Document:

Exhibit
        10.1

      Rodney
        S.
        Rougelot Employment Agreement

      

      EMPLOYMENT
        AGREEMENT

       

      This
        Employment Agreement dated as of July 31, 2006 (“Agreement”)
        is
        made by and between Itec
        Environmental Group, Inc.,
        a
        corporation duly organized and existing under the laws of the State of Delaware
        (the “Company”),
        and
Rodney
        S. Rougelot
        (“Executive”)
        (referred to collectively herein as the “Parties”).

       

      RECITALS

       

      WHEREAS,
        the
        Company desires to hire Executive and Executive desires to become employed
        by
        the Company; and

       

      WHEREAS,
        the
        Company and Executive have determined that it is in their respective best
        interest to enter into this Agreement on the terms and conditions as set
        forth
        herein;

       

      NOW,
        THEREFORE,
        in
        consideration of the premises and the mutual covenants and promises contained
        herein, and for other good and valuable consideration, the receipt and
        sufficiency of which are hereby acknowledged, the parties hereto hereby agree
        as
        follows:

       

      1. Nature
        of Agreement.
        Any
        and
        all prior oral understandings, offers, and/or representations (if any) with
        respect to the employment of Executive are deemed by the parties to be either
        canceled and void and/or are deemed to be superseded by this final written
        Agreement.

       

      2. Employment
        Terms and Duties.

       

      2.1. Term
        of Employment.
        The
        employment of Executive under this Agreement shall be deemed to have commenced
        on August 1, 2006 or such later date as the company satisfied to the reasonable
        satisfaction of Executive the conditions set for on Schedule 2.1 hereto (the
        “Effective
        Date”),
        and
        shall continue until terminated in accordance with Section 6 hereof (the
        “Employment
        Term”).
        

       

      2.2. Location.
        Executive agrees that he shall carry out his duties and obligations under
        the
        terms of this Agreement at: (a) such reasonably configured premises within
        the
        State of California as shall be identified by Executive (which shall, during
        the
        Employment Term, be rented by the Company for use hereunder by Executive),
        or
        (b) the Company’s principal office in Riverbank, California, as reasonably
        required by the Company from time to time. 

       

      2.3. Position
        and Primary Responsibility.
        

       

      (a) It
        is
        understood that Executive shall serve as (i) President and Chief Executive
        Officer, and (ii) as a Director of the Company. Contemporaneously with the
        execution and delivery of this Agreement, the Company shall effectuate all
        such
        action as shall be required to procure the appointment of Executive as President
        and Chief Executive Officer, and as a member of the Board of Directors, of
        the
        Company.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b) Executive,
        as Chief Executive Officer, shall have general supervision, direction and
        control of the business and affairs of the Company. Accordingly, all officers
        of
        the Company other than the Chief Executive Officer shall perform their duties
        under the direction of, and subject to, the authority of the Chief Executive
        Officer. 

       

      (c) In
        connection with the employment of Executive, Executive
        shall have all of the powers and duties of the Chief Executive Officer, as
        prescribed by the Bylaws of the Company in effect on the date hereof; and,
        without limitation, shall have general supervision, direction and control
        of the
        business and affairs of the Company, and of each and every subsidiary of
        the
        Company, and discretionary power, subject to board approval, to hire officers
        of
        the Company
        and its
        subsidiaries.
        The
        Company agrees that, during the Employment Term, neither the Restated
        Certificate of Incorporation, nor the Bylaws, of the Company shall at any
        time
        be amended in a manner inconsistent with the foregoing or the additional
        provisions of this Agreement.

       

      2.4. Exclusivity.
        Executive agrees to devote his full time, attention, energies, solely and
        exclusively in the performance of his duties under the terms of this Agreement.
        However, the expenditure of reasonable amounts of time for educational,
        charitable, or professional activities shall not be deemed a breach of this
        Agreement if those activities do not materially interfere with the services
        required under this Agreement, and shall not require the prior written consent
        of the Company’s Board of Directors. This Agreement shall not be interpreted to
        prohibit Executive from making passive personal investments or conducting
        private business affairs, or serving on the boards of directors of other
        companies or other entities, if those activities do not materially interfere
        with the services required under this Agreement and do not violate Sections
        5.1,
        9
        and
        11
        of this
        Agreement. 

       

      3. Compensation.

       

      3.1. Base
        Salary.
        In
        consideration for the services rendered to the Company hereunder by Executive,
        the Company shall, during his employment, pay Executive a salary at the annual
        rate of Three Hundred Thousand Dollars ($300,000.00) (as may be adjusted
        pursuant to section 3.5, the “Base
        Salary”),
        less
        statutory deductions and withholdings, payable to Executive on a bi-monthly
        basis. In the event that the Company hires a chief operating officer
        (“COO”)
        with
        an annual base salary that exceeds Two Hundred Seventy Three Thousand Dollars
        ($273,000.00), Executive’s Base Salary shall be increased to be at least 10%
        more than the COO’s base salary. For purposes of clarity, in no event shall
        Executive’s Base Salary be decreased pursuant to the preceding sentence.

       

      3.2. Payment.
        All
        compensation payable to Executive hereunder shall be subject to all applicable
        state and federal employment law(s); it being understood that Executive shall
        be
        responsible for the payment of all taxes resulting from a determination that
        any
        portion of the compensation and/or benefits paid/received hereunder is a
        taxable
        event to Executive; it being further understood that Executive shall hold
        the
        Company harmless from any governmental claim(s) for Executive’s personal tax
        liabilities, including interest or penalties, arising from any failure by
        Executive to pay his individual taxes when due.

       

      
        
          
          

        

        
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      3.3. Reimbursement
        of Expenses.
        During
        the Employment Term, the Company shall reimburse Executive
        for all reasonable and necessary expenses incurred by Executive
        while performing his duties under this Agreement in accordance with the
        Company’s customary practices for its executive employees, subject to provision
        by Executive
        of documentation reasonably satisfactory to the Board
        of
        Directors. The Company further agrees to provide Executive with a laptop
        computer and such other further technological tools and services as Executive
        may reasonably request in performing his duties under this
        Agreement. 

       

      3.4. Cash
        Bonuses.
        Executive
        shall have a bonus entitlement during each calendar year (or portion thereof)
        of
        the Employment Term of up to one hundred percent (100%) of his Base Salary
        for
        such year (or portion thereof). Within thirty (30) days of the Effective
        Date,
        the Company and Executive
        shall concur, within their respective reasonable discretion, on the criteria
        and
        procedures applicable to establishment of Executive’s entitlement to such amount
        for the then current calendar year; and, thereafter, within thirty (30) days
        prior to the commencement of each calendar year of the Employment Term, the
        Company and Executive
        shall concur, within their respective reasonable discretion, on the criteria
        and
        procedures applicable to establishment of Executive’s entitlement to such amount
        for the ensuing calendar year. Such criteria shall include, without limitation:
        (i) specified revenue targets for the Company during the applicable period;
        (ii)
        specified EBITDA targets for the Company during the applicable period (as
        defined pursuant to consensus between the Company and Executive);
        and (iii) such
        additional
        specified targets as
        the
        Company and Executive
        mutually
        determine.
        Any
        such cash bonuses shall be paid by the Company no later than March 15 of
        the
        taxable year commencing after the year in which the Executive’s right to such
        payment becomes vested.

