Document:

Exhibit
      4.12

    Arbor
      Malone Loan Agreement

     

    LOAN
      AGREEMENT

     

    THIS
      LOAN
      AGREEMENT (this "Agreement"),
      is
      executed as of August ____, 2006, by and between Itec Environmental Group,
      Inc.,
      a Delaware corporation (the "Company"),
      and
      Arbor Malone, LLC, a Delaware limited liability company (the "Lender").

     

    WHEREAS,
      the Company wishes to borrow and the Lender wishes to lend $2.0 million as
      a
      short term bridge loan; and

     

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

     

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

     

    ARTICLE
      1

    DEFINITIONS

     

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

     

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

     

    “Closing
      Date”
shall
      mean the date upon which the Loan is received by the Company.

     

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

     

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

     

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

     

    ARTICLE
      2

    THE
      LOAN

     

    2.1
      Loan.
      According to the terms and subject to the conditions of this Agreement, the
      Lender shall loan to the Company the aggregate amount of Two Million Dollars
      ($2,000,000.00) (the "Loan").
      One
      half of the Loan amount shall be funded on the initial closing date that will
      occur as soon as the conditions to close specified in Section 2.4 below are
      satisfied (the “First Closing Date”) and the balance of the Loan amount shall be
      funded on the second closing date (the “Second
      Closing Date”
and
      the
      First Closing Date and Second Closing Date are each referred to herein as a
      “Closing
      Date”)
      that
      will occur as soon as reasonably practicable after the Effective Date set forth
      in the Employment Agreement between Rodney Rougelot and the Company dated as
      of
      July 31, 2006 (the “Rougelot
      Employment Agreement”).
      The
      Loan shall be evidenced by one or more convertible promissory notes in the
      form
      attached hereto as Exhibit
      A
      (each a
      "Note"),
      duly
      executed on behalf of the Company and dated as of the Closing Date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.2
      Interest.
      

     

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

     

    (b)
      Default
      Interest.
      Upon
      the occurrence of an Event of Default and for so long as such Event of Default
      continues, Interest shall accrue on the outstanding Loan amount at the rate
      per
      annum equal to the lower of eighteen percent (18%) or the maximum rate of
      interest permissible under applicable law at any time (the "Default
      Interest Rate").
      The
      term "Interest"
      shall
      include both the interest rate described in Section 2.2(a) and the Default
      Interest Rate, if applicable.

     

    2.3
      Maturity
      Date.
      Unless
      the Loan is earlier accelerated pursuant to the terms hereof or converted
      pursuant to the provisions of Section 4.1 hereof, the Loan and all accrued
      Interest thereon shall be due and payable in full on the date that is one (1)
      year following the Second Closing Date (the “Maturity
      Date”).
      The
      Lender may, at the Lender's option, extend the Maturity Date on such terms
      and
      conditions as determined by the Lender in their sole discretion.

     

    2.4 Conditions
      Precedent to the Loan.
      The
      obligation of the Lender to make the Loan pursuant to Section 2.1 shall be
      subject to the satisfaction, on or before the applicable Closing Date, of the
      conditions set forth in this Section. If the conditions set forth in this
      Section are not met on or prior to the applicable Closing Date, the Lender
      shall
      have no obligation to fund the amount of the Loan required on the applicable
      Closing Date. 

     

    (a)
      The
      Company shall have duly executed and delivered to the Lender the Note
      representing the Loan in the amount funded on the applicable Closing
      Date.

     

    (b)
      The
      Company shall have duly authorized, executed, and delivered to the Lender a
      security agreement in the form attached hereto as Exhibit
      B
      (the
“Security
      Agreement”)
      to
      secure the repayment of the Loan and granting the Lender a continuing security
      interest in all presently existing and hereafter acquired assets and property
      of
      the Company of whatever nature and wherever located which such Security Interest
      shall be senior to all other security interests or Encumbrances against the
      assets and property of the Company other than Senior Debt (as hereafter
      defined). Lender shall be entitled to a security interest pari
      passu on
      a
      pro-rata basis with the investors participating in private placement pursuant
      to
      the 2006 Private Placement Memorandum (the “PPM”)
      of the
      Company and, except as set forth above, Lender’s security interest shall be
      senior to any other indebtedness of the Company, whether now existing or created
      or incurred in the future. “Senior
      Debt” shall mean all indebtedness for all principal,
      fees, expenses, interest, penalties, post-bankruptcy petition interest, and
      all
      other amounts payable for money borrowed from banking or other financial
      institutions or governmental lending facilities that is not convertible into
      equity securities of the Company, including, but not limited to the $2,000,000
      loan from the California Integrated Waste Management Board (the “CIWMB
      Loan”)
      and
      the remaining amount due and owing under the forbearance agreement by and
      between the Company and the Elevation Fund, LLC (the “Forbearance
      Agreement”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)
      On
      each Closing Date, the Company shall have caused its counsel to deliver to
      the
      Lender a legal opinion dated as of the applicable Closing Date in form and
      substance acceptable to Lender. With respect to the Second Closing Date, the
      Effective Date under the Rougelot Employment Agreement shall have occurred.
      

     

    ARTICLE
      3

    REPRESENTATIONS,
      WARRANTIES AND COVENANTS

     

    3.1
      Organization,
      qualification and Authority.
      The
      Company is a corporation duly organized and validly existing under the laws
      of
      the State of Delaware, and is in good standing and duly qualified to do business
      as a foreign corporation in all jurisdictions where the operation of its
      business or the ownership of its properties make such qualification necessary.
      The Company has the requisite corporate power and authority to own, lease and
      operate its facilities and assets as presently owned, leased and operated,
      and
      to carry on its respective business as it is now being conducted. The Company
      has the requisite or individual right, power and authority to execute, deliver
      and carry out the terms of this Agreement and all documents and agreements
      contemplated hereby or necessary to give effect to the provisions of this
      Agreement and to consummate the transactions contemplated hereunder and
      thereunder. The execution, delivery and consummation of this Agreement, and
      all
      other agreements and documents executed in connection herewith by the Company,
      have been duly authorized by all necessary action on the part of the Company.
      No
      other action, consent or approval on the part of the Company or any other person
      or entity, is necessary to authorize the Company's due and valid execution,
      delivery and consummation of this Agreement and all other agreements and
      documents executed in connection hereto. This Agreement and all other agreements
      and documents executed in connection herewith by the Company, upon due execution
      and delivery thereof, shall constitute the valid and binding obligations of
      the
      Company, enforceable in accordance with its terms, except as enforcement may
      be
      limited by bankruptcy, insolvency, reorganization or similar laws affecting
      creditors' rights generally and by general principles of equity.

     

    3.2
      Compliance
      with Laws.
      The
      nature and transaction of the Company's business and operations and the use
      of
      its properties and assets do not, and during the term of this Agreement shall
      not, violate or conflict with in any material respect any applicable law,
      statute, ordinance, rule, regulation or order of any kind or
      nature.

