Document:

THIS AGREEMENT is made the     12th    day of December 2004

PARTIES:

(1)	Dr Boris Gorbunov of 20 Kings Park, Canterbury, Kent CT1 1QH
("Dr Gorbunov"),

(2)	Atlantic Security Inc (incorporated in the Florida) whose
registrar address in the UK is (30 St Giles Street, Oxford,
OX 1 3LE).

RECITALS:

(A)	Dr Gorbunov is the major shareholder that owns the intellectual
property related to the Bio Detection technologies.

(B)	Dr Gorbunov desires to grant to the Optionholder a call option in
respect of his shares in Company A that will be or have already
been formed for these technologies.

NOW IT IS HEREBY AGREED as follows:

1.	DEFINITIONS AND INTERPRETATION

In this Agreement unless there is something in the subject or
context inconsistent therewith the following expressions have the
following meanings:

The Articles                   Means the articles of association
                               from time to time of Company A;

Bio- Detection technologies    Means the Intellectual Property
                               Rights in relation to bio-detection only

The COMPANY                    means the company which is purchasing
                               the option from company A

the Company(ies)               Means Company A set up for the sole
                               purpose of conveying the IPR as
                               referred to in this document.

Company A                      means a new company registered in
                               England  registration number 5038861
                               and created to incorporate the Bio-
                               Detection technologies for the
                               purposes of this Agreement

Completion                     means the performance of both parties
                               obligations under Clause 3.2;

Encumbrance                    means any charge, lien, equity, third
                               party right, option, right of pre-
                               emption or any other encumbrance,
                               priority or security interest of
                               whatsoever nature other than any such
                               arising under the Articles;

Exercise Date                  means the date of service of an
                               Option Notice;

Intellectual Property Rights   means patents, copyright, trade
                               marks, design rights, registered
                               designs, utility models, plant
                               variety rights, database rights,
                               rights in trade or business names,
                               semiconductor topography rights,
                               domain names, moral rights, rights in
                               performances, rights protecting
                               confidential information and know
                               how, rights protecting goodwill and
                               reputation and all similar or
                               analogous rights or forms of
                               protection anywhere in the world, and
                               all applications and rights to
                               register any of those rights;

"Bonus Price" milestone        The first positive customer "in-
                               field" test of a demonstration model
                               i.e. the first positive test of Bio-
                               product for the detection.
                               Anticipated to occur one year from
                               date of this agreement.

The Milestone                  A transportable detector with a
                               performance capability higher than
                               any other competing products
                               currently available on the market.
                               Anticipated to occur in excess of one
                               year but less than two years from the
                               date of this agreement

Option                         means the option granted by Dr
                               Gorbunov to the Optionholder by this
                               Agreement pursuant to Clause 2.2;

Option Notice                  means a notice exercising the Option
                               given pursuant to Clause 2.3;

Option Period                  means the period commencing on the
                               date of this Agreement and expiring
                               at 5p.m. on the date falling 10 month
                               from the date of this Agreement (both
                               dates inclusive) only extendable by
                               the written agreement of Dr Gorbunov;

Option Shares                  Means, separately, the total amount
                               of ordinary shares in the capital of
                               Company A held by Dr Gorbunov at the
                               date hereof and all securities in
                               Company A which are hereafter derived
                               from such shares or which are
                               hereafter distributed by Company A in
                               respect of such shares or any
                               securities previously so derived or
                               distributed and (in each case) of
                               which Dr Gorbunov is the beneficial
                               owner, or to which he is entitled,
                               from time to time together (if
                               applicable) with any ordinary shares
                               in the capital of Company A acquired
                               by Dr Gorbunov by transfer from the
                               other members of  Company A;

Reorganisation                 means any variation in the issued
                               share capital of the Company A
                               whether by  way of capitalisation
                               issue, rights issue, sub-division,
                               consolidation, reduction, purchase or
                               otherwise or any alteration of the
                               rights attached thereto;

Sale                           A sale is the purchase of a single
                               unit of a product to a customer & the
                               payment being made according to
                               Federal accounting standard AcSEC
                               SOP98-4, SOP97-1, SOP97-2and SOP99-1

Technologies                   The "Bio- Detection" technologies;

Transfer Price                 means the price to be paid (subject
                               to the satisfaction of certain
                               conditions as set out in Clause 4)
                               for the Option Shares which shall be
                               made up as follows:
                               (i)      625,000  pounds cash (625,000 pounds
                               in shares) initial payment.
                               (ii)     625,000 pounds cash (625,000 pounds
                               in shares) "Bonus Payment" (If
                               Professor Gorbunov becomes an
                               employee of the company then
                               this will be paid 10 months from
                               joining date) (professor
                               Gorbunov must still be an
                               employee on this date)
                               (iii)    500,000 pounds ("Bonus payment after
                               the first sale of the product
                               and 500,000 pounds in shares)

Transfer Terms                 means that all the Option Shares
                               shall be sold and purchased free from
                               any Encumbrance and together with all
                               rights attaching thereto as at the
                               Exercise Date (other than rights to
                               receive dividends which shall have
                               been paid prior thereto) or at any
                               time thereafter and that the
                               consideration for the Option Shares
                               shall be the Transfer Price.

