Document:

<PAGE>

                              TAX SHARING AGREEMENT

                  THIS TAX SHARING AGREEMENT (this "AGREEMENT") is dated as of
[MARCH 8, 2004] by and between Danielson Holding Corporation, a Delaware
corporation (hereinafter referred to as "PARENT"), Covanta Energy Corp.
("COVANTA"), a Delaware corporation and, solely for purposes of Section 6 of
this Agreement, Covanta Power International Holdings, Inc., a Delaware
Corporation ("COVANTA INTERNATIONAL").

                                   WITNESSETH

                  WHEREAS, Parent is the common parent corporation of an
"affiliated group" of corporations (as it may be constituted from time to time,
the "AFFILIATED GROUP"), as defined in Section 1504 of the Internal Revenue Code
of 1986, as amended (the "CODE"); and

                  WHEREAS, Parent will file a U.S. consolidated federal income
tax return on behalf of the Affiliated Group for the taxable year ending
December 31, 2004, and generally will be required to file consolidated federal
income tax returns for subsequent years, which will, beginning on [MARCH 9, 2004
(ONE DAY AFTER THE CLOSING DATE)], include Covanta and all of its current and
future subsidiaries that would be treated as members of an affiliated group of
corporations, as defined in Section 1504(a) of the Code, for which Covanta would
be the common parent corporation if Covanta and such subsidiaries were not
members of the Affiliated Group (each of such subsidiary and Covanta, a
"SUBGROUP MEMBER," such affiliated group of Subgroup Members, "COVANTA SUBGROUP"
as listed in Appendix A attached hereto);

                  WHEREAS, Covanta International will not be a member of the
Affiliated Group; and

                  WHEREAS, it is the intent and desire of Parent and Covanta to
enter into this Agreement, to provide, with respect to federal, state and local
income taxes, for the amount and time of payments by Covanta to Parent and for
the amount and time of payments by Parent to Covanta.

                  NOW, THEREFORE, Parent and Covanta, intending to be legally
bound hereby, and in consideration of the mutual covenants herein contained,
agree as follows:

         1.       Consolidated Federal Return.

                  A U.S. consolidated federal income tax return and estimated
tax returns shall be prepared and filed by Parent for the taxable year ending
December 31, 2004 (THE "2004 TAXABLE YEAR"), and for each subsequent taxable
period in respect of which the Affiliated Group is required or permitted to file
a consolidated federal income tax return. With respect to such tax return
preparation, Parent shall act in good faith with regard to any and all Subgroup
Members. All Subgroup Members shall cooperate with Parent in the preparation and
filing of such tax return and shall provide such assistance and documents,
without charge, as may be requested by

                                       1
<PAGE>

Parent for that purpose. Parent shall have the right with respect to any
consolidated federal income tax returns to determine (a) the manner in which
such returns, documents or statements shall be prepared and filed, including,
without limitation, the manner in which any item of income, gain, loss,
deduction or credit shall be reported, (b) whether any extensions should be
requested, and (c) the elections that will be made by any Subgroup Member. In
addition, Parent shall have the sole right to (x) contest, compromise, or settle
any adjustments or deficiency proposed, asserted or assessed as a result of any
audit of any consolidated tax return, (y) file, prosecute, compromise or settle
any claim for refund, and (z) determine whether any refunds shall be received by
way of refund or credited against tax liabilities. Each Subgroup Member and
their respective counsel shall cooperate, to the extent reasonably practicable,
in the contest or compromise of, or defense against any such suit, action or
proceeding described above. Parent may, and shall cause Subgroup Members to,
execute and file such consents, elections, and other documents as Parent
determines are required or appropriate for the proper filing of such returns.

