EXHIBIT 10.26 - EMPLOYMENT AGREEMENT - Jonathan Herzog


                              EMPLOYMENT AGREEMENT

                  This Employment Agreement ("Agreement"), dated as of September
1, 2002, is made by and between I. T. Technology, Inc., a Delaware corporation
(the "Company"), and Jonathan Herzog, an individual ("Employee").

                                    RECITALS

                  WHEREAS, Employee is one of the founders of the Company and
has served as an executive of the Company in a number of capacities most
currently as Executive Vice President and Secretary;

                  WHEREAS, Employee is an executive with financial, regulatory
compliance, operational and marketing experience who is very familiar with the
business and operations of the Company;

                  WHEREAS, the Company and the Employee wish to secure the
services of the Employee on an ongoing basis;

                  WHEREAS, the Employee agrees to accept the employment by the
Company pursuant to the terms and conditions set forth in this Agreement; and

                  NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, the Company and Employee agree as follows:

                  1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings, unless otherwise expressly
provided or unless the context otherwise requires:

                           (a) "Board" means the Board of Directors of the
Company.
                           (b) "Cause" means, as used with respect to the
involuntary termination of Executive: (i) The continued failure or refusal by
Employee to substantially perform his duties pursuant to the terms of this
Agreement;
                                    (ii) The engaging by Employee in willful
misconduct or inaction materially injurious to the
Company; or
                                    (iii) The conviction of Employee for a
felony or of a crime involving moral turpitude;

                           (c) "Good Reason" means, with respect to the
voluntary termination by Employee, the occurrence, without the Employee's
express written consent, of any of the following:

                                    (i)     Except as provided in Section 2
hereof, the assignment to Employee by the Company of any duties materially
inconsistent with, or the diminution of, Executive's positions, titles, offices,
duties and responsibilities with the Company, as provided in Section 2 below, or
any removal of Employee from, or any failure to re-elect Employee to, any
titles, offices or positions held by Employee pursuant to said Section 2;

                                    (ii) Except in accordance with the terms
hereof, a reduction by the Company in Executive's base salary or any other
compensation provided for herein; and

                                    (iii) The failure by the Company to continue
in effect any material benefit or compensation plan to which Employee is
entitled, hereunder, or plans providing Employee with substantially similar
benefits, the taking of any action by the Company which would materially and
adversely affect Executive's participation in, or materially reduce Executive's
benefits under, any such benefit plan or deprive Employee of any material fringe
benefits enjoyed by Employee hereunder, or the failure by the Company to provide
Employee with the number of paid vacation days to which Employee is then
entitled (based on years of service) under the Company's normal vacation
policies and practices in effect on the date hereof or in effect from time to
time hereafter; provided, however, that the occurrence of any of the foregoing
shall not constitute Good Reason to the extent that such occurrence is part of a
change in benefits, compensation, policies or practices that affect either: (i)
substantially all of the employees of the Company or (ii) all other senior
executives of the Company of comparable or lower status to the Executive;
<PAGE>

                           (d) "Incapacity" means the absence of the Employee
from his employment or the inability of Employee to perform his essential job
duties with reasonable accommodations on a full-time basis by reason of mental
or physical illness, disability or incapacity for a period of ninety (90)
consecutive days.

                  2. Employment, Services and Duties. The Company hereby employs
Employee as Executive Vice President and Secretary, and such title
designation(s) as the Company, acting through its Board and the Employee may
from time to time agree upon. Employee shall report to and be supervised by the
Board and shall have such duties and responsibilities as normally associated
with the position of Secretary, including but not limited to keeping the
Company's Board minutes and records and preparing the non-financial portions of
the Company's filings with the Securities and Exchange Commission pursuant to
the Act, as well as such other duties and responsibilities as the Board and
Employee may mutually agree upon from time to time. Employee shall perform his
services in the Los Angeles metropolitan area and shall henceforth principally
perform his services pursuant to Agreement from the Company's offices; provided,
however, he shall also be entitled to perform such services from his home office
or such other office as Employee, at Employee's own expense may otherwise
utilize.

