DANIELSON HOLDING CORP
FORM OF RESTRICTED STOCK AWARD AGREEMENT
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<DESCRIPTION>FORM OF RESTRICTED STOCK AWARD AGREEMENT
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<P align="right" style="font-size: 10pt">Exhibit&nbsp;10.4



<P align="center" style="font-size: 10pt"><B>DANIELSON HOLDING CORPORATION<BR>
RESTRICTED STOCK AWARD AGREEMENT</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS AGREEMENT is made and entered into as of this 5th day of October,
2004 (the &#147;Grant Date&#148;) by and between Danielson Holding Corporation, a
Delaware corporation (the &#147;Company&#148;), and <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> (the
&#147;Employee&#148;), pursuant to the Danielson Holding Corporation 2005 Equity Award
Plan for Employees and Officer (the &#147;Plan&#148;). This Agreement and the award
contained herein is subject to the terms and conditions set forth in the Plan,
which are incorporated by reference herein, and the following terms and
conditions:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Award of Restricted Stock. In consideration for the prior and
continued service of Employee to Covanta Energy Corporation (&#147;Covanta&#148;), a
wholly-owned subsidiary of the Company, and as part of the Long-Term Incentive
Program of Covanta, as adopted by the Company, the Company hereby awards to the
Employee, subject to the further terms and conditions set forth in this
Agreement, <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>shares (the &#147;Restricted Stock&#148;) of its common stock,
$0.10 par value per share (the &#147;Common Stock&#148;), as of the Grant Date.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Rights of Stockholder. Employee shall have all of the rights of a
stockholder with respect to the shares of Restricted Stock (including the right
to vote the shares of Restricted Stock and the right to receive dividends with
respect to the shares of Restricted Stock), except as provided in Section&nbsp;3 and
Section&nbsp;6 hereof.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;Restrictions on Transfer. Except as otherwise provided in this
Agreement, Employee may not sell, transfer, assign, pledge, encumber or
otherwise dispose of any of the shares of Restricted Stock or the rights
granted hereunder (any such disposition or encumbrance being referred to herein
as a &#147;Transfer&#148;). Any Transfer or purported Transfer by Employee of any of the
shares of Restricted Stock shall be null and void and the Company shall not
recognize or give effect to such Transfer on its books and records or recognize
the person to whom such purported Transfer has been made as the legal or
beneficial holder of such shares. The shares of Restricted Stock shall not be
subject to sale, execution, pledge, attachment, encumbrance or other process
and no person shall be entitled to exercise any rights of Employee as the
holder of such Restricted Stock by virtue of any attempted execution,
attachment or other process until the restrictions imposed herein on the
Transfer of the shares of Restricted Stock shall lapse as provided in Section&nbsp;4
hereof. All certificates representing the shares of Restricted Stock shall
have endorsed thereon the following legend (in addition to any other legends
that are customary or required on certificates representing shares of the
Company&#146;s Common Stock):



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER AND OTHER TERMS AND CONDITIONS (INCLUDING
FORFEITURE) SET FORTH IN A RESTRICTED STOCK AWARD AGREEMENT DATED
AS OF OCTOBER 5, 2004, BETWEEN THE COMPANY AND THE REGISTERED
HOLDER, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE



<P align="center" style="font-size: 10pt">&nbsp;
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<P align="left" style="margin-left:3%; font-size: 10pt">COMPANY. ANY TRANSFER OR PURPORTED TRANSFER OF THE SHARES
REPRESENTED BY THIS CERTIFICATE IN VIOLATION OF SUCH RESTRICTED
STOCK AWARD AGREEMENT SHALL BE NULL AND VOID.&#148;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If and when the restrictions imposed herein on the transfer of shares of
Restricted Stock shall have lapsed as provided in Section&nbsp;4 hereof,
certificates for such shares without the restricted stock legend set forth in
this section shall be delivered to the Employee. Until such restrictions have
lapsed, any certificates representing any shares of Restricted Stock shall be
held in custody by the Company, and the Employee shall, as a condition of any
award of Restricted Stock, have delivered a stock power, endorsed in blank,
relating to the Common Stock covered by such award. Employee may request the
removal of such restricted stock legend from certificates representing any
shares of Restricted Stock as to which the restrictions imposed herein on the
transfer thereof shall have lapsed as provided in Section&nbsp;4 hereof. Such
request shall be in writing to the General Counsel of the Company.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;Lapse of Restrictions and Forfeiture. Subject to Section 4(c) hereof,
the restrictions on transfer imposed on the shares of Restricted Stock by this
Section&nbsp;4 shall lapse with respect to the shares of Restricted Stock and the
Employee will vest, or gain actual &#147;ownership&#148; of the shares of Restricted
Stock in accordance with the terms of Section 4(a) hereof.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Restricted Stock Time Vesting. One-half of the shares of Restricted
Stock awarded hereunder, consisting of <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>shares (&#147;Time Vesting
Restricted Stock&#148;), shall vest as of the dates and in the amounts set forth
below provided that Employee is employed on such date by the Company or its
Affiliates or Subsidiaries:</TD>
</TR>

