Document:

THORIUM
      POWER, LTD.

    

    AMENDED
      AND RESTATED 2006 STOCK PLAN

    

    NOTICE
      OF GRANT

    

    Capitalized
      but otherwise undefined terms in this Notice of Grant and the attached Stock
      Option Agreement shall have the same defined meanings as in the Amended and
      Restated 2006 Stock Plan (the “Plan”). 

    

    
      	
              Name:
                Thomas Graham, Jr.

            	
              Address:
                ____________________

            
	 	            
              ____________________

    

     

    You
      have
      been granted an option (the “Option”) to purchase Common Stock of the
      Corporation, subject to the terms and conditions of the Plan and the attached
      Stock Option Agreement, as follows:

    

    
      	
              Date
                of Grant:

            	
              December
                15, 2006

            
	 	 
	
              Vesting
                Commencement Date:

            	
              December
                15, 2006

            
	 	 
	
              Option
                Price per Share:

            	
              $0.30

            
	 	 
	
              Total
                Number of Shares Granted:

            	
              467,242

            
	 	 
	
              Total
                Option Price:

            	
              $140,173

            
	 	 
	
              Type
                of Option:

            	
              Nonqualified
                Stock Option

            
	 	 
	
              Term/Expiration
                Date:

            	
              Two
                (2) years after Date of Grant

            
	 	 

    

    Vesting
      Schedule:

    

    The
      Option shall vest, in whole, immediately upon the grant.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    THORIUM
      POWER, LTD.

    

    AMENDED
      AND RESTATED 2006 STOCK PLAN

    

    STOCK
      OPTION AGREEMENT

     

    This
      STOCK
      OPTION AGREEMENT (“Agreement”),
      dated as of the 5th day of January, 2007 is made by and between THORIUM POWER,
      LTD., a Nevada corporation (the “Corporation”), and THOMAS GRAHAM, JR. (the
“Optionee”), which term as used herein shall be deemed to include any successor
      to the Optionee by will or by the laws of descent and distribution, unless
      the
      context shall otherwise require).

     

    BACKGROUND

     

    Pursuant
      to the Corporation’s Amended and Restated 2006 Stock Plan (the “Plan”), the
      Corporation, acting through the Committee of the Board of Directors (if a
      committee has been formed to administer the Plan) or its entire Board of
      Directors (if no such committee has been formed) responsible for administering
      the Plan (in either case, referred to herein as the “Committee”), approved the
      issuance to the Optionee, effective as of the date set forth above, of a stock
      option to purchase shares of Common Stock of the Corporation at the price (the
      “Option Price”) set forth in the attached Notice of Grant (which is expressly
      incorporated herein and made a part hereof, the “Notice of Grant”), upon the
      terms and conditions hereinafter set forth.

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual premises and undertakings hereinafter set forth,
      the
      parties hereto agree as follows:

     

    1. Option;
      Option Price.
      On
      behalf of the Corporation, the Committee hereby grants to the Optionee the
      option (the “Option”) to purchase, subject to the terms and conditions of this
      Agreement and the Plan (which is incorporated by reference herein and which
      in
      all cases shall control in the event of any conflict with the terms, definitions
      and provisions of this Agreement), that number of shares of Common Stock of
      the
      Corporation set forth in the Notice of Grant, at an exercise price per share
      equal to the Option Price as is set forth in the Notice of Grant (the “Optioned
      Shares”). If designated in the Notice of Grant as an “incentive stock option,”
the Option is intended to qualify for Federal income tax purposes as an
“incentive stock option” within the meaning of Section 422 of the Code. A copy
      of the Plan as in effect on the date hereof has been supplied to the Optionee,
      and the Optionee hereby acknowledges receipt thereof.

     

    2. Term.
      The term
      (the “Option Term”) of the Option shall commence on the date of this Agreement
      and shall expire on the Expiration Date set forth in the Notice of Grant unless
      such Option shall theretofore have been terminated in accordance with the terms
      of the Notice of Grant, this Agreement or of the Plan.

     

    3. Time
      of Exercise.
      

     

    (a) Unless
      accelerated in the discretion of the Committee or as otherwise provided herein,
      the Option shall become exercisable during its term in accordance with the
      Vesting Schedule set out in the Notice of Grant. Subject to the provisions
      of
      Sections 5 and 8 hereof, shares as to which the Option becomes exercisable
      pursuant to the foregoing provisions may be purchased at any time thereafter
      prior to the expiration or termination of the Option.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) Anything
      contained in this Agreement to the contrary notwithstanding, to the extent
      the
      Option is intended to be an Incentive Stock Option, the Option shall not be
      exercisable as an Incentive Stock Option, and shall be treated as a
      Non-Statutory Option, to the extent that the aggregate Fair Market Value on
      the
      date hereof of all stock with respect to which Incentive Stock Options are
      exercisable for the first time by the Optionee during any calendar year (under
      the Plan and all other plans of the Corporation, its parent and its
      subsidiaries, if any) exceeds $100,000.

