Document:

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                                                                    EXHIBIT 10.6

                              SECURITY AGREEMENT

     SECURITY AGREEMENT (this "Agreement"), dated as of March 30, 2001, by and
                               ---------
among Airtech International Group, Inc., a Wyoming corporation ("Company"), and
                                                                 -------
the secured parties signatory hereto and their respective endorsees, transferees
and assigns  (collectively, the "Secured Party").
                                 -------------

                             W I T N E S S E T H:
                             - - - - - - - - - -

     WHEREAS, pursuant to a Securities Purchase Agreement, dated the date hereof
between Company and the Secured Party (the "Purchase Agreement"), Company has
                                            ------------------
agreed to issue to the Secured Party and the Secured Party has agreed to
purchase from Company certain of Company's 12% Secured Convertible Debentures,
due one year from the date of issue (the "Debentures"), which are convertible
                                          -----------
into shares of Company's Common Stock, $ 0.05 par value (the "Common Stock").
                                                              -------------
In connection therewith, Company shall issue the Secured Party certain Common
Stock purchase warrants dated as of the date hereof to purchase the number of
shares of Common Stock indicated below each Secured Party's name on the Purchase
Agreement (the "Warrants"); and
                --------

     WHEREAS, in order to induce the Secured Party to purchase the Debentures,
Company has agreed to execute and deliver to the Secured Party this Agreement
for the benefit of the Secured Party and to grant to it a first priority
security interest in certain property of Company to secure the prompt payment,
performance and discharge in full of all of Company's obligations under the
Debentures and exercise and discharge in full of Company's obligations under the
Warrants.

     NOW, THEREFORE, in consideration of the agreements herein contained and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:

     1.   Certain Definitions.  As used in this Agreement, the following terms
          -------------------
shall have the meanings set forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the UCC
(such as "general intangibles" and "proceeds") shall have the respective
         --------------------       --------
meanings given such terms in Article 9 of the UCC.

          (a)  "Collateral" means the collateral in which the Secured Party is
                ----------
granted a security interest by this Agreement and which shall include the
following, whether presently owned or existing or hereafter acquired or coming
into existence, and all additions and accessions thereto and all substitutions
and replacements thereof, and all proceeds, products and accounts thereof,
including, without limitation, all proceeds from the sale or transfer of the
Collateral and of insurance covering the same and of any tort claims in
connection therewith:

               (i)  All Goods of the Company, including, without limitations,
          all machinery, equipment, computers, motor vehicles, trucks, tanks,
          boats, ships, appliances, furniture, special and general tools,
          fixtures, test and quality control
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          devices and other equipment of every kind and nature and wherever
          situated, together with all documents of title and documents
          representing the same, all additions and accessions thereto,
          replacements therefor, all parts therefor, and all substitutes for any
          of the foregoing and all other items used and useful in connection
          with the Company's businesses and all improvements thereto
          (collectively, the "Equipment"); and
                              ---------

               (ii) All Inventory of the Company; and

               (iii)  All of the Company's contract rights and general
          intangibles, including, without limitation, all partnership interests,
          stock or other securities, licenses, distribution and other
          agreements, computer software development rights, leases, franchises,
          customer lists, quality control procedures, grants and rights,
          goodwill, trademarks, service marks, trade styles, trade names,
          patents, patent applications, copyrights, deposit accounts, and income
          tax refunds (collectively, the "General Intangibles"); and
                                          -------------------

               (iv) All Receivables of the Company including all insurance
          proceeds, and rights to refunds or indemnification whatsoever owing,
          together with all instruments, all documents of title representing any
          of the foregoing, all rights in any merchandising, goods, equipment,
          motor vehicles and trucks which any of the same may represent, and all
          right, title, security and guaranties with respect to each Receivable,
          including any right of stoppage in transit; and

               (v)  All of the Company's documents, instruments and chattel
          paper, files, records, books of account, business papers, computer
          programs and the products and proceeds of all of the foregoing
          Collateral set forth in clauses (i)-(iv) above.

          (b)  "Company" shall mean, collectively, Company and all of the
                -------
subsidiaries of Company, a list of which is contained in Schedule A, attached
                                                         ----------
hereto.

          (c)  "Obligations" means all of the Company's obligations under this
                -----------
Agreement and the Debentures, in each case, whether now or hereafter existing,
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or unliquidated, whether or not jointly owed with others, and whether or not
from time to time decreased or extinguished and later decreased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from the Secured Party as a preference, fraudulent
transfer or otherwise as such obligations may be amended, supplemented,
converted, extended or modified from time to time.

          (d)  "UCC" means the Uniform Commercial Code, as currently in effect
                ---
in the State of New York.

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     2.   Grant of Security Interest.  As an inducement for the Secured Party to
          --------------------------
purchase the Debentures and to secure the complete and timely payment,
performance and discharge in full, as the case may be, of all of the
Obligations, the Company hereby, unconditionally and irrevocably, pledges,
grants and hypothecates to the Secured Party, a continuing security interest in,
a continuing first lien upon, an unqualified right to possession and disposition
of and a right of set-off against, in each case to the fullest extent permitted
by law, all of the Company's right, title and interest of whatsoever kind and
nature in and to the Collateral (the "Security Interest").
                                      -----------------

     3.   Representations, Warranties, Covenants and Agreements of the Company.
          --------------------------------------------------------------------
The Company represents and warrants to, and covenants and agrees with, the
Secured Party as follows:

          (a)  The Company has the requisite corporate power and authority to
enter into this Agreement and otherwise to carry out its obligations thereunder.
The execution, delivery and performance by the Company of this Agreement and the
filings contemplated therein have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company.
This Agreement constitutes a legal, valid and binding obligation of the Company
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creidtor's rights generally.

          (b)  The Company represents and warrants that it has no place of
business or offices where its respective books of account and records are kept
(other than temporarily at the offices of its attorneys or accountants) or
places where Collateral is stored or located, except as set forth on Schedule A
                                                                     ----------
attached hereto;

          (c)  The Company is the sole owner of the Collateral (except for non-
exclusive licenses granted by the Company in the ordinary course of business),
free and clear of any liens, security interests, encumbrances, rights or claims,
and is fully authorized to grant the Security Interest in and to pledge the
Collateral. There is not on file in any governmental or regulatory authority,
agency or recording office an effective financing statement, security agreement,
license or transfer or any notice of any of the foregoing (other than those that
have been filed in favor of the Secured Party pursuant to this Agreement)
covering or affecting any of the Collateral. So long as this Agreement shall be
in effect, the Company shall not execute and shall not knowingly permit to be on
file in any such office or agency any such financing statement or other document
or instrument (except to the extent filed or recorded in favor of the Secured
Party pursuant to the terms of this Agreement).

          (d)  No part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any Collateral or the
Company's use of any Collateral violates the rights of any third party. There
has been no adverse decision to the Company's claim of ownership rights in or
exclusive rights to use the Collateral in any jurisdiction or to the Company's
right to keep and maintain such Collateral in full force and effect, and there
is no proceeding involving said rights pending or, to the best knowledge of the
Company, threatened

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before any court, judicial body, administrative or regulatory agency, arbitrator
or other governmental authority.

          (e)  The Company shall at all times maintain its books of account and
records relating to the Collateral at its principal place of business and its
Collateral at the locations set forth on Schedule A attached hereto and may
                                         ----------
not relocate such books of account and records or tangible Collateral unless it
delivers to the Secured Party at least 30 days prior to such relocation (i)
written notice of such relocation and the new location thereof (which must be
within the United States) and (ii) evidence that appropriate financing
statements and other necessary documents have been filed and recorded and other
steps have been taken to perfect the Security Interest to create in favor of the
Secured Party valid, perfected and continuing first priority liens in the
Collateral.

          (f)  This Agreement creates in favor of the Secured Party a valid
security interest in the Collateral securing the payment and performance of the
Obligations and, upon making the filings described in the immediately following
sentence, a perfected first priority security interest in such Collateral.
Except for the filing of financing statements on Form-1 under the UCC with the
jurisdictions indicated on Schedule B, attached hereto, no authorization or
                           ----------
approval of or filing with or notice to any governmental authority or regulatory
body is required either (i) for the grant by the Company of, or the
effectiveness of, the Security Interest granted hereby or for the execution,
delivery and performance of this Agreement by the Company or (ii) for the
perfection of or exercise by the Secured Party of its rights and remedies
hereunder.

          (g)  On the date of execution of this Agreement, the Company will
deliver to the Secured Party one or more executed UCC financing statements on
Form-1 with respect to the Security Interest for filing with the jurisdictions
indicated on Schedule B, attached hereto and in such other jurisdictions as
             ----------
may be requested by the Secured Party.

          (h)  The execution, delivery and performance of this Agreement does
not conflict with or cause a breach or default, or an event that with or without
the passage of time or notice, shall constitute a breach or default, under any
agreement to which the Company is a party or by the Company is bound. No consent
(including, without limitation, from stock holders or creditors of the Company)
is required for the Company to enter into and perform its obligations hereunder.

          (i)  The Company shall at all times maintain the liens and Security
Interest provided for hereunder as valid and perfected first priority liens and
security interests in the Collateral in favor of the Secured Party until this
Agreement and the Security Interest hereunder shall terminated pursuant to
Section 11. The Company hereby agrees to defend the same against any and all
persons. The Company shall safeguard and protect all Collateral for the account
of the Secured Party. At the request of the Secured Party, the Company will sign
and deliver to the Secured Party at any time or from time to time one or more
financing statements pursuant to the UCC (or any other applicable statute) in
form reasonably satisfactory to the Secured Party and

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will pay the cost of filing the same in all public offices wherever filing is,
or is deemed by the Secured Party to be, necessary or desirable to effect the
rights and obligations provided for herein. Without limiting the generality of
the foregoing, the Company shall pay all fees, taxes and other amounts necessary
to maintain the Collateral and the Security Interest hereunder, and the Company
shall obtain and furnish to the Secured Party from time to time, upon demand,
such releases and/or subordinations of claims and liens which may be required to
maintain the priority of the Security Interest hereunder.

          (j)  The Company will not transfer, pledge, hypothecate, encumber,
license (except for non-exclusive licenses granted by the Company in the
ordinary course of business), sell or otherwise dispose of any of the Collateral
without the prior written consent of the Secured Party.

          (k)  The Company shall keep and preserve its Equipment, Inventory and
other tangible Collateral in good condition, repair and order and shall not
operate or locate any such Collateral (or cause to be operated or located) in
any area excluded from insurance coverage.

          (l)  The Company shall, within ten (10) days of obtaining knowledge
thereof, advise the Secured Party promptly, in sufficient detail, of any
substantial change in the Collateral, and of the occurrence of any event which
would have a material adverse effect on the value of the Collateral or on the
Secured Party's security interest therein.

