CONVERTIBLE DEBENTURE RETIREMENT AGREEMENT

         CONVERTIBLE DEBENTURE RETIREMENT AGREEMENT dated as of February 1, 2000
(the  "Agreement"),  among the  entities  listed on  Schedule A attached  hereto
(referred  to  individually  as a  "Purchaser"  collectively  as  "Purchasers"),
SETTONDOWN  CAPITAL  INTERNATIONAL LTD. (the "Placement Agent" and together with
the  Purchasers,  referred  to  individually  as a "Holder" or  collectively  as
"Holders")  located at  Charlotte  House,  Charlotte  Street,  P.O. Box N. 9204,
Nassau,  Bahamas,  a corporation  organized  under the laws of the Bahamas,  and
DYNATEC  INTERNATIONAL,  INC., a corporation  incorporated under the laws of the
State of Utah,  and having its  principal  place of  business at 3820 West Great
Lakes Drive, Salt Lake City, Utah 84120 (the "Company").

                                    Recitals

         WHEREAS,  the parties to this Agreement  previously have entered into a
Convertible  Debenture and Private Equity Line of Credit  Agreement  dated as of
May 22, 1998 (the "Credit Agreement"),  a Registration Rights Agreement dated as
of May 15, 1998 (the "Registration  Rights Agreement"),  and an Escrow Agreement
dated as of May 15, 1998 (the "Escrow  Agreement,"  and together with the Credit
Agreement,  the Registration  Rights  Agreement,  and the other  instruments and
documents executed in connection therewith, the "Funding Agreements"); and

         WHEREAS,  pursuant to the Credit  Agreement,  the Company  caused to be
issued to the Purchasers  convertible debentures  ("Convertible  Debentures") of
the Company in the aggregate  principal amount of $1,500,000,  which Convertible
Debentures are subject to the terms and conditions  described therein and in the
Funding Agreements; and

         WHEREAS,  pursuant to the Credit  Agreement,  the Company  caused to be
issued to the Holders  the  Company's A Warrants  ("A  Warrants")  to purchase a
total of  300,000  shares of the  Company's  common  stock and the  Company's  B
Warrants ("B  Warrants") to purchase a total of 450,000  shares of the Company's
common stock (the A Warrants and the B Warrants are collectively  referred to in
this Agreement as the "Warrants"); and

         WHEREAS,  as  of  the  date  of  this  Agreement,  the  Purchasers  own
Convertible  Debentures in the aggregate  principal  amount of  $1,226,500;  the
principal  amount of  Convertible  Debentures  owned by each of the  Purchasers,
together with interest  accrued  thereon as of February 14, 2000, and the number
of  Warrants  owned by each of the  Holders is set forth on  Schedule B attached
hereto; and

         WHEREAS,  the  Company  and the  Holders  entered  into a  Modification
Agreement dated as of June 25, 1999 (the "Modification Agreement"),  pursuant to
which the parties agreed to certain  modifications to the Funding  Agreements as
set forth therein; and



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<PAGE>

         WHEREAS,  the Purchasers agreed to certain  amendments to the terms and
conditions  of  the  Modification  Agreement  pursuant  to an  Amendment  to the
Modification Agreement dated as of November 13, 1999; and

         WHEREAS, subject to the terms and conditions of this Agreement, (a) the
Company  desires to pay,  retire and cancel certain of the presently  issued and
outstanding  Convertible  Debentures and to pay or otherwise  obtain a waiver of
all of the interest  accrued  thereon and otherwise to satisfy and discharge all
of its  obligations to the Purchasers and the Placement  Agent under the Funding
Agreements,  (b) the  Purchasers  desire  to  have  certain  of the  Convertible
Debentures  owned by them retired and  cancelled  and (c) the Holders  desire to
tender to the Company for  cancellation all of the Warrants owned by them and to
amend the terms and conditions of the Funding Agreements as set forth below.

                                    Agreement

         NOW,  THEREFORE,  in consideration of the covenants and mutual promises
below  and  other  good  and  valuable  consideration,  the  receipt  and  legal
sufficiency  of which the  parties  acknowledge  by their  signatures  appearing
below,  and intending to be legally bound hereby,  the parties to this Agreement
hereby agree as follows:

         1.       Primary Terms of  Transaction.

                  1.1 Retirement of Convertible Debentures.  In consideration of
payment by the  Company to each of the  Purchasers  in the  amounts set forth on
Schedule B hereto,  which payment in the aggregate  shall consist of One Million
Five Hundred  Thousand  Dollars  (U.S.  $1,500,000)  (the "Cash  Payment"),  the
Purchasers,  and each of them,  shall  tender to the  Company  for  cancellation
Convertible  Debentures owned by each such Purchaser in the amounts set forth on
Schedule B hereto,  which  Convertible  Debentures each shall be marked "Paid or
Cancelled".  Each of the  Purchasers  shall  hold,  after  payment  of the  Cash
Payment, the principal amount of Convertible Debentures set forth opposite their
names on Schedule B (the "Residual Convertible Debentures").