       

      3.5. Compensation
        Review.
        It is
        understood and agreed that Executive’s performance will be reviewed by the
        Company’s Board of Directors at
        the end
        of each calendar year
        during
        which this
        Agreement is in force for the purpose of determining whether or not Executive’s
        Base Salary and/or cash bonuses should be increased; it being further understood
        that the decision to increase Executive’s compensation shall be at the sole and
        exclusive option of the Board of Directors.

       

      3.6. Equity
        Awards.
        

       

      (a) The
        Executive shall be entitled to a combination of (x) restricted grants of
        common
        stock, $.0.001 par value (“Common
        Stock”),
        of
        the Company and (y) grants of “incentive
        stock options” (as defined under Section 422 of the Internal Revenue Code of
        1986, as amended (the
        “Code”)),
        exercisable over a period of ten (10) years after grant with respect to shares
        of Common Stock, in the aggregate covering the lower of (i) eight percent
        (8%)
        of the Common Stock Equivalents (as defined below) or (ii) twenty eight million
        (28,000,000) shares of Common Stock (the “Executive
        Shares”)
        (such
        number of shares appropriately adjusted for any subsequent stock dividends,
        stock splits, combinations, reclassifications and the like), as required
        by this
        Section 3.6 and subject to adjustment as set forth in Section 3.6(d) below
        on
        the first anniversary of the Effective Date (the “True
        Up Date”).
        Executive
        shall
        be
        entitled to
        receive
        additional equity awards (the “Additional
        Equity Awards”)
        in
        accordance with Schedule
        A,
        attached
        hereto and incorporated herein. Any Additional Equity Awards shall be
        disregarded for all purposes under this Section 3.6, including, but not limited
        to any adjustments to the number of Executive Shares issued or issuable to
        Executive hereunder. For purposes hereof, “Common
        Stock Equivalents”
shall
        mean the number of shares of Common Stock then outstanding, plus the
        total
        maximum aggregate number of shares that are issuable pursuant to any
        rights to subscribe for or purchase, and any options or
        warrants for
        the
        purchase of, shares of Common Stock, plus the
        total
        maximum aggregate number of shares that are issuable pursuant to any
        stock
        or securities convertible into or exchangeable for shares of Common Stock
        and
        any options
        or
        warrants
        therefor
        (all of the foregoing calculated after giving effect to the operation of
        any and
        all provisions designed to protect against dilution contained in securities
        theretofore issued and other obligations theretofore entered into by the
        Company
        directly or indirectly triggered as a result of consummation of the transactions
        contemplated hereunder or any other event or circumstance). 

       

      
        
          
          

        

        
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      (b) Promptly
        after the execution and delivery of this Agreement, the Company, at its expense,
        shall engage an independent appraiser mutually satisfactory to the Company
        and
Executive,
        in their respective reasonable discretion, to determine the fair market value
        per share (the “Appraised
        Value”)
        of
        Common Stock issuable to Executive under this Section 3.6, as at the respective
        dates of issuance of, respectively, of the Restricted Shares, the Initial
        Options and the Additional Options (as those terms are defined below). As
        soon
        as practicable after determination of the initial Appraised Value, but in
        any
        event within thirty (30) days of the date of this Agreement (such date of
        issuance, the “Original
        Issue Date”)
        , the
        Company shall issue and deliver to Executive the following equity
        awards:

       

      (x) A
        number
        of shares of Common Stock (the “Restricted
        Shares”),
        as
        determined by Executive with an aggregate Appraised Value of up to
        Seven
        Hundred Fifty Thousand ($750,000.00),
        such
        shares to be subject
        to repurchase
        by the Company at a purchase price per share equal to the Taxable Amount
        Per
        Share (as defined below). ;
        “Taxable
        Amount Per Share”
shall
        mean the quotient obtained by dividing (i) product of (1) the aggregate amount
        of income tax that Executive realizes pursuant to applicable federal, state
        and
        local tax laws as a result of receipt of the Restricted Shares multiplied
        by (2)
        Executive’s marginal tax rate with respect to such income under applicable
        federal, state and local tax laws, divided by (ii) the total number of
        Restricted Shares issued to Executive (as appropriately adjusted to reflect
        stock splits, stock dividends and the like). 

       

      (y) If
        the
        Restricted Shares do not equal eight percent (8%) of the Common Stock
        Equivalents outstanding on the Original Issue Date, then the Company shall
        issue
        incentive stock options (the “Initial
        Options”)
        exercisable, over a period of ten years after grant at a price per share
        equal
        to the Appraised Value per share of Common Stock on the date of grant,
        determined by such appraiser as aforesaid, exercisable for that number of
        shares
        of Common Stock (the “Initial
        Option Shares”)
        equal
        to the difference obtained by subtracting (i) the number of Restricted Shares
        from (ii) that
        number of shares equal to eight percent (8%) of the Common Stock Equivalents
        outstanding on the Original Issue Date.
        The
        Initial Options
        shall
        also be subject to such additional terms and conditions (without, however,
        any
        additional conditions to exercisability as aforesaid) as shall be mutually
        acceptable to the Company and Executive, in their respective reasonable
        discretion.

       

      
        
          
          

        

        
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      (z) The
        Restricted Shares and Initial Options (if any) shall vest on the following
        schedule (i) the number of Restricted Shares equal to two percent (2%) of
        the
        total number of Common Stock Equivalents
        outstanding
        on the
        Original Issue Date shall vest immediately upon issuance (the “Initially
        Vested Shares”);
        (ii)
        if the Financing (as defined below) is completed prior to the True Up Date,
        then
        that number of Restricted Shares (or all of the remaining unvested Restricted
        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)
        plus
        Initial Options (if the remaining unvested Restricted Shares that Executive
        then
        holds is less than two percent (2%) of the total number of Common Stock
        Equivalents
        outstanding on such date),
        in the
        aggregate, 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 Restricted Shares (or all of the remaining unvested Restricted
        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)
        plus
        Initial Options (if the remaining unvested Restricted Shares that Executive
        then
        holds is less than two percent (2%) of the total number of Common Stock
        Equivalents
        outstanding on such date),
        in the
        aggregate, 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
        Restricted Shares and Initial Options as of the True Up Date shall vest ratably
        on a monthly basis such that all of the remaining unvested Restricted Shares
        and
        Initial Options shall be fully vested
        on the
        second anniversary of the Effective Date (provided that all of the unvested
        Restricted Shares and Initial Options shall become fully vested upon a
“Change-of-Control” (as
        defined below).

       

      (c) In
        the
        event that the Company does not complete a Financing (as defined below) prior
        to
        the True Up Date, Executive shall forfeit (in accordance with Section 3.6(d)(y)
        below) rights to that number of Executive Shares , if any, necessary to reduce
        the total amount of Executive Shares subject to this Agreement to six percent
        (6%) of the Common Stock Equivalents on the True Up Date. “Financing”
shall
        mean any transaction or series of transactions that close on or prior to
        the
        True Up Date in which the Company receives at least Eight Million Dollars
        ($8,000,000) (or such other amount as mutually agreed upon dollar amount
        by the
        Parties). In addition, the Restricted Shares other than the Initially Vested
        Shares shall be subject to an irrevocable proxy exercisable by the Board
        of
        Directors of the Company (with Executive abstaining) until the earlier to
        occur
        of (i) the closing of the Financing, or (ii) the True Up Date.