     

    3.3
      Absence
      of Conflicts.
      The
      execution, delivery and performance by the Company of this Agreement and all
      other agreements and documents executed in connection herewith by the Company,
      and the transactions contemplated hereby, do not constitute a breach or default,
      or require consents under, any agreement, permit, contract or other instrument
      to which the Company is a party, or by which the Company is bound or to which
      any of the assets of the Company is subject, or any judgment, order, writ,
      decree, authorization, license, rule, regulation, or statute to which the
      Company is subject, and will not result in the creation of any lien upon any
      of
      the assets of the Company. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.4
      Litigation
      and Taxes.
      There
      is no
      litigation or governmental proceeding pending, or to the best knowledge of
      the
      Company after due inquiry, threatened, against the Company other than as
      disclosed in the Company SEC Reports (as defined below). The Company has duly
      filed all applicable income or other tax returns and has paid all material
      income or other taxes when due. There is no controversy or objection pending,
      or
      to the best knowledge of the Company after due inquiry, threatened in respect
      of
      any tax returns of the Company.

     

    3.5
      Intellectual
      Property.
      No
      proceedings have been instituted or are pending or, to the Company’s knowledge,
      threatened which challenge the validity of the ownership by the Company of
      any
      Proprietary Rights of the Company. The Company has not licensed anyone to use
      any such Proprietary Rights and, to the Company’s knowledge, there has been no
      use or infringement of any of such Proprietary Rights by any other
      person.

     

    3.6
      Company's
      SEC Reports.
      The
      Company is current in regards to all filings with the Securities and Exchange
      Commission (the “SEC”)
      of all
      forms, reports, definitive proxy statements, schedules and registration
      statements (the “ Company
      SEC Reports”)
      required to be filed by it with the SEC pursuant to the Securities Act of 1933,
      as amended (the “Securities
      Act”),
      and
      the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”),
      and
      the respective rules and regulations of the SEC thereunder. As of their
      respective filing dates or, if amended prior to the date hereof, as of the
      date
      of the last amendment, none of the Company SEC Reports contained any untrue
      statement of a material fact or omitted to state any material fact required
      to
      be stated therein or necessary to make the statements made therein, in the
      light
      of the circumstances under which they were made, not misleading. The Company’s
      SEC Reports (including, without limitation, any financial statements and
      schedules included therein) when filed or, if amended prior to the date hereof,
      as of the date of the last amendment, complied in all material respects with
      the
      applicable requirements of the Securities Act and the Exchange Act, and the
      respective rules and regulations of the SEC thereunder.

     

    3.7
      No
      Omissions or Misstatements.
      None of
      the information included in this Agreement, other documents or information
      furnished to the Lender by the Company, or any of its representations, contains
      any untrue statement of a material fact or is misleading in any material respect
      or omits to state any material fact. Copies of all documents referred to in
      herein have been delivered or made available to the Lender and constitute true
      and complete copies thereof and include all amendments, schedules, appendices,
      supplements or modifications thereto or waivers thereunder.

     

    3.8
      Other
      Indebtedness.
      On and
      as of the date hereof and on and as of each Closing Date, the Company does
      not
      and will not have any outstanding Senior Indebtedness other than the CIWMB
      Loan
      and the amount due and owning pursuant to the Forbearance Agreement. For so
      long
      as the Note (or any note issued upon transfer of the Note, in whole or in part)
      remains outstanding, the Company shall not incur, create or enter into any
      agreement to incur or create indebtedness ranking on a parity or parri
      passu
      with the
      Notes (“Parity
      Indebtedness”),
      other
      than the investors participating in the current financing under the Company’s
      2006 Private Placement Memorandum and certain other lenders, identified in
      Schedule
      A
      to the
      Security Agreement, as defined below, without the prior written consent of
      the
      Lender, which consent shall not be unreasonably withheld.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.9
      Lender
      Board Representation.
      Effective at the Closing of the Loan, the Company shall appoint Mr. Ronald
      M.
      Domingue (or his designee) to the Company’s Board of Directors. For so long as
      (i) the Note (or any note issued upon transfer of the Note, in whole or in
      part)
      remains outstanding, or if later (ii) one year from the First Closing Date,
      the
      Company shall nominate Mr. Domingue (or his designee) for election to the Board
      at any and all times that the stockholders of the Company take action (whether
      by meeting or written consent) to elect members of the Board of Directors and
      shall use best efforts to secure Mr. Domingue’s (or his designee’s) election to
      the Board. 

     

    ARTICLE
      4

    CONVERSION

     

    4.1
      Conversion
      Right.
      Lender
      in its sole discretion may convert, via written notice to the Company, the
      full
      amount of the principal plus any interest payable under the Note and the Loan
      Agreement into shares of common stock of the Company at a conversion price
      of
      $0.0975 per share (the “Conversion
      Right”).
      Further, in the event that the Lender elects to exercise the Conversion Right,
      the Company will issue to Lender a warrant, exclusive of the warrant referenced
      in Article 6, with coverage equal to sixty-five percent (65%) of the value
      of
      the Loan, exercisable at Twelve Cents ($0.12) per share (the “Conversion
      Warrant”).
      All
      conversion and exercise prices in this Loan Agreement shall be subject to
      appropriate adjustment in the case of stock splits, stock dividends,
      recapitalizations and the like. The form of warrant evidencing the Conversion
      Warrant shall be identical to the form attached as Exhibit
      C
      hereto.  

     

    ARTICLE
      5

    DEFAULT

     

    5.1
      Events
      of Default.
      The
      occurrence of any of the following events (each an “Event
      of Default”),
      not
      cured in the applicable cure period, if any, shall constitute and Event of
      Default of the Company:

     

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

     

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

     

    (c)
      the
      failure to make when due any payment on any Senior Indebtedness or Parity
      Indebtedness, whether on or after the maturity date, by acceleration or
      otherwise; 

     

    (d)
      The
      removal of Mr. Ronald M. Domingue (or his designee) from the Company’s Board of
      Directors or the failure of Mr. Domingue (or his designee) to continue to serve
      on the Board of Directors of the Company for any reason other than his death
      or
      voluntary resignation; 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e)
      The
      Effective Date under the Rougelot Employment Agreement shall not have occurred
      on or prior to August 25, 2006 or Mr. Rougelot shall no longer serve as the
      Chief Executive Officer of the Company for any reason other than his death
      or
      disability, Voluntary departure or removal for Cause (as such terms are defined
      in the Rougelot Employment Agreement); and 

     

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

     

    5.2
      Effect
      of Default.
      Upon
      the occurrence of any Event of Default that is not cured within any applicable
      cure period, the Lender may elect, by written notice delivered to the Company,
      to take any or all of the following actions: (i) declare the outstanding amounts
      under the Note to be forthwith due and payable, whereupon the entire unpaid
      Loan, together with accrued and unpaid Interest thereon (including the Default
      Interest Rate), and all other cash obligations hereunder, shall become forthwith
      due and payable, without presentment, demand, protest or any other notice of
      any
      kind, all of which are hereby expressly waived by the Company, anything
      contained herein or in any of the Note to the contrary notwithstanding, and
      (ii)
      exercise any and all other remedies provided hereunder or available at law
      or in
      equity upon the occurrence and continuation of an Event of Default.

