shall mean the Encumbrances in respect of the HGC
Project and the HFC Project in favor of GECC or its Affiliates or nominees as
set forth in Schedule 4.10.

         "HFC Operator" shall mean Covanta Geothermal Operations, Inc., the
operator of the HFC Project.

         "HGC Operator" shall mean Covanta Imperial Power Services, Inc., the
operator of the HGC Project.

                                     Page 6
<PAGE>
         "Holding Companies" shall mean SIGC One Sub, SIGC Two Sub, Amor, MP One
Sub and MP Two Sub.

         "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.

         "Improvements" shall have the meaning set forth in Section 4.11(a).

         "Independent Auditor" shall mean PricewaterhouseCoopers or another
independent auditor with arbitration experience mutually agreeable to the
Parties.

         "Interests" shall mean the SIGC Interests, the MP Interests, the HFC
Interests and the HGC Interests.

         "Liabilities" shall mean any direct or indirect liability,
indebtedness, obligation, commitment, expense, deficiency or guaranty, in each
case requiring the payment of a monetary amount, of or by a Project Company or
Holding Company of any type, whether accrued, absolute, contingent, matured,
unmatured, liquidated, unliquidated, known or unknown.

         "MP Operator" shall mean Covanta Power Plant Operations, the operator
of the MP Project.

         "Material Adverse Effect" shall mean, with respect to a Project
Company, any material adverse effect on the Business, operations, or financial
condition of such Project Company; provided that there shall be no Material
Adverse Effect resulting, individually or in the aggregate, from (x)
macro-economic events or general market-related changes unless the Project
Companies are affected by such events or changes in a manner that is
substantially disproportionate when compared to competitor or peer businesses or
(y) that certain Order Authorizing Assumption of Certain Intercompany
Agreements, issued by the Bankruptcy Court on June 27, 2002, and that certain
Emergency Interim Order (I) Authorizing the Use of Cash Collateral Pursuant to
11 U.S.C. ss.363 and (II) Granting Adequate Protection Pursuant to 11 U.S.C.
ss.363 and ss.364, And (III) Scheduling a Final Hearing Pursuant to Bankruptcy
Rules 4001(b) and (c), issued by the Bankruptcy Court on April 2, 2002.

         "Material Contracts" shall have the meaning set forth in Section 4.13.

         "O+M Contract" shall have the meaning set forth in Section 12.1.

         "On Site Employee" shall have the meaning set forth in Section 12.1.

         "Ordinary Course of Business" shall mean all actions that are
consistent with the past operating practices of a Project Company taken in the
course of normal day-to-day operations of its Business.

         "Permits" shall mean all licenses, permits, franchises, approvals,
authorizations, consents or orders of, or filings with, any governmental
authority, whether foreign, federal, state or local, necessary for the conduct
or operation of the Business or ownership of the Assets, including, without
limitation, the Projects.

         "Permitted Encumbrances" means (i) Encumbrances for current taxes not
yet due and payable, (ii) Encumbrances listed on Schedule 4.10, (iii) any
Encumbrances to be released at the Closing, (iv) any easements, zoning
restrictions, rights-of-way or similar encumbrances imposed by statute or
operation of law, and (v) mechanics', workmen's, repairmen's, carriers' or other
like liens and encumbrances arising in the Ordinary Course of Business or being
contested in good faith by appropriate proceedings.

         "Person" shall mean and includes an individual, a partnership, a

                                     Page 7
<PAGE>
limited liability company, a joint stock company, an association, a bank, a
trust company, a land trust, a business trust, a joint venture, a corporation, a
trust, an unincorporated organization, a Governmental Person, or any other
entity whether or not such entity is a legal entity.

         "Plan" means the plan of reorganization for the Reorganizing Heber
Debtors, including exhibits and supplements thereto, as amended or modified from
time to time by the Reorganizing Heber Debtors in accordance with its terms, a
copy of which is attached hereto as Exhibit A - Part II.

         "Power Purchase Agreements" shall mean (a) the Power Purchase Contract,
dated as of April 16, 1985, between Southern California Edison Company ("SCE")
and the SIGC Project Company, as amended by Amendment No. 1, dated as of October
23, 1987, between SCE and SIGC Project Company, as amended by Amendment No. 2,
dated as of July 27, 1990, between SCE and SIGC Project Company, as amended by
Amendment No. 3, dated as of November 24, 1992, between SCE and SIGC Project
Company, as amended by the Agreement Addressing Renewable Energy Pricing and
Payment Issues, dated June 19, 2001, between SCE and SIGC Project Company, as
amended on November 30, 2001;

         (b) the Power Purchase and Sales Agreement, dated as of August 26,
1983, between SCE and Chevron U.S.A., Inc., as assigned to HGC Project Company
by the Assignment and Assumption Agreement, dated August 26, 1983, between
Chevron U.S.A., Inc. and HGC Project Company, as amended by Amendment No. 1 to
Power Purchase and Sales Agreement, dated as of December 11, 1984, between SCE
and HGC Project Company, as amended by Settlement Agreement and Amendment No. 2
to Power Purchase Contract, executed on August 7, 1995, between SCE and HGC
Project Company, as amended by the Agreement Addressing Renewable Energy Pricing
and Payment Issues, dated as of June 19, 2001, as amended on November 30, 2001;

         (c) the Amended and Restated Power Purchase and Sales Agreement, dated
as of December 2, 1986, between SCE and MP Project Company, as amended by the
Amendment No. 1 to the Amended and Restated Power Purchase and Sales Agreement,
dated as of May 18, 1990, between SCE and MP Project Company, as amended by the
Agreement Addressing Renewable Energy Pricing and Payment Issues, dated as of
June 19, 2001, between SCE and MP Project Company, as amended on November 30,
2001;

         (d) the Power Purchase Contract, dated as of April 15, 1985, between
SCE and MP Project Company, as amended by Amendment No. 1 to Power Purchase
Contract, dated as of October 27, 1989, between SCE and MP Project Company, as
amended by Amendment No. 2 to Power Purchase Contract, dated as of December 20,
1989, between SCE and MP Project Company, as amended by the Agreement Addressing
Renewable Energy Pricing and Payment Issues, dated as of June 19, 2001, between
SCE and MP Project Company, as amended on November 30, 2001; and

         (e) the Power Purchase Contract, dated as of April 16, 1985, between
SCE and Santa Fe Geothermal, Inc., as assigned to Pacific Lighting Energy
Systems by Assignment and Assumption Agreement, dated April 2, 1986, between
Santa Fe Geothermal, Inc., and Pacific Lighting Energy Systems, as amended by
Amendment No. 1 to Power Purchase Contract, dated as of October 27, 1989,
between SCE and Pacific Lighting Energy Systems, as amended by Amendment No. 2
to the Power Purchase Contract, dated as of December 20, 1989, between SCE and
Pacific Lighting Energy Systems, as assigned to MP Project Company by Assignment
and Assumption Agreement, dated January 29, 1990, among Pacific Lighting Energy
Systems, Pacific Geothermal Company, CD Mammoth Lakes I, CD Mammoth Lakes II,
and MP Project Company, as amended by the Agreement Addressing Renewable Energy
Pricing and Payment Issues, dated as of June 19, 2001, between SCE and MP
Project Company, as amended on November 30, 2001.

         "Project" shall mean each of the SIGC Project, the MP Project, the HFC
Project and the HGC Project.

                                     Page 8
<PAGE>
         "Project Company" shall mean each of the SIGC Project Company, the MP
Project Company, the HFC Project Company and the HGC Project Company.

         "Proprietary Rights" shall mean all (a) U.S. and foreign patents,
patent applications, patent disclosures and improvements thereto, including any
applications therefor, (b) software (other than software normally subject to
commercial shrink-wrap licenses), drawings, specifications, designs, technical
data, copyrightable works, financial and business data, pricing and cost
information, and customer and supplier lists and information, (c) copies and
tangible embodiments thereof (in whatever form or medium) and (d) licenses
granting any rights with respect to any of the foregoing.

         "Purchase Price" shall mean $214,000,000.

         "Real Property" shall have the meaning set forth in Section 4.11(b).

         "Real Property Agreements" shall have the meaning set forth in Section
4.11(a).

         "Regulations" shall mean any laws, statutes, ordinances, regulations,
rules, notice requirements, court decisions, and orders of any foreign, federal,
state or local government and any other governmental department or agency,
including Environmental Laws, energy, motor vehicle safety, public utility,
zoning, building and health codes, occupational safety and health, and laws
respecting employment practices, employee documentation, and the terms and
conditions of employment, wages and hours.

         "Related Party" shall mean (i) any Affiliate of any Seller or any
Project Company, (ii) any officers, director or employee of any Seller, Project
Company or Affiliate thereof, and (iii) any Person in which any Project Company
or Seller or any Affiliate of any Project Company or Seller has any direct or
material indirect interest.

         "Release" shall have the meaning set forth in Section 4.26.

         "Reorganizing Heber Debtors" shall mean SIGC One Sub, SIGC Two Sub,
Amor and the Debtor Project Companies.

         "Representatives" shall mean, with regard to any Person, the employees,
officers, directors, and authorized agents of such Person.

         "Qualifying Facility Self Recertification" shall have the meaning set
forth in Section 12.2.

         "Sale Hearing" shall have the meaning set forth in Section 6.1(b);
provided, however, if the transactions contemplated by this Agreement are
effected by way of a Plan, all references to the Sale Hearing shall be deemed
references to the hearing before the Bankruptcy Court seeking confirmation of
the Plan.

         "Sale Motions" shall have the meaning set forth in Section 6.1(c);
provided, however, if the transactions contemplated by this Agreement are
effected by way of a Plan, all references to the Sale Motions in Sections 7.11
and 10.2(c) shall be deemed references to the Plan.

         "Sale Orders" shall have the meaning set forth in Section 6.1(c);
provided, however, if the transactions contemplated by this Agreement are
effected by way of a Plan, all references to the Sale Order shall be deemed
references to the Plan and/or Confirmation Order, as applicable.

         "Scheduled Contracts" shall mean the Contracts set forth on Schedule
3.3(a), Schedule 3.3(b) and Schedule 3.3(c), each as amended to reflect any
additional contracts of any Seller listed on any of the schedules to the Plan as

                                     Page 9
<PAGE>
contracts to be assumed or assumed and assigned or any other contracts agreed to
be included as a "Scheduled Contract" by Buyer and Seller.

         "Seller" and "Sellers" shall have the respective meanings set forth in
the title paragraph of this Agreement.

         "SIGC/GE Project Documents" shall mean each of the agreements in
connection with the SIGC Project set forth in Schedule 4.13 that are designated
as "SIGC/GE Project Documents."

         "SIGC Operator" shall mean Covanta SIGC Geothermal Operations, Inc.,
the operator of the SIGC Project.

         "Tax" or "Taxes" shall mean any and all taxes, assessments, levies,
charges or fees, including all net income, corporation, gross income, ad
valorem, receipts, transfer, gains, profits, windfall profits, excise, real and
personal property, gross receipts, sales, capital stock, use, production,
value-added, goods and services, disability, license, payroll, estimated, stamp,
custom duties, severance, withholding, social security and franchise or other
governmental taxes or charges, imposed by any Governmental Person, and such term
shall include any interest, penalties or additions to tax attributable thereto.

         "Tax Return" shall mean any report, return (including any information
return), declaration, statement, bill, schedule, claim for refund or written
information required to be supplied to a Governmental Person with respect to
Taxes, including any amendments thereof or any schedule or attachment thereto.

         "Title Policies" shall mean title insurance policies or commitments to
issue title insurance policies with respect to the Real Property.

         "Working Capital" shall mean the aggregate amount of adjusted current
assets minus adjusted current liabilities for the Project Companies and the
Holding Companies, taken as a whole, as of the opening of business on the
Closing Date, calculated in accordance with the Working Capital Methodology;
provided, that with respect to the MP Project Company, only 50% of the aggregate
amount attributable to such company shall be included in the definition of
"Working Capital"; provided, further, if the transactions contemplated by this
Agreement are effected by way of a Plan, all reasonable, documented
out-of-pocket costs and expenses incurred by the Reorganizing Heber Debtors
following the Closing Date in connection with the administration and closing of
their cases before the Bankruptcy Court shall be accounted for and treated as a
current liability in the computation of "Working Capital."

         "Working Capital Methodology" shall mean the methodology for the
computation of Working Capital set forth in Exhibit C, provided that unless
specified differently in such Exhibit C, the components of Working Capital set
forth as line items on Exhibit C will be calculated on the basis of generally
accepted accounting principles in the United States of America as in effect on
the date hereof consistently applied.

