Unassociated Document


     

    THIS
      WARRANT AND THE SHARES OF COMMON STOCK WHICH MAY BE PURCHASED UPON THE EXERCISE
      OF THIS WARRANT HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT AND HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
      STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
      PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
      COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH SALE, OFFER,
      PLEDGE OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
      REQUIREMENTS OF THE ACT AND OF ANY APPLICABLE STATE SECURITIES
      LAWS.

    
      


      ITEC
        ENVIRONMENTAL GROUP INC.

      


      COMMON
        STOCK PURCHASE WARRANT

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

      


      No.
        __
        Void after ___________

      


      THIS
        CERTIFIES THAT, for value received, _____________ (the "Holder") is entitled
        to
        subscribe for and purchase ______________ shares (as such number of shares
        shall
        be adjusted pursuant to Section 3 hereof, thus adjusting the per share Exercise
        Price) of the fully paid and nonassessable Common Stock, $0.001 par value
        (the
        "Shares"), of Itec Environmental Group, Inc., a Delaware corporation (the
        "Company"), at the exercise price of $.06 per share (the "Exercise Price"),
        subject to the provisions and upon the terms and conditions hereinafter set
        forth. 

      


      1.
         Method
        of
        Exercise; Payment.

      


      (a)
         Cash
        Exercise. The purchase rights represented by this Warrant may be exercised
        by
        the Holder, in whole or in part, by the surrender of this Warrant (with the
        notice of exercise form attached hereto as Exhibit
        A
        duly
        executed) at the principal office of the Company, and by the payment to the
        Company, by certified, cashier's or other check acceptable to the Company
        or by
        wire transfer to an account designated by the Company, of an amount equal
        to the
        aggregate Exercise Price of the Shares being purchased.

      


      (b)
         Net
        Issue
        Exercise. In lieu of exercising this Warrant, the Holder may elect to receive
        Shares equal to the value of this Warrant (or the portion thereof being
        canceled) by surrender of this Warrant at the principal office of the Company
        together with notice of such election, in which event the Company shall issue
        to
        the Holder a number of Shares computed using the following formula:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        
          	 	 	

                  X
                    =
                    Y (A-B)

                  -------

                  A

                	 	 
	 	 	 	 	 
	 	
                  Where
                    X 

                	
                  =
                    

                	 	
                  the
                    number of the Shares to be issued to the Holder.

                
	 	 	 	
                   

                	 
	 	
                  Y
                    

                	
                  =
                    

                	 	
                  the
                    number of the Shares purchasable under this Warrant.

                
	 	 	 	 	 
	 	
                  A
                    

                	
                  =
                    

                	 	
                  the
                    fair market value of one Share on the date of
                    determination.

                
	 	 	 	 	 
	 	
                  B
                    

                	
                  =
                    

                	 	
                  the
                    per share Exercise Price (as adjusted to the date of such
                    calculation).

                


        



      (c)
         Fair
        Market Value. For purposes of this Section 1, the per share fair market value
        of
        the Shares shall mean:

      


      (i)
         If
        the
        Company's Common Stock is publicly traded, the per share fair market value
        of
        the Shares shall be the average of the closing prices of the Common Stock
        as
        quoted on the Nasdaq National Market or the principal exchange on which the
        Common Stock is listed, or if not so listed then the fair market value shall
        be
        the average of the closing bid prices of the Common Stock as published in
        The
        Wall Street Journal, in each case for the fifteen (15) trading days ending
        five
        (5) trading days prior to the date of determination of fair market
        value;

      


      (ii)
         If
        the
        Company's Common Stock is not so publicly traded, the per share fair market
        value of the Shares shall be such fair market value as is determined in good
        faith by the Board of Directors of the Company after taking into consideration
        factors it deems appropriate, including, without limitation, recent sale
        and
        offer prices of the capital stock of the Company in private transactions
        negotiated at arm's length.

      


      (d)
         Stock
        Certificates. In the event of any exercise of the rights represented by this
        Warrant, certificates for the Shares so purchased shall be delivered to the
        Holder within a reasonable time and, unless this Warrant has been fully
        exercised or has expired, a new Warrant representing the shares with respect
        to
        which this Warrant shall not have been exercised shall also be issued to
        the
        Holder within such time.