     

    ARTICLE
      6

    ISSUANCE
      OF STOCK

     

    6.1 Issuance
      of Warrants.
      The
      Company shall issue to the Lender one (1) warrant to purchase a combined total
      of twenty million (20,000,000) shares of common stock of the Company in the
      form
      attached hereto as Exhibit
      C
      (the
“Warrant”).
      The
      Warrant shall be immediately exercisable by the Lender (or its assigns) on
      the
      Closing Date and at an exercise price of Twelve Cents ($0.12) per share. The
      Warrant shall be exercisable for a period of four (4) years following the
      Closing Date. The number of shares purchasable upon Exercise of the Warrant
      and
      the exercise price thereof shall be subject to appropriate adjustment in the
      case of stock splits, stock dividends, recapitalizations and will contain
      antidilution protection identical to those contained in the Note.

     

    6.2 Registration
      of Registrable Securities.
      Within
      nine (9) months after the First Closing Date,
      the
      Company, at its expense, shall have registered pursuant to one or more effective
      registration statements filed with the SEC under
      the
      Securities Act the
      resale by Lender or any successor thereto any and all Company shares issued
      or
      issuable (x) pursuant to the Conversion Right or otherwise with respect to
      the
      Loan and (y) upon exercise or conversion of the Warrants and the Additional
      Warrant (collectively, the “Registrable Securities”), and the Company agrees to
      maintain the effectiveness
      and currency
      of each such
      registration statement, including any related prospectus until the earlier
      to
      occur of (i) the resale of the Registrable Securities by Lender or any successor
      thereto in the manner contemplated by such registration statement or (ii) such
      time as all of the Registrable Securities may be sold by Lender or any successor
      thereto pursuant to Rule 144(k) under the Securities Act (or any successor
      provision thereto); and the Company 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 agrees to amend such registration statements from time to time
      upon
      request of the Lender to reflect any successors of Lender’s rights hereunder.
      The Company shall from time to time furnish to Lender or any successor thereto
      sufficient copies of any such prospectus, and any supplements thereto, so as
      to
      permit the resale of such Registrable Securities, or any portion thereof, in
      the
      manner prescribed by Lender or any successor thereto. If,
      at any
      time prior to nine (9) months after the First Closing Date, the Company files
      a
      registration statement with the SEC for the purpose of registering the sale
      of
      its equity securities under the Securities Act (other than on Form S-4 or Form
      S-8), the Company agrees to include the registration of the resale of the
      Registrable Securities in such registration statement and the other applicable
      covenants and agreements of the Company set forth in this Section 6.2 shall
      apply to such registration statement. The
      Company shall pay all costs and expenses of any such registration contemplated
      by this Section 6.2, including the reasonable legal fees and expenses (up to
      a
      maximum of $15,000) that Lender or any successor thereto may incur in connection
      therewith. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      7

    MISCELLANEOUS

     

    7.1
      Successors
      and Assigns; Third Party Beneficiary.
      Subject
      to the exceptions specifically set forth in this Agreement, the terms and
      conditions of this Agreement shall inure to the benefit of and be binding upon
      the respective executors, administrators, heirs, successors and permitted
      assigns of the parties. This Agreement may not be assigned (whether by operation
      of law or otherwise) by the Company without the prior written consent of the
      Lender. Lender’s rights under this Agreement and the related agreements of the
      Company contemplated hereby (including the Note and the Security Agreement)
      may
      be assigned, in whole or in part, by the Lender without the consent of the
      Company.

     

    7.2
      Titles
      and Subtitles.
      The
      titles and subtitles of the Sections of this Agreement are used for convenience
      only and shall not be considered in construing or interpreting this agreement.
      

     

    7.3
      Notices.
      Any
      notice, request or other communication required or permitted hereunder shall
      be
      in writing and shall be delivered personally or by facsimile (receipt confirmed
      electronically) or shall be sent by a reputable express delivery service or
      by
      certified mail, postage prepaid with return receipt requested, addressed as
      follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    if
      to
      the Company, to:

    

    Itec
      Environmental Group, Inc.

    5300
      Claus Road, Box 760

    Riverbank,
      CA 95367

    Attn: Gary
      M.
      De Laurentiis

    Fax: (209)
      881-3529

    

    with
      a
      copy to:

    

    The
      Otto
      Law Group, PLLC

    601
      Union
      Street, Suite 4500

    Seattle,
      WA 98101

    Attn:
       David
      M.
      Otto

    Fax: (206)
      262-9513

    

    if
      to
      the Lender, to:

    

    Arbor
      Malone, LLC

    _______________________

    _______________________

    _______________________

    

    With
      a
      copy to:

    

    Gary
      J.
      Kocher

    Preston
      Gates & Ellis LLP

    925
      Fourth Avenue

    Suite
      2900

    Seattle,
      WA 98104

    

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

     

    7.4
      Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the domestic
      laws of the State of California without giving effect to any choice of law
      or
      conflict of law provision or rule (whether of the State of California or any
      other jurisdiction) that would cause the application of the laws of any
      jurisdiction other than the State of California.

     

    7.5
      Waiver
      and Amendment.
      Any
      term of this Agreement may be amended, waived or modified with the written
      consent of the Company and the Lender.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7.6
      Remedies.
      No
      delay or omission by the Lender in exercising any of its rights, remedies,
      powers or privileges hereunder or at law or in equity and no course of dealing
      between the Lender and the undersigned or any other person shall be deemed
      a
      waiver by the Lender of any such rights, remedies, powers or privileges, even
      if
      such delay or omission is continuous or repeated, nor shall any single or
      partial exercise of any right, remedy, power or privilege preclude any other
      or
      further exercise thereof by the Lender or the exercise of any other right,
      remedy, power or privilege by the Lender. The rights and remedies of the Lender
      described herein shall be cumulative and not restrictive of any other rights
      or
      remedies available under any other instrument, at law or in equity.

     

    7.7
      Expenses.
      The
      Company agrees to reimburse Lender for fees and expenses incurred by Lender
      in
      connection with the preparation of this Agreement and the transactions
      contemplated hereby, including reasonable attorneys fess, up to a maximum amount
      of Twenty Thousand Dollars ($20,000.00).  

     

    7.8
      Enforcement.
      In the
      event an action is instituted to enforce or interpret any of the terms of this
      Agreement including but not limited to any action or participation by Lender
      in,
      or in connection with, a case or proceeding under the Bankruptcy Code or any
      successor statute, the prevailing party shall be entitled to recover all
      expenses reasonably incurred at, before and after trial and on appeal or review,
      whether or not taxable as costs, including, without limitation, attorney fees,
      witness fees (expert and otherwise), deposition costs, copying charges and
      other
      expenses.

     

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

    
      	 	 	 
	 	
              ITEC
                ENVIRONMENTAL GROUP, INC.