                  3. Acceptance of Employment. (a) Notwithstanding the
provisions of Section 3(b) hereof, Employee and the Company agree that initially
Employee shall be engaged by the Company on a "part time status" pursuant to
which Employee shall not be required to work more than eighty (80) hours per
month on behalf of the Company . During the term of this Agreement, Employee
shall continue to fulfill the responsibilities of Secretary and such other
duties and responsibilities as Employee and the Board may mutually agree upon.

                           (b) At any time during the term hereof, the Company
and Employee agree, that in the event the Employee's activities on behalf of the
Company exceed eighty (80) hours per month, Employee shall be entitled to
receive additional compensation, with the excess hours pro-rated to the Base
Salary listed in Section 4 below (the "Additional Salary"), but in no event to
exceed nine thousand dollars ($9,000) (USD) per month (the "Maximum Salary"),
unless otherwise approved by the Board. It is further understood by the
Employee, that to be eligible for the Additional Compensation, the Company's
Chief Executive Officer, President or Chief Financial Officer must first approve
in writing the Additional Salary request submitted by the Employee.

                           (c) During the term of this agreement, the Company
expressly acknowledges and agrees that Employee shall be entitled to accepted
employment with one or more other enterprises or act as a consultant for other
businesses ("Outside Activities"); provided that such Outside Activities do not
violate Sections 11 and 12 hereof.

                  4. Compensation. (a) Subject to the provisions of the
Additional Salary outlined in Section 3(b) above, Employee shall be entitled to
a minimum salary at a rate of seventy two thousand dollars ($72,000) (USD) annum
or six thousand dollars ($6000) (USD) per month ("Base Salary"), or such greater
amount as the Board may determine from time to time.

                           (b) The Base Salary due Employee shall be payable in
monthly installments in arrears or in such other installments as may be agreed
upon between the parties.

                           (c) The Company agrees that after the commencement of
the payment of the Adjusted Base Salary, such Adjusted Base Salary shall be
reviewed periodically by the Company and may be adjusted to reflect the
achievement of mutually agreeable milestones by the Company.

                           (d)     Except as expressly set forth in Sections
3(b), 5 or 6 hereof or specifically set forth elsewhere in this Agreement,
Employee shall not be entitled to receive any other compensation or benefits
from the Company as a result of the performance of Employee's services
hereunder.
<PAGE>

                  5. Benefits. (a) In addition to the compensation provided for
in Section 5 of this Agreement, Employee shall have the right to participate in
any profit-sharing, pension, life, health and accident insurance, or other
employee benefits ("Benefit Plan(s)") presently adopted or which hereafter may
be adopted by the Company in a manner comparable to those offered or available
to other employees of the Company located in the State of California who are
similarly situated where such plans or programs are available to all such
similarly situated employees pursuant to their terms. Nothing contained herein,
shall require that the Company establish or continue any Benefit Plan or that
the Board designate the Employee as a participant in any new plan or program
where the Board, in its sole discretion, is entitled to designate participants
or qualifications for any new or additional program. Except as set forth above,
the Company reserves the right to add, terminate and/or amend any existing
plans, policies, programs and/or arrangements during the term of this Agreement
without any obligation to the Employee hereunder.

                           (b) Employee shall also be entitled to ten (10) days
annual vacation time, during which time his average Base Salary for the last
three completed months will be paid in full. Unused vacation days at the end of
any pay period(s) may be carried over to subsequent pay period(s), provided that
the cumulative number of vacation days accruing from and after the date of this
Agreement carried over into any subsequent pay period shall not exceed ten (10)
days. Employee shall not accrue additional vacation days during any pay period
once the total number of accumulated vacation days equals ten (10) days.
However, solely in the event Employee, pursuant to Company policy, has accrued
in excess of ten (10) vacation days prior to the date of this Agreement ("Excess
Vacation Days"), Employee shall be entitled to carry over up to, but not in
excess of, such amount of Excess Vacation Days from pay period to any subsequent
pay period. Notwithstanding the foregoing, Employee shall not be entitled to,
nor shall accrue any new vacation days during any pay period in which Employee
has Excess Vacation Days. In the event Employee reduces the amount of Excess
Vacation Days in any year through the utilization of more than ten (10) vacation
days in such year, Employee shall not be entitled to the restoration of such
Excess Vacation Days through the utilization of less than ten (10) vacation days
in any subsequent year and pay period. Employee shall under no circumstances be
entitled to cash in lieu of vacation days, except in the event of Employee's
termination of employment with the Company.