          (m)  The Company shall promptly execute and deliver to the Secured
Party such further deeds, mortgages, assignments, security agreements, financing
statements or other instruments, documents, certificates and assurances and take
such further action as the Secured Party may from time to time request and may
in its sole discretion deem necessary to perfect, protect or enforce its
security interest in the Collateral including, without limitation, the execution
and delivery of a separate security agreement with respect to the Company's
intellectual property ("Intellectual Property Security Agreement") in which the
                        ----------------------------------------
Secured Party has been granted a security interest hereunder, substantially in a
form acceptable to the Secured Party, which Intellectual Property Security
Agreement, other than as stated therein, shall be subject to all of the terms
and conditions hereof.

          (n)  The Company shall permit the Secured Party and its
representatives and agents to inspect the Collateral at any time, and to make
copies of records pertaining to the Collateral as may be requested by the
Secured Party from time to time.

          (o)  The Company will take all steps reasonably necessary to
diligently pursue and seek to preserve, enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the Collateral.

          (p)  The Company shall promptly notify the Secured Party in sufficient
detail upon becoming aware of any attachment, garnishment, execution or other
legal process levied against any Collateral and of any other information
received by the Company that may materially

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affect the value of the Collateral, the Security Interest or the rights and
remedies of the Secured Party hereunder.

          (q)  All information heretofore, herein or hereafter supplied to the
Secured Party by or on behalf of the Company with respect to the Collateral is
accurate and complete in all material respects as of the date furnished.

          (r)  Schedule A, attached hereto contains a list of all of the
               ----------
subsidiaries of Company.

     4.   Defaults. The following events shall be "Events of Default":
          --------                                 -----------------

          (a)  The occurrence of an Event of Default (as defined in the
Debentures) under the Debentures;

          (b)  Any representation or warranty of the Company in this Agreement
or in the Intellectual Property Security Agreement shall prove to have been
incorrect in any material respect when made;

          (c)  The failure by the Company to observe or perform any of its
obligations hereunder or in the Intellectual Property Security Agreement for ten
(10) days after receipt by the Company of notice of such failure from the
Secured Party; and

          (d)  Any breach of, or default under, the Warrants.

     5.   Duty To Hold In Trust.  Upon the occurrence of any Event of Default
          ---------------------
and at any time thereafter, the Company shall, upon receipt by it of any
revenue, income or other sums subject to the Security Interest, whether payable
pursuant to the Debentures or otherwise, or of any check, draft, note, trade
acceptance or other instrument evidencing an obligation to pay any such sum,
hold the same in trust for the Secured Party and shall forthwith endorse and
transfer any such sums or instruments, or both, to the Secured Party for
application to the satisfaction of the Obligations.

     6.   Rights and Remedies Upon Default.  Upon occurrence of any Event of
          --------------------------------
Default and at any time thereafter, the Secured Party shall have the right to
exercise all of the remedies conferred hereunder and under the Debentures, and
the Secured Party shall have all the rights and remedies of a secured party
under the UCC and/or any other applicable law (including the Uniform Commercial
Code of any jurisdiction in which any Collateral is then located). Without
limitation, the Secured Party shall have the following rights and powers:

          (a)  The Secured Party shall have the right to take possession of the
Collateral and, for that purpose, enter, with the aid and assistance of any
person, any premises where the Collateral, or any part thereof, is or may be
placed and remove the same, and the Company shall assemble the Collateral and
make it available to the Secured Party at places which the Secured

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Party shall reasonably select, whether at the Company's premises or elsewhere,
and make available to the Secured Party, without rent, all of the Company's
respective premises and facilities for the purpose of the Secured Party taking
possession of, removing or putting the Collateral in saleable or disposable
form.

          (b)  The Secured Party shall have the right to operate the business of
the Company using the Collateral and shall have the right to assign, sell, lease
or otherwise dispose of and deliver all or any part of the Collateral, at public
or private sale or otherwise, either with or without special conditions or
stipulations, for cash or on credit or for future delivery, in such parcel or
parcels and at such time or times and at such place or places, and upon such
terms and conditions as the Secured Party may deem commercially reasonable, all
without (except as shall be required by applicable statute and cannot be waived)
advertisement or demand upon or notice to the Company or right of redemption of
the Company, which are hereby expressly waived. Upon each such sale, lease,
assignment or other transfer of Collateral, the Secured Party may, unless
prohibited by applicable law which cannot be waived, purchase all or any part of
the Collateral being sold, free from and discharged of all trusts, claims, right
of redemption and equities of the Company, which are hereby waived and released.

     7.   Applications of Proceeds.  The proceeds of any such sale, lease or
          ------------------------
other disposition of the Collateral hereunder shall be applied first, to the
expenses of retaking, holding, storing, processing and preparing for sale,
selling, and the like (including, without limitation, any taxes, fees and other
costs incurred in connection therewith) of the Collateral, to the reasonable
attorneys' fees and expenses incurred by the Secured Party in enforcing its
rights hereunder and in connection with collecting, storing and disposing of the
Collateral, and then to satisfaction of the Obligations, and to the payment of
any other amounts required by applicable law, after which the Secured Party
shall pay to the Company any surplus proceeds. If, upon the sale, license or
other disposition of the Collateral, the proceeds thereof are insufficient to
pay all amounts to which the Secured Party is legally entitled, the Company will
be liable for the deficiency, together with interest thereon, at the rate of 15%
per annum (the "Default Rate"), and the reasonable fees of any attorneys
                ------------
employed by the Secured Party to collect such deficiency. To the extent
permitted by applicable law, the Company waives all claims, damages and demands
against the Secured Party arising out of the repossession, removal, retention or
sale of the Collateral, unless due to the gross negligence or willful misconduct
of the Secured Party.

     8.   Costs and Expenses.  The Company agrees to pay all out-of-pocket
          -------------------
fees, costs and expenses incurred in connection with any filing required
hereunder, including without limitation, any financing statements, continuation
statements, partial releases and/or termination statements related thereto or
any expenses of any searches reasonably required by the Secured Party. The
Company shall also pay all other claims and charges which in the reasonable
opinion of the Secured Party might prejudice, imperil or otherwise affect the
Collateral or the Security Interest therein. The Company will also, upon demand,
pay to the Secured Party the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Secured Party may incur in connection with (i) the enforcement
of this Agreement, (ii) the custody or preservation of, or the sale of,
collection from,

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or other realization upon, any of the Collateral, or (iii) the exercise or
enforcement of any of the rights of the Secured Party under the Debentures.
Until so paid, any fees payable hereunder shall be added to the principal amount
of the Debentures and shall bear interest at the Default Rate.

     9.   Responsibility for Collateral.  The Company assumes all liabilities
          -----------------------------
and responsibility in connection with all Collateral, and the obligations of the
Company hereunder or under the Debentures and the Warrants shall in no way be
affected or diminished by reason of the loss, destruction, damage or theft of
any of the Collateral or its unavailability for any reason.

     10.  Security Interest Absolute.  All rights of the Secured Party and all
          --------------------------
Obligations of the Company hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Debentures, the Warrants or any agreement entered into in connection with
the foregoing, or any portion hereof or thereof; (b) any change in the time,
manner or place of payment or performance of, or in any other term of, all or
any of the Obligations, or any other amendment or waiver of or any consent to
any departure from the Debentures, the Warrants or any other agreement entered
into in connection with the foregoing; (c) any exchange, release or
nonperfection of any of the Collateral, or any release or amendment or waiver of
or consent to departure from any other collateral for, or any guaranty, or any
other security, for all or any of the Obligations; (d) any action by the Secured
Party to obtain, adjust, settle and cancel in its sole discretion any insurance
claims or matters made or arising in connection with the Collateral; or (e) any
other circumstance which might otherwise constitute any legal or equitable
defense available to the Company, or a discharge of all or any part of the
Security Interest granted hereby. Until the Obligations shall have been paid and
performed in full, the rights of the Secured Party shall continue even if the
Obligations are barred for any reason, including, without limitation, the
running of the statute of limitations or bankruptcy. The Company expressly
waives presentment, protest, notice of protest, demand, notice of nonpayment and
demand for performance. In the event that at any time any transfer of any
Collateral or any payment received by the Secured Party hereunder shall be
deemed by final order of a court of competent jurisdiction to have been a
voidable preference or fraudulent conveyance under the bankruptcy or insolvency
laws of the United States, or shall be deemed to be otherwise due to any party
other than the Secured Party, then, in any such event, the Company's obligations
hereunder shall survive cancellation of this Agreement, and shall not be
discharged or satisfied by any prior payment thereof and/or cancellation of this
Agreement, but shall remain a valid and binding obligation enforceable in
accordance with the terms and provisions hereof. The Company waives all right to
require the Secured Party to proceed against any other person or to apply any
Collateral which the Secured Party may hold at any time, or to marshal assets,
or to pursue any other remedy. The Company waives any defense arising by reason
of the application of the statute of limitations to any obligation secured
hereby.

     11.  Term of Agreement.  This Agreement and the Security Interest shall
          -----------------
terminate on the date on which all payments under the Debentures have been made
in full and all other Obligations have been paid or discharged. Upon such
termination, the Secured Party, at the request and at the expense of the
Company, will join in executing any termination statement with respect to any
financing statement executed and filed pursuant to this Agreement.

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     12.  Power of Attorney; Further Assurances.
          -------------------------------------

          (a)  The Company authorizes the Secured Party, and does hereby make,
constitute and appoint it, and its respective officers, agents, successors or
assigns with full power of substitution, as the Company's true and lawful
attorney-in-fact, with power, in its own name or in the name of the Company, to,
after the occurrence and during the continuance of an Event of Default, (i)
endorse any notes, checks, drafts, money orders, or other instruments of payment
(including payments payable under or in respect of any policy of insurance) in
respect of the Collateral that may come into possession of the Secured Party;
(ii) to sign and endorse any UCC financing statement or any invoice, freight or
express bill, bill of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with accounts, and
other documents relating to the Collateral; (iii) to pay or discharge taxes,
liens, security interests or other encumbrances at any time levied or placed on
or threatened against the Collateral; (iv) to demand, collect, receipt for,
compromise, settle and sue for monies due in respect of the Collateral; and (v)
generally, to do, at the option of the Secured Party, and at the Company's
expense, at any time, or from time to time, all acts and things which the
Secured Party deems necessary to protect, preserve and realize upon the
Collateral and the Security Interest granted therein in order to effect the
intent of this Agreement, the Debentures and the Warrants, all as fully and
effectually as the Company might or could do; and the Company hereby ratifies
all that said attorney shall lawfully do or cause to be done by virtue hereof.
This power of attorney is coupled with an interest and shall be irrevocable for
the term of this Agreement and thereafter as long as any of the Obligations
shall be outstanding.

