Document:

EXHIBIT 10.5

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                      CHANGE IN CONTROL SEVERANCE AGREEMENT

         THIS CHANGE IN CONTROL SEVERANCE AGREEMENT  ("Agreement")  entered into
this 1st day of January 2000 ("Effective Date"), by and between Guaranty Federal
Savings Bank (the "Bank") and James E. Haseltine (the "Executive").

         WHEREAS,  the Executive is currently  employed by the Bank as President
and is experienced in the business of the Bank; and

         WHEREAS, the parties desire by this writing to set forth the rights and
responsibilities  of the Bank and Executive if the Bank should  undergo a change
in control (as defined hereinafter in the Agreement) after the Effective Date.

         NOW, THEREFORE, it is AGREED as follows:

         1.  Employment.  The  Executive  is  employed  in the  capacity  as the
President  of the Bank.  The  Executive  shall  render such  administrative  and
management services to the Bank and Guaranty Federal Bancshares, Inc. ("Parent")
as are currently  rendered and as are customarily  performed by persons situated
in a similar executive  capacity.  The Executive's other duties shall be such as
the Board of Directors  for the Bank (the "Board of  Directors"  or "Board") may
from time to time reasonably  direct,  including  normal duties as an officer of
the Bank and the Parent.

         2.  Term of  Agreement.  The  term of this  Agreement  shall be for the
period  commencing  on the  Effective  Date and ending  thirty-six  (36)  months
thereafter ("Term").

         3.  Termination  of Employment  in  Connection  with or Subsequent to a
Change in Control.

         (a) Notwithstanding any provision herein to the contrary,  in the event
of the involuntary  termination of Executive's  employment under this Agreement,
absent Just Cause, in connection with, or within  twenty-four (24) months after,
any Change in Control of the Bank or Parent,  Executive  shall be paid an amount
equal to two (2.0)  times the  Executives  "base  amount"  as defined in Section
280G(b)(3)  of the  Internal  Revenue  Code of  1986  ("Code"),  and  the  costs
associated  with  maintaining  coverage  under the  Bank's  medical  and  dental
insurance  reimbursement  plans  similar  to  that  in  effect  on the  date  of
termination of employment for a period of two years  thereafter.  Said sum shall
be paid, at the option of  Executive,  either in one (1) lump sum not later than
the date of such termination of employment or in periodic payments over the next
24 months, as if Executive's employment had not been terminated. Notwithstanding
the forgoing,  all sums payable hereunder shall be reduced in such manner and to
such extent so that no such payments made  hereunder  when  aggregated  with all
other  payments to be made to the  Executive  by the Bank or the Parent shall be
deemed an "excess parachute payment" in accordance with Section 280G of the Code
and be subject to the excise tax  provided at Section  4999(a) of the

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Code.  The term  "change in  control"  shall  refer to (i) the sale of all, or a
material  portion,  of the assets of the Bank or the Parent;  (ii) the merger or
recapitalization of the Bank or the Parent whereby the Bank or the Parent is not
the surviving  entity;  (iii) a change in control of the Bank or the Parent,  as
otherwise  defined  or  determined  by  the  Office  of  Thrift  Supervision  or
regulations promulgated by it; or (iv) the acquisition,  directly or indirectly,
of the  beneficial  ownership  (within the meaning of that term as it is used in
Section  13(d)  of the  Securities  Exchange  Act of  1934  and  the  rules  and
regulations  promulgated thereunder) of twenty-five percent (25%) or more of the
outstanding  voting  securities of the Bank or the Parent by any person,  trust,
entity or group.  This  limitation  shall not apply to the purchase of shares by
underwriters  in connection  with a public  offering of Bank or Parent stock, or
the  purchase of shares of up to 25% of any class of  securities  of the Bank or
Parent by a  tax-qualified  employee stock benefit plan which is exempt from the
approval  requirements,  set forth under 12 C.F.R.  ss.574.3(c)(1)(vi) as now in
effect or as may hereafter be amended. The term "person" refers to an individual
or  a  corporation,   partnership,  trust,  association,  joint  venture,  pool,
syndicate, sole proprietorship, unincorporated organization or any other form of
entity not specifically listed herein.

              (b)  Notwithstanding  any other provision of this Agreement to the
contrary,  Executive may voluntarily  terminate his employment  within 24 months
following  a change  in  control  of the Bank or  Parent,  and  Executive  shall
thereupon  be entitled to receive the payment  described in Section 3(a) of this
Agreement,  upon the occurrence,  or within 120 days  thereafter,  of any of the
following  events,  which have not been consented to in advance by the Executive
in writing: (i) if Executive would be required to move his personal residence or
perform his principal  executive functions more than thirty-five (35) miles from
the Executive's  primary office as of the signing of this Agreement;  (ii) if in
the organizational  structure of the Bank, Executive would be required to report
to a person or persons  other than the Board of Directors of the Bank;  (iii) if
the Bank should fail to maintain  Executive's base  compensation in effect as of
the date of the Change in Control  and the  existing  employee  benefits  plans,
including  material fringe benefit,  stock option and retirement  plans; (iv) if
Executive  would be  assigned  duties  and  responsibilities  other  than  those
normally associated with his position as referenced at Section 1, herein; (v) if
Executive's  responsibilities  or  authority  have  in any way  been  materially
diminished or reduced;  or (vi) if Executive would not be reelected to the Board
of Directors of the Bank or the Parent.

         4.       Other Changes in Employment Status.

         Except as provided for at Section 3, herein, the Board of Directors may
terminate  the  Executive's  employment  at any time with or without  Just Cause
within its sole discretion. This Agreement shall not be deemed to give Executive
any right to be  retained  in the  employment  or  service  of the  Bank,  or to
interfere  with  the  right  of the  Bank to  terminate  the  employment  of the
Executive at any time. The Executive shall have no right to receive compensation
or other benefits for any period after  termination for Just Cause.  Termination
for "Just Cause" shall include termination  because of the Executive's  personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated

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duties,  willful  violation of any law, rule or  regulation  (other than traffic
violations or similar  offenses) or final  cease-and-desist  order,  or material
breach of any provision of the Agreement.