      2. SALE AND PURCHASE OF INTERESTS

         2.1 Purchase of Interests. At the Closing, upon the terms and subject
to the conditions of this Agreement and in reliance upon the representations,
warranties and agreements contained herein:

         (a) (i) SIGC Seller shall sell, convey, assign, transfer and deliver to
SIGC Buyer, and SIGC Buyer shall purchase or acquire from SIGC Seller, all of
its right, title and interest in SIGC One Sub held by SIGC Seller and (ii) SIGC
Seller shall sell, convey, assign, transfer and deliver to SIGC Buyer, and SIGC
Buyer shall purchase or acquire from SIGC Seller, all of its right, title and
interest in SIGC Two Sub held by SIGC Seller; provided, however, if at least
three days prior to the Closing Date Buyer receives the consent of GECC and GECC

                                    Page 10
<PAGE>
agrees to release any and all liens against and/or security interests in the
equity and assets of SIGC One Sub, SIGC Two Sub, Amor and any other Debtor
(other than the SIGC Project Company) in connection with the SIGC Project, then,
at Buyer's option, Amor and SIGC Two Sub shall sell, convey, assign, transfer
and deliver to SIGC Buyer, and SIGC Buyer shall purchase or acquire from Amor
and SIGC Two Sub, all of their right, title and interest in the SIGC Project
Company only;

         (b) Mammoth Seller shall sell, convey, assign, transfer and deliver to
Mammoth Buyer, and Mammoth Buyer shall purchase or acquire from Mammoth Seller,
all of its right, title and interest in the MP Interests held by Mammoth Seller;
provided, however, if at least three days prior to the Closing Date Buyer
receives the consent of Constellation Energy, then, at Buyer's option, MP Sub
One and MP Sub Two shall sell, convey, assign, transfer and deliver to Mammoth
Buyer, and Mammoth Buyer shall purchase or acquire from MP Sub One and MP Sub
Two, all of their right, title and interest in the MP Project;

         (c) (i) HGC One Seller shall sell, convey, assign, transfer and deliver
to HFC/HGC One Buyer, and HFC/HGC One Buyer shall purchase or acquire from HGC
One Seller, all of its right, title and interest in 50% of the HGC Interests
held by HGC One Seller, (ii) HGC One Seller shall sell, convey, assign, transfer
and deliver to HFC/HGC Two Buyer, and HFC/HGC Two Buyer shall purchase or
acquire from HGC One Seller, all of its right, title and interest in 50% of the
HGC Interests held by HGC One Seller, (iii) HGC Two Seller shall sell, convey,
assign, transfer and deliver to HFC/HGC One Buyer, and HFC/HGC One Buyer shall
purchase or acquire from HGC Two Seller, all of its right, title and interest in
the HGC Interests held by HGC Two Seller and (iv) HGC Three Seller shall sell,
convey, assign, transfer and deliver to HFC/HGC Two Buyer, and HFC/HGC Two Buyer
shall purchase or acquire from HGC Three Seller, all of its right, title and
interest in the HGC Interests held by HGC Three Seller; and

         (d) (i) HFC One Seller shall sell, convey, assign, transfer and deliver
to HFC/HGC One Buyer, and HFC/HGC One Buyer shall purchase or acquire from HFC
One Seller, all of its right, title and interest in the HFC Interests held by
HFC One Seller, and (ii) HFC Two Seller shall sell, convey, assign, transfer and
deliver to HFC/HGC Two Buyer, and HFC/HGC Two Buyer shall purchase or acquire
from HFC Two Seller, all of its right, title and interest in the HFC Interests
held by HFC Two Seller;

in each case, free and clear of any lien, claim or Encumbrance, except for the
GECC Liens, in exchange for the payment by Buyers of the Purchase Price adjusted
in accordance with Section 2.2.

         2.2 Working Capital Adjustment.

         (a) Seven business days prior to the Closing, the Sellers shall prepare
and deliver to the Buyers an estimated statement of Working Capital as of the
opening of business on the scheduled Closing Date (the "Pre-Closing Statement").
The Sellers shall prepare the Pre-Closing Statement in good faith, in accordance
with the Working Capital Methodology applied on a consistent basis, and shall
consult with the Buyers in respect thereof and give the Buyers proper access to
the work papers used in the preparation thereof.

         (b) The Purchase Price shall, immediately prior to the Closing, be (A)
increased by 100% of the amount, if any, by which the Closing Working Capital,
as calculated based on the Pre-Closing Statement, is greater than $12,508,000 or
(B) decreased by 100% of the amount, if any, by which the Closing Working
Capital, as calculated based on the Pre-Closing Statement, is less than
$12,508,000; provided, that if the amount of any adjustment increasing the
Purchase Price exceeds $4,000,000, the excess over $4,000,000 shall be deposited
in escrow with the Escrow Agent pending determination of the Final Closing
Statement and true-up of the Purchase Price pursuant to paragraph (e) hereof.

                                    Page 11
<PAGE>
         (c) Within 30 business days after the Closing, the Buyers shall prepare
and deliver to Covanta a statement of Closing Working Capital (the "Closing
Statement"). The Closing Statement shall be prepared in accordance with the
Working Capital Methodology applied on a consistent basis showing the
differences from the Pre-Closing Statement. After receipt of the Closing
Statement, Covanta shall have 15 business days to review it together with the
work papers used in the preparation thereof. Unless Covanta delivers written
notice to the Buyers on or prior to the 15th business day after the receipt of
the Closing Statement stating that they have objections thereto, the Sellers
shall be deemed to have accepted and agreed to the Closing Statement. If,
however, Covanta notifies the Buyers of objections to the Closing Statement on
or prior to the 15th business day after its receipt of the Closing Statement,
the parties shall in good faith attempt to resolve, within 10 business days (or
such longer period as the parties may agree in writing) following such notice
(the "Resolution Period"), their differences with respect to such objections and
any resolution by them as to any disputed amounts shall be final binding and
conclusive. In so doing, the parties (sharing any fees and expenses equally) may
engage a mutually agreed upon independent accounting firm experienced in audit
projects to assist such resolution by acting as a non-binding mediator.

         (d) Amounts relating to any working capital and other accounts set
forth in the Closing Statement remaining in dispute at the conclusion of the
Resolution Period shall be promptly submitted to the Independent Auditor for
resolution. The Independent Auditor shall render a decision within 30 calendar
days from referral of the dispute by either party. The decision of the
Independent Auditor with respect to the Closing Statement and the determination
of the Closing Working Capital shall be final and binding upon the parties. The
Independent Auditor shall be retained at the parties' equally shared expense.

         (e) Once the determination of the Closing Working Capital is finalized
in accordance with this Section 2.2 (as so finalized, the "Final Closing
Statement"), the Purchase Price shall be trued up as set forth in this Section
2.2(e) to give effect to the Closing Working Capital as of the opening of
business on the Closing Date. If the Purchase Price as adjusted pursuant to this
Section 2.2(e) is less than the Purchase Price as adjusted pursuant to Section
2.2(b), Covanta shall pay to the Buyers an amount of cash equal to the
difference obtained by subtracting the Purchase Price as adjusted pursuant to
this Section 2.2(e) from the Purchase Price as adjusted pursuant to Section
2.2(b). Such payment shall be made by wire transfer from Covanta of immediately
available funds within two business days to an account designated in writing by
the Buyers. Such payment shall constitute an administrative priority claim
against Covanta's and the Sellers' estates under Sections 503(b) and 507(a)(1)
of the Bankruptcy Code and shall be paid immediately, without further order of
the Bankruptcy Court. If the Purchase Price as adjusted pursuant to this Section
2.2(e) is greater than the Purchase Price as adjusted pursuant to Section
2.2(b), the Buyers shall pay to Covanta and the Sellers an amount of cash equal
to the difference obtained by subtracting the Purchase Price as adjusted
pursuant to Section 2.2(b) from the Purchase Price as adjusted pursuant to this
Section 2.2(e). Such payment shall be made by wire transfer from the Buyers of
immediately available funds within two business days to an account designated in
writing by Covanta or the Sellers.

         (f) During the preparation of the Pre-Closing Statement and Closing
Statement and the period of any review or dispute within the contemplation of
this Section 2.2, the parties shall (i) provide each other upon reasonable
advance request with full access for review and copying by the other party, its
agents and Representatives at all reasonable times, and in a manner so as not to
interfere unreasonably with the normal business operations of each party, to all
relevant books, records (whether in paper or electronic form), work papers,
information and employees, and (ii) cooperate fully with each other as necessary
for the preparation, calculation and reviews of the Pre-Closing Statement and
Closing Statement or for the contemplated resolution of any dispute between the
Parties relating thereto.

                                    Page 12
<PAGE>
         2.3 Deposit. (a) On November 14, 2003 the Buyers made a deposit on the
Purchase Price of $15,000,000 and (b) on November 25, 2003 the Buyers shall make
an additional deposit on the Purchase Price of $25,000,000 (the aggregate of
such amounts referred to in clauses (a) and (b), as of their deposit, together
with all interest and fees earned or charged thereon, the "Deposit"), to be held
by The Bank of Nova Scotia Trust Company of New York (the "Escrow Agent")
pursuant to the escrow agreement attached as Exhibit D hereto. Upon receipt of
the Deposit, the Escrow Agent shall immediately deposit the Deposit into an
interest-bearing account. The Escrow Agent shall hold the Deposit until the
earlier of the Closing Date or the termination of this Agreement, at which time
the Deposit shall, (x) if the Closing shall occur, be applied to the payment of
the Purchase Price, (y) if this Agreement shall terminate prior to the Closing,
be applied in accordance with Section 10.2. The Escrow Agent's escrow fees and
charges shall be paid one-half by the Sellers, collectively, and one-half by the
Buyers. Each of the Buyers and the Sellers agree to provide written instructions
to the Escrow Agent providing for the release of the Deposit in accordance with
the terms of this Section 2.3.

      3. CLOSING.

         3.1 Time and Place. The closing of the transactions contemplated hereby
(the "Closing") shall be held at a location to be mutually agreed to by the
parties at 10:00 a.m. (New York time) on the third business day (the "Closing
Date") following the satisfaction or waiver of the conditions set forth in
Sections 7 and 8 (other than those conditions that by their nature are to be
satisfied at the Closing, but subject to the satisfaction or waiver of those
conditions at the Closing) or at such other time, or at such other place as
Buyers and Sellers may agree.

         3.2 Transactions at Closing. At the Closing, (a) the Sellers shall
transfer the Interests as set forth in Section 2.1, together with all
certificates evidencing such Interests and accompanied by instruments of
assignment and transfer reasonably satisfactory to Buyers, and (b) the Buyers
shall deliver to Sellers an amount that, together with the Deposit delivered to
Sellers by the Escrow Agent, equals the Purchase Price, by wire transfer of
immediately available funds to an account designated by the Sellers to the
Buyers no later than three business days prior to the Closing Date.

         3.3 Contracts. (a) At the Closing, immediately prior to the
transactions referred to in Section 3.2, hereof the Holding Companies and the
Debtor Project Companies shall assume the Contracts set forth in Schedule
3.3(a).

         (b) At the Closing, immediately prior to the transactions referred to
in Section 3.2 hereof, the Sellers and the Debtor Operators, as applicable,
shall assume and assign to the Buyers the Contracts set forth in Schedule
3.3(b).

         (c) At the Closing, immediately prior to the transactions referred to
in Section 3.2 hereof, the Sellers, the Debtor Project Companies and the Debtor
Operators, as applicable, shall assign to the Buyers or Buyers' designee the
Contracts previously assumed by such entities as set forth in Schedule 3.3(c),
including the applicable O+M Contracts.

         (d) At the Closing, the MP Operator shall transfer, assign and convey
to the Buyers or Buyers' designee all of its rights and obligations under the
Agreement, dated August 15, 2003, between the MP Operator, the MP Project
Company and EMA in respect of permitting services in the amount of $176,000
(which agreement expires August 15, 2004).

         3.4 Reorganization -- Dismissal of Bankruptcy Cases. At the Closing,
(i) the Plan shall become effective with respect to the Reorganizing Heber

                                    Page 13
<PAGE>
Debtors or, (ii) alternatively, if the transactions contemplated by this
Agreement are not effected by way of a Plan, immediately following the
transactions referred to in Section 3.2 hereof, the Bankruptcy Cases in respect
of SIGC One Sub, the SIGC Two Sub, Amor, SIGC Project Company, the HGC Project
Company and the HFC Project Company shall be deemed dismissed pursuant to the
Sale Order.

      4. REPRESENTATIONS AND WARRANTIES OF SELLERS. Covanta and each Seller
makes the following representations and warranties to the Buyers as of the date
hereof, all of which have been and will be relied upon by the Buyers in entering
into this Agreement and consummating the transactions contemplated hereby.

         4.1 Organization. (a) Covanta and each Seller (other than Mammoth
Seller and HGC One Seller) is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. Each of Mammoth Seller
and HGC One Seller is a partnership or a corporation duly organized, validly
existing and in good standing under the laws of the State of California. Covanta
and each Seller has corporate or equivalent power and authority to conduct its
Business as it is presently being conducted, subject to, in the case of Covanta
or any Seller that is a Debtor, the limitations imposed by the Bankruptcy Code
and the Bankruptcy Court. Covanta and each Seller is duly qualified to do
business as a foreign limited liability company, partnership or corporation and
is in good standing in each jurisdiction in which such qualification is
necessary under applicable law.

         (b) The HFC Project Company and the HGC Project Company are each a
general partnership, and the SIGC Project Company and the MP Project Company are
each a limited partnership, duly organized, validly existing and in good
standing under the laws of the State of California. SIGC One Sub and Amor are
each a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware. SIGC Two Sub, MP One Sub and MP Two Sub are
each a corporation, duly organized, validly existing and in good standing under
the laws of the State of California. Each Holding Company and Project Company
has corporate or equivalent power and authority to conduct its Business as it is
presently being conducted and to own or lease, as applicable, its Assets,
subject to, in the case of SIGC One Sub, SIGC Two Sub, Amor and any Debtor
Project Company, the authority and supervision of the Bankruptcy Court. SIGC One
Sub and Amor are duly qualified to do business as a corporation in the State of
California and are in good standing in each jurisdiction in which such
qualification is necessary under applicable law.