      


      2.
         Stock
        Fully Paid; Reservation of Shares. All of the Shares issuable upon the exercise
        of the rights represented by this Warrant will, upon issuance and receipt
        of the
        Exercise Price therefor, be fully paid and nonassessable, and free from all
        taxes, liens and charges with respect to the issue thereof. During the period
        within which the rights represented by this Warrant may be exercised, the
        Company shall at all times have authorized and reserved for issuance sufficient
        shares of its Common Stock to provide for the exercise of the rights represented
        by this Warrant.

      


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      3.
         Adjustments.
        Subject to the provisions of Section 11 hereof, the number and kind of
        securities purchasable upon the exercise of this Warrant and the Exercise
        Price
        therefor shall be subject to adjustment from time to time upon the occurrence
        of
        certain events, as follows:

      


      (a)
         Reclassification.
        In the case of any reclassification or change of securities of the class
        issuable upon exercise of this Warrant (other than a change in par value,
        or
        from par value to no par value, or from no par value to par value, or as
        a
        result of a subdivision or combination), or in case of any merger of the
        Company
        with or into another corporation (other than a merger with another corporation
        in which the Company is the acquiring and the surviving corporation and which
        does not result in any reclassification or change of outstanding securities
        issuable upon exercise of this Warrant), or in case of any sale of all or
        substantially all of the assets of the Company, the Company, or such successor
        or purchasing corporation, as the case may be, shall duly execute and deliver
        to
        the holder of this Warrant a new Warrant (in form and substance reasonably
        satisfactory to the holder of this Warrant), or the Company shall make
        appropriate provision without the issuance of a new Warrant, so that the
        holder
        of this Warrant shall have the right to receive, at a total purchase price
        not
        to exceed that payable upon the exercise of the unexercised portion of this
        Warrant, and in lieu of the shares of Common Stock theretofore issuable upon
        exercise of this Warrant, (i) the kind and amount of shares of stock, other
        securities, money and property receivable upon such reclassification, change,
        merger or sale by a holder of the number of shares of Common Stock then
        purchasable under this Warrant, or (ii) in the case of such a merger or sale
        in
        which the consideration paid consists all or in part of assets other than
        securities of the successor or purchasing corporation, at the option of the
        Holder of this Warrant, the securities of the successor or purchasing
        corporation having a value at the time of the transaction equivalent to the
        fair
        market value of the Common Stock at the time of the transaction. The provisions
        of this subparagraph (a) shall similarly apply to successive reclassifications,
        changes, mergers and transfers.

       

      (b)
         Stock
        Splits, Dividends and Combinations. In the event that the Company shall at
        any
        time subdivide the outstanding shares of Common Stock or shall issue a stock
        dividend on its outstanding shares of Common Stock the number of Shares issuable
        upon exercise of this Warrant immediately prior to such subdivision or to
        the
        issuance of such stock dividend shall be proportionately increased, and the
        Exercise Price shall be proportionately decreased, and in the event that
        the
        Company shall at any time combine the outstanding shares of Common Stock
        the
        number of Shares issuable upon exercise of this Warrant immediately prior
        to
        such combination shall be proportionately decreased, and the Exercise Price
        shall be proportionately increased, effective at the close of business on
        the
        date of such subdivision, stock dividend or combination, as the case may
        be.

      


      4.
         Notice
        of
        Adjustments. Whenever the number of Shares purchasable hereunder or the Exercise
        Price thereof shall be adjusted pursuant to Section 3 hereof, the Company
        shall
        provide notice to the Holder setting forth, in reasonable detail, the event
        requiring the adjustment, the amount of the adjustment, the method by which
        such
        adjustment was calculated, and the number and class of shares which may be
        purchased thereafter and the Exercise Price therefor after giving effect
        to such
        adjustment.

      


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      5.
         Fractional
        Shares. This Warrant may not be exercised for fractional shares. In lieu
        of
        fractional shares the Company shall make a cash payment therefor based upon
        the
        Exercise Price then in effect and the fair market value of the shares then
        obtaining (calculated in accordance with Section 1(c) hereof as if the shares
        were the Shares referred to in such Section).

      


      6.
         Representations
        of the Company. The Company represents that all corporate actions on the
        part of
        the Company, its officers, directors and shareholders necessary for the sale
        and
        issuance of the Shares pursuant hereto and the performance of the Company's
        obligations hereunder were taken prior to and are effective as of the effective
        date of this Warrant.