         5.       Regulatory Exclusions.

         (a) If the  Executive is removed  and/or  permanently  prohibited  from
participating  in the  conduct of the Bank's  affairs by an order  issued  under
Sections  8(e)(4) or 8(g)(1) of the Federal  Deposit  Insurance Act ("FDIA") (12
U.S.C.  1818(e)(4) and (g)(1)), all obligations of the Bank under this Agreement
shall terminate, as of the effective date of the order, but the vested rights of
the contracting parties shall not be affected.

         (b) If the Bank is in default (as  defined in Section  3(x)(1) of FDIA)
all obligations  under this Agreement shall terminate as of the date of default,
but this  paragraph  shall not  affect  any  vested  rights  of the  contracting
parties.

         (c) All obligations under this Agreement shall be terminated, except to
the extent  determined that  continuation of this Agreement is necessary for the
continued  operation  of the Bank:  (i) by the  Director of the Office of Thrift
Supervision  ("Director of OTS"),  or his or her designee,  at the time that the
Federal  Deposit  Insurance  Corporation  ("FDIC")  enters into an  agreement to
provide assistance to or on behalf of the Bank under the authority  contained in
Section  13(c)  of  FDIA;  or (ii) by the  Director  of the  OTS,  or his or her
designee,  at the time  that the  Director  of the OTS,  or his or her  designee
approves a supervisory  merger to resolve  problems  related to operation of the
Bank or when  the  Bank is  determined  by the  Director  of the OTS to be in an
unsafe or unsound condition. Any rights of the parties that have already vested,
however, shall not be affected by such action.

         (d) If the Executive is suspended  and/or  temporarily  prohibited from
participating  in the  conduct of the Bank's  affairs by a notice  served  under
Section  8(e)(3) or (g)(1) of the FDIA (12 U.S.C.  1818(e)(3)  and (g)(1)),  the
Bank's  obligations  under the  Agreement  shall be  suspended as of the date of
service, unless stayed by appropriate proceedings.  If the charges in the notice
are  dismissed,  the Bank may within its discretion (i) pay the Executive all or
part of the compensation  withheld while its contract obligations were suspended
and (ii)  reinstate  (in whole or in part)  any of its  obligations  which  were
suspended.

         (e) Notwithstanding  anything herein to the contrary, any payments made
to the Executive  pursuant to the Agreement,  or otherwise,  shall be subject to
and  conditioned  upon  compliance  with 12 USC ss.1828(k)  and any  regulations
promulgated thereunder.

         6.       Successors and Assigns.

         (a) This  Agreement  shall inure to the benefit of and be binding  upon
any corporate or other  successor of the Bank which shall  acquire,  directly or
indirectly,   by  merger,   consolidation,   purchase  or   otherwise,   all  or
substantially all of the assets or stock of the Bank or Parent.

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         (b) The Executive  shall be precluded  from assigning or delegating his
rights or duties  hereunder  without first  obtaining the written consent of the
Bank.

         7.  Amendments.  No amendments or additions to this Agreement  shall be
binding  upon the  parties  hereto  unless  made in  writing  and signed by both
parties, except as herein otherwise specifically provided.

         8.  Applicable  Law. This  agreement  shall be governed by all respects
whether as to validity, construction, capacity, performance or otherwise, by the
laws of the State of  Missouri,  except to the extent that  Federal law shall be
deemed to apply.

         9.  Severability.  The  provisions  of this  Agreement  shall be deemed
severable and the  invalidity  or  unenforceability  of any provision  shall not
affect the validity or enforceability of the other provisions hereof.

         10. Arbitration. Any controversy or claim arising out of or relating to
this  Agreement,  or the breach  thereof,  shall be settled  by  arbitration  in
accordance  with the rules then in effect of the district office of the American
Arbitration  Association  ("AAA")  nearest to the home  office of the Bank,  and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof,  except to the extent  that the parties  may  otherwise  reach a mutual
settlement of such issue.  Further, the settlement of the dispute to be approved
by the Board of the Bank may include a provision  for the  reimbursement  by the
Bank  to  the  Executive  for  all  reasonable  costs  and  expenses,  including
reasonable  attorneys' fees, arising from such dispute,  proceedings or actions,
or the Board of the Bank or the Parent may authorize such  reimbursement of such
reasonable  costs and  expenses  by separate  action  upon a written  action and
determination   of  the  Board  following   settlement  of  the  dispute.   Such
reimbursement shall be paid within ten (10) days of Executive  furnishing to the
Bank or Parent  evidence,  which may be in the form,  among other  things,  of a
canceled check or receipt, of any costs or expenses incurred by Executive.

         11. Confidential  Information.  The Executive  acknowledges that during
his or her  employment  he or she will  learn and have  access  to  confidential
information  regarding the Bank and the Parent and its customers and  businesses
("Confidential Information"). The Executive agrees and covenants not to disclose
or use for his or her own benefit, or the benefit of any other person or entity,
any such  Confidential  Information,  unless  or until  the Bank or tthe  Parent
consents to such disclosure or use or such information  becomes common knowledge
in the  industry or is otherwise  legally in the public  domain.  The  Executive
shall  not  knowingly  disclose  or  reveal  to  any  unauthorized   person  any
Confidential  Information  relating to the Bank, the Parent, or any subsidiaries
or affiliates,  or to any of the businesses  operated by them, and the Executive
confirms that such  information  constitutes the exclusive  property of the Bank
and the Parent.  The  Executive  shall not  otherwise  knowingly  act or conduct
himself  (a)  to the  material  detriment  of the  Bank  or the  Parent,  or its
subsidiaries, or affiliates, or (b) in a manner which is inimical or contrary to
the interests of the Bank or the Parent.  Executive acknowledges and agrees that
the  existence  of this  Agreement  and its  terms  and  conditions  constitutes
Confidential  Information of the Bank, and the

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Executive agrees not to disclose the Agreement or its contents without the prior
written consent of the Bank.  Notwithstanding  the foregoing,  the Bank reserves
the right in its sole  discretion  to make  disclosure  of this  Agreement as it
deems  necessary or  appropriate  in compliance  with its  regulatory  reporting
requirements.  Notwithstanding  anything herein to the contrary,  failure by the
Executive  to comply  with the  provisions  of this  Section  may  result in the
immediate  termination of the Agreement  within the sole discretion of the Bank,
disciplinary  action against the Executive taken by the Bank,  including but not
limited to the  termination  of  employment  of the  Executive for breach of the
Agreement and the  provisions of this  Section,  and other  remedies that may be
available in law or in equity.