</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>shares and representing one-third of the Time
Vesting Restricted Stock, shall vest on February&nbsp;28, 2005;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>shares and representing one-third of the Time
Vesting Restricted Stock, shall vest on February&nbsp;28, 2006; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>shares and representing one-third of the Time
Vesting Restricted Stock, shall vest on February&nbsp;28, 2007.</TD>
</TR>

</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Restricted Stock Performance Vesting. One-half of the shares of
Restricted Stock awarded hereunder, consisting of <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>shares
(&#147;Performance Vesting Restricted Stock&#148;), shall vest as of the dates and in the
amounts set forth below:</TD>
</TR>

</TABLE>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>First Tranche Amount. The &#147;First Tranche Amount&#148; consisting of
<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>shares and representing one-third of the Performance
Vesting Restricted Stock, shall vest on February&nbsp;28, 2005 pursuant to the
satisfaction of the applicable performance based metric of operating
cashflow of the Covanta as set forth in the Covanta 2004 Cash Bonus Plan.</TD>
</TR>

</TABLE>
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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Second Tranche Amount. The &#147;Second Tranche Amount&#148; consisting of
<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>shares and representing one-third of the Performance
Vesting Restricted Stock, shall vest on February&nbsp;28, 2006 pursuant to the
satisfaction of the applicable performance criteria and schedule
determined by the Board of Directors of the Company (the &#147;Board&#148;) or the
Compensation Committee of the Company&#146;s Board of Directors (&#147;Compensation
Committee&#148;); <I>provided, however, </I>that if the Board or Compensation
Committee does not establish new criteria, then the performance criteria
and schedule for awarding bonuses under the Covanta 2005 Cash Bonus Plan
shall apply; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Third Tranche Amount. The &#147;Third Tranche Amount&#148; consisting of
<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>shares and representing one-third of the Performance
Vesting Restricted Stock, shall vest on February&nbsp;28, 2007 pursuant to the
satisfaction of the applicable performance criteria and schedule
determined by the Board or Compensation Committee; <I>provided, however,</I>
that if the Board or Compensation Committee does not establish new
criteria, then the performance criteria and schedule for awarding bonuses
under the Covanta 2006 Cash Bonus Plan shall apply.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Forfeiture of Unearned Restricted Stock. In the event that any
shares of Performance Vesting Restricted Stock do not vest pursuant to
any of Subsection A, B or C of this Section&nbsp;4(b), then such Performance
Vesting Restricted Stock shall be forfeited and cancelled as of such
date.</TD>
</TR>

