Exhibit 10.149
                                 --------------




THESE  SECURITIES HAVE NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED,  OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR
AN OPINION OF COUNSEL OR OTHER  EVIDENCE  ACCEPTABLE  TO THE BORROWER  THAT SUCH
REGISTRATION IS NOT REQUIRED.

Issue Date: April 12, 2005                       Principal Amount: US $5,100,733



                      COMMODORE APPLIED TECHNOLOGIES, INC.

                            CONVERTIBLE SECURED NOTE

         THIS  CONVERTIBLE  SECURED NOTE (this "Note") is issued in favor of The
Shaar Fund, Ltd. (the "Holder")  pursuant to the terms of that certain  Exchange
Agreement,   dated  as  of  April  12,  2005  (together  with  all   amendments,
supplements, extensions, renewals, substitutions or other modifications thereof,
and also together with all  schedules,  exhibits and  attachments  thereto,  the
"Exchange Agreement") by and between Commodore Applied  Technologies,  Inc. (the
"Borrower") and the Holder. This Note is issued in exchange for that certain (i)
note issued by the Borrower on June 13, 2001, in the original  principal  amount
of  $500,000  (as  amended  and  restated),  which such note has an  outstanding
principal  balance as of the date hereof of $3,279,585  ("Original Shaar Note"),
in  conjunction  with a Security  Agreement,  as amended  and  restated  ("Shaar
Security  Agreement"),  by and among the Borrower,  Commodore Advanced Sciences,
Inc.  ("CASI") and Holder,  a Warrant  ("Shaar  Warrant"),  issued to Holder,  a
Registration Rights Agreement ("Shaar  Registration  Rights agreement"),  by and
between the Borrower and Holder, and a Guaranty, as amended and restated ("Shaar
Guaranty")  by CASI in  favor  of  Holder  and  (ii)  Secured  Promissory  Note,
initially  issued  by the  Borrower  on June  13,  2001  to  Milford  Capital  &
Management  (or an  affiliate  thereof)("Milford"),  in the  original  principal
amount  of  Five  Hundred  Thousand  Dollars  ($500,000),   which  such  Secured
Promissory  Note has an outstanding  principal  balance as of the date hereof of
One Hundred Eight-Eight  Thousand One Hundred Forty-Nine Dollars  ($188,149)(the
"Milford  Note"),  together with all accrued and unpaid interest and unpaid fees
and  forbearance  amounts on the Original  Shaar Note and the Milford Note.  The
Milford  Note was  acquired by Holder  from  Milford  pursuant  to that  certain
Purchase  Agreement,  dated March 23, 2005.  The Shaar Security  Agreement,  the
Shaar Warrant,  the Shaar Registration Rights Agreement,  and the Shaar Guaranty
are sometimes hereinafter collectively referred to as the "Loan Documents."

         FOR VALUE RECEIVED, the Borrower hereby promises to pay to the order of
the Holder,  its  successors  and assigns,  at the office of the Holder c/o SS&C
Fund Services  N.V.,  Pareraweg 45,  Curacao,  Netherlands  Antilles (or at such
other  address as the holder  hereof  may  specify  from time to time by written
notice to the Borrower) on April 12, 2009 (the "Maturity  Date"),  the principal
sum of Five Million One Hundred Thousand Seven Hundred Thirty-Three ($5,100,733)

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Dollars, or so much thereof as shall constitute the entire outstanding principal
balance of the loans hereunder (the "Principal Balance"), together with interest
on the unpaid Principal Balance outstanding from time to time at the rate of 10%
per annum,  compounded  monthly.  Interest shall be calculated on the basis of a
360 day year and paid for the  actual  number of days  elapsed  for any whole or
partial  month in which  interest  is being  calculated.  So long as any uncured
Event of Default (hereinafter  defined) exists hereunder,  regardless of whether
or not there has been an acceleration of the indebtedness  evidenced hereby, and
at all times after maturity of the  indebtedness  evidenced  hereby  (whether by
acceleration or otherwise),  interest shall accrue on the outstanding  principal
balance of this Note at a rate per annum equal to fourteen  (14.0%)  percent per
annum,  or if  such  increased  rate of  interest  may  not be  collected  under
applicable  law,  then at the maximum  rate of  interest,  if any,  which may be
collected from Borrower under applicable law

         On the Issue  Date of this  Note,  the  Principal  Balance of this Note
shall  be  Four  Million  Six  Hundred   Thousand  Seven  Hundred   Thirty-Three
($4,600,733)  Dollars.  During the six (6) month period following the Issue Date
of this Note, if both parties consent,  which consent can be withheld by a party
for any reason whatsoever,  Holder will, from time to time, make advances to the
Borrower  under this Note in an  aggregate  principal  amount of up to $500,000;
provided,  that at no time shall this Note have an outstanding Principal Balance
more than $5,100,733.  Disbursements of advances hereunder shall be made by wire
transfer to an account designated in writing by Borrower to Holder, or otherwise
in a manner agreed upon by Holder and the Borrower.