         4.2 Capitalization. (a) The Sellers own the entirety of the Interests.
The Interests represent all of the equity interests in the Holding Companies and
the Project Companies (other than the MP Project Company) and, following the
Closing, the Interests (other than the SIGC Interests) shall be free and clear
of any and all liens, pledges, claims, assessments, security interests or other
Encumbrances of any nature whatsoever. Except as follows from the GECC Liens or
the HGC/HGC Liens, neither Covanta nor any Seller has entered into any agreement
or delivered any document that in any way restricts the transferability of the
Interests or the Buyers' full exercise of their rights as the holders of all
Interests after the Closing. At the Closing, the Sellers will transfer and
convey to the Buyers the SIGC Interests, the MP Interests, the HFC Interests and
the HGC Interests, and the Buyers will receive such Interests, free and clear of
any lien or Encumbrance other than, in the case of the SIGC Interests, the GECC
Liens.

         (b) There are no outstanding options, warrants, convertible securities
or rights of any kind to purchase or otherwise acquire any general partnership
interests, limited partnership interests, stock or other securities in any
Holding Company or Debtor Project Company.

         (c) The Interests are validly issued, and are not subject to any
preemptive rights created by (i) applicable statute, (ii) any Holding Company's

                                    Page 14
<PAGE>
or Project Company's governing documents or (iii) any contract or agreement, and
the Interests have been issued in compliance with all relevant Regulations,
including, without limitation, all applicable federal and state corporate,
limited partnership, limited liability company and securities laws. There are no
voting agreements or voting trusts with respect to the Interests of any Holding
Company or Project Company, except pursuant to the DIP Security Agreement, the
GECC Liens and the HGC/HFC Liens.

         (d) Except for the Sellers, no other Person has any interest, economic,
voting or otherwise, in the Interests, except pursuant to the DIP Security
Agreement, the GECC Liens and the HGC/HFC Liens.

         4.3 Authorization. (a) Subject to approval of the Bankruptcy Court in
the case of Covanta and the Sellers that are Debtors, Covanta and each Seller
has all necessary corporate or equivalent power and authority to enter into this
Agreement and the Closing Instruments to which it is a party and has taken all
partnership, limited partnership, limited liability company or corporate action,
as appropriate, necessary for the consummation of the transactions contemplated
hereby and thereby and, in the case of Covanta and a Seller that is a Debtor,
upon receipt of any required approval of the Bankruptcy Court, to perform its
obligations hereunder and thereunder.

         (b) This Agreement and the Closing Instruments have each been duly and
validly executed and delivered by Covanta and the Sellers that are parties
thereto and (assuming due authorization, execution and delivery hereof by the
Buyers and subject to approval of the Bankruptcy Court) will constitute the
legal, valid and binding obligation of Covanta and the Sellers enforceable
against Covanta and the Sellers in accordance with its terms.

         4.4 Officers and Directors. Schedule 4.4 contains a complete and
accurate list of all officers and directors of each Holding Company and each
Project Company.

         4.5 Bank Accounts. (a) Schedule 4.5 contains a complete and accurate
list of the bank accounts, safe deposit boxes, and related powers of attorney of
each Holding Company or Project Company, and persons authorized to draw thereon
or have access thereto.

         (b) No Holding Company or Project Company has an outstanding power of
attorney for banking or other purposes, except as disclosed in such Schedule
4.5.

         4.6 MP Project Bankruptcy. (a) Neither the MP Project Company nor the
Mammoth Seller and its Subsidiaries has filed any voluntary petition in
bankruptcy or been adjudicated as bankrupt or insolvent, filed any petition or
answer seeking any reorganization, liquidation, dissolution or similar relief
under any federal bankruptcy, insolvency, or other debtor relief law, or sought
or consented to or acquiesced in the appointment of any trustee, receiver,
conservator or liquidator of all or any substantial part of its properties.

         (b) No court of competent jurisdiction has entered an order, judgment
or decree approving a petition filed against the MP Project Company or the
Mammoth Seller and its Subsidiaries seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
federal bankruptcy act, or other debtor relief law, and no other liquidator has
been appointed for the MP Project Company or the Mammoth Seller and its
Subsidiaries, or for all or any substantial part of their properties.

         (c) The MP Project Company and the Mammoth Seller and its Subsidiaries
are solvent, have assets which do not constitute unreasonably small capital and
are able to pay their debts as such debts mature.

         4.7 Reserved.

                                    Page 15
<PAGE>
         4.8 Subsidiaries, Etc. There are no corporations, partnerships, joint
ventures or other entities in which any Project Company or Holding Company owns,
of record or beneficially, any direct or indirect equity interest or any right
(contingent or otherwise) to acquire the same (a "Subsidiary") other than as set
forth in this Agreement.

         4.9 Absence of Certain Changes or Events. Except as set forth in
Schedule 4.9 or as required in this Agreement, since December 31, 2002:

         (a) there has been no failure by any Seller, any Holding Company or any
Project Company to operate the Business of such Holding Company or Project
Company, as applicable, in the Ordinary Course of Business and no failure to use
commercially reasonable efforts to preserve such Business intact;

         (b) there has been no actual or, to the knowledge of the Sellers,
threatened termination of any Material Contract; and each Holding Company and
Project Company has fulfilled, or taken all action necessary to enable it to
fulfill when due, all of its material obligations under each Material Contract
listed in Schedule 4.13, including, without limitation, the Real Property
Agreements;

         (c) there has been no failure by the MP Project Company to satisfy its
payment obligations;

         (d) there has been no commencement or assertion of any Action by any
Holding Company or Project Company against any Person;

         (e) there has been no cancellation of any indebtedness or compromise,
waiver or settlement of any claim, potential claim or any other rights of value
to any Holding Company or Project Company, except (i) in the Ordinary Course of
Business or (ii) in the case of SIGC One Sub, SIGC Two Sub, Amor or a Debtor
Project Company, as authorized by the Bankruptcy Court; and

         (f) there has been no agreement by any Holding Company or Project
Company to do any of the foregoing.

         4.10 Assets. (a) Each Holding Company and Project Company has title to
its respective Assets and none of the Assets are subject to any Encumbrances,
except for Permitted Encumbrances.

         (b) Except as set forth on Schedule 4.10, to the Sellers' knowledge,
the Assets of each Holding Company and Project Company constitute all of the
material Assets, rights and properties, tangible or intangible, real or
personal, which are required by such Holding Company and Project Company in the
operation of its Business and each Holding Company and Project Company has title
to its respective Assets.

         (c) Except as set forth on Schedule 4.10, all tangible assets and
properties which are part of the Assets of each Holding Company and Project
Company are in good operating condition and repair, normal wear and tear
excepted, and are usable in the Ordinary Course of Business.

         4.11 Real Property. (a) Schedule 4.11 sets forth all agreements and
instruments relating to the Real Property or any parcel thereof, including any
amendments thereto (the "Real Property Agreements"), pursuant to which each
Holding Company or Project Company leases, subleases, licenses or otherwise
occupies or uses any plants, offices, facilities, warehouses, control buildings
or other structures, improvements, or fixtures (collectively, "Improvements"),
land, mineral rights, surface use rights or any other Real Property.

         (b) The Real Property Agreements set forth the material real property
and real property rights and interests owned or leased by each Holding Company

                                    Page 16
<PAGE>
and Project Company, whether solely owned or owned in co-tenancy, and any
options to acquire material real property or real property interests
(collectively, the "Real Property").

         (c) No Seller, Holding Company or Project Company has received written
notice of, and no Seller, Holding Company or Project Company has knowledge that:

                    (i) there are any pending or threatened utility or
               governmental proceedings in eminent domain, for rezoning or
               otherwise, which would affect the Real Property or any portion
               thereof or any Improvements;

                    (ii) the Real Property or any portion thereof or any
               Improvements, or the uses conducted therein or thereon, violate
               any Regulations or Court Orders; or

                    (iii) there are any pending or threatened public
               improvements or special assessments that would affect the Real
               Property or any portion thereof or any Improvements, or that
               could result in any charge being levied or assessed or in the
               creation of any lien.

         (d) To the Sellers' knowledge, there is not pending or threatened any
utility or governmental action that would result in the utilities necessary for
the use of the Real Property and each material portion thereof by any Holding
Company or Project Company or any Improvements as presently used, not being
available thereto.

         (e) Except as disclosed in the schedules to this Agreement or the Title
Policies, no Holding Company, Project Company or any Seller is a party to or has
knowledge of any lease, tenancy, sublease, license, occupancy or co-tenancy in
effect, oral or written, related to Real Property or any portion thereof or any
Improvements.

         (f) Except for Permitted Encumbrances, there are no material
Encumbrances, covenants, conditions, reservations, restrictions, easements or
other matters affecting the Real Property or any portion thereof or any
Improvements.

         4.12 Firm Operation. The original "firm operation date" under each of
the Power Purchase Agreements occurred as set forth on Schedule 4.12.

         4.13 Material Contracts. Schedule 4.13 sets forth (a) a complete and
accurate list of all Contracts that have a remaining term of one year or more
and provide for the future delivery of or payment for goods and services having
a value in excess of $50,000 in the aggregate in any calendar year ("Material
Contracts") and (b) certain other Contracts. Copies of all of the Material
Contracts listed on Schedule 4.13, including all amendments and supplements
thereto, have been made available to Buyers. All of the Material Contracts
listed in Schedule 4.13 (including the Real Property Agreements) are valid,
binding and enforceable against the Holding Company or Project Company party
thereto in accordance with their terms, subject to the Bankruptcy Cases and, in
the case of Contracts of the MP Project Company, except that enforceability may
be limited by the effect of bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the rights of creditors and
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). In the case of the SIGC One
Sub, SIGC Two Sub, Amor and the Debtor Project Companies, the commencement of
the Bankruptcy Cases does not impair the enforceability of any Material Contract
or give rise to a default thereunder, which shall not have been cured or voided
pursuant to the Approval Order. There is no existing Default by any Holding
Company or Project Company, or to the knowledge of the Sellers, by any
counterparty, and to the Sellers' knowledge there is no existing material

                                    Page 17
<PAGE>
dispute, each time with respect to performance under the Material Contracts
listed in Schedule 4.13 (including the Real Property Agreements).

         4.14 No Conflict or Violation; Consents. Except as set forth in
Schedule 4.14, (a) the execution, delivery or performance by Covanta and each
Seller of this Agreement and the Closing Instruments, and, assuming approval of
this Agreement by the Bankruptcy Court, the consummation of the transactions
contemplated hereby and thereby, and compliance by Covanta, each Seller, each
Holding Company and each Project Company with any of the provisions hereof, will
not (i) violate or conflict with any provision of their respective governing
documents; (ii) violate, conflict with, result in a breach of, constitute a
default (with or without notice or passage of time) under, result in the
termination of, accelerate the performance required by, result in a right to
terminate, accelerate, modify or cancel under, require a notice under, or result
in the creation of any Encumbrance upon any of its respective Assets or the
Business or under any Contract, lease, sublease, license, sublicense, franchise,
Permit, indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, security interest or other arrangement to which any such Seller,
Holding Company or any Project Company is a party or by which such Seller,
Holding Company or any Project Company is bound or to which any of its
respective Assets are subject; (iii) violate any Regulation or Court Order
applicable to any Seller, Holding Company or any Project Company, in each case;
or (iv) impose any Encumbrance on any Assets or the Business.

         (b) Except as set forth on Schedule 4.14, no notices to, declaration,
filing or registration with, approvals or consents of, or assignments by, any
Persons (including any federal, state or local governmental or administrative
authorities) are necessary to be made or obtained by Covanta, any Seller,
Holding Company or Project Company in connection with the execution, delivery or
performance of this Agreement or any Closing Instrument.

         4.15 Permits. (a) Schedule 4.15 sets forth a list, true and complete in
all respects, of all Permits held by each Project Company.

         (b) To the Sellers' knowledge, the Permits listed on Schedule 4.15
constitute all Permits required under any applicable Regulation in connection
with the operation of any Project Company or its Business. Except as set forth
on Schedule 4.15(b), each Project Company owns or possesses the Permits listed
on Schedule 4.15 free and clear of all Encumbrances, except for the DIP Security
Agreement, the GECC Liens and the HGC/HFC Liens. No Project Company is in
default, and no Project Company or Seller has received any notice of any claim
of default, with respect to any Permit listed on Schedule 4.15. Each Project
Company has materially complied with all requirements set forth in the Permits
listed on Schedule 4.15. Each Project Company has properly and validly obtained
the Permits listed on Schedule 4.15 under applicable Regulations from all
relevant authorities, and, to the knowledge of the Sellers, there is no
threatened suspension, cancellation or revocation of the Permits.

         4.16 Books and Records; Minutes. (a) Each Holding Company and each
Project Company maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed with
management's authorization, and (ii) access to Assets is permitted only in
accordance with management's authorization.

         (b) The books and records of each Holding Company and each Project
Company, in reasonable detail, accurately and fairly reflect the activities of
such Project Company and its Business and have been provided to Buyers for their
inspection.

         (c) The records and minute books, or equivalent records and documents,
of each Holding Company and each Project Company have heretofore been made
available to Buyers and, as applicable, have been kept and maintained as
required by law and in accordance with applicable accounting principles, and

                                    Page 18
<PAGE>
contain true, correct and complete copies of the governing documents of such
Holding Company or Project Company.