         12. Entire Agreement. This Agreement together with any understanding or
modifications  thereof as agreed to in writing by the parties,  shall constitute
the entire agreement between the parties hereto.  This Agreement  supercedes any
prior written Employment Agreement or Severance Agreements between the Executive
and the Bank or the Parent.

                               [End of Agreement]

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         In  addition  to the change in  control  severance  agreement  with Mr.
Haseltine, Guaranty Federal Savings Bank entered into identical agreements as of
the same date with the following nine employees of the bank:  William  Williams,
Bruce Winston,  Kevin Bell,  Larry Cruzan,  Dana Elwell,  Thomas  Howard,  Jerry
Graham,  Carla Green, and Lorene Thomas. Each agreement provides for the payment
of two times the  employee's  "base  amount"  (as  defined in 26 U.S.C.  Section
280G(b)(3)) in the event of a change in control.NEITHER THE  WARRANTS  REPRESENTED  BY THIS  CERTIFICATE  NOR THE
     SHARES ISSUABLE UPON EXERCISE  HEREOF HAVE BEEN REGISTERED  UNDER
     THE SECURITIES ACT OF 1933, AS AMENDED.  NEITHER THE WARRANTS NOR
     SUCH  SHARES  MAY  BE  OFFERED  OR  SOLD  EXCEPT  PURSUANT  TO AN
     EFFECTIVE  REGISTRATION STATEMENT UNDER SUCH ACT, OR AN EXEMPTION
     FROM REGISTRATION UNDER SUCH ACT.

                      COMMODORE APPLIED TECHNOLOGIES, INC.

               WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK

No. 99-1                                                          250,000 Shares

     THIS CERTIFIES  that, for value  received,  AVALON RESEARCH GROUP INC. (the
"Holder"),  is entitled to subscribe  for and purchase  from  COMMODORE  APPLIED
TECHNOLOGIES,  INC., a Delaware corporation (the "Company"),  upon the terms and
conditions set forth herein, at any time after the date hereof,  and before 5:00
P.M. on November  30,  2004,  New York City time (the  "Exercise  Period"),  Two
Hundred  Fifty  Thousand  (250,000)  shares,  par value $.001 per share,  of the
Company  ("Common  Stock"),  at an  exercise  price of  $1.1963  per share  (the
"Exercise Price"). As used herein the term "this Warrant" shall mean and include
this Warrant and any Warrant or Warrants  hereafter  issued as a consequence  of
the exercise or transfer of this Warrant in whole or in part.

     The number of shares of Common Stock  issuable upon exercise of the Warrant
(the "Warrant  Shares") and the Exercise Price may be adjusted from time to time
as hereinafter set forth.

     1.  This  Warrant  may be  exercised  during  the  Exercise  Period  by the
surrender  of this  Warrant  (with the form of  election  at the end hereof duly
executed)  to the  Company  at its  office as set forth in the form of  election
attached  hereto,  or at such  other  place as is  designated  in writing by the
Company,  together with a certified or bank cashier's check payable to the order
of the Company in an amount equal to the Exercise Price multiplied by the number
of respective Warrant Shares for which this Warrant is being exercised.

     2. Upon the exercise of the Holder's rights to purchase Warrant Shares, the
Holder shall be deemed to be the holder of record of the Warrant Shares issuable
upon such exercise, notwithstanding that the transfer books of the Company shall
then be closed or certificates  representing  such Warrant Shares shall not then
have been actually  delivered to the Holder.  As soon as  practicable  after the
exercise of this Warrant and payment of the Exercise Price by the

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Holder,  a certificate or certificates for the Warrant Shares issuable upon such
exercise,  registered in the name of the Holder or its designee, shall be issued
by the Company to the Holder.  If the Warrant  should be exercised in part only,
the Company shall, upon surrender of this Warrant for cancellation,  execute and
deliver a new Warrant evidencing the right of the Holder to purchase the balance
of the Warrant Shares (or portions thereof) subject to purchase hereunder.

     3. The  Company  shall be entitled  to treat the  registered  holder of any
Warrant on the Warrant  Register as the Owner in fact  thereof for all  purposes
and shall not be bound to recognize  any equitable or other claim to or interest
in such Warrant on the part of any other person, and shall not be liable for any
registration or transfer of Warrants which are registered or to be registered in
the name of a  fiduciary  or the  nominee of a  fiduciary  unless  made with the
actual  knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such  registration  or transfer,  or with the knowledge of such facts
that its  participation  therein  amounts to bad faith.  This  Warrant  shall be
transferable  only on the  books  of the  Company  upon  delivery  thereof  duly
endorsed by the Holder or by his duly authorized attorney or representative,  or
accompanied  by proper  evidence of  succession,  assignment,  or  authority  to
transfer.  In all cases or transfer  by an  attorney,  executor,  administrator,
guardian, or other legal representative,  duly authenticated  evidence of his or
its authority shall be produced.  Upon any registration of transfer, the Company
shall  deliver a new  Warrant or Warrants to the person  entitled  thereto.  The
Company  shall have no  obligation to cause  Warrants to be  transferred  on its
books to any person if, in the opinion of counsel to the Company,  such transfer
does not comply with the  provisions of the  Securities  Act of 1933, as amended
(the "Act"), and the rules and regulations promulgated thereunder.