         Beginning  on the  Issue  Date and for the  twelve  (12)  month  period
thereafter  (the  "Deferral  Period"),  interest  shall accrue on the  principal
amount  of the Note  outstanding  from  time to time.  On April  12,  2006,  the
Borrower  shall make a single lump sum payment to the Holder in an amount  equal
to all interest that accrued during the Deferral Period. Beginning May 15, 2006,
and monthly  thereafter  on the 15th day of each month until the Maturity  Date,
the  Borrower  shall pay to the Holder all  accrued  and unpaid  interest on the
Principal  Balance  of the Note  outstanding  during  the  prior  month.  On the
Maturity  Date,  the Borrower shall make a single lump sum payment to the Holder
equal to the  outstanding  Principal  Balance  of the  Note,  together  with all
accrued and unpaid interest  thereon.  Each date that a payment hereunder is due
shall be  referred to as  "Payment  Date".  All  payments  of  principal  and/or
interest  shall be paid no later than 3:00 p.m., New York City time on the dates
set forth Above;  provided,  however,  that the Borrower  shall be entitled to a
fifteen (15) day period ("Grace Period") in which to make each such payment (and
interest shall accrue during such Grace Period at the rates per annum  specified
herein).

         Interest on the outstanding  Principal Balance shall be payable in cash
or shares of Common  Stock,  par value $0.001 per share,  of the  Borrower  (the
"Common  Stock"  or  "Common  Shares")  at the  Borrower's  option  at the  then
applicable  Conversion  Price (as such term is  defined  in Section 5 below) and
shall accrue  commencing on the date hereof and shall  continue until payment in
full of the outstanding Principal Balance has been made. The Borrower shall only
be permitted to issue shares of its Common Stock in payment of accrued  interest
if the shares to be issued  are, as of the date of such  issuance,  are duly and
validly  authorized and issued,  fully paid and  nonassessable,  freely tradable
shares  of  the  Common  Stock,   registered  for  resale  in  the  open  market
transactions on a registration  statement,  which  registration  statement shall

                                       2
<PAGE>

then be  effective  under the  Securities  Act of 1933,  as amended (the "Act").
Notwithstanding  the  foregoing,  at least ten (10) days  prior to each  Payment
Date,  the  Borrower  will send  written  notice to the Holder of the  estimated
interest amount to be paid on the Payment Date and the manner (cash or shares of
Common Stock) in which such interest shall be paid. The interest so payable will
be paid to the person in whose name this Note (or one or more predecessor Notes)
is registered on the records of the Borrower regarding  registration of the Note
(the "Note  Register").  Each such payment  shall be made in lawful money of the
United States of America by wire transfer of immediately  available funds of the
Borrower payable to Holder as follows:

Bank:             Bank of New York
Address:          350 5th Avenue, New York City, NY
ABA no.:          021-000-018
Account name:     Krieger and Prager LLP
Account no.:      637-1657965
Reference:        Shaar Fund - escrow


         or at such other address as the Holder shall from time to time indicate
by written notice to the Borrower.

         This  Note  may not be  prepaid,  in  whole  or in  part,  prior to the
Maturity Date.

         By  acceptance  of this Note,  the Holder  agrees that it will promptly
deliver  and  surrender  this Note to the  Borrower  upon full  payment  thereof
(including  interest and fees), and that it will promptly notify the Borrower of
any  disposition  of the Note and of the name and address of the  transferee  of
this Note. All of the agreements of the Borrower and the other terms of the Loan
Documents and the Exchange Agreement are incorporated  herein by reference as if
the same were  fully set forth in this Note.  Terms  used in this Note,  but not
otherwise defined shall have the meanings given to such terms in the Certificate
of Designation of Series I Convertible  Preferred Stock of the Borrower ("Series
I Preferred Stock").

         This Note is subject to the following additional provisions:

         1. Events of Default.  Any of the following  events which occur and are
continuing shall constitute an "Event of Default":  (a) if the Borrower fails to
make any payment of any principal or interest under this Note on a Payment Date,
including  the allowance  for the Grace  Period;  (b) if a receiver,  trustee or
other such  official is appointed for the Borrower,  or if any  proceedings  are
commenced  by or against  the  Borrower  under any  bankruptcy,  reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation law or
statute  of the  federal  government  or  any  state  government  and,  if  such
proceedings  are  instituted  against the Borrower,  and (i) the Borrower by any
action or failure to act indicates his approval of,  consent to or  acquiescence
therein;  (ii) an order  shall be entered  approving  the  petition  or granting
relief  in  such  proceeding  or  (iii)  such  proceeding  remains  undismissed,
undischarged  or unbonded for a period of  forty-five  (45) days;  (c) except as