         2.       Allocation of Federal Tax Liability

                  (a)      Covanta agrees to pay to Parent, for each taxable
year or portion thereof during the term of this Agreement, as the Covanta
Subgroup's share of the tax liability of the Affiliated Group, an amount equal
to the apportioned tax liability of the Covanta Subgroup determined under
Regulation Section 1.1552-1(a)(1) with the modifications provided in Section 3
of this Agreement. For purposes of this Agreement, Covanta will be treated as
the common parent corporation of the Covanta Subgroup. Accordingly, the Covanta
Subgroup's proportionate share of the tax liability of the Affiliated Group
shall be determined by multiplying the Affiliated Group's tax liability by a
fraction, the numerator of which equals Covanta's Taxable Income (as defined
below in Section 3), and the denominator of which equals the Affiliated Group's
consolidated taxable income computed pursuant to Section 1552(a)(1) of the Code
and Treasury Regulations Section 1.1552-1(a)(1). For purposes of this Agreement,
tax liability shall include any liability for alternative minimum tax ("AMT").
The Covanta Subgroup shall compute its separate adjusted AMT in accordance with
the principles of Proposed Treasury Regulations Sections 1.1552-1(g) and
1.1502-55(h)(6)(iv) as the excess (if any) of the AMT of the Affiliated Group
over the AMT of the Affiliated Group as determined by excluding the Covanta
Subgroup's income, gains, deductions and losses (with the modifications provided
in Section 3 of this Agreement and assuming an AMT net operating loss as of the
Closing Date of $556,399,000) and credits, and Covanta Subgroup's proportionate
share of the AMT of the Affiliated Group shall be determined by multiplying the
AMT of the Affiliated Group by a fraction, the numerator of which equals Covanta
Subgroup's separate adjusted AMT and the denominator of which equals the sum of
the separate adjusted AMT's of all members of the Affiliated Group (determined
with the modifications provided in Section 3 of this Agreement and assuming an
AMT net operating loss as of the Closing Date of $556,399,000); provided,
however, Covanta shall pay Parent for any AMT liability actually incurred by
Parent if such AMT liability would not have been incurred if in an earlier
taxable year the Covanta Subgroup had computed its AMT liability under Section
55 et seq. of the Code (with the modifications provided in Section 3 of this
Agreement and assuming an AMT net operating loss as of the Closing Date of
$556,399,000) as if it had filed its own separate return as the common parent
corporation of the Covanta Subgroup and had not been included in the U.S.
consolidated federal

                                       2
<PAGE>

income tax return filed by Parent on behalf of the Affiliated Group, provided
further however, that the amount of such payment shall not exceed the excess of
the cumulative Covanta Subgroup separate adjusted AMT (as defined in Proposed
Treasury Regulations Section 1.1502-55(h)(6)(iv) with the modifications provided
in Section 3 of this Agreement and assuming an AMT net operating loss as of the
Closing Date of $556,399,000) over the sum of (A) the cumulative AMT amount the
Covanta Subgroup has paid under this Section 2(a) of this Agreement and (B) any
reduction in Parent's AMT liability resulting from the inclusion of the Covanta
Subgroup in Parent's Affiliated Group.

                  (b)      The Covanta Subgroup's allocable share of the U.S.
consolidated federal income tax liability of Parent for each year beginning with
the 2004 Taxable Year, determined as provided in Section 2(a) above, shall be
further apportioned among the Subgroup Members, other than Covanta Warren Energy
Resources Co., LP ("WARREN"), Covanta Equity of Stanislaus, Inc. ("STANISLAUS"),
Covanta Equity of Alexandria/Arlington, Inc. ("ALEXANDRIA"), Covanta Tampa
Construction, Inc. ("TAMPA CONSTRUCTION"), and Covanta Tampa Bay, Inc. ("TAMPA
BAY") (together, the "REMAINING DEBTORS") in a manner consistent with the
allocation method provided in Section 2(a) above. The Tax Sharing Agreement
between Covanta, Warren, Stanislaus and Alexandria dated as of [ ], the Tax
Sharing Agreement between Covanta and Tampa Construction dated as of [ ] and the
Tax Sharing Agreement between Covanta and Tampa Bay provide, with respect to
federal, state and local income taxes, for the amount of payments by Covanta to
the Remaining Debtors and for the amount of payments by the Remaining Debtors to
Covanta.