     4. The Company  shall at all times  reserve and keep  available  out of its
authorized  and unissued  Common Stock,  solely for the purpose of providing for
the exercise of the rights to purchase all Warrant  Shares  granted  pursuant to
the Warrants, such number of shares of Common Stock as shall, from time to time,
be sufficient  therefor.  The Company  covenants that all shares of Common Stock
issuable upon exercise of this Warrant,  upon receipt by the Company of the full
Exercise Price therefor, shall be validly issued, fully paid, nonassessable, and
free of preemptive rights.

     5. (a) In case the  Company  shall at any time after the date the  Warrants
were first issued (i) declare a dividend on the outstanding Common Stock payable
in shares of its capital  stock,  (ii) subdivide the  outstanding  Common Stock,
(iii) combine the outstanding  Common Stock into a smaller number of shares,  or
(iv) issue any shares of its  capital  stock by  reclassification  of the Common
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation),  then, in each case,
the Exercise  Price,  and the number of Warrant Shares issuable upon exercise of
this  Warrant,  in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination, or reclassification,  shall
be proportionately adjusted so that the Holder after such time shall be entitled
to receive the aggregate  number and kind of shares  which,  if such Warrant had
been  exercised  immediately  prior to such time,  he would have owned upon such
exercise and

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been entitled to receive by virtue of such dividend,  subdivision,  combination,
or  reclassification.  Such adjustment shall be made  successively  whenever any
event listed above shall occur.

     (b) No  adjustment  in  the  Exercise  Price  shall  be  required  if  such
adjustment is less than $.05; provided,  however,  that any adjustments which by
reason of this  Section 5 are not  required to be made shall be carried  forward
and taken into account in any subsequent adjustment. All calculations under this
Section 5 shall be made to the nearest cent or to the nearest  one-thousandth of
a share, as the case may be.

     (c) In any case in which this Section 5 shall require that an adjustment in
the Exercise Price be made effective as of a record date for a specified  event,
the Company may elect to defer,  until the occurrence of such event,  issuing to
the Holder,  if the Holder  exercised  this Warrant after such record date,  the
shares of Common Stock,  if any,  issuable upon such exercise over and above the
shares of Common Stock, if any,  issuable upon such exercise on the basis of the
Exercise Price in effect prior to such adjustment;  provided,  however, that the
Company shall deliver to the Holder a due bill or other  appropriate  instrument
evidencing  the  Holder's  right to  receive  such  additional  shares  upon the
occurrence of the event requiring such adjustment

     (d) Whenever  there shall be an  adjustment  as provided in this Section 5,
the Company shall promptly cause written notice thereof to be sent by registered
mail,  postage prepaid,  to the Holder, at its address as it shall appear in the
Warrant Register,  which notice shall be accompanied by an officer's certificate
setting forth the number of Warrant Shares purchasable upon the exercise of this
Warrant and the Exercise  Price after such  adjustment and setting forth a brief
statement of the facts requiring such  adjustment and the  computation  thereof,
which officer's  certificate shall be conclusive  evidence of the correctness of
any such adjustment absent manifest error.

     6. (a) In case of any  consolidation  with or merger of the Company with or
into  another  corporation  (other than a merger or  consolidation  in which the
Company is the  surviving or  continuing  corporation),  or in case of any sale,
lease,  or conveyance to another  corporation  of the property and assets of any
nature of the Company as an  entirety  or  substantially  as an  entirety,  such
successor,  leasing,  or purchasing  corporation,  as the case may be, shall (i)
execute  with the Holder an agreement  providing  that the Holder shall have the
right  thereafter to receive upon  exercise of this Warrant  solely the kind and
amount  of  shares  of  stock  and  other  securities,  property,  cash,  or any
combination thereof receivable upon such consolidation,  merger, sale, lease, or
conveyance  by a holder of the  number of shares of Common  Stock for which this
Warrant  might  have been  exercised  immediately  prior to such  consolidation,
merger,  sale,  lease,  or conveyance and (ii) make  effective  provision in its
certificate  of  incorporation  or  otherwise,  if  necessary,  to  effect  such
agreement. Such agreement shall provide for adjustments which shall be as nearly
equivalent as practicable to the adjustments in Section 5.

     (b) In case of any reclassification or change of the shares of Common Stock
issuable upon exercise of this Warrant (other than a change in par value or from
no par  value to a  specified  par  value,  or as a result of a  subdivision  or
combination, but including any change in

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the  shares  into two or more  classes or series of  shares),  or in case of any
consolidation  or merger of another  corporation  into the  Company in which the
Company is the continuing  corporation and in which there is a  reclassification
or change (including a change to the right to receive cash or other property) of
the shares of Common  Stock  (other  than a change in par value,  or from no par
value to a specified par value,  or as a result of a subdivision or combination,
but  including  any change in the shares  into two or more  classes or series of
shares),  the Holder shall have the right thereafter to receive upon exercise of
this Warrant solely the kind and amount of shares of stock and other securities,
property,    cash,   or   any   combination   thereof   receivable   upon   such
reclassification,  change, consolidation, or merger by a holder of the number of
shares  of Common  Stock  for  which  this  Warrant  might  have been  exercised
immediately prior to such reclassification,  change,  consolidation,  or merger.
Thereafter,  appropriate  provision shall be made for adjustments which shall be
as nearly equivalent as practicable to the adjustments in Section 5.

     (c) The  above  provisions  of this  Section  6 shall  similarly  apply  to
successive  reclassifications  and  changes  of shares  of  Common  Stock and to
successive consolidations, mergers, sales, leases, or conveyances.