          (b)  On a continuing basis, the Company will make, execute,
acknowledge, deliver, file and record, as the case may be, in the proper filing
and recording places in any jurisdiction, including, without limitation, the
jurisdictions indicated on Schedule B, attached hereto, all such instruments,
                           ----------
and take all such action as may reasonably be deemed necessary or advisable, or
as reasonably requested by the Secured Party, to perfect the Security Interest
granted hereunder and otherwise to carry out the intent and purposes of this
Agreement, or for assuring and confirming to the Secured Party the grant or
perfection of a security interest in all the Collateral.

          (c)  The Company hereby irrevocably appoints the Secured Party as the
Company's attorney-in-fact, with full authority in the place and stead of the
Company and in the name of the Company, from time to time in the Secured Party's
discretion, to take any action and to execute any instrument which the Secured
Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including the filing, in its sole discretion, of one or more
financing or continuation statements and amendments thereto, relative to any of
the Collateral without the signature of the Company where permitted by law.

     13.  Notices.  All notices, requests, demands and other communications
          -------
hereunder shall be in writing, with copies to all the other parties hereto, and
shall be deemed to have been duly given when (i) if delivered by hand, upon
receipt, (ii) if sent by facsimile, upon receipt of

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proof of sending thereof, (iii) if sent by nationally recognized overnight
delivery service (receipt requested), the next business day or (iv) if mailed by
first-class registered or certified mail, return receipt requested, postage
prepaid, four days after posting in the U.S. mails, in each case if delivered to
the following addresses:

  If to the Company:       Airtech International Group, Inc.
                           15400 Knoll Trail, Suite 200
                           Dallas, Texas  75248
                           Attention:  C.J. Comu, Chairman & Chief Executive
                                       Officer
                           Facsimile:  (972) 960-9395

  With copies to:          John Rebensdorf, Esquire
                           6116 North Central Expressway, Suite 1313
                           Dallas, Texas  75206
                           Facsimile:  (214) 696-9430

  If to the Secured Party: AJW Partners, LLC
                           155 First Street, Suite B
                           Mineola, NY 11501
                           Attention: Corey S. Ribotsky
                           Facsimile: (516) 739-7115

                                   and

                           New Millennium Capital Partners II, LLC
                           155 First Street, Suite B
                           Mineola, NY 11501
                           Attention: Glenn A. Arbeitman
                           Facsimile: (516) 739-7115

  With copies to:          Ballard Spahr Andrews & Ingersoll, LLP
                           1735 Market Street
                           51st Floor
                           Philadelphia, PA 19103
                           Attention: Gerald J. Guarcini, Esq.
                           Facsimile: (215) 864-8999

     14.  Other Security.  To the extent that the Obligations are now or
          --------------
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Party shall have the right, in its sole

                                       10
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discretion, to pursue, relinquish, subordinate, modify or take any other action
with respect thereto, without in any way modifying or affecting any of the
Secured Party's rights and remedies hereunder.

     15.  Miscellaneous.
          -------------

          (a)  No course of dealing between the Company and the Secured Party,
nor any failure to exercise, nor any delay in exercising, on the part of the
Secured Party, any right, power or privilege hereunder or under the Debentures
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or thereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.

          (b)  All of the rights and remedies of the Secured Party with respect
to the Collateral, whether established hereby or by the Debentures or by any
other agreements, instruments or documents or by law shall be cumulative and may
be exercised singly or concurrently.

          (c)  This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and is intended to supersede all prior
negotiations, understandings and agreements with respect thereto. Except as
specifically set forth in this Agreement, no provision of this Agreement may be
modified or amended except by a written agreement specifically referring to this
Agreement and signed by the parties hereto.

          (d)  In the event that any provision of this Agreement is held to be
invalid, prohibited or unenforceable in any jurisdiction for any reason, unless
such provision is narrowed by judicial construction, this Agreement shall, as to
such jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.

          (e)  No waiver of any breach or default or any right under this
Agreement shall be considered valid unless in writing and signed by the party
giving such waiver, and no such waiver shall be deemed a waiver of any
subsequent breach or default or right, whether of the same or similar nature or
otherwise.

          (f)  This Agreement shall be binding upon and inure to the benefit of
each party hereto and its successors and assigns.

                                       11
<PAGE>

          (g)  Each party shall take such further action and execute and deliver
such further documents as may be necessary or appropriate in order to carry out
the provisions and purposes of this Agreement.

          (h)  This Agreement shall be construed in accordance with the laws of
the State of New York, except to the extent the validity, perfection or
enforcement of a security interest hereunder in respect of any particular
Collateral which are governed by a jurisdiction other than the State of New York
in which case such law shall govern. Each of the parties hereto irrevocably
submit to the exclusive jurisdiction of any New York State or United States
Federal court sitting in Manhattan county over any action or proceeding arising
out of or relating to this Agreement, and the parties hereto hereby irrevocably
agree that all claims in respect of such action or proceeding may be heard and
determined in such New York State or Federal court. The parties hereto agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. The parties hereto further waive any objection to venue
in the State of New York and any objection to an action or proceeding in the
State of New York on the basis of forum non convenient.

          (i)  EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO
A JURY TRAIL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF
THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY
HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY
ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY TRIAL
FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING THAT,
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF A
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

          (j)  This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and, all of
which taken together shall constitute one and the same Agreement. In the event
that any signature is delivered by facsimile transmission, such signature shall
create a valid binding obligation of the party executing (or on

                                       12
<PAGE>

whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       13
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed on the day and year first above written.

                         AIRTECH INTERNATIONAL GROUP, INC.

                         By:
                            -------------------------------------
                              C.J. Comu
                              Chairman and Chief Executive Officer

                         AJW PARTNERS, LLC
                         By: SMS Group, LLC

                         By:
                            -------------------------------------
                              Corey S. Ribotsky
                              Manager

                         NEW MILLENNIUM CAPITAL PARTNERS II, LLC
                         By: First Street Manager II, LLC

                         By:
                            -------------------------------------
                              Glenn A. Arbeitman
                              Manager

                                       14
<PAGE>

                                         Schedules A and B to Security Agreement
                                         ---------------------------------------

                  Principal Place of Business of the Company:
                  -------------------------------------------

15400 Knoll Trail, Suite 200
Dallas, Texas 75248
County of Dallas, Texas

               Locations where Collateral is Located or Stored:
               ------------------------------------------------

15400 Knoll Trail, Suite 200
Dallas, Texas 75248
and
12561 Perimerter
Dallas, Texas 75228

Both County of Dallas, Texas.

                     List of Subsidiaries of the Company:
                     ------------------------------------

Airtech International Corporation, a Texas Corporation;

Airsopure Inc., a Texas Corporation

Airsopure International Group, Inc. a Nevada Corporation;

Watersopure, Inc., a shelf-non-operating, Texas Corporation;

McCleskey Sales and Services, Inc., a dormant Texas Corporation

And,

Airsopure, Inc. is a General Partner in "Airsopure 999, LP", a Texas Limited
Partnership

                                 Jurisdictions:
                                 --------------

Texas

                                       15<PAGE>

                                                                    EXHIBIT 10.7

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
     REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
     "ACT"). THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR
     ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
     FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN
     FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN
     COMPARABLE TRANSACTIONS THAT REGISTRATION IS NOT REQUIRED UNDER
     SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

                         SECURED CONVERTIBLE DEBENTURE

Dallas, Texas
March 30, 2001                                                        $________

          FOR VALUE RECEIVED, AIRTECH INTERNATIONAL GROUP, INC., a Wyoming
corporation (hereinafter called the "Borrower"), hereby promises to pay to the
order of _____________________________or registered assigns (the "Holder") the
sum of ___________________________Dollars ($_______), on March __, 2003 (the
"Maturity Date"), and to pay interest on the unpaid principal balance hereof at
the rate of twelve percent (12%) per annum from March __, 2001 (the "Issue
Date") until the same becomes due and payable, whether at maturity or upon
acceleration or by prepayment or otherwise.  Any amount of principal or interest
on this Debenture which is not paid when due shall bear interest at the rate of
fifteen percent (15%) per annum from the due date thereof until the same is paid
("Default Interest").  Interest shall commence accruing on the issue date, shall
be computed on the basis of a 365-day year and the actual number of days elapsed
and shall be payable, at the option of the Holder, either quarterly on March 31,
June 30, September 30 and December 31 of each year beginning on March 31, 2001,
or at the time of conversion of the principal to which such interest relates in
accordance with Article I below.  All payments due hereunder (to the extent not
converted into common stock, par value $0.05 per share, of the Borrower (the
"Common Stock") in accordance with the terms hereof) shall be made in lawful
money of the United States of America. All payments shall be made at such
address as the Holder shall hereafter give to the Borrower by written notice
made in accordance with the provisions of this Debenture.  Whenever any amount
expressed to be due by the terms of this Debenture is due on any day which is
not a business day, the same shall instead be due on the next succeeding day
which is a business day and, in the case of any interest payment date which is
not the date on which this Debenture is paid in full, the extension of the due
date thereof shall not be taken into account for purposes of determining the
amount of interest due on such date.  As used in this Debenture, the
<PAGE>

term "business day" shall mean any day other than a Saturday, Sunday or a day on
which commercial banks in New York City, New York are authorized or required by
law or executive order to remain closed. This Debenture shall be secured
pursuant to the terms of that certain Security Agreement by and between the
Borrower and the Holder of even date herewith. Each capitalized term used
herein, and not otherwise defined, shall have the meaning ascribed thereto in
that certain Securities Purchase Agreement, dated March 30, 2001, pursuant to
which this Debenture was originally issued (the "Purchase Agreement").