         4.17 Liabilities. No Holding Company or Project Company has any
Liabilities except (a) as set forth or reflected in the audited financial
statements for the SIGC Project dated as of December 31, 2002 and the balance
sheets for each of the Holding Companies, the HFC Project, the HGC Project and
the MP Project dated as of July 31, 2003, (b) pursuant to the Contracts to which
such Project Company is a party, (c) Current Liabilities to be included in the
Closing Working Capital and (d) pursuant to the DIP Agreement.

         4.18 Litigation. (a) Except as set forth on Schedule 4.18, there is no
Action pending or, to the knowledge of any Seller, threatened (i) against any
Holding Company, Project Company, or any of their officers and directors as such
or the Business or any Assets of the relevant Holding Company or Project Company
and (ii) which seek to obtain any legal or equitable relief from, or remedies
against, such Holding Company or Project Company.

         (b) Except as set forth on Schedule 4.18 and except in respect of the
Bankruptcy Cases, there are presently no outstanding judgments, decrees or
orders of any court or any governmental or administrative agency against or
affecting any Holding Company, Project Company, its Business or any of their
Assets.

         4.19 Employees. No Holding Company or Project Company currently employs
any individual or has any "leased employees," within the meaning of Section
414(n) of the Code, and, except for individuals serving as officers of a Project
Company from time to time, (a) in the case of the HGC Project Company, since
January 1, 1990, the HGC Project Company has not employed any individual or had
any such leased employees; (b) in the case of the HFC Project Company, since
January 1, 1992, the HFC Project Company has not employed any individual or had
any such leased employees; (c) in the case of the SIGC Project, since January 1,
1995, each of SIGC One Sub, SIGC Two Sub, Amor and the SIGC Project Company has
not employed any individual or had any such leased employees; and (d) in the
case of the MP Project, since January 1, 1998, each of MP One Sub, MP Two Sub
and the MP Project Company has not employed any individual or had any such
leased employees.

         4.20 Employee Benefit Plans. No Holding Company or Project Company
currently maintains, nor, (a) in the case of the HGC Project Company, since
January 1, 1990, (b) in the case of the HFC Project Company, since January 1,
1992, (c) in the case of the SIGC Project, since January 1, 1995, and (d) in the
case of the MP Project, since January 1, 1998, has such Holding Company or
Project Company, as applicable, maintained, any Employee Benefit Plan, nor does
such Holding Company or Project Company currently have, and (a) in the case of
the HGC Project Company, since January 1, 1990, (b) in the case of the HFC
Project Company, since January 1, 1992, (c) in the case of the SIGC Project,
since January 1, 1995, and (d) in the case of the MP Project, since January 1,
1998, has not had, an obligation to contribute to any Employee Benefit Plan.

         4.21 Transactions with Related Parties. Except as set forth on Schedule
4.21, no Related Party (A) has made any material loan of money or other property
to, or borrowed money or other property from, any Holding Company or Project
Company which has not been repaid or returned, (B) has asserted any contractual
or other claims, express or implied, of any kind whatsoever against any Holding
Company or Project Company, (C) has any interest in any property used by any
Holding Company or Project Company or in any of the Assets, (D) has any pending
transaction with any Holding Company or Project Company, or (E) has any material
interest, beneficial or otherwise, in any contractual rights of any Holding
Company, Project Company or Seller. For the purposes of this Section 4.21,
Constellation Energy and its Affiliates shall not be deemed Related Parties.

         4.22 Compliance with Law. (a) The Debtor Operators, the MP Operator,

                                    Page 19
<PAGE>
each Holding Company and Project Company have conducted the Business and owned
or operated the Real Property, as applicable, in compliance with all applicable
Regulations and Court Orders.

         (b) None of the Debtor Operators, the MP Operator, any Holding Company
or any Project Company have received any written notice to the effect that any
Project Company is not in compliance with any applicable Regulations or Court
Orders.

         (c) Sellers do not have knowledge of any existing circumstance that
would result in a material violation of any Regulation or Court Order by any
Project Company or its Business.

         4.23 Intellectual Property Matters. (a) General. The transfer of the
Interests under this Agreement shall not violate or cause a breach of any
material license or other agreement pursuant to which any Holding Company or
Project Company has acquired Proprietary Rights.

         (b) Adequacy. The Proprietary Rights of each Holding Company and
Project Company constitute all of the material intellectual property rights that
are used by such Holding Company and Project Company in the operation of its
Business as it is presently conducted.

         (c) Royalties and Licenses. No Holding Company or Project Company has
any obligation to compensate any Person for the use of any of such Project
Company's Proprietary Rights nor has any Holding Company or Project Company
granted to any Person any license, option or other rights to use in any manner
any of such Holding Company's or Project Company's Proprietary Rights, whether
requiring the payment of royalties or not.

         (d) Ownership. Each Holding Company and Project Company owns or holds a
valid right or license to use its respective Proprietary Rights, and such
Proprietary Rights will not cease to be valid rights of such Holding Company or
Project Company by reason of the execution, delivery and performance of this
Agreement or the Closing Instruments or the consummation of the transactions
contemplated hereby.

         (e) Absence of Claims. To the knowledge of the Sellers, no Seller,
Holding Company or Project Company has received any written notice of (A)
alleged invalidity with respect to any Proprietary Rights of the Holding
Companies or Project Companies, (B) alleged infringement of any rights of others
due to any activity or use of the Proprietary Rights by any Holding Company or
Project Company, or (C) alleged entitlement to receive royalties or license fees
in exchange for any Holding Company's or Project Company's exercise of its
Proprietary Rights.

         4.24 Tax Matters.

         (a) Each Project Company is and has, since its inception, been treated
as a partnership for Federal, state and local income tax purposes (and,
therefore, has never been classified as an association taxable as a corporation
for Federal, state and local income tax purposes).

         (b) The Holding Companies, the Project Companies and the Sellers have
each timely filed when due, all federal, state and local Tax Returns required to
be filed by it for any and all periods ending on or prior to the Closing Date
and all such Tax Returns are true, correct and complete in all material
respects, a true and correct list of all such returns for 2002 which is set
forth on Schedule 4.24. Each Holding Company, Project Company or Seller has paid
all material Taxes required to be paid in respect of all periods for which Tax
Returns have been filed or are due, and neither the Holding Companies, Project
Companies nor the Sellers have any liability for Taxes materially in excess of
the amount so paid. The Holding Companies, Project Companies and the Sellers

                                    Page 20
<PAGE>
have each paid all material Taxes and all deficiencies or assessments of
material Taxes proposed or claimed as a result of examination by any taxing
authority, with respect to any and all periods ending on or before the Closing
Date.

         (c) There are no Tax audits, claims, assessments, levies,
administrative proceedings, or lawsuits pending, or to the knowledge of the
Sellers, threatened against any Holding Company or Project Company or as to
which the Assets of such Holding Company or Project Company could be made
subject.

         (d) There are no agreements or consents currently in effect for the
extension or waiver of the time (A) for any Holding Company or Project Company
to file any Tax Return or (B) for assessment, audit or collection of any Taxes
relating to any Holding Company or Project Company for any period.

         (e) No Holding Company or Project Company has registered or qualified
to do business in any state other than the State of California, other than, in
the case of SIGC One Sub, the State of Delaware, and, in the case of Amor, the
State of Delaware and the State of Oregon.

         (f) The Assets of each Holding Company and Project Company are not
subject to the Alternative Depreciation System within the meaning of Section
168(g) of the Code (or equivalent provision of state or local law).

         (g) No Holding Company or Project Company is a party to any Tax sharing
or Tax indemnity agreements or similar arrangements.

         (h) No Holding Company or Project Company is subject to any joint
venture or other arrangement or contract which is treated as a partnership or
other entity for income tax purposes.

         (i) All Taxes which any Holding Company or Project Company is required
by Regulation to withhold or collect have been duly withheld or collected, and
have been timely paid over to the appropriate taxing authorities to the extent
due and payable.

         (j) No Holding Company or Project Company is liable or has any
obligations (contingent or otherwise) to any Person, for any Taxes paid or
payable by such Person.

         (k) No Tax ruling has been requested of any Governmental Authority with
respect to any Tax matter relating to any Holding Company or Project Company.

         4.25 Insurance.

         (a) Schedule 4.25 contains a complete and accurate description of all
material policies or binders of insurance of which any Project Company is the
owner, insured or beneficiary on the date hereof.

         (b) To the knowledge of the Sellers, no Project Company is in default
under any of such policies or binders, nor have they failed to give any notice
or to present any claim under any such policy or binder in a due and timely
fashion.

         (c) Except as set forth on Schedule 4.25, there are no outstanding
unpaid claims with respect to any of the Project Companies under any such
policies or binders, and such policies and binders are in full force and effect.
All policies or binders of insurance provided by Sellers or their Affiliates
which name any Project Company as owner, insured or beneficiary shall be
cancelled on the Closing Date with respect to such Project Company.

                                    Page 21
<PAGE>
         4.26 Environmental Matters.

         (a) Definitions. The following terms, when used in this Section 4.26,
shall have the following meanings:

         "Project Company" for purposes of this Section 4.26 includes (A) all
partnerships, joint ventures and other entities or organizations in which such
Project Company was at any time or is a partner, joint venturer, member or
participant and (B) all predecessor or former corporations, partnerships, joint
ventures, organizations, businesses or other entities, whether in existence as
of the date hereof or at any time prior to the date hereof, the Assets or
obligations of which have been acquired or assumed by any Project Company or to
which any Project Company has succeeded.

         "Release" means and includes any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment or the workplace of any Hazardous Substance, and
otherwise as defined in any Environmental Law.

         "Hazardous Substance" means any pollutants, contaminants, chemicals,
waste and any toxic, infectious, carcinogenic, reactive, corrosive, ignitable or
flammable chemical or chemical compound or hazardous substance, material or
waste, whether solid, liquid or gas, including any quantity of asbestos in any
form, urea formaldehyde, PCBs, radon gas, crude oil or any fraction thereof, all
forms of natural gas, petroleum products or by-products or derivatives,
radioactive substance, waste waters, sludges, slag and any other substance,
material or waste that is subject to regulation, control or remediation under
any Environmental Laws.

         "Environmental Laws" means all Regulations which regulate or relate to
the protection or clean-up of the environment, the use, treatment, storage,
transportation, generation, manufacture, processing, distribution, handling or
disposal of, or emission, discharge or other release or threatened release of,
Hazardous Substances or otherwise dangerous substances, wastes, pollution or
materials (whether gas, liquid or solid), the preservation or protection of
waterways, groundwater, drinking water, air, wildlife, plants or other natural
resources, or the health and safety of persons or property, including protection
of the health and safety of employees. Environmental Laws include the Federal
Water Pollution Control Act, Resource Conservation and Recovery Act, Clean Water
Act, Safe Drinking Water Act, Atomic Energy Act, Occupational Safety and Health
Act, Toxic Substances Control Act, Clean Air Act, Comprehensive Environmental
Response, Compensation and Liability Act, Hazardous Materials Transportation
Act, Endangered Species Act and all analogous or related federal, state or local
law.

         "Environmental Conditions" means the introduction into the environment
of any pollution, including any Hazardous Substance (whether or not such
pollution constituted at the time thereof a violation of any Environmental Law
as a result of any Release of any kind whatsoever of any Hazardous Substance),
as a result of which any Project Company has or would reasonably be expected to
become liable to any Person or by reason of which any of the Assets have been or
would reasonably be expected to be subjected to any Encumbrance.

         (b) Notice of Violation. Except as set forth in Schedule 4.26, no
Project Company, Debtor Operator, the MP Operator or any Seller has received or
given to any third party any written notice or has actual knowledge of alleged,
actual or potential liability or responsibility for (A) any Release or
threatened Release of any Hazardous Substance at the Real Property or (B) an
alleged violation of or non-compliance with the conditions of any Permit
required under any Environmental Law or the provisions of any Environmental Law.
Except as set forth in Schedule 4.26, no Project Company, Debtor Operator, the
MP Operator or any Seller has received any written notice of any other claim,
demand or Action by any Person alleging any actual or threatened injury or
damage to any Person, property, natural resource or the environment arising from

                                    Page 22
<PAGE>
or relating to any Release or threatened Release by any Project Company of any
Hazardous Substances.

         (c) Environmental Conditions. Except as set forth in the Schedule 4.26,
there are no Environmental Conditions in any way relating to any Holding
Company, Project Company, the Business or the Assets.

         (d) Notices, Warnings and Records. Except as set forth in Schedule
4.26, each Project Company has given all notices and warnings, made all reports,
and kept and maintained all records required by and in compliance with all
Environmental Laws.

         4.27 No Brokers; Transaction Costs. No Holding Company, Project Company
nor any Seller has entered into or will enter into any contract, agreement,
arrangement or understanding with any Person which will result in the obligation
of the Buyers or any Holding Company or Project Company to pay any finder's fee,
brokerage commission or similar payment in connection with the transactions
contemplated hereby.