     7. In case at any time the Company shall propose:

          (a) to pay any dividend or make any  distribution  on shares of Common
     Stock in shares of Common Stock or make any other distribution  (other than
     regularly  scheduled cash  dividends  which are not in a greater amount per
     share than the most  recent  such cash  dividend)  to all holders of Common
     Stock; or

          (b) to issue any rights,  warrants, or other securities to all holders
     of Common Stock entitling them to purchase any additional  shares of Common
     Stock or any other rights, warrants, or other securities; or

          (c) to effect any  reclassification or change of outstanding shares of
     Common Stock, or any consolidation,  merger,  sale, lease, or conveyance of
     property, described in Section 6; or

          (d) to effect  any  liquidation,  dissolution,  or  winding-up  of the
     Company; or

          (e) to take any other  action which would cause an  adjustment  to the
     Exercise Price;

then,  and in any one or more of such  cases,  the  Company  shall give  written
notice  thereof,  by  registered  mail,  postage  prepaid,  to the Holder at the
Holder's address as it shall appear in the Warrant Register,  mailed at least 15
days prior to (i) the date as of which the holders of record of shares of Common
Stock to be  entitled  to  receive  any  such  dividend,  distribution,  rights,
warrants,  or other securities are to be determined,  (ii) the date on which any
such   reclassification,   change  of   outstanding   shares  of  Common  Stock,
consolidation, merger, sale, lease, conveyance

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of  property,  liquidation,  dissolution,  or  winding-up  is expected to become
effective,  and the date as of which it is  expected  that  holders of record of
shares of Common Stock shall be entitled to exchange their shares for securities
or other property,  if any,  deliverable upon such  reclassification,  change of
outstanding shares, consolidation,  merger, sale, lease, conveyance of property,
liquidation,  dissolution, or winding-up, or (iii) the date of such action which
would require an adjustment to the Exercise Price.

     8. (a) If, at any time prior to the expiration of the Exercise Period,  the
Company  proposes  to file with the  Securities  and  Exchange  Commission  (the
"Commission")  a registration  statement under the Act on any form (other than a
registration  statement on Form S-4,  Form S-8, or any  successor  form) for the
general  registration  of  securities  to be  sold  for  cash  (a  "Registration
Statement")  with  respect  to any  shares of Common  Stock,  either for its own
account  or for the  account of any  stockholder  of the  Company,  it will give
written notice (a "Piggyback  Notice") to the Holder at least 30 days before the
initial filing of such Registration Statement,  which Piggyback Notice shall set
forth the  intended  method of  disposition  of the  securities  proposed  to be
registered.  The  Piggyback  Notice  shall  offer to include in such filing such
aggregate number of Warrant Shares held by the Holder as the Holder may request.
The Holder shall advise the Company in writing  within 10 days after the date of
receipt of the Piggyback  Notice from the Company  whether the Holder intends to
have any Warrant Shares  registered  under the Registration  Statement,  setting
forth the number of such Warrant Shares for which registration is requested. The
Company shall  thereupon  include in such  Registration  Statement the aggregate
number  of  Warrant  Shares  held by the  Holder  for which  registration  is so
requested, subject to the next sentence. If a Registration Statement involves an
underwritten  offering  and the  managing  underwriter  advises  the  Company in
writing that, in its opinion,  the number of securities requested to be included
in such  Registration  Statement  exceeds  the number  which can be sold in such
offering without adversely  affecting the offering,  the Company will include in
such  Registration  Statement the number of such securities which the Company is
so  advised  can be  sold in  such  offering  without  adversely  affecting  the
offering,  determined  as follows:  (i) first,  the  securities  proposed by the
Company to be sold for it own  account;  and (ii)  second,  any  Warrant  Shares
requested  to be  included  in such  registration  by the  Holder  and any other
securities  of the Company pro rata among the holders  thereof  requesting  such
registration on the basis of the number of shares of such  securities  requested
to be included by such holders. As used herein,  "Registrable  Securities" shall
mean the  Warrant  Shares  that  have not been  previously  sold  pursuant  to a
registration statement or Rule 144 promulgated under the Act.

     (b) In the  event of a  registration  pursuant  to the  provisions  of this
Section  8, the  Company  shall use its best  efforts  to cause the  Registrable
Securities  so  registered  to be  registered  or  qualified  for sale under the
securities or blue sky laws of such  jurisdictions  as the Holder may reasonably
request; provided, however, that the Company shall not be required to qualify to
do  business  in any  state by reason  of this  Section  8(b) in which it is not
otherwise required to qualify to do business.

     (c) The Company shall keep  effective  any  registration  or  qualification
contemplated  by this Section 8 and shall from time to time amend or  supplement
each applicable

                                       5
<PAGE>

registration statement,  preliminary prospectus, final prospectus,  application,
document,  and  communication  for such  period of time as shall be  required to
permit the Holder to complete the offer and sale of the  Registrable  Securities
covered  thereby.  The  Company  shall in no event be  required to keep any such
registration  or  qualification  in effect for a period in excess of nine months
from  the date on which  the  Holder  is  first  free to sell  such  Registrable
Securities; provided, however, that, if the Company is required to keep any such
registration or  qualification  in effect with respect to securities  other than
the  Registrable  Securities  beyond such  period,  the Company  shall keep such
registration  or  qualification  in  effect  as it  relates  to the  Registrable
Securities  for so long as such  registration  or  qualification  remains  or is
required to remain in effect in respect of such other securities.

     (d) In the  event of a  registration  pursuant  to the  provisions  of this
Section 8, the Company  shall furnish to the Holder such number of copies of the
Registration  Statement and of each  amendment and  supplement  thereto (in each
case,  including  all  exhibits),  such  reasonable  number  of  copies  of each
prospectus  contained in such  registration  statement  and each  supplement  or
amendment thereto  (including each preliminary  prospectus),  all of which shall
conform to the requirements of the Act and the rules and regulations thereunder,
and such other documents, as the Holder may reasonably request to facilitate the
disposition of the Registrable Securities included in such registration.