1.2	Words importing persons shall be construed as importing a
corporate body and vice-versa

1.3	Where a party comprises more than one person the obligations and
liabilities of that party under this Agreement shall be joint and
several obligations and liabilities of those persons.

1.4	The clause headings do not form part of this Agreement and shall
not be taken in account in its construction or interpretation

1.5	Any reference to a clause or a paragraph or a schedule is to one
in this Agreement so numbered.

2.	CALL OPTION

2.1	In consideration of the Optionholder paying to Dr Gorbunov the
sum of 1 pound (receipt of which is hereby acknowledged), Dr Gorbunov
hereby grants to the Optionholder the option referred to in
Clause 2.2.

2.2	The Optionholder shall have the option to purchase all (but not
some only) of the Option Shares, on the exercise of which and in
accordance with this Agreement, Dr Gorbunov will become bound to
sell and the Optionholder will become bound to complete the
purchase of all of the Option Shares on the Transfer Terms.

2.3	The Option must be exercised by notice in writing to Dr Gorbunov
served only during the Option Period, failing which this
Agreement  will lapse and cease to have any further effect. An
Option Notice, once given, may not be withdrawn except with the
written consent of Dr Gorbunov.

2.4	If the Option is exercised, then the remaining provisions of this
Clause 2 and Clauses 3 and 5 will apply.

2.5	Neither Dr Gorbunov nor the Optionholder shall be obliged to
complete the sale and purchase of the Option Shares unless the
sale and purchase of all the Option Shares is completed
simultaneously, but completion of the sale and purchase of some
of the Option Shares will not affect the rights of Dr Gorbunov or
the Optionholder with respect to the other.

2.6	All voting and other rights attached to the Option Shares in
Company A shall accrue to the Optionholder on the Completion Date
and following that time Dr Gorbunov shall exercise all voting and
other rights at the direction of the Optionholder if clause 5.7
is not in force. See Appendix A

3	COMPLETION

3.1	Completion of the sale and purchase of the Option Shares for
Company A shall take place at the registered office of the
Company (or at such other place as may be agreed) at 12 noon
on the day 14 days after the Exercise Date, provided that if
such day is not a business day then Completion shall take
place at 12 noon on the first business day thereafter.

3.2	In relation to Company A On Completion, Dr Gorbunov shall :

3.2.1	transfer or procure the transfer of the Option Shares
to the Optionholder;

3.2.2	deliver all relevant share certificates and other
documents of title in respect of the Option Shares to
the Optionholder;

3.2.3	account to the Optionholder for all benefits received
in respect of the Option Shares between the Exercise
Date and the date of Completion (both dates
inclusive);

3.2.4	deliver to the Optionholder any form of consent or
waiver required from Dr Gorbunov or any other member
of the Company to enable the transfer of the Option
Shares to be registered in accordance with the
Articles;

3.2.5	use his best endeavours to procure registration of the
transfer of the Option Shares forthwith (subject to
the transfer being stamped with any necessary stamp
duty at the expense of the Optionholder); and

3.2.6	do such things and execute such documents as shall be
necessary or as the Optionholder may reasonably
request to give effect to the sale of the Option
Shares on the Transfer Terms.

             3.3  In relation to Company A, the Optionholder, shall on
achieving the Bonus Price milestone, pay the initial payment
in cash of 625,000 pounds plus 625,000 pounds of company share capital to
Dr. Gorbunov in return for Dr. Gorbunov effecting Completion
of the Option Shares in relation to Company A.

4	POST-SIGNING OBLIGATIONS OF DOCTOR GORBUNOV AND Optionholder

4.1	As soon as practicable after the execution of this
Agreement, Dr Gorbunuv shall procure that

4.1.1	all the Bio- Detection technologies owned by him are
assigned to, vested in and beneficially held by the
Company A.