       

      (d) Subject
        to Section 3.6(c) above, on the True Up Date the total number of Executive
        Shares shall be adjusted pursuant to this Section 3.6(d) (the “True
        Up”)
        so
        that after giving effect to the True Up the Executive Shares shall represent
        either (i) eight percent (8%) of the Common Stock Equivalents outstanding
        on the
        True Up Date if the Financing has closed by such date or (ii) six percent
        (6%)
        of the Common Stock Equivalents outstanding on the True Up Date if the Financing
        has not closed by such date. 

       

      (x) In
        the
        event that Executive is entitled to receive additional Executive Shares pursuant
        to the True Up, the Company shall grant Executive additional
        incentive
        stock options (the “Additional
        Options”)
        exercisable, over a period of ten (10) years after grant at a price per share
        equal to the fair market value per share of Common Stock on the date of grant
        determined by the appraiser as aforesaid, with respect to a number of shares
        of
        Common Stock (the “Additional
        Option Shares”)
        equal
        to the difference,
        if
        any,
        obtained
        by subtracting (x) the sum of the number of Restricted Shares plus the Initial
        Option Shares from (y) a number of shares that equals eight percent (8%)
        of the
        Common Stock Equivalents outstanding on the True Up Date if the Financing
        has
        closed by such date or six percent (6%) of the Common Stock Equivalents
        outstanding on the True Up Date if the Financing has not closed by such
        date.
        The
        Additional Options shall vest and become exercisable on a
        monthly
        basis such that the Additional Options shall be fully vested
        on the
        second anniversary of the Effective Date (provided that all such options
        shall
        become immediately exercisable upon a Change-of Control),
        such
        options to be subject to such additional terms and conditions as heretofore
        determined with respect to the Initial Options, applied mutatis mutandis. 

       

      
        
          
          

        

        
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      (y) In
        the
        event that number of Executive Shares are to be reduced pursuant to the True
        Up,
        Executive shall forfeit Initial Options and/or Restricted Shares representing
        the right to purchase the difference obtained from subtracting (x) a number
        of
        shares that equals eight percent (8%) of the Common Stock Equivalents
        outstanding on the True Up Date if the Financing has closed by such date
        or six
        percent (6%) of the Common Stock Equivalents outstanding on such date if
        the
        Financing has not closed by such date from (y) the sum of the number of
        Restricted Shares plus the Initial Option Shares. In the event Executive
        must
        forfeit Initial Options or Restricted Shares pursuant to clause (c) or (d)
        of
        this Section 3.6, Executive shall first forfeit unexercised Initial Options
        (pro
        rata across vested and unvested Initial Options), then, to the extent additional
        shares must be forfeited by the Executive to reach the applicable percentage,
        the Company shall have the right to repurchase from Executive any shares
        issued
        upon exercise of the Initial Options at a purchase price equal to the exercise
        price paid by Executive or Restricted Shares at the Taxable Amount Per Share,
        as
        applicable, and the Executive shall forfeit, waive or forego any claim of
        right,
        title or interest to such shares.

       

      (e) The
        Company shall cooperate with the appraiser selected hereunder in all reasonable
        respects and furnish to such appraiser all information and data reasonably
        requested thereby. The Company shall further cooperate with Executive in
        the
        making by Executive of a timely election under Section 83(b) of the Code
        with
        respect to the Restricted Shares. Executive shall submit a copy to the Company
        of any such election if made.

       

      (f) On
        or
        prior to the first anniversary of the date hereof
        (or as
        soon as reasonably practicable following a termination for Good Reason or
        Without Cause),
        the
        Company shall, at its expense, register with the Securities and Exchange
        Commission pursuant to one
        or
        more effective registration statements under the
        Securities Act of 1933, as amended, in
        the
        manner prescribed by Executive, any and all shares now owned or hereafter
        acquired by Executive (the “Registrable
        Securities”),
        including all Restricted Shares, Initial Option Shares,
        Additional Option Shares, and
        shall
        maintain the effectiveness
        and currency
        of each
        such
        registration statement, including any related prospectus until the resale
        of
        such shares by Executive or any successor thereof; and shall take all such
        further action (including, without limitation, any registration of such shares
        under applicable state securities laws
        and the
        listing of such shares on any and all trading markets or stock exchanges
        as the
        Company’s Common Shares may trade from time to time)
        as
        shall permit the resale of such shares, or any portion thereof, as aforesaid.
        The Company shall from time to time furnish to Executive sufficient copies
        of
        any such prospectus, and any supplements thereto, so as to permit the resale
        of
        such shares, or any portion thereof, in the manner prescribed by Executive.
        In
        addition, prior to the grant of the Initial Options, the Company shall enter
        into an additional agreement with Executive extending to Executive incidental
        registration rights covering the resale of the Registrable Securities on
        terms
        no less favorable to Executive than have then been extended to any other
        stockholder of the Company.
        The
        Company shall pay the costs and expenses incurred by Executive in connection
        with any such registration, including the reasonable legal fees and expenses
        that Executive may incur in connection therewith. The obligations of the
        Company
        pursuant to this Section 3.6(f) are referred to herein as the “Registration
        Obligations.”

       

      
        
          
          

        

        
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      (g) On
        or
        prior to the True Up Date, the Company and Executive shall have concurred,
        in
        their respective reasonable discretion, on the terms and conditions of a
        long-term equity incentive award program pursuant to which Executive and
        the
        other members of executive management of the Company shall be entitled to
        grants
        of shares of Common Stock based upon achievement of specified performance
        objectives.

       

      (h) Prior
        to
        the issuance of the Executive Shares, the Company shall adopt a new equity
        incentive plan (the “Equity
        Plan”),
        the
        terms and scope of which shall be approved by the shareholders of the Company
        and sufficient to provide for the issuance to the Executive Shares, the
        additional equity awards contemplated by Schedule A hereto and the Additional
        Options.

       

      (i) The
        Restricted Shares shall be issued pursuant to a Restricted Stock Agreement,
        a
        form of which is attached hereto as Exhibit
        C.

       

      4. Benefits.
        Within
        sixty (60) days of the date of this Agreement, the Company and Executive
        shall
        determine, in their respective reasonable discretion, the terms of the “Welfare
        Benefits” (as hereinafter defined) to which
        Executive shall be entitled. For purposes hereof, “Welfare
        Benefits”
shall
        mean medical, prescription and dental plans, in no event less favorable than
        those applicable to any other executive of the Company, and in all events
        extending to (x) paid vacation per annum equal to four (4) weeks (accruing
        ratably each year) and eleven (11) paid holidays and (y) a non-accountable
        monthly allowance of Fifteen Hundred Dollars ($1,500) (the“Monthly
        Allowance”).

       

      5. Representations.

       

      5.1. Executive
        Representations.
        Executive hereby represents and warrants that:

       

      
        
          
          

        

        
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      (a) His
        employment with the Company under the terms of this Agreement will not conflict
        with any continuing duty(ies) or obligation(s) Executive has with any other
        person(s), firm(s) and/or entity(ies). Executive also represents that he
        has not
        brought to the Company (during the period before or after the Effective Date
        of
        this Agreement) any confidential material(s) and/or document(s) of any former
        employer(s), or any confidential information or property belonging to
        other(s).

       

      (b) During
        the Employment Term, he will promptly disclose to the Board of Directors
        of the
        Company any direct interest (greater than five percent (5%)) he
        holds
        in any
        business that
        provides
        service(s) and/or product(s) to the Company (whether as a principal,
        stockholder, lender, employee, director, officer, partner, venturer, consultant
        or otherwise).