                  6. Expenses. The Company shall reimburse Employee for all
reasonable travel, hotel, entertainment and other expenses incurred by Employee
in the discharge of Employee's duties hereunder, in accordance with Company
policy regarding same, only after receipt from Employee of vouchers, receipts or
other reasonable substantiation of such expenses acceptable to the Company.

                  7. Term of Employment. Unless sooner terminated pursuant to
the terms of this Agreement, the term of this Agreement and Employee's
employment shall be for a period of three (3) years (the "Initial Term"),
commencing as of the date of this Agreement and terminating on September 1,
2005; provided, however, the Agreement shall automatically be extended for
additional one (1) year periods (the "Annual Renewals), unless either party
delivers written notice to the other of the termination hereof on or before one
hundred and twenty (120) days prior to the completion of the Initial Term or any
annual extension thereof (the "Term") Employee's employment with the Company
pursuant to this Agreement shall terminate prior to the completion of the Term
upon the occurrence of any of the following events:

                           (a) The death of Employee;
                           (b) Employee voluntarily leaves the employ of the
                           Company without Good Reason; (c) The Incapacity of
                           Employee; (d) The Company terminates this Agreement
                           for Cause; (e) The Company terminates this Agreement
                           for any reason other than as set forth in Sections
                           7(a), 7(c)or 7(d) hereof;
                           (f) Employee terminates this Agreement for Good
                           Reason; or
                           (g) The appointment of a trustee for the Company for
                           the purpose of liquidating and winding up the
                           Company pursuant to Chapter 7 of the Federal
                           Bankruptcy Code.
<PAGE>

                  8. Compensation Upon Termination. In the event this Agreement
is terminated pursuant to Section 7, the Company shall pay to Employee his then
current Base Salary, prorated through the Employee's last day of employment with
the Company ( the "Termination Date") and solely those additional bonuses that
had been declared or fully earned by Employee prior to such termination ("Earned
Bonuses"), but had not yet received Earned Bonuses, and any accrued vacation
days through the Termination Date pursuant to Section 5 (the "Termination Pay").
Except as set forth below, all employment compensation and benefits shall cease
as of the Termination Date. In addition to the foregoing:

                           (a) In the event that such termination arises under
Section 7(a), Employee's estate shall be entitled to receive severance
compensation equal to such amount of Employee's then current Base Salary as
would have been paid over an additional thirty (30) day period;

                           (b) Employee recognizes that this Agreement and
Employee's employment with the Company may be terminated at any time by the
Company prior to the expiration of the Term (the "Expiration Date") "without
cause" and nothing contained herein shall require that the Company continue to
employ the Employee until the Expiration Date ; notwithstanding the foregoing,
if prior to the Expiration Date of this Agreement or prior to its termination
pursuant to Sections 7(a)- 7(d) hereof, this Agreement is terminated pursuant to
Sections 7(e) or 7(f) above, the Company shall pay the employee (x) the lesser
of his then current Base Salary through the Expiration Date of the Agreement or
eighteen (18) months of the Base Salary, which amount to be due and payable
within five (5) business daysfrom the Employee's Termination Date. (the
"Severance Salary"); (y) the health, dental, disability and life insurance
benefits that Employee was receiving or participating in pursuant to Section 5
immediately prior to such termination, as though such termination had not
occurred, through the Expiration Date (the "Severance Benefits"); and(z) any
bonus, profit sharing or other incentive compensation which would otherwise been
due Employee through the end of the fiscal or calendar year in which the
termination occurred as though such termination has not occurred (the "Severance
Bonus Participation"). If the Company is unable to continue any Severance
Benefits, the Company shall obtain or reimburse Employee for all costs actually
incurred by the Employee to obtain substantially equivalent benefits. The
Severance Benefits shall be provided to Employee as and when such amounts or
benefits would have been paid to Employee had such termination not occurred
until the first to occur of: (1) the Expiration Date, (2) Employee's Death or
(3) until such time as Employee obtains other employment which offers any such
benefits to Employee. The Severance Salary, Severance Benefits and Severance
Bonus Participation are hereinafter collectively referred to as the "Severance
Compensation".