     

    4. Termination
      of Option.

     

    (a) 
      The
      Optionee may exercise the Option (but only to the extent the Option was
      exercisable at the time of termination of the Optionee’s business relationship
      with the Corporation, its parent or any of its subsidiaries) at any time within
      three (3) months following the termination of the Optionee’s business
      relationship with the Corporation, its parent or any of its subsidiaries, but
      not later than the scheduled expiration date. If the termination of the
      Optionee’s business relationship is for cause or is otherwise attributable to a
      breach by the Optionee of an employment, non-competition, non-disclosure or
      other material agreement, the Option shall expire immediately upon such
      termination. If the Optionee is a natural person who dies while in a business
      relationship with the Corporation, its parent or any of its subsidiaries, this
      option may be exercised, to the extent of the number of shares with respect
      to
      which the Optionee could have exercised it on the date of his death, by his
      estate, personal representative or beneficiary to whom this option has been
      assigned pursuant to Section 9 of the Plan, at any time within the twelve (12)
      month period following the date of death. If the Optionee is a natural person
      whose business relationship with the Corporation, its parent or any of its
      subsidiaries is terminated by reason of his disability, this Option may be
      exercised, to the extent of the number of shares with respect to which the
      Optionee could have exercised it on the date the business relationship was
      terminated, at any time within the twelve (12) month period following the date
      of such termination, but not later than the scheduled expiration date. At the
      expiration of such three (3) or twelve (12) month period or the scheduled
      expiration date, whichever is the earlier, this Option shall terminate and
      the
      only rights hereunder shall be those as to which the Option was properly
      exercised before such termination.

     

    (b) Anything
      contained herein to the contrary notwithstanding, the Option shall not be
      affected by any change of duties or position of the Optionee (including a
      transfer to or from the Corporation, its parent or any of its subsidiaries)
      so
      long as the Optionee continues in a Business Relationship with the Corporation,
      its parent or any of its subsidiaries.

     

    5. Procedure
      for Exercise.

     

    (a) The
      Option may be exercised, from time to time, in whole or in part (but for the
      purchase of whole shares only), by delivery of a written notice in the form
      attached as Exhibit
      A
      hereto
      (the “Notice”) from the Optionee to the Secretary of the Corporation, which
      Notice shall: 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (i) state
      that the Optionee elects to exercise the Option;

     

    (ii) state
      the
      number of shares with respect to which the Option is being exercised (the
“Optioned Shares”);

     

    (iii) state
      the
      method of payment for the Optioned Shares pursuant to Section 5(b);

     

    (iv) state
      the
      date upon which the Optionee desires to consummate the purchase of the Optioned
      Shares (which date must be prior to the termination of such Option and no later
      than 30 days from the delivery of such Notice);

     

    (v) include
      any representations of the Optionee required under Section 8(b); 

     

    (vi) if
      the
      Option shall be exercised in accordance with Section 9 of the Plan by any person
      other than the Optionee, include evidence to the satisfaction of the Committee
      of the right of such person to exercise the Option; and

     

    (b) Payment
      of the Option Price for the Optioned Shares shall be made either (i) by delivery
      of cash or a check to the order of the Corporation in an amount equal to the
      Option Price or (ii) by any other means which the Board of Directors determines
      are consistent with the purpose of the Plan and with applicable laws and
      regulations (including, without limitation, the provisions of Rule 16b-3 and
      Regulation T promulgated by the Federal Reserve Board). 

     

    (c) The
      Corporation shall issue a stock certificate in the name of the Optionee (or
      such
      other person exercising the Option in accordance with the provisions of Section
      9 of the Plan) for the Optioned Shares as soon as practicable after receipt
      of
      the Notice and payment of the aggregate Option Price for such
      shares.

     

    6. No
      Rights as a Stockholder.
      The
      Optionee shall not have any privileges of a stockholder of the Corporation
      with
      respect to any Optioned Shares until the date of issuance of a stock certificate
      pursuant to Section 5(c).

     

    7.  Adjustments.
      The Plan
      contains provisions covering the treatment of options in a number of
      contingencies such as stock splits and mergers. Provisions in the Plan for
      adjustment with respect to stock subject to options and the related provisions
      with respect to successors to the business of the Corporation are hereby made
      applicable hereunder and are incorporated herein by reference. In general,
      the
      Optionee should not assume that options would survive the acquisition of the
      Corporation.

     

    8. Additional
      Provisions Related to Exercise.
      

     

    (a) The
      Option shall be exercisable only on such date or dates and during such period
      and for such number of shares of Common Stock as are set forth in this
      Agreement.

     

    (b) To
      exercise the Option, the Optionee shall follow the procedures set forth in
      Section 5 hereof. Upon the exercise of the Option at a time when there is not
      in
      effect a registration statement under the Securities Act of 1933, as amended
      (the “Securities Act”), relating to the shares of Common Stock issuable upon
      exercise of the Option, the Committee in its discretion may, as a condition
      to
      the exercise of the Option, require the Optionee (i) to execute an Investment
      Representation Statement substantially in the form set forth in Exhibit
      B
      hereto
      and (ii) to make such other representations and warranties as are deemed
      appropriate by counsel to the Corporation. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c) Stock
      certificates representing shares of Common Stock acquired upon the exercise
      of
      Options that have not been registered under the Securities Act shall, if
      required by the Committee, bear an appropriate restrictive legend referring
      to
      the Securities Act. No shares of Common Stock shall be issued and delivered
      upon
      the exercise of the Option unless and until the Corporation and/or the Optionee
      shall have complied with all applicable Federal or state registration, listing
      and/or qualification requirements and all other requirements of law or of any
      regulatory agencies having jurisdiction.