                                       3
<PAGE>

hereinafter  provided,  if the Borrower  breaches any covenant set forth in this
Note or any of the Loan  Documents  and such breach is not cured  within  thirty
(30) days; (d) if Borrower voluntarily files for protection under any applicable
bankruptcy  or  insolvency  statutes;  (e) if Borrower  shall  default under any
obligations relating to (i) the Exchange Agreement,  (ii) the shares of Series I
Preferred Stock,  (iii) the Securities  Purchase Agreement entered into on March
15, 2000 with  Holder,  (iv) any  warrants  exercisable  for Common Stock of the
Borrower issued to or held by Holder,  or (v) any existing  Registration  Rights
Agreement to which Holder is a party; (f) any representation or warranty made or
deemed made by a Borrower or any subsidiary of Borrower (a  "Subsidiary") in any
agreement  between or among the Borrower and/or such  Subsidiary and Holder,  or
which is contained in any  certificate,  document,  opinion,  financial or other
statement furnished at any time under or in connection therewith, shall prove to
have been incorrect in any material  respect on or as of the date made or deemed
made; (g) either Borrower or any Subsidiary  shall: (i) fail to pay any material
indebtedness,  as the case may be, or any interest or premium thereon,  when due
(whether by scheduled maturity,  required  prepayment,  acceleration,  demand or
otherwise);  or (ii) fail to perform or observe any material  term,  covenant or
condition  on its part to be  performed  or  observed  under  any  agreement  or
instrument  relating to any such indebtedness,  when required to be performed or
observed,  if the effect of such failure to perform or observe is to accelerate,
or to permit the acceleration of, after the giving of notice or passage of time,
or both, the maturity of such  indebtedness;  or any such indebtedness  shall be
declared  to be due and  payable,  or  required  to be prepaid  (other than by a
regularly scheduled required prepayment),  prior to the stated maturity thereof;
or (iii)  fail to make any  payment  due under or  otherwise  fail to perform or
observe any covenant or obligation contained in the Shaar Guaranty; (h) Borrower
or any  Subsidiary  shall  generally  not,  or be unable  to, or shall  admit in
writing its  inability  to, pay its debts as such debts  become  due;  (i) there
shall occur a loss, theft,  damage or destruction of any material portion of the
tangible  assets of a  Borrower  or a  Subsidiary  for which  there is either no
insurance coverage or for which, in the reasonable  opinion of Holder,  there is
insufficient  insurance  coverage;  (j) other than as a result of or inaction on
the part of the Holder,  Holder  shall fail to have a perfected  first  priority
security  interest  in,  except for the  Patents in foreign  jurisdictions,  the
Collateral (as defined in the Shaar Security Agreement); or (k) (i) the Borrower
challenges,  disputes  or denies  the right of the  Holder  hereof to effect the
conversion  of the  Principal  Balance or shares of Series I Preferred  Stock or
dividends  thereon  into Common  Shares or  otherwise  dishonors  or rejects any
Conversion Notice delivered in accordance with Section 6 or (ii) any third party
commences any lawsuit or  proceeding  or otherwise  asserts any claim before any
court or  public or  governmental  authority  which  seeks to  challenge,  deny,
enjoin, limit, modify, delay or dispute the right of the Holder hereof to effect
the  conversion of the Principal  Balance or any accrued  interest  thereon,  or
shares of Series I Preferred Stock or dividends  thereon,  into Common Shares (a
"Blockage  Claim"),  and such  Blockage  Claim shall remain in effect and not be
resolved for a period of more than 90 days.  Upon the  occurrence of an Event of
Default,  the entire  Principal  Balance and all unpaid accrued interest of this
Note shall,  at the Holder's  option,  become  immediately  due and payable upon
written notice thereof (other than in the case of an Event of Default  described
in  clauses  (b) and (d) above in which case the entire  Principal  Balance  and
accrued  interest shall become  immediately due and payable without any required
written notice to the Borrower. Notwithstanding the foregoing, in the event of a
violation of Section  1(g)(i) or (ii) above,  such violation shall not result in
an Event of Default hereunder and the Holder shall have no right to exercise the
remedies  set  forth  herein  if (1) the  Borrower  has  entered  into a written
agreement with the party to whom it is indebted,  pursuant to which,  such party
agrees  to  forbear  from  exercising  any  remedy  available  to it under  such
indebtedness  and (ii) such  agreement  remains in effect.  The  Borrower  shall
promptly  provide the Holder with a copy of any such  Forbearance  Agreement and
all amendments or modifications thereto.

                                       4
<PAGE>

         2. [Reserved]

         3. Covenants of Borrower.  Borrower hereby covenants and agrees that it
will  promptly,  upon becoming  aware of the existence of any condition or event
which  constitutes  an Event of  Default  hereunder,  deliver a  written  notice
specifying the nature and period of existence  thereof and what action  Borrower
is taking (and proposes to take) with respect thereto.

         4.   Representations   and   Warranties   of  Borrower.   The  Borrower
acknowledges  and agrees that, based upon advice received from its legal counsel
after  such  counsel  reviewed  certain  "No-Action"  letters  which  it  deemed
relevant,  this Note,  for the  purposes of and  pursuant to Rule  144(d)(3)(i),
promulgated  under the Act,  shall be deemed to have been  acquired  at the same
time as the Original  Shaar Note,  and that the shares of Common Stock  issuable
upon conversion hereof shall be deemed,  by reason of Rule  144(d)(3)(ii) of the
Act to have been  acquired at the same time as the Original  Shaar Note and that
upon issuance of such shares,  the Holder shall be entitled to immediately  sell
such shares under Rule 144. In the event the Holder is prohibited  from publicly
selling any shares of Common  Stock  issued  upon  conversion  of the  Principal
Balance, the Borrower shall promptly use its commercially  reasonable efforts to
register such shares pursuant to an effective  registration statement permitting
their resale under the Act.