     The following terms shall apply to this Debenture:

                         ARTICLE I. CONVERSION RIGHTS

          1.1  Conversion Right.  The Holder shall have the right from time to
               ----------------
time, and at any time on or prior to the earlier of (i) the Maturity Date and
(ii) the date of payment of the Default Amount (as defined in Article III)
pursuant to Section 1.6(a) or Article III, the Optional Prepayment Amount (as
defined in Section 5.1) or any payments pursuant to Section 1.7, each in respect
of the remaining outstanding principal amount of this Debenture, to convert all
or any part of the outstanding and unpaid principal amount of this Debenture
into fully paid and non-assessable shares of Common Stock, as such Common Stock
exists on the Issue Date, or any shares of capital stock or other securities of
the Borrower into which such Common Stock shall hereafter be changed or
reclassified at the conversion price  (the "Conversion Price") determined as
provided herein (a "Conversion"); provided, however, that in no event shall the
                                  --------  -------
Holder be entitled to convert any portion of this Debenture) in excess of that
portion of this Debenture upon conversion of which the sum of (1) the number of
shares of Common Stock beneficially owned by the Holder and its affiliates
(other than shares of Common Stock which may be deemed beneficially owned
through the ownership of the unconverted portion of the Debentures or the
unexercised or unconverted portion of any other security of the Borrower
(including, without limitation, the warrants issued by the Borrower pursuant to
the Purchase Agreement) subject to a limitation on conversion or exercise
analogous to the limitations contained herein) and (2) the number of shares of
Common Stock issuable upon the conversion of the portion of this Debenture with
respect to which the determination of this proviso is being made, would result
in beneficial ownership by the Holder and its affiliates of more than 4.9% of
the outstanding shares of Common Stock.  For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulations 13D-G thereunder, except as otherwise provided in
clause (1) of such proviso.  The Holder of this Debenture may waive the
limitations set forth herein by thirty (30) days prior written notice to the
Company.  The number of shares of Common Stock to be issued upon each conversion
of this Debenture shall be determined by dividing the Conversion Amount (as
defined below) by the applicable Conversion Price then in effect on the date
specified in the notice of conversion, in the form attached hereto as Exhibit A
(the "Notice of Conversion"), delivered to the Borrower by the Holder in
accordance with Section 1.4 below; provided that the Notice of Conversion is
submitted by facsimile (or by other means resulting in, or reasonably expected
to result in, notice) to the Borrower before 9:00 p.m., New York City, New York
time on such conversion date (the "Conversion Date").  The term "Conversion
Amount" means, with respect to any conversion

                                       2
<PAGE>

of this Debenture, the sum of (1) the principal amount of this Debenture to be
converted in such conversion plus (2) accrued and unpaid interest, if any, on
                             ----
such principal amount at the interest rates provided in this Debenture to the
Conversion Date plus (3) Default Interest, if any, on the amounts referred to in
                ----
the immediately preceding clauses (1) and/or (2) plus (4) at the Holder's
                                                 ----
option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g)
hereof or pursuant to Section 2(c) of that certain Registration Rights
Agreement, dated as of March 30, 2001, executed in connection with the initial
issuance of this Debenture and the other Debentures issued on the Issue Date
(the "Registration Rights Agreement").

          1.2  Conversion Price.
               ----------------

          (a)  Calculation of Conversion Price.  The Conversion Price shall be
               -------------------------------
the lesser of (i) the Variable Conversion Price (as defined herein) and (ii) the
Fixed Conversion Price (as defined herein) (subject, in each case, to equitable
adjustments for stock splits, stock dividends or rights offerings by the
Borrower relating to the Borrower's securities or the securities of any
subsidiary of the Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events).  The "Variable Conversion
Price" shall mean the Applicable Percentage (as defined herein) multiplied by
the Market Price (as defined herein).  "Market Price" means the average of the
lowest three (3) Trading Prices (as defined below) for the Common Stock during
the twenty (20) Trading Day period ending one Trading Day prior to the date the
Conversion Notice is sent by the Holder to the Borrower via facsimile (the
"Conversion Date").  "Trading Price" means, for any security as of any date, the
inter-day trading price on the Over-the-Counter Bulletin Board (the "OTCBB") as
reported by a reliable reporting service mutually acceptable to and hereafter
designated by Holders of a majority in interest of the Debentures (the
"Reporting Service") or, if the OTCBB is not the principal trading market for
such security, the inter-day trading price of such security on the principal
securities exchange or trading market where such security is listed or traded as
reported by the Reporting Service or, if no inter-day trading price of such
security is available in any of the foregoing manners, the average of the inter-
day trading prices of any market makers for such security that are listed in the
"pink sheets" by the National Quotation Bureau, Inc.  If the Trading Price
cannot be calculated for such security on such date in the manner provided
above, the Trading Price shall be the fair market value as mutually determined
by the Borrower and the Holders of a majority in interest of the Debentures
being converted for which the calculation of the Trading Price is required in
order to determine the Conversion Price of such Debentures.  "Trading Day" shall
mean any day on which the Common Stock is traded for any period on the OTCBB, or
on the principal securities exchange or other securities market on which the
Common Stock is then being traded.  "Applicable Percentage" shall mean 50.0%.
The "Fixed Conversion Price" shall mean $0.25.

          (b)  Conversion Price During Major Announcements.  Notwithstanding
               -------------------------------------------
anything contained in Section 1.2(a) to the contrary, in the event the Borrower
(i) makes a public announcement that it intends to consolidate or merge with any
other corporation (other than a merger in which the Borrower is the surviving or
continuing corporation and its capital stock is unchanged) or sell or transfer
all or substantially all of the assets of the Borrower or (ii) any person, group
or entity (including the Borrower) publicly announces a tender offer to purchase
50% or more of the Borrower's Common Stock (or any

                                       3
<PAGE>

other takeover scheme) (the date of the announcement referred to in clause (i)
or (ii) is hereinafter referred to as the "Announcement Date"), then the
Conversion Price shall, effective upon the Announcement Date and continuing
through the Adjusted Conversion Price Termination Date (as defined below), be
equal to the lower of (x) the Conversion Price which would have been applicable
for a Conversion occurring on the Announcement Date and (y) the Conversion Price
that would otherwise be in effect. From and after the Adjusted Conversion Price
Termination Date, the Conversion Price shall be determined as set forth in this
Section 1.2(a). For purposes hereof, "Adjusted Conversion Price Termination
Date" shall mean, with respect to any proposed transaction or tender offer (or
takeover scheme) for which a public announcement as contemplated by this Section
1.2(b) has been made, the date upon which the Borrower (in the case of clause
(i) above) or the person, group or entity (in the case of clause (ii) above)
consummates or publicly announces the termination or abandonment of the proposed
transaction or tender offer (or takeover scheme) which caused this Section
1.2(b) to become operative.

          1.3  Authorized Shares.  The Borrower covenants that during the period
               -----------------
the conversion right exists, the Borrower will reserve from its authorized and
unissued Common Stock a sufficient number of shares, free from preemptive
rights, to provide for the issuance of Common Stock upon the full conversion of
this Debenture and the other Debentures issued pursuant to the Purchase
Agreement.  As of the date of issuance of this Debenture, ______ (2x currently
required) authorized and unissued shares of Common Stock have been duly reserved
for issuance upon conversion of this Debenture and the other Debentures issued
pursuant to the Purchase Agreement (the "Reserved Amount").  The Reserved Amount
shall be increased from time to time in accordance with the Borrower's
obligations pursuant to Section 4(h) of the Purchase Agreement.  The Borrower
represents that upon issuance, such shares will be duly and validly issued,
fully paid and non-assessable.  In addition, if the Borrower shall issue any
securities or make any change to its capital structure which would change the
number of shares of Common Stock into which the Debentures shall be convertible
at the then current Conversion Price, the Borrower shall at the same time make
proper provision so that thereafter there shall be a sufficient number of shares
of Common Stock authorized and reserved, free from preemptive rights, for
conversion of the outstanding Debentures.  The Borrower (i) acknowledges that it
has irrevocably instructed its transfer agent to issue certificates for the
Common Stock issuable upon conversion of this Debenture, and (ii) agrees that
its issuance of this Debenture shall constitute full authority to its officers
and agents who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock in
accordance with the terms and conditions of this Debenture.

          If, at any time a Holder of this Debenture submits a Notice of
Conversion, and the Borrower does not have sufficient authorized but unissued
shares of Common Stock available to effect such conversion in accordance with
the provisions of this Article I (a "Conversion Default"), subject to Section
4.8, the Borrower shall issue to the Holder all of the shares of Common Stock
which are then available to effect such conversion.  The portion of this
Debenture which the Holder included in its Conversion Notice and which exceeds
the amount which is then convertible into available shares of Common Stock (the
"Excess Amount") shall, notwithstanding anything to the contrary contained
herein, not be convertible into Common Stock in accordance with the terms hereof
until (and at the Holder's option at any time after) the

                                       4
<PAGE>

date additional shares of Common Stock are authorized by the Borrower to permit
such conversion, at which time the Conversion Price in respect thereof shall be
the lesser of (i) the Conversion Price on the Conversion Default Date (as
defined below) and (ii) the Conversion Price on the Conversion Date thereafter
elected by the Holder in respect thereof. In addition, the Borrower shall pay to
the Holder payments ("Conversion Default Payments") for a Conversion Default in
the amount of (x) the sum of (1) the then outstanding principal amount of this
                      ------
Debenture plus (2) accrued and unpaid interest on the unpaid principal amount of
          ----
this Debenture through the Authorization Date (as defined below) plus (3)
                                                                 ----
Default Interest, if any, on the amounts referred to in clauses (1) and/or (2),
multiplied by (y) .24, multiplied by (z) (N/365), where N = the number of days
-------------          -------------
from the day the holder submits a Notice of Conversion giving rise to a
Conversion Default (the "Conversion Default Date") to the date (the
"Authorization Date") that the Borrower authorizes a sufficient number of shares
of Common Stock to effect conversion of the full outstanding principal balance
of this Debenture. The Borrower shall use its best efforts to authorize a
sufficient number of shares of Common Stock as soon as practicable following the
earlier of (i) such time that the Holder notifies the Borrower or that the
Borrower otherwise becomes aware that there are or likely will be insufficient
authorized and unissued shares to allow full conversion thereof and (ii) a
Conversion Default. The Borrower shall send notice to the Holder of the
authorization of additional shares of Common Stock, the Authorization Date and
the amount of Holder's accrued Conversion Default Payments. The accrued
Conversion Default Payments for each calendar month shall be paid in cash or
shall be convertible into Common Stock (at such time as there are sufficient
authorized shares of Common Stock) at the applicable Conversion Price, at the
Company's option, as follows:

          (a)  In the event Company elects to make such payment in cash, cash
payment shall be made to Holder by the fifth (5th) day of the month following
the month in which it has accrued; and

          (b)  In the event Company elects to make such payment in Common Stock,
the Holder may convert such payment amount into Common Stock at the Conversion
Price (as in effect at the time of conversion) at any time after the fifth day
of the month following the month in which it has accrued in accordance with the
terms of this Article I (so long as there is then a sufficient number of
authorized shares of Common Stock).

          The Holder's election shall be made in writing to the Borrower at any
time prior to 9:00 p.m., New York City, New York time, on the third day of the
month following the month in which Conversion Default payments have accrued.  If
no election is made, the Holder shall be deemed to have elected to receive cash.
Nothing herein shall limit the Holder's right to pursue actual damages (to the
extent in excess of the Conversion Default Payments) for the Borrower's failure
to maintain a sufficient number of authorized shares of Common Stock, and each
holder shall have the right to pursue all remedies available at law or in equity
(including degree of specific performance and/or injunctive relief).