                  (c)      Covanta's payment of such apportioned tax liability
shall constitute a complete settlement of the federal income tax liability of
all Subgroup Members for such taxable year, except as otherwise provided in
Section 9 of this Agreement. Parent shall indemnify and hold harmless Covanta
against any liability for federal income tax (including alternative minimum tax
and additional amounts) relating to taxable years during the term of this
Agreement (including any liability for taxes attributable to other corporations
for which a Subgroup Member is liable under Regulation Section 1.1502-6) other
than such apportioned tax liability. All computations under this Agreement shall
be made on the basis that each Subgroup Member is a member of the Affiliated
Group and that such group files a consolidated return.

         3.       Taxable Income. For purposes of this Agreement, "Covanta's
Taxable Income" shall be Covanta's taxable income computed in accordance with
Regulation Section 1.1552-1(a)(1)(ii) (and shall not be negative), except that
the following modifications will apply:

                  (i) Covanta's Taxable Income shall be computed in accordance
         with Regulation Section 1.1552-1(a)(1)(ii), assuming Covanta's separate
         taxable income is the amount that would be shown on the consolidated
         return for the Covanta Subgroup, had Covanta filed such return as the
         common parent corporation of the Covanta Subgroup;

                  (ii) for purposes of applying Regulation Section
         1.1552-1(a)(1)(ii)(a), for each Taxable Year (beginning the day after
         the Closing Date), (A) the portion of the consolidated net operating
         loss deduction attributable to Covanta shall be deemed to be increased
         by the

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<PAGE>

         Adjustment Amount (as defined below) and (B) the net operating loss
         deduction attributable to other members of the Affiliated Group shall
         be accordingly reduced;

                  (iii) the "ADJUSTMENT AMOUNT" shall be the lesser of (A) the
         excess of Covanta's taxable income (computed as if Covanta had filed a
         separate return as the common parent of the Covanta Subgroup) over the
         portion of the consolidated net operating loss deduction attributable
         solely to the Covanta Subgroup and actually available to be used by the
         Affiliated Group and (B) the excess of $571,846,000 over: the sum of
         (i) the cumulative Adjustment Amount for all prior periods (beginning
         after the Closing Date); (ii) the cumulative amount of the consolidated
         net operating loss deduction utilized by affiliates of the Parent
         listed in Appendix B attached hereto for all prior periods (beginning
         after the Closing Date); and (iii) the sum of any net operating losses
         that (x) expired unused for such prior periods (except to the extent
         such expiration resulted from a current-year loss of a Parent Affiliate
         (other than a Subgroup Member) being used to offset Covanta's taxable
         income(computed as if Covanta had filed a separate return as the common
         parent of the Covanta Subgroup)) and (y) that would have expired unused
         for all such prior periods had the Covanta Subgroup and the affiliates
         of Parent listed in Appendix B been the only members of the Affiliated
         Group with Parent. For purposes of this clause (iii), the amount of net
         operating loss and time of expiration is as set forth on Appendix C (as
         adjusted due to a change in law).

         4.       Limitations on Attribute Use.

                  Notwithstanding anything in this Agreement to the contrary, if
Covanta realizes an item of income or gain as a result of any disposition of any
of its assets that is subject to Section 384 of the Code, the portion of tax
liability attributable to such item shall be paid in full by Covanta; provided,
however, the amount of such payment shall not exceed the tax liability of Parent
for such taxable year. Any remaining tax liability of the Affiliated Group shall
be allocated pursuant to this Agreement without taking into account such item of
income or gain.

         5.       No Current Payments for Utilization of Net Operating Losses.

                  Neither Covanta nor any other Subgroup Member shall have any
liability to make payments to Parent or to any other member of the Affiliated
Group for the utilization by the Covanta Subgroup of net operating losses deemed
to be attributable to Covanta pursuant to Section 3(ii) of this Agreement.

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<PAGE>

         6.       Covanta International.

                  If the Affiliated Group or any member of the Affiliated Group
is liable for any federal, state, local or foreign tax liability generated by
Covanta International, or would be liable but for the use of any Affiliated
Group attributes or offsets, then Covanta International will pay to Parent, on
an after-tax basis, the amount of any such liability.