4.2	Dr Gorbunov undertakes that at the Exercise Date all his
Intellectual Property Rights in the Technologies shall be
owned by, vested in and beneficially held by the Companies
will be free from all encumbrances and any other third party
rights in accordance with clause 4.1 above .

4.3	As soon as practicable after the execution of this
Agreement, Dr Gorbunuv undertakes that he will use best
endeavours for and on behalf of the Optionholder to enter
into negotiations with all of the other members of Company A
for the purpose of entering into an binding agreement to
acquire all of their shares in the Company.

4.4	The Optionholder will after completion use its resources in
the best interest of all the Companies to commercially
exploit the IPR & Technologies concerned. The Optionholder
will not withhold reasonable resources to facilitate the
commercialisation of the acquired IPR as long as this will
not contravene US law.

5	PAYMENT OF THE TRANSFER PRICE

Subject to Dr Gorbunov complying with his obligations under
Clause 3, and on completion the Optionholder shall pay the
Transfer Price in accordance with the following provisions:

5.1	The Transfer Price shall be payable in cash provided that
the Optionholder may, at its option, satisfy up to a maximum
of fifty per cent (50%) of the Transfer Price by the
allotment and issue to Dr Gorbunov of such number of fully
tradable shares in the Optionholder as are of equal value
(determined at the Exercise Date) to that part of the
Transfer Price so satisfied as long as this action will not
contravene US securities exchange commission rules at the
time of the transaction.

5.2	The Optionholder shall pay the Initial Price on Completion
or (if later) the date falling 10 months after the
commencement of Dr Gorbunov's employment by the Company and
subject to Dr Gorbunov remaining an employee on that date.

5.3	If Dr Gorbunov shall have entered into a contract of
employment with the Optionholder in the form reasonably
acceptable to the Optionholder which requires that Dr
Gorbunov serve the Optionholder as an employee for a period
of not less than 10 months from the date of this Agreement
and meets the agreed "Bonus Price" milestone, the
Optionholder shall pay the Bonus Price on Completion or (if
later) the date falling 10 months after the commencement of
Dr Gorbunov's employment by the Company and subject to Dr
Gorbunov remaining an employee on that date.

5.4	If on Completion, the Option Shares represent the entire
issued share capital of Company A, the Optionholder shall
immediately pay to Dr Gorbunov the Total Price (initial
payment) on Completion or (if later) the date falling 10
months after the commencement of Dr Gorbunov's employment by
the Company and subject to Dr Gorbunov remaining an employee
on that date.

..
5.5	On Completion of the first sale of a bio product as referred
to in the definition of Transfer Price in clause 1 and that
uses the Bio- Detection technologies, the Optionholder shall
immediately pay to Dr Gorbunov the cash sum of 500,000 pounds and
500,000 pounds of company share capital as in clause 5.1.

5.6	Should Optionholder fail to meet the payment schedule any
IPR , share certificates and other documents of title in
respect of Option Shares held by the Optionholder in Company
A will be returned to Dr Gorbunov. Monies (both cash and
shares) paid for shares and IPR in Company A as in the
Transfer price (i) will be returned to the Company. Monies
(both cash and shares) paid as in the employment bonus price
(ii) to Dr Gorbunov will remain with Dr Gorbunov, Dr
Gorbunov must still be an employee at this time. Each party
will be fully responsible for their own taxation
liabilities.

6	OWNERSHIP AND ALIENATION

6.1	Dr Gorbunov warrants to the Optionholder that at the time of
execution of this Agreement he is the registered holder and
beneficial owner of the Option Shares and that, apart from
this Agreement, such shares are free from all Encumbrances
and that he has full power and authority to exercise and
enjoy all rights attaching thereto without the consent of
any other person and to grant the Option in respect of the
same upon the terms and conditions of this Agreement.

6.2	Dr Gorbunov undertakes to the Optionholder that during the
Option Period he will not (without the prior written consent
of the Optionholder) dispose of any interest in any of the
Option Shares or any right attaching thereto (save as may be
required in pursuance of his obligations under this
Agreement) or create or allow to be created any Encumbrance
over any of the Option Shares or agree (whether subject to
any condition precedent or condition subsequent or
otherwise) to do any of such things.

7	DURATION OF OBLIGATIONS

7.1	Agreement shall terminate on the expiry of the Option Period
if no Option Notice shall have been served on or prior to
such date.

7.2	If an Option Notice shall have been served on or prior to
the date mentioned in Clause 7.1  this Agreement shall
continue in force after such date until the fulfilment of
the parties' obligations hereunder in relation to such
Option Notice whereupon it shall terminate.