     

    9.  No
      Evidence of Employment or Service.
      Nothing
      contained in the Plan or this Agreement shall confer upon the Optionee any
      right
      to continue in employment with the Corporation, its parent or any of its
      subsidiaries or interfere in any way with the right of the Corporation, its
      parent or its subsidiaries (subject to the terms of any separate agreement
      to
      the contrary) to terminate the Optionee’s business relationship or to increase
      or decrease the Optionee’s compensation at any time.

     

    10. Restriction
      on Transfer.
      The
      Option may not be transferred, pledged, assigned, hypothecated or otherwise
      disposed of in any way by the Optionee, except by will or by the laws of descent
      and distribution, and may be exercised during the lifetime of the Optionee
      only
      by the Optionee. If the Optionee dies, the Option shall thereafter be
      exercisable, during the period specified in Section 4, by his executors or
      administrators to the full extent to which the Option was exercisable by the
      Optionee at the time of his death. The Option shall not be subject to execution,
      attachment or similar process. Any attempted assignment, transfer, pledge,
      hypothecation or other disposition of the Option contrary to the provisions
      hereof, and the levy of any execution, attachment or similar process upon the
      Option, shall be null and void and without effect. The words “transfer” and
“dispose” include without limitation the making of any sale, exchange,
      assignment, gift, security interest, pledge or other encumbrance, or any
      contract therefor, any voting trust or other agreement or arrangement with
      respect to the transfer of any interest, beneficial or otherwise, in the Option,
      the creation of any other claim thereto or any other transfer or disposition
      whatsoever, whether voluntary or involuntary, affecting the right, title,
      interest or possession with respect to the Option.

     

    11. Specific
      Performance.
      Optionee expressly agrees that the Corporation will be irreparably damaged
      if
      the provisions of this Agreement and the Plan are not specifically enforced.
      Upon a breach or threatened breach of the terms, covenants and/or conditions
      of
      this Agreement or the Plan by the Optionee, the Corporation shall, in addition
      to all other remedies, be entitled to a temporary or permanent injunction,
      without showing any actual damage, and/or decree for specific performance,
      in
      accordance with the provisions hereof and thereof. The Board of Directors shall
      have the power to determine what constitutes a breach or threatened breach
      of
      this Agreement or the Plan. Any such determinations shall be final and
      conclusive and binding upon the Optionee.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    12. Disqualifying
      Dispositions.
      To the
      extent the Option is intended to be an Incentive Stock Option, and if the
      Optioned Shares are disposed of within two years following the date of this
      Agreement or one year following the issuance thereof to the Optionee (a
“Disqualifying Disposition”), the Optionee shall, immediately prior to such
      Disqualifying Disposition, notify the Corporation in writing of the date and
      terms of such Disqualifying Disposition and provide such other information
      regarding the Disqualifying Disposition as the Corporation may reasonably
      require.

     

    13. Notices.
      All
      notices or other communications which are required or permitted hereunder shall
      be in writing and sufficient if (i)
      personally delivered or sent by telecopy, (ii)
      sent by
      nationally-recognized overnight courier or (iii)
      sent by
      registered or certified mail, postage prepaid, return receipt requested,
      addressed as follows: 

     

    if
      to the
      Optionee, to the address (or telecopy number) set forth on the Notice of Grant;
      and

    

    if
      to the
      Corporation, to its principal executive office as specified in any report filed
      by the Corporation with the Securities and Exchange Commission or to such
      address as the Corporation may have specified to the Optionee in writing,
      Attention: Corporate Secretary;

    

    or
      to
      such other address as the party to whom notice is to be given may have furnished
      to the other party in writing in accordance herewith. Any such communication
      shall be deemed to have been given (i) when delivered, if personally delivered,
      or when telecopied, if telecopied, (ii) on the first Business Day (as
      hereinafter defined) after dispatch, if sent by nationally-recognized overnight
      courier and (iii) on the third Business Day following the date on which the
      piece of mail containing such communication is posted, if sent by mail. As
      used
      herein, “Business Day” means a day that is not a Saturday, Sunday or a day on
      which banking institutions in the city to which the notice or communication
      is
      to be sent are not required to be open.

    

    14.  No
      Waiver.
      No
      waiver of any breach or condition of this Agreement shall be deemed to be a
      waiver of any other or subsequent breach or condition, whether of like or
      different nature.

     

    15. Optionee
      Undertaking.
      The
      Optionee hereby agrees to take whatever additional actions and execute whatever
      additional documents the Corporation may in its reasonable judgment deem
      necessary or advisable in order to carry out or effect one or more of the
      obligations or restrictions imposed on the Optionee pursuant to the express
      provisions of this Agreement.

     

    16. Modification
      of Rights.
      The
      rights of the Optionee are subject to modification and termination in certain
      events as provided in this Agreement and the Plan.

     

    17. Governing
      Law.
      This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of Nevada applicable to contracts made and to be wholly performed
      therein, without giving effect to its conflicts of laws principles.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    18. Counterparts;
      Facsimile Execution.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original, but all of which together shall constitute one and
      the
      same instrument. Facsimile execution and delivery of this Agreement is legal,
      valid and binding execution and delivery for all purposes.