      


      7.
         Representations
        and Warranties by the Holder. The Holder represents and warrants to the Company
        as follows:

      


      (a)
         This
        Warrant and the Shares issuable upon exercise thereof are being acquired
        for its
        own account, for investment and not with a view to, or for resale in connection
        with, any distribution or public offering thereof within the meaning of the
        Securities Act of 1933, as amended (the "Act"). Upon exercise of this Warrant,
        the Holder shall, if so requested by the Company, confirm in writing, in
        a form
        satisfactory to the Company, that the securities issuable upon exercise of
        this
        Warrant are being acquired for investment and not with a view toward
        distribution or resale.

      


      (b)
         The
        Holder understands that the Warrant and the Shares have not been registered
        under the Act by reason of their issuance in a transaction exempt from the
        registration and prospectus delivery requirements of the Act pursuant to
        Section
        4(2) thereof, and that they must be held by the Holder indefinitely, and
        that
        the Holder must therefore bear the economic risk of such investment
        indefinitely, unless a subsequent disposition thereof is registered under
        the
        Act or is exempted from such registration. The Holder further understands
        that
        the Shares have not been qualified under the California Securities Law of
        1968
        (the "California Law") by reason of their issuance in a transaction exempt
        from
        the qualification requirements of the California Law pursuant to Section
        25102(f) thereof, which exemption depends upon, among other things, the bona
        fide nature of the Holder's investment intent expressed above.

      


      (c)
         The
        Holder has such knowledge and experience in financial and business matters
        that
        it is capable of evaluating the merits and risks of the purchase of this
        Warrant
        and the Shares purchasable pursuant to the terms of this Warrant and of
        protecting its interests in connection therewith.

      


      (d)
         The
        Holder is able to bear the economic risk of the purchase of the Shares pursuant
        to the terms of this Warrant.

      


      8.
         Restrictive
        Legend.

      


      The
        Shares (unless registered under the Act) shall be stamped or imprinted with
        a
        legend in substantially the following form:

      


      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      THE
        SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
        AND NOT
        WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF,
        AND
        HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
        SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
        OR
        UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO
        IT
        STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND
        PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT.

      


      9.
         Restrictions
        Upon Transfer and Removal of Legend.

      


      (a)
         The
        Company need not register a transfer of this Warrant or Shares bearing the
        restrictive legend set forth in Section 8 hereof, unless the conditions
        specified in such legend are satisfied. The Company may also instruct its
        transfer agent not to register the transfer of the Shares, unless one of
        the
        conditions specified in the legend referred to in Section 8 hereof is
        satisfied.

      


      (b)
         Notwithstanding
        the provisions of paragraph (a) above, no opinion of counsel shall be necessary
        for a transfer without consideration by any holder (i) if such holder is
        a
        partnership, to a partner or retired partner of such partnership who retires
        after the date hereof or to the estate of any such partner or retired partner,
        or (ii) if such holder is a corporation, to a shareholder of such corporation,
        or to any other corporation under common control, direct or indirect, with
        such
        holder.

      


      10.
         Rights
        of
        Shareholders. No holder of this Warrant shall be entitled, as a Warrant holder,
        to vote or receive dividends or be deemed the holder of any Shares or any
        other
        securities of the Company which may at any time be issuable on the exercise
        hereof for any purpose, nor shall anything contained herein be construed
        to
        confer upon the holder of this Warrant, as such, any of the rights of a
        stockholder of the Company or any right to vote for the election of directors
        or
        upon any matter submitted to shareholders at any meeting thereof, or to give
        or
        withhold consent to any corporate action (whether upon any recapitalization,
        issuance of stock, reclassification of stock, change of par value,
        consolidation, merger, conveyance, or otherwise) or to receive notice of
        meetings, or to receive dividends or subscription rights or otherwise until
        the
        Warrant shall have been exercised and the Shares purchasable upon the exercise
        hereof shall have become deliverable, as provided herein. The holder of this
        Warrant will not be entitled to share in the assets of the Company in the
        event
        of a liquidation, dissolution or the winding up of the Company.