THE SEVERANCE COMPENSATION , PAYABLE PURSUANT TO SUBSECTION 7(b), SHALL BE PAID
OR MADE AVAILABLE TO EMPLOYEE AS LIQUIDATED DAMAGES FOR ALL CLAIMS EMPLOYEE
WOULD HAVE WITH RESPECT TO: (i) THE TERMINATION OF THIS AGREEMENT OR THE
TERMINATION OF EMPLOYEE'S EMPLOYMENT UPON THE EXPIRATION OF THIS AGREEMENT; (ii)
ANY COMPENSATION OR BENEFITS DUE EMPLOYEE FROM THE COMPANY PURSUANT TO THIS
AGREEMENT AND (iii) THE INJURY TO EMPLOYEE'S REPUTATION AS A RESULT OF ANY
TERMINATION OF THIS AGREEMENT OR TERMINATION OF EMPLOYMENT UPON THE EXPIRATION
OF THIS AGREEMENT. IN CONNECTION THEREWITH, THE PARTIES AGREE THAT IT WOULD BE
IMPRACTICAL AND EXTREMELY DIFFICULT TO FIX THE ACTUAL AMOUNT OF SUCH DAMAGES AND
CLAIMS DUE EMPLOYEE WITH RESPECT THERETO AND THAT SUCH SEVERANCE COMPENSATION
AND/OR TERMINATION PAY SHALL CONSTITUTE A REALISTIC AND REASONABLE VALUATION OF
THE DAMAGES WITH RESPECT TO EMPLOYEE'S CLAIMS.

                  1. EMPLOYEE'S INITIALS     JH

                  COMPANY'S INITIALS         DA
<PAGE>

                           (c)     Except as otherwise provided in Section
8 (a), (b) or 8(c) above, all other compensation and benefits enjoyed by or due
to Employee as part of Employee's employment with Employer shall cease as of the
Termination Date; including but not limited to any rights to office or parking
space, vacation or sick pay, use of telephones, Xeroxing or facsimile equipment,
secretarial assistance, any unpaid bonus other than Earned Bonuses), all
benefits and/or rights pursuant to Section 5 above and the right to receive
grants of any stock options which have not previously been granted to employee
or, except as expressly provided in any applicable stock option agreement or
plan, vesting in any stock options previously granted to Employee which have not
vested as of the Termination Date.

                           (d) In the event Employee does not receive, on or
before the Expiration Date, an offer for a new employment agreement but
nevertheless continues as an employee of the Company after the Expiration Date,
Employee shall be thereafter deemed to be an "at will employee" who may be
terminated by the Company at any time. In the event Employee's employment with
the Company is terminated while Employee is an "at will employee", Employee
shall be entitled to only those severance benefits, if any, which are in
accordance with the Company's then existing Policies Manual or other written
personnel policies. Employee acknowledges and understands that in such event,
Employee will no longer be entitled to the Severance Compensation set forth
herein.

                           (e) All payments of Severance Compensation and all
Change of Control Payments, Severance Benefits, Severance Salary and Termination
Pay shall be paid or provided subject to the usual withholdings, including state
and federal taxes.

                  9. Ownership of Intellectual Property.

                           (a) Intellectual Property shall be defined as all
copyrights, patent rights, trademark rights, confidential information, and all
other intangible proprietary rights, including all goodwill, claims and causes
of action related thereto which arise from or are embodied in all services
performed by or material created by Employee for the Company in the past or by
Employee for the Company hereafter. Such services and materials may result in or
be embodied in processes, designs, drawings, inventions, discoveries,
improvements, technology, methodology, procedures, printed material, machine
readable media, software, and business systems. The parties agree that
Intellectual Property shall not include routine software modules utilized by
Employee in the past in connection with Employee's services on behalf of the
Company the rights to which are owned by third parties.