     

    19. Entire
      Agreement.
      This
      Agreement (including the Notice of Grant) and the Plan, and, upon execution,
      the
      Notice and Investment Representation Statement, constitute the entire agreement
      between the parties with respect to the subject matter hereof, and supersede
      all
      previously written or oral negotiations, commitments, representations and
      agreements with respect thereto.

     

    20. Severability.
      In the
      event one or more of the provisions of this Agreement should, for any reason,
      be
      held to be invalid, illegal or unenforceable in any respect, such invalidity,
      illegality or unenforceability shall not affect any other provisions of this
      Agreement, and this Agreement shall be construed as if such invalid, illegal
      or
      unenforceable provision had never been contained herein. 

     

    21. WAIVER
      OF JURY TRIAL.
      THE
      OPTIONEE HEREBY EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY
      JURY
      IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY
      COUNTERCLAIM THEREIN.

    

    [Signature
      Page Follows]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Option Agreement as of the date first written
      above.

    
      	 	 	 
	 	THORIUM
              POWER,
              LTD.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Seth
                Grae

            
	 	President
              and
              Chief Executive Officer

    
      	 	 	OPTIONEE:
	 
 	 
 	 
 
	 	     	 
	 	
              

              Thomas
                Graham, Jr.

            

    
       

      [Signature
        Page to Option Agreement]

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    NOTE
      RE: EXHIBITS

     

    EXHIBITS
      A AND B ARE TO BE SIGNED

    

    WHEN
      OPTIONS ARE EXERCISED,

    

    NOT
      WHEN OPTION AGREEMENT IS SIGNED.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      A

    

    THORIUM
      POWER, LTD.

    

    AMENDED
      AND RESTATED 2006 STOCK PLAN

    

    EXERCISE
      NOTICE

    

    Thorium
      Power, Ltd.

    Attention:
      Chief Executive Officer

    

    1. Exercise
      of Option.
      Effective as of today, _______________________, 20__ , the undersigned (the
      “Optionee”) hereby elects to exercise the Optionee’s option to purchase
      ________________ shares of the Common Stock (the “Shares”) of Thorium Power,
      Ltd. (the “Corporation”) under and pursuant to the Amended and Restated 2006
      Stock Plan (the “Plan”) and the Stock Option Agreement dated January 5, 2007,
      (the “Stock Option Agreement”), with the purchase of the Shares to be
      consummated on ______________ ___, ____ (the “Effective Date”), which date is
      prior to the termination of the Option and no later than 30 days from the date
      of delivery of this Notice.

    

    2. Representations
      of the Optionee.
      The
      Optionee acknowledges that the Optionee has received, read and understood the
      Plan and the Stock Option Agreement and agrees to abide by and be bound by
      their
      terms and conditions. 

    

    3. Rights
      as Shareholder; Shares Subject to Stockholders Agreement.
      Until
      the stock certificate evidencing such Shares is issued (as evidenced by the
      appropriate entry on the books of the Corporation or of a duly authorized
      transfer agent of the Corporation), no right to vote or receive dividends or
      any
      other rights as a stockholder shall exist with respect to the Shares,
      notwithstanding the exercise of the Option. The Corporation shall issue (or
      cause to be issued) such stock certificate promptly after the Effective Date,
      provided the applicable price has been paid and the required documents have
      been
      received. No adjustment will be made for a dividend or other right for which
      the
      record date is prior to the date the stock certificate is issued, except as
      otherwise provided in the Plan. Unless waived by the Corporation in writing,
      the
      Shares shall automatically become subject to the terms and conditions of any
      stockholders agreement or similar agreement to which a majority of the
      outstanding capital stock of the Corporation is subject at the time of exercise
      and the Optionee shall sign as a condition to the issuance of the Shares such
      joinder agreement, signature pages or other documents in order to evidence
      the
      Optionee’s agreement to be so bound.

    

    4. Tax
      Consultation.
      The
      Optionee understands that the Optionee may suffer adverse tax consequences
      as a
      result of the Optionee’s purchase or disposition of the Shares. The Optionee
      represents that the Optionee has consulted with any tax consultants the Optionee
      deems advisable in connection with the purchase or disposition of the Shares
      and
      that the Optionee is not relying on the Corporation for any tax
      advice.

    

    5. Successors
      and Assigns.
      The
      Corporation may assign any of its rights under the Stock Option Agreement to
      single or multiple assignees (who may be stockholders, officers, directors,
      employees or consultants of the Corporation), and this Agreement shall inure
      to
      the benefit of the successors and assigns of the Corporation. Subject to the
      restrictions on transfer set forth in the Stock Option Agreement, this Agreement
      shall be binding upon the Optionee and his or her heirs, executors,
      administrators, successors and assigns.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    6. Interpretation.
      Any
      dispute regarding the interpretations of this Agreement shall be submitted
      by
      the Optionee or by the Corporation forthwith to the Committee, which shall
      review such dispute at its next regular meeting. The resolution of such a
      dispute by the Committee shall be final and binding on the Corporation and
      on
      the Optionee.

    

    7. Governing
      Laws: Severability.
      This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of New York applicable to contracts made and to be wholly performed
      therein, without giving effect to its conflicts of laws principles. Should
      any
      provision of this Agreement be determined by a court of law to be illegal or
      unenforceable, the other provisions shall nevertheless remain effective and
      shall remain enforceable.