         7.       Payment of Tax.

                  (a)      Each Subgroup Member shall pay to Covanta no later
than 4 business days before the date on which the Affiliated Group's
consolidated federal income tax return is required to be filed (taking account
of any extensions thereof) such Subgroup Member's separate return tax liability
determined as provided under Section 2(b) above plus its "Equitable Share" (as
defined below) of any interest or penalties shown on the Affiliated Group's
consolidated federal income tax return. Any payments made by the Remaining
Debtors under this Agreement will be counted towards their obligations under the
Tax Sharing Agreement between Covanta, Warren, Stanislaus and Alexandria dated
as of [ ], the Tax Sharing Agreement between Covanta and Tampa Construction
dated as of [ ] and the Tax Sharing Agreement between Covanta and Tampa Bay
dated as of [ ].

                  (b)      Covanta shall pay to Parent no later than 2 business
days before the date on which the Affiliated Group's consolidated federal income
tax return is required to be filed (taking account of any extensions thereof)
Covanta Subgroup's separate return tax liability determined as provided under
Section 2 and 3 above plus its "Equitable Share" (as defined below) of any
interest or penalties shown on the Affiliated Group's consolidated federal
income tax return.

                  (c)      To the extent that the interest and penalties shown
on a return are directly related to items of income, deduction, credit, etc. of
a particular "member" of the Affiliated Group as defined in Section 1504(a) of
the Code (a "MEMBER"), or such Member's delay in providing information to Parent
as provided in Section 1 above, such Member's Equitable Share of such interest
and penalties is 100%. Section 3(ii) shall not apply for purposes of determining
whether a consolidated net operating loss deduction is directly related to
Covanta. Each Member's Equitable Share of any interest and penalties shown on
the return that are not directly related to the items or delay of a particular
Member (and so allocated to that particular Member) will be a ratable share of
any such interest or penalties, determined by multiplying such interest or
penalties by a fraction, the numerator of which equals the portion of the
Affiliated Group's tax liability allocated to such Member determined as provided
under Section 2 above (before interest or penalties) and the denominator of
which equals the Affiliated Group's tax liability (before interest or
penalties).

         8.       Estimated Tax Payments.

                  (a)      If the Affiliated Group is required to make estimated
federal income tax payments (including payments due at the time any extension of
time is sought for the filing of

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<PAGE>

the Affiliated Group's federal income tax return), Covanta shall, if requested
by Parent, pay to Parent, no later than 2 business days before the date each
estimated tax payment is to be made by Parent, that percentage of the estimated
tax payment that equals the percentage which the estimated separate return tax
liability of Covanta Subgroup bears to the sum of the Parties' estimated
separate return tax liabilities for the taxable year computed as provided under
Sections 2 and 3 above. Parent shall reasonably determine such estimates. If
Covanta is required to make a payment to Parent for estimated taxes as provided
in the preceding sentence, each Subgroup Member shall, if requested by Covanta,
pay to Covanta, no later than 2 business days before the date Covanta is
required to make a payment to Parent, that percentage of such payment that
equals the percentage which the estimated separate return tax liability of such
Subgroup Member bears to the Covanta Subgroup's estimated separate return tax
liability for the taxable year computed as provided under Sections 2 and 3
above.

                  (b)      Any estimated tax payments made by Covanta to Parent
and by any Subgroup Member to Covanta under this Section 8 with respect to any
taxable year shall be applied to reduce the amount, if any, owed by Covanta and
the Subgroup Member, as applicable, under Section 7 hereof with respect to such
year. Any excess of such estimated payments by Covanta and the Subgroup Member,
as applicable, over the amount described in Section 7 for such year shall be
repaid by Parent to Covanta and by Covanta to the Subgroup Member, as
applicable, no later than 10 business days after the date of filing of the
consolidated federal tax return for such taxable year or, to the extent such
excess represents all or a part of a tax refund to be received by the Affiliated
Group, no later than 10 business days after the receipt of the refund.