                           (a)  Payment of Cash Payment.  The Cash Payment shall
         be paid to the Purchasers, c/o Grushko & Mittman IOLTA Account, Attn.
         Edward M. Grushko, Esq., Grushko & Mittman, P.C., 277 Broadway, Suite
         801, New York, New York  10007.  The Cash Payment shall be paid via
         wire transfer according to instructions to be provided by the
         Purchasers or their agent prior to Closing, as that term is defined in
         Section 2.

                           (b)  Conversion of Residual  Debentures.  At Closing,
         the  Purchasers  shall be  deemed  to have  converted  that  number  of
         Residual Convertible Debentures owned by each of them after the payment
         of the Cash Payment,  which amounts are set forth on Schedule B hereto.
         In  connection  with such  conversion,  the  Company  shall  deliver at
         Closing  certificates  representing shares of the Company's  restricted
         common  stock to each of the  Purchasers  in the  amounts  set forth on
         Schedule B (the "Residual Conversion Shares").



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<PAGE>

                           (c)  Debenture  Payoff  . As  of  the  Closing  Date,
         defined  below,  subject  to the  payment of the Cash  Payment  and the
         conversion of the Residual  Convertible  Debentures as described above,
         the Convertible  Debentures  shall be deemed paid in full and canceled,
         and all of the rights and obligations of the Purchasers and the Company
         under the Convertible Debentures shall automatically terminate.

                  1.2 Cancellation  of Warrants.  At Closing,  the Holders shall
surrender for  cancellation all of the Warrants issued and outstanding as of the
date hereof,  consisting of a total of A Warrants to purchase  300,000 shares of
the  Company's  common  stock and B Warrants to purchase  450,000  shares of the
Company's  common stock.  The number of Warrants owned by each of the Holders is
set forth on Schedule B.

                  1.3 Funding Agreements Terminated. As of the Closing Date, the
Funding  Agreements,  as such may have been  amended or modified to date,  shall
automatically  be and become  null and void and of no further  force and effect,
and all of the rights and  obligations  of the  Company and the Holders or their
successors  and  assigns  under  the  Funding  Agreements  shall   automatically
terminate.  Without  limiting the  generality  of the  foregoing  sentence,  the
parties hereto agree that (x) the Company may and should take such action as the
Company's management deems appropriate to withdraw the registration statement on
Form SB-2 that was filed with the U.S.  Securities and Exchange  Commission (the
"SEC") pursuant to the  Registration  Rights  Agreement,  and is pending but not
effective with the SEC as of the date of this  Agreement,  and the Company shall
have no obligation  whatsoever  with respect to  registration  of any securities
owned  by any of the  Holders,  and (y) the  Company's  performance  under  this
Agreement  shall  constitute  payment  or  discharge  of all  of  the  Company's
obligations under all of the Funding  Agreements,  including without limitation,
any  obligation  of the  Company  to pay any  liquidated  or  other  damages  or
penalties of any kind whatsoever otherwise payable to the Holders, regardless of
whether any such damages are accrued or liquidated as of the date hereof.

                  1.4 Releases.

                           (a) Release of the Company.  Each of the Holders, for
         themselves and their affiliates and assigns, hereby agrees to discharge
         and release the Company  and each of its  subsidiaries,  divisions  and
         affiliated  corporations,  each  of the  Company's  current  or  former
         officers,  directors,   employees,   managers,  agents,  attorneys  and
         representatives,  as well as all of the  Company's  current  or  former
         shareholders,  owners, insurers, predecessors,  successors and assigns,
         from any and all claims or demands  that any of the Holders may have in
         connection  with or arising out of or related in any way to the Funding
         Agreements or the purchase and sale of the  Convertible  Debentures and
         the Warrants.  The release set forth in this Section 1.4(a)  includes a
         release of any rights or claims  that any of the Holders may have based
         on any facts or events, whether known or unknown by any of the Holders,
         that  occurred  on or  before  the date  hereof  or the  Closing  Date,
         whichever  shall be later,  or any of the events  contemplated  by this
         Agreement.