            
	 
 	 
 	 
 
	
            	By:  	 
	 	
              

              Gary
                M. De Laurentiis 

              Chief
                Executive Officer 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    

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

    
      	 	 	 
	 	
              ARBOR
                MALONE, LLC 

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name: Ronald
                S. Domingue

              Title:
                Manager 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Exhibit
      A

    

    Form
      of Note

    

    ITEC
      ENVIRONMENTAL GROUP, INC.

    10%
      CONVERTIBLE NOTE

    

      
        	
                $__

              	
                August___,
                  2006

              
	
              	
                RIVERBANK,
                  CALIFORNIA

              

      

    

     

    ITEC
      ENVIRONMENTAL GROUP, INC., a Delaware corporation (“Maker” or the “Company”),
      hereby promises to pay to the order of Arbor Malone, LLC, a Delaware limited
      liability company or its assigns (“Holder”), the sum of ___ Dollars ($__), with
      interest at the rate of ten percent (10%) per annum accruing on and as of August
      ___, 2006 [date of the First Closing] until paid. All outstanding principal
      and
      accrued and unpaid interest shall become due August __, 2007 (the “Maturity
      Date”). All payments due and owning under this 10% Convertible Note (“Note”)
      shall be subject to the terms and conditions set forth herein. 

    

    
      	 	
              1.

            	
              Agreement.

            

    

    

    The
      Note
      is issued pursuant to that certain Loan Agreement (the “Agreement”), dated
      August __, 2006, by and between Maker and Holder, which is hereby incorporated
      by reference. Capitalized terms used but not defined in this Note have the
      meanings assigned to them in the Agreement. 

    

    
      	 	
              2.

            	
              Register.

            

    

    

    The
      Company shall keep at its principal office a register in which the Company
      shall
      provide for the registration of the Holder of the Note or for the registration
      of a transfer of the Note to a different Holder.

    

    
      	 	
              3.

            	
              Loss
                Theft, Destruction or Mutilation of the
                Note.

            

    

    

    Upon
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of the Note and, in the case of any such loss, theft
      or destruction, upon receipt of an indemnity bond in such reasonable amount
      as
      the Company may determine (or if such Note is held by the original Holder,
      of an
      unsecured indemnity agreement reasonably satisfactory to the Company) or, in
      the
      case of any such mutilation, upon surrender and cancellation of such Note,
      the
      Company will make and deliver, in lieu of such lost, stolen, destroyed or
      mutilated Note, a new Note of like tenor and unpaid principal amount and dated
      as of the date to which interest has been paid on the Note so lost, stolen,
      destroyed or mutilated.

    

    
      	 	
              4.

            	
              Registered
                Holder.

            

    

    

    The
      Company may deem and treat the person in whose name any Note is registered
      as
      the absolute owner and Holder of such Note for the purpose of receiving payment
      of the principal of and interest on such Note and for the purpose of any
      notices, waivers or consents thereunder, whether or not such Note shall be
      overdue, and the Company shall not be affected by notice to the contrary.
      Payments with respect to any Note shall be made only to the registered Holder
      thereof.

    

    
      	 	
              5.

            	
              Surrender
                of the Note.

            

    

    

    The
      Company may, as a condition of payment of all or any of the principal of, and
      interest on, the Note, or its conversion, require Holder to present the Note
      for
      notation of such payment and, if the Note be paid in full or converted at the
      election of Holder as herein provided, require the surrender
      hereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              6.

            	
              Security
                and Subordination.

            

    

    

    The
      Company’s obligations under this Note are subject to a
      security agreement in the form attached as Exhibit
      B
      to the
      Agreement which secures the repayment of the Loan and grants Holder a continuing
      security interest in all presently existing and hereafter acquired assets and
      property of the Company of whatever nature and wherever located which such
      Security Interest is senior to all other security interests or Encumbrances
      against the assets and property of the Company other than Senior Indebtedness
      and Parity Indebtedness. The
      Company, in its sole discretion, may subordinate this Note to any Senior
      Indebtedness of the Company. .
      

    

    
      	 	
              7.

            	
              Conversion.

            

    

    

    At
      any
      time prior to or at the Maturity Date, at the option of the Holder, all
      principal and accrued interest due on this Note (the “Convertible Amount”) may
      be converted at $0.0975 per share (the “Conversion Price”). The Conversion Price
      shall be adjusted downward in the event the Company issues common stock (or
      securities exercisable for or convertible into or exchangeable for common stock)
      at a price below the Conversion Price, to a price equal to such issue price.
      The
      preceding adjustments shall be effective immediately at the time of the issuance
      of any security issued (or of any reduction in effective price of any security)
      on or before the Maturity Date. In addition, the Conversion Price shall be
      appropriately adjusted in the case of stock splits, stock dividends,
      recapitalizations and the like. 

     

    In
      the
      event that the Holder elects to exercise the conversion right set forth above,
      the Company shall issue to Holder to a warrant, exclusive of the warrant
      referenced in Article 6, with coverage equal to sixty-five percent (65%) of
      the
      value of the Convertible Amount, exercisable at Twelve Cents ($0.12) per share
      (subject to appropriate adjustment in the case of stock splits, stock dividends,
      recapitalizations and the like). The form of warrant shall be identical to
      the
      form attached as Exhibit
      C
      to the
      Agreement.  

     

    If,
      on or
      prior to the Maturity Date, Holder has not elected to convert this Note, all
      outstanding principal and accrued and unpaid interest shall become due and
      payable. 

     

    
      	 	
              8.

            	
              Mechanics
                of Conversion.

            

    

    

    Upon
      the
      Company’s receipt of written notice of Holder’s election to convert the Note,
      the principal amount of this Note plus any accrued interest shall be deemed
      converted into such number of shares of the Company’s Common Stock as determined
      pursuant to Section 7, and no further payments shall thereafter accrue or be
      owing under the Note. The entire balance due and owing under the Note must
      be
      converted to Common Stock; no partial conversions will be allowed. Holder shall
      return this Note to the Company at the address set forth below, or such other
      place as the Company may require in writing. Within ten (10) days after receipt
      of this Note, the Company shall cause to be issued in the name of and delivered
      to Holder at the address set forth above, or to such other address as to which
      Holder shall have notified the Company in writing, a certificate and a warrant
      evidencing the securities to which Holder is entitled. No fractional securities
      will be issued upon conversion of the Note. If on conversion of the Note a
      fraction of a security results, the Company shall round up the total number
      of
      securities to be issued to Holder to the nearest whole number.

    

    
      	 	
              9.

            	
              Notice.

            

    

    

    Any
      notice required or desired to be given under this Agreement shall be in writing
      and shall be deemed given when personally delivered, one business day after
      deposit with a reputable overnight courier service for next business day
      delivery, or three days after being sent by certified or registered mail postage
      prepaid to the addresses set forth below, or such other address as to which
      one
      party may have notified the other in such manner.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
              10.

            	
              Default.

            

    

    

    Upon
      an
      Event of Default (as defined in the Agreement) that is not cured within any
      applicable cure period set forth in the Agreement, and
      at
      the option of Holder, or Holder’s successors or assigns, Holder
      may (i) accelerate all amounts due and owing under this Note and demand payment
      immediately and/or (ii) declare the right to exercise any and all remedies
      available to Holder under applicable law.