8	REORGANISATIONS

8.1	Dr Gorbunov shall procure that until this Agreement
terminates in accordance with Clause 7 the Company A shall
not effect any Reorganisation that can reduce his shares in
Company A below 92% without the prior written consent of the
Optionholder.

8.2	Dr Gorbunov shall procure that until this Agreement
terminates in accordance with Clause 7 that Company A shall
not issue, allot, redeem, purchase or grant options over any
of its shares or other securities nor issue or create any
loan or other security convertible into its shares that can
reduce Dr Gorbunov's shares in Company A below 92%.

9	CONFIDENTIALITY

This Clause contains restrictions on the use of information
disclosed by either party ("the Disclosing Party") to the other
("the Receiving Party").

9.1	Definitions.

For the purposes of this clause 9 the following expressions shall
have the following meanings:

9.1.1	"Confidential Information" means:
(a)	All information of a confidential nature or which
is marked or identified as confidential at the
time of disclosure, which is provided directly or
indirectly by the Disclosing Party to the
Receiving Party  (in any form or stored on any
medium), and whether before, on or after the date
of this Agreement;

(b)	any copy of any of the information described in
paragraph (a) above including a version of that
information incorporated in another form; and

(c)	the fact that discussions are taking place
between us the parties to this Agreement and the
terms of this Agreement.

9.1.2	"The Purpose" means negotiations for the exploitation
of the Technologies.

9.2	Confidentiality and Non-Use

The Receiving Party undertakes to the Disclosing Party to keep the
Confidential Information secret at all times, not to disclose it or
allow it to be disclosed in whole or in part to any third party
without the Disclosing Party's prior written consent and not to use
all or any of it except for the Purpose.

Exceptions.

A party will not breach this the obligations in Clause 9.2 hereof
to the extent that the Confidential Information which is
disclosed:

9.2.1	is known to the Receiving Party before its disclosure
by the Disclosing Party; or

9.2.2	is or becomes publicly known without the fault of the
Receiving Party; or

9.2.3	is obtained by the Receiving Party from a third party
in circumstances where the Receiving Party has no
reason to believe that there has been a breach of an
obligation of confidentiality owed to the Disclosing
Party; or

9.2.3.1	is independently developed by the Receiving
Party; or where. Party  such development is
not either a consequence, directly or
indirectly, of access to the Intellectual
Property Rights; or,
9.2.3.2	by way of reverse engineering;

9.2.4	is approved for release in writing by an authorised
representative of the Disclosing Party; or

9.2.5	is required to be disclosed pursuant to an order of
any Court of competent jurisdiction; or

9.2.6	is required to be disclosed for the purpose of
obtaining legal advice

9.3	Permitted disclosures by the Optionholder

The Optionholder undertakes to permit access to Dr Gorbunov's
Confidential Information only to those third parties (including,
but not limited to, potential investors in the Technologies) who
reasonably need access to Dr Gorbunov's Confidential Information
for the Purpose, and on the condition that those third parties
must have:

9.3.1	those third parties must have entered into legally
binding confidentiality obligations with the Receiving
Party and the Disclosing Party on terms equivalent to
those set out in this Agreement and applicable to the
Confidential Information;

9.3.2	those third parties must have been informed of the
Disclosing Party's interest in the Confidential
Information and the terms of this Agreement; and

9.3.3	those third parties must have been instructed to treat
the Confidential Information as secret and
confidential in accordance with the provisions of this
Agreement.

9.3.4	the Optionholder shall:

9.3.4.1	obtain a full indemnity from each of the third
parties in respect of a breach of
confidentiality; and,
9.3.4.2	will fully indemnify and keep indemnified Dr.
Gorbunov, for any unauthorised disclosure of
Confidential Information by any third party
who had Confidential Information disclosed to
them by the Optionholder

9.7	Return of information and property

The Receiving Party acknowledges and agrees that the property and
copyright in Confidential Information disclosed to it by the
Disclosing Party, including any documents, files and other items
containing any Confidential Information or in any other form of
media, belongs to the Disclosing Party.  At the Disclosing
Party's written request, the Receiving Party will return
immediately to the Disclosing Party all Confidential Information
which the Receiving Party has received under this Agreement and
which whether or not the information is in the Receiving Party's
possession, including any copies made in any other form of media,
and make no further use or disclosure of any of the Confidential
Information.

9.8       No implied rights

	9.8.1 This Agreement is not intended to grant the Receiving Party
any license or rights howsoever arising in respect of the
Confidential Information other than as expressly set out in
this Agreement nor to require the Disclosing Party to
disclose any Confidential Information to the Receiving Party.