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<PAGE>


                           (b) Release of the Holders.  The Company,  for itself
         and its affiliates and assigns,  hereby agrees to discharge and release
         each  of  the  Holders  and  each  of  their  respective  subsidiaries,
         divisions  and  affiliated  corporations,  and  each  of  the  Holders'
         respective current or former officers, directors,  employees, managers,
         agents,  attorneys and representatives,  as well as all of the Holders'
         respective   current   or  former   shareholders,   owners,   insurers,
         predecessors,  successors  and  assigns,  from  any and all  claims  or
         demands  that the  Company may have  against any of them in  connection
         with or arising out of or related in any way to the Funding  Agreements
         or  the  purchase  and  sale  of the  Convertible  Debentures  and  the
         Warrants.  The  release  set forth in this  Section  1.4(b)  includes a
         release of any rights or claims  that the Company may have based on any
         facts or events, whether known or unknown by the Company, that occurred
         on or before the date hereof or the Closing  Date,  whichever  shall be
         later, or any of the events contemplated by this Agreement.

                  1.5 Indemnification.

                           (a)  Indemnification  By  the  Holders.  The  Holders
         severally,  and not jointly, shall indemnify,  defend and hold harmless
         the  Company and each of its  subsidiaries,  divisions  and  affiliated
         corporations,  each  of  the  Company's  current  or  former  officers,
         directors,  employees, managers, agents, attorneys and representatives,
         as well as all of the Company's current or former shareholders, owners,
         insurers,  predecessors,  successors  and assigns,  against any and all
         claims, demands, losses,  expenses,  costs,  obligations,  defenses and
         liabilities,  including interest,  penalties, and reasonable attorneys'
         fees,  that the Company  and each of its  subsidiaries,  divisions  and
         affiliated  corporations,  each  of the  Company's  current  or  former
         officers,  directors,   employees,   managers,  agents,  attorneys  and
         representatives,  as well as all of the  Company's  current  or  former
         shareholders,  owners, insurers,  predecessors,  successors and assigns
         may  incur  by  reason  of  (i)  any  breach  of,  or  failure  by  the
         indemnifying Holder to perform, any of its obligations,  covenants,  or
         agreements  set forth in this  Agreement,  (ii) any  inaccuracy  in the
         representations  and warranties of the indemnifying Holder in Section 4
         of this Agreement,  or (iii) the failure of the indemnifying  Holder to
         release fully and effectively  the Company from its  obligations  under
         the  Convertible  Debentures  and the Funding  Agreements,  pursuant to
         Section 1.4(a), above.

                           (b)  Indemnification By the Company.The Company shall
         indemnify,  defend and hold  harmless  each of the  Holders and each of
         their  subsidiaries,  divisions and  affiliated  corporations,  each of
         their  current  or former  officers,  directors,  employees,  managers,
         agents,  attorneys and representatives,  as well as all of the Holders'
         current  or  former  shareholders,   owners,  insurers,   predecessors,
         successors and assigns,  against any and all claims,  demands,  losses,
         expenses,  costs,  obligations,  defenses  and  liabilities,  including
         interest,  penalties,  and reasonable  attorneys' fees, that any of the
         Holders  and  each of  their  subsidiaries,  divisions  and  affiliated
         corporations,  each of their  current  or former  officers,  directors,
         employees, managers, agents, attorneys and representatives,  as well as
         all of the Holders' current or former shareholders,  owners,  insurers,
         predecessors,  successors  and  assigns  may incur by reason of (i) any
         breach  of,  or  failure  by  the  Company  to  perform,   any  of  its



                                       4
<PAGE>

         obligations, covenants, or agreements set forth in this Agreement, (ii)
         any inaccuracy in the  representations and warranties of the Company in
         Section 3 of this  Agreement,  or (iii) the  failure of the  Company to
         release fully and effectively  the Holders from its  obligations  under
         the  Convertible  Debentures  and the  Funding  Agreements  pursuant to
         Section 1.4(b), above.


                  1.6 Effect of Failure to Close.  In the event that the Closing
shall not occur as described herein on or prior to the Closing Date,  except for
such  changes  or  delays as the  Purchasers  may  expressly  waive at or before
Closing,  this  Agreement  shall have no effect  whatsoever on the status of the
Convertible Debentures or the Company's obligations thereunder, or on any of the
Funding Agreements, which shall continue according to their terms, as amended or
modified  prior to the  date  hereof.  Furthermore,  in such  event,  and if the
Company  does not obtain the  approval of its  shareholders  as  required  under
Section  6.13 of the  Credit  Agreement  within  ninety  (90)  days  after  this
Agreement  ceases to have effect pursuant to this Section 1.6, the Company shall
have a period of thirty (30) days during  which to seek a waiver from the Nasdaq
Stock Market from any  applicable  shareholder  approval  requirements,  failing
which the  Company  shall take such  action as shall be  necessary  to cause its
common stock to be delisted from the Nasdaq SmallCap Market and shall thereafter
honor all  conversions of the Convertible  Debentures  without regard to the 20%
limitation described in Section 6.13 of the Credit Agreement.  To the extent the
Company honors such  conversion,  the Company's  obligation to pay liquidated or
other  monetary  damages  under  Section 6.13 of the Credit  Agreement  shall be
proportionally discharged.