    

    
      	 	
              11.

            	
              Miscellaneous.

            

    

    

    (a) Interest
      hereunder shall be calculated based on ten percent (10%)
      per
      annum calculated using a 360-day year composed of 12 30-day months, payable
      in
      full, unless otherwise converted to common stock in the Company, at maturity
      or
      conversion.

    

    (b) The
      Company agrees that all Conversion Shares at the time of issuance will be fully
      paid and non-assessable. Maker shall pay upon demand any and all expenses,
      including reasonable attorney fees, incurred or paid by Holder of this Note
      without suit or action in attempting to collect funds due under this Note or
      in
      connection with the issuance of the Conversion Shares. In the event an action
      is
      instituted to enforce or interpret any of the terms of this Note including
      but
      not limited to any action or participation by Maker in, or in connection with,
      a
      case or proceeding under the Bankruptcy Code or any successor statute, the
      prevailing party shall be entitled to recover all expenses reasonably incurred
      at, before and after trial and on appeal or review, whether or not taxable
      as
      costs, including, without limitation, attorney fees, witness fees (expert and
      otherwise), deposition costs, copying charges and other expenses.

    

    (c) All
      parties to this Note hereby waive presentment, dishonor, notice of dishonor
      and
      protest. All parties hereto consent to, and Holder is hereby expressly
      authorized to make, without notice, any and all renewals, extensions,
      modifications or waivers of the time for or the terms of payment of any sum
      or
      sums due hereunder, or under any documents or instruments relating to or
      securing this Note, or of the performance of any covenants, conditions or
      agreements hereof or thereof or the taking or release of collateral securing
      this Note. Any such action taken by Holder shall not discharge the liability
      of
      any party to this Note.

    

    (d) The
      Company may not prepay the amount due and owing under this Note.

    

    (e) This
      Note
      shall be governed by and construed in accordance with the laws of the State
      of
      California without regard to conflict of law principles.

    

    (f) All
      payments due and owing under this Note shall be delivered to Holder at the
      address set forth below unless Holder provides the Company with written notice
      of a change of such instructions.

     

    IN
      WITNESS WHEREOF, the parties hereto execute this Convertible Note as of this
      ____ day of August, 2006.

    
      	 	 	 
	Maker:	 	
              ITEC
                ENVIRONMENTAL GROUP, INC.

            
	 
 	 
 	 
 
	
            	
            	 
	 	
              
                

              

              By:  

              Its: 

            

    

     

    
      
        	
                Holder:

              	
                Arbor
                  Malone, LLC

              
	
                Holder’s
                  address:

              	
                _______________________

              
	 	
                _______________________

              
	 	
                _______________________

              
	 	 
	
                With
                  a copy to:

              	
                Preston
                  Gates & Ellis LLP

              
	 	
                925
                  Fourth Avenue

              
	 	
                Suite
                  2900

              
	 	
                Seattle,
                  WA 98177

              
	 	
                Attn:
                  Gary J. Kocher

              
	 	 
	
                Maker’s
                  address:

              	
                Itec
                  Environmental Group, Inc.

              
	 	
                Attn:
                  Gary De Laurentiis

              
	 	
                5300
                  Claus Road

              
	 	
                P.O.
                  Box 760

              
	 	
                Riverbank,
                  California 95367

              
	 	 
	
                With
                  a copy to:

              	
                The
                  Otto Law Group, PLLC

              
	 	
                Attn:
                  David M. Otto

              
	 	
                601
                  Union Street, Suite 4500

              
	 	
                Seattle,
                  Washington 98101

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Exhibit
      B

    

    Form
      of Security Agreement

    

    SECURITY
      AGREEMENT

    

    This
      SECURITY AGREEMENT ("Security
      Agreement")
      is
      dated as of September __, 2006 (the
      "Effective
      Date"),
      by and
among
      Itec
      Environmental Group, Inc., a Delaware corporation (the
      "Company"),
      and the
      parties listed in Schedule
      A and B,
      attached hereto (the “Secured
      Parties”).

     

    WHEREAS,
      on the Effective Date, the Company received funds pursuant to certain loans
      (collectively, the “Loans”
and
      each individually, a “Loan”)
      by the
      Secured Parties; and

     

    WHEREAS,
      in order to induce Secured Parties to provide the Loans to the Company, the
      Company agreed to grant to the Secured Parties a security interest in all of
      the
      Company’s assets to secure the amounts currently owing, and any additional
      amounts which may be owing, by the Company pursuant to the agreements between
      each of the Secured Parties and the Company that evidence the Loans (the
“Loan
      Documents”).

     

    NOW,
      THEREFORE, for good and valuable consideration, the receipt of which is hereby
      acknowledged, the Company and parties listed
      in
Schedule
      A and B
      attached
      hereto, agree as follows:

     

    1.
      Defined
      Terms.
      The
      following terms shall have the following meanings, unless the context otherwise
      requires:

     

    “Arbor
      Malone Notes”
shall
      mean the Secured Convertible Promissory Notes dated August 14, 2006 and
      September __, 2006 issued by the Company to Arbor Malone, LLC (“Arbor
      Malone”)
      in the
      aggregate principal amount of $2,300,000.00. 

    

    “Baek
      Note”
means
      the Secured Convertible Promissory Note dated August 29, 2006 issued by the
      Company to Ji Y. Baek (“Baek”)
      in the
      aggregate principal amount of $202,000.00. 

    

    "Code"
      shall
      mean the Uniform Commercial Code as in effect in the State of California on
      the
      Loan Closing Date.

    

    "Collateral"
      shall
      have the meaning given such term in Section 2. 

    

    "Event
      of Default"
      shall
      have the meaning given such term in each Note.

    

    “Goldman
      Note”
shall
      mean the Secured Convertible Promissory Note dated July 27, 2006 issued by
      the
      Company to Leroy and Lois Goldman (“Goldman”)
      in the
      aggregate principal amount of $500,000.00.

    

    “Itec
      Capital Group Notes”
shall
      mean the Secured Convertible Promissory Note issued by the Company to each
      of
      investors participating in the offering described in the Company’s 2006 Private
      Placement Memorandum as set forth on Schedule
      B
      hereto,
      in the aggregate principal amount of $3,022,500.00.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    “Note”
and
      “Notes”
shall
      mean the Arbor Malone Notes, the Baek Note, the Goldman Note and the Itec
      Capital Group Notes, individually and collectively, as the case may be.

    

    "Obligations"
      shall
      mean the obligations of the Company under the Notes and the Loan Documents,
      including all costs of collection.

    

    “Senior
      Debt”
shall
      mean all
      indebtedness for all principal,
      fees, expenses, interest, penalties, post-bankruptcy petition interest, and
      all
      other amounts payable for money borrowed from banking or other financial
      institutions or governmental lending facilities that is not convertible into
      equity securities of the Company, including, but not limited to the $2,000,000
      loan from the California Integrated Waste Management Board (the “CIWMB
      Loan”).