                           (b) Employee acknowledges and agrees that all right,
title, and interest in all pre-existing Intellectual Property which Employee
created for or in connection with Employee's services on behalf of the Company
is and shall be owned solely by the Company and Employee agrees that all right,
title, and interest in Intellectual Property hereafter created by Employee
during Employee's employment with the Company shall be solely owned by the
Company. With respect to copyrights in works created during Employee's
employment pursuant to this Agreement, such works shall be deemed works made for
hire.

                           (c) In addition to the ownership of the Intellectual
Property, Employee agrees that the Company does and shall own all physical and
tangible embodiments of the Intellectual Property.

                  10.      Further Assurances.

                           Employee agrees to perform all acts, and execute,
acknowledge and deliver all documents and instruments, the Company deems
necessary or desirable to secure or confirm any right of the Company including,
but not limited to, assignments. Should Employee fail to take any such action or
execute, acknowledge or deliver any such document or instrument within five (5)
business days (or such shorter period of time as the Company shall reasonably
require) after requested by the Company to do so, automatically and without any
affirmative act by Employee, the Company shall be appointed, and Employee hereby
irrevocably appoint, the Company as Employee's true and lawful attorney-in-fact
to take any such action and to execute, acknowledge and deliver such documents
in Employer name and as Employer attorney-in-fact (with full powers of
substitution and delegation), such appointment being an irrevocable right
coupled with an enforceable interest, and shall survive Employee's subsequent
incapacity. If the Company signs any documents or instruments as Employee's
attorney-in-fact, the Company will provide Employee with copies of any such
documents or instruments as promptly as practicable but no failure to do so
shall constitute a breach of this Agreement.
<PAGE>

                  11.      Protection of Confidential Information

                           (a) Confidential Information shall be defined to
include confidential information, proprietary
information, trade secrets, and other business, technical, and commercial
information, including but not limited to financial information, preliminary
concepts, marketing proposals, branding strategies, creative designs and
concepts, technical data, internet designs, software, know-how, technology,
formulae, research, personnel data, product plans, products, customer technical
requirements, services, customers, employee lists, customer lists, business
prospects and projects, operations, markets, developments, inventions,
processes, designs, drawings, engineering, apparatus, techniques, marketing,
forecasts, business strategy, finances, contracts, documents, memoranda,
diaries, notes and observations, whether prepared by Employee, the Company any
of its subsidiaries or others.

                           (b) All Confidential Information acquired by Employee
from Company or any subsidiary of the Company or created by Employee for the
Company or subsidiary of the Company shall be solely owned by the Company or
such subsidiary, as the case may be.

                           (c) All Confidential Information created by or
acquired by Employee from the Company during the term of this Agreement shall be
solely owned by the Company.

                           (d) During the Term hereof and after the termination
of Employee's employment with the Company for any reason whatsoever, Employee
shall not, without the prior written consent of the Company in each instance or
except only as otherwise required by compulsory legal process (after prior
detailed written notice thereof to the Company and the assertion of all
available defenses and privileges), disclose, use, reveal, divulge or make
known, or cause or permit to be disclosed, used, revealed, divulged or made
known to or used by anyone, any Confidential Information.

                           (e) Except in the discharge of Employee's duties in
connection with the preparation of any filing pursuant to the Act or related
disclosure, without limiting the generality of the foregoing, Employee shall not
act in any way as a source for, contribute to, participate in, encourage,
confirm, corroborate or authenticate any news or media report relating to
Confidential Information including, but not limited to, by way of any article or
news story.

                           (f) Employee shall not remove from the Company's
premises (except to the extent such removal is for the purpose of the
performance of Employee's duties hereunder at home or while traveling, or except
as otherwise specifically authorized by the Company) any Confidential
Information.

                           (g) All media in which any Confidential Information
is recorded or stored, and which is at any time within Employee's possession or
control, immediately shall be delivered to the Company upon the termination of
Employee's employment hereunder for any reason, or at any other time, upon
request by the Company, and Employee shall make no copy or other reproduction
thereof.