       

      5.2. Company
        Representations.
        The
        Company hereby represents and warrants that:

       

      (a) The
        execution and delivery by the Company of this Agreement, the performance
        by the
        Company of its covenants and agreements under this Agreement, and the
        consummation by the Company of the transactions contemplated by this Agreement
        have been duly authorized by all necessary corporate action. When
        executed and delivered by the Company, this Agreement shall constitute the
        valid
        and legally binding obligation of the Company enforceable against the Company
        in
        accordance with its terms.

       

      (b) Neither
        the execution and delivery of this Agreement by the Company nor the consummation
        by the Company of the transactions contemplated in this Agreement will violate
        any provision of the Restated Certificate of Incorporation or By-laws of
        the
        Company or
        any
        law, rule regulation, writ, judgment, injunction, decree, determination,
        award
        or other order of any court, governmental agency or instrumentality binding
        upon
        the Company, or conflict with or result in any breach of or event of termination
        or right of acceleration under any of the terms of, or the creation or
        imposition of any mortgage, deed of trust, pledge, lien, security interest
        or
        other charge or encumbrance of any nature pursuant to, the terms of any contract
        or agreement to which the Company is a party or by which the Company or any
        of
        its properties or assets is bound. No consent, approval, notice to or other
        authorization of any governmental body, agency or instrumentality, or any
        other
        person or entity, is required for the execution, delivery and performance
        of
        this Agreement by the Company (other than notices heretofore timely delivered).
        

       

      (c) The
        Restricted Shares, Initial Option Shares and Additional Option Shares, when
        issued and delivered in accordance with the terms of this Agreement, shall
        be
        validly issued, fully paid and non-assessable shares of Common Stock, free
        and
        clear of any mortgages, deeds of trust, pledges, liens, security interests
        or
        any charges or encumbrances of any nature (other than the restrictions on
        the
        Restricted Shares expressly contemplated hereunder). There are no preemptive
        rights
        with regard to the issuance of the Restricted Shares, Initial Option Shares
        and
        Additional Option Shares to the Executive.

       

      (d) The
        number of shares and type of all authorized, issued and outstanding capital
        stock, options and other securities of the Company (whether or not presently
        convertible into or exercisable or exchangeable for shares of capital stock
        of
        the Company) is set forth in the SEC Reports (as defined below). All of the
        outstanding shares of capital stock of the Company are duly authorized, validly
        issued, fully paid and non-assessable, have been issued in compliance in
        all
        material respects with all applicable federal and state securities laws,
        and
        none of such outstanding shares was issued in violation of any preemptive
        rights
        or similar rights to subscribe for or purchase any capital stock of the Company.
        Except as specified in the SEC Reports and Schedule
        B,
        attached hereto and incorporated herein, there are no outstanding options,
        warrants or other rights to subscribe to, calls or commitments of any character
        whatsoever relating to, or securities, rights or obligations convertible
        into or
        exchangeable for, or giving any person or entity any right to subscribe for
        or
        acquire, any shares of the Company’s capital stock, or contracts, commitments,
        understandings or arrangements by which the Company or any subsidiary is
        or may
        become bound to issue additional shares of capital stock of the Company,
        or
        options, securities or rights convertible or exchangeable into shares of
        capital
        stock of the Company. Except for customary adjustments as a result of stock
        dividends, stock splits, combination of shares, reorganizations,
        recapitalizations, reclassifications or other similar events, there are no
        anti-dilution or price adjustment provisions contained in any security issued
        by
        the Company (or in any agreement providing rights to security holders of
        the
        Company) and the issuance of the Restricted Shares, Initial Option Shares
        and
        Additional Option Shares will not, immediately or with the passage of time,
        obligate the Company to issue shares of Common Stock or other securities
        to any
        person or entity and will not, result in a right of any holder of securities
        to
        adjust the exercise, conversion, exchange or reset price under such securities.
        

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      (e) The
        Company has filed all reports required to be filed by it under the Securities
        Exchange Act of 1934, as amended (the “Exchange
        Act”),
        including pursuant to Section 13(a) or 15(d) thereof, for the two years
        preceding the date hereof (the foregoing materials being collectively referred
        to herein as the “SEC
        Reports”)
        on a
        timely basis or has received a valid extension of such time of filing and
        has
        filed any such SEC Reports prior to the expiration of any such extension.
        As of
        the date hereof, the Company is not aware of any event (other than the
        transactions contemplated by this Agreement) that requires the filing of
        a Form
        8-K after the Effective Date. As of their respective dates, or to the extent
        corrected by a subsequent restatement, the SEC Reports complied in all material
        respects with the requirements of the Securities Act and the Exchange Act
        and
        the rules and regulations of the Commission promulgated thereunder, and none
        of
        the SEC Reports, when filed, contained any untrue statement of a material
        fact
        or omitted to state a material fact required to be stated therein or necessary
        in order to make the statements therein, in light of the circumstances under
        which they were made, not misleading.

       

      (f) The
        financial statements of the Company included in the SEC Reports comply in
        all
        material respects with applicable accounting requirements and the rules and
        regulations of the Commission with respect thereto as in effect at the time
        of
        filing (or to the extent corrected by a subsequent restatement). Such financial
        statements have been prepared in accordance with generally accepted accounting
        principles in the United States (“GAAP”)
        applied on a consistent basis during the periods involved, except as may
        be
        otherwise specified in such financial statements or the notes thereto and
        except
        that unaudited financial statements may not contain all footnotes required
        by
        GAAP, and fairly present in all material respects the financial position
        of the
        Company and its consolidated subsidiaries taken as a whole as of and for
        the
        dates thereof and the results of operations and cash flows for the periods
        then
        ended, subject, in the case of unaudited statements, to normal, year-end
        audit
        adjustments. 

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      6. Termination.
        Executive’s employment and this Agreement (except as otherwise provided
        hereunder) shall terminate upon the occurrence of any of the following, at
        the
        time set forth therefor (the “Termination
        Date”):

       

      6.1. Death
        or Disability.
        Immediately upon the death of Executive or after six (6) months of Executive’s
        inability to perform the essential functions of his duties, with or without
        reasonable accommodation (defined under
        applicable law),
        due to
        a mental or physical illness or incapacity (“Disability”)
        (termination pursuant to this Section 6.1 being referred to herein as
        termination for “Death
        or Disability”);
        

       

      6.2. Termination
        for Good Reason.
        Immediately following notice of termination for “Good Reason” (as defined
        below), specifying such Good Reason, given by Executive (termination pursuant
        to
        this Section 6.2 being referred to as termination for “Good
        Reason”).
        As
        used herein, “Good
        Reason”
means
        (i) any reduction in Base Salary
        or other
        benefits specified hereunder;
        (ii) a
        substantial diminution
        or dilution
        of the responsibilities, functions and duties attached to the position with
        the
        Company held by Executive; (iii) the Company fails to provide any of the
        compensation or other benefits required hereunder; (iv) any
        representation made by the Company herein is materially untrue or the
        Company otherwise is in material breach of this Agreement; or (v) the Company
        and Executive
        fail to effectuate the matters contemplated by Sections 3.4, 3.6 or 4 within
        the
        respective periods contemplated thereunder. 

       

      6.3. Voluntary
        Termination.
        Thirty
        (30) days following Executive’s written notice to the Company of voluntary
        termination of employment other
        than
        for Good
        Reason;
        provided, however, that the Company may suspend,
        with no reduction in pay or benefits (including, without limitation, bonuses,
        options and vesting), Executive from his duties as set forth herein (including,
        without limitation, Executive’s position as a representative and agent of the
        Company) until the 30th
        day
        following Notice of Voluntary termination)
        (termination pursuant to this Section 6.3 being referred to herein as
“Voluntary”
        termination).