                                       5
<PAGE>

          1.4  Method of Conversion.
               --------------------

          (a)  Mechanics of Conversion.  Subject to Section 1.1, this Debenture
               -----------------------
may be converted by the Holder in whole or in part (together with accrued and
unpaid interest thereon) at any time from time to time after the Issue Date, by
(A) submitting to the Borrower a Notice of Conversion (by facsimile or other
reasonable means of communication dispatched on the Conversion Date prior to
9:00 p.m., New York City, New York time) and (B) subject to Section 1.4(b),
surrendering this Debenture at the principal office of the Borrower.

          (b)  Surrender of Debenture Upon Conversion.  Notwithstanding anything
               --------------------------------------
to the contrary set forth herein, upon conversion of this Debenture in
accordance with the terms hereof, the Holder shall not be required to physically
surrender this Debenture to the Borrower unless the entire unpaid principal
amount of this Debenture is so converted.  The Holder and the Borrower shall
maintain records showing the principal amount so converted and the dates of such
conversions or shall use such other method, reasonably satisfactory to the
Holder and the Borrower, so as not to require physical surrender of this
Debenture upon each such conversion.  In the event of any dispute or
discrepancy, such records of the Borrower shall be controlling and determinative
in the absence of manifest error.  Notwithstanding the foregoing, if any portion
of this Debenture is converted as aforesaid, the Holder may not transfer this
Debenture unless the Holder first physically surrenders this Debenture to the
Borrower, whereupon the Borrower will forthwith issue and deliver upon the order
of the Holder a new Debenture of like tenor, registered as the Holder (upon
payment by the Holder of any applicable transfer taxes) may request,
representing in the aggregate the remaining unpaid principal amount of this
Debenture.  The Holder and any assignee, by acceptance of this Debenture,
acknowledge and agree that, by reason of the provisions of this paragraph,
following conversion of a portion of this Debenture, the unpaid and unconverted
principal amount of this Debenture represented by this Debenture may be less
than the amount stated on the face hereof.

          (c)  Payment of Taxes.  The Borrower shall not be required to pay any
               ----------------
tax which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock or other securities or property on conversion
of this Debenture in a name other than that of the Holder (or in street name),
and the Borrower shall not be required to issue or deliver any such shares or
other securities or property unless and until the person or persons (other than
the Holder or the custodian in whose street name such shares are to be held for
the Holder's account) requesting the issuance thereof shall have paid to the
Borrower the amount of any such tax or shall have established to the
satisfaction of the Borrower that such tax has been paid.

          (d)  Delivery of Common Stock Upon Conversion.  Upon receipt by the
               ----------------------------------------
Borrower from the Holder of a facsimile transmission (or other reasonable means
of communication) of a Notice of Conversion meeting the requirements for
conversion as provided in this Section 1.4, the Borrower shall issue and deliver
or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion within three (3)
business days after such receipt (and, solely in the case of conversion of the
entire unpaid principal amount hereof, surrender of this Debenture) (such third
business day being hereinafter referred to as the "Deadline") in accordance with
the terms hereof and the

                                       6
<PAGE>

Purchase Agreement (including, without limitation, in accordance with the
requirements of Section 2(g) of the Purchase Agreement that certificates for
shares of Common Stock issued on or after the effective date of the Registration
Statement upon conversion of this Debenture shall not bear any restrictive
legend).

          (e)  Obligation of Borrower to Deliver Common Stock.  Upon receipt by
               ----------------------------------------------
the Borrower of a Notice of Conversion, the Holder shall be deemed to be the
holder of record of the Common Stock issuable upon such conversion, the
outstanding principal amount and the amount of accrued and unpaid interest on
this Debenture shall be reduced to reflect such conversion, and, unless the
Borrower defaults on its obligations under this Article I, all rights with
respect to the portion of this Debenture being so converted shall forthwith
terminate except the right to receive the Common Stock or other securities, cash
or other assets, as herein provided, on such conversion.  If the Holder shall
have given a Notice of Conversion as provided herein, the Borrower's obligation
to issue and deliver the certificates for Common Stock shall be absolute and
unconditional, irrespective of the absence of any action by the Holder to
enforce the same, any waiver or consent with respect to any provision thereof,
the recovery of any judgment against any person or any action to enforce the
same, any failure or delay in the enforcement of any other obligation of the
Borrower to the holder of record, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder of any
obligation to the Borrower, and irrespective of any other circumstance which
might otherwise limit such obligation of the Borrower to the Holder in
connection with such conversion.  The Conversion Date specified in the Notice of
Conversion shall be the Conversion Date so long as the Notice of Conversion is
received by the Borrower before 9:00 p.m., New York City, New York time, on such
date.

          (f)  Delivery of Common Stock by Electronic Transfer.  In lieu of
               -----------------------------------------------
delivering physical certificates representing the Common Stock issuable upon
conversion, provided the Borrower's transfer agent is participating in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST")
program, upon request of the Holder and its compliance with the provisions
contained in Section 1.1 and in this Section 1.4, the Borrower shall use its
best efforts to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the Holder by crediting the account of
Holder's Prime Broker with DTC through its Deposit Withdrawal Agent Commission
("DWAC") system.

          (g)  Failure to Deliver Common Stock Prior to Deadline. Without in any
               -------------------------------------------------
way limiting the Holder's right to pursue other remedies, including actual
damages and/or equitable relief, the parties agree that if delivery of the
Common Stock issuable upon conversion of this Debenture is more than three (3)
days after the Deadline (other than a failure due to the circumstances described
in Section 1.3 above, which failure shall be governed by such Section) the
Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the
Deadline that the Borrower fails to deliver such Common Stock.  Such cash amount
shall be paid to Holder by the fifth day of the month following the month in
which it has accrued or, at the option of the Holder (by written notice to the
Borrower by the first day of the month following the month in which it has
accrued), shall be added to the principal amount of this Debenture, in which
event interest shall accrue thereon in accordance with the terms of this
Debenture and

                                       7
<PAGE>

such additional principal amount shall be convertible into Common Stock in
accordance with the terms of this Debenture.

          1.5  Concerning the Shares.  The shares of Common Stock issuable upon
               ---------------------
conversion of this Debenture may not be sold or transferred unless  (i) such
shares are sold pursuant to an effective registration statement under the Act or
(ii) the Borrower or its transfer agent shall have been furnished with an
opinion of  counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
the shares to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration or (iii) such shares are sold or transferred
pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv)
such shares are transferred to an "affiliate" (as defined in Rule 144) of the
Borrower who agrees to sell or otherwise transfer the shares only in accordance
with this Section 1.5 and who is an Accredited Investor (as defined in the
Purchase Agreement).  Except as otherwise provided in the Purchase Agreement
(and subject to the removal provisions set forth below), until such time as the
shares of Common Stock issuable upon conversion of this Debenture have been
registered under the Act as contemplated by the Registration Rights Agreement or
otherwise may be sold pursuant to Rule 144 without any restriction as to the
number of securities as of a particular date that can then be immediately sold,
each certificate for shares of Common Stock issuable upon conversion of this
Debenture that has not been so included in an effective registration statement
or that has not been sold pursuant to an effective registration statement or an
exemption that permits removal of the legend, shall bear a legend substantially
in the following form, as appropriate:

     "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
     REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
     SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE
     ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
     UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND
     SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS,
     THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT  UNLESS SOLD
     PURSUANT TO RULE 144 UNDER SAID ACT."

          The legend set forth above shall be removed and the Borrower shall
issue to the Holder a new certificate therefor free of any transfer legend if
(i) the Borrower or its transfer agent shall have received an opinion of
counsel, in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale or transfer of such
Common Stock may be made without registration under the Act and the shares are
so sold or transferred, (ii) such Holder provides the Borrower or its transfer
agent with reasonable assurances that the Common Stock issuable upon conversion
of this Debenture (to the extent such securities are deemed to have been
acquired on the same date) can be sold pursuant to Rule 144 or (iii) in the case
of the Common Stock issuable upon conversion of this Debenture, such security is
registered for sale by the Holder under an effective registration statement
filed under the Act or otherwise may be sold pursuant to Rule 144 without any
restriction as to the number of securities as of a particular date that can then
be immediately sold.  Nothing in this Debenture shall (i) limit the Borrower's
obligation under the Registration Rights Agreement or (ii) affect in

                                       8
<PAGE>

any way the Holder's obligations to comply with applicable prospectus delivery
requirements upon the resale of the securities referred to herein.

          1.6  Effect of Certain Events.
               ------------------------

          (a)  Effect of Merger, Consolidation, Etc.  At the option of the
               -------------------------------------
Holder, the sale, conveyance or disposition of all or substantially all of the
assets of the Borrower, the effectuation by the Borrower of a transaction or
series of related transactions in which more than 33% of the voting power of the
Borrower is disposed of, or the consolidation, merger or other business
combination of the Borrower with or into any other Person (as defined below) or
Persons when the Borrower is not the survivor shall either:  (i) be deemed to be
an Event of Default (as defined in Article III) pursuant to which the Borrower
shall be required to pay to the Holder upon the consummation of and as a
condition to such transaction an amount equal to the Default Amount (as defined
in Article III) or (ii) be treated pursuant to Section 1.6(b) hereof.  "Person"
shall mean any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.

          (b)  Adjustment Due to Merger, Consolidation, Etc.  If, at any time
               ---------------------------------------------
when this Debenture is issued and outstanding and prior to conversion of all of
the Debentures, there shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization, or other similar event, as a result of which
shares of Common Stock of the Borrower shall be changed into the same or a
different number of shares of another class or classes of stock or securities of
the Borrower or another entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Borrower other than in connection with a
plan of complete liquidation of the Borrower, then the Holder of this Debenture
shall thereafter have the right to receive upon conversion of this Debenture,
upon the basis and upon the terms and conditions specified herein and in lieu of
the shares of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which the Holder would have been entitled to
receive in such transaction had this Debenture been converted in full
immediately prior to such transaction (without regard to any limitations on
conversion set forth herein), and in any such case appropriate provisions shall
be made with respect to the rights and interests of the Holder of this Debenture
to the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares issuable upon
conversion of the Debenture) shall thereafter be applicable, as nearly as may be
practicable in relation to any securities or assets thereafter deliverable upon
the conversion hereof.  The Borrower shall not effect any transaction described
in this Section 1.6(b) unless (a) it first gives, to the extent practicable,
thirty (30) days prior written notice (but in any event at least fifteen (15)
days prior written notice) of the record date of the special meeting of
stockholders to approve, or if there is no such record date, the consummation
of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event or sale of assets (during which time the
Holder shall be entitled to convert this Debenture) and (b) the resulting
successor or acquiring entity (if not the Borrower) assumes by written
instrument the obligations of this Section 1.6(b).  The above provisions shall
similarly apply to successive consolidations, mergers, sales, transfers or share
exchanges.

