Unassociated Document


    

      LOAN
        AGREEMENT

       

      THIS
        LOAN
        AGREEMENT (this "Agreement"),
        is
        executed as of September ___, 2005, by and between Itec Environmental Group,
        Inc., a Delaware corporation (the "Company"),
        and
        the Lenders whose names appear on the signature page hereto (the "Lenders").

       

      WHEREAS,
        the Company is preparing to conduct a private placement whereby it will offer
        $7,500,000 of senior cumulative debentures and warrants (the "Private
        Placement");

       

      WHEREAS,
        in order to fund the Company’s operations until such Private Placement is
        completed, the Company wishes to borrow $150,000 from the Lenders
        as a
        short term bridge loan; and

       

      WHEREAS,
        the Lenders are willing to provide such financing on terms and conditions
        as set
        forth herein.

       

      NOW,
        THEREFORE, in consideration of the mutual covenants and agreements set forth
        herein, and for other good and valuable consideration, the receipt and
        sufficiency of which are hereby acknowledged, the Company and the Lenders,
        intending to be legally bound, agree as follows:

       

      ARTICLE
        1

      DEFINITIONS

       

      1.1  Defined
        terms.
        Certain
        capitalized terms used in this Agreement shall have the specific meanings
        defined below:

       

      “Business
        Day”
        shall
        mean a day other than a Saturday, Sunday, or other day on which commercial
        banks
        are authorized or required by law to close.

       

      “Closing
        Date”
        shall
        mean the date upon which the Loan is made to the Company.

       

      "Encumbrance"
        means
        any lien, charge, security interest, mortgage, deed of trust, pledge or other
        encumbrance of any nature whatsoever.

       

      “Excluded
        Securities”
        shall
        mean (i) securities issued in connection with the Private Placement; (ii)
        securities issued upon conversion of any securities outstanding on the Closing
        Date; (iii) securities issued pursuant to the acquisition of another business
        or
        business segment of any such entity by the Company by merger, purchase of
        substantially all the assets or other reorganization whereby the Company
        will
        own more than fifty percent (50%) of the voting power of such business entity
        or
        business segment of any such entity; (iv) securities issued to employees,
        consultants, officers, directors or advisors of the Company pursuant to any
        stock option, stock purchase or stock bonus plan, agreement or arrangement
        approved by the Board of Directors of the Company; (v) securities issued
        in
        connection with obtaining lease financing, whether issued to Lenders, lessor,
        guarantor or other person and approved by the Board of Directors of the Company;
        (vi) securities issued to leasing companies, landlords and other providers
        of
        goods and services to the Company and approved by the Board of Directors;
        (vii)
        securities issued in connection with any stock split, stock dividend or
        recapitalization of the Company; (viii) securities issued in connection with
        strategic transactions involving the Company and other entities, including
        (A)
        joint ventures, manufacturing, marketing or distribution arrangements or
        (B)
        technology license, transfer or development arrangements; provided that such
        strategic transactions and the issuance of shares therein, have been approved
        by
        the Board of Directors of the Company; and (ix) any right, option or warrant
        to
        acquire any security convertible into the securities pursuant to subsections
        (i)
        through (viii) above.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      “Interest
        Rate”
        shall
        mean ten percent (10%).

       

      "Proprietary
        Rights"
        means
        all patents, trademarks, service marks, copyrights, trade names and all
        registrations and applications and renewals for any of the foregoing and
        all
        goodwill associated therewith.

       

      ARTICLE
        2

      THE
        LOAN

       

      2.1  Loan.
        According to the terms and subject to the conditions of this Agreement, the
        Lenders shall loan to the Company on the Closing Date in the aggregate amount
        of
        $150,000 (the "Loan").
        The
        Loan shall be evidenced by a promissory note in the form attached hereto
        as
Exhibit
        A
        ("Note"),
        duly
        executed on behalf of the Company and dated as of the Closing Date.

       

      2.2  Interest.
        

       

      (a)  Interest
        Rate.
        The
        Loan shall bear interest ("Interest")
        from
        the date of payment by the Lenders until the Maturity Date at the Interest
        Rate
        (calculated on the basis of the actual number of days elapsed over a year
        of 360
        days). Interest is payable by the Company on a monthly basis in arrears on
        the
        first Business Day of the month. 

       

      (b)  Default
        Interest.
        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 rate
        per
        annum equal to the lower of 18% or the maximum rate of interest permissible
        under applicable law at any time (the "Default
        Interest Rate").
        The
        term "Interest"
        shall
        include both the interest rate described in Section 2.3(a) and the Default
        Interest Rate.