                  1.7 Condition   Precedent;   Consent.  An   express  condition
precedent  to the  Company's  obligations  under  this  Agreement  shall  be the
completion,  on or  before  February  11,  2000,  by the  Company  of a  private
placement of its equity securities yielding aggregate proceeds to the Company of
at least  $1,500,000  and  involving  a  corresponding  number  of shares of the
Company's  common stock,  which shares shall be valued at the greater of (i) one
hundred percent (100%) of the average closing bid prices of the Company's common
stock as  quoted  on the  Nasdaq  Stock  Market  for the five (5)  trading  days
immediately preceding the closing of such private placement,  or (ii) one dollar
(US $1.00).  By their  signatures  appearing below, the Holders waive any rights
any of them may have with  respect  to any  subsequent  equity  offering  by the
Company  arising under the Funding  Agreements or otherwise,  including  without
limitation, any right of consent to or participation in such equity offering.

         2.       Closing. The closing (the  "Closing")   of  the   transactions
contemplated  by this  Agreement  shall occur at the  offices of Durham  Jones &
Pinegar,  P.C.,  50 South Main Street,  Suite 800,  Salt Lake City,  Utah 84144,
counsel for the  Company,  on or before  February 14, 2000 or such later date as
the parties may mutually agree in writing (the "Closing Date").

                  2.1 Deliveries of the Company at Closing. At the Closing,  the
Company  shall  deliver to the  Purchasers:  (i) the Cash  Payment  (payable  as
described  in  Section  1.1(a)  above),  (ii) a  certificate  of  the  corporate
secretary  of  Company  as to the  incumbency  of  the  officer  executing  this
Agreement on behalf of the Company; (iii) certified copies of resolutions of the
Company's  board  of  directors  authorizing  the  Company's  execution  of  and


                                       5
<PAGE>

performance  under  this  Agreement;  and  (iv)  certificates  representing  the
Residual Conversion Shares.

                  2.2 Deliveries of the Purchasers or Holders at Closing. At the
Closing,  (i) the Purchasers shall deliver to the Company the original execution
copies of all of the  Convertible  Debentures,  marked "Paid in Full" across the
face of the  Convertible  Debentures  and signed by the  Purchasers  who own the
Convertible  Debentures,  and (ii) the Holders  shall deliver to the Company for
cancellation  the original  execution  copies of all of the  Warrants  presently
issued and  outstanding.  If any of the instruments  required to be delivered at
Closing by the Holders have been lost,  stolen or  destroyed,  the Company shall
accept in lieu  thereof  from any Holder a  completed  and fully  executed  Lost
Instrument Certificate in the form attached to this Agreement as Exhibit "A".

         3.       Representations and Warranties of the Company. The Company
hereby makes the following representations and  warranties  to the Holders,  and
the Company  warrants that the following are true and accurate as of the date
hereof and shall be true and accurate on the Closing Date:

                  3.1 Organization;  Qualification. The Company is a corporation
duly  organized and validly  existing under the laws of the State of Utah and is
in good standing under such laws. The Company has all requisite  corporate power
and authority to own, lease and operate its properties and assets,  and to carry
on its business as presently conducted.  The Company is qualified to do business
as a foreign  corporation  in each  jurisdiction  in which the  ownership of its
property or the nature of its business requires such qualification, except where
failure to so qualify would not have a material adverse effect on the Company.

                  3.2 Authorization.  The  Company has all  requisite  corporate
right,  power and  authority  to  execute  and  deliver  this  Agreement  and to
consummate the  transactions  contemplated  hereby.  All corporate action on the
part  of  the  Company,  its  directors  and  stockholders   necessary  for  the
authorization,  execution,  delivery and  performance  of this  Agreement by the
Company and the  performance  of the Company's  obligations  hereunder have been
taken.  When this  Agreement has been duly executed and delivered by the Company
it shall  constitute  a legal,  valid  and  binding  obligation  of the  Company
enforceable in accordance with its terms, subject to laws of general application
relating to  bankruptcy,  insolvency  and the relief of debtors and rules of law
governing specific  performance,  injunctive relief or other equitable remedies,
and to  limitations  of public  policy as they may apply to the  indemnification
provisions set forth in this Agreement.