    

    8. Notices.
      Any
      notice required or permitted hereunder shall be given in writing and shall
      be
      deemed effectively given if given in the manner specified in the Stock Option
      Agreement.

    

    9. Further
      Instruments.
      The
      parties agree to execute such further instruments and to take such further
      action as may be reasonably necessary to carry out the purposes and intent
      of
      this Agreement.

    

    10. Delivery
      of Payment.
      The
      Optionee herewith delivers to the Corporation the full Option Price for the
      Shares.

    

    11. Entire
      Agreement.
      The
      Plan, the Notice of Grant, and the Stock Option Agreement are incorporated
      herein by reference. This Agreement, the Plan, the Notice of Grant, the Stock
      Option Agreement, and the Investment Representation Statement constitute the
      entire agreement of the parties and supersede in their entirety all prior
      undertakings and agreements of the Corporation and the Optionee with respect
      to
      the subject matter hereof.

     

    
      	Submitted by:	Accepted by:
	 	 
	OPTIONEE:	THORIUM POWER, LTD.
	 	 
	 	By:_____________________________
	 	 
	______________________________	Its:______________________________
	THOMAS
              GRAHAM, JR.	 

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      B

    

    THORIUM
      POWER, LTD.

    

    AMENDED
      AND RESTATED 2006 STOCK PLAN

    

    INVESTMENT
      REPRESENTATION STATEMENT

    

      
        	
                OPTIONEE

              	
                :

              	
                ___________________________________

              
	 	 	 
	
                CORPORATION

              	
                :

              	
                THORIUM
                  POWER, LTD.

              
	 	 	 
	
                SECURITY

              	
                :

              	
                Common
                  Stock

              
	 	 	 
	
                AMOUNT

              	
                :

              	
                ___________________________________

              
	 	 	 
	
                DATE

              	
                :

              	
                ___________________________________

              

      

    

    

    In
      connection with the purchase of the above-listed Securities, the undersigned
      Optionee represents to the Corporation the following:

    

    (a) The
      Optionee is aware of the Corporation’s business affairs and financial condition
      and has acquired sufficient information about the Corporation to reach an
      informed and knowledgeable decision to acquire the Securities. The Optionee
      is
      acquiring these Securities for investment for the Optionee’s own account only
      and not with a view to, or for resale in connection with, a “distribution”
thereof within the meaning of the Securities Act of 1933, as amended (the
“Securities Act”).

    

    (b) The
      Optionee acknowledges and understands that the Securities constitute “restricted
      securities” under the Securities Act and have not been registered under the
      Securities Act in reliance upon a specific exemption therefrom, which exemption
      depends upon, among other things, the bona fide nature of the Optionee’s
      investment intent as expressed herein. In this connection, the Optionee
      understands that, in the view of the Securities and Exchange Commission, the
      statutory basis for such exemption may be unavailable if the Optionee’s
      representation was predicated solely upon a present intention to hold these
      Securities for the minimum capital gains period specified under tax statutes,
      for a deferred sale, for or until an increase or decrease in the market price
      of
      the Securities, or for a period of one year or any other fixed period in the
      future. The Optionee further understands that the Securities must be held
      indefinitely unless they are subsequently registered under the Securities Act
      or
      an exemption from such registration is available. The Optionee further
      acknowledges and understands that the Corporation is under no obligation to
      register the Securities. The Optionee understands that the certificate
      evidencing the Securities will be imprinted with a legend which prohibits the
      transfer of the Securities unless they are registered or such registration
      is
      not required in the opinion of counsel satisfactory to the Corporation and
      other
      legends required under the applicable state or federal securities
      laws.

     

    Signature
      of Optionee: _____________________________

    THOMAS
      GRAHAM, JR.

    Date:__________________EXHIBIT
      10.8

    Restricted
      Stock Agreement

    

    This
      Restricted Stock Agreement (the "Agreement")
      is
      made and entered into as of December
      29, 2006
      (the
      "Effective
      Date")
      by and
      between Itec Environmental Group, Inc., a Delaware corporation (the
      "Company"),
      and
      Rodney S. Rougelot ("Stockholder").

    

    RECITALS

    

    
      	
              A.

            	
              The
                Company’s Board of Directors (the "Board")
                has authorized and approved the issuance of shares of the Company’s common
                stock to Stockholder subject to the restrictions set forth herein
                and
                pursuant to the terms hereof.

            

    

    

    
      	
              B.

            	
              The
                shares provided for in this Agreement are to be issued pursuant to
                and in
                connection with Stockholder’s Employment Agreement with the Company dated
                as of July 31, 2006
                and effective as of December 29, 2006 (the “Employment
                Agreement”).
                Capitalized terms used but not defined herein, have the meanings
                assigned
                to them in the Employment
                Agreement.

            

    

    

    NOW,
      THEREFORE, in consideration of the mutual benefits hereinafter provided, and
      each intending to be legally bound, the Company and Director hereby agree as
      follows:

    

    Definitions. Capitalized
      terms used but not defined in this Agreement shall have the meanings assigned
      to
      them in the Employment Agreement. 