       

      2.3  Conversion
        of the Loan.
        The
        Loan may be converted into the common stock of the Company pursuant to the
        provisions of Section 8.7 hereof. 

       

      2.4  Maturity
        Date.
        Unless
        the Loan is earlier accelerated pursuant to the terms hereof or converted
        into
        common stock pursuant to the provisions of Section 8.7 hereof, the Loan and
        all
        accrued Interest thereon shall be due and payable in full on the earlier
        of (a)
        the date that is 120 days following the Closing Date or (b) the closing date
        of
        the Private Placement (the “Maturity
        Date”).
        In
        the event that the Private Placement is not consummated within 120 days after
        the Closing Date, the Lenders may, at the Lenders' option, extend the Maturity
        Date on such terms and conditions as determined by the Lenders in their sole
        discretion.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      ARTICLE
        3

      CONDITIONS
        PRECEDENT TO THE LOAN

       

      3.1  Conditions
        on the Closing Date.
        The
        obligation of the Lenders to make the Loan pursuant to Section 2.1 shall
        be
        subject to the satisfaction, on or before the Closing Date, of the conditions
        set forth in this Section. If the conditions set forth in this Section are
        not
        met on or prior to the Closing Date, the Lenders shall have no obligation
        to
        make the Loan. 

       

      (a)  The
        Company shall have duly executed and delivered to the Lenders the Notes
        representing the Loan.

       

      ARTICLE
        4

      REPRESENTATIONS
        AND WARRANTIES

       

      4.1  Organization,
        qualification and Authority.
        The
        Company is a corporation duly organized and validly existing under the laws
        of
        the State of Delaware, and is in good standing and duly qualified to do business
        as a foreign corporation in all jurisdictions where the operation of its
        business or the ownership of its properties make such qualification necessary.
        The Company has the requisite corporate power and authority to own, lease
        and
        operate its facilities and assets as presently owned, leased and operated,
        and
        to carry on its respective business as it is now being conducted. The Company
        has the requisite or individual right, power and authority to execute, deliver
        and carry out the terms of this Agreement and all documents and agreements
        necessary to give effect to the provisions of this Agreement and to consummate
        the transactions contemplated hereunder. The execution, delivery and
        consummation of this Agreement, and all other agreements and documents executed
        in connection herewith by the Company, have been duly authorized by all
        necessary action on the part of the Company. No other action, consent or
        approval on the part of the Company or any other person or entity, is necessary
        to authorize the Company's due and valid execution, delivery and consummation
        of
        this Agreement and all other agreements and documents executed in connection
        hereto. This Agreement and all other agreements and documents executed in
        connection herewith by the Company, upon due execution and delivery thereof,
        shall constitute the valid and binding obligations of the Company, enforceable
        in accordance with its terms, except as enforcement may be limited by
        bankruptcy, insolvency, reorganization or similar laws affecting creditors'
        rights generally and by general principles of equity.

       

      4.2  Capitalization.
        All of
        the Company's authorized and outstanding equity securities (including securities
        convertible into equity securities) are identified on Exhibit
        B
        attached
        hereto (the “Company
        Securities”).
        Other
        than as set forth on Exhibit
        B,
        there
        are no outstanding shares of capital stock or any options, warrants or other
        preemptive rights, rights of first refusal or similar rights to purchase
        equity
        securities of the Company. There are no outstanding obligations of the Company
        to repurchase, redeem or otherwise acquire any securities of the Company
        or pay
        any dividend or make any other distribution in respect thereof. Except as
        set
        forth in Section 4.3, the Company owns no securities of any other entity
        and no
        rights to acquire any securities from any other entity. All outstanding Company
        Securities have been duly authorized and validly issued and are fully paid,
        non-assessable and free and clear of all Encumbrances. Upon issuance, the
        Warrant issued to the Lenders pursuant to Section 7.1 will be duly authorized,
        validly issued, fully paid, non-assessable and free and clear of all
        Encumbrances. 

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      4.3  Subsidiaries.
        With
        the exception of the one share of common stock of ITec Acquisitions, Inc.,
        a
        Delaware corporation and wholly-owned subsidiary of the Company, held by
        the
        Company, the Company owns no securities of any other entity, and, except
        as set
        forth in this Section 4.3, there are no outstanding shares of capital stock
        or
        any options, warrants or other preemptive rights, rights of first refusal
        or
        similar rights to purchase equity securities of any other entity. 