</TABLE>

<P>
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding anything to the contrary in Section&nbsp;4(a), in the event
that prior to the lapse of restrictions on transfer pursuant to Section&nbsp;4(a),
Employee&#146;s employment with all of the Company, its Affiliates and Subsidiaries
is terminated for any reason other than death or Disability, Employee shall
forfeit, on the date on which his employment is terminated, all of the shares
of Restricted Stock as to which the restrictions on transfer imposed thereon by
Section&nbsp;3 hereof shall not have lapsed prior to such date.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding anything to the contrary in Sections 4(a) or (b)
hereof, in the event of a Change in Control, the restrictions on transfer
imposed by Section&nbsp;3 on the shares of Restricted Stock shall lapse. For
purposes of this Agreement, a &#147;Change in Control&#148; shall mean the occurrence of
any of the following events, each of which shall be determined independently of
the others: (i)&nbsp;any &#147;Person&#148; (as hereinafter defined), other than a holder of
at least 10% of the outstanding voting power of the Company as of the date of
this Agreement, becomes a &#147;beneficial owner&#148; (as such term is used in Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the
&#147;Exchange Act&#148;)) of a majority of the stock of the Company entitled to vote in
the election of directors of the Company; (ii)&nbsp;individuals who are Continuing
Directors of the Company (as hereinafter defined) cease to constitute a
majority of the members of the Board; (iii)&nbsp;stockholders of the Company adopt
and consummate a plan of complete or substantial liquidation or an agreement
providing for the distribution of all or substantially all of the assets of the
Company; (iv)&nbsp;the Company is a party to a merger, consolidation, other form of
business combination or a sale of all or substantially all of its assets, with
an unaffiliated third party, unless the business of the Company following
consummation of such merger, consolidation or other business combination is
continued following any such transaction by a resulting entity (which may be,
but need not be, the Company) and the</TD>
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<P align="left" style="margin-left:8%; font-size: 10pt">stockholders of the Company immediately
prior to such transaction hold, directly or indirectly, at least a majority of
the voting power of the resulting entity; <I>provided, however</I>, that a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) shall not constitute a Change in Control; (v)&nbsp;there is a
Change in Control of the Company of a nature that is reported in response to
item 5.01 of Current Report on Form 8-K or any similar item, schedule or form
under the Exchange Act, as in effect at the time of the change, whether or not
the Company is then subject to such reporting requirements; <I>provided, however</I>,
that for purposes of this Agreement a Change in Control shall not be deemed to
occur if the Person or Persons deemed to have acquired control is a holder of
at least 10% of the outstanding Voting Power of the Company as of the date of
this Agreement; or (vi)&nbsp;the Company consummates a transaction which constitutes
a &#147;Rule&nbsp;13e-3 transaction&#148; (as such term is defined in Rule&nbsp;13e-3 of the
Exchange Act) prior to the termination or expiration of this Agreement.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event of a Rule&nbsp;13e-3 transaction, then effective coincident
with the consummation of such Rule&nbsp;13e-3 transaction, the restrictions on
transfer imposed by Section&nbsp;3 on the shares of Restricted Stock shall lapse;
<I>provided, however, </I>that notwithstanding the foregoing, in connection with the
consummation of such Change in Control or Rule&nbsp;13e-3 transaction, all such
unvested shares of Restricted Stock then held by Employee shall be deemed to
vest and become exercisable at such time in order to permit Employee to
participate in such transaction.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event that Employee is an employee of Covanta, then the
references to the Company in Section&nbsp;4(d)(i), (iii), (iv), (v)&nbsp;and (vi)&nbsp;above
shall also include, in the alternative, Covanta.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For purposes of this Section&nbsp;4, &#147;Continuing Directors&#148; shall mean the
members of the Board on the date of execution of this Agreement, provided that
any person becoming a member of the Board subsequent to such date whose
election or nomination for election was supported by at least a majority of the
directors who then comprised the Continuing Directors shall be considered to be
a Continuing Director; and the term &#147;Person&#148; is used as such term is used
Sections 13(d) and 14(d) of the Exchange Act.</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;Transferability. Notwithstanding anything contained in this Agreement
to the contrary, shares of Restricted Stock are not transferable or assignable
by the Employee until the restrictions thereon have lapsed.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;Adjustment Provisions. If, during the term of this Agreement, there
shall be any merger, reorganization, consolidation, recapitalization, stock
dividend, stock split, rights offering or extraordinary distribution with
respect to the Common Stock, or other change in corporate structure affecting
the Common Stock, the Committee shall make or cause to be made an appropriate
and equitable substitution, adjustment or treatment with respect to the
Restricted Stock, including a substitution or adjustment in the aggregate
number or kind of shares subject to this Agreement, notwithstanding that the
Restricted Stock are subject to the restrictions on transfer imposed by Section
3 above. Any securities, awards or rights issued pursuant to this Section&nbsp;6
shall be subject to the same restrictions as the underlying Restricted Stock to
which they relate.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;Tax Withholding. As a condition precedent to the receipt of any shares