                                       9
<PAGE>

          (c)  Adjustment Due to Distribution.  If the Borrower shall declare or
               ------------------------------
make any distribution of its assets (or rights to acquire its assets) to holders
of Common Stock as a dividend, stock repurchase, by way of return of capital or
otherwise (including any dividend or distribution to the Borrower's shareholders
in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a "Distribution"), then the Holder of this Debenture shall
be entitled, upon any conversion of this Debenture after the date of record for
determining shareholders entitled to such Distribution, to receive the amount of
such assets which would have been payable to the Holder with respect to the
shares of Common Stock issuable upon such conversion had such Holder been the
holder of such shares of Common Stock on the record date for the determination
of shareholders entitled to such Distribution.

          (d)  Adjustment Due to Dilutive Issuance. If, at any time when any
               -----------------------------------
Debentures are issued and outstanding, the Borrower issues or sells, or in
accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any
shares of Common Stock for no consideration or for a consideration per share
(before deduction of reasonable expenses or commissions or underwriting
discounts or allowances in connection therewith) less than the Fixed Conversion
Price in effect on the date of such issuance (or deemed issuance) of such shares
of Common Stock (a "Dilutive Issuance"), then immediately upon the Dilutive
Issuance, the Fixed Conversion Price will be reduced to the amount of the
consideration per share received by the Borrower in such Dilutive Issuance;
provided that only one adjustment will be made for each Dilutive Issuance.
--------

          The Borrower shall be deemed to have issued or sold shares of Common
Stock if the Borrower in any manner issues or grants any warrants, rights or
options (except for options granted pursuant to an employee stock option plan
existing on the date of issuance of this Debenture), whether or not immediately
exercisable, to subscribe for or to purchase Common Stock or other securities
convertible into or exchangeable for Common Stock ("Convertible Securities")
(such warrants, rights and options to purchase Common Stock or Convertible
Securities are hereinafter referred to as "Options") and the price per share for
which Common Stock is issuable upon the exercise of such Options is less than
the Fixed Conversion Price then in effect, then the Fixed Conversion Price shall
be equal to such price per share.  For purposes of the preceding sentence, the
"price per share for which Common Stock is issuable upon the exercise of such
Options" is determined by dividing (i) the total amount, if any, received or
receivable by the Borrower as consideration for the issuance or granting of all
such Options, plus the minimum aggregate amount of additional consideration, if
any, payable to the Borrower upon the exercise of all such Options, plus, in the
case of Convertible Securities issuable upon the exercise of such Options, the
minimum aggregate amount of additional consideration payable upon the conversion
or exchange thereof at the time such Convertible Securities first become
convertible or exchangeable, by (ii) the maximum total number of shares of
Common Stock issuable upon the exercise of all such Options (assuming full
conversion of Convertible Securities, if applicable).  No further adjustment to
the Conversion Price will be made upon the actual issuance of such Common Stock
upon the exercise of such Options or upon the conversion or exchange of
Convertible Securities issuable upon exercise of such Options.

          Additionally, the Borrower shall be deemed to have issued or sold
shares of Common Stock if the Borrower in any manner issues or sells any
Convertible

                                       10
<PAGE>

Securities, whether or not immediately convertible (other than where the same
are issuable upon the exercise of Options), and the price per share for which
Common Stock is issuable upon such conversion or exchange is less than the Fixed
Conversion Price then in effect, then the Fixed Conversion Price shall be equal
to such price per share. For the purposes of the preceding sentence, the "price
per share for which Common Stock is issuable upon such conversion or exchange"
is determined by dividing (i) the total amount, if any, received or receivable
by the Borrower as consideration for the issuance or sale of all such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Borrower upon the conversion or exchange
thereof at the time such Convertible Securities first become convertible or
exchangeable, by (ii) the maximum total number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
further adjustment to the Fixed Conversion Price will be made upon the actual
issuance of such Common Stock upon conversion or exchange of such Convertible
Securities.

          (e)  Purchase Rights.  If, at any time when any Debentures are issued
               ---------------
and outstanding, the Borrower issues any convertible securities or rights to
purchase stock, warrants, securities or other property (the "Purchase Rights")
pro rata to the record holders of any class of Common Stock, then the Holder of
this Debenture will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such Holder could have
acquired if such Holder had held the number of shares of Common Stock acquirable
upon complete conversion of this Debenture (without regard to any limitations on
conversion contained herein) immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights or, if no such
record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights.

          (f)  Notice of Adjustments.  Upon the occurrence of each adjustment
               ---------------------
or readjustment of the Conversion Price as a result of the events described in
this Section 1.6, the Borrower, at its expense, shall promptly compute such
adjustment or readjustment and prepare and furnish to the Holder of a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based.  The Borrower
shall, upon the written request at any time of the Holder, furnish to such
Holder a like certificate setting forth (i) such adjustment or readjustment,
(ii) the Conversion Price at the time in effect and (iii) the number of shares
of Common Stock and the amount, if any, of other securities or property which at
the time would be received upon conversion of the Debenture.

          1.7  Trading Market Limitations.  Unless permitted by the applicable
               --------------------------
rules and regulations of the principal securities market on which the Common
Stock is then listed or traded, in no event shall the Borrower issue upon
conversion of or otherwise pursuant to this Debenture and the other Debentures
issued pursuant to the Purchase Agreement more than the maximum number of shares
of Common Stock that the Borrower can issue pursuant to any rule of the
principal United States securities market on which the Common Stock is then
traded (the "Maximum Share Amount"), which, as of the Issue Date shall be
5,830,762 shares (19.99% of the total shares outstanding on the Issue Date),
subject to equitable adjustment from time to time for stock splits, stock
dividends, combinations, capital reorganizations and similar events relating

                                       11
<PAGE>

to the Common Stock occurring after the date hereof. Once the Maximum Share
Amount has been issued (the date of which is hereinafter referred to as the
"Maximum Conversion Date"), if the Borrower fails to eliminate any prohibitions
under applicable law or the rules or regulations of any stock exchange,
interdealer quotation system or other self-regulatory organization with
jurisdiction over the Borrower or any of its securities on the Borrower's
ability to issue shares of Common Stock in excess of the Maximum Share Amount (a
"Trading Market Prepayment Event"), in lieu of any further right to convert this
Debenture, and in full satisfaction of the Borrower's obligations under this
Debenture, the Borrower shall pay to the Holder, within fifteen (15) business
days of the Maximum Conversion Date (the "Trading Market Prepayment Date"), an
amount equal to 120% times the sum of (a) the then outstanding principal amount
                     -----     ---
of this Debenture immediately following the Maximum Conversion Date, plus (b)
                                                                     ----
accrued and unpaid interest on the unpaid principal amount of this Debenture to
the Trading Market Prepayment Date, plus (c) Default Interest, if any, on the
                                    ----
amounts referred to in clause (a) and/or (b) above, plus (d) any optional
                                                    ----
amounts that may be added thereto at the Maximum Conversion Date by the Holder
in accordance with the terms hereof (the then outstanding principal amount of
this Debenture immediately following the Maximum Conversion Date, plus the
                                                                  ----
amounts referred to in clauses (b), (c) and (d) above shall collectively be
referred to as the "Remaining Convertible Amount"). With respect to each Holder
of Debentures, the Maximum Share Amount shall refer to such Holder's pro rata
                                                                     --- ----
share thereof determined in accordance with Section 4.8 below. In the event that
the sum of (x) the aggregate number of shares of Common Stock issued upon
conversion of this Debenture and the other Debentures issued pursuant to the
Purchase Agreement plus (y) the aggregate number of shares of Common Stock that
                   ----
remain issuable upon conversion of this Debenture and the other Debentures
issued pursuant to the Purchase Agreement, represents at least one hundred
percent (100%) of the Maximum Share Amount (the "Triggering Event"), the
Borrower will use its best efforts to seek and obtain Stockholder Approval (or
obtain such other relief as will allow conversions hereunder in excess of the
Maximum Share Amount) as soon as practicable following the Triggering Event and
before the Maximum Conversion Date. As used herein, "Stockholder Approval" means
approval by the stockholders of the Borrower to authorize the issuance of the
full number of shares of Common Stock which would be issuable upon full
conversion of the then outstanding Debentures but for the Maximum Share Amount.

          1.8  Status as Stockholder.  Upon submission of a Notice of Conversion
               ---------------------
by a Holder, (i) the shares covered thereby (other than the shares, if any,
which cannot be issued because their issuance would exceed such Holder's
allocated portion of the Reserved Amount or Maximum Share Amount) shall be
deemed converted into shares of Common Stock and (ii) the Holder's rights as a
Holder of such converted portion of this Debenture shall cease and terminate,
excepting only the right to receive certificates for such shares of Common Stock
and to any remedies provided herein or otherwise available at law or in equity
to such Holder because of a failure by the Borrower to comply with the terms  of
this Debenture.  Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business
day after the expiration of the Deadline with respect to a conversion of any
portion of this Debenture for any reason, then (unless the Holder otherwise
elects to retain its status as a holder of Common Stock by so notifying the
Borrower) the Holder shall regain the rights of a Holder of this Debenture with
respect to such unconverted portions of this Debenture and the Borrower shall,
as soon as practicable, return such unconverted

                                       12
<PAGE>

Debenture to the Holder or, if the Debenture has not been surrendered, adjust
its records to reflect that such portion of this Debenture has not been
converted. In all cases, the Holder shall retain all of its rights and remedies
(including, without limitation, (i) the right to receive Conversion Default
Payments pursuant to Section 1.3 to the extent required thereby for such
Conversion Default and any subsequent Conversion Default and (ii) the right to
have the Conversion Price with respect to subsequent conversions determined in
accordance with Section 1.3) for the Borrower's failure to convert this
Debenture.

                         ARTICLE II. CERTAIN COVENANTS

          2.1  Distributions on Capital Stock.  So long as the Borrower shall
               ------------------------------
have any obligation under this Debenture, the Borrower shall not without the
Holder's written consent (a) pay, declare or set apart for such payment, any
dividend or other distribution (whether in cash, property or other securities)
on shares of capital stock other than dividends on shares of Common Stock solely
in the form of additional shares of Common Stock or (b) directly or indirectly
or through any subsidiary make any other payment or distribution in respect of
its capital stock except for distributions pursuant to any shareholders' rights
plan which is approved by a majority of the Borrower's disinterested directors.

          2.2  Restriction on Stock Repurchases.  So long as the Borrower shall
               --------------------------------
have any obligation under this Debenture, the Borrower shall not without the
Holder's written consent redeem, repurchase or otherwise acquire (whether for
cash or in exchange for property or other securities or otherwise) in any one
transaction or series of related transactions any shares of capital stock of the
Borrower or any warrants, rights or options to purchase or acquire any such
shares.