         9.       Adjustments to Tax Liability.

                  (a)      If the consolidated federal tax liability is adjusted
for any taxable period, whether pursuant to an amended return, a claim for
refund, a tax audit by the Internal Revenue Service or some other reason, the
liability of the Parties and each Subgroup Member shall be recomputed to give
effect to such adjustments. In the case of a refund, Parent shall make payment
to Covanta, and Covanta shall make a payment to each Subgroup Member, for its
share of the refund determined in the same manner as in Section 2 above, within
10 business days after the refund is received by Parent or Covanta, as
applicable. In the case of an increase in tax liability, (i) each Subgroup
Member shall pay to Covanta its allocable share of such increased tax liability
(including its Equitable Share of any interest and penalties) within 5 business
days after receiving notice of such liability from Covanta, and (ii) Covanta
shall pay to Parent the Covanta Subgroup's share of such increase (including
Covanta Subgroup's Equitable Share of any interest and penalties) within 10
business days after receiving notice of such liability from Parent. The Members
recognize that a recomputation of the consolidated tax liability for any taxable
year under this Section 9 is not necessarily the final liability for such year,
and such liability may be recomputed more than once.

                  (b)      Each Subgroup Member or any Covanta Tax Affiliate (as
defined in the Investment and Purchase Agreement) shall be responsible for its
tax liability relating to periods prior to (and including) the Closing Date.
Thus, if the Affiliated Group pays any such tax resulting from any final
determination or settlement with the IRS, or any other taxing authority,

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<PAGE>

or any court decision relating to a tax period prior to the Closing Date, then
such Subgroup Member shall reimburse Parent the amount of any tax, interest,
penalties or other costs resulting from such final determination, settlement, or
court decision.

         10.      Parent's Obligations. Parent shall:

                  (a)      timely file returns and other documents and take such
other action as may be necessary and appropriate to carry out the purpose of
this Agreement; and

                  (b)      subject to receipt by Parent of the payments required
to be made pursuant to Section 7 of this Agreement, timely pay to the Internal
Revenue Service the federal income taxes of the Affiliated Group, including
deficiencies.

         11.      New Members of Affiliated Group.

                  For all taxable periods or portions thereof during which this
Agreement remains in effect, if Covanta acquires (directly or indirectly) or
organizes another entity treated as a corporation for federal, state or local
tax purposes that is required to be included in the Affiliated Group's
consolidated federal income tax return, then such corporation shall join in and
be bound by this Agreement.

         12.      Amendment and Termination of Agreement.

                  (a)      This Agreement may be amended or terminated in whole
or in part only by a written instrument signed by all the parties hereto.

                  (b)      This Agreement shall not be automatically terminated
because Covanta ceases to be included in the Affiliated Group. In such case,
Covanta shall be liable to Parent for an amount determined by multiplying the
Affiliated Group's tax liability (calculated assuming Covanta was still a member
of the Affiliated Group) by a fraction, the numerator of which equals Covanta's
Taxable Income, and the denominator of which equals the Affiliated Group's
consolidated taxable income so computed pursuant to Section 1552(a)(1) of the
Code and Treasury Regulations Section 1.1552-1(a)(1) and assuming Covanta was
still a member of the Affiliated Group. Such payment by Covanta shall constitute
a complete settlement of the federal income tax liability of all Subgroup
Members for such taxable year, except as otherwise provided in Section 9 of this
Agreement. Parent shall indemnify and hold harmless Covanta against any
liability for federal income tax (including alternative minimum tax and
additional amounts) relating to taxable years during the term of this Agreement
other than such apportioned tax liability.

         13.      Audits and Refund Claims.

                  Parent and a former Member shall also consult and furnish each
other with information concerning the status of any tax audit or tax refund
claim relating to a taxable year in which the former Member was included in the
Affiliated Group and a consolidated federal income tax was filed. Parent shall
have the right to make the final determination as to the

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<PAGE>

response of the Affiliated Group to any audit and shall have the sole right to
control any contest of any change proposed and any proposed disallowance of a
refund claim by the Internal Revenue Service through the Appeals Office of the
Internal Revenue Service and the courts in connection with any taxable year for
which this Agreement is in effect. Each Member shall bear an equitable share of
the cost of any such contest (including fees and expenses of outside
accountants, lawyers or other experts)