       

      6.4. Termination
        For Cause.
        Immediately following notice of termination for “Cause” (as defined below),
        specifying such Cause, given by the Company (termination pursuant to this
        Section 6.4 being referred to herein as termination for “Cause”).
        As
        used herein, “Cause”
means
        (i) termination based on Executive’s conviction or plea of “guilty” or “no
        contest” to any crime constituting a felony in the jurisdiction in which the
        crime constituting a felony is committed, or
        any
        other conviction
        by a court of competent jurisdiction for a violation
        of criminal law involving dishonesty that
        materially injures the Company (whether or not a felony); (ii) Executive’s
        substance abuse that in any manner
        that
        materially
        interferes with the performance of his duties; (iii) Executive’s failure to
        perform at all or in a reasonably acceptable manner the
        responsibilities, functions and duties attached to his position with the
        Company, including, but not limited to helping to complete a
        Financing;
         or
        (iv)
        Executive’s material breach of this Agreement.
        The
        Board of
        Directors shall
        provide Executive
        thirty
        (30) days written notice of
        any
        determination
        to
        terminate Executive for Cause
        and
shall
        afforded
        Executive the opportunity to be heard by the full Board of Directors.
        Notwithstanding any other provision in this Agreement, if Executive is
        terminated pursuant to subsections
        (ii), (iii) or
        (iv)
        of this Section 6.4, excluding refusal to perform his duties at all, Executive
        shall have sixty (60) days (thirty (30) days in the case of subsection (iii)
        of
        this Section 6.4) to cure the behavior upon which the threatened termination
        is
        based.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      6.5. Termination
        Without Cause.
        Notwithstanding any other provisions contained herein, the Company may terminate
        Executive’s employment thirty (30) days following notice of termination without
        Cause given by the Company; provided, however, that during any such thirty
        (30)
        day notice period, the Company may suspend, with no reduction in pay or
        benefits (including,
        without limitation, bonuses, options and vesting),
        Executive from his duties as set forth herein (including, without limitation,
        Executive’s position as a representative and agent of the Company) (termination
        pursuant to this Section 6.5 being referred to herein as termination
“Without
        Cause”).

       

      6.6. Other
        Remedies.
        Termination pursuant to Section 6.2 above shall be in addition to and without
        prejudice to any other right or remedy to which Executive may be entitled
        at
        law, in equity, or under this Agreement. Termination pursuant to Section
        6.4
        above shall be in addition to and without prejudice to any other right or
        remedy
        to which the Company may be entitled at law, in equity, or under this
        Agreement.

       

      6.7. Salary
        Continuation During Disability.
        Notwithstanding Section 6.1 above, if Executive suffers any physical or mental
        disability that would prevent the performance of his essential job duties,
        the
        Company agrees to pay Executive one hundred percent (100%) of Executive’s
        salary
        and
        other benefits (including, without limitation, bonuses, options and
        vesting),
        payable
        in the same manner as provided for the payment of salary
        and
        benefits (including, without limitation, bonuses, options and
        vesting)
        herein,
        for the duration of the disability, or six (6) months, whichever is less.
        

       

      6.8. Forfeiture
        of Unvested Shares upon Termination.
        In the
        event that this Agreement is terminated pursuant to the provisions of Sections
        6.3 or 6.4, the Executive shall forfeit, waive or forego any claim to right,
        title or interest in any unvested shares issued pursuant the Agreement, subject
        to any repurchase requirement set forth in Section 3.6 and immediately remit
        any
        issued, forfeited shares to the Company for immediate cancellation (against
        payment of the purchase price therefore in the case of Restricted Shares).
        

       

      7. Severance
        and Termination.

       

      7.1. Voluntary
        Termination, Termination for Cause, Termination for Death or
        Disability.
        In the
        case of a termination of Executive’s employment hereunder for Death in
        accordance with Section 6.1 above, or Executive’s Voluntary termination of
        employment hereunder in accordance with Section 6.3 above, or a termination
        of
        Executive’s employment hereunder for Cause in accordance with Section 6.4 above,
        (i) Executive shall not be entitled to receive payment of, and the Company
        shall
        have no obligation to pay, any severance or similar compensation attributable
        to
        such termination, other than Base Salary earned but unpaid, accrued but unused
        vacation to the extent required by the Company’s policies and any non-reimbursed
        expenses pursuant to Section 4 hereof incurred by Executive as of the
        termination date, and (ii) the Company’s obligations under this Agreement shall
        immediately cease except (x)
        as
        required by law
        and (y)
        as provided in Section 16.1 below.
        Provided further, in the event of
        a
        termination of Executive’s employment hereunder for Cause in accordance with
        Section 6.4 above, Executive shall tender back to the Company all unexercised
        options granted to Executive by the Company in connection with Executive’s
        employment. 

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      7.2. Termination
        for Good Reason, Termination Without Cause. 

       

      (a) In
        the
        case of a termination of Executive’s employment hereunder for Good Reason in
        accordance with Section 6.2 above, or Without Cause in accordance with Section
        6.4 above, the Company shall, within thirty (30) days of the Termination
        Date,
        pay Executive, in a lump-sum, cash in the amount (the “Severance
        Payment”)
        of the
        sum of fifty percent (50%) of his annual Base Salary; provided, however,
        that,
        in the event such termination of Executive’s employment follows a
“Change-of-Control” (as defined below), the Severance Payment shall be an amount
        equal to the sum of one hundred and fifty percent (150%) of his annual Base
        Salary. As used herein, “Change-of-Control”
        means:

       

      (i) the
        acquisition by any individual, entity or group (within the meaning of Section
        13(d)(3) or 14(d)(2) under the Exchange
        Act)
        of
        beneficial ownership (within the meaning of Rule 13d-3 promulgated under
        the
        Exchange Act) of twenty percent (20%) or more of the combined voting power
        of
        the outstanding voting securities of the Company entitled to vote generally
        in
        the election of directors; provided, however, that the following acquisitions
        shall not constitute a Change-of-Control: (w) any original
        issuance by
        the
        Company, (x) any acquisition by the Company
        after
        which the holders of the Company’s voting securities entitled to vote generally
        in the election of directors of the Company (the “Voting
        Stock”)
        outstanding immediately prior to consummation of such acquisition continue
        to
        hold at least fifty percent (50%) of the Company’s Voting Stock after such
        acquisition,
        (y) any
        acquisition by any employee benefit plan (or related trust) sponsored or
        maintained by the Company, or (z) any acquisition by any corporation pursuant
        to
        a transaction which complies with clauses (w), (x) and (y) immediately
        preceding; or

       

      (ii) individuals
        who, as of the date hereof, constitute the Board of Directors of the Company
        (the “Incumbent
        Board”)
        cease
        for any reason to constitute at least a majority of the Board of Directors
        of
        the Company unless they are replaced with a slate nominated by at least a
        majority of the Incumbent Board and further provided that any individual
        becoming a director subsequent to the date hereof whose election, or nomination
        for election by the Company's stockholders, was approved by a vote of at
        least a
        majority of the directors then comprising the Incumbent Board shall, for
        purposes of this sub-paragraph (ii), be considered as though such individual
        were a member of the Incumbent Board, but excluding, for this purpose, any
        such
        individual whose initial assumption of office occurs as a result of an actual
        or
        threatened election contest with respect to the election or removal of directors
        or other actual or threatened solicitation of proxies or consents by or on
        behalf of an individual, entity or group other than the Board of Directors
        of
        the Company acting by at least a majority thereof; or