         5.  Conversion;   Conversion  Price.  At  the  option  of  the  Holder,
outstanding Principal Balance may be converted, either in whole or in part, into
Common Shares (calculated as to each such conversion to the nearest 1/100th of a
share)  at any time and from  time to time at a  conversion  price  per share of
Common Stock (the "Conversion Price") equal to the lesser of (i) $.0285 (subject
to adjustment for any  stock-split or stock  combination to occur after the date
hereof) or (ii) the average of the closing  bid prices of one Common  Share,  as
reported on the OTC Bulletin Board ("OTCBB") or the principal  national security
exchange  or  quotation  system on which  such  security  is quoted or listed or
admitted to trading,  for the ten Trading Days prior to a  Conversion  Date (the
"Market Price");  provided, if such security is not quoted or listed or admitted
to trading on the OTCBB or any national  securities  exchange,  the Market Price
shall be the 50% of the  average  closing  bid  prices of such  security  on the
over-the-counter  market,  as reported by Bloomberg  LP, or a similar  generally
accepted reporting service, for the ten Trading Days prior to a Conversion Date.
For purposes  hereof,  "Trading  Day" means any day on which (a)  purchases  and
sales  of  securities  authorized  for  quotation  on the  OTCBB or the over the
counter  market are reported  thereon,  (b) no event which results in a material
suspension  or  limitation  of trading of the Common  Shares on the OTCBB or the
over the counter market has occurred and (c) at least one bid for the trading of
Common Shares is reported on the OTCBB or the over the counter market .

         The number of shares of Common  Stock due upon  conversion  of all or a
portion of the  Principal  Balance  shall be (i) the  portion  of the  Principal
Balance divided by (ii) the applicable Conversion Price.

         Within  two  Business  Days  of the  occurrence  of a  Valuation  Event
(hereinafter  defined),  the Borrower  shall send notice  thereof to the Holder.
Notwithstanding  anything to the contrary contained herein, if a Valuation Event
occurs  during any Valuation  Period,  the Holder may convert some or all of the
Principal  Balance,  at its sole  option,  at a  Conversion  Price  equal to the
Current Market Price on any Trading Day during the Valuation Period.

                                       5
<PAGE>

         For purposes of this Section 5, a "Valuation Event" shall mean an event
in which the Borrower takes any of the following actions:

         (a) subdivides or combines its Capital Shares;

         (b) makes any distribution on its Capital Shares;

         (c) issues any  additional  Capital  Shares  (the  "Additional  Capital
Shares"),  otherwise  than as provided in the  foregoing  Sections 5(a) and 5(b)
above,  at a price per share  less,  or for other  consideration  lower than the
Current Market Price in effect  immediately prior to such issuances,  or without
consideration,  except for issuances under (A) employee benefit plans consistent
with those presently in effect, (B) presently outstanding  warrants,  options or
convertible securities and (C) in connection with an acquisition or merger where
the Board of  Directors  of the  Borrower  determines  in good  faith  that such
Additional Capital Shares are not being issued for consideration  lower than the
Current Market Price on the date of such issuance;

         (d) issues any  warrants,  options or other rights to subscribe  for or
purchase  any  Additional  Capital  Shares  if the  price  per  share  for which
Additional  Capital  Shares may at any time  thereafter be issuable  pursuant to
such  warrants,  options or other rights  shall be less than the Current  Market
Price on the date of such issuance;

         (e)  issues  any  securities   convertible   into  or  exchangeable  or
exercisable  for Additional  Capital Shares if the  consideration  per share for
which Additional  Capital Shares may at any time thereafter be issuable pursuant
to the terms of such convertible,  exchangeable or exercisable  securities shall
be less than the Current Market Price on the date of such issuance;

         (f) announces or effects a Fundamental Corporate Change;

         (g) makes any  distribution  of its assets or evidences of indebtedness
to the holders of its Capital  Shares as a dividend in  liquidation or by way of
return of capital or other than as a dividend payable out of earnings or surplus
legally  available  for the payment of  dividends  under  applicable  law or any
distribution to such holders made in respect of the sale of all or substantially
all of the Borrower's assets (other than under the circumstances provided for in
the foregoing Sections 5(a) through 5(e)); or

         (h) takes any  action  affecting  the  number  of  Outstanding  Capital
Shares,  other than an action  described in any of the  foregoing  Sections 5(a)
through 5(g) hereof,  inclusive,  which in the opinion of the Holder, determined
in good  faith,  would have a  material  adverse  effect  upon the rights of the
Holder at the time of a conversion  of the  Principal  Balance or is  reasonably
likely to result in a decrease in the Market Price.

