Document:

EXHIBIT 10.4(b)(iii)
                                                            --------------------

                        CONSOLIDATED AMENDED AND RESTATED
                                   DEMAND NOTE
                                   -----------

                          Dated as of November 26, 2001

         ON DEMAND, FOR VALUE RECEIVED, Scott G. Mackin, (the "Undersigned"),
promises to pay to the order of COVANTA ENERGY CORPORATION, a corporation
organized and existing under the laws of the State of Delaware, f/k/a Ogden
Corporation, located and doing business at 40 Lane Road, Fairfield, New Jersey
07007, (the "Holder") the amount equal to the aggregate Fair Market Value (as
defined herein) of the Shares (as defined herein) (such amount being referred to
hereinafter as the "Indebtedness") in lawful money of the United States of
America. The Undersigned agrees to pay all costs and expenses incurred by the
Holder of this Note in any action taken to enforce or collect all or part of the
Indebtedness evidenced hereby after default, including court costs and
reasonable attorneys' fees.

         This Consolidated Amended and Restated Demand Note liquidates and
consolidates, effective as of November 26, 2001, all of the Indebtedness,
including interest thereon, evidenced by, and amends and restates the terms and
conditions in their entirety of, that certain (i) Demand Note made by the
Undersigned to and in favor of the Holder dated August 6, 1999, in the principal
amount of $401,800.98, and (ii) Demand Note made by the Undersigned to and in
favor of the Holder dated August 6, 1999, in the principal amount of
$104,037.06.

         For the purposes of this Note, the term "Shares" shall mean, subject to
any Adjustment (as defined below), 29,400 shares of common stock of Covanta
Energy Corporation, a Delaware corporation, with a par value of $0.50 per share.
If the shares of Holder common stock, with a par value of $0.50 per share, are
changed as a result of any merger, reorganization, consolidation,
recapitalization, liquidation, stock dividend, split-up, spin-off, stock split,
reverse stock split, share combination, share exchange or other similar
transaction, the Shares shall be equitably adjusted (an "Adjustment"). For the
purposes of this Note, the term "Fair Market Value" shall mean the price at
which the Undersigned actually sells his shares, net of all costs of sale, in
accordance with this Note. Additionally, if the Undersigned sells different
portions of the "Shares" on different Business Days, the "Fair Market Value" of
each portion of the Shares sold shall be determined on the Business Day that
such portion of the Shares is actually sold. The term "Business Day," as used in
this Note, shall mean any day on which the New York Stock Exchange is open for
the transaction of business. Upon the sale of the Shares, the net proceeds shall
be applied by the Undersigned within 10 Business Days to the discharge of this
Note. There shall be no interest payable on this note.

         Upon default in any payment hereunder for a period of thirty (30) days,
or upon any default under any other indebtedness between the Undersigned and
Holder in existence on the date hereof or existing at any time in the future,
then all of the Indebtedness and any other obligations of the Undersigned
hereunder shall become due and payable immediately, at the option of the Holder
hereof, without the necessity for demand or notice. No failure to exercise such
option shall be deemed a waiver on the part of the Holder of this Note of any
right accruing thereafter.

         At any time within eighteen (18) months of the date hereof, the Holder
may direct the Undersigned to sell the Shares on the open market. Such sale may
only be required in accordance with the Holder's policy of business conduct. In
addition, the Undersigned may decline to make such sale if he is advised against
such sale by counsel on the grounds that such sale might violate state or
federal securities laws or the rules of the New York Stock Exchange or other
applicable self-regulatory organization. The demand for such sale shall be made
in writing by the Chairman of the Holder's Compensation Committee. In addition,
the Undersigned may sell the Shares on his own initiative, subject to the other
provisions of this Note. The proceeds from any such sale of the Shares shall be
applied by the Holder in full satisfaction of the Indebtedness of the
Undersigned hereunder.

         Holder shall not be deemed to have modified or waived any of its rights
or remedies hereunder unless such modification or waiver is in writing and
signed by the Holder, and then only to the extent specifically set forth
therein. A waiver in one event shall not be construed as continuing or as a
waiver of or bar to such right or remedy on a subsequent event. After any
acceleration of, or the entry of any judgment on, this Note, the acceptance by
Holder of any payments by or on behalf of the Undersigned on account of the
Indebtedness evidenced by this Note shall not cure or be deemed to cure any
default or reinstate or be deemed to reinstate the terms of this Note absent an
express written agreement duly executed by the Holder and the Undersigned.

         The Undersigned waives demand, notice, presentment, protest, notice of
dishonor, notice of protest and diligence of collection of this Note. The
Undersigned consents to any and all extensions of time, renewals, waivers or
modifications that may be granted by Holder with respect to the payment or other
provisions of this Note.

         The covenants, conditions, waivers, releases and agreements contained
in this Note shall bind, and the benefits thereof shall inure to, the parties
hereto and their respective heirs, executors, administrators, successors and
assigns, provided, however, that this Note cannot be assigned by the Undersigned
without the prior written consent of Holder, and any such assignment or
attempted assignment by the Undersigned shall be void and of no effect with
respect to Holder.

         This is a demand note and all Indebtedness and any other obligations of
the Undersigned hereunder shall become immediately due and payable upon demand.
Notwithstanding all other provisions of this Note, no demand for any payment
hereunder shall be made at any time except after providing direction to sell the
Shares and allowing a reasonable period of time with which to comply with such
direction and only insofar as such direction is one that the Undersigned is
required to accept under this Note. In addition, the Indebtedness and any other
obligations of the Undersigned hereunder shall automatically become immediately
due and payable if the Undersigned or any endorser of this Note commences or has
commenced against it any bankruptcy or insolvency proceeding.

         This Note may not be supplemented, extended, modified or terminated
except by an agreement in writing signed by the party against whom enforcement
of any such waiver, change, modification or discharge is sought.

         Unless applicable law requires a different method, any notice that must
be given to Undersigned under this Note will be given by delivering it or
mailing it by First Class Mail to Undersigned at 40 Lane Road, Fairfield, New
Jersey 07007 or at a different address if the Undersigned gives the Holder a
notice of a different address. Unless the Holder requires a different method,
any notice that must be given to the Holder under this Note will be given by
mailing it by First Class Mail to the Holder at the address stated above, or at
a different address if the Holder gives the Undersigned a notice of a different
address.

         Privilege is reserved to pay this debt in whole or in part at any time
prior to maturity.

         This Note shall be governed by and construed in accordance with the
substantive laws of the State of New York without reference to conflict of laws
principles.

                                               /s/ Scott G. Mackin
                                               ------------------------
                                               Scott G. MackinEXHIBIT 10.4(e)(i)
                                                              ------------------

           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 Bruce W. Stone
("Stone") and Covanta Energy Corporation (f.k.a., Ogden Corporation)
("Covanta").

                              W I T N E S S E T H :

WHEREAS, Stone 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, Stone 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 Stone each shall report, to every
applicable government authority (including the Internal Revenue Service),
ordinary income characterized as compensation in the amount of $184,657, which
represents the difference between the aggregate principal and accrued interest
due on that certain (i) Demand Note made by Stone to and in favor of Covanta
dated August 6, 1999, in the principal amount of $344,399.90, and (ii) Demand
Note made by Stone to and in favor of Covanta dated August 6, 1999, in the
principal amount of $91,621.10 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 Stone on that day.

         2. Payment of Bonus. Covanta shall pay Stone a bonus in the amount of
$212,626.

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

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

                                           BRUCE W. STONE

                                           /s/ Bruce W. Stone
                                           --------------------------

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