         4.28 Regulatory Status. Each of the electric generating facilities
owned by any Project Company is a Qualifying Facility (as defined under the
Public Utility Regulatory Policies Act of 1978, as amended). The nameplate
capacity of each of the facilities (as determined in accordance with 18 C.F.R.
Section 292.204(a)) does not exceed 80 megawatts, calculated in accordance with
18 C.F.R. Section 292.204(a) and each such facility is eligible for the
exemptions set forth in 18 C.F.R. Sections 292.601(c) and 292.602(b) and (c).
Compliance by the Project Companies with the material terms and conditions
contained in any of the Contracts, this Agreement or the Closing Instruments
will not cause or result in the Project losing its status as a Qualifying
Facility or losing its exemption under 18 C.F.R. Sections 292.601(c) and
292.602(b) and (c).

         4.29 No Other Agreements to Sell Project Companies or the Assets.
Subject to the auction which may be carried out pursuant to the Bidding
Procedures Order and except as contemplated by the transactions described
herein, no Holding Company, Project Company or Seller has any legal obligation,
absolute or contingent, to any other Person to sell all or substantially all the
Assets or to sell any of the Interests or any other ownership interests of any
Holding Company or Project Company or to effect any merger, consolidation or
other reorganization (including, without limitation, a plan of reorganization
pursuant to the Bankruptcy Code) of any Holding Company or Project Company or to
enter into any agreement with respect thereto.

         4.30 Financial Statements. The Sellers have heretofore furnished to
Buyers balance sheets and income statements of each Holding Company and each
Project Company as of July 31, 2003. Such financial statements are complete and
correct and fairly present the financial condition of each such Holding Company
or Project Company as of said date.

         4.31 Material Misstatements or Omissions. No representation or warranty
of Covanta or any Seller made under this Agreement, and no Schedule furnished by
Covanta or the Sellers to the Buyers pursuant to this Agreement, contains any
untrue statement of a material fact, or omits to state a material fact necessary
in order to make the statements contained therein not misleading.

         4.32 Exclusivity of Representations. Except for the representations and
warranties contained in this Section 4, (a) neither Covanta, the Sellers nor any
other Person has made any representation or warranty (whether express or
implied) on behalf of Covanta, the Sellers, any of their respective Affiliates
or any of their respective employees, agents or representatives regarding
Covanta, the Sellers or any of its Affiliates or any transactions contemplated
by this Agreement and (b) Covanta and the Sellers hereby disclaim any such
representation or warranty, notwithstanding the delivery or disclosure to the

                                    Page 23
<PAGE>
Buyers or their respective employees, agents or representatives of any
information, documents or other material, including without limitation any
projections, estimates or budgets.

      5. REPRESENTATIONS AND WARRANTIES OF BUYERS. The Buyers represent and
warrant to Covanta and the Sellers as follows:

         5.1 Organization; Authority. Each Buyer is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Each Buyer has full power and authority under its certificate of
formation, operating agreement and applicable laws to execute and deliver this
Agreement and the Closing Instruments, to consummate the transactions
contemplated hereby, to perform all its agreements and obligations under this
Agreement and the Closing Instruments in accordance with their respective terms,
and to purchase the Interests from the Sellers.

         5.2 Corporate or Other Approval; Binding Effect. Each Buyer has
obtained all necessary authorizations and approvals required for the execution
and delivery of this Agreement and the Closing Instruments and the consummation
of the transactions contemplated hereby and thereby. This Agreement has been
duly executed and delivered by the Buyers and constitutes the legal, valid and
binding obligation of each Buyer, enforceable against each Buyer in accordance
with its terms, except to the extent such enforceability is subject to the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium or
other law affecting or relating to creditors' rights generally and general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

         5.3 Non-Contravention. Neither the execution and delivery of this
Agreement by Buyers nor the consummation by each Buyer of the transactions
contemplated hereby will constitute a violation of, or be in conflict with,
constitute or create a default under, or result in the creation or imposition of
any liens upon any property of any Buyer pursuant to (a) the charter documents
or by-laws of any Buyer, each as amended to date; (b) any agreement or
commitment to which any Buyer is a party or by which any Buyer or any of its
properties is bound or to which any Buyer or any of its properties is subject;
or (c) subject to the expiration of the waiting period under the HSR Act, any
statute or any judgment, decree, order, regulation or rule of any court or other
Governmental Person relating to any Buyer.

         5.4 Consents. No consent, approval or authorization of, or
registration, qualification or filing with, any Governmental Person is required
for the execution and delivery of this Agreement or the Closing Instruments by
Buyers or for the consummation by the Buyers of the transactions contemplated
hereby, other than those already obtained prior to Closing. No consent or
approval of any other Person is required for the execution and delivery of this
Agreement or the Closing Instruments by the Buyers or for the consummation by
the Buyers of the transactions contemplated hereby, other than those already
obtained prior to Closing.

         5.5 Brokers. No Buyer has entered into or will enter into any contract,
agreement, arrangement or understanding with any Person that will result in the
obligation of Covanta, the Sellers, any Holding Company or any Project Company
to pay any finder's fee, brokerage commission or similar payment in connection
with the transactions contemplated hereby.

         5.6 No Financing. The Buyers will jointly have adequate funds at their
disposal to finance the Purchase Price on the Closing Date. The consummation of
the purchase described in this Agreement shall not be subject to the Buyers'
ability to obtain financing.

         5.7 Investment Company Act. No Buyer is an "investment company" or a
company "controlled" by an investment company within the meaning of the

                                    Page 24
<PAGE>
Investment Company Act of 1940.

         5.8 Due Diligence Review. The Buyers and their Affiliates, considered
as a whole, are sophisticated and knowledgeable with respect to geothermal power
projects and related matters and have performed their own independent
investigation, with due diligence, of the investment represented by the purchase
of the Interests and have formed their own independent assessment of the risks
and potential returns of the Interests. The Buyers and their Affiliates, taken
as a whole, have extensive financial experience with investments such as the
investment contemplated by this Agreement and therefore have the ability to
protect their own interests in connection with this Agreement.

         5.9 No Registration; Investment Representation; Sophisticated Person.
Each Buyer acknowledges that the Interests have not been registered under any
federal, state or local securities laws, and may not be resold unless permitted
under applicable exemptions contained in such securities laws or upon
satisfaction of the registration or qualification requirements of such
securities laws (nor does any Seller have any obligation to effect any such
registration). Each Buyer will refrain from acquiring, transferring or otherwise
disposing of the Interests or any interest therein, in such manner as to violate
any registration requirements of any applicable federal, state or local
securities laws, and the rules and regulations promulgated thereunder regulating
the disposition thereof. Each Buyer is acquiring the Interests for its own
account for investment purposes only, and not with a view to, or for sale in
connection with, any distribution or public offering thereof or any portion
thereof.

         5.10 No Reliance. The Buyers and their Affiliates, considered as a
whole, are experienced and sophisticated with respect to the transactions
contemplated by this Agreement and have had access to all information they deem
relevant to its decision to enter into this Agreement. In entering into this
Agreement, the Buyers and their Affiliates, considered as a whole, are not
relying on the accuracy or completeness of any information or materials provided
(whether in writing or orally) by or on behalf of Covanta, the Sellers, any of
their Affiliates or their respective employees, agents or representatives except
for representations and warranties made herein. Without limiting the generality
of the foregoing, the Buyers acknowledge that, except for representations and
warranties made herein, no representation or warranty has been made by or on
behalf of Covanta, the Sellers, any of their Affiliates or any of their
respective employees, agents or representatives with respect to any information,
documents or material provided or made available by Covanta, the Sellers, any of
their Affiliates or any of their respective employees, agents or representatives
to the Buyers or any of its employees, agents or representatives relating to
Covanta, the Sellers, including without limitation any projections, estimates or
budgets.

         5.11 ERISA. Each Buyer is buying the Interests with its general assets.
No funds used to acquire the Interests will be furnished directly or indirectly
out of the assets of or in connection with any Employee Benefit Plan.

         5.12 No Public Utility Company Status. Neither the Buyers nor any of
their Affiliates are or will become, as a result of the transactions
contemplated hereby, subject to regulation as a "public utility company" or a
"holding company" or a "subsidiary company" or an "affiliate", in each case of a
"holding company" or a "public utility company", as such terms are defined under
the Federal Power Act or the Public Utility Holding Company Act, nor otherwise
subject to any federal, state or local utility regulation. Neither the Buyer nor
any of its Affiliates owns or operates facilities for the transmission or sale
of electric energy other than (i) a "qualifying small power production facility"
or "qualifying cogeneration facility", as such terms are defined under 16 U.S.C.
Section 796(17) and (18) and the implementing regulations of the FERC or (ii) an
"exempt wholesale generator", as such term is defined under 15 U.S.C. Section
79z-5a(a)(1) and the implementing regulations of the FERC.

                                    Page 25
<PAGE>
      6. COVENANTS PRIOR TO CLOSING DATE

         6.1 Submission for Bankruptcy Court Approval.

         (a) On the timetables set forth below, the Debtors shall file with the
Bankruptcy Court one or more motions and proposed orders as set forth below,
notify, as required by the Bankruptcy Code, the Bankruptcy Rules and the
Bankruptcy Court, all parties entitled to notice of such motions and orders, and
subject to the provisions of this Agreement, the Debtors shall use commercially
reasonable efforts to obtain Bankruptcy Court approval of such orders. The
Buyers agree to cooperate with such efforts.

         (b) Bidding Procedures Order. The Debtors filed with the Bankruptcy
Court one or more motions (the "Bidding Procedures Motion") requesting entry of
an order (the "Bidding Procedures Order") detailing the bidding procedures for
the sale of the Interests. The Bankruptcy Court entered the Bidding Procedures
Order on September 26, 2003.

         (c) Approval Order. As Promptly as possible, the Debtors shall file
with the Bankruptcy Court the Plan and one or more motions (collectively, the
"Sale Motions") requesting entry of the Confirmation Order or, alternatively,
the Sale Order. Said motions shall, among other things, seek to:

                    (i) approve the sale of the Interests in SIGC One Sub, SIGC
               Two Sub, Amor and the Debtor Project Companies to the Buyers on
               the terms and conditions set forth in this Agreement and
               authorize Covanta and the Sellers that are Debtors to proceed
               with this transaction;

                    (ii) include a specific finding that the Buyers are a good
               faith purchaser of the Interests in SIGC One Sub, SIGC Two Sub,
               Amor and the Debtor Project Companies;

                    (iii) state that the sale of the Interests to the Buyers
               shall be free and clear of all liens, claims, interests and
               encumbrances whatsoever, except as set forth in this Agreement;

                    (iv) provide for a waiver of the stays contemplated by
               Bankruptcy Rules 6004(g) and 6006(d);

                    (v) approve SIGC One Sub's, SIGC Two Sub's, Amor's and the
               Debtor Project Companies' respective assumption and/or assignment
               pursuant to Section 365 of the Bankruptcy Code of all of the
               Scheduled Contracts, find void and unenforceable any provision
               thereof which purports to give rise to a default or other breach
               of such Scheduled Contracts by reason of the Bankruptcy Cases or
               the sale of the Interests pursuant to this Agreement, find that
               the time to assume any Scheduled Contracts, to the extent
               applicable, has not expired and that such are in full force and
               effect and free from default (other than for specified cure
               amounts);

                    (vi) provide that the Sellers shall pay all cure costs
               payable in connection with the assumption of the Scheduled
               Contracts pursuant to this Agreement and the Approval Order or
               that such cure cost shall be properly accrued for, without
               duplication, in the Current Liabilities of the relevant Debtor
               Project Companies;

                    (vii) waive and release all claims of any kind of Covanta,
               the Sellers and any other Debtors against SIGC One Sub, SIGC Two
               Sub, Amor and the Debtor Project Companies, including, without

                                    Page 26
<PAGE>
               limitation, all preference or avoidance claims and actions of the
               Sellers against SIGC One Sub, SIGC Two Sub, Amor or any Debtor
               Project Company, pursuant to Sections 544, 545, 547, 548, 549,
               550 and 553(b) of the Bankruptcy Code;

                    (viii) approve the assumption of any Scheduled Contract
               solely on the terms contained therein as in existence on the date
               hereof and shall not impose upon the Buyers or any Holding
               Company or Project Company any additional financial obligation to
               provide "adequate assurances" (as such term is used in Section
               365 of the Bankruptcy Code) to any Person in respect of any such
               Scheduled Contract except as required under the terms of any such
               Scheduled Contract; and

                    (ix) if the Approval Order is the Sale Order, after approval
               of the assumptions of the Scheduled Contracts, order the
               dismissal of the Bankruptcy Cases with respect to each of SIGC
               One Sub, SIGC Two Sub, Amor and the Debtor Project Companies.

         Following the filing of the Sale Motion, Covanta and the Sellers shall
         use reasonable efforts to obtain entry of the Approval Order. Covanta
         and the Sellers shall seek to obtain entry by the Bankruptcy Court of
         the Approval Order not later than November 30, 2003 (or, in the event
         the Sellers pursue consummation of the transactions contemplated in
         this Agreement through the Plan, December 15, 2003).

         (d) Plan. Covanta and the Sellers shall provide the Buyers with (i)
proposed final drafts of all documents, motions, orders, filings or pleadings
that Covanta and the Sellers propose to file with the Bankruptcy Court which
relate to the consummation or approval of the Plan (to the extent related to the
transactions contemplated herein), this Agreement or any provision therein or
herein, and will provide the Buyers with reasonable opportunity to review such
filings and (ii) any objections to the Plan or Disclosure Statement (to the
extent related to the transactions contemplated herein). Covanta and the Sellers
shall make such modifications to the Plan or the Confirmation Order that are
reasonably requested by the Buyers and that are necessary or desirable in order
to make the Plan or the Confirmation Order consistent with the provisions of
this Agreement and to provide the Buyers with legal protection and economic
benefits consistent with those provided by the provisions of this Agreement. Any
such requests and modifications shall be made within seven Business Days of the
date hereof.