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<PAGE>

         6. Exercise of Conversion Privilege.

         (a) Conversion of the Principal  Balance may be exercised,  in whole or
in part, by the Holder by  transmitting  via facsimile an executed and completed
Conversion  Notice,  in the form attached  hereto as Exhibit A, to the Borrower.
Each date on which a  Conversion  Notice is  transmitted  via  facsimile  to the
Borrower in accordance with the provisions of this Section 6 shall  constitute a
"Conversion  Date".  The Borrower  shall  convert  such amount of the  Principal
Balance and issue the Common Stock,  and all voting and other rights  associated
with the  beneficial  ownership  of the Common Stock shall vest with the Holder,
effective as of the  Conversion  Date at the time  specified  in the  Conversion
Notice.  The  Conversion  Notice  also  shall  state  the  name or  names  (with
addresses)  of the Persons who are to become the holders of the Common  Stock in
connection with such  conversion.  If such  conversion  would convert the entire
remaining  Principal  Balance of this  Note,  the  Holder  shall  deliver to the
Borrower the original Note being  converted no later than five (5) business days
after the delivery of the Conversion  Notice.  As promptly as practicable  after
the receipt of the  Conversion  Notice as  aforesaid,  but in any event not more
than five Business Days after the Borrower's  receipt of such Conversion Notice,
the Borrower shall (i) issue the Common Stock in accordance  with the provisions
of this  Agreement,  and (ii)  utilize the DWAC system or cause to be mailed for
delivery by overnight  courier to the Holder (x) a certificate or certificate(s)
representing  the  number of Common  Shares to which the Holder is  entitled  by
virtue of such  conversion and (y) cash, as provided in Section 7, in respect of
any fraction of a Common Share issuable upon such  conversion.  Such  conversion
shall be deemed to have been effected at the time at which the Conversion Notice
indicates and at such time the rights of the Holder of the Note, as such,  shall
cease and the Person or Persons in whose name or names the Common Stock shall be
issuable  shall be deemed to have  become the holder or holders of record of the
Common  Shares  represented  thereby and all voting and other rights  associated
with the beneficial ownership of such Common Shares shall at such time vest with
such  Person or Persons.  The  Conversion  Notice  shall  constitute  a contract
between  the  Holder and the  Borrower,  whereby  the Holder  shall be deemed to
subscribe  for the number of Common  Shares which it will be entitled to receive
upon such conversion and, in payment and satisfaction of such  subscription (and
for any cash  adjustment  to which it is  entitled  pursuant  to Section  7), to
surrender  that  portion  of the  Note  and to  release  the  Borrower  from all
liability thereon. No cash payment aggregating less than $1.00 shall be required
to be given unless specifically requested by the Holder.

         (b) The Holder shall be entitled to exercise its  conversion  privilege
notwithstanding  the  commencement  of any case under 11 U.S.C.  ss. 101 et seq.
(the  "Bankruptcy  Code").  The  Borrower  hereby  waives to the fullest  extent
permitted any rights to relief it may have under 11 U.S.C. ss. 362 in respect of
the conversion of the Note. The Borrower agrees,  without cost or expense to the
Holder,  to take or consent to any and all action necessary to effectuate relief
under 11 U.S.C. ss. 362.

         7. Fractional Shares. No fractional Common Shares or scrip representing
fractional Common Shares shall be issued upon conversion of the Note. Instead of
any fractional  Common Shares which  otherwise would be issuable upon conversion
of the  Note,  the  Borrower  shall pay a cash  adjustment  in  respect  of such
fraction in an amount equal to the same fraction.

         8. Adjustments to Conversion Price. Except with respect to issuances of
Capital  Shares in connection  with an  acquisition or merger where the Board of
Directors of the Borrower  determines in good faith that such Capital Shares are
not being issued for  consideration  lower than the Current  Market Price on the
date of  such  issuance,  for so long as the  obligations  under  the  Note  are

                                       7
<PAGE>

outstanding,  if the Borrower  issues and sells  pursuant to an  exemption  from
registration  under the  Securities Act (A) Common Shares at a purchase price on
the date of  issuance  thereof  that is lower  than the  Conversion  Price,  (B)
warrants or options with an exercise price on the date of issuance  thereof that
is lower  than the  Conversion  Price for the  Holder on such  date,  except for
warrants or options issued  pursuant to employee  benefit plans  consistent with
those presently in effect,  employee stock option  agreements or stock incentive
agreements of the Borrower,  or (C)  convertible,  exchangeable  or  exercisable
securities  with a right to exchange at lower than the Current  Market  Price on
the  date of  issuance  or  conversion,  as  applicable,  of  such  convertible,
exchangeable or exercisable  securities,  except for stock option  agreements or
stock incentive agreements, then on any date on which the Conversion Price shall
be determined,  the Conversion  Price shall be reduced by an amount equal to the
amount by which  the  purchase  price,  exercise  price or  exchange  price,  as
applicable,  is lower than the  Conversion  Price or Current  Market  Price,  as
applicable, multiplied by a fraction the denominator of which is the outstanding
principal amount of this Note at the time of the adjustment and the numerator of
which is the sum of (A) the aggregate  number of (i) Common Shares,  in the case
of (A) above,  (ii)  Common  Shares  into  which the  warrants  or  options  are
exchangeable  into, in the case of (B) above,  or (iii) equity  securities  into
which the  convertible or exchangeable  securities are exercisable  into, in the
case of (C) above,  multiplied by (B) the Conversion Price, in each case, with a
maximum adjustment equal to the applicable  discount  triggering such adjustment
pursuant to this Section 8.

         9. Certain Conversion Limitations.

         (a) Notwithstanding  anything herein to the contrary,  the Holder shall
not have the right,  and the Borrower shall not have the obligation,  to convert
all or any portion of the Principal Balance (and the Borrower shall not have the
right to pay interest on the Principal  Balance in shares of Common  Stock,  but
such interest shall continue to accrue until payment thereof in shares of Common
Stock will not violate the terms  hereof) if and to the extent that the issuance
to the Holder of shares of Common  Stock  upon such  conversion  (or  payment of
interest) would result in the Holder being deemed the "beneficial owner" of more
than 5% of the then  Outstanding  shares of Common  Stock  within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended,  and the rules
promulgated thereunder.