    

    2.
      Grant
      of Security Interest.
      As
      collateral security for the prompt and complete payment and performance when
      due
      of all the Obligations, the Company hereby grants to the Secured Parties a
      security interest in all of the Company's right, title and interest in, to
      and
      under the following, whether now existing or hereafter acquired (all of which
      collateral being hereinafter collectively called the “Collateral”);
      provided, however, that the security interest granted hereby shall be
      subordinate to the security interest to be granted or granted (as the case
      may
      be) by the Company in connection any Senior Debt. Secured Parties shall be
      entitled to a security interest in the following:

     

    ACCOUNTS

     

    All
      present and future accounts owned by the Company, including and together with
      any and all contract rights, accounts receivable, security deposits (where
      not
      otherwise prohibited by law or agreement), and other rights of any kind to
      receive payments for services rendered and goods supplied by the Company,
      together with agreements, customer lists, client lists, and accounts, invoices,
      agings, verification reports and other records relating in any way to such
      accounts.

     

    CONTRACTS

     

    All
      contracts, contract rights, royalties, license rights, leases, instruments,
      undertakings, documents or other agreements in or under which the Company may
      now or hereafter have any right, title or interest whether now existing or
      hereinafter created and all forms of obligations owing to the Company arising
      out of the sale or lease of goods, the licensing of technology or the rendering
      of services by the Company, whether or not earned by performance, and any and
      all credit insurance, guaranties, and other security therefor, as well as all
      merchandise returned to or reclaimed by the Company.

     

    EQUIPMENT,
      FURNISHINGS AND MISCELLANEOUS PERSONAL PROPERTY

     

    All
      presently owned and hereafter acquired furniture, furnishings, equipment,
      machinery, vehicles (including motor vehicles and trailers) computer hardware
      and software, accounting or bookkeeping systems, client or customer lists and
      information, data sheets and other records of any kind, wherever located, stored
      or inventoried, which are used or which may be used in the Company’s business;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    FIXTURES

     

    All
      materials used by the Company in connection with its business operations,
      including, but not limited to, supplies, trade equipment, appliances, apparatus
      and any other items, now owned or hereafter acquired by the Company, and now
      or
      hereafter attached to, or installed in (temporarily or permanently) any real
      property now or in the future owned or leased by the Company; 

     

    GENERAL
      INTANGIBLES

     

    All
      general intangibles and other personal property of the Company, now owned or
      hereinafter acquired, including, without limitation, the following: (a) permits,
      authorizations and approvals presently and hereafter issued by any federal,
      state, municipal or local governmental or regulatory authority in favor of
      the
      Company; (b) all plans, specifications, renderings and other similar materials
      presently owned or hereafter acquired by the Company; (c) all presently existing
      and hereafter created contracts, leases, licenses and agreements to which the
      Company is a party; (d) all presently and hereafter existing policies and
      agreements of insurance in favor of the Company; (e) all presently and hereafter
      existing equity contribution agreements and other equity financing arrangements
      in favor of the Company; (f) all copyrights, chattel paper, electronic chattel
      paper, licenses, money, insurance proceeds, contract rights, subscription lists,
      mailing lists, licensing agreements, patents, trademarks, service marks, trade
      styles, patents, patent applications, franchise agreements, blueprints,
      drawings, purchase orders, customer lists, route lists, infringements, claims,
      computer programs, computer discs, computer tapes, literature, reports,
      catalogs, design rights, income tax refunds, payments of insurance and rights
      to
      payment of any kinds, trade names, refundable, returnable or reimbursable fees,
      deposits or other funds or evidences of credit or indebtedness deposited by
      or
      on behalf of the Company with any governmental agencies, boards, corporations,
      providers of utility services, public or private; (g) all presently existing
      and
      hereafter acquired computer programs, computer software and other electronic
      systems and materials of any kind of the Company; (h) goodwill; and (i) all
      other presently existing and hereafter acquired documents, accounts, general
      intangibles and intangible personal property of any kind.

     

    DOCUMENTS

     

    All
      documents, cash, deposit accounts, securities, securities entitlements,
      securities accounts, investment property, financial assets, letters of credit,
      certificates of deposit, instruments, chattel paper, and electronic chattel
      paper now owned or hereafter acquired and the Company’s books relating to the
      foregoing.

     

    COPYRIGHTS

     

    All
      copyright rights, copyright applications, copyright registrations and like
      protections in each work of authorship and derivative work thereof, whether
      published or unpublished, now owned or hereafter acquired; all trade secret
      rights, including all rights to unpatented inventions, know-how, operating
      manuals, license rights and agreements and confidential information, now owned
      or hereafter acquired; all mask work or similar rights available for the
      protection of semiconductor chips, now owned or hereafter acquired; all claims
      for damages by way of any past, present and future infringement of any of the
      foregoing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    PROCEEDS

     

    All
      of
      the Company’s books and records relating to the foregoing and any and all
      present and future accounts, general intangibles, chattel paper, electronic
      chattel paper, products, accessions, replacements, betterments and substitutions
      for any of the foregoing described property, and all proceeds arising from
      or by
      virtue of, or from the sale or disposition of, or collections with respect
      to,
      or insurance proceeds payable with respect to, or claims against any other
      persons, corporations or other entities with respect to, all or any part of
      the
      foregoing described property and interests.

     

    3.
      Pro
      Rata Distributions among Secured Parties.
      It is
      expressly agreed by the Secured Parties that all payments received by the
      Company under or in connection with the any sale or liquidation of the
      Collateral, subject to any Senior Debt, shall be divided among the Secured
      Parties pari
      passu
      on a
      pro-rata basis equal to the quotient of: (x) the unpaid principal amount of
      the
      Note held by each of the respective Secured Parties (without regard to
      interest); divided by (y) the aggregate unpaid principal amount of all Notes
      (without regard to interest).

     

    4.
      Rights
      of Secured Parties; Limitations on Secured Parties’ Obligations.
      It is
      expressly agreed by the Company that, anything herein to the contrary
      notwithstanding, the Company shall remain liable under each of its contracts
      and
      documents to observe and perform all the conditions and obligations to be
      observed and performed by it thereunder, all in accordance with and pursuant
      to
      the terms and provisions of its contracts and documents. Secured Parties shall
      have no obligation or liability under any of the Company’s contracts and
      documents by reason of or arising out of this Security Agreement or the granting
      to Secured Parties of a security interest therein or the receipt by Secured
      Parties of any payment relating to any of the Company’s contracts and documents
      pursuant hereto, nor shall Secured Parties be required or obligated in any
      manner to perform or fulfill any of the obligations of the Company under or
      pursuant to any of its contracts and documents, or to make any payment, or
      to
      make any inquiry as to the nature or the sufficiency of any payment received
      by
      it or the sufficiency of any performance by any party under any of its contracts
      and documents, or to present or file any claim, or to take any action to collect
      or enforce any performance or the payment of any amounts which may have been
      assigned to it or to which it may be entitled at any time or times.

