EXHIBIT 10.4(a)(ii)
                                                             -------------------

           SUPPLEMENTAL AGREEMENT TO CONSOLIDATED AMENDED AND RESTATED
                                  DEMAND NOTE


THIS SUPPLEMENTAL AGREEMENT TO CONSOLIDATED AND AMENDED DEMAND NOTE (the
"Agreement"), is made effective as of November 26, 2001, between Lynde H. Coit
("Coit") and Covanta Energy Corporation (f.k.a., Ogden Corporation) ("Covanta").

                              W I T N E S S E T H :

WHEREAS, Coit and Covanta are entering into a Consolidated Amended and Restated
Demand Note (the "Consolidated Amended and Restated Demand Note") simultaneous
with the execution of this Agreement; and

WHEREAS, Coit and Covanta wish to set forth in this Agreement certain of their
additional rights and obligations relating to such Consolidated Amended and
Restated Demand Note.

NOW, THEREFORE, in consideration of the mutual grants and covenants contained in
the Consolidated Amended and Restated Demand Note and herein, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties do hereby agree as follows:

         1. Consistent Reporting. Covanta and Coit each shall report, to every
applicable government authority (including the Internal Revenue Service),
ordinary income characterized as compensation in the amount of $43,816, which
represents the difference between the aggregate principal and accrued interest
due on that certain (i) Demand Note made by Coit to and in favor of Covanta
dated August 6, 1999, in the principal amount of $86,099.41, and (ii) Demand
Note made by Coit to and in favor of Covanta dated August 6, 1999, in the
principal amount of $20,764.59 as of November 26, 2001, and the aggregate "Fair
Market Value" of the "Shares" (as these terms are defined in the Consolidated
Amended and Restated Demand Note) held by Coit on that day.

         2. Payment of Bonus. Covanta shall pay Coit a bonus in the amount of
$55,004.

         3. Providing Documentation of Tax Benefits. Coit shall provide Covanta
with documentation detailing the use of any item arising from or attributable to
the execution of the Consolidated Amended and Restated Demand Note, including
but not limited to the use of capital losses and/or interest deductions, and any
tax benefit accruing to Coit therefrom that reduces the tax liability as shown
on his return filed in accordance with Section 1 above. Coit shall also provide
Covanta with documentation detailing any adjustment, regardless of the source,
relating to his tax return filed in accordance with Section 1 above, and the
extent that Coit realizes a tax benefit from such adjustment. To the extent Coit
realizes a tax benefit from any such use or adjustment, Covanta may (i) require
immediate payment from Coit in an amount equal to this tax benefit or (ii)
offset other payments due to Coit by the amount of this tax benefit. To the
extent required by Covanta, Coit shall provide to Covanta's independent tax
preparer a copy of his tax return for any tax years beginning in 2001 and ending
on the later of the time when all items arising from or attributable to the
execution of the Consolidated Amended and Restated Demand Note have expired or
have been used, or the time when the statute of limitations for adjustments to
be made to Coit's tax return filed in accordance with Section 1 above has
expired.

         4. Indemnification for Unexpected Tax Liability. Covanta shall
indemnify Coit against any additional taxes and penalties that result from a
final determination by an applicable governmental authority (with which a return
was filed as provided in Section 1 above) that the amount of compensation income
resulting from the execution of the Consolidated Amended and Restated Demand
Note exceeds the amount set forth in Section 1 hereof. Covanta shall also
indemnify Coit against any additional taxes and penalties that may result in the
event that a final determination is made by an applicable governmental authority
that Coit has compensation in the future as a result of interest that is imputed
on the Consolidated Amended and Restated Demand Note (net of any tax benefits
that may accrue to Coit as a result of such imputation, such as an interest
deduction).




                                           COVANTA ENERGY CORPORATION



                                           /s/ Stephen M. Gansler
                                           --------------------------
                                           By:  Stephen M. Gansler
                                           Its: Vice President, Human Resources


                                           LYNDE H. COIT



                                           /s/ Lynde H. Coit
                                           --------------------------
                                           By: Lynde H. Coit