    

    1. Issuance
      of Shares. Subject
      to the restrictions, terms and conditions of this Agreement, the Company hereby
      issues to Stockholder thirty-five million two hundred thousand (35,200,000)
      shares
      (the“Shares")
      of the Company’s common stock (“Common
      Stock”).
      As
      used in this Agreement, the term
      (“Shares”)
      refers to the Shares issued hereunder and includes all securities received
      (i) in replacement of the Shares, (ii) as a result of stock dividends
      or stock splits in respect of the Shares, and (iii) in replacement of the
      Shares in a recapitalization, merger, reorganization or the like.

    

    2. Delivery.

    

    2.1 Deliveries
      by Stockholder.
      Stockholder
      hereby delivers to the Company (i) this Agreement; and (ii) four (4)
      copies of a blank Stock Power and Assignment of Uncertificated Securities in
      the
      form of Exhibit
      1
      attached
      hereto (the“Stock
      Powers”),
      all
      of which are executed by Stockholder (and Stockholder’s spouse or domestic
      partner, if any).

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.2 Deliveries
      by the Company.
      Upon
      its
      receipt of all of the documents to be executed and delivered by Stockholder
      to
      the Company under Section 2.1, the Company will issue the Shares in the name
      of
      Stockholder on the books and records of the Company and send to Stockholder
      any
      notice required by the Delaware General Corporation Law for the issuance of
      uncertificated shares. At such time as the Shares become Vested Shares (as
      defined below), the Company shall issue certificates representing such
      Shares.

    

    3. Repurchase
      and Vesting.

    

    3.1  Repurchase
      Right for Unvested Shares.
      As
      of the
      Effective Date, all of the Shares are “Unvested
      Shares,”
and
      shall be restricted and subject to repurchase at the Taxable Amount Per Share
      (as
      defined in the Employment Agreement) based
      on
      the following vesting schedule (shares
      that have vested are referred to herein as “Vested
      Shares”):
      (i) the
      number of Shares equal to two percent (2%) of the total number of Common Stock
      Equivalents (as
      defined in the Employment Agreement) outstanding
      on the
      Original Issue Date (as
      defined in the Employment Agreement)
      shall
      vest immediately upon issuance (the “Initially
      Vested Shares”);
      (ii)
      if the Financing (as
      defined in the Employment Agreement) is
      completed prior to the True Up Date (as
      defined in the Employment Agreement),
      then
      that number of Shares (or all of the remaining unvested Shares that Executive
      then holds if such number is less than two percent (2%) of the total number
      of
      Common Stock Equivalents
      outstanding on such date)
      equaling two percent (2%) of the total number of Common Stock
      Equivalents
      outstanding
      on and
      as of the closing date of the Financing shall vest on such date; (iii) the
      number of Shares (or all of the remaining unvested Shares that Executive then
      holds if such number is less than two percent (2%) of the total number of Common
      Stock Equivalents
      outstanding on such date)
      equaling two percent (2%) of the total number of Common Stock
      Equivalents
      outstanding
      on and
      as of the True Up Date shall vest on such date and (iv) any remaining unvested
      Shares as of the True Up Date shall vest ratably on a monthly basis such that
      all of the remaining unvested Shares shall be fully vested
      on the
      second anniversary of the Effective Date (provided that all of the unvested
      Shares shall
      become
      fully vested upon a “Change-of-Control”
      (as
      defined
      in the Employment Agreement). Stockholder
      agrees not to sell, assign, transfer, pledge, hypothecate, or otherwise dispose
      of, by operation of law or otherwise, such Unvested Shares except as permitted
      by this Agreement. 

    

    3.2 Adjustments.
      The
      number of Shares that are Vested Shares or Unvested Shares will be equitably
      adjusted for any stock split, combination, stock dividend, merger,
      consolidation, reorganization, recapitalization, or any other change in
      corporate structure or other transaction not involving the receipt of
      consideration by the Company occurring after the Effective Date.

    

    4. Accelerated
      Vesting.
      Stockholder’s
      Unvested Shares shall immediately vest upon the occurrence of a
      Change-of-Control. 

     

    5. Restricted
      Securities.
      Stockholder
      acknowledges and understands that Stockholder may not transfer any Shares unless
      such Shares are registered under the Securities Act and qualified under
      applicable state securities laws or unless, in the opinion of counsel to the
      Company, exemptions from such registration and qualification requirements are
      available. Stockholder understands that only the Company may file a registration
      statement with the Securities and Exchange Commission (the“SEC”)
      and
      that the Company is obligated under the Employment Agreement to do
      so. 

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    6. Restrictions
      on Transfers.
      Stockholder agrees not to voluntarily transfer, assign, grant a lien or security
      interest in, pledge, hypothecate, encumber or otherwise dispose of
      (collectively, a“Transfer”)
      any of
      the Unvested Shares. 

    

    7. Rights
      as Stockholder; Proxy.
      Subject
      to the terms and conditions of this Agreement, Stockholder will have all of
      the
      rights of a holder of Common Stock with respect to the Shares from and after
      the
      date that Stockholder delivers an executed copy of this Agreement until such
      time as Stockholder Transfers the Shares or they are repurchased by the Company.
      All Unvested Shares shall be subject to an irrevocable proxy in the form
      attached as Exhibit
      2
      hereto
      exercisable by the Board of Directors of the Company (with Stockholder
      abstaining) until such time as the shares become Vested Shares.