         (e) The Bidding Procedures Motion and the Sale Motions may be brought
in a single motion or in separate motions, so long as the Bidding Procedures
Order is entered in accordance with the time limitation set forth in Section
6.1(b) above.

         (f) If any Approval Order, the Bidding Procedures Order or any other
order of the Bankruptcy Court relating to this Agreement shall be appealed by
any Person (or a petition for certiorari or motion for rehearing, reargument or
stay shall be filed with respect thereto), the Debtors agree to, and to cause
their Affiliates to, take all commercially reasonable steps, and use
commercially reasonable efforts, to defend against such appeal, petition or
motion, and Buyers agree to cooperate in such efforts. Each party shall use
commercially reasonable efforts to obtain an expedited resolution of such
appeal; provided that nothing herein shall preclude the parties hereto, in their
sole and absolute discretion, from consummating the transactions contemplated
herein if the Approval Order shall have been entered and have not been stayed
and the Buyers have waived in writing the requirement that the Approval Order be
an order as to which the time to file an appeal, a motion for rehearing or
reconsideration or a petition for a writ of certiorari has expired and no such
appeal, motion or petition is pending, in which event the Buyers shall be able
to assert the benefits of Section 363(m) of the Bankruptcy Code as a consequence

                                    Page 27
<PAGE>
of which such appeal shall become moot.

         6.2 Reserved.

         6.3 Access and Investigation; Developments. From the date of this
Agreement until the Closing Date, subject to the terms of the Confidentiality
Agreement, each Debtor will, and the Sellers and Covanta will cause each Holding
Company, Project Company, Debtor Operator and their respective Representatives
to, upon reasonable notice, (i) afford Buyers and their Representatives and
prospective lenders and their Representatives (collectively, "Buyers' Advisors")
reasonable access, during normal business hours, to its personnel (including on
site personnel providing operations and maintenance services), properties and
leased properties, contracts, books and records, corporate minute books,
financial records and other documents and data (whether in paper or electronic
form) of each Holding Company, Project Company and Debtor Operator, (ii) furnish
Buyers and Buyers' Advisors with copies of all such contracts, books and
records, and other existing documents and data as Buyers may reasonably request,
including (subject to availability with respect to Amor) balance sheets and
income statements of each Holding Company and each Project Company as specified
in Section 4.30 on a monthly basis for periods after July 31, 2003, and (iii)
notify Buyers of (x) any events or conditions that may cause any of the
representations and warranties of the Sellers and Covanta contained in this
Agreement not to be true and correct as of the Closing Date and (y) the
occurrence or non-occurrence of any event prior to Closing that would constitute
a deviation from the operation of the Business as contemplated by Section 6.4.
In addition, from the date hereof through the Closing Date, Covanta and the
Sellers shall reasonably promptly (with a monthly summary) inform in writing the
Buyers of developments pertaining to the Business that would require
modifications to the Schedules hereto and, as appropriate and with the consent
of the Sellers, update the disclosure provided in the Schedules hereto.

         6.4 Operation of the Business of each Project Company. Except as
authorized by Court Order of the Bankruptcy Court, from the date of this
Agreement until the Closing Date, Sellers and Covanta will cause each Project
Company to:

         (a) conduct its Business only in the Ordinary Course of Business;

         (b) use their commercially reasonable efforts to preserve intact the
current business organization of each Project Company, keep available the
services of the current employees of Affiliates of Covanta that provide services
to the Business and maintain the relations and goodwill with material suppliers,
customers, landlords, creditors, employees, agents, Governmental Bodies and
others having material business relationships with the Business other than as
permitted with the prior written consent of the Buyers; and

         (c) not enter into any transactions with Affiliates or enter into
transactions other than on an arms-length basis or with the prior written
consent of the Buyers.

         6.5 Negative Covenant. Except (i) as contemplated by this Agreement,
(ii) in the Ordinary Course of Business, or (iii) as required by Legal
Requirement or order of the Bankruptcy Court, from the date of this Agreement
until the Closing Date, each Debtor Operator, the MP Operator, each Holding
Company and each Project Company will not, and the Sellers will cause each
Debtor Operator, the MP Operator, each Holding Company and each Project Company
not to, without the prior consent of the Buyers (such consent not to be
unreasonably withheld), fail to take any commercially reasonable action within
its control to prevent any of the changes or events listed in Section 4.9 from
occurring.

         6.6 Commercially Reasonable Efforts. Until the Closing has occurred,
the parties shall use all commercially reasonable efforts to cause the

                                    Page 28
<PAGE>
conditions to Closing set forth in Sections 7 and 8 to be satisfied as promptly
as practicable.

         6.7 Further Assignments. Provided that the Buyers have received consent
to such assignment from CD Mammoth Lakes I, Inc. and CD Mammoth Lakes II, Inc.,
the Sellers shall cause the MP Operator to assign to an entity designated by the
Buyers the Plant Operating Services Agreement between the MP Project Company and
the MP Operator providing for the management and operation of the MP Project by
the MP Operator. At the Closing, Covanta and the Sellers shall have caused
Covanta Power Pacific, Inc. to transfer, assign and convey its interests in
Federal Leases CA-14404, CA-14405, CA-14406, CA-14407 and CA-11672 to MP Two
Sub.

         6.8 Bayerische Vereinsbank, AG Payment. At the Closing, Covanta shall
have repaid all amounts outstanding under the Loan Agreement, dated as of April
10, 1998, among Ogden Power Pacific, Inc. and Bayerische Vereinsbank, AG, New
York Branch and the lenders referred to therein, as amended.

         6.9 Release of Affiliate Claims. At the Closing, Covanta shall have
caused all of its Affiliates to release all claims against the Holding Companies
and the Project Companies.

         6.10 Heber Debt. At the Closing, Covanta shall have repaid all amounts
outstanding to GECC in connection with the HGC Project and the HFC Project
giving rise to the HGC/HFC Liens, the HGC/HFC Liens shall have been released or
reconveyed, and the assets and contracts related to the HGC Project and the HFC
Project shall be sold, transferred, assigned or otherwise transferred to the HGC
Project Company and the HFC Project Company, as applicable, from GECC.

         7. CONDITIONS PRECEDENT TO THE BUYERS' OBLIGATIONS AT CLOSING. The
obligation of the Buyers to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction at or prior to the Closing of
each of the following conditions (to the extent noncompliance is not waived in
writing by the Buyers):

         7.1 Representations and Warranties True at Closing. The representations
and warranties of Covanta and the Sellers contained in this Agreement shall be
true and correct (without giving effect to any limitation as to "materiality" or
"Material Adverse Effect" qualifiers set forth therein) on and as of the Closing
Date, with the same force and effect as though made on and as of the Closing
Date, except in any case for such failures to be true and correct which would
not, individually or in the aggregate, result in a Material Adverse Effect.

         7.2 Compliance With Agreement. Covanta and each Seller shall have
performed and complied with its respective obligations under this Agreement to
be performed or complied with by such Seller on or prior to the Closing Date,
except where failures to perform or comply would not, individually or in the
aggregate, result in a Material Adverse Effect.

         7.3 Officer's Certificate. The Sellers shall have delivered to the
Buyers in writing, at and as of the Closing, a certificate, in form and
substance satisfactory to the Buyers, certifying that the conditions in each of
Sections 7.1 and 7.2 hereof have been satisfied.

         7.4 Resignations of Directors and Officers. All the directors and
officers of each Holding Company and Project Company shall have resigned their
positions on or prior to the Closing Date, and shall have delivered to the
Buyers releases of any claims against such Holding Company and Project Company.
In addition, all powers of attorney authorizing any individual (including,
without limitation, those identified on Schedule 4.5) to draw upon the bank
account of any Holding Company or Project Company or to take any other action on
their behalf shall have been terminated in their entirety.

                                    Page 29
<PAGE>
         7.5 Opinion of Counsel. Special counsel to the Sellers, shall have
delivered to the Buyers a written opinion, addressed to the Buyers and dated the
Closing Date, in connection with the sale of the MP Interests, substantially in
the form of Schedule 7.5.

         7.6 Documents. The Sellers shall have delivered or caused to be
delivered each of the following documents:

         (a) an executed copy of each Closing Instrument to which any Seller or
Affiliate of any Seller is a party; and

         (b) for each Seller, Holding Company and Project Company, certified
copies of charter/organizational documents, partnership, agreement, bylaws or
limited liability company agreement, as the case may be, certificates of good
standing, and evidence of all corporate partnership or limited liability company
authority for each Seller with respect to the execution, delivery and
performance of this Agreement.

         7.7 Consents and Approvals. All consents listed on Schedule 7.7 shall
have been obtained.

         7.8 No Actions or Court Orders. No Action by any court, governmental
authority or other Person shall have been instituted or threatened which
questions the validity or legality of the transactions contemplated hereby and
by the Closing Instruments and which could reasonably be expected to have a
Material Adverse Effect on the Project Companies if the transactions
contemplated hereby or thereby are consummated. There shall not be any
Regulation or Court Order that makes the purchase and sale of the Interests
contemplated hereby illegal or otherwise prohibited.

         7.9 Title Policies. Title Policies with respect to the Project
Companies, in substance in accordance with Schedule 7.9, shall have been
delivered to the Buyers.

         7.10 No Material Adverse Effect. Since the date of this Agreement until
the Closing Date, there shall not have been any facts, changes, conditions,
circumstances or occurrences of any events that, individually or in the
aggregate, have had a Material Adverse Effect.

         7.11 Notice of Sale. The Sellers shall have served a copy of the
Bidding Procedures Motion and the Sale Motion upon: (i) the Office of the United
States Trustee; (ii) counsel to the Buyers; (iii) counsel to the committee for
Covanta's unsecured creditors; (iv) counsel to the administrative agent for the
Debtors' prepetition lenders; (v) counsel to the lenders under the DIP
Agreement; (vi) counsel to the trustee for the 9.25% debenture holders; (vii)
counsel to the committee for 9.25% debenture holders; (viii) all entities known
to have expressed an interest in acquiring any of the Interests or the Assets
and which the Debtors reasonably consider to be potential qualified bidders;
(ix) all entities known to have asserted any Encumbrances in or upon any of the
SIGC Interests, HFC Interests or the HGC Interests; (x) all federal, state and
local taxing authorities that have jurisdiction over the Acquired Debtor
Companies (as defined in the Bidding Procedures Motion) or their Businesses;
(xi) all regulatory authorities or recording offices that have a reasonably
known interest in the relief requested in the Bidding Procedures Motion; (xii)
all governmental agencies having jurisdiction over the Acquired Debtor Companies
or their Businesses with respect to environmental laws; (xiii) parties to
governmental approvals or permits; (xiv) the United States Attorney's office and
the attorneys general of all states in which the Acquired Debtor Companies
conduct business; (xv) the Securities and Exchange Commission; (xvi) all
non-Debtor parties to the Scheduled Contracts; and (xvii) all other parties that
had filed a notice of appearance and demand for service of papers in these
bankruptcy cases under Bankruptcy Rule 2002 as of the date of the Bidding
Procedures Motion. In addition, the Sellers shall have served notice of the

                                    Page 30
<PAGE>
Bidding Procedures Motion and the Sale Motion (which notice may take the form of
a signed order to show cause) on (xviii) all scheduled creditors of the Acquired
Debtor Companies, the Sellers that are Debtors and the Debtor Operators; (xix)
all creditors or interest holders who have filed proofs of claim against the
Acquired Debtor Companies; and (xx) each of the On Site Employees. In addition,
the Sellers shall have served a copy of the Sale Motion, along with the exhibits
attached thereto, to (xxi) all other persons reasonably designated by the Buyers
on or before two business days after entry of the Bidding Procedures Order. The
Sellers shall have filed an affidavit of such service with the Bankruptcy Court
in the Bankruptcy Case (the "Affidavit of Service").

         7.12 Bankruptcy Court Action. (a) The Bankruptcy Court shall have
entered the Approval Order in conformance with the provisions of this Agreement;
(b) the Bidding Procedures Order, the Plan (if the transactions contemplated by
this Agreement are effected by way of a Plan) and the Approval Order shall be in
a form and substance reasonably satisfactory to the Buyers; and (c) the Approval
Order shall be a final order which has not been reversed, modified, rescinded,
or stayed, and for which the time to appeal the Approval Order has expired and
the Approval Order is no longer subject to appeal or further judicial review.

         7.13 Heber Resource Leases. At the Closing Date, Heber Resource Leases
relating to not less than 90% in value of the leased geothermal resource
available to the HFC Project shall be either (i) amended in accordance with the
Heber Settlement pursuant to legal instruments that are in full force and effect
and assumed by the relevant Debtor Project Company pursuant to an order of the
Bankruptcy Court given under Section 365 of the Bankruptcy Code, or (ii) assumed
by the relevant Debtor Project Company pursuant to an order of the Bankruptcy
Court given under Section 365 of the Bankruptcy Code, provided in the latter
case that the counter-parties to each such Heber Resource Leases will be offered
a settlement substantially on the same terms as set forth in the Heber
Settlement.