     (e) In the  event of a  registration  pursuant  to the  provisions  of this
Section 8, the Company shall furnish the Holder of any Registrable Securities so
registered with an opinion of its counsel (reasonably  acceptable to the Holder)
to the effect that (i) the registration statement has become effective under the
Act and no order suspending the  effectiveness  of the  registration  statement,
preventing or suspending the use of the registration statement,  any preliminary
prospectus,  any final  prospectus,  or any amendment or supplement  thereto has
been issued,  nor has the  Commission or any securities or blue sky authority of
any  jurisdiction  instituted or threatened  to institute any  proceedings  with
respect to such an order,  (ii) the  registration  statement and each prospectus
forming  a  part  thereof  (including  each  preliminary  prospectus),  and  any
amendment or supplement thereto,  complies as to form with the Act and the rules
and  regulations  thereunder,  and (iii) such  counsel has no  knowledge  of any
material  misstatement  or  omission  in  such  registration  statement  or  any
prospectus,  as  amended  or  supplemented.  Such  opinion  shall also state the
jurisdictions  in which  the  Registrable  Securities  have been  registered  or
qualified for sale pursuant to the provisions of Section 8(b).

     (f) In the  event  of a  registration  pursuant  to the  provision  of this
Section 8, the  Company  shall  enter  into a  cross-indemnity  agreement  and a
contribution agreement,  each in customary form, with each underwriter,  if any,
and, if requested,  enter into an underwriting agreement containing conventional
representations,  warranties,  allocation  of expenses,  and  customary  closing
conditions,  including, but not limited to, opinions of counsel and accountants'
cold  comfort  letters,  with  any  underwriter  who  acquires  any  Registrable
Securities.

     (g) In the  event of a  registration  pursuant  to the  provisions  of this
Section 8:

                                       6
<PAGE>

          (i)  The  Holder  shall   furnish  to  the  Company  in  writing  such
     appropriate  information  (relating to the Holder and the intention of such
     Holder as to proposed methods of sale or other disposition of its shares of
     Common  Stock)  and  the  identity  of and  compensation  to be paid to any
     proposed  underwriters  to be  employed  in  connection  therewith  as  the
     Company,  any  underwriter,  or  the  Commission  or any  other  regulatory
     authority may request;

          (ii) The  Holder  shall  enter  into the usual and  customary  form of
     underwriting  agreement  agreed to by the Company and any underwriter  with
     respect to any such offering, if required,  and such underwriting agreement
     shall contain the customary  rights of indemnity  between the Company,  the
     underwriters, and the Holder;

          (iii) The Holder  shall agree that he shall  execute,  deliver  and/or
     file with or supply the Company,  any  underwriters,  the Commission and/or
     any  state or  other  regulatory  authority  such  information,  documents,
     representations,  undertakings and/or agreements necessary to carry out the
     provisions of the registration covenants contained in this Section 8 and/or
     to effect  the  registration  or  qualification  of his or its  Registrable
     Securities  under the Act  and/or  any of the laws and  regulations  of any
     state of governmental instrumentality;

          (iv) the Company's obligation to include any Registrable Securities in
     a registration  statement shall be subject to the written  agreement of the
     Holder thereof to offer such  securities in the same manner and on the same
     terms and  conditions  as the other  securities of the same class are being
     offered  pursuant to the registration  statement,  if such shares are being
     underwritten;

          (v) In the event  that all the  Registrable  Securities  have not been
     sold on or prior to the expiration of the period  specified in Section 8(c)
     above,  the  Company  may  de-register  by  post-effective   amendment  any
     Registrable Securities covered by the registration statement,  but not sold
     on or prior to such date. The Company agrees that it will notify the Holder
     of  Registrable  Securities  of the  filing  and  effective  date  of  such
     post-effective amendment; and

          (vi) The Holder agrees that upon  notification by the Company that the
     prospectus  in  respect to any public  offering  covered by the  provisions
     hereof is in need of revision,  such Holder shall  immediately upon receipt
     of such  notification  (x)  cease to offer  or sell any  securities  of the
     Company which must be accompanied by such  prospectus,  (y) return all such
     prospectuses  in such Holder's  hands to the Company,  and (z) not offer or
     sell any securities of the Company until such Holder has been provided with
     a current  prospectus  and the Company  has given such Holder  notification
     permitting such Holder to resume offers and sales.

     (h) The Company agrees that until all the Registrable  Securities have been
sold under a  registration  statement  or pursuant to Rule 144 under the Act, it
shall  keep  current  in filing  all  reports,  statements  and other  materials
required to be filed with the  Commission to permit  holders of the  Registrable
Securities to sell such securities under Rule 144.

                                       7
<PAGE>

     9. (a) Subject to the  conditions  set forth below,  the Company  agrees to
indemnify  and hold  harmless the Holder,  its  officers,  directors,  partners,
employees,  agents and counsel,  and each person,  if any, who controls any such
person  within the  meaning  of  Section  15 of the Act or Section  20(a) of the
Securities  Exchange Act of 1934,  as amended  (the  "Exchange  Act"),  from and
against  any and  all  loss,  liability,  charge,  claim,  damage,  and  expense
whatsoever (which shall include,  for all purposes of this Section 9, but not be
limited  to,  attorneys'  fees  and any and all  reasonable  expense  whatsoever
incurred in  investigating,  preparing,  or  defending  against any  litigation,
commenced or threatened,  or any claim whatsoever,  and any and all amounts paid
in settlement of any claim or litigation), as and when incurred, arising out of,
based upon, or in connection  with:  (i) any untrue  statement or alleged untrue
statement  of a  material  fact  contained  (A) in any  registration  statement,
preliminary  prospectus,  or final  prospectus (as from time to time amended and
supplemented),  or any amendment or supplement thereto,  relating to the sale of
any of the Registrable  Securities,  or (B) in any application or other document
or  communication  (in this  Section 9  collectively  called  an  "application")
executed  by or on behalf  of the  Company  or based  upon  written  information
furnished by or on behalf of the Company filed in any  jurisdiction  in order to
register or qualify any of the  Registrable  Securities  under the securities or
blue sky laws thereof or filed with the Commission or any  securities  exchange;
or (ii) any omission or alleged omission to state a material fact required to be
stated in any  document  referenced  in clause (A) or (B) above or  necessary to
make the statements  therein not  misleading,  unless such statement or omission
was made in reliance upon and in conformity with written  information  furnished
to the  Company  with  respect  to such  Holder by or on  behalf of such  person
expressly for inclusion in any registration  statement,  preliminary prospectus,
or  final  prospectus,  or  any  amendment  or  supplement  thereto,  or in  any
application,  as the case may be;  or (iii) any  breach  of any  representation,
warranty,  covenant,  or agreement of the Company contained in this Warrant. The
foregoing  agreement  to  indemnify  shall be in addition to any  liability  the
Company may otherwise have, including liabilities arising under this Warrant.