       

      4.4  Compliance
        with Laws.
        The
        nature and transaction of the Company's business and operations and the use
        of
        its properties and assets do not, and during the term of this Agreement shall
        not, violate or conflict with in any material respect any applicable law,
        statute, ordinance, rule, regulation or order of any kind or
        nature.

       

      4.5  Absence
        of Conflicts.
        The
        execution, delivery and performance by the Company of this Agreement, and
        the
        transactions contemplated hereby, do not constitute a breach or default,
        or
        require consents under, any agreement, permit, contract or other instrument
        to
        which the Company is a party, or by which the Company is bound or to which
        any
        of the assets of the Company is subject, or any judgment, order, writ, decree,
        authorization, license, rule, regulation, or statute to which the Company
        is
        subject, and will not result in the creation of any lien upon any of the
        assets
        of the Company. 

       

      4.6  Litigation
        and Taxes.
        There
        is no
        litigation or governmental proceeding pending, or to the best knowledge of
        the
        Company after due inquiry, threatened, against the Company. The Company has
        duly
        filed all applicable income or other tax returns and has paid all material
        income or other taxes when due. There is no controversy or objection pending,
        or
        to the best knowledge of the Company after due inquiry, threatened in respect
        of
        any tax returns of the Company.

       

      4.7  Intellectual
        Property.
        No
        proceedings have been instituted or are pending or, to the Company’s knowledge,
        threatened which challenge the validity of the ownership by the Company of
        any
        such Proprietary Rights. The Company has not licensed anyone to use any such
        Proprietary Rights and, to the Company’s knowledge, there has been no use or
        infringement of any of such Proprietary Rights by any other person.

       

      4.8  Company's
        SEC Reports.
        The
        Company has timely filed with the Securities and Exchange Commission (the
        “SEC”)
        all
        forms, reports, definitive proxy statements, schedules and registration
        statements (the “Company
        SEC Reports”)
        required to be filed by it with the SEC pursuant to the Securities Act of
        1933,
        as amended (the “Securities
        Act”),
        or
        the Securities Exchange Act of 1934, as amended (the “Exchange
        Act”).
        As of
        their respective filing dates or, if amended, as of the date of the last
        amendment, none of the Company SEC Reports contained any untrue statement
        of a
        material fact or omitted to state any material fact required to be stated
        therein or necessary to make the statements made therein, in the light of
        the
        circumstances under which they were made, not misleading. The Company SEC
        Reports (including, without limitation, any financial statements and schedules
        included therein) when filed or, if amended, as of the date of the last
        amendment, complied in all material respects with the applicable requirements
        of
        the Securities Act and the Exchange Act.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      4.9  No
        Omissions or Misstatements.
        None of
        the information included in this Agreement, other documents or information
        furnished or to be furnished by the Company, or any of its representations,
        contains any untrue statement of a material fact or is misleading in any
        material respect or omits to state any material fact. Copies of all documents
        referred to in herein have been delivered or made available to the Lenders
        and
        constitute true and complete copies thereof and include all amendments,
        schedules, appendices, supplements or modifications thereto or waivers
        thereunder.

       

      ARTICLE
        5  

       

      COVENANTS

       

      5.1  Negative
        Covenants of the Company.
        The
        Company covenants and agrees that, from the Closing Date until the Maturity
        Date
        (and, in any event, during such time as any portion of the Loan or any Interest
        thereon is outstanding), without the consent of the Lenders, the Company
        will
        not:

       

      (a)  create,
        incur, assume or suffer to exist any indebtedness that is in any way senior
        or
        superior to this Agreement or the indebtedness represented hereby except
        as set
        forth in Section 3.1(b);

       

      (b)  merge
        or
        consolidate with or into any other corporation or sell or otherwise convey
        25%
        or more of its assets; provided, however, that notwithstanding anything in
        this
        Agreement or the Note to the contrary, the Company shall not be prohibited
        from
        consummating that certain Agreement and Plan of Merger by and among the Company,
        ITec Acquisitions, Inc. and Rose Waste Systems, Inc. (the “Merger”);

       

      (c)  in
        a
        single transaction or series of related transactions, effect a significant
        acquisition of any business or entity (for purposes hereof, a “significant”
        acquisition shall be determined in accordance with Instructions 2, 3 and
        4 or
        Item 2 of Form 8-K of the Securities and Exchange Commission); provided,
        however, that notwithstanding anything in this Agreement or the Note to the
        contrary, the Company shall not be prohibited from consummating the
        Merger;