9.8.2	No warranty, condition or representation, express or
implied, is given as to the accuracy, efficacy, completeness,
capabilities or safety of any materials or information
provided under this Agreement.

9.9	Press releases, etc

Neither party will issue any press release or similar statement
or give any interview to the media relating to the Purpose
without first obtaining the other party's consent.

10  EXCLUSIVITY

In consideration of the Optionholder paying to Dr Gorbunov the
sum of 1 pounds receipt of which is hereby acknowledged, Dr Gorbunov
agrees that he shall not (and shall procure that Company A shall
not,) during the Option Period negotiate with any party other
than the Optionholder for the use or exploitation in any way of
all or any part of the Technologies or transfer or grant any
rights in or to all or any part of the Technologies to any third
party, and the Optionholder is hereby granted sole and exclusive
rights to market, [sell], produce, [distribute] and otherwise
exploit during the Option Period the Technologies and any
products arising from or derived or created from the
Technologies.

11 NOTICES

Any notice required or permitted to be given hereunder shall be
in writing and shall be sent to the relevant party at their
address for service in England and Wales as set out in this
Agreement or to such other address in England as they may
designate by notice to the other party in accordance with this
Clause. Any such notice shall be delivered personally or sent in
a pre-paid letter and shall be deemed to have been served if by
personal delivery when delivered and if by post 48 hours after
posting.

12 GENERAL

12.1	This Agreement may not be assigned in whole or in part but
is binding upon and shall inure for the benefit of the
parties' personal representatives and other successors.

12.2	This Agreement shall be governed by and construed in
accordance with the laws of England and the parties hereby
submit to the non-exclusive jurisdiction of the English
Courts.

12.3	The parties hereto shall, and shall use their respective
best endeavours to procure that any necessary third parties
shall, execute and do all such further deeds, documents and
things as either party may reasonably require by notice in
writing to the other party to carry the provisions of this
Agreement into full force and effect and (so far as they are
able) shall do everything necessary (including, without
limitation, exercising their powers as shareholders and as
directors of the Company) to give effect to the spirit and
intent of this Agreement.

EXECUTED as a deed the day and year first before written.

SIGNED as a DEED and DELIVERED by	)

/s/ Boris Gurbanov
------------------
BORIS GURBANOV in the presence of:	)

Witness Signature		.........

Witness Name			.........

Witness Address                 .........
				..........

Witness Occupation		..........

SIGNED and DELIVERED by
/s/ Terence Sullivan
---------------------
Terence Sullivan

/s/ Greg Chan
------------------
and Greg Chan on behalf 	  	............
of The COMPANY  and thereby
executed by it as its DEED

...President  Terence Sullivan.
[Title of authorised signatory]

..Company Secretary. Greg Chan.
[Title of authorised signatory]

<PAGE>

Appendix A

Dr Boris Gorbunov by signing this document attests that he holds free
from all Encumbrances .100% in company A
The Share percentages in Company A are as follows:
Name		Dr Boris Gorbunov ........100%
Name		 ..................%
Name		...................%
Name		...................%
Name		...................%

DATED                 	23 December 2004

<PAGE>Exhibit 10.1

DISCRETIONARY BONUS FOR CHIEF EXECUTIVE OFFICER

The following is a description of a discretionary bonus to be paid to the Chief Executive Officer of ITEX Corporation in accordance with his compensation agreement.  This description is provided pursuant to Paragraph 10(ii) to Item 601 of Regulation S-B, requiring a written description of a compensatory arrangement when no formal document contains the compensation information.

Under his current compensation agreement, Mr. White is entitled to an annual base salary of $124,800 for serving as Chief Executive Officer.  Mr. White currently is not compensated for his services as ITEX’s interim CFO.  Mr. White has declined at this time increases to his base salary, electing performance-based incentives tied to the business interests and achievement of strategic goals of the Company.  The Compensation Committee, in its discretion, may periodically award cash or stock bonuses on a recurring or nonrecurring basis in amounts that are determined by the Compensation Committee, taking into account factors used to determine the CEO’s base compensation, the achievement of performance goals to be determined by the Compensation Committee, and any other factors the Compensation Committee determines to be relevant.  Mr. White is also eligible to participate in any benefit programs applicable to eligible employees
generally that are adopted by the Board of Directors.

On January 27, 2005, the Compensation Committee awarded Steven White a discretionary cash bonus of $50,000.  This bonus was in recognition of Mr. White’s direct involvement in ITEX achieving and maintaining profitable operations, strengthening its financial condition and improving its business model and strategic plan.

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