                  3.3 No Conflict.  The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby will not,
conflict  with,  or result in any  violation  of, or default,  or give rise to a
right of termination, cancellation or acceleration of any material obligation or
to a loss of a material  benefit,  under,  (i) any  provision of the Articles of
Incorporation  and any  amendments  thereto,  or the By-laws and any  amendments
thereto of the Company,  (ii) any material mortgage,  indenture,  lease or other
agreement or  instrument,  permit,  concession,  franchise,  license,  judgment,
order, decree,  statute,  law, ordinance,  rule or regulation  applicable to the


                                       6
<PAGE>

Company, its properties or assets and which would have a material adverse effect
on the Company's business and financial  condition,  or (iii) any law, judgment,
order,  arbitration  award, rule,  regulation,  ordinance,  writ,  injunction or
decree of any governmental  agency or  instrumentality or court applicable to or
having jurisdiction over the Company or any of its assets or properties.

                  3.4 Consents.  No consent,  approval or  authorization  of  or
designation,  declaration or filing with any governmental  authority on the part
of the Company is required in connection  with the valid  execution and delivery
of this Agreement or the consummation of any transaction contemplated hereby.

                  3.5 Solvency. As of the date of this Agreement the Company is,
and as of the Closing Date the Company  shall be, able to pay its current  debts
and liabilities when and as due.

                  3.6 Fair Value. The Cash Payment and the other  performance of
the parties under this Agreement represents a fair present value of that portion
of the Convertible Debentures, the interest accrued thereon, and any damages and
penalties  payable  under any of the Funding  Agreements,  based on the relevant
risks,  the nature of the Convertible  Debentures,  the market for the Company's
common  stock,  the  value  of  the  Warrants  and  the  present  status  of the
transactions contemplated by the Funding Agreements.

         4.       Representations and Warranties of the Purchasers. Each  of the
Purchasers  hereby makes the  following  representations  and  warranties to the
Company,  and each of the  Purchasers  warrants  that the following are true and
accurate on the date  hereof and will be true and  correct on the Closing  Date,
provided that each Purchaser's representations and warranties as set forth below
shall be deemed to pertain only to that  Purchaser,  and no  Purchaser  shall be
deemed to have made any  representation  or warranty  for, on behalf of or about
any other Purchaser:

                  4.1 Holder  of  Debenture.  The  Purchaser  is  the  sole  and
complete  owner and, in such  capacity  owns and holds all of the rights and has
all of the obligations under the Convertible  Debentures owned by such Purchaser
as  indicated on Schedule B hereto,  free and clear of all liens,  encumbrances,
security agreements,  assignments,  charges, restrictions or any other claims of
any type, kind or nature whatsoever.

                  4.2 No  Liens.   The  Purchaser  has  not  caused   any  lien,
encumbrance,  security agreement, charge, restriction, or any other claim of any
type,  kind or nature  whatsoever,  to be recorded  or filed  against any of the
property or assets of the Company.

                  4.3 Authorization.  The Purchaser has all requisite  corporate
right,  power and  authority  to  execute  and  deliver  this  Agreement  and to
consummate the  transactions  contemplated  hereby.  All corporate action on the
part of the  Purchaser,  and its  directors and  stockholders  necessary for the
authorization,  execution,  delivery and  performance  of this  Agreement by the
Purchaser and the performance of the Purchaser's obligations hereunder have been
taken. When this Agreement has been duly executed and delivered by the Purchaser
it shall  constitute  a legal,  valid and binding  obligation  of the  Purchaser


                                       7
<PAGE>

enforceable in accordance with its terms, subject to laws of general application
relating to  bankruptcy,  insolvency  and the relief of debtors and rules of law
governing specific  performance,  injunctive relief or other equitable remedies,
and to  limitations  of public  policy as they may apply to the  indemnification
provisions set forth in this Agreement.

                  4.4 No Conflict.  The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby will not,
conflict  with,  or result in any  violation  of, or default,  or give rise to a
right of termination, cancellation or acceleration of any material obligation or
to a loss of a material benefit,  under, (i) any provision of the certificate or
articles of  incorporation or any other charter or organization  documents,  and
any  amendments  thereto  or  the  By-laws,   operating  agreements  or  similar
documents,  and any  amendments  thereto  of the  Purchaser,  (ii) any  material
mortgage, indenture, lease or other agreement or instrument, permit, concession,
franchise,  license,  judgment,  order, decree, statute, law, ordinance, rule or
regulation applicable to the Purchaser, its properties or assets and which would
have a  material  adverse  effect  on the  Purchaser's  business  and  financial
condition,  or  (iii)  any  law,  judgment,   order,  arbitration  award,  rule,
regulation,  ordinance, writ, injunction or decree of any governmental agency or
instrumentality or court applicable to or having jurisdiction over the Purchaser
or any of its assets or properties.

                  4.6 Valid  Corporate  Organization  and Good Standing.  To the
extent the  Purchasers  are not natural  persons,  each of the  Purchasers  is a
corporation,  partnership,  limited  liability  company  or  other  entity  duly
organized,  validly  existing and in good standing  under the laws of the state,
country  or  jurisdiction  of its  organization  or  incorporation,  and has the
corporate or other entity power and authority  necessary and  appropriate to own
its properties and to engage in the business in which it is presently engaged.