         7.14 [Intentionally Omitted.]

         7.15 Release of Security Interests. At the Closing, the lenders under
the DIP Agreement shall have released all claims against the Holding Companies
and the Project Companies under the DIP Agreement and all security interests
granted to them pursuant to the DIP Security Agreement in respect of the
Interests, the Assets or the Business of the Project Companies.

      8. CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS AT CLOSING. The
obligation of the Sellers to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction, at or prior to the Closing, of
each of the following conditions (to the extent noncompliance is not waived in
writing by Sellers):

         8.1 Representations and Warranties True at Closing. The representations
and warranties of each Buyer contained in this Agreement shall be true and
correct (without giving effect to any limitation as to "materiality" or
"Material Adverse Effect" qualifiers set forth therein) on and as of the Closing
Date, with the same force and effect as though made on and as of the Closing
Date, except in any case for such failures to be true and correct which would
not, individually or in the aggregate, result in a Material Adverse Effect.

         8.2 Compliance with Agreement. The Buyers shall have paid the Purchase
Price and shall have performed and complied with their obligations under this
Agreement to be performed or complied with by the Buyers on or prior to the
Closing Date, except where failures to perform or comply would not, individually
or in the aggregate, result in a Material Adverse Effect.

         8.3 Officer's Certificate. Each Buyer shall have delivered to the
Sellers in writing, at and as of the Closing, a certificate, in form and
substance satisfactory to the Sellers, to the effect that the conditions in each

                                    Page 31
<PAGE>
of Sections 8.1 and 8.2 hereof have been satisfied.

         8.4 Documents. The Buyers shall have delivered each of the following
documents:

         (a) an executed copy of each Closing Instrument to which any Buyer or
Affiliate of any Buyer is a party; and

         (b) for each Buyer, certified copies of charter, and bylaws or limited
liability company agreement, as the case may be, certificates of good standing,
and evidence of all corporate or limited liability company authority for each
Buyer with respect to the execution, delivery and performance of this Agreement.

         8.5 Bankruptcy Court Action. The Bankruptcy Court shall have entered
the Bidding Procedures Order in accordance with Section 6.1(b) below and the
Approval Order shall be a final order which has not have been reversed,
modified, rescinded, or stayed as of the Closing Date.

         8.6 Covanta Creditor Approval. The Sellers shall have received formal
approval of the lenders under the DIP Agreement, consenting to the consummation
of the transactions contemplated herein and releasing security interests granted
to them pursuant to the DIP Security Agreement.

         8.7 Bayerische Hypo-Vereinsbank, AG Consent. The Sellers shall have
received such consents and waivers as are required with respect to the sale and
transfer of the Interests from the lenders under the Loan Agreement, dated as of
April 10, 1998, among Ogden Power Pacific, Inc. and Bayerische Vereinsbank, AG,
New York Branch and the lenders referred to therein, as amended.

         8.8 Consents and Approvals. All consents listed on Schedule 7.7 shall
have been obtained.

         8.9 No Actions or Court Orders. No Action by any court, governmental
authority or other Person shall have been instituted or threatened which
questions the validity or legality of the transactions contemplated hereby and
by the Closing Instruments and which could reasonably be expected to have a
Material Adverse Effect on the Project Companies if the transactions
contemplated hereby or thereby are consummated. There shall not be any
Regulation or Court Order that makes the purchase and sale of the Interests
contemplated hereby illegal or otherwise prohibited.

      9. CONFIDENTIAL INFORMATION AND HSR ACT.

         9.1 Confidentiality Agreement. The Sellers and the Buyers agree that
the Confidentiality Agreement shall remain in full force and effect for the
duration thereof, and that the parties hereto shall be governed by its terms and
conditions, which are hereby incorporated into this Agreement by reference.
Notwithstanding anything herein to the contrary, except as reasonably necessary
to comply with applicable securities laws, each party to this Agreement (and
each employee, representative or other agent of such party) may (a) consult any
tax advisor regarding the U.S. federal income tax treatment or tax structure of
the transaction, and (b) disclose to any and all persons, without limitation of
any kind, the U.S. federal income tax treatment and tax structure of the
transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to the taxpayer relating to such tax treatment and
tax structure; provided that clause (b) shall not apply until the earliest of
(i) the date of the public announcement of discussions relating to the
transaction, (ii) the date of the public announcement of the transaction or
(iii) the date of the execution of an agreement, with or without conditions, to
enter into the transaction. For this purpose, "tax structure" is limited to any
facts relevant to the U.S. federal income tax treatment of the transaction and
does not include information relating to the identity of the parties.

                                    Page 32
<PAGE>
         9.2 HSR Act. The Buyers and the Sellers each shall prepare and file
with the United States Department of Justice and the United States Federal Trade
Commission the Notification and Report Form required to be filed under the HSR
Act, concerning the transactions contemplated hereby, as soon as practicable and
in any event within three days following the entry of the Confirmation Order.
The Buyers and the Sellers acknowledge and agree that it shall be a condition to
closing the transactions contemplated by this Agreement that the waiting period
specified in the HSR Act has either expired or been earlier terminated.

     10. TERMINATION

         10.1 Termination Events.

         This Agreement may, by notice given prior to the Closing, be
terminated:

         (a) by the Buyers,

                    (i) in the event of non-compliance by any Debtor with the
               requirements set forth in Section 6.1 hereof, except where such
               non-compliance has not or would not reasonably be expected to
               have a Material Adverse Effect, provided that if any such
               non-compliance is curable prior to December 31, 2003 by the
               Sellers through the use of commercially reasonable efforts,
               following written notice of such breach from the Buyers for as
               long as the Sellers shall be using their commercially reasonable
               best efforts to cure such breach, the Buyers may not terminate
               this Agreement pursuant to this clause (i),

                    (ii) in the event the Sellers shall fail to make their
               pre-merger notification filing with the Federal Trade Commission
               no later three days following entry of the Confirmation Order,

                    (iii) if the Bankruptcy Court shall fail to enter (A) the
               Sale Order in the form required by Section 6.1 on or before
               November 30, 2003 or, (B) if the Reorganizing Heber Debtors
               pursue confirmation of the Plan, the Confirmation Order on or
               before December 15, 2003,

                    (iv) if there shall have been, since the date hereof, any
               change, condition, circumstance or occurrence of any event that,
               individually or in the aggregate, has had or would reasonably be
               expected to have a Material Adverse Effect,

                    (v) if any of the conditions in Sections 7.1 through and
               including 7.15 are not satisfied by December 31, 2003 (other than
               through the failure of the Buyers to comply with their
               obligations under this Agreement) and the Buyers have not waived
               such condition, or

                    (vi) if the Closing Date does not occur on or prior to
               December 31, 2003;

         (b) by the Sellers,

                    (i) if any of the conditions in Section 8.1 through and
               including 8.9 becomes incapable of being satisfied by December
               31, 2003 (other than through the failure of the Sellers to comply
               with their obligations under this Agreement) and the Sellers have
               not waived such condition, or

                    (ii) if the Buyers fail to make the Deposit as required by
               Section 2.3 of this Agreement,

                                    Page 33
<PAGE>
(a termination pursuant to this clause (b) resulting from a breach by the Buyers
of obligations under this Agreement being referred to as a "Buyer Default
Termination"); or

         (c) by mutual consent of the Buyers and the Sellers (which such consent
shall be signed by each such party hereto and effective when signed.

         10.2 Liabilities in the Event of Termination.

         (a) Return of Deposit; No Special Damages. In the event this Agreement
terminates as a result of any reason other than a Buyer Default Termination, the
Deposit shall be immediately returned to Buyers. In no event shall Covanta or
the Sellers have any liability to the Buyers for any special, consequential or
punitive damages, and any claim, right, cause of action or liability for any
damages that are special, consequential or punitive or for specific performance
of this Agreement is hereby fully released and forever discharged.

         (b) Termination As a Consequence Of A Buyer Default Termination. In the
event this Agreement terminates as a result of a Buyer Default Termination,
Covanta's and the Sellers' sole and exclusive remedy, notwithstanding any other
provision of this Agreement, shall be strictly limited to the retention of the
Interests and of the Deposit as liquidated damages. In no event shall the Buyers
or their Affiliates have any liability to Covanta and the Sellers in excess of
the Deposit in the event this Agreement terminates as a result of a Buyer
Default Termination, except in the event of the Buyers' gross negligence or
fraud. In no event shall the Buyers have any liability to Covanta or the Sellers
for any special, consequential or punitive damages, and any claim, right, cause
of action or liability for any damages that are special, consequential or
punitive or for specific performance of this Agreement is hereby fully released
and forever discharged. Without limiting the generality of the foregoing, the
Sellers shall not have a right to specific performance following a Buyer Default
Termination.

     11. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES

         11.1 Nature of Representations and Warranties. Each statement,
representation, warranty, covenant and agreement made by Covanta and the
Sellers, on the one hand, and the Buyers, on the other hand, in this Agreement
or in any document, certificate or other instrument delivered pursuant to this
Agreement or in connection herewith shall be deemed the joint and several
statement, representation, warranty, covenant and agreement of Covanta and the
Sellers, on the one hand, and the Buyers, on the other hand.

         11.2 No Survival of Representations and Warranties. The representations
and warranties contained in this Agreement or in any certificate or other
writing delivered pursuant hereto or in the connection herewith shall not
survive the Closing. Neither Covanta nor the Sellers shall be liable to the
Buyers for any statement, representation, warranty, covenant or agreement
contained in this Agreement or in any certificate or other writing delivered
pursuant hereto or in connection herewith after the Closing Date and the Buyers
hereby acknowledge that the Buyers are purchasing the Interests on an "as-is,
where-is" basis; provided, however, that nothing in this Section 11.2 shall be
deemed to limit the liability of Covanta or the Sellers under applicable law for
intentional misrepresentations or for fraud or under Section 13.2 or Section
13.7.

     12. POST CLOSING LABOR AND REGULATORY MATTERS

         12.1 Service Contractors; Employment. The Buyers and the Sellers
acknowledge and agree that the individuals identified on Schedule 12.1 attached
hereto and made a part hereof (the "On Site Employees") are employed by certain
Affiliates of Covanta (the "O+M Affiliates") that are not a party to this

                                    Page 34
<PAGE>
Agreement in connection with the operation of the Projects. The Debtor Operators
and MP Operator currently provide on-site operations and maintenance services to
the Project Companies pursuant to the operations and maintenance agreements
identified on Schedule 12.1 (all of such agreements being collectively referred
to as the "O+M Contracts"). It is agreed that in connection with the foregoing:

         (a) At the Closing, each Debtor Operator and the MP Operator, to the
extent required by Section 6.7, that is a party to an O+M Contract will assign
all of its rights and obligations under such O+M Contract to a designee of
Buyers.

         (b) Such designee of the Buyers will offer employment, subject to
satisfaction of the customary hiring requirements of Ormat Nevada Inc.,
commencing on the Closing Date, to each On Site Employee that prior to the
Closing Date had been providing services for a Project Company. Such offer of
employment will contain terms and conditions, including benefits, that are
substantially similar in the aggregate to the terms and conditions of employment
of the On Site Employees as of the date hereof. To the extent applicable, with
respect to the medical, dental, health, disability, life insurance and other
welfare plans, programs and arrangements of the Buyers to be applicable to each
On Site Employee, such plans, programs and arrangements shall not contain any
exclusions or limitations for pre-existing conditions and/or evidence of
insurability and/or actively at work requirements. The benefit plans and
policies applicable to each On Site Employee, including with respect to
vacation, floating holidays, retirement, severance and welfare plans, programs
and arrangements, shall recognize (i) for purposes of satisfying any deductibles
during the coverage period that includes the Closing Date, any payments made by
any On Site Employee towards deductibles in any health or insurance plan of the
O+M Affiliates in which such On Site Employee participated, and (ii) for
purposes of determining eligibility to participate, vesting and for any schedule
of benefits based on service, all service with the O+M Affiliates, including
service with predecessor employers that was recognized by the O+M Affiliates.

         (c) Other than as set forth in paragraph (b) above, neither the Buyers,
their designee nor, after the Closing, any Holding Company, any Project Company,
shall have any duties or liabilities with respect to any or all of the On Site
Employees pursuant to this Agreement.

         (d) The Sellers will notify the Buyers of (i) any increase in the rate
of compensation granted by Covanta or the Sellers payable to or to become
payable prior to the Closing Date to any On Site Employee, including the making
of any loan to, or the payment, grant or accrual of any bonus, incentive
compensation, service award or other similar benefit to, any such On Site
Employee prior to the Closing Date, other than compensation changes as a matter
of law or regulation and (ii) any resignations or terminations of any On Site
Employees prior to the Closing Date, other than in the Ordinary Course of
Business.

         12.2 FERC Self-Recertification. The Buyers shall prepare and file,
within six months from the Closing Date, at FERC in respect of each Project a
self-recertification using FERC Form 556 updating the prior certification or
self certification, as applicable, to include any changes that have occurred
prior to Closing and the change in upstream ownership effected by the
transaction contemplated at Closing (each a "Qualifying Facility Self
Recertification"). Each such Qualifying Facility Self Recertification shall
fully comply with all applicable FERC rules and regulations, including but not
limited to, fully updating all changes that have occurred to the relevant
Project since the last certification for which FERC's rules and regulations
require a recertification, including, without limitation, its ownership,
technical characteristics, fuel use, size and ability to meet applicable
operating and efficiency requirements.