     

    5.
      Representations
      and Warranties.
      The
      Company hereby represents and warrants that the chief executive office and
      chief
      place of business of the Company is 5300 Claus Road, Riverbank, CA 95367, and
      the Company will not change such chief executive office and chief place of
      business or remove such records unless the Company shall have given the Secured
      Parties at least 10 days' prior written notice thereof.

     

    6.
      Covenants.
      The
      Company covenants and agrees with the Secured Parties that from and after the
      date of this Security Agreement and until the Obligations are fully
      satisfied:

     

    (a)
      Further
      Documentation.
      At any
      time and from time to time, upon the written request of the Secured Parties,
      and
      at the sole expense of the Company, the Company will promptly and duly execute
      and deliver any and all such further documents and take such further action
      as
      any Secured Party may reasonably request in carrying out the terms and
      conditions of this Security Agreement and the rights and powers herein granted,
      including, without limitation, the filing of any financing or continuation
      statements under the Uniform Commercial Code in effect in any jurisdiction
      with
      respect to the security interests granted hereby. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)
      Continuous
      Perfection.
      The
      Company will not change its name, identity or corporate structure in any manner
      unless the Company shall have given the Secured Parties at least 10 days' prior
      written notice thereof and shall have taken all action (or made arrangements
      to
      take such action substantially simultaneously with such change if it is
      impossible to take such action in advance) necessary or reasonably requested
      by
      any Secured Party to amend any financing statement or continuation statement
      filed with respect to the Collateral so that it is not misleading.

     

    (c)
      Insurance.
      The
      Company will insure the Collateral against such risks and hazards as other
      companies similarly situated insure against, in amounts and under policies
      which
      it currently holds and under such additional or substituted amounts or policies
      as it may from time to time determine, which shall be reasonably acceptable
      to
      the Secured Parties (providing that no cancellation of such insurance shall
      be
      effective without 30 days written notice to the Secured Parties and containing
      loss payable clauses to the Secured Parties as their interest may appear) and
      all premiums thereon shall be paid by the Company.

     

    6.
      Remedies,
      Rights Upon Default. 

     

    (a)
      In
      addition to any other rights given to the Secured Parties hereunder, if an
      Event
      of Default shall occur and be continuing and any Secured Party shall have
      declared the amounts owing under the Note(s) to be due and payable (or such
      amounts shall have automatically, become due and payable), all payments received
      by the Company under or in connection with any of the Collateral shall be
      subject to the subordination provisions contained in the preceding Section
      2,
      held by the Company in trust for the Secured Parties, shall be segregated from
      other funds of the Company and shall, if requested by any Secured Party
      forthwith upon receipt by the Company be turned over to the Secured Parties,
      in
      the same form as received by the Company (duly endorsed by the Company to the
      Secured Parties, if required).

     

    If
      any
      Event of Default shall occur and be continuing and subject to the subordination
      provisions of the preceding Section 2, any Secured Party may exercise in
      addition to all other rights and remedies granted to it in this Security
      Agreement or in any other instrument or agreement securing, evidencing or
      relating to the Obligations or at law or in equity, all rights and remedies
      of a
      secured party under the Code. Without limiting the generality of the foregoing,
      the Company expressly agrees that in any such event, the Secured Parties,
      without demand of performance or other demand, (except the notice specified
      below of time and place of public or private sale) to or upon the Company or
      any
      other person may forthwith collect, receive, appropriate and realize upon the
      Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
      give
      option or options to purchase, or sell or otherwise dispose of and deliver
      said
      Collateral (or contract to do so), or any part thereof, in one or more parcels
      at public or private sale or sales, at any exchange broker's board or at any
      of
      the Secured Parties’ offices or elsewhere at such prices as it may deem best,
      for cash or on credit or for future delivery without assumption of any credit
      risk. Each Secured Party shall have the right upon any such public sale or
      sales, and, to the extent permitted by law, upon any such private sale or sales,
      to purchase the whole or any part of said Collateral so sold, free of any right
      or equity of redemption, which equity of redemption the Company hereby releases.
      The Company further agrees, at any Secured Party’s request, to assemble the
      Collateral, make it available to one or more of the Secured Parties at places
      which a Secured Party shall reasonably select, whether at the Company's premises
      or elsewhere. The Secured Parties shall apply the net proceeds of any such
      collection, recovery, receipt, appropriation, realization or sale, after
      deducting all reasonable costs and expenses of every kind incurred therein
      or
      incidental to the care, safe keeping or otherwise of any or all of the
      Collateral or in any way relating to the rights of the Secured Parties
      hereunder, including reasonable attorneys' fees and legal expenses, to the
      payment in whole or in part of the Obligations, the Company remaining liable
      for
      any deficiency remaining unpaid after the application, and only after so paying
      over such net proceeds and after the payment by the Secured Parties of any
      other
      amount required by any provision of law. To the extent permitted by applicable
      law, the Company waives all claims, damages, and demands against the Secured
      Parties arising out of the repossession, retention or sale of the Collateral.
      The Company agrees that a Secured Party need not give more than 10 days notice
      of the time and place of any public sale or of the time after which a private
      sale may take place and that such notice is reasonable notification of such
      matters. The Company shall remain liable for any deficiency if the proceeds
      of
      any sale or disposition of the Collateral are insufficient to pay all amounts
      to
      which a Secured Party is entitled.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
      Company hereby waives presentment, demand, protest or any notice (to the extent
      permitted by applicable law) of any kind in connection with this Security
      Agreement or any Collateral.

     

    8.
      Application
      of Proceeds.
      Subject
      to the subordination provisions contained in the preceding Section 2, the
      Proceeds of all sales and collections in respect of any Collateral shall be
      applied as follows:

     

    (a)
      First, to the payment of the costs and expenses of such sales and collections,
      the expenses of Secured Parties and the reasonable fees and expenses of counsel
      to the Secured Parties;

     

    (b)
      Second, any surplus then remaining to the payment of the Obligations in such
      order and manner consistent with the provisions of Section 3 above as the
      Secured Parties may in their sole discretion determine; and

     

    (c)
      Third, any surplus then remaining shall be paid to the Company.

     

    9.
      Limitation
      on Secured Parties’ Duty in Respect of Collateral.
      Beyond
      the use of reasonable care in the custody thereof, no Secured Party shall have
      any duty as to any Collateral in their possession or control or in the
      possession or control of any agent or nominee of it or any income thereon or
      as
      to the preservation of rights against prior Secured Parties or any other rights
      pertaining thereto.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10.
      Notices.
      Any
      notice, request or other communication required or permitted hereunder shall
      be
      in writing and shall be delivered personally or by facsimile (receipt confirmed
      electronically) or shall be sent by a reputable express delivery service or
      by
      certified mail, postage prepaid with return receipt requested, addressed as
      follows:

     

    if
      to
      the Company, to:

    

    Itec
      Environmental Group, Inc.