       

      (iii) consummation
        of a reorganization, merger or consolidation or sale or disposition of all
        or
        substantially all of the assets of the Company (a “Business
        Combination”),
        in
        each case, unless, following such transaction: (x) all or substantially all
        of
        the individuals and entities who were the beneficial owners, respectively,
        of
        the outstanding voting securities of the Company entitled to vote generally
        in
        the election of directors immediately prior to such Business Combination
        beneficially own, directly or indirectly, more than fifty percent (50%) (20%
        in
        the case of any Business Combination being proposed and implemented by at
        least
        a majority of the Incumbent Board) of the Voting
        Stock
        of the
        corporation resulting from such Business Combination (including, without
        limitation, a corporation which as a result of such transaction owns the
        Company
        or all or substantially all of the Company's assets either directly or through
        one or more subsidiaries) in substantially the same proportions as their
        ownership, immediately prior to such Business Combination, of the outstanding
        Voting
        Stock,
        (y) no
        individual, entity or group beneficially owns, directly or indirectly, twenty
        percent (20%) or more of the Voting
        Stock
        of such
        corporation except to the extent that such ownership existed prior to the
        Business Combination, and (z) at least a majority of the members of the board
        of
        directors of the corporation resulting from such Business Combination were
        members of the Incumbent Board, or were nominated by at least a majority
        of the
        members of the Incumbent Board, at the time of the execution of the initial
        agreement, or by the action of the Board providing for such Business
        Combination; or

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      (iv) approval
        by the stockholders of the Company of a complete liquidation or dissolution
        of
        the Company.

       

      (b) In
        addition, in the event Paragraph (a) immediately preceding applies, for six
        months after the Termination Date (or such longer period as may be provided
        by
        the terms of the appropriate plan, program, practice or policy), the Company
        shall continue Welfare Benefits to Executive
        and/or his family at least equal to those which would have been provided
        if 
        Executive’s employment had not been terminated (provided, however, that such
        period shall be eighteen months in the event such Paragraph (a) applies
        following a Change-of-Control).

       

      Notwithstanding
        the foregoing, in the event Executive is a “specified employee” as defined in
        Section 409A(a)(2)(B)(i) of the Code, the payment of the Severance Payment
        under
        this Section 7.2 shall be made no earlier than six months after the Termination
        Date.

       

      8. Severance
        Not
        Conditioned
        on Release of Claims. The
        Company’s obligation to provide Executive with the Severance Payment set forth
        in Section 7.2 is not contingent upon Executive’s execution of a release of
        claims in favor of the Company.

       

      9. Non-competition,
        Non-solicitation.  

       

      9.1 Non-Competition.
        Executive agrees that he shall not, during the Employment Term and for
twelve
        (12) months
        subsequent thereto, without both the disclosure to and the written approval
        of
        the Board of Directors of the Company, directly or indirectly, engage or
        be
        interested in (whether as a principal, lender, employee, officer, director,
        partner, venturer, consultant or otherwise) any business(es) that is
competitive
        with the business
        being
        conducted by the Company through the Termination Date, without the express
        written approval of the Board of Directors.

       

      9.2 Non-Solicitation.
        Executive agrees that he will not, without the prior written consent of the
        Company’s Board of Directors, for a period of twelve
        (12) months
        after the Termination Date, directly or indirectly disturb, entice, or in
        any
        other manner persuade, any employee(s) or consultant(s) of the Company to
        discontinue that person’s or firm’s relationship with the Company if the
        employee(s) and/or consultant(s) were employed by the Company at any time
        during
        the twelve (12) month period prior to the Termination Date.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      9.3 Customers.
        Executive agrees that he will not, for a period of twelve
        (12)
        months
        following the Termination Date, contact or solicit orders, sales or business
        from any customer of the Company so as to induce or attempt to induce such
        customer to cease doing business with the Company.

       

      9.4 Public
        Investments.
        The
        provisions of Section 9.1 through 9.3, inclusive, shall not be deemed breached
        by reason of Executive’s ownership of five percent (5%) or less of the equities
        of any entity with a class of publicly traded securities.

       

      10. Inventions,
        Discoveries and Improvements.
        Any and
        all invention(s), discovery(ies) and improvement(s), whether protectible
        or
        unprotectible by patent, trademark, copyright or trade secret, made, devised,
        or
        discovered by Executive, whether by Executive alone or jointly with others,
        from
        the time of entering the Company’s employ until the earlier of the Termination
        Date of this Agreement or the actual date of termination of employment, relating
        or pertaining in any way to Executive’s employment with the Company, shall be
        promptly disclosed in writing to the Board of Directors of the Company, and
        become and remain the sole and exclusive property of the Company. Executive
        agrees to execute any assignments to the Company, or its nominee, of
 Executive’s
        entire right, title, and interest in and to any such inventions, discoveries
        and
        improvements and to execute any other instruments and documents requisite
        or
        desirable in applying for and obtaining patents, trademarks or copyrights
        at the
        cost of the Company, with respect thereto in the United States and in all
        foreign countries, that may be requested by the Company. Executive further
        agrees, whether or not then in the employment of the Company, to cooperate
        to
        the fullest extent and in the manner that may be reasonably requested by
        the
        Company in the prosecution and/or defense of any suit(s) involving claim(s)
        of
        infringement and/or misappropriation of proprietary rights relevant to
        patent(s), trademark(s), copyright(s), trade secret(s), processes, and/or
        discoveries involving the Company’s product(s); it being understood that all
        reasonable costs and expenses thereof shall be paid by the Company. The Company
        shall have the sole right to determine the treatment of disclosures received
        from Executive, including the right to keep the same as a trade secret, to
        use
        and disclose the same without a prior patent application, to file and prosecute
        United States and foreign patent application(s) thereon, or to follow any
        other
        procedure which the Company may deem appropriate. In accordance with this
        provision, Executive understands and is hereby further notified that this
        Agreement does not apply to an invention which the employee developed entirely
        on his own time without using the Company’s equipment, supplies, facilities, or
        trade secret information.

       

      11. Confidential
        Information and Trade Secrets.

       

      11.1
         Non-Disclosure.
        Executive hereby acknowledges that all confidential or proprietary trade,
        engineering, production, and technical data, information or “know-how”
including, but not limited to, customer lists, sales and marketing techniques,
        vendor names, purchasing information, processes, methods, investigations,
        ideas,
        equipment, tools, programs, costs, product profitability, plans, specifications,
        patent application(s), drawings, blueprints, sketches, layouts, formulas,
        inventions, processes and data, whether or not reduced to writing, used in
        the
        development and manufacture of the Company’s products and/or the performance of
        services, or in research or development, are the exclusive property of the
        Company, and shall be at all times, whether after the Effective Date or after
        the Termination Date, be kept strictly confidential and secret by Executive;
        it
        being understood, however, that information which was publicly known, or
        which
        is in the public domain, or which is generally known, shall not be subject
        to
        this restriction (and Executive’s duties of non-disclosure shall further not
        extend to (i) disclosures to other employees, executives, officers and/or
        directors of the Company, or as may be required or appropriate in connection
        with performance hereunder, and (ii) the requirements of legal process, subpoena
        or other court order). 

