Unassociated Document


    LOAN
      AGREEMENT

     

    THIS
      LOAN
      AGREEMENT (this "Agreement"),
      is
      executed as of August ___, 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 $500,000 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
      $500,000 (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 8.8(a) 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 8.8(a) 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.

     

    
      
         

      

      
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    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
      8.8(a) hereof , the Company shall issue to the Lenders on a pro-rata basis
      warrant to purchase in the aggregate 500,000 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).

     

    
      
         

      

      
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    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 


    
      
         

      

      
        11

        
          

        

      

      
         

      

    


    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:


    
      
         

      

      
        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