     If any  action  is  brought  against  the  Holder  or any of its  officers,
directors,  partners,  employees, agents, or counsel, or any controlling persons
of such person (an  "indemnified  party") in respect of which  indemnity  may be
sought against the Company pursuant to the foregoing paragraph, such indemnified
party or parties shall promptly notify the Company in writing of the institution
of such action (but the failure so to notify  shall not relieve the Company from
any liability other than pursuant to this Section 9(a),  except to the extent it
may have been  prejudiced  in any  material  respect  by such  failure)  and the
Company  shall  promptly  assume  the  defense  of such  action,  including  the
employment of counsel  (reasonably  satisfactory  to such  indemnified  party or
parties) and payment of expenses.  Such indemnified  party or parties shall have
the right to employ its or their own counsel in any such case,  but the fees and
expenses of such counsel  shall be at the expense of such  indemnified  party or
parties  unless the  employment  of such counsel  shall have been  authorized in
writing by the  Company in  connection  with the  defense of such  action or the
Company shall not have promptly employed counsel reasonably satisfactory to such
indemnified  party or parties to have  charge of the  defense of such  action or
such indemnified party or parties shall have reasonably concluded that there may
be one

                                       8
<PAGE>

or more legal defenses  available to it or them or to other indemnified  parties
which are different from or additional to those available to the Company, in any
of which  events  such fees and  expenses  shall be borne by the Company and the
Company  shall not have the right to direct the defense of such action on behalf
of the  indemnified  party or  parties.  Anything  in this  Section  9(a) to the
contrary notwithstanding,  the Company shall not be liable for any settlement of
any such claim or action effected without its written  consent,  which shall not
be  unreasonably  withheld.  The Company  shall not,  without the prior  written
consent of each  indemnified  party that is not  released as  described  in this
sentence, settle or compromise any action, or permit a default or consent to the
entry of judgment in or otherwise  seek to terminate  any pending or  threatened
action,  in respect of which indemnity may be sought  hereunder  (whether or not
any indemnified party is a party thereto),  unless such settlement,  compromise,
consent,  or termination  includes an unconditional  release of each indemnified
party from all liability in respect of such action.  The Company agrees promptly
to notify  the  Holder of the  commencement  of any  litigation  or  proceedings
against the Company or any of its officers or directors in  connection  with the
sale of any Registrable  Securities or any preliminary  prospectus,  prospectus,
registration  statement,  or amendment or supplement thereto, or any application
relating to any sale of any Registrable Securities.

     (b) The Holder  agrees to indemnify  and hold  harmless  the Company,  each
director of the  Company,  each officer of the Company who shall have signed any
registration  statement covering Registrable Securities held by the Holder, each
other person,  if any, who controls the Company within the meaning of Section 15
of the Act or Section  20(a) of the Exchange  Act,  and its or their  respective
counsel,  to the same extent as the foregoing  indemnity from the Company to the
Holder in Section 9(a),  but only with respect to  statements  or omissions,  if
any,  made in any  registration  statement,  preliminary  prospectus,  or  final
prospectus (as from time to time amended and supplemented),  or any amendment or
supplement  thereto,  or in any application,  in reliance upon and in conformity
with written information  furnished to the Company with respect to the Holder by
or on behalf of the Holder  expressly  for  inclusion  in any such  registration
statement,  preliminary  prospectus,  or final  prospectus,  or any amendment or
supplement  thereto,  or in any  application,  as the case may be. If any action
shall be brought against the Company or any other person so indemnified based on
any such registration statement, preliminary prospectus, or final prospectus, or
any amendment or supplement  thereto,  or in any application,  and in respect of
which  indemnity may be sought against the Holder pursuant to this Section 9(b),
the  Holder  shall have the rights  and  duties  given to the  Company,  and the
Company and each other  person so  indemnified  shall have the rights and duties
given to the indemnified parties, by the provisions of Section 9(a).

     (c) To provide for just and equitable  contribution,  if (i) an indemnified
party  makes  a claim  for  indemnification  pursuant  to  Section  9(a) or 9(b)
(subject  to the  limitations  thereof)  but it is  found  in a  final  judicial
determination,  not subject to further appeal, that such indemnification may not
be enforced in such case,  even though this  Agreement  expressly  provides  for
indemnification  in such case, or (ii) any  indemnified  or  indemnifying  party
seeks  contribution  under the Act,  the  Exchange  Act or  otherwise,  then the
Company (including for this purpose any contribution made by or on behalf of any
director of the Company, any officer of the

                                       9
<PAGE>

Company who signed any such registration  statement,  any controlling  person of
the Company, and its or their respective counsel), as one entity, and the Holder
of the  Registrable  Securities  included in such  registration in the aggregate
(including for this purpose any  contribution  by or on behalf of an indemnified
party), as a second entity, shall contribute to the losses, liabilities, claims,
damages,  and expenses  whatsoever  to which any of them may be subject,  on the
basis of relevant  equitable  considerations  such as the relative  fault of the
Company and such  Holder in  connection  with the facts  which  resulted in such
losses,  liabilities,  claims, damages, and expenses. The relative fault, in the
case of an untrue  statement,  alleged untrue  statement,  omission,  or alleged
omission,  shall be determined by, among other things,  whether such  statement,
alleged statement, omission, or alleged omission relates to information supplied
by the Company or by such Holder,  and the parties' relative intent,  knowledge,
access to  information,  and  opportunity to correct or prevent such  statement,
alleged  statement,  omission,  or alleged omission.  The Company and the Holder
agree that it would be unjust and  inequitable if the respective  obligations of
the Company and the Holder for  contribution  were determined by pro rata or per
capita allocation of the aggregate losses,  liabilities,  claims,  damages,  and
expenses (even if the Holder and the other  indemnified  parties were treated as
one entity for such purpose) or by any other method of allocation  that does not
reflect the equitable considerations referred to in this Section 9(c). No person
guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution  from any person who is not guilty of
such fraudulent misrepresentation. Anything in this Section 9(c) to the contrary
notwithstanding,  no party shall be liable for contribution  with respect to the
settlement of any claim or action  effected  without its written  consent.  This
Section 9(c) is intended to supersede any right to  contribution  under the Act,
the Exchange Act or otherwise.