                  4.9 Fair Value. The Cash Payment and the other  performance of
the Company under this Agreement represents a fair present value of that portion
of the Convertible Debentures, the interest accrued thereon, and any damages and
penalties  payable  under any of the Funding  Agreements  based on the  relevant
risks,  the nature of the Convertible  Debentures,  the market for the Company's
common  stock,  the  value  of  the  Warrants  and  the  present  status  of the
transactions contemplated by the Funding Agreements.

                  4.10 Investment Intent. In respect of the Residual  Conversion
Shares,  the  Purchasers  represent  that they are and will be the sole and true
parties  in  interest,  and no other  person or entity has or will have upon the
issuance  of the  Residual  Conversion  Shares any  beneficial  interest  in the
Residual  Conversion  Shares or any portion of the Residual  Conversion  Shares,
whether direct or indirect. The Purchasers shall receive the Residual Conversion
Shares for its own account for  investment  purposes only and not with a view to
or for  distributing  or reselling  the Residual  Conversion  Shares or any part
thereof or interest therein,  without  prejudice,  however,  to each Purchaser's
right  at all  times  to sell or  otherwise  dispose  of all or any  part of the
Residual Conversion Shares pursuant to an effective registration statement under
the  Securities  Act,  as that term is defined  below,  and in  compliance  with
applicable state securities laws or under an exemption from such registration.


                                       8
<PAGE>


                  4.11 Accredited  Investor.  As  of the date of this Agreement,
the Purchasers are, and on the Closing Date they will be, "accredited investors"
as defined in Rule 501(a) of Regulation D under the  Securities  Act of 1933, as
amended (the "Securities Act").

                  4.12 No Representations.  The Purchasers  acknowledge that the
Company  files reports  under the  Securities  Exchange Act of 1934, as amended,
with the SEC, which reports are available to the public. The Purchasers have had
access to such reports and other  publicly  available  information  as they have
deemed  appropriate.  Without  limiting the  generality  of the  foregoing,  the
Purchasers  acknowledge  that they have read the Company's Annual Report on Form
10-KSB for the year ended December 31, 1998,  and the Quarterly  Reports on Form
10-QSB for the periods  ended  March 31,  June 30 and  September  30,  1999.  No
representative, director, officer, employee, shareholder or agent of the Company
has made any  representation  of any kind about the Company,  its  operations or
financial condition other than as set forth in publicly available reports.

                  4.13 Transfer   Restrictions;    Legends.   The   Purchasers
acknowledge that the Residual Conversion Shares may only be disposed of pursuant
to an effective  registration statement under the Securities Act, to the Company
or pursuant to an available  exemption  from or in a transaction  not subject to
the registration requirements thereof. In connection with any transfer of any of
the Residual  Conversion  Shares, the Company may require the transferor thereof
to provide to the Company an opinion of counsel selected by the transferor,  the
form and  substance of which opinion  shall be  reasonably  satisfactory  to the
Company,  to the effect that such transfer does not require  registration  under
the Securities Act. The parties agree to the imprinting of the following  legend
on the certificate or certificates representing the Residual Conversion Shares:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
         APPLICABLE  STATE  SECURITIES  LAWS IN RELIANCE UPON AN EXEMPTION  FROM
         REGISTRATION  UNDER THE SECURITIES  ACT, AND,  ACCORDINGLY,  MAY NOT BE
         OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE  REGISTRATION STATEMENT
         UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR
         IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION  REQUIREMENTS OF THE
         SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

Nothwithstanding  the  foregoing,  the Company  acknowledges  generally that the
Purchasers  shall be able to sell the  Residual  Conversion  Shares  to the full
extent permitted by Rule 144 under the Securities Act, and specifically that, as
amended to date,  Rule  144(d)(3)(ii)  under the  Securities Act would allow the
Purchasers to deem any Residual  Conversion  Shares to have been acquired by the
Purchasers  at  the  same  time  as the  Residual  Convertible  Debentures  were
acquired.

                                       9
<PAGE>

         5.       Miscellaneous Provisions.

                  5.1 Costs.  The  Purchasers and the Company shall each pay all
of their own costs  and  expenses  incurred  or to be  incurred  by each of them
respectively  in negotiating and preparing this Agreement and in taking whatever
actions  may  be  necessary  or  appropriate  to  consummate  the   transactions
contemplated by this Agreement, including the costs of obtaining any consents or
approvals.