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      11.2 Return
        of Property.
        Executive agrees not to remove from the Company’s office or copy any of the
        Company’s confidential information, trade secrets, books, records, documents or
        customer or supplier lists, or any copies of such documents, without the
        express
        written permission of the Board of Directors of the Company or as may be
        required or appropriate in connection with performance hereunder. Executive
        agrees, at the Termination Date, to return any property belonging to the
        Company, including, but not limited to, any and all records, notes, drawings,
        specifications, programs, data and other materials (or copies thereof)
        pertaining to the Company’s businesses or its product(s) and service(s),
        generated or received by Executive during the course of his employment with
        the
        Company.

       

      12.
         Information
        of Others.
        Executive agrees that the Company does not desire to acquire from Executive
        any
        secret or confidential information or “know-how” of others. Executive,
        therefore, specifically represents to the Company that he will not bring
        to the
        Company any materials, documents, or writings containing any such information.
        Executive represents and warrants that from the Effective Date of this Agreement
        he is free to divulge to the Company, without any obligation to, or violation
        of, the rights of others, information, practices and/or techniques which
        Executive will describe, demonstrate or divulge or in any other manner make
        known to the Company during Executive’s performance of services. Executive also
        agrees to indemnify and hold the Company harmless from and against any and
        all
        liabilities, losses, costs, expenses, damages, claims or demands for any
        violation of the rights of others as it relates to Executive’s misappropriation
        of secrets, confidential information, or “know-how” of others. Such
        indemnification will not apply in the event action by the Company is
        unsuccessful.

       

      13.
         Indemnification.
        The
        Company shall indemnify Executive in his capacity as director, officer and
        employee of the Company upon terms no less favorable to him than are contained
        under Article 7 of the Restated Certificate of Incorporation of the Company,
        and
        Article VI of the By-laws of the Company, as in effect on the date hereof.
        The
        Company shall extend to Executive the benefits of directors’ and officers’
liability insurance upon terms no less favorable than are extended to any
        other
        director or officer of the Company.
        Upon
        execution, the Company and Executive shall enter into an Indemnification
        Agreement in form and substance acceptable to Executive providing for the
        indemnification contemplated hereby. 

       

      14.
         Notice.
        All
        notices and other communications under this Agreement shall be in writing
        and
        shall be delivered personally or mailed by registered or certified mail,
        return
        receipt requested, and shall be deemed given when so delivered or mailed,
        to a
        party at his or its address as follows (or at such other address as a party
        may
        designate by notice given hereunder):

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      
        	If to Executive:	 	Rodney S.
                Rougelot
	 	 	542 46th
                Avenue
	 	 	San Francisco, CA 94121
	 	 	 
	With a copy to:	 	 Gary J. Kocher
	 	 	 Preston Gates & Ellis
                LLP
	 	 	 925 Fourth Avenue
	 	 	 Suite 2900
	 	 	 Seattle, WA 98104
	 	 	 
	If to the Company: 	 	Itec Environmental Group, Inc.
	 	 	P.O. Box 760
	 	 	Riverbank, CA 95367 
	 	 	 
	With
                a copy to:	 	David
                M. Otto
	 	 	The Otto Law Group, PLLC
	 	 	601 Union St., Suite 4500
	 	 	Seattle, WA
                98101

      

       

      15.
         Suit,
        Jurisdiction.
        Any
        controversy between the Company and Executive 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 Executive 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.

      

      16.
         Miscellaneous.

       

      16.1 Post
        Termination Obligations.
        Notwithstanding the termination of Executive’s employment hereunder, the
        provision(s) of Section(s) “3.6(f),”
        “5,”
“7,”
        “9,” “10,” “11,” “13” and “15” shall survive the Termination Date.

       

      16.2 Assignment.
        This
        Agreement shall be assigned to and inure to the benefit of, and be binding
        upon,
        any successor to substantially all of the assets and business of the Company
        as
        a going concern, whether by merger, consolidation, liquidation or sale of
        substantially all of the assets of the Company or otherwise. The Company
        will
        require any successor (whether direct or indirect, by purchase, merger,
        consolidation or otherwise) to all or substantially all of the business and/or
        assets of the Company to assume expressly and agree to perform this Agreement
        in
        the same manner and to the same extent that the Company would be required
        to
        perform it if no such succession had taken place; and, as used in this
        Agreement, "Company"
        shall
        mean the Company as hereinbefore defined and any successor to its business
        and/or assets as aforesaid which assumes and agrees to perform this Agreement
        by
        operation of law, or otherwise; provided that for purposes of Section 9 hereof,
        the term “Company” shall mean the Company as hereinbefore defined and any such
        transaction in which this Agreement is assigned to a successor may not expand
        or
        enlarge the scope of restrictions applicable to Executive pursuant to Section
        9
        hereof. Executive understands and agrees, however, that this Agreement is
        exclusive and personal to him only, and, as such, he will neither assign
        nor
        subcontract all or part of his undertaking(s) or obligation(s) under the
        terms
        of this Agreement.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      16.3 Severability.
        In the
        event that any provision of this Agreement shall be determined to be
        unenforceable or otherwise invalid, the balance of the provision(s) shall
        be
        deemed to be enforceable and valid; it being understood that all provision(s)
        of
        this Agreement are deemed to be severable, so that unenforceability or
        invalidity of any single provision will not affect the remaining
        provision(s).

       

      16.4 Headings.
        The
        Section(s) and paragraph heading(s) in this Agreement are deemed to be for
        convenience only, and shall not be deemed to alter or affect any provision
        herein.

       

      16.5 Interpretation
        of Agreement.
        This
        Agreement shall be interpreted in accordance plain meaning of its terms and
        under the laws of the State of California.

       

      16.6 Variation.
        Subject
        to Section 16.8, any changes in the Sections relating to salary, bonus, or
        other
        material condition(s) after the Effective Date of this Agreement shall not
        be
        deemed to constitute a new Agreement. All unchanged terms are to remain in
        force
        and effect.

       

      16.7 Collateral
        Documents.
        Each
        party hereto shall make, execute and deliver such other instrument(s) or
        document(s) as may be reasonably required in order to effectuate the purposes
        of
        this Agreement.

       

      16.8 Non-Impairment.
        This
        Agreement may not be amended or supplemented at any time unless reduced to
        a
        writing executed by each party hereto. No amendment, supplement or termination
        of this Agreement shall affect or impair any of the rights or obligations
        which
        may have matured thereunder.

       

      16.9 Execution.
        This
        Agreement may be executed in one or more counterpart(s), and each executed
        counterpart(s) shall be considered by the parties as an original.

       

      16.10 Legal
        Counsel.
        Executive represents to the Company that he has retained legal counsel of
        his
        own choosing, and was given sufficient opportunity to obtain legal counsel
        prior
        to executing this Agreement. Executive also represents that he has read each
        provision of this Agreement and understands its meaning.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      16.11 Transition.
        In the
        event that Executive’s employment with the Company terminates, Executive shall,
        through the last day of employment, and at the Company’s request, use
        Executive’s reasonable efforts (at the Company’s expense) to assist the Company
        in transitioning Executive’s duties and responsibility responsibilities to
        Executive’s successor and maintaining the Company’s professional relationship
        with all customers, suppliers, etc. Without limiting the generality of the
        foregoing, Executive shall cooperate and assist the Company, at the Company’s
        direction and instruction, during the transition period between any receipt
        of
        or giving of notice of the termination of employment and the final day of
        employment. 