     10.  The  issuance  of any  Warrant  Shares  or other  securities  upon the
exercise of this Warrant,  and the delivery of certificates or other instruments
representing  such shares or other  securities,  shall be made without charge to
the Holder for any tax or other charge in respect of such issuance.  The Company
shall not,  however,  be required to pay any tax which may be payable in respect
of any transfer  involved in the issue and delivery of any certificate in a name
other than that of the Holder and the Company  shall not be required to issue or
deliver any such certificate  unless and until the person or persons  requesting
the issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.

     11. Prior to the registration of the Warrant Shares under Section 8 hereof,
certificates  evidencing  the Warrant Shares issued upon exercise of the Warrant
shall bear the following legend:

     "THE  SHARES  REPRESENTED  BY  THIS  CERTIFICATE  HAVE  NOT  BEEN
     REGISTERED  UNDER THE  SECURITIES  ACT OF 1933, AS AMENDED.  SUCH
     SHARES MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
     REGISTRATION  STATEMENT  UNDER  SUCH ACT,  OR AN  EXEMPTION  FROM
     REGISTRATION UNDER SUCH ACT."

                                       10
<PAGE>

     12.  Upon  receipt of  evidence  satisfactory  to the  Company of the loss,
theft,  destruction,  or  mutilation  of any Warrant (and upon  surrender of any
Warrant  if  mutilated),  and upon  reimbursement  of the  Company's  reasonable
incidental expenses, the Company shall execute and deliver to the Holder thereof
a new Warrant of like date, tenor, and denomination.

     13. The  Holder of any  Warrant  shall not have,  solely on account of such
status, any rights of a stockholder of the Company,  either at law or in equity,
or to any notice of meetings of stockholders or of any other  proceedings of the
Company, except as provided in this Warrant.

     14. Any notice or other  communication  required or  permitted  to be given
hereunder  shall be in writing  and shall be mailed by  certified  mail,  return
receipt requested or sent by Federal Express, Express Mail, or similar overnight
delivery or courier  service or delivered (in person or by telecopy,  telex,  or
similar telecommunications equipment) against receipt to the party to whom it is
to be given, if sent to the Company,  at: 150 East 58th Street,  Suite 3400, New
York, New York 10155, Attention:  Assistant Secretary and General Counsel; or if
sent to the Holder,  at the  Holder's  address as it shall appear on the Warrant
Register;  or to such other address as the party shall have furnished in writing
in  accordance  with the  provisions  of this  Section  14.  Any notice or other
communication  given by  certified  mail  shall be  deemed  given at the time of
certification thereof, except for a notice changing a party's address which will
be deemed given at the time of receipt thereof.  Any notice given by other means
permitted  by this  Section  14 shall  be  deemed  given at the time of  receipt
thereof.

     15. This Warrant shall be binding upon the Company and its  successors  and
assigns  and shall  inure to the  benefit of the Holder and its  successors  and
assigns.

     16. This  Warrant  shall be construed  in  accordance  with the laws of the
State of New York applicable to contracts made and performed  within such State,
without regard to principles of conflicts of law.

                                       11
<PAGE>

     17. The Company  irrevocably  consents to the jurisdiction of the courts of
the  State  of New  York  and of any  federal  court  located  in such  State in
connection  with any action or  proceeding  arising  out of or  relating to this
Warrant, any document or instrument delivered pursuant to, in connection with or
simultaneously  with  this  Warrant,  or a breach  of this  Warrant  or any such
document or  instrument.  In any such action or  proceeding,  the Company waives
personal service of any summons, complaint or other process.

Dated: November 29, 1999            Commodore Applied Technologies, Inc.

                                    By:    /s/ Paul E. Hannesson
                                           -------------------------------------
                                    Name:  Paul E. Hannesson
                                    Title: President and Chief Executive Officer

                                       12
<PAGE>

                               FORM OF ASSIGNMENT

   (To be executed by the registered holder if such holder desires to transfer
                             the attached Warrant.)

     FOR VALUE RECEIVED,  ______________________________  hereby sells, assigns,
and transfers unto _____________________ a Warrant to purchase Shares, par value
$.001 per share,  of  Commodore  Applied  Technologies,  Inc.  (the  "Company"),
together  with  all  right,  title,  and  interest  therein,   and  does  hereby
irrevocably constitute and appoint ___________________ attorney to transfer such
Warrant on the books of the  Company,  with full power of  substitution.

Dated: ____________________

                                        Signature _____________________________

                                     NOTICE

     The signature on the foregoing  Assignment  must  correspond to the name as
written upon the face of this Warrant in every particular, without alteration or
enlargement or any change whatsoever.

                                       13
<PAGE>

To:  Commodore Applied Technologies, Inc.
     150 East 58th Street, Suite 3400
     New York, New York 10155

                              ELECTION TO EXERCISE

     The  undersigned  hereby  exercises  its rights to purchase  ______________
Warrant Shares covered by the within warrant and tenders payment herewith in the
amount of $_____________ in accordance with the terms thereof, and requests that
certificates for such securities be issued in the name of, and delivered to:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
                    (Print Name, Address and Social Security
                          or Tax Identification Number)

and,  if such  number of  Warrant  Shares  shall not be all the  Warrant  Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.

Dated:_____________________             Name __________________________________
                                                        (Print)

Address: ______________________________________________________________________

                                        _______________________________________
                                                     (Signature)

                                       14

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