         (b)  Notwithstanding  anything  herein to the  contrary,  if and to the
extent that, on any date (the "Section 16 Determination  Date"),  the holding by
the  Holder of the Note would  result in the  Holder's  becoming  subject to the
provisions  of Section  16(b) of the  Exchange Act in virtue of being deemed the
"beneficial  owner"  of more than 10% of the then  Outstanding  shares of Common
Stock, then the Holder shall not have the right, and the Borrower shall not have
the obligation,  to convert all or any portion of the Principal Balance (and the
Borrower  shall not have the right to pay interest on the  Principal  Balance in
shares of Common Stock, but such interest shall continue to accrue until payment
thereof in shares of Common  Stock will not violate  the terms  hereof) as shall
cause such Holder to be deemed the beneficial owner of more than 10% of the then
Outstanding  shares of Common Stock  during the period  ending 60 days after the
Section 16 Determination Date.

         10.  Merger;  Consolidation.  If,  for as  long as  this  Note  remains
outstanding, the Borrower enters into a merger (other than where the Borrower is
the surviving entity) or consolidation with another  corporation or other entity

                                       8
<PAGE>

or a sale or transfer of all or substantially  all of the assets of the Borrower
to another person  (collectively,  a "Sale"),  the Borrower will require, in the
agreements  reflecting such  transaction,  that the surviving  entity  expressly
assume the obligations of the Borrower hereunder.

         11. Adjustments.

         (a) In case of any stock split or reverse stock split,  stock dividend,
reclassification of the Common Stock, recapitalization, merger or consolidation,
or like capital adjustment  affecting the Common Stock of the Borrower (each, an
"Adjustment"),  the Conversion  Rate in effect at the time of the effective date
for such Adjustment shall be  proportionally  adjusted so that the Holder of the
Note  which is  converted  after  such date shall be  entitled  to  receive  the
aggregate  number and kind of shares which,  if this Note had been  converted by
the Holder immediately prior to such date, the Holder would have owned upon such
conversion  and been  entitled  to receive  upon such  Adjustment  (and for such
purposes the Holder shall, to the extent  relevant,  be deemed to have converted
this Note  immediately  prior to the record date or the  effective  date, as the
case may, for the Adjustment). For example, if the Borrower declares a 2:1 stock
dividend or stock split and the Conversion Price immediately prior to the record
date for such  Adjustment  was $1.00 per share,  the adjusted  Conversion  Price
immediately after the Adjustment would be $.50 per share. Such adjustment may be
made  successively if there is more than one  Adjustment.  In all other respects
the  provisions  of this  Section  shall be  applied  in a fair,  equitable  and
reasonable  manner so as to give  effect,  as nearly as may be, to the  purposes
hereof.  A rights offering to  stockholders  shall be deemed a stock dividend to
the extent of the bargain purchase element of the rights. The provisions of this
Section  11 shall  similarly  apply to  successive  reclassifications,  changes,
consolidations, mergers, mandatory share exchanges and sales and transfers.

         (b) In the event the Borrower  shall  propose to take any action of the
type described in Section 5, 8, 10, 11 and 12, the Borrower shall give notice to
Holder,  which notice shall specify the record date, if any, with respect to any
such action and the approximate date on which such action is to take place. Such
notice  shall  also set  forth  such  facts  with  respect  thereto  as shall be
reasonably  necessary  to indicate the effect of such action (to the extent such
effect may be known at the date of such notice) on the Conversion  Price and the
number,  kind or class of shares or other  securities or property which shall be
deliverable  upon  conversion of the Note. In the case of any action which would
require the fixing of a record date,  such notice shall be given at least twenty
(20) days  prior to the date so fixed,  and in case of all  other  action,  such
notice  shall be given at least  fifteen  (15) days  prior to the taking of such
proposed action.  Failure to give such notice, or any defect therein,  shall not
affect the legality or validity of any such action.

         12. Spin-Offs.  If, for any reason,  prior to payment in full hereunder
or the  conversion  of this Note in full,  the  Borrower  spins off or otherwise
divests  itself of a part of its business or  operations or disposes all or of a
part of its assets in a transaction  (the "Spin Off") in which the Borrower does
not receive  compensation  for such business,  operations or assets,  but causes
securities  of  another  entity  (the  "Spin  Off  Securities")  to be issued to
security  holders  of the  Borrower,  then the  Borrower  shall  cause (i) to be
reserved Spin Off  Securities  equal to the number thereof which would have been

                                       9
<PAGE>

issued to the Holder had all of the Holder's unconverted Note outstanding on the
record date (the "Record  Date") for  determining  the amount and number of Spin
Off  Securities  to  be  issued  to  security   holders  of  the  Borrower  (the
"Outstanding  Note") been  converted  as of the close of business on the trading
day  immediately  before the Record Date (the "Reserved  Spin Off Shares"),  and
(ii) to be issued to the  Holder  on the  conversion  of all or any of the Note,
such amount of the Reserved  Spin Off Shares equal to (x) the Reserved  Spin Off
Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of
the Note then being  converted,  and (II) the  denominator  is the amount of the
Note.

         13. Costs. The Borrower shall pay all documentary,  stamp,  transfer or
other  transactional taxes attributable to the issuance or delivery of shares of
Common Stock upon  conversion of the Note;  provided that the Borrower shall not
be  required  to pay any taxes  which may be payable in respect of any  transfer
involved in the  issuance or  delivery of any  certificate  for such shares in a
name other  than that of the  Holder in  respect of which such  shares are being
issued.