       

      16.12 Expenses.
        The
        Company agrees to reimburse Executive for fees and expenses incurred by
        Executive in connection with the preparation of this Agreement, including
        reasonable attorneys fess, up to a maximum amount of Fifteen Thousand Dollars
        ($15,000).

       

      16.13
        Section
        409A Matters.
        It is
        the intention of the parties that no payment or entitlement pursuant to this
        Agreement will give rise to any adverse tax consequences to the Executive
        under
        26 U.S.C. § 409A ("409A").
        The
        Agreement shall be interpreted to that end and, consistent with that objective
        and notwithstanding any provision herein to the contrary, the Company shall
        indemnify Executive from any adverse tax consequences, penalties and/or interest
        thereon that may arise under 409A, and the Company may unilaterally take
        any
        action it deems necessary or desirable to amend any provision herein to avoid
        the application of 409A if such action will only benefit the Executive. Should
        either party determine that there is a reasonable possibility that the text
        of
        this Agreement could give rise to such adverse tax consequences, the parties
        agree to negotiate in good faith to amend the Agreement to obviate the
        possibility of such consequences.

       

      If,
        at
        any time, the Company (or its direct or indirect parent) has a class of stock
        that is publicly traded on an established securities market or otherwise,
        the
        Company shall from time to time compile a list of “Specified Employees” as
        defined in, and pursuant to, Prop. Reg. § 1.409A-1(i) or any successor
        regulation. Notwithstanding any other provision herein, if the Executive
        is a
        Specified Employee on the date of his termination of employment, no payment
        of
        compensation under this Agreement shall be made to the Executive during the
        period lasting six months from the date of his termination of employment
        unless
        the Executive determines that there is no reasonable basis for believing
        that
        making such payment would cause the Executive to suffer any adverse tax
        consequences pursuant to 409A. If any payment to the Executive is delayed
        pursuant to the provisions of this paragraph, such payment instead shall
        be made
        on the first business day following the expiration of the six (6) month period
        referred to in the prior sentence.

       

      [Signature
        page to follow]

      
        
          
          

        

        
          18

          
            

          

        

         

      

      IN
        WITNESS WHEREOF,
        the
        parties hereto have set their hands and seals the day and year first above
        written.

       

      THE
        COMPANY:

      

      ITEC
        ENVIRONMENTAL GROUP, INC.

      

       

        
          

        

      

      By:

      Its:

      

      EXECUTIVE:

      

      RODNEY
        S.
        ROUGELOT

       

      

      
        
Rodney
        S. Rougelot

       

      
        
          
          

        

        
          19

          
            

          

        

         

      

      Schedule
        2.1

       

      
        	 	
                ·

              	
                Coloris
                  commission deal documented to reasonable satisfaction of
                  Executive

              

      

       

      
        	 	
                ·

              	
                Gary
                  D. Contract written and detailed to reasonable satisfaction of
                  Executive
                  to include, but not limited to, the following terms - cut options,
                  assume
                  title of CTO, salary, severance, duties, goals to remove guarantee
                  of
                  CIWMB Loan 

              

      

       

      
        	 	
                ·

              	
                Documentation
                  of term changes for KWS investors to Knight investor terms
                  

              

      

       

      
        	 	
                ·

              	
                Delivery
                  to Executive of detailed financial statements at and as of July
                  31 which
                  will reflect all accrued liabilities through such date, including
                  detailed
                  AP (including all legal fees incurred through such date), liabilities,
                  cap
                  table, off BS liabilities i.e., George Gitschel,
                  etc...

              

      

       

      
        	 	
                ·

              	
                Confirmation
                  from Coloris and KWS that they are not entitled to receive commission
                  for
                  Executive's funding contacts from date of Agreement forward.
                  

              

      

       

      
        	 	
                ·

              	
                Increase
                  in D&O policy in scope and amount reasonable acceptable to Executive.
                  

              

      

       

      
        	 	
                ·

              	
                Amendment
                  to the Certificate of Incorporation to provide for maximum indemnification
                  and limitation of liability to directors and officers under Delaware
                  law.

              

      

       

      
        	 	
                ·

              	
                Completion
                  of the information on Schedule B hereto to include specific details
                  relating to the amounts and other details on the shares and other
                  securities issuable to the individuals and entities listed theron,
                  to the
                  reasonable satisfaction of Executive.

              

      

       

      
        
          
          

        

        
          20

          
            

          

        

         

      

      SCHEDULE
        A

      

      ADDITIONAL
        EQUITY AWARDS

      

      Capitalized
        terms used but not defined in this Schedule A have the meanings assigned
        to them
        in the Employment Agreement to which this Schedule A is attached (the
“Agreement”).
        

       

      Executive
        shall be entitled to additional equity awards (the “Additional
        Equity Awards”)
        in the
        event that the Company successfully receives new investment after the Effective
        Date in one or a series of transactions from Executive, parties that Executive
        introduced to the Company, and/or parties that were not stockholders of the
        Company prior to the date of the Agreement (“New
        Funding”).
        In
        the event such New Funding in the aggregate equals or exceeds $1.0 million
        but
        is less than $6.0 million, the Additional Equity Awards will equal one percent
        (1.0%) of the number of Common Stock Equivalents outstanding on the date
        of
        issuance (subject to adjustment as set forth below). In the event such New
        Funding in the aggregate equals or exceeds $6.0 million, such additional
        equity
        awards will equal, in the aggregate, two percent (2.0%) of the number of
        Common
        Stock Equivalents outstanding on the date of issuance (subject to adjustment
        as
        set forth below). Such awards shall be issued by the Company at the time
        of
        closing of the transaction that gives rise to the Company’s obligation hereunder
        and shall be in the form of grants of incentive stock options exercisable
        over a
        period of ten (10) years after grant at
        a
        price per share equal to the fair market value per share of Common Stock
        on the
        date of grant determined by the appraiser as set forth in the
        Agreement.
        In the
        event that, after the date of the issuance of any such Additional Equity
        Award
        and on or prior to the True Up Date, the Company issues additional securities
        such that the number of Common Stock Equivalents is increased, the amount
        of
        shares subject to such Additional Equity Award(s) shall be increased so that
        they reflect the specified percentage(s) on and as of the True Up Date. The
        Company’s Registration Obligations shall apply to any shares issued as
        Additional Equity Awards hereunder and the Company shall use best efforts
        to
        register such shares in accordance with the provisions of Section 3.6(f)
        of the
        Agreement. 

      
        
          
          

        

        
          21

          
            

          

        

         

      

      SCHEDULE
        B

      

      · Cambridge
        Capital Partners promissory note, or its assigns.

       

      · Settlement
        with George Gitschel.

       

      · EnviroPlastics
        Hungary settlement.

       

      · Forbearance
        Agreement with the Elevation Fund.

       

      · Forbearance
        Agreement with Capital Growth Financial.

       

      · David
        Coloris consulting fees.

       

      · KW
        Securities fees related to the 2005 Private Placement Memorandum (“KW
        PPM”).

       

      · Investors
        pursuant to the KW PPM.

       

      · The
        Otto
        Law Group, PLLC, or its assigns.

       

      · Saratoga
        Capital Partners, or its assigns.

      
        
          
          

        

        
          22EXHIBIT
        10.2

    

    Rodney
      S.
      Rougelot Restricted Stock Agreement

    

      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.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    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.

    

    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.	 	 	STOCKHOLDER
	 	 	 	 	 
	By:	 	 	 	 
	
               

              Its:  

            	
              
                

              

               

              
                

              

               

            	 	 	
              

               

              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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