    

    8. Tax
      Consequences.
      STOCKHOLDER
      UNDERSTANDS THAT STOCKHOLDER MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT
      OF
      STOCKHOLDER’S ACQUISITION OR DISPOSITION OF THE SHARES. Stockholder hereby
      acknowledges that Stockholder has been informed that, unless an election is
      filed by the Stockholder with the Internal Revenue Service (and, if necessary,
      the proper state taxing authorities), within
      30 days
      of the
      acquisition of the Shares, electing pursuant to Section 83(b) of the Internal
      Revenue Code (and similar state tax provisions, if applicable) to be taxed
      currently on the fair market value on the date of acquisition of the Shares,
      there will be a recognition of taxable income to the Stockholder equal to the
      fair market value of the Shares at the time they are considered transferable
      or
      no longer subject to substantial risk of forfeiture or repurchase for nominal
      consideration. Stockholder
      represents that he has consulted any tax adviser(s) that he deems advisable
      in
      connection with his acquisition of the Shares and the filing of the election
      under Section 83(b) and similar tax provisions.
      A
      form of
      Election under Section 83(b) is attached hereto as Exhibit
      3
      for
      reference.
      STOCKHOLDER HEREBY ASSUMES ALL RESPONSIBILITY FOR FILING OR NOT FILING SUCH
      ELECTION AND PAYING ANY TAXES RESULTING FROM FILING OR FAILING TO FILE SUCH
      ELECTION.

    

    9. Compliance
      with Laws and Regulations.
      The
      issuance and transfer of the Shares will be subject to and conditioned upon
      compliance by the Company and Stockholder with all applicable state and federal
      laws and regulations and with all applicable requirements of any stock exchange
      or automated quotation system on which the Company’s securities may be listed or
      quoted at the time of such issuance or transfer.

    

    10. Successors
      and Assigns.
      The
      Company may assign any of its rights under this Agreement. This Agreement shall
      be binding upon and inure to the benefit of the successors and assigns of the
      Company. Subject
      to the restrictions on transfer herein set forth, this Agreement will be binding
      upon Stockholder and Stockholder’s heirs, executors, administrators, successors
      and assigns.

    

    11. Governing
      Law; Jurisdiction.
      This
      Agreement shall be interpreted in accordance plain meaning of its terms and
      under the laws of the State of California. Any controversy between the Company
      and Stockholder arising out of or relating to any of the terms, provisions
      or
      conditions of this Agreement shall be submitted to arbitration in accordance
      with the American Arbitration Association’s National Arbitration Rules for the
      Resolution of Employment Disputes. On the written request of either party for
      arbitration of such a claim pursuant to this paragraph, the Company and
      Stockholder shall both be deemed to have waived the right to litigate the claim
      in any federal or state court. To the extent that any claim or controversy
      arising out of this Agreement cannot be submitted to arbitration as set forth
      above, each party hereby agrees that any suit, action or proceeding with respect
      to this Agreement, and any transactions relating hereto, may be brought in
      the
      State of California, County of San
      Francisco, and each of the parties hereby irrevocably consents and submits
      to
      the jurisdiction of such Court(s) for the purpose of any such suit, action
      or
      proceeding. Each of the parties hereby waives and agrees not to assert, by
      way
      of motion, as a defense or otherwise, in any such suit, action or proceeding;
      any claim that it (he) is not personally subject to the jurisdiction of the
      above-named Court(s); and, to the extent permitted by applicable law, any claim
      that such suit, action or proceeding is brought in an inconvenient forum or
      that
      the venue of such suit, action or proceeding is improper or that this Agreement
      or any replacements hereof or thereof may not be enforced in or by such
      Court(s). The Company shall pay any and all costs associated with arbitration
      or
      court adjudication.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    12. Notices.
      Any
      notice required to be given or delivered to the Company shall be in writing
      and
      addressed to the Corporate Secretary of the Company at its principal corporate
      offices. Any notice required to be given or delivered to Stockholder hereunder
      shall be in writing and addressed to Stockholder at the last address Stockholder
      provided to the Company. All notices shall be deemed effectively given upon
      personal delivery, three (3) days after deposit in the United States mail by
      certified or registered mail (return receipt requested), one (1) business day
      after its deposit with any return receipt express courier (prepaid), or on
      the
      business day that it is sent by fax to the fax number last provided by
      Stockholder to the Company, but only if (A) the receiving fax device immediately
      generates a message, printed by the sending fax device, that confirms receipt,
      and (B) receipt of the fax is confirmed by a telephone call between sender
      and
      recipient.

    

    13. Further
      Instruments.
      The
      parties agree to execute such further instruments and to take such further
      action as may be reasonably necessary to carry out the purposes and intent
      of
      this Agreement.

    

    14. Headings.
      The
      captions and headings of this Agreement are included for ease of reference
      only
      and will be disregarded in interpreting or construing this
      Agreement. All
      references herein to “Sections”
will
      refer to Sections of this Agreement.

    

    15. Entire
      Agreement.
      This
      Agreement, the Employment Agreement and the other agreements specifically
      referenced herein contain the entire understanding of the parties regarding
      the
      subject matter of this Agreement and such other agreements and supersede all
      prior and contemporaneous negotiations and agreements, whether written or oral,
      between the parties with respect to the subject matter of this Agreement and
      such other agreements.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    -
      SIGNATURE PAGE -

    RESTRICTED
      STOCK AGREEMENT

    

    IN
      WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
      duly authorized representative and Stockholder has executed this Agreement
      as of
this
      29th
      Day of
      December, 2006.

