COVANTA ENERGY CORP
<DOCUMENT>
<TYPE>EX-10.4EI
<SEQUENCE>22
<FILENAME>covex10-4ei_718.txt
<TEXT>
                                                              EXHIBIT 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
                                           --------------------------

</TEXT>
</DOCUMENT>