         14.  Reservation  of Shares.  The Borrower  shall at all times from and
after the date hereof  shall  maintain a  sufficient  number of shares of Common
Stock,  duly and validly  authorized  and  reserved  for issuance to satisfy the
conversion of this Note, the Series I Preferred Stock, the Shaar Warrant and all
other  warrants held by the Holder  (collectively,  the  "Warrants");  provided,
that, in no event shall the number of shares  reserved for such issuance be less
than  the  greater  of (a)  75,000,000  and (b)  115% of the  number  of  shares
necessary for the full conversion of this Note, the Series I Preferred Stock and
the Warrants. In addition to such other remedies as shall be available to Holder
hereunder,  the Borrower will take such corporate  action as may, in the opinion
of its counsel,  be necessary to increase the number of authorized  but unissued
shares  of Common  Stock to the  number of  shares  required  hereby,  including
without limitation,  using its best efforts to obtain the requisite  stockholder
approval necessary to increase the number of authorized shares of the Borrower's
Common Stock.

         15.  Representations  of Holder.Upon  conversion of all or a portion of
this  Note,  the  Holder  shall  confirm  in  writing,   in  a  form  reasonably
satisfactory  to the Borrower,  that the shares of Common Stock so purchased are
being acquired  solely for the Holder's own account and not as a nominee for any
other party, and that such Holder is an Accredited  Investor (as defined in Rule
501(a)  of  Regulation  D  promulgated   under  the  1933  Act).   The  Borrower
acknowledges  that  Holder's  duly  executed  certification  on  the  Notice  of
Conversion  is  satisfactory   confirmation  of  the  facts  set  forth  in  the
immediately  preceding sentence. If such Holder cannot make such representations
because  they would be  factually  incorrect,  it shall be a  condition  to such
Holder's  conversion  of all or a portion of the Note that the Borrower  receive
such other  representations  as the Borrower considers  reasonably  necessary to
assure the Borrower that the issuance of its securities  upon  conversion of the
Note shall not violate any United States or state securities laws.

         16.  Communications  and  Notices.  Except  as  otherwise  specifically
provided herein,  all communications and notices provided for in this Note shall
be sent by facsimile to:

                  If to the Holder, to:

                  The Shaar Fund Ltd.
                  c/o Maarten Robberts
                  SS&C Fund Services N.V.
                  Pareraweg 45
                  Curacao, Netherlands Antilles
                  Phone: (599-9) 434-3562
                  Fax: (599-9) 434-3560

                                       10
<PAGE>

                  with copies to:

                  Meltzer, Lippe, Goldstein & Breitstone, LLP
                  Attn:  Ira Halperin, Esq.
                  190 Willis Avenue
                  Mineola, NY 11501
                  Phone: (516) 747-0300
                  Fax: (516) 747-0653

                  and:

                  Levinson Capital Management
                  350 Fifth Avenue, Suite 2210
                  New York, NY 10018
                  Attention: Samuel D. Levinson
                  (212) 244-3576
                  (212) 395-0059

                  If to the Borrower, to:

                  Commodore Applied Technologies, Inc.
                  Attn: James DeAngelis
                  Chief Financial Officer
                  150 East 58th Street
                  Suite 3238
                  New York, New York 10155
                  Phone: (212) 308-5800
                  Fax: (212) 753-0731

         Notices sent by facsimile shall be deemed  received upon delivery.  The
Borrower and the Holder may from time to time change their respective addresses,
for  purposes  of this  Section  16, by  written  notice  to the other  parties;
provided,  however,  that notice of such  change  shall be  effective  only upon
receipt.

         17.  Governing  Law;  Jurisdiction.  This Note  shall be  construed  in
accordance  with and governed by the laws of the State of New York.  Each of the
parties  hereto  consents to the exclusive  jurisdiction  of the federal  courts
whose  districts  encompass any part of the City of New York or the state courts
of the State of New York sitting in the City of New York in connection  with any
dispute  arising  under this Note.  Each party  hereto  hereby  irrevocably  and
unconditionally  waives,  to the fullest  extent it may  effectively  do so, any

                                       11
<PAGE>

defense of an  inconvenient  forum or improper venue to the  maintenance of such
action or proceeding in any such court and any right of  jurisdiction on account
of its place of  residence  or  domicile.  Each  party  hereto  irrevocably  and
unconditionally  consents  to the  service  of any and all  process  in any such
action or  proceeding in such courts by the mailing of copies of such process by
certified or  registered  airmail at its address  specified  herein.  Each party
hereto agrees that a final  judgment in any such action or  proceeding  shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.

         18.  Assignment.  This Note shall bind and inure to the  benefit of the
respective successors and assigns of the parties hereto;  provided that Borrower
shall not be permitted to assign its obligations hereunder.

         19.  Security.  This Note is  secured  inter  alia,  (i) by a  security
interest in certain  assets of the  Borrower  and CASI as set forth in the Shaar
Security  Agreement and (ii) by a certain Patent Collateral  Assignment dated as
of June 13, 2001 from Borrower to Holder, as amended and restated as of the date
hereof. Borrower agrees and acknowledges that all of its payment and performance
obligations under this Note constitute "Obligations", as such term is defined in
the Shaar  Security  Agreement.  Subject  to the  consent of the  Holder,  which
consent shall not be unreasonably withheld, the Borrower shall, upon at not less
than fifteen (15) days prior written  notice to the Holder,  be permitted to (x)
amend the  "Collateral"  described on Security  Agreement and Patent  Collateral
Assignment to reflect  patents  abandoned by the Borrower in the ordinary course
of its  business  and (y)  grant  a  first  priority  security  interest  on new
equipment  obtained by the  Borrower  or CASI in  connection  with an  equipment
leasing arrangement entered into after the date hereof in a transaction approved
by the Board of Directors of the Borrower or CASI, as the case may be.