      


      11.
         Notices.
        All notices and other communications required or permitted hereunder shall
        be in
        writing, shall be effective when given, and shall in any event be deemed
        to be
        given upon receipt or, if earlier, (a) five (5) days after deposit with the
        U.S.
        Postal Service or other applicable postal service, if delivered by first
        class
        mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one business
        day after the business day of deposit with Federal Express or similar overnight
        courier, freight prepaid or (d) one business day after the business day of
        facsimile transmission, if delivered by facsimile transmission with copy
        by
        first class mail, postage prepaid, and shall be addressed (i) if to the Holder,
        at the Holder's address as set forth on the books of the Company, and (ii)
        if to
        the Company, at the address of its principal corporate offices (attention:
        Gary
        De Laurentiis, President and CEO), with a copy to David M. Otto, The Otto
        Law
        Group, PLLC, 900 Fourth Avenue, Suite 3140, Seattle, WA 98164 or at such
        other
        address as a party may designate by ten (10) days advance written notice
        to the
        other party pursuant to the provisions above.

      


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      12.
         Independent
        Legal Advice. Each of the parties
        hereto represents and warrants (a) that it, she or he
        has read
        and understands each of the provisions set forth herein, that he, she or
        it has
        had the opportunity to consult with counsel of his, her or its own choice
        in
        connection with this Agreement and to have each of the provisions set forth
        herein fully explained by such counsel, and that this Agreement is entered
        into
        freely, voluntarily, and without any duress or undue influence of any nature
        by,
        or on behalf of, any person or entity and (b) that each of the Parties, together
        with its, his or her attorneys, has made such investigation of the facts
        pertaining to this settlement and this release, and of all the matters
        pertaining thereto, as it, she or he deems necessary.

      


      13. Piggy
        Back Registration of the Shares. If the Company proposes to register any
        of its
        securities under the Securities Act (other than pursuant to a Form S-4, Form
        S-8
        or any other successor form of limited purpose), it will give written notice
        by
        registered mail at least thirty (30) business days prior to the filing of
        each
        such registration statement to the Holder of its intention to do so. If the
        Holder notifies the Company within twenty (20) business days after receipt
        of
        any such notice of its desire to include any of the Shares in such proposed
        registration statement, the Company shall afford the Holder the opportunity
        to
        have any such amount of the Shares registered under such registration
        statement.

      


      14. Governing
        Law. This Warrant and all actions arising out of or in connection with this
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of California, without regard to the conflicts of law provisions of
        the
        State of California or of any other state.

      


      
        
          	 	 	 
	 	ITEC
                  ENVIRONMENTAL GROUP, INC.
	 
 	 
 	 
 
	 	 	 
	 	
                  

                  Name:
                    Gary De Laurentiis

                  Title:
                    Chief Executive Officer

                


        



       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      EXHIBIT
        A

      ---------

      NOTICE
        OF EXERCISE

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

      


      TO:
         Itec
        Environmental Group, Inc.

      P.O.
        Box
        760

      Riverbank,
        Ca. 95367

      Attention:
        President

      


      1.
        The
        undersigned hereby elects to purchase __________ Shares of Itec Environmental
        Group, Inc. pursuant to the terms of the attached Warrant.

      


      2.
        Method
        of Exercise (Please initial the applicable blank):

      


      
        	 	
                ___
                  

              	
                The
                  undersigned elects to exercise the attached Warrant by means of
                  a cash
                  payment, and tenders herewith or by concurrent wire transfer payment
                  in
                  full for the purchase price of the shares being purchased, together
                  with
                  all applicable transfer taxes, if
                  any.

              


      

      


      
        	 	
                ___
                  

              	
                The
                  undersigned elects to exercise the attached Warrant by means of
                  the net
                  exercise provisions of Section 1(b) of the
                  Warrant.

              


      

      


      
        
          	 	
                  3.
                    

                	
                  Please
                    issue a certificate or certificates representing said Shares
                    in the name
                    of the undersigned or in such other name as is specified
                    below:

                


        

        
          	 	 	 


        

        
          	 	 	

                  _________________________________

                                       
                    (Name)

                  _________________________________

                  


                  _________________________________

                                       
                    (Address)

                


        

      

      


      


      4.
         The
        undersigned hereby represents and warrants that the aforesaid Shares are
        being
        acquired for the account of the undersigned for investment and not with a
        view
        to, or for resale, in connection with the distribution thereof, and that
        the
        undersigned has no present intention of distributing or reselling such shares
        and all representations and warranties of the undersigned set forth in Section
        7
        of the attached Warrant are true and correct as of the date hereof.

       

      
        
          
            	 	 	

                    ______________________________

                                         
                      (Signature)

                    


                    Title:
                      __________________________

                    


                    ______________________________

                    (Date)
                      

                    


                  


          

          
 

          
            
              
              

            

            7