                           (h) Employee agree that it would be difficult to
measure damage to the Company for any breach by Employee of the promises set
forth in this Agreement and that injury to the Company from any such breach
would be impossible to calculate, and that money damages would be an inadequate
remedy for any such breach. Accordingly, Employee agree that if any provision of
this Agreement is breached, the Company shall be entitled, in addition to all
other remedies it may have, to an injunction or other appropriate orders to
restrain any such breach by Employee without showing or proving any actual
damage sustained by the Company.

                  12. Non-Competition and Non-Solicitation.

                           Employee expressly agrees that , during the Term of
this Agreement, Employee shall not, directly or indirectly own, manage, operate,
join, control or become employed by, or render any services of any advisory
nature or otherwise, or participate in the ownership, management, operation or
control of, any business which competes with the business of the Company or any
of its subsidiaries. As used in this paragraph, the verb "employ" shall include
its variations, for example, "retain" or "engage".

                  13. Equitable Remedies. In the event of a breach or threatened
breach by Employee of any of his obligations under Sections 9, 10, 11 and 12 of
this Agreement, Employee acknowledges that the Company may not have an adequate
remedy at law and therefore it is mutually agreed between Employee and the
Company that, in addition to any other remedies at law or in equity which the
Company may have, the Company shall be entitled to seek in a court of law and/or
equity a temporary and/or permanent injunction restraining Employee from any
continuing violation or breach of this Agreement.
<PAGE>

                  14. Arbitration. (a)  Binding Arbitration. With the exception
of the Company's right to enforce the provisions found in Sections 9, 10,11 and
12 of this Agreement pursuant to Section 11 hereof, any and all disputes arising
out of or relating to this Agreement, including the actions or failure to act by
Employee hereunder, the termination of this Agreement, any claim for unlawful
retaliation, wrongful termination of employment, violation of public policy or
unlawful discrimination or harassment because of race, color, sex, national
origin, religion, age, physical or mental disability or condition, marital
status, sexual orientation or other legally protected characteristic shall be
resolved by final and binding arbitration before a single arbitrator. All
claims, disputes, or controversies (any or all of which shall hereinafter be
referred to as the "Dispute" or the "Disputes") arising between the parties
hereto with respect to the making, construction, terms, or interpretation of
this Agreement or the Transactional Documents or any breach thereof, or the
rights or obligations of any party hereto or thereto, the Dispute shall, in lieu
of court action, be submitted to mandatory, binding arbitration upon written
demand of either party in accordance with the procedures set forth below. 2. (b)
Form of Demand. Notice of the demand for arbitration shall be served by mail
upon the party against whom arbitration is sought. Said notice shall be in
conformity with Section 15(f) of this Agreement. The demand shall set forth a
reasonable description of the issues to be submitted to arbitration, the amount
involved, if any, to the extent known, if any, and the relief sought (the
"Demand").

                         3. (c) Type of Arbitration. The arbitration shall be
conducted in accordance with the commercial arbitration rules of the Uniform
Arbitration Act adopted by the State of California (hereinafter the "AAA").

                         4. (d) Selection of Arbitrator. Within ten (10) days
after service of the Demand, the party seeking arbitration shall file the
following items with the office of the AAA nearest to the location of the
arbitration and shall copy the non-initiating party by certified mail: (i) the
Demand; (ii) three (3) copies of this arbitration provision; (iii) a detailed
statement of the Dispute and, if known and the remedy or remedies sought; and
(iv) the appropriate AAA administrative fee. The submission shall request that
the AAA submit to the parties a list of at least three available (3)
disinterested arbitrators who have no prior dealings (other than prior service
as an arbitrator) with either of the parties. The parties shall jointly select
one (1) of the proposed arbitrators. If no agreement is reached as to the
selection of the arbitrator, the parties may request that the AAA recommend at
least three (3) additional arbitrators with the above stated qualifications. If
the parties cannot agree on one (1) arbitrator from among the second group
proposed by the AAA, the AAA shall appoint one (1) of the six (6) previously
designated persons to serve a arbitrator.