                  5.2 Further Acts. The parties, at any time before or after the
Closing,  will  execute,  acknowledge,  and deliver any  assignments,  releases,
conveyances,  and other  assurances,  documents,  and  instruments  of transfer,
reasonably  requested  by any  other  party,  and  will  take any  other  action
consistent  with the terms of this Agreement that may reasonably be requested by
any other party.

                  5.3 Captions. The subject headings or captions of the sections
and  subsections of this Agreement are included only for purposes of convenience
and shall  not  affect  the  construction  or  interpretation  of any  provision
contained herein.

                  5.4 Entire   Agreement.  This  Agreement  (together  with  all
schedules  and  exhibits to this  Agreement)  constitutes  the entire  agreement
between the parties  pertaining to the subject matter hereof, and supersedes any
and all  prior or  contemporaneous  written  or oral  negotiations,  agreements,
representations,  and understandings of the parties with respect to such subject
matter.

                  5.5 Expenses.  If any legal action or any arbitration or other
proceeding is brought for the  enforcement of this  Agreement,  or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Agreement,  the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in that action or  proceeding,  in  addition to any other  relief to which it or
they may be entitled.

                  5.6 Modification,  Amendment or Waiver. This Agreement may not
be amended,  supplemented  or otherwise  modified,  and none of its terms may be
waived, unless such amendment, supplement,  modification or waiver is in writing
and  executed  by the party or parties to be bound  thereby.  The failure of any
party at any time or times to require  performance of any provision hereof shall
not affect the right of such party at a later time to enforce  the same,  and no
waiver of any term or provision hereof on any one occasion shall be deemed to be
a waiver of the same or any other  provision  hereof at any  subsequent  time or
times.

                  5.7 Binding  Effect;   Assignment.  This  Agreement  shall  be
binding  upon,  and shall  enure to the  benefit of and be  enforceable  by, the
parties  hereto,  and their  respective  heirs,  successors,  assigns  and legal
representatives;  provided,  however,  that  no  assignment  of  any  rights  or
delegation  of any  obligations  provided for herein may be made by any party to
this Agreement without the prior written consent of the other parties hereto.


                                       10
<PAGE>


                  5.8  Construction.   This  Agreement  shall  be  construed  in
accordance  with its intent and without  regard to any  presumption or any other
rule  requiring  construction  against the party causing the same to be drafted.
The parties acknowledge that this Agreement,  and the terms hereof, were arrived
at after  negotiations  between the parties,  and each provision hereof shall be
construed as having been drafted by each and all of the parties hereto.

                  5.9 Governing  Law.  The  laws of the State of New York  shall
govern the validity,  performance and enforcement of this Agreement. Each of the
parties consents to the  jurisdiction of the U.S.  District Court sitting in the
Southern  District of the State of New York or the state  courts of the State of
New York sitting in Manhattan in connection  with any dispute arising under this
Agreement.

                  5.10 Counterparts; Facsimile Signatures. This Agreement may be
executed in  counterparts,  each of which shall be deemed an original and all of
which taken together shall constitute the same  instrument.  A facsimile copy of
an original signature shall have the same effect as an original signature.

                  5.11 No Third Parties  Benefited.  This  Agreement is made and
entered into for the sole protection and benefit of the Company and the Holders,
their  respective  successors and assigns,  and no other person or persons shall
have any right of action hereon.

                  5.12 Severability.  If any provision of this Agreement, or any
portion  of any  provision,  shall be deemed  invalid or  unenforceable  for any
reason  whatsoever,  such  invalidity or  unenforceability  shall not affect the
enforceability and validity of the remaining provisions hereof.

                  5.13 Definitions. Capitalized terms used in this Agreement but
not specifically  defined in this Agreement shall have the meanings set forth in
the Funding Agreements.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                      [SIGNATURE PAGE FOLLOWS IMMEDIATELY]


                                       11
<PAGE>

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the date first set forth above.

THE COMPANY:                             THE PURCHASERS:

DYNATEC INTERNATIONAL, INC.              ELLIS ENTERPRISES



By: /s/ Frederick W. Volcansek, Sr.      By:  /s/ Illegible
  -------------------------------------     -----------------------------------
    Its: Chief Executive Officer            Its: Director



By: /s/  Michael Whaley                  TLG REALTY
   ------------------------------------
   Its: Chief Financial Officer

                                         By: /s/ Illegible
                                            ----------------------------------
                                            Its: President

PLACEMENT AGENT:

SETTONDOWN CAPITAL                       BALMORE FUNDS, S.A.
         INTERNATIONAL, LTD.