       

      (d)  engage
        in
        any business other than the business conducted by the Company on the Closing
        Date;

       

      (e)  declare,
        set aside or pay any dividend or other distribution on any of its capital
        stock;

       

      (f)  engage
        in
        any transaction with any Affiliate (as such term is defined in Rule 501(b)
        of
        the Securities Act of 1933, as amended) on terms less favorable to the Company
        than could be obtained from an unrelated party; or

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      (g)  amend
        its
        Certificate of Incorporation or Bylaws in any manner that adversely affects
        the
        rights associated with this Agreement, the Warrant issued to the Lenders
        pursuant to Section 7.1 hereof or the Registrable Securities.

       

      The
        Company will give notice to the Lenders of any default under any provisions
        of
        this Agreement within three business days after the discovery by the Company
        of
        such default. 

       

      5.2  Affirmative
        Covenants of the Company.
        The
        Company covenants and agrees that, from the Closing Date until the Maturity
        Date
        (and, in any event, during such time as any portion of the Loan or any Interest
        thereon is outstanding), the Company shall:

       

      (a)  operate
        its business only in the ordinary course and maintain its properties and
        assets
        in good repair, working order and condition;

       

      (b)  cause
        to
        be done all things reasonably necessary to maintain, preserve and renew its
        corporate existence and all material licenses, authorizations and permits
        necessary to the conduct of its businesses;

       

      (c)  comply
        with all applicable laws, rules and regulations of all governmental authorities,
        the violation of which could reasonably be expected to have a material adverse
        effect on its business, properties or prospects;

       

      (d)  deliver
        to the Lenders within 10 days after the end of each fiscal month and within
        30
        days of the end of each fiscal quarter, unaudited consolidated financial
        statements (including balance sheets, statements of income and loss, statements
        of cash flow and statements of shareholders' equity) all in reasonable detail,
        fairly presenting the financial position and the results of operations of
        the
        Company as of the end of and through such periods, prepared in accordance
        with
        generally accepted accounting principles, consistently applied in the United
        States and consistent with past practice;

       

      (e)  deliver
        to the Lenders the Company's audited annual financial statements and the
        Company's annual budget, and allow the Lenders reasonable access during normal
        business hours to visit the Company and inspect the financial records of
        the
        Company; and

       

      (f)  provide
        the Lenders with at least 10 days' written notice of any meeting of the Board
        of
        Directors of the Company and permit the Lenders to designate an individual
        to
        attend such meeting, including any adjournment thereof, as an observer. In
        addition, the Lenders' designees shall receive all written material disseminated
        to the Board of Directors in advance, during or following any meeting, whether
        or not the designee was in attendance. The Lenders' designees shall receive
        the
        same compensation as is paid to the members of the Board of Directors in
        connection with such designee's attendance of meetings of the Board of
        Directors.

       

      5.3  Additional
        Covenant Regarding Registration Statements on Form S-8.
        During
        the period from the Closing Date until the date that is 30 days following
        the
        closing of the Private Placement, the Company shall not issue any stock options
        or warrants that are subject to or covered by the Company’s registration
        statements on Form S-8 on file with the Securities and Exchange
        Commission.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      ARTICLE
        6

      DEFAULT

       

      6.1  Events
        of Default.
        The
        occurrence of any of the following events (each an “Event
        of Default”),
        not
        cured in the applicable cure period, if any, shall constitute and Event of
        Default of the Company:

       

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

       

      (b)  the
        failure to make when due any payment described in this Agreement or the Note,
        whether on or after the Maturity Date, by acceleration or otherwise;
        and

       

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

       

      6.2  Effect
        of Default.
        Upon
        the occurrence of any Event of Default that is not cured within any applicable
        cure period, the Lenders may elect, by written notice delivered to the Company,
        to take any or all of the following actions: (i) declare this Agreement
        terminated and the outstanding amounts under the Note to be forthwith due
        and
        payable, whereupon the entire unpaid Loan, together with 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 the Company, anything contained herein or in any
        of
        the Note to the contrary notwithstanding, and (ii) exercise any and all other
        remedies provided hereunder or available at law or in equity upon the occurrence
        and continuation of an Event of Default. In addition, during the occurrence
        of
        any Event of Default, the Company shall not pay make any payment on any other
        outstanding indebtedness of the Company (other than indebtedness of the Company
        to which the Lenders have agreed in writing to subordinate this Agreement
        and
        the Note hereunder). 