         14.      State and Local Income Taxes.

                  The principles underlying the rights and obligations hereunder
of the Members in respect of federal income taxes shall be applied in respect of
any state or local tax (it being understood that the principles provided in
Section 3(ii) of this Agreement shall apply only to the extent Parent has net
operating losses for such applicable state and local taxes on the Closing Date)
based on or measured by all or any part of the net income or loss of the
Affiliated Group or several of its members (a "COMBINED TAX"). All of the
procedural and timing requirements of this Agreement applicable to federal
income taxes shall be equally applicable to any Combined Tax, with appropriate
adjustments thereto to reflect the differences, if any, in corresponding
provisions of the applicable income tax code, law or statute governing any such
Combined Tax and any administrative provisions relating thereto.

         15.      Entire Agreement. This Agreement contains the entire
understanding of the parties hereto with respect to the subject matter contained
herein.

         16.      Successors. This Agreement shall be binding upon and inure to
the benefit of any successor, whether by statutory merger, acquisition of
assets, or otherwise, to any of the parties hereto, to the same extent as if the
successor had been an original party to the agreement.

         17.      Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

         18.      Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute one and the same instrument.

                            [SIGNATURE PAGE FOLLOWS]

                                        8
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their duly authorized representatives on the first date mentioned
herein.

                           DANIELSON HOLDING CORPORATION

                           By:________________________________________
                           Name:
                           Title:

                           COVANTA ENERGY CORP.

                           By:________________________________________
                           Name:
                           Title:

                           COVANTA POWER INTERNATIONAL HOLDINGS, INC.

                           By:________________________________________
                           Name:
                           Title:

<PAGE>

                                   APPENDIX A

                                COVANTA SUBGROUP

       Greenway Insurance Company of Vermont
       DSS Environmental, Inc.
       Covanta Cunningham Environmental Support, Inc.
       Haverhill Power, Inc.
       LMI, Inc.
       Michigan Waste Energy, Inc.
       Covanta Oahu Waste Energy Recovery, Inc.
       Covanta Energy Group, Inc.
       Covanta Energy Resource Corp.
       Covanta Energy International, Inc.
       Covanta Energy West, Inc.
       Covanta Engineering Services, Inc.
       Covanta Haverhill Properties, Inc.
       Covanta Marion Land Corp.
       Covanta Alexandria/Arlington, Inc.
       Covanta Babylon, Inc.
       Covanta Bristol, Inc.
       Covanta Fairfax Inc.
       Covanta Haverhill, Inc.
       Covanta Hillsborough, Inc.
       Covanta Huntington Res. Rec. 1 Corp.
       Covanta Huntington Res. Rec. 7 Corp.
       Covanta Huntsville, Inc.
       Covanta Indianapolis, Inc.
       Covanta Kent, Inc.
       Covanta Lancaster, Inc.
       Covanta Lee, Inc.
       Covanta Long Island, Inc.
       Covanta Marion, Inc.
       Covanta Montgomery Inc.
       Covanta Onondaga Five Corp.
       Covanta Onondaga Four Corp.
       Covanta Onondaga Inc.

                                       10
<PAGE>

       Covanta Onondaga Three Corp.
       Covanta Onondaga Two Corp.
       Covanta Pasco, Inc.
       Covanta Stanislaus, Inc.
       Covanta Tulsa, Inc.
       Covanta Union, Inc.
       Covanta Systems, Inc.
       Covanta Omega Lease, Inc.
       Covanta Plant Services of New Jersey, Inc.
       Covanta Projects of Hawaii, Inc.
       Covanta Projects, Inc.
       Covanta Energy Services, Inc.
       Covanta Wallingford Associates, Inc.
       Covanta Waste to Energy, Inc.
       Covanta Secure Services, Inc.
       Covanta Water Holdings, Inc.
       Covanta Water Systems, Inc.
       Covanta Warren Energy Resources Co, L.P.
       Covanta Water Treatment Services, Inc.
       Covanta Acquisition, Inc.
       Covanta Bessemer, Inc.
       Covanta Onondaga Operations, Inc.
       Covanta OPW Associates, Inc.
       Covanta OPWH, Inc.
       Covanta Mid-Conn, Inc.
       Covanta RRS Holdings, Inc.
       Olmec Insurance, Ltd.
       8309 Tujunga Avenue Corp.
       Burney Mountain Power, Inc.
       Covanta New Martinsville Hydroelectric, Corporation
       ERC Energy, Inc.
       ERC Energy II, Inc.
       Covanta Geothermal Operations Holdings, Inc.
       Heber Field Energy II, Inc.
       Covanta Imperial Power Services, Inc.
       Mammoth Power Co.
       Mt. Lassen Power
       Covanta New Martinsville Hydro Operations

