TERMINATION AGREEMENT

Termination Agreement

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COVANTA ENERGY CORP

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Title: TERMINATION AGREEMENT
Governing Law: California Date: 3/30/2004
Industry: Electric Utilities Sector: Utilities

TERMINATION AGREEMENT, Parties: covanta energy corp

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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

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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;

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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.

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.

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).

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.

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

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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;

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;

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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;

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;

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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;

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.

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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.

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;

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

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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

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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.

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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,

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