          2.3  Borrowings.  So long as the Borrower shall have any obligation
               ----------
under this Debenture, the Borrower shall not, without the Holder's written
consent, create, incur, assume or suffer to exist any liability for borrowed
money, except (a) borrowings in existence or committed on the date hereof and of
which the Borrower has informed Holder in writing prior to the date hereof, (b)
indebtedness to trade creditors or financial institutions incurred in the
ordinary course of business, including, but not limited to, lines of credit, or
(c) borrowings, the proceeds of which shall be used to repay this Debenture.

          2.4  Sale of Assets.  So long as the Borrower shall have any
               --------------
obligation under this Debenture, the Borrower shall not, without the Holder's
written consent, sell, lease or otherwise dispose of any significant portion of
its assets outside the ordinary course of business.  Any consent to the
disposition of any assets may be conditioned on a specified use of the proceeds
of disposition.

          2.5  Advances and Loans.  So long as the Borrower shall have any
               ------------------
obligation under this Debenture, the Borrower shall not, without the Holder's
written consent, lend money, give credit or make advances to any person, firm,
joint venture or corporation, including, without limitation, officers,
directors, employees, subsidiaries and affiliates of the Borrower, except loans,
credits or advances (a) in existence or committed on the date hereof and which
the

                                       13
<PAGE>

Borrower has informed Holder in writing prior to the date hereof or (b) made in
the ordinary course of business.

          2.6  Contingent Liabilities.  So long as the Borrower shall have any
               ----------------------
obligation under this Debenture, the Borrower shall not, without the Holder's
written consent, assume, guarantee, endorse, contingently agree to purchase or
otherwise become liable upon the obligation of any person, firm, partnership,
joint venture or corporation, except by the endorsement of negotiable
instruments for deposit or collection and except assumptions, guarantees,
endorsements and contingencies (a) in existence or committed on the date hereof
and which the Borrower has informed Holder in writing prior to the date hereof,
and (b) similar transactions in the ordinary course of business.

                        ARTICLE III. EVENTS OF DEFAULT

          If any of the following events of default (each, an "Event of
Default") shall occur:

          3.1  Failure to Pay Principal or Interest.  The Borrower fails to pay
               ------------------------------------
the principal hereof or interest thereon when due on this Debenture, whether at
maturity, upon a Trading Market Prepayment Event pursuant to Section 1.7, upon
acceleration or otherwise.

          3.2  Conversion and the Shares.  The Borrower fails to issue shares of
               -------------------------
Common Stock to the Holder (or announces or threatens that it will not honor its
obligation to do so) upon exercise by the Holder of the conversion rights of the
Holder in accordance with the terms of this Debenture (for a period of at least
sixty (60) days, if such failure is solely as a result of the circumstances
governed by Section 1.3 and the Borrower is using its best efforts to authorize
a sufficient number of shares of Common Stock as soon as practicable), fails to
transfer or cause its transfer agent to transfer (electronically or in
certificated form) any certificate for shares of Common Stock issued to the
Holder upon conversion of or otherwise pursuant to this Debenture as and when
required by this Debenture or the Registration Rights Agreement, or fails to
remove any restrictive legend (or to withdraw any stop transfer instructions in
respect thereof) on any certificate for any shares of Common Stock issued to the
Holder upon conversion of or otherwise pursuant to this Debenture as and when
required by this Debenture or the Registration Rights Agreement (or makes any
announcement, statement or threat that it does not intend to honor the
obligations described in this paragraph) and any such failure shall continue
uncured (or any announcement, statement or threat not to honor its obligations
shall not be rescinded in writing) for ten (10) days after the Borrower shall
have been notified thereof in writing by the Holder.

          3.3  Failure to Effect Registration.  The Borrower fails to obtain
               ------------------------------
effectiveness with the Securities and Exchange Commission of the Registration
Statement prior to one hundred and five (105) days from the Closing Date or such
Registration Statement lapses in effect (or sales cannot otherwise be made
thereunder effective, whether by reason of the Borrower's failure to amend or
supplement the prospectus included therein in accordance with

                                       14
<PAGE>

the Registration Rights Agreement or otherwise) for more than ten (10)
consecutive days or fifteen (15) days in any twelve month period after the
Registration Statement becomes effective;

          3.4  Breach of Covenants.  The Borrower breaches any material covenant
               -------------------
or other material term or condition contained in Sections 1.3, 1.6 or 1.7 of
this Debenture, or Sections 4(c), 4(e), 4(h), 4(i), 4(j) or 5 of the Purchase
Agreement and such breach continues for a period of ten (10) days after written
notice thereof to the Borrower from the Holder;

          3.5  Breach of Representations and Warranties.  Any representation or
               ----------------------------------------
warranty of the Borrower made herein or in any agreement, statement or
certificate given in writing pursuant hereto or in connection herewith
(including, without limitation, the Purchase Agreement and the Registration
Rights Agreement), shall be false or misleading in any material respect when
made and the breach of which has (or with the passage of time will have) a
material adverse effect on the rights of the Holder with respect to this
Debenture, the Purchase Agreement or the Registration Rights Agreement;

          3.6  Receiver or Trustee.  The Borrower or any subsidiary of the
               -------------------
Borrower shall make an assignment for the benefit of creditors, or apply for or
consent to the appointment of a receiver or trustee for it or for a substantial
part of its property or business, or such a receiver or trustee shall otherwise
be appointed;

          3.7  Judgments.  Any money judgment, writ or similar process shall be
               ---------
entered or filed against the Borrower or any subsidiary of the Borrower or any
of its property or other assets for more than $25,000, and shall remain
unvacated, unbonded or unstayed for a period of twenty (20) days unless
otherwise consented to by the Holder, which consent will not be unreasonably
withheld;

          3.8  Bankruptcy.  Bankruptcy, insolvency, reorganization or
               ----------
liquidation proceedings or other proceedings for relief under any bankruptcy law
or any law for the relief of debtors shall be instituted by or against the
Borrower or any subsidiary of the Borrower; or

          3.9  Delisting of Common Stock.  The Borrower shall fail to maintain
               -------------------------
the listing of the Common Stock on at least one of the OTCBB, the Nasdaq
National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the
American Stock Exchange;

          3.10 Default Under Other Debentures.  An Event of Default has
               ------------------------------
occurred and is continuing under any of the other Debentures issued pursuant to
the Purchase Agreement.

then, upon the occurrence and during the continuation of any Event of Default
specified in Section 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.9, or 3.10, at the option
of the Holders of a majority of the aggregate principal amount of the
outstanding Debentures issued pursuant to the Purchase Agreement exercisable
through the delivery of written notice to the Borrower by such Holders (the
"Default Notice"), and upon the occurrence of an Event of Default specified in
Section 3.6 or 3.8, the Debentures shall become immediately due and payable and
the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount equal to the greater of (i) 120% times the sum of (w) the
                                                      -----     ---
then outstanding principal amount of this Debenture plus (x)
                                                    ----

                                       15
<PAGE>

accrued and unpaid interest on the unpaid principal amount of this Debenture to
the date of payment (the "Mandatory Prepayment Date") plus (y) Default Interest,
                                                      ----
if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any
                                                             ----
amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof or
pursuant to Section 2(c) of the Registration Rights Agreement (the then
outstanding principal amount of this Debenture to the date of payment plus the
                                                                      ----
amounts referred to in clauses (x), (y) and (z) shall collectively be known as
the "Default Sum") or (ii) the "Parity Value" of the Default Sum to be prepaid,
where Parity Value means (a) the highest number of shares of Common Stock
issuable upon conversion of or otherwise pursuant to such Default Sum in
accordance with Article I, treating the Trading Day immediately preceding the
Mandatory Prepayment Date as the "Conversion Date" for purposes of determining
the lowest applicable Conversion Price, unless the Default Event arises as a
result of a breach in respect of a specific Conversion Date in which case such
Conversion Date shall be the Conversion Date), multiplied by (b) the highest
                                               -------------
Closing Price for the Common Stock during the period beginning on the date of
first occurrence of the Event of Default and ending one day prior to the
Mandatory Prepayment Date (the "Default Amount") and all other amounts payable
hereunder shall immediately become due and payable, all without demand,
presentment or notice, all of which hereby are expressly waived, together with
all costs, including, without limitation, legal fees and expenses, of
collection, and the Holder shall be entitled to exercise all other rights and
remedies available at law or in equity. If the Borrower fails to pay the Default
Amount within five (5) business days of written notice that such amount is due
and payable, then the Holder shall have the right at any time, so long as the
Borrower remains in default (and so long and to the extent that there are
sufficient authorized shares), to require the Borrower, upon written notice, to
immediately issue, in lieu of the Default Amount, the number of shares of Common
Stock of the Borrower equal to the Default Amount divided by the Conversion
Price then in effect.

                           ARTICLE IV. MISCELLANEOUS

          4.1  Failure or Indulgence Not Waiver.  No failure or delay on the
               --------------------------------
part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privileges.  All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

          4.2  Notices.  Any notice herein required or permitted to be given
               -------
shall be in writing and may be personally served or delivered by courier or sent
by United States mail and shall be deemed to have been given upon receipt if
personally served (which shall include telephone line facsimile transmission) or
sent by courier or three (3) days after being deposited in the United States
mail, certified, with postage pre-paid and properly addressed, if sent by mail.
For the purposes hereof, the address of the Holder shall be as shown on the
records of the Borrower; and the address of the Borrower shall be 15400 Knoll
Trail, Suite 200, Dallas, Texas 75248, (facsimile number: (972) 960-9395). Both
the Holder and the Borrower may change the address for service by service of
written notice to the other as herein provided.

                                       16
<PAGE>

          4.3  Amendments.  This Debenture and any provision hereof may only be
               ----------
amended by an instrument in writing signed by the Borrower and the Holder.  The
term "Debenture" and all reference thereto, as used throughout this instrument,
shall mean this instrument (and the other Debentures issued pursuant to the
Purchase Agreement) as originally executed, or if later amended or supplemented,
then as so amended or supplemented.

          4.4  Assignability.  This Debenture shall be binding upon the Borrower
               -------------
and its successors and assigns, and shall inure to be the benefit of the Holder
and its successors and assigns.  Each transferee of this Debenture must be an
"accredited investor" (as defined in Rule 501(a) of the 1933 Act).
Notwithstanding anything in this Debenture to the contrary, this Debenture may
be pledged as collateral in connection with a bona fide margin account or other
                                              ---- ----
lending arrangement.