                         5. (e) Evidence. The arbitrator shall be the sole judge
of the admissibility, relevance and materiality of the evidence offered and
conformity with the legal rules of evidence shall not be necessary.

                         6. (f) Location of Hearing. Each Party hereby
irrevocably submits to the jurisdiction of the arbitrator in Los Angeles,
California and waives any defense to said venue.

                         7. (g) Arbitrator Compensation; Costs of Arbitration.
The fees and expenses of the arbitrator shall be paid by the Company and
arbitrator shall fix his/her compensation together with the time and manner of
payment.

                         8. (h) Limitation On Relief Awardable. The sole forms
of relief awardable by the arbitrators shall be to: issue a declaratory judgment
on the construction and/or interpretation of any clause in the Agreement; and/or
award actual money damages plus, if the arbitrator deems appropriate, pre-award
and post award interest at the prime rate, as reported in the Wall Street
Journal, Western Edition, plus 100 basis points, from the time when such amounts
became due until paid. The arbitrator shall have no authority or power to grant,
and no party shall seek, any award of punitive or exemplary or like damages.
<PAGE>

                         9. (i) Decision of the Arbitrator and Entry of
Judgment. The arbitrator's decision shall be in writing, setting forth the
reasons and grounds for the arbitrator's decision. The arbitrator's decision
shall be final and binding upon, and enforceable as to, the parties. Judgment on
the arbitration award may be entered in a court having jurisdiction over the
matter.

                         10. (j) Payment of Award; Performance of Obligations.
The party against whom the award is rendered shall pay any monetary award and/or
comply with any other order of the arbitrator within five (5) Business Days of
the entry of judgment on the award, or take an appeal, to the extent that
appeals of binding arbitration are permitted under the AAA procedures.

                           (k) CONSENT TO ARBITRATION. BY INITIALING IN THE
SPACE BELOW, EMPLOYEE ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE
MATTERS INCLUDED IN THE "ARBITRATION" PROVISION OF THIS AGREEMENT DECIDED BY
NEUTRAL ARBITRATION AS PROVIDED BY THE LAWS OF THE STATE OF CALIFORNIA AND
EMPLOYEE IS GIVING UP ANY RIGHTS EMPLOYEE MIGHT POSSESS TO HAVE THE DISPUTE
LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW EMPLOYEE IS
GIVING UP EMPLOYEE'S JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE
RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION" PROVISION OF THIS
AGREEMENT. IF EMPLOYEE REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS
PROVISION, EMPLOYEE MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE
LAWS OF THE STATE OF CALIFORNIA. EMPLOYEE AGREE THAT EMPLOYEE'S AGREEMENT TO
THIS ARBITRATION PROVISION IS VOLUNTARY.

         EMPLOYEE HAS READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT
DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION" PROVISION OF
THIS AGREEMENT TO NEUTRAL ARBITRATION.

                  11. EMPLOYEE'S INITIALS       JH

                  COMPANY'S INITIALS            DA

                  15.      Miscellaneous.

                           (a) This Agreement shall be binding upon and inure to
the benefit of the Company and any successor of the Company. Except as set forth
in Section 7(g) above, this Agreement shall not be terminated by the voluntary
or involuntary dissolution of the Company or by any merger, reorganization or
other transaction in which the Company is not the surviving or resulting
corporation or upon any transfer of all or substantially all of the assets of
the Company in the event of any such merger, or transfer of assets. The
provisions of this Agreement shall be binding upon and shall inure to the
benefit of the surviving business entity or the business entity to which such
assets shall be transferred in the same manner and to the same extent that the
Company would be required to perform it if no such transaction had taken place.
Neither this Agreement nor any rights arising hereunder may be assigned or
pledged by Employee.
                           (b) Except as otherwise provided by law or elsewhere
herein, in the event of an act of force majeure, as hereinafter defined, during
the term hereof which event continues for a period of no less than fifteen (15)
days, the Company shall be entitled to suspend this Agreement for the duration
of such event of force majeure. In such event, during the duration of the event
of force majeure the Company shall be relieved of its obligations to the
Employee pursuant to Sections 4 and 5; except for the continuation of any
health, life or disability insurance coverage. For the purposes hereof, "force
majeure" shall be defined as the occurrence of one or more of the following
events:

                                    (i) any act commonly understood to be of
                                    force majeure which materially and adversely
                                    affects the Company's business and
                                    operations, including but not limited to,
                                    the Company having sustained a material
                                    loss, whether or not insured, by reason of
                                    fire, earthquake, flood, epidemic,
                                    explosion, accident, calamity or other act
                                    of God;

                                    (ii) any strike or labor dispute or court or
                                    government action, order or decree;

                                    (iii) a banking moratorium having been
                                    declared by federal or state authorities;
<PAGE>

                                    (iv) an outbreak of major armed conflict,
                                    blockade, embargo, or other international
                                    hostilities or restraints or orders of
                                    civic, civil defense, or military
                                    authorities or other national or
                                    international calamity having occurred;

                                    (v) any act of public enemy, riot or civil
                                    disturbance or threat thereof; or

                                    (vi) a pending or threatened legal or
                                    governmental proceeding or action relating
                                    generally to the Company's business, or a
                                    notification having been received by the
                                    Company of the threat of any such proceeding
                                    or action, which could materially adversely
                                    affect the Company.

                           (c) Except as expressly provided herein, this
Agreement contains the entire understanding between the parties with respect to
the subject matter hereof, and may not be modified, altered or amended except by
an instrument in writing signed by the parties hereto. This Agreement supersedes
all prior agreements of the parties with respect to the subject matter hereof.

                           (d) This Agreement shall be construed in accordance
with the laws of the State of California applicable to agreements wholly made
and to be performed entirely within such state and without regard to the
conflict of law principles thereof.

                           (e) Nothing in this Agreement is intended to require
or shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability pursuant to court order to
perform its obligations under this Agreement shall not constitute a breach of
this Agreement. If any provision of this Agreement is invalid or unenforceable,
the remainder of this Agreement shall nevertheless remain in full force and
effect. If any provision is held invalid or unenforceable with respect to
particular circumstances, it shall, nevertheless, remain in full force and
effect in all other circumstances.

                           (f) Any notice to the Company required or permitted
hereunder shall be given in writing to the Company, either personally by
messenger, courier or otherwise, telex, telecopier or, if by mail, by registered
or certified mail, return receipt requested, postage prepaid, duly addressed to
the Secretary of the Company at its then principal place of business. Any such
notice to Employee shall be given to the Employee in a like manner, and if
mailed shall be addressed to Employee at Employee's home address then shown in
the files of the Company. For the purpose of determining compliance with any
time limit herein, a notice shall be deemed given on the fifth day following the
postmarked date, if mailed, or the date of delivery if delivered personally, by
telex or telecopier.

                           (g) Employee acknowledges that: (i) Barry Burten and
the law firm of Jeffer, Mangels, Butler & Marmaro LLP have been acting solely as
counsel to the Company in the negotiation and drafting of this Agreement and
have not been acting in any way as Employee's legal counsel, (ii) he has been
advised by the Company that this Agreement affects his legal rights and to seek
the advice of his own legal counsel prior to executing it and (ii) he has had
the opportunity to consult with his own legal counsel in connection with the
negotiations of the terms of this Agreement, his rights with respect hereto and
the execution hereof.

                 EMPLOYEE INITIALS:  JH

                           (h) A waiver by either party of any term or condition
of this Agreement or any breach thereof, in any one instance, shall not be
deemed or construed to be a waiver of such term or condition or of any
subsequent breach thereof.

                           (i) The section and subsection headings contained in
this Agreement are solely for convenience and shall not be considered in its
interpretation.

                           (j) This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first written above.

                                            COMPANY:

                             I. T. TECHNOLOGY, INC.,
                             a Delaware corporation

                             By:     /s/ Daniel Aharonoff
                                    ---------------------------
                                    Daniel Aharonoff
                                    President

                                            EMPLOYEE:

                            By:     /s/ Jonathan Herzog
                                    ---------------------------
                                    Jonathan Herzog