                                       11
<PAGE>

       Corporation
       Covanta Geothermal Operations, Inc.
       Covanta Heber Field Energy, Inc.
       Covanta Hydro Energy, Inc.
       Covanta Hydro Operations, Inc.
       Covanta Power Equity Corp.
       Covanta Power Pacific, Inc.
       Covanta Power Plant Operations
       Covanta SIGC Geothermal Operations, Inc.
       Pacific Energy Resources, Inc.
       Pacific Hydropower Co.
       Pacific Oroville Power, Inc.
       Pacific Recovery Corp.
       Pacific Wood Fuels Co.
       Pacific Wood Services Co.
       Penstock Power Co.
       Covanta Energy Construction, Inc.
       Three Mountain Operations, Inc.
       Covanta Hydro Operations West, Inc.
       Covanta Tampa Bay, Inc.
       Three Mountain Power LLC
       Covanta Tampa Construction
       Covanta Equity of Stanislaus, Inc.
       Covanta Equity of Alexandria/Arlington, Inc.

                                       12

<PAGE>

                                   APPENDIX B

            Danielson Insurance Co. (Mission Insurance Company Trust)
          Danielson Insurance Co. (Enterprise Insurance Company Trust)
 Danielson National Insurance Company (Mission National Insurance Company Trust)
      Danielson Indemnity Company (Holland-America Insurance Company Trust)
    Danielson Reinsurance Corporation (Mission Reinsurance Corporation Trust)

                                       13
<PAGE>

                                   APPENDIX C

                    Schedule of Expiring Net Operating Losses

<TABLE>
<CAPTION>
Year of Expiration                     Amount Expiring
------------------                     ---------------
<S>                                    <C>
       2004                             $  69,947,000
       2005                               106,225,000
       2006                                92,355,000
       2007                                89,790,000
       2008                                31,688,000
       2009                                39,665,000
       2010                                23,600,000
       2011                                19,755,000
       2012                                38,255,000
       2019                                33,635,000
       2022                                26,931,000

       Total                            $ 571,846,000
</TABLE>

                                       14<PAGE>

                                                                   EXHIBIT 10.30

                            [ZIFF DAVIS MEDIA LOGO]

                                                         November 15, 2002

PERSONAL AND CONFIDENTIAL
Mr. Derek Irwin
880 Fifth Avenue, 6A
New York, NY  10021

Dear Derek:

         We are pleased to extend to you our offer of employment with Ziff Davis
Media Inc. (ZDM) as Senior Vice President, Finance for the company. You will
report to me, the Chief Operating Officer and CFO. As we have discussed, this is
an important position at ZDM, and it will certainly give you the opportunity to
make a major contribution to our business. The challenges for ZDM now and in the
future are substantial. We welcome your playing a key role in defining and
building-out the systems, procedures and longer-term financial vision for ZDM
and in leading the organization in the achievement of that vision.

         This letter sets forth the terms of our offer:

BASE SALARY

         Your annual base salary will be $225,000. You will be eligible for an
annual review in which your base salary and other compensation may be adjusted
on a discretionary basis. Your initial review will occur on approximately the
first anniversary of your starting date with ZDM and subsequent reviews will
occur approximately at the time that other members of the management team
receive their reviews. Base salary will be paid in accordance with ZDM's
standard payroll policies as may be in effect from time to time. Currently, base
salary is paid on the 15th and the last day of each month.

ANNUAL INCENTIVE BONUS

         Your annual incentive bonus target for 2003 will be approximately
$100,000 and will be based on ZDM's operating performance as well as specific
quantitative and qualitative objectives that we will mutually develop at the
beginning of the year.

