Unassociated Document


    

      THE
        SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE UNITED
        STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR UNDER THE
        PROVISIONS OF ANY APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED
        BY
        THE REGISTERED HOLDER HEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON
        STATUTORY EXEMPTIONS UNDER THE 1933 ACT, AND UNDER ANY APPLICABLE STATE
        SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR
        ASSIGNED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE PROVISIONS OF
        THE
        1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EFFECTIVE
        REGISTRATION STATEMENT.

       

      


      


      PROMISSORY
        NOTE

      


      Oakdale,
        California

      August
        4,
        2005

      


      FOR
        VALUE
        RECEIVED, ITec Environmental Group, Inc., a Delaware corporation ("Borrower"),
        hereby promises to pay to the order of Capital Growth Equity Fund I, LLC,
        a
        Florida limited liability company ("Lender"),
        in
        lawful money of the United States at the address of Lender set forth herein,
        the
        principal amount of $100,000 (the “Loan”),
        together with Interest. This Promissory Note ("Note")
        has
        been executed by Borrower on the date set forth above (the "Effective
        Date")
        pursuant to the Loan Agreement entered into as of the date hereof between
        Lender
        and Borrower (the "Loan
        Agreement").
        Capitalized terms use but not defined herein shall have the meanings assigned
        to
        such terms in the Loan Agreement.

      


      1.  Interest.
        The
        Loan shall bear interest at the Interest Rate from the Effective Date and
        continuing until payment in full of the Loan. Upon the occurrence of an Event
        of
        Default and for so long as such Event of Default continues, Interest shall
        accrue on the outstanding Loan amount at the Default Interest Rate.


      


      2.  Maturity
        Date.
        Subject
        to Section 3, all or any portion of the Loan, all accrued Interest thereon
        and
        all other sums due hereunder, shall be due and payable on demand by Lender
        on
        the Maturity Date.

      


      3.  Conversion.
        In
        Lender’s discretion, at any time prior to the consummation of the Private
        Placement, Lender may convert all or any portion of the outstanding principal
        amount of this Note into the securities offered by the Company in the Private
        Placement on the same terms as such securities are sold to the other investors
        in the Private Placement. In such event, any accrued by unpaid interest
        outstanding at the time of the conversion of this Note and any outstanding
        principal under this Note not so converted shall be paid in full by the Company
        simultaneously upon such conversion.

      


      4.  Application
        of Payments.
        

      


      
        
           

        

        
           

          
            

          

        

        
           

        

      

      4.1.  Except
        as
        otherwise expressly provided herein, payments under this Note shall be applied
        (i) first to the repayment of any sums incurred by Lender for the payment
        of any
        expenses in enforcing the terms of this Note, (ii) then to the payment of
        the
        Default Interest Rate, (iii) then to the payment of the Interest Rate, and
        (iv)
        then to the reduction of the Loan.

      


      4.2.  Upon
        payment in full of the Loan and applicable accrued and unpaid Interest thereon,
        this Note shall be marked "Paid in Full" and returned to Borrower.

       

      5.  Waiver
        of Notice.
        Borrower hereby waives diligence, notice, presentment, protest and notice
        of
        dishonor.

      


      6.  Transfer.
        This
        Note may be transferred by Lender at any time, provided that such transfer
        complies with applicable securities laws.

      


      7.  Events
        of Default.
        The
        occurrence of any of following events (each an "Event
        of Default"),
        not
        cured in any applicable cure period, shall constitute an Event of Default
        of
        Borrower:

      


      7.1.  The
        failure to make when due any payment described in this Note or the Loan
        Agreement, whether on or after the Maturity Date, by acceleration or otherwise;
        and

      


      7.2.  A
        breach
        of any representation, warranty, covenant or other provision of this Note
        or the
        Loan Agreement, which, if capable of being cured, is not cured within three
        days
        following notice thereof to the Company;

       

      7.3.  (i)
        The
        application for the appointment of a receiver or custodian for Borrower or
        the
        property of Borrower, (ii) the entry of an order for relief or the filing
        of a
        petition by or against Borrower under the provisions of any bankruptcy or
        insolvency law, (iii) any assignment for the benefit of creditors by or against
        Borrower, or (iv) the insolvency of Borrower.