By:  /s/ Illegible                       By:  /s/  Illegible
   ------------------------------------     -----------------------------------
   Its:  Director                           Its:
       --------------------------------         -------------------------------

                                         AUSTOST ANSTALT SCHAAN



                                         By:  /s/ Illegible
                                            -----------------------------------
                                            Its:
                                                -------------------------------

                                         HEWLETT FUND



                                         By: /s/ Illegible
                                            -----------------------------------
                                            Its:
                                                -------------------------------


                                       12
<PAGE>



                                   Schedule A

                                   Purchasers

Austost Anstalt Schaan
733 Fuerstentum Liechtenstein
Landstrasse 163

Balmore Funds S.A.
Trident Chambers
P.O. Box 146
Roadstown, Tortula BVI

Ellis Enterprises
12A Waterloo Road
London NW2 7UF, England

Hewlett Fund
1615 Avenue I
Brooklyn, NY 11230

TLG Realty
c/o Melo
525 West 52nd St.
New York, NY 10019




                                       13
<PAGE>



                                   Schedule B
<TABLE>
<CAPTION>

---------------------------- -------------------------- -------------------------- ----------------- --------------- --------------
           Holder              Convertible Debentures          Warrants Owned           Residual       Common Stock     Purchase
                                At February 14, 2000        At February 14, 2000        Principal      Issuable Upon   Price Payable
                                                                                        Amount of        Conversion
                                 Principal  Interest            A         B            Convertible
                                  Amount    Accrued         Warrants  Warrants          Debentures

---------------------------- -------------------------- -------------------------- ----------------- --------------- --------------


---------------------------- ------------- ------------ ------------ ------------- ----------------- --------------- --------------
<S>                          <C>             <C>            <C>           <C>               <C>              <C>        <C>
  Austost Anstalt Schaan        $531,000     $ 112,041       62,500        62,500           $25,325          40,891     $  649,409

  Balmore Funds, S.A.            531,000       112,041       62,500        62,500           $25,325          40,891        649,409

  Ellis Enterprises               57,000        12,027       10,000        10,000           $ 2,718           4,389         69,711

  Hewlett Fund                    25,000         5,275        5,000         5,000           $ 1,192           1,925         30,575

  TLG Realty                      82,500        17,407       10,000        10,000           $ 3,935           6,354        100,896

  Settondown Capital                   0             0       82,500             0                 0               0              0
  International

  Manchester Asset Management          0             0       67,500        50,000                 0               0              0
  Limited

  Avalon Capital Limited               0             0            0       125,000                 0               0              0

  Avalon Capital, Inc.                 0             0            0       125,000                 0               0              0

                   Totals    $ 1,226,500     $ 258,792      300,000       450,000            58,495          94,450     $1,500,000
---------------------------- ------------- ------------ ------------ ------------- ----------------- --------------- --------------
</TABLE>




                                       14
<PAGE>


                                                                     EXHIBIT "A"

                           LOST INSTRUMENT CERTIFICATE

         The undersigned, is the holder of the following instrument(s) issued by
Dynatec  International,  Inc., a Utah corporation  (the  "Company"),  on May 22,
1998, in connection  with the closing of the  transactions  contemplated by that
certain Convertible Debenture and Private Equity Line of Credit Agreement by and
among the Company,  Settondown Capital  International,  Ltd., Ellis Enterprises,
TLG Realty,  Balmore Funds, S.A., Austost Anstalt Schaan and Hewlett Fund, dated
as of May 22, 1998 [Check all that apply]:

               Convertible Debenture No. ________ in the principal amount of
               _________________ Dollars ($___________); and/or

               A Warrant No. _________ entitling the holder thereof to acquire
               ____________ (____________) shares of the Company's common stock;
               and/or

               B Warrant No. _________ entitling the holder thereof to acquire
               ____________ (____________) shares of the Company's common stock.

         The undersigned  hereby certifies that said  instrument(s) as indicated
immediately above is(are) lost or has(have) been destroyed and cannot be located
and agrees that, in the event such instrument(s)  is(are) found, the undersigned
will forthwith deliver such instrument(s) to Dynatec  International,  Inc., 3820
West Great Lakes Drive,  Salt Lake City,  Utah 84120,  Attn.  Michael L. Whaley,
Chief Financial Officer.  Further, the undersigned  represents and warrants that
the securities or other rights  represented by such  instrument(s) have not been
encumbered,  transferred,  assigned or pledged by the  undersigned  to any other
person or entity and the  undersigned  is the lawful owner of and has marketable
title to all such securities or other rights. The undersigned  further agrees to
indemnify  and hold the Company and its  officers,  directors,  representatives,
agents and attorneys and their successors and assigns,  harmless for any and all
loss,  expense  (including counsel fees and damages) or liability the Company or
any of such persons may suffer due to such lost  instrument(s) or as a result of
any of the statements made herein by the undersigned being untrue.

                                        Dated:                          , 2000
                                              -------------------------
                                        -------------------------------
                                        Signature:


                                        -------------------------------

                                        Printed Name:

                                        --------------------------------