         20.  Enforcement and Waiver.  No failure or delay on the part of Holder
in exercising any of its rights, powers or privileges hereunder shall operate as
a waiver thereof,  nor shall a single or partial  exercise  thereof preclude any
other or further  exercise of any right,  power or  privilege.  Borrower  hereby
waives  diligence,  presentment,  demand  for  payment,  notice of  non-payment,
presentment,  notice of dishonor, protest, notice of protest or any other notice
in connection with the delivery, acceptance,  performance or enforcement of this
Note.

         21.  Modification.  This Note may not be changed or terminated  orally,
nor may any of its  provisions  be  waived,  except by an  agreement  in writing
signed by the party against whom  enforcement  of such change or  termination is
sought.

         22. Remedies. In case any one or more Events of Default shall occur and
be continuing, Holder may proceed to protect and enforce its rights by an action
at law, suit in equity or other appropriate  proceeding.  Borrower shall pay all
reasonable costs of collection when incurred,  including  reasonable  attorneys'
fees.

         23.  Collection  Costs.  In the event that the Holder  shall place this
Note in the hands of an attorney for  collection  during the  continuance of any
Event of Default,  the  Borrower  shall  further be liable to the Holder for all
costs and expenses (including  reasonable attorneys' fees) which may be incurred
by the Holder in enforcing this Note, which amounts may, at the Holder's option,
be added to the principal hereof.

                                       12
<PAGE>

         24. Waiver of Jury Trial.  THE BORROWER  EXPRESSLY  WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND,  ACTION OR CAUSE OF ACTION (A) ARISING UNDER
THIS NOTE OR ANY OTHER INSTRUMENT,  DOCUMENT OR AGREEMENT  EXECUTED OR DELIVERED
IN  CONNECTION  HEREWITH,  OR  (B) IN ANY  WAY  CONNECTED  WITH  OR  RELATED  OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES  HERETO OR ANY OF THEM WITH RESPECT TO
THIS NOTE OR ANY OTHER INSTRUMENT,  DOCUMENT OR AGREEMENT  EXECUTED OR DELIVERED
IN CONNECTION  HEREWITH,  OR THE TRANSACTIONS  RELATED HERETO OR THERETO IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE;  AND THE BORROWER HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY,  AND THAT ANY PARTY MAY FILE AN ORIGINAL  COUNTERPART  OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN  EVIDENCE OF THIS WAIVER OF THE RIGHT TO TRIAL
BY JURY.

         25.  Prior  Notes.  The  Borrower  agrees  and  acknowledges  that  the
indebtedness  of the  Borrower  evidenced  by the  Original  Shaar  Note and the
Milford Note (together,  the "Prior Notes")  remains  outstanding as of the date
hereof, and this Convertible Secured Note: (a) is exchanged for and re-evidences
the indebtedness evidenced by the Prior Notes; (b) is given in substitution for,
and not in payment of the Prior  Notes;  and (c) is not intended to discharge or
constitute a novation of the Prior Notes.

                            [Signature Page Follows]



                                       13
<PAGE>



         IN WITNESS  WHEREOF,  the Borrower  has executed  this Note on the date
first above written.


                                    COMMODORE APPLIED TECHNOLOGIES, INC.



                                    By: /s/ James M. DeAngelis
                                    --------------------------
                                    James M. DeAngelis, Chief Financial Officer


                                       14
<PAGE>

                                    EXHIBIT A


                         [FORM OF NOTICE OF CONVERSION]

                                                              _________ __, 200_
Commodore Applied Technologies, Inc.
150 East 58th Street
Suite 3238
New York, New York 10155

Attn: Chief Financial Officer

         The undersigned,  owner of Commodore Applied Technologies,  Inc.'s (the
"Borrower")  Convertible  Secured Note, due April 12, 2009 (the "Note"),  hereby
exercises its option to convert  $___________  principal amount of the Note into
shares of the common stock,  $.001 par value per share, of the Borrower ("Common
Stock"), in accordance with the terms of the Note.

         The undersigned hereby instructs the Borrower to convert the portion of
the Note  specified  above into shares of Common  Stock at  Conversion  Price in
accordance with the provisions of Section 5 of the Note. The undersigned directs
that (i) the Common Stock issuable and  certificates  therefor  deliverable upon
conversion,  and (ii) if so delivered by the Holder, the Note, recertificated in
the principal  amount,  if any, not being  surrendered  for  conversion  hereby,
together with any check in payment for fractional Common Stock, be issued in the
name of and  delivered  to the  undersigned  unless  a  different  name has been
indicated  below.  All  capitalized  terms used and not defined  herein have the
respective meanings assigned to them in the Note.

         By delivering this conversion  notice, the undersigned owner represents
and  warrants to the Borrower  that the shares of Common Stock so purchased  are
being acquired  solely for the Holder's own account and not as a nominee for any
other party, and that such Holder is an Accredited  Investor (as defined in Rule
501(a) of Regulation D promulgated under the 1933 Act).

                                                HOLDER:



                                       15