          4.5  Cost of Collection.  If default is made in the payment of this
               ------------------
Debenture, the Borrower shall pay the Holder hereof costs of collection,
including reasonable attorneys' fees.

          4.6  Governing Law.  THIS DEBENTURE SHALL BE ENFORCED, GOVERNED BY AND
               -------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS.  THE BORROWER HEREBY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS DEBENTURE, THE
AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING.  BOTH PARTIES FURTHER AGREE
THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING.  NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.  BOTH PARTIES AGREE THAT A FINAL NON-
APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY
BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS DEBENTURE SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

          4.7  Certain Amounts.  Whenever pursuant to this Debenture the
               ---------------
Borrower is required to pay an amount in excess of the outstanding principal
amount (or the portion thereof required to be paid at that time) plus accrued
and unpaid interest plus Default Interest on such interest, the Borrower and the
Holder agree that the actual damages to the Holder from the receipt of cash
payment on this Debenture may be difficult to determine and the amount to be so
paid by the Borrower represents stipulated damages and not a penalty and is
intended to

                                       17
<PAGE>

compensate the Holder in part for loss of the opportunity to convert this
Debenture and to earn a return from the sale of shares of Common Stock acquired
upon conversion of this Debenture at a price in excess of the price paid for
such shares pursuant to this Debenture. The Borrower and the Holder hereby agree
that such amount of stipulated damages is not plainly disproportionate to the
possible loss to the Holder from the receipt of a cash payment without the
opportunity to convert this Debenture into shares of Common Stock.

          4.8   Allocations of Maximum Share Amount and Reserved Amount.  The
                -------------------------------------------------------
Maximum Share Amount and Reserved Amount shall be allocated pro rata among the
Holders of Debentures based on the principal amount of such Debentures issued to
each Holder.  Each increase to the Maximum Share Amount and Reserved Amount
shall be allocated pro rata among the Holders of Debentures based on the
principal amount of such Debentures held by each Holder at the time of the
increase in the Maximum Share Amount or Reserved Amount.  In the event a Holder
shall sell or otherwise transfer any of such Holder's Debentures, each
transferee shall be allocated a pro rata portion of such transferor's Maximum
Share Amount and Reserved Amount.  Any portion of the Maximum Share Amount or
Reserved Amount which remains allocated to any person or entity which does not
hold any Debentures shall be allocated to the remaining Holders of Debentures,
pro rata based on the principal amount of such Debentures then held by such
Holders.

          4.9   Damages Shares.  The shares of Common Stock that may be issuable
                --------------
to the Holder pursuant to Sections 1.3 and 1.4(g) hereof and pursuant to Section
2(c) of the Registration Rights Agreement ("Damages Shares") shall be treated as
Common Stock issuable upon conversion of this Debenture for all purposes hereof
and shall be subject to all of the limitations and afforded all of the rights of
the other shares of Common Stock issuable hereunder, including without
limitation, the right to be included in the Registration Statement filed
pursuant to the Registration Rights Agreement.  For purposes of calculating
interest payable on the outstanding principal amount hereof, except as otherwise
provided herein, amounts convertible into Damages Shares ("Damages Amounts")
shall not bear interest but must be converted prior to the conversion of any
outstanding principal amount hereof, until the outstanding Damages Amounts is
zero.

          4.10  Denominations.  At the request of the Holder, upon surrender of
                -------------
this Debenture, the Borrower shall promptly issue new Debentures in the
aggregate outstanding principal amount hereof, in the form hereof, in such
denominations of at least $50,000 as the Holder shall request.

          4.11  Purchase Agreement.  By its acceptance of this Debenture, each
                ------------------
Holder agrees to be bound by the applicable terms of the Purchase Agreement.

          4.12  Notice of Corporate Events.  Except as otherwise provided below,
                --------------------------
the Holder of this Debenture shall have no rights as a Holder of Common Stock
unless and only to the extent that it converts this Debenture into Common Stock.
The Borrower shall provide the Holder with prior notification, simultaneous with
notification to other shareholders of the Company, of any meeting of the
Borrower's shareholders (and copies of proxy materials and other information
sent to shareholders).  In the event of any taking by the Borrower of a record

                                       18
<PAGE>

of its shareholders for the purpose of determining shareholders who are entitled
to receive payment of any dividend or other distribution, any right to subscribe
for, purchase or otherwise acquire (including by way of merger, consolidation,
reclassification or recapitalization) any share of any class or any other
securities or property, or to receive any other right, or for the purpose of
determining shareholders who are entitled to vote in connection with any
proposed sale, lease or conveyance of all or substantially all of the assets of
the Borrower or any proposed liquidation, dissolution or winding up of the
Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20)
days prior to the record date specified therein (or thirty (30) days prior to
the consummation of the transaction or event, whichever is earlier), of the date
on which any such record is to be taken for the purpose of such dividend,
distribution, right or other event, and a brief statement regarding the amount
and character of such dividend, distribution, right or other event to the extent
known at such time.  The Borrower shall make a public announcement of any event
requiring notification to the Holder hereunder substantially simultaneously with
the notification to the Holder in accordance with the terms of this Section
4.12.

          4.13  Remedies.  The Company acknowledges that a breach by it of its
                --------
obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby.  Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Debenture will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Debenture, that the
Holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Debenture
and to enforce specifically the terms and provisions thereof, without the
necessity of showing economic loss and without any bond or other security being
required.

                        ARTICLE V. OPTIONAL PREPAYMENT

          5.1.  Optional Prepayment.  Notwithstanding anything to the contrary
                -------------------
contained in this Article V, for not more than thirty (30) days from the date
hereof, so long as (i) no Event of Default or Trading Market Prepayment Event
shall have occurred and be continuing, and (ii) the Borrower has a sufficient
number of authorized shares of Common Stock reserved for issuance upon full
conversion of the Debentures, then at any time after the Issue Date, the
Borrower shall have the right, exercisable on not less than ten (10) Trading
Days prior written notice to the Holders of the Debentures (which notice may not
be sent to the Holders of the Debentures until the Borrower is permitted to
prepay the Debentures pursuant to this Section 5.1), to prepay all of the
outstanding Debentures in accordance with this Section 5.1.  Any notice of
prepayment hereunder (an "Optional Prepayment") shall be delivered to the
Holders of the Debentures at their registered addresses appearing on the books
and records of the Borrower and shall state (1) that the Borrower is exercising
its right to prepay all of the Debentures issued on the Issue Date and (2) the
date of prepayment (the "Optional Prepayment Notice").  On the date fixed for
prepayment (the "Optional Prepayment Date"), the Borrower shall make payment of
the Optional Prepayment Amount (as defined below) to or upon the order of the
Holders as specified by the Holders in writing to the Borrower at least one (1)
business day prior to the Optional Prepayment Date.  If the Borrower exercises
its right to prepay the Debentures,

                                       19
<PAGE>

the Borrower shall make payment to the holders of an amount in cash (the
"Optional Prepayment Amount") equal to 120% multiplied by the sum of (w) the
then outstanding principal amount of this Debenture plus (x) accrued and unpaid
                                                    ----
interest on the unpaid principal amount of this Debenture to the Optional
Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in
                ----
clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections
                    ----
1.3 and 1.4(g) hereof or pursuant to Section 2(c) of the Registration Rights
Agreement (the then outstanding principal amount of this Debenture to the date
of payment plus the amounts referred to in clauses (x), (y) and (z) shall
           ----
collectively be known as the "Optional Prepayment Sum"). Notwithstanding notice
of an Optional Prepayment, the Holders shall at all times prior to the Optional
Prepayment Date maintain the right to convert all or any portion of the
Debentures in accordance with Article I and any portion of Debentures so
converted after receipt of an Optional Prepayment Notice and prior to the
Optional Prepayment Date set forth in such notice and payment of the aggregate
Optional Prepayment Amount shall be deducted from the principal amount of
Debentures which are otherwise subject to prepayment pursuant to such notice. If
the Borrower delivers an Optional Prepayment Notice and fails to pay the
Optional Prepayment Amount due to the Holders of the Debentures within two (2)
business days following the Optional Prepayment Date, the Borrower shall forever
forfeit its right to redeem the Debentures pursuant to this Section 5.1.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       20
<PAGE>

          IN WITNESS WHEREOF, Borrower has caused this Debenture to be signed in
its name by its duly authorized officer this 30th day of March, 2001.

                                   AIRTECH INTERNATIONAL GROUP, INC.

                                   By:  ______________________________
                                        C. J. Comu
                                        Chairman and Chief Executive Officer

                                       21
<PAGE>

                                                                       EXHIBIT A

                             NOTICE OF CONVERSION
                   (To be Executed by the Registered Holder
                      in order to Convert the Debentures)

          The undersigned hereby irrevocably elects to convert $_____________
principal amount of the Debenture (defined below) into shares of common stock,
par value $0.05 per share ("Common Stock"), of Airtech International Group,
Inc., a Wyoming corporation (the "Borrower") according to the conditions of the
convertible debentures of the Borrower dated as of March __, 2001 (the
"Debentures"), as of the date written below. If securities are to be issued in
the name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto and is delivering herewith such
certificates. No fee will be charged to the Holder for any conversion, except
for transfer taxes, if any. A copy of each Debenture is attached hereto (or
evidence of loss, theft or destruction thereof).

          The Borrower shall electronically transmit the Common Stock issuable
pursuant to this Notice of Conversion to the account of the undersigned or its
nominee with DTC through its Deposit Withdrawal Agent Commission system ( "DWAC
Transfer").

     Name of DTC Prime Broker:_________________________________________
     Account Number:___________________________________________________

          In lieu of receiving shares of Common Stock issuable pursuant to this
Notice of Conversion by way of a DWAC Transfer, the undersigned hereby requests
that the Borrower issue a certificate or certificates for the number of shares
of Common Stock set forth below (which numbers are based on the Holder's
calculation attached hereto) in the name(s) specified immediately below or, if
additional space is necessary, on an attachment hereto:

     Name:_____________________________________________________________
     Address:__________________________________________________________

          The undersigned represents and warrants that all offers and sales by
the undersigned of the securities issuable to the undersigned upon conversion of
the Debentures shall be made pursuant to registration of the securities under
the Securities Act of 1933, as amended (the "Act"), or pursuant to an exemption
from registration under the Act.

          Date of Conversion:__________________________________________
          Applicable Conversion Price:_________________________________
          Number of Shares of Common Stock to be Issued
          Pursuant to Conversion of the Debentures:____________________
          Signature:___________________________________________________
          Name:________________________________________________________
          Address:_____________________________________________________

The Borrower shall issue and deliver shares of Common Stock to an overnight
courier not later than three business days following receipt of the original
Debenture(s) to be converted, and shall make payments pursuant to the Debentures
for the number of business days such issuance and delivery is late.

                                      A-1

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