of Restricted Stock hereunder, Employee agrees to pay to the Company, at such
times as the Company shall determine, such amounts as the Company shall deem
necessary to satisfy any withholding taxes due on income that Employee
recognizes as a result of (i)&nbsp;the lapse of the restrictions imposed by Section
3 hereof on the shares of Restricted Stock or (ii)&nbsp;Employee&#146;s filing of an
election pursuant to Section 83(b) of the Internal Revenue Code of 1986 (the
&#147;Code&#148;), as amended, with respect to the shares of Restricted Stock. The
obligations of the Company under this Agreement and the Plan shall be
conditional on such payment or arrangements, and the Company, its Affiliates
and Subsidiaries shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment otherwise due to the Employee.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;Registration. This grant is subject to the condition that if at any
time the Board or Compensation Committee shall determine, in its discretion,
that the listing of the shares of Common Stock subject hereto on any securities
exchange, or the registration or qualification of such shares under any federal
or state law, or the consent or approval of any regulatory body, shall be
necessary or desirable as a condition of, or in connection with, the grant,
receipt or delivery of shares hereunder, such grant, receipt or delivery will
not be effected unless and until such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Board or Compensation Committee. The Company agrees to
make every reasonable effort to effect or obtain any such listing,
registration, qualification, consent or approval.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;Rights of Employee. In no event shall the granting of the Restricted
Stock or the other provisions hereof or the acceptance of the Restricted Stock
by Employee interfere with or limit in any way the right of the Company, an
Affiliate or Subsidiary to terminate Employee&#146;s employment at any time, nor
confer upon Employee any right to continue in the employ of the Company, an
Affiliate or Subsidiary for any period of time or to continue his or her
present or any other rate of compensation.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;Construction.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Successors. This Agreement and all the terms and provisions
hereof shall be binding upon and shall inure to the benefit of the
parties hereto and their respective legal representatives, heirs and
successors, except as expressly herein otherwise provided.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Entire Agreement; Modification. This Agreement contains the
entire understanding between the parties with respect to the matters
referred to herein. Subject to Section 16(c) of the Plan, this Agreement
may be amended by the Board or Compensation Committee at any time.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Capitalized Terms; Headings; Pronouns; Governing Law.
Capitalized terms used and not otherwise defined herein are deemed to
have the same meanings as in the Plan. The descriptive headings of the
respective sections and subsections of this Agreement are inserted for
convenience of reference only and shall not be deemed to modify or
construe the provisions which follow them. Any use of any masculine
pronoun shall include the feminine and vice-versa and any use of a
singular, the plural</TD>
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</TABLE>
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<P align="left" style="margin-left:8%; font-size: 10pt">and vice-versa, as the context and facts may
require. The construction and interpretation of this Agreement shall be
governed in all respects by the laws of the State of Delaware.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notices. Each notice relating to this Agreement shall be in
writing and shall be sufficiently given if delivered by registered or
certified mail, or by a nationally recognized overnight delivery service,
with postage or charges prepaid, to the address hereinafter provided in
this Section&nbsp;10. Any such notice or communication given by first-class
mail shall be deemed to have been given two business days after the date
so mailed, and such notice or communication given by overnight delivery
service shall be deemed to have been given one business day after the
date so sent, provided such notice or communication arrives at its
destination. Each notice to the Company shall be addressed to it at its
offices at 40 Lane Road, Fairfield, New Jersey 07004 (attention: Chief
Financial Officer), with a copy to the Secretary of the Company or to
such other designee of the Company. Each notice to the Employee shall be
addressed to the Employee at the Employee&#146;s address shown on the
signature page hereof.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement or the
application thereof to any party or circumstance shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to
the minimal extent of such provision or the remaining provisions of this
Agreement or the application of such provision to other parties or
circumstances.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Counterpart Execution. This Agreement may be executed in
counterparts, each of which shall constitute an original and all of
which, when taken together, shall constitute the entire document.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top">&nbsp;</TD>
    <TD colspan="3"><B>DANIELSON HOLDING CORPORATION</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<P align="left" style="font-size: 10pt">&nbsp;


<P align="left" style="font-size: 10pt">Accepted this <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> day of<BR>
<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>, 2004.


<P align="left" style="font-size: 10pt">&nbsp;


<P align="left" style="font-size: 10pt"><HR size="1" noshade width="25%" align="left">


<P align="left" style="font-size: 10pt">&nbsp;


<P align="left" style="font-size: 10pt"><B>EMPLOYEE&#146;S ADDRESS:</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


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