     13. POST CLOSING TAX MATTERS

                                    Page 35
<PAGE>
         13.1 Closing of the Books. Covanta, the Sellers and the Buyers
acknowledge and agree that the Sellers shall cause each Holding Company and each
Project Company to use the interim closing of the books method to allocate
between the Sellers and the Buyers items of income, gain, loss, deduction and
credit attributable to the Interests for the taxable year or taxable period of
each Holding Company and each Project Company that includes the Closing Date.

         13.2 Returns for Periods Through the Effective Date. Covanta and the
Sellers will include the income of each Holding Company and each Project Company
on Covanta's consolidated federal income tax returns and state income tax
returns for all periods through the Closing Date and pay any and all Taxes
attributable to such income and will indemnify and hold harmless the Buyers in
respect thereof. The Buyers shall cause each Holding Company and each Project
Company to furnish Tax information to the Sellers for inclusion in the Seller's
federal consolidated income Tax Return for the period up to and including the
Closing Date in accordance with the Holding Company's and Project Company's past
custom and practice. The income of each Holding Company and each Project Company
will be apportioned to the period up to and including the Closing Date and the
period after the Closing Date by closing the books of the Holding Company and
Project Company as of the end of the Closing Date.

         13.3 Audits. The Buyers shall notify the Sellers within 30 days of its
receipt of written notice of any pending or threatened examination, audit or
other administrative or judicial proceeding relating to any Project Company or
Holding Company that could reasonably be expected to result in an
indemnification obligation of the Sellers and Covanta pursuant to Section 13.2
("Contested Taxes"). If the Buyers fail to provide such notice to the Sellers,
the Buyers shall not be entitled to indemnification for such Contested Taxes if
the failure shall preclude or effectively preclude a contest of the Contested
Tax. The Buyers shall control the contest of any Contested Tax that could affect
any post-Closing Tax obligation of a Project Company, Holding Company or its
owners. If the Contested Tax could not affect any post Closing Tax obligation of
a Holding Company, Project Company or its owners and if the Sellers request in
writing, the Buyers shall cause the Project Company to contest such Contested
Tax at the cost and expense of Sellers and Sellers may control the contest of
such Contested Tax. Regardless of which party controls the contest of the
Contested Tax, the other party shall have the right to observe the conduct of
the contest at its own expense, including through its own counsel and other
professional experts, and to receive copies of any written material issued by or
to the party in control (other than material reasonably believed to be the
subject of a privilege arising under a rule or statute). Any refunds or rebates
of Taxes relating to a Project Company or Holding Company shall be for the
account of the Buyers, unless they relate to a tax period for which Taxes were
paid during the Sellers ownership of the Interests, in which case such refund or
rebate, net of any expenses of the Project Company or the Buyers in obtaining
such refund or rebate, shall be for the account of the Sellers.

         13.4 Post-Closing Elections. At the reasonable request of the Buyers,
the Sellers will join with the Buyers in making any election if the making of
such election does not have an adverse impact on the Sellers, including an
election under Section 338 of the Code (or any comparable state or local law).

         13.5 Allocation of Purchase Price. The Buyers and the Sellers agree to
the Purchase Price allocation on Schedule 13.5. The Buyers, the Sellers and
Covanta mutually agree that all Tax Returns filed by the parties shall be filed
consistent with such allocation. The Buyers, the Sellers and Covanta further
agree to take no position, unless otherwise required by applicable law, with
respect to any Taxes inconsistent with such allocation.

         13.6 Transfer and Similar Taxes. The Buyers and the Sellers shall each
be liable for 50% of all transfer, sales, stamp, recording and other similar
fees and Taxes due in connection with the transactions contemplated hereunder.

                                    Page 36
<PAGE>
         13.7 Taxes of the Sellers or their Affiliates. Covanta and the Sellers
agree to indemnify the Buyers from and against their allocable portion of any
adverse consequences the Buyers may suffer resulting from, arising out of,
relating to, in the nature of, or caused by, any liability of any Holding
Company or Project Company for Taxes of Covanta, the Sellers or any of their
Affiliates under Treasury Regulation Section 1.1502-6 (or any similar provision
of state, local or foreign law).

     14. GENERAL.

         14.1 Expenses. All expenses of the preparation, execution and
consummation of this Agreement and of the transactions contemplated hereby,
including, without limitation, attorneys', accountants' and outside advisers'
fees and disbursements, shall be borne by (a) Buyer, if incurred for Buyer's
account or (b) Sellers, if incurred for the account of Sellers or the Project
Companies.

         14.2 Notices. All notices, demands and other communications hereunder
shall be in writing or by written telecommunication, and shall be deemed to have
been duly given if delivered personally, by overnight courier, by facsimile or,
if mailed, by certified mail, return receipt requested, postage prepaid, or sent
by written telecommunication, as follows:

         If to Covanta or any Seller, care of:

                  Covanta Energy Corporation
                  40 Lane Road
                  Fairfield, NJ  07007-2615

                  Attention:        Anthony Orlando
                  Telephone:        (973) 882-7152
                  Facsimile:        (973) 882-4148

         with a copy to:

                  Cleary Gottlieb Steen & Hamilton
                  One Liberty Plaza
                  New York, NY  10006-1470

                  Attention:        Filip Moerman/James L. Bromley
                  Telephone:        (212) 225-2940 / 2264
                  Facsimile:        (212) 225-3999

         If to any Buyer, to:

                  c/o Ormat Nevada, Inc.
                  980 Greg Street
                  Sparks, NV 89431

                  Attention: President
                  Telephone: 775-356-9029
                  Facsimile: 775-356-9039

         with a copy to:

                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, NY 10153

                  Attention:        Philip Rosen
                  Telephone:        212-310-8604
                  Facsimile:        212-310-8007

                                    Page 37
<PAGE>
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.

         14.3 Entire Agreement. This Agreement, together with the
Confidentiality Agreement, incorporated herein by reference, and each Closing
Instrument entered into contemporaneously herewith, contain the entire
understanding of the parties, supersede all prior agreements and understandings
relating to the subject matter hereof and shall not be amended except by a
written instrument hereafter signed by all of the parties hereto.

         14.4 GOVERNING LAW; BANKRUPTCY COURT JURISDICTION. (a) EXCEPT TO THE
EXTENT THAT THE MANDATORY PROVISIONS OF THE BANKRUPTCY CODE APPLY, THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS GUARANTEE
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

         (b) EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO
SUBMIT TO THE JURISDICTION OF THE COURTS OF THE SOUTHERN DISTRICT OF NEW YORK,
INCLUDING THE BANKRUPTCY COURT, FOR ANY LITIGATION ARISING OUT OF OR RELATING TO
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY (AND AGREES NOT TO
COMMENCE ANY LITIGATION RELATING THERETO EXCEPT IN SUCH COURTS), WAIVES ANY
OBJECTION TO THE LAYING OF VENUE OF ANY SUCH LITIGATION THEREIN, AND AGREES NOT
TO PLEAD OR CLAIM THAT SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.

         14.5 Sections and Section Headings. All references to "Section"
"subsection" "Exhibit" and "Schedule" shall be a reference to Sections and
subsection of, and Exhibits and Schedules to, this Agreement. The headings of
Sections and subsections are for reference only and shall not limit or control
the meaning thereof.

         14.6 Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors and
permitted assigns. Neither this Agreement nor the obligations of any party
hereunder shall be assignable or transferable by such party without the prior
written consent of the other parties hereto; provided, however, that a Buyer,
upon prior written notice to the Sellers, may assign this Agreement without the
prior consent of the Sellers to an Affiliate of such Buyer if, in the Sellers'
reasonable determination, (a) such Affiliate has provided an adequate assurance
of performance and (b) such Affiliate is a creditworthy party and provided
further that such assignee agrees in writing to assume the obligations of such
assignor hereunder and agrees to be bound by the terms of this Agreement.

         14.7 Further Assurances. The Sellers and the Buyers shall execute and
deliver to all appropriate other parties such other instruments as may be
reasonably required in connection with the performance of this Agreement and
each shall take all such further actions as may be reasonably required to carry
out the transactions contemplated by this Agreement. Without limiting the
generality of the foregoing, Covanta and the Sellers shall cause all of the
books and records mentioned in Section 4.16 hereof and all files, documentation
and records, in whatever form, of the Project Companies or any Holding Company
relating to the Business, including (to the extent permitted by applicable law)
employment records and files relating to the individuals identified on Schedule
12.1 hereof, to be delivered to the Buyers promptly following the Closing.

         14.8 Survival of Certain Sections. Notwithstanding anything to the
contrary contained in this Agreement, Sections 9.1, 10.2, 11.2, and Article 14
hereof shall survive the termination of this Agreement.

         14.9 No Implied Rights or Remedies. Except as otherwise expressly
provided herein, nothing herein expressed or implied is intended or shall be
construed to confer upon or to give any person, firm or corporation, other than

                                    Page 38
<PAGE>
the Sellers and Buyers and their respective shareholders or members hereto, any
rights or remedies under or by reason of this Agreement.

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

         14.11 Representation. (a) Covanta shall represent all the Sellers for
the purposes of this Agreement, including, without limitation, with respect to
any waivers or consents. Any notice given or communication, including, without
limitation, any required deliveries of any documents or reports required
hereunder, made to the Buyers on behalf of any Seller by Covanta shall
constitute effective notice or communication to the Buyers. Any notice given or
communication, including, without limitation, any required deliveries of any
documents or reports required hereunder, made by the Buyers to Covanta shall
constitute effective notice or communication to all Sellers. Any action,
approval or consent by Covanta, including, without limitation, with respect to
any waivers or consents, under or with respect to this Agreement shall bind all
the Sellers. Covanta represents that it has the authority to act on behalf of
all the Sellers as provided for in this Section 14.11.

         (b) HFC/HGC One Buyer shall represent all the Buyers for the purposes
of this Agreement, including, without limitation, with respect to any waivers or
consents. Any notice given or communication, including, without limitation, any
required deliveries of any documents or reports required hereunder, made to the
Sellers on behalf of any Buyer by HFC/HGC One Buyer shall constitute effective
notice or communication to the Sellers. Any notice given or communication,
including, without limitation, any required deliveries of any documents or
reports required hereunder, made by the Sellers to HFC/HGC One Buyer shall
constitute effective notice or communication to all Buyers. Any action, approval
or consent by HFC/HGC One Buyer, including, without limitation, with respect to
any waivers or consents, under or with respect to this Agreement shall bind all
the Buyers. HFC/HGC One Buyer represents that it has the authority to act on
behalf of all the Buyers as provided for in this Section 14.11.

         14.12 Transitional Services. During a transition period of two months
from Closing, Covanta shall provide to the Buyers, subject to availability,
limited transition services in the area of asset management, legal and
regulatory (including in connection with the requirements of Section 12.2), risk
management and human resources. Covanta and the Buyers shall each designate a
transition services coordinator. The Buyers shall reimburse Covanta for
out-of-pocket expenses incurred in connection with the rendering of such
transition services. Covanta shall incur no liability to the Buyers in
connection with such transition services.

         14.13 Knowledge of the Sellers. For purposes of any representation or
warranty of the Sellers set forth in this Agreement, references to the "Sellers'
knowledge" or to the "knowledge of the Sellers" shall mean the actual knowledge
after due inquiry of such records and other individuals employed by Covanta or
any of its Affiliates that are in a position to know such information by reason
of the duties and responsibilities of their job description, as of the date of
such representation or warranty, of Lucian Fox, Dale Daileader, Richard Dyer,
Jeff Wood (in respect of tax matters), Gary Perusse (with respect to insurance
matters), Andrew Washington (in respect of environmental matters) and Stephen
Gansler (in respect of human resources matters).

               [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

                                    Page 39
<PAGE>
         IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties hereto have caused this Agreement to be duly executed and delivered by
their respective duly authorized officers as of the date and year first above
written.

                                    SELLERS:
                                    --------

                                    COVANTA HEBER FIELD ENERGY, INC.

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

                                    HEBER FIELD ENERGY II, INC.

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

                                    ERC ENERGY, INC.

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

                                    ERC ENERGY II, INC.

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

                                    HEBER LOAN PARTNERS

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

                                    COVANTA POWER PACIFIC, INC.

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

                                    COVANTA ENERGY AMERICAS, INC.

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

                                    PACIFIC GEOTHERMAL CO.

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

                                    MAMMOTH GEOTHERMAL CO.

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

                                    AMOR 14 CORPORATION

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

                                    COVANTA SIGC ENERGY II, INC.

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

                                    COVANTA:

                                    COVANTA ENERGY CORPORATION

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

                                    Page 40
<PAGE>
                                    BUYERS:
                                    -------

                                    ORHEBER 1 INC.

                                    By
                                       -----------------------------------------
                                         Name:   Ran Raviv
                                         Title:  Authorized Signatory

                                    ORHEBER 2 INC.

                                    By
                                       -----------------------------------------
                                         Name:   Ran Raviv
                                         Title:  Authorized Signatory

                                    ORHEBER 3 INC.

                                    By
                                       -----------------------------------------
                                         Name:   Ran Raviv
                                         Title:  Authorized Signatory

                                    ORMAMMOTH INC.

                                    By
                                       -----------------------------------------
                                         Name:  Ran Raviv
                                         Title: Authorized Signatory

                                    Page 41

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