       

      ARTICLE
        7

      ISSUANCE
        OF STOCK

       

      7.1 Issuance
        of Warrant.
        Unless
        the Loan is converted into common stock pursuant to the provisions of Section
        8.7 hereof, the Company shall issue to the Lender on a pro-rata basis warrant
        to
        purchase in the aggregate, the Company shall issue to the Lenders on a pro-rate
        basis warrant to purchase in the aggregate 150,000 shares of common stock
        of the
        Company in the form attached hereto as Exhibit
        C
        (the
“Warrant”).
        The
        Warrant shall be immediately exercisable by the Lenders (or their assigns)
        at an
        exercise price of $.13 per share. The Warrant shall be exercisable for a
        period
        of ten years following the Effective Date.

       


      
        
           

        

        
          7

          
            

          

        

        
           

        

      


      


       

      7.2 Registration
        of Registrable Securities. 

       

      (a) The
        Company shall prepare and, as soon as practicable, but in no event later
        than 75
        days following the closing date of the Private Placement (the “Filing
        Deadline”),
        file
        with the Securities and Exchange Commission (the “SEC”)
        a
        registration statement on Form SB-2 covering the resale of all shares of
        common
        stock underlying the Note (the “Note
        Shares”);
        provided,
        however;
        that in
        the event the Loan is not converted prior to the Maturity Date (the “Note
        Repayment”), the registration statement on Form SB-2 shall cover instead the
        shares of common stock underlying the Warrant (the “Warrant
        Shares”)
        (the
        shares of common stock required to be registered pursuant to this Section
        7.2(a), the “Registrable
        Securities”).
        In
        the event that Form SB-2 is unavailable for such a registration, the
        Company
        shall
        register the resale of the Registrable Securities on another appropriate
        form
        reasonably acceptable to the holders of at least a majority of the Registrable
        Securities and undertake to register the Registrable Securities on Form SB-2
        as
        soon as such form is available, provided that the Company
        shall
        maintain the effectiveness of the Registration Statement then in effect until
        such time as a Registration Statement on Form SB-2 covering the Registrable
        Securities has been declared effective by the SEC.
        The
        Company shall use its reasonable best efforts to have such registration
        statement declared effective by the SEC as soon as practicable, but in no
        event
        later than the date which is 180 days following the closing date of the Private
        Placement (the “Effectiveness
        Deadline”).

       

      (b) In
        the
        event the registration statement required to be filed with the SEC pursuant
        to
        Section 7.2(a) is not filed with the SEC by the Filing Deadline, (a
        "Filing
        Failure"),
        then,
        as partial relief for the damages to any holder by reason of any such delay
        in
        or reduction of its ability to sell the Registrable Securities (which remedy
        shall not be exclusive of any other remedies available at law or in equity),
        the
        Company shall pay to Lenders an amount in stock equal to one and one-half
        percent (1.5%) of the Loan on the following dates the day of a Filing Failure
        and on every thirtieth day (pro rated for periods totaling less than thirty
        days) thereafter until such Filing Failure is cured. The payments to which
        the
        Lenders shall be entitled pursuant to this Section 7.2(b) are referred to
        herein
        as "Filing
        Failure Delay Payments."
        Filing
        Failure Delay Payments shall be paid on the earlier of (I) the last day of
        the
        calendar month during which such Filing Failure Delay Payments are incurred
        and
        (II) the third Business Day after the event or failure giving rise to the
        Filing
        Failure Delay Payments is cured. In the event the Company fails to make Filing
        Failure Delay Payments in a timely manner, such Registration Delay Payments
        shall bear interest at the rate of 1.5% per month (prorated for partial months)
        until paid in full.

       

      (c) All
        expenses incident to the filing of the registration statement required by
        Section 7.2, including without limitation all registration and filing fees,
        fees
        and expenses of compliance with securities or blue sky laws, printing expenses,
        messenger and delivery expenses, and fees and disbursements of counsel for
        the
        Company and all independent certified public accountants, underwriters
        (excluding discounts and commissions) and other professionals retained by
        the
        Company will be borne by the Company. In no event shall the Company be obligated
        to pay any discounts or commissions with respect to the shares sold by any
        holder of Registrable Securities. In connection with any registration statement,
        the Company shall reimburse the holders of Registrable Securities covered
        by
        such registration for the reasonable fees and disbursements of one counsel
        chosen by the holders of a majority of the Registrable Securities initially
        requesting such registration. 