    

    
      	
              ITEC
                ENVIRONMENTAL GROUP, INC.

              

By: ___________________________________

              Its:
                ___________________________________

            	
              STOCKHOLDER

              

________________________________________
Name:
                Rodney S. Rougelot

            

    

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    LIST
      OF EXHIBITS

    

    Exhibit
      1: Stock
      Power and Assignment of Uncertificated Securities

    

    Exhibit
      2: Irrevocable
      Proxy

    

    Exhibit
      3: Election
      under Section 83(b) of the Internal Revenue Code

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
      1

    

    Stock
      Power and Assignment

    of
      Uncertificated Securities

    

    FOR
      VALUE
      RECEIVED and pursuant to that certain Restricted Stock Agreement dated as
      of
      July 31,
      2006 and effective on December 29, 2006 (the“Agreement”),
      the
      undersigned hereby sells, assigns and transfers unto ITEC ENVIRONMENTAL GROUP,
      INC., a Delaware corporation (the “Company”),
      ______________ uncertificated shares of the Common Stock of the Company,
      standing in the undersigned’s name on the books of the Company delivered
      herewith, and does hereby irrevocably constitute and appoint the Secretary
      of
      the Company as the undersigned’s attorney-in-fact, with full power of
      substitution, to transfer said stock on the books of the Company. 

    

    Dated:
      ________________________

    

    
      	 	
              STOCKHOLDER

            
	 	 
	 	 
	 	 
	 	
              (Signature)

            
	 	 
	 	 
	 	
              (Please
                Print Name)

            
	 	 
	 	 
	 	 
	 	
              (Spouse’s
                or Domestic 

              Partner’s
                Signature)

            
	 	 
	 	 
	 	
              (Please
                Print Spouse’s or 

              Domestic
                Partner’s Name)

            

    

    

    

    Instruction:
      Please
      do
not
      fill in
      any blanks other than the signature line. The purpose of this Stock Power and
      Assignment of Uncertificated Securities is to enable the Company and/or its
      assignee(s) to acquire the shares upon repurchase by the Company as set forth
      in
      the Agreement without requiring additional signatures on the part of Stockholder
      or Stockholder’s Spouse or Domestic Partner.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    EXHIBIT
      2

    

    Irrevocable
      Proxy

    

    Irrevocable
      Unlimited Proxy to Vote Corporate Shares

    

    THE
      UNDERSIGNED STOCKHOLDER, being the owner of 17,600,000
      shares
      of
      common stock (the “Stock”)
      of
      Itec Environmental Group, Inc. (“Itec”)
      does
      hereby grant to David M. Otto an irrevocable and unlimited proxy (the
“Proxy”)
      and
      hereby appoints David M. Otto its attorney-in-fact to vote the Stock in
      connection with any shareholder meeting of Itec.

    

    IN
      WITNESS WHEREOF, I have executed this proxy this 29th
      Day of
      December 2006.

    

    By:______________________________

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
      3

    

    Section
      83(b) Election

    

    The
      undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal
      Revenue Code, to include in gross income for the taxpayer’s current taxable year
      of the fair market value of the property described below at the time of transfer
      as compensation for services.

    

    
      	
              (1)

            	
              The
                taxpayer who performed the services to Itec Environmental Group,
                Inc. (the
                “Company”):

            

    

    

    
      	 	
              Name:
                

            

    

    
      	 	
              Address:
                

            

    

    
      	 	
              Social
                Security No.: 

            

    

    

    
      	
              (2)

            	
              The
                property with respect to which the election is made is
                44,000,000 shares of the Common Stock (the “Shares”)
                of the Company.

            

    

    

    
      	
              (3)

            	
              The
                property was transferred on
                __________________.

            

    

    

    
      	
              (4)

            	
              The
                taxable year for which the election is made is the calendar
                year
                2006.

            

    

    

    
      	
              (5)

            	
              The
                Shares are subject to the following restrictions: the shares are
                subject
                to vesting based upon continued service as an employee of the Company.
                The
                restrictions described herein are set forth in the Restricted Stock
                Agreement between the Company and taxpayer dated
                ________________.

            

    

    

    
      	
              (6)

            	
              The
                fair market value of a Share at the time of transfer (determined
                without
                regard to any restriction other than a restriction which by its terms
                will
                never lapse) was $____ per Share.

            

    

    

    
      	
              (7)

            	
              No
                consideration was paid by the taxpayer for the
                Shares.

            

    

    

    
      	
              (8)

            	
              A
                copy of this statement was furnished to the Company for whom taxpayer
                rendered the services underlying the transfer of such
                shares.

            

    

    

    
      	
              (9)

            	
              This
                statement is executed on
                ___________________.

            

    

    

    

    
      	 	 	 
	
              Taxpayer

            	 	
              Spouse
                or Domestic Partner (if any)

            

    

    

    This
      election must be filed with the Internal Revenue Service Center with which
      the
      Stockholder files his or her federal income tax returns and must be filed within
      30 days after the date of acquisition. This filing should be made by registered
      or certified mail, return receipt requested. The Stockholder must retain two
      copies of the completed form for filing with his or her federal and state tax
      returns for the current tax year and an additional copy for his or her
      records.

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