      


      Upon
        the
        occurrence of any Event of Default that is not cured within any applicable
        cure
        period, if any, Lender may elect, by written notice delivered to Borrower,
        to
        take at any time any or all of the following actions: (i) declare this Note
        to
        be forthwith due and payable, whereupon the entire unpaid Loan, together
        with
        all accrued and unpaid Interest thereon (including the Default Interest Rate),
        and all other cash obligations hereunder, shall become forthwith due and
        payable, without presentment, demand, protest or any other notice of any
        kind,
        all of which are hereby expressly waived by Borrower, anything contained
        herein
        to the contrary notwithstanding, and (ii) exercise any and all other remedies
        provided hereunder or available at law or in equity. 

      


      8.  Miscellaneous.

      


      8.1.  Successors
        and Assigns.
        Subject
        to the exceptions specifically set forth in this Note and the Loan Agreement,
        the terms and conditions of this Note shall inure to the benefit of and be
        binding upon the respective executors, administrators, heirs, successors
        and
        permitted assigns of the parties. This Note (or a portion hereof) may be
        assigned by Lender without the consent of Borrower.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      8.2.  Loss
        or Mutilation of Note.
        Upon
        receipt by Borrower of evidence satisfactory to Borrower of the loss, theft,
        destruction or mutilation of this Note, together with indemnity reasonably
        satisfactory to Borrower, in the case of loss, theft or destruction, or the
        surrender and cancellation of this Note, in the case of mutilation, Borrower
        shall execute and deliver to Lender a new promissory note of like tenor and
        denomination as this Note.

       

      8.3.  Notices.
        Any
        notice, demand, offer, request or other communication required or permitted
        to
        be given pursuant to the terms of this Note shall be in writing and shall
        be
        deemed effectively given the earlier of (i) when received, (ii) when delivered
        personally, (iii) one business day after being delivered by facsimile (with
        receipt of appropriate confirmation), (iv) one business day after being
        deposited with an overnight courier service, or (v) four days after being
        deposited in the U.S. mail, First Class with postage prepaid, and addressed
        to
        the recipient at the addresses set forth below unless another address is
        provided to the other party in writing:

      


      If
        to
        Borrower, to:

      


      ITec
        Environmental Group, Inc.

      5300
        Claus Road, Box 760

      Riverbank,
        CA 95367

      Attn: Gary
        M.
        De Laurentiis

      Fax: (209)
        881-3529

      


      with
        a
        copy to:

      


      The
        Otto
        Law Group, PLLC

      601
        Union
        Street, Suite 4500

      Seattle,
        WA 98101

      Attn:
         David
        M.
        Otto

      Fax: (206)
        262-9513

      


      if
        to
        Lender, to:

      


      Capital
        Growth Equity Fund I, LLC

      225
        NE
        Mizner Blvd. Ste. 750

      Boca
        Raton, FL 33432

      Attn:
         Alan
        Jacobs

      Fax:
         

      


      8.4 Governing
        Law.
        This
        Note shall be governed in all respects by the laws of the State of California
        as
        applied to agreements entered into and performed entirely within the State
        of
        California by residents thereof, without regard to any provisions thereof
        relating to conflicts of laws among different
        jurisdictions.

      


      8.5 Waiver
        and Amendment.
        Any
        term of this Note may be amended, waived or modified only with the written
        consent of Borrower and Lender.

       

      8.6 Remedies;
        Costs of Collection; Attorneys' Fees.
        No
        delay or omission by Lender in exercising any of its rights, remedies, powers
        or
        privileges hereunder or at law or in equity and no course of dealing between
        Lender and the undersigned or any other person shall be deemed a waiver by
        Lender of any such rights, remedies, powers or privileges, even if such delay
        or
        omission is continuous or repeated, nor shall any single or partial exercise
        of
        any right, remedy, power or privilege preclude any other or further exercise
        thereof by Lender or the exercise of any other right, remedy, power or privilege
        by Lender. The rights and remedies of Lender described herein shall be
        cumulative and not restrictive of any other rights or remedies available
        under
        any other instrument, at law or in equity. If an Event of Default occurs,
        Borrower agrees to pay, in addition to the Loan and Interest payable thereon,
        reasonable attorneys' fees and any other reasonable costs incurred by Lender
        in
        connection with its pursuit of its remedies under this Note.

      *
        * * *
        * 


      
        
          
             

          

           

        

        
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      IN
        WITNESS WHEREOF, Borrower has caused this Note to be signed on the Effective
        Date.

      


      


      BORROWER:

      


      ITEC
        ENVIRONMENTAL GROUP, INC.

      


      


      By: _______________________________ 

              Gary
        M.
        De Laurentiis 

        Chief
        Executive Officer

       

      


      
        
           

        

        
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