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      ARTICLE
        8

      MISCELLANEOUS

       

      8.1  Successors
        and Assigns; Third Party Beneficiary.
        Subject
        to the exceptions specifically set forth in this Agreement, the terms and
        conditions of this Agreement shall inure to the benefit of and be binding
        upon
        the respective executors, administrators, heirs, successors and permitted
        assigns of the parties. This Agreement may not be assigned (whether by operation
        of law or otherwise) by the Company without the prior written consent of
        the
        Lenders. This Agreement may be assigned by the Lenders without the consent
        of
        the Company.

       

      8.2  Titles
        and Subtitles.
        The
        titles and subtitles of the Sections of this Agreement are used for convenience
        only and shall not be considered in construing or interpreting this
        agreement.

       

      8.3  Notices.
        Any
        notice, request or other communication required or permitted hereunder shall
        be
        in writing and shall be delivered personally or by facsimile (receipt confirmed
        electronically) or shall be sent by a reputable express delivery service
        or by
        certified mail, postage prepaid with return receipt requested, addressed
        as
        follows:

       

      


      if
        to
        the Company, 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
        the Lenders, to:

      


      The
        address set forth 

      on
        the
        signature page hereto 

      


      Either
        party hereto may change the above specified recipient or mailing address
        by
        notice to the other party given in the manner herein prescribed. All notices
        shall be deemed given on the day when actually delivered as provided above
        (if
        delivered personally or by facsimile, provided that any such facsimile is
        received during regular business hours at the recipient's location) or on
        the
        day shown on the return receipt (if delivered by mail or delivery
        service).

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      8.4  Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the domestic
        laws of the State of California without giving effect to any choice of law
        or
        conflict of law provision or rule (whether of the State of Colorado or any
        other
        jurisdiction) that would cause the application of the laws of any jurisdiction
        other than the State of California.

       

      8.5  Waiver
        and Amendment.
        Any
        term of this Agreement may be amended, waived or modified with the written
        consent of the Company and the Lenders.

       

      8.6  Remedies.
        No
        delay or omission by the Lenders in exercising any of its rights, remedies,
        powers or privileges hereunder or at law or in equity and no course of dealing
        between the Lenders and the undersigned or any other person shall be deemed
        a
        waiver by the Lenders 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 the Lenders or the exercise of any other right,
        remedy, power or privilege by the Lenders. The rights and remedies of the
        Lenders described herein shall be cumulative and not restrictive of any other
        rights or remedies available under any other instrument, at law or in equity.
        

       

      8.7  Conversion.
        In the
        event the Lenders elects to convert the Note, all principal and interest
        due
        pursuant to the Note shall convert into common stock of the Company at a
        price
        per share of the lesser of seventy five percent (75%) of (i) $.13, or (ii)
        the
price
        of
        the common stock of the Company on the Over The Counter Bulletin Board on
        the
        day the Lenders elect to convert.

       

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        remainder of this page intentionally left blank]

       


      
        
           

        

        
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      IN
        WITNESS WHEREOF, the Company has caused this Loan Agreement to be signed
        in its
        name on the date first set forth above.

      


      


      


      ITEC
        ENVIRONMENTAL GROUP, INC.

      


      


      By: ________________________ 

               Gary
        M.
        De Laurentiis 

               Chief
        Executive Officer 


      
        
           

        

        
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      IN
        WITNESS WHEREOF, the Lender has caused this Loan Agreement to be signed in
        its
        name on the date first set forth above.

      


      


      


      


      


      By: ________________________ 

              Name: James
        W.
        Rose


      
        
           

        

        
          12

          
            

          

        

        
           

        

      


      Schedule
        of Lenders

      


      
        	
                Name
                  of Lender

              	
                Amount
                  of Loan

              	
                Contact
                  Information

              	
                Amount
                  of Warrants

              	
                Legal
                  Representative

              
	 	 	
                Address:

                 

                 

                Fax:

              	 	
                Address:

                 

                 

                Fax:

              
	 	 	
                Address:

                 

                 

                Fax:

              	 	
                Address:

                 

                 

                Fax:

              
	 	 	
                Address:

                 

                 

                Fax:

              	 	
                Address:

                 

                 

                Fax:

              
	 	 	
                Address:

                 

                 

                Fax:

              	 	
                Address:

                 

                 

                Fax:

              


      

      


              

      


      


      


      
        
           

        

        
          13