EXHIBIT 10.4(b)(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 Scott G. Mackin
("Mackin") and Covanta Energy Corporation (f.k.a., Ogden Corporation)
("Covanta").

                              W I T N E S S E T H :

WHEREAS, Mackin 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, Mackin 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 Mackin each shall report, to every
applicable government authority (including the Internal Revenue Service),
ordinary income characterized as compensation in the amount of $212,212, which
represents the difference between the aggregate principal and accrued interest
due on that certain (i) Demand Note made by Mackin to and in favor of Covanta
dated August 6, 1999, in the principal amount of $401,800.98, and (ii) Demand
Note made by Mackin to and in favor of Covanta dated August 6, 1999, in the
principal amount of $104,037.06 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 Mackin on that day.

         2. Payment of Bonus. Covanta shall pay Mackin a bonus in the amount of
$254,146.

         3. Providing Documentation of Tax Benefits. Mackin 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 Mackin therefrom that reduces the
tax liability as shown on his return filed in accordance with Section 1 above.
Mackin 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 Mackin realizes a tax benefit from such
adjustment. To the extent Mackin realizes a tax benefit from any such use or
adjustment, Covanta may (i) require immediate payment from Mackin in an amount
equal to this tax benefit or (ii) offset other payments due to Mackin by the
amount of this tax benefit. To the extent required by Covanta, Mackin 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 Mackin's tax return filed
in accordance with Section 1 above has expired.

         4. Indemnification for Unexpected Tax Liability. Covanta shall
indemnify Mackin 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 Mackin against any additional taxes and penalties that may result in
the event that a final determination is made by an applicable governmental
authority that Mackin 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 Mackin 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


                                           SCOTT G. MACKIN



                                           /s/ Scott G. Mackin
                                           --------------------------