<PAGE>

Mr. Derek Irwin
November 15, 2002
Page 2

LONG-TERM INCENTIVE PROGRAM

         You will be granted options to purchase shares of ZDM preferred and
common stock at approximately the time that options initially are granted to
other members of ZDM's management team. We currently expect these grants to
occur in the fourth quarter of 2002. The amount of such options, their
respective exercise prices, vesting dates and other terms and conditions, will
be as set forth in the option agreement(s) reflecting your grant. Your grant
will be contingent upon your execution of such option agreement(s).

MEDICAL, DENTAL, LIFE AND DISABILITY INSURANCE AND OTHER BENEFITS

         You will be eligible to participate in the standard ZDM benefits
programs that may be in effect from time to time. Your rights and eligibility
under each benefits plan will be governed by the terms of such plan. Under ZDM's
current plans, you would be eligible to participate in medical, dental, life and
disability insurance, and flexible spending and dependent care accounts,
effective on the 1st day of your employment with ZDM.

401(k) PROGRAM

         You will be eligible to participate in ZDM's 401(k) plan that may be in
effect from time to time. Your rights and eligibility under each benefits plan
will be governed by the terms of such plan. Under ZDM's current 401(k) plan, you
would be eligible to participate effective on the 1st day of your employment
with ZDM. Among other provisions, ZDM's current 401(k) plan provides that each
pay period ZDM will make a matching contribution equal to 50% of the
contribution you make up to 4% of your salary (i.e., the matching contribution
may be up to 2% of your salary), with such matching contributions vesting over a
period of 3 years.

SEVERANCE

         If you are terminated by ZDM for any reasons other than Cause, you will
be entitled to receive severance payments as set forth below, in an aggregate
amount equal to 6 months of your base salary, if within 30 days of such
termination you execute and deliver to ZDM a general release in favor of ZDM,
its affiliates and their respective directors, officers, employees, agents and
representatives, in form satisfactory to ZDM. Severance payments will be paid
each normal pay period following the date of your termination, with the gross
amount of each such payment equaling the portion of your gross base salary that
would have been paid to you on such date had you remained in ZDM's employ;
provided that the aggregate severance payment shall not exceed 6 months of your
base salary. All such severance checks shall be subject to applicable
withholdings. If you voluntarily elect to terminate your employment with ZDM,
you will not be eligible for severance pay. If you are terminated for Cause all
obligations of ZDM hereunder will immediately terminate. For purposes of this
letter, "Cause" shall mean gross negligence in the performance of your duties;
commission of a felony; misappropriation, embezzlement, fraud, or dishonesty;
any act or omission which is materially injurious to the reputation of ZDM; or
the willful failure to carry out written instructions of ZDM consistent with
your duties under this letter.

VACATION

         You will receive 3 weeks of vacation per year beyond the company
holidays.

<PAGE>

Mr. Derek Irwin
November 15, 2002
Page 3

         Your employment will be on an "at will" basis and may be terminated by
either you or ZDM at any time, with or without advance notice or warning, for
any reason or no reason. You will be subject to ZDM's employment policies in
effect from time to time. ZDM reserves the right to at any time to change its
employment policies and the terms of (or to discontinue) any of its benefits
plans. This letter contains the entire agreement of the parties with respect to
the subject matter hereof, and supersedes all other discussions, negotiations
and understandings, whether written or oral, with respect to such subject
matter. This letter may not be amended except in a writing signed by each party.
Signatures received via facsimile shall be deemed originals for all purposes.

         We are extremely pleased to offer you this opportunity to join ZDM and
Bob Callahan and I, personally, look forward to once again working with you.
Please indicate your agreement with the terms of this letter by signing below
and returning your signed copy to me.

         I look forward to your long and prosperous relationship with Ziff Davis
Media Inc.

                                                 Sincerely,

                                                 Bart W. Catalane
                                                 Chief Operating Officer and CFO

cc:      Bob Callahan

AGREED AND ACCEPTED:

/s/ Derek Irwin                                  November 19, 2002
-------------------
Derek Irwin                                      Date

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