    5300
      Claus Road, Box 760

    Riverbank,
      CA 95367

    Attn: Gary
      M.
      De Laurentiis

    Fax: (209)
      881-3529

     

    if
      to
      Arbor Malone, to:

    

    Arbor
      Malone, LLC

    _______________________

    _______________________

    _______________________

     

    if
      to
      the Baek, to:

    

    Ji
      Y.
      Baek

    _______________________

    _______________________

    

    if
      to
      the Goldman, to:

    

    Leroy
      and
      Lois Goldman 

    _______________________

    _______________________

    

    if
      to
      Itec Capital Group, to:

    

    See
      Schedule
      B.

    

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

     

    11.
      Severability.
      Any
      provision of this Security Agreement which is prohibited or unenforceable in
      any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof, and any such prohibition or unenforceability in any
      jurisdiction shall not invalidate or render unenforceable such provision in
      any
      other jurisdiction.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    12.
      No
      Waiver; Cumulative Remedies.
      No
      Secured Parties shall by any act, delay, omission or otherwise be deemed to
      have
      waived any of their rights or remedies hereunder and no waiver shall be valid
      unless in writing, signed by the Secured Party, and then only to the extent
      therein set forth. A waiver by a Secured Party of any right or remedy hereunder
      on any one occasion shall not be construed as a bar to any right or remedy
      which
      the Secured Parties would otherwise have had on any future occasion and shall
      not apply to any other Secured Party. No failure to exercise nor any delay
      in
      exercising on the part of a Secured Party, any right, power or privilege
      hereunder, shall operate as a waiver thereof, nor shall any single or partial
      exercise of any right, power or privilege hereunder preclude any other or future
      exercise thereof or the exercise or any other right, power or privilege. The
      rights and remedies hereunder provided are cumulative and may be exercised
      singly or concurrently, and are not exclusive of any rights and remedies
      provided by law. 

     

    13.
      Successors
      and Assigns.
      This
      Security Agreement and all obligations of the Company hereunder shall be binding
      upon the successors and permitted assigns of the Company, and shall, together
      with the rights and remedies of the Secured Parties hereunder, inure to the
      benefit of each of the Secured Parties and their successors and permitted
      assigns; provided that the Company may not assign any of its rights or
      obligations hereunder without the prior written consent of each of the Secured
      Parties.

     

    14.
      Waiver
      and Amendment.
      None of
      the terms or provisions of this Security Agreement may be waived, altered,
      modified or amended except by an instrument in writing, duly executed by the
      Company and the Secured Party against whom such waiver, alteration, modification
      or amendment is sought to be enforced.

     

    15.
      Governing
      Law.
      This
      Security Agreement shall be governed by and construed in accordance with the
      domestic laws of the State of California without giving effect to any choice
      of
      law or conflict of law provision or rule (whether of the State of California
      or
      any other jurisdiction) that would cause the application of the laws of any
      jurisdiction other than the State of California.

     

    16.
      Counterparts.
      This
      Security Agreement may be executed in separate counterparts each of which will
      be an original and all of which taken together will constitute one and the
      same
      agreement.

     

    17.
      Facsimile.
      This
      Security Agreement may be executed using facsimiles of signatures, and a
      facsimile of a signature shall be deemed to be the same, and equally
      enforceable, as an original of such signature.

     

    18.
      Termination.
      At such
      time as the Obligations have been fully paid in cash, the security interest
      created hereby shall automatically terminate, the Secured Parties shall take
      all
      such actions as may be requested by the Company to evidence such termination
      and
      to release the liens created hereby, at the Company's expense.

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    IN
      WITNESS WHEREOF, each of the Secured Parties hereto has caused this Security
      Agreement to be executed and delivered by its duly authorized officer as of
      Effective Date.

    
      	 	 	 
	 	
              ITEC
                ENVIRONMENTAL GROUP, INC.

            
	 
 	 
 	 
 
	 	By:  	
            
	 	
              

              Gary
                M. De Laurentiis 

              Chief
                Executive Officer 

            

    
      	 	 	 
	 	
              
                SECURED
                  PARTY: 

              

            
	 
 	 
 	 
 
	 	By:  	
            
	 	
              

              Its:

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      A

     

    
      	
              Secured
                Party

            	 	
              Aggregate
                Principal Amount of Note(s)

            	 
	
              Itec
                Capital Group, LLC 

            	 	
              $

            	
              3,022,500.00

            	 
	
              Arbor
                Malone, LLC

            	 	
              $

            	
              2,300,000.00

            	 
	
              Leroy
                and Lois Goldman

            	 	
              $

            	
              500,000.00

            	 
	
              Ji
                Y. Baek

            	 	
              $

            	
              202,000.00

            	 
	 	 	 	 	 
	
              Total
                

            	 	
              $

            	
              6,024,500.00

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      B

    

    Itec
      Capital Group, LLC Investors

    

    
      	
              Name

            	 	
              Address

            	 	
              City

            	 	
              State

            	 	
              Zip
                Code

            
	
              Allen
                and Judy Adler Trust

            	 	 	 	 	 	 	 	 
	
              Jeffrey
                D. Alpert

            	 	 	 	 	 	 	 	 
	
              Ji
                Y. Baek

            	 	 	 	 	 	 	 	 
	
              Craig
                R. Barone

            	 	 	 	 	 	 	 	 
	
              Brandon
                Barrera

            	 	 	 	 	 	 	 	 
	
              Robert
                Belli

            	 	 	 	 	 	 	 	 
	
              Benetti
                Trust

            	 	 	 	 	 	 	 	 
	
              Gil
                Bensimon or Danielle Krause Simon

            	 	 	 	 	 	 	 	 
	
              Maurice
                & Paula Benard

            	 	 	 	 	 	 	 	 
	
              Amy
                Blanchard & Jerry Ivers

            	 	 	 	 	 	 	 	 
	
              Jordan
                Lee & Judy Bloom

            	 	 	 	 	 	 	 	 
	
              Phil
                Brodie

            	 	 	 	 	 	 	 	 
	
              Thomas
                A. Brown

            	 	 	 	 	 	 	 	 
	
              Douglas
                R. Curtis & Mary P. Curtis

            	 	 	 	 	 	 	 	 
	
              Mark
                S. Devereaux

            	 	 	 	 	 	 	 	 
	
              Paul
                Dittmeier

            	 	 	 	 	 	 	 	 
	
              Ronald
                Domingue

            	 	 	 	 	 	 	 	 
	
              Michael
                J. Edwards

            	 	 	 	 	 	 	 	 
	
              Douglas
                & Jennifer Flentge

            	 	 	 	 	 	 	 	 
	
              Joel
                Frazin Trust

            	 	 	 	 	 	 	 	 
	
              Michael
                Frazin

            	 	 	 	 	 	 	 	 
	
              Clayton
                S. Friedman & Terri E. Friedman

            	 	 	 	 	 	 	 	 
	
              Leroy
                H. Goldman & Lois H. Goldman

            	 	 	 	 	 	 	 	 
	
              Todd
                S. Greenhalgh

            	 	 	 	 	 	 	 	 
	
              Hart
                Trust

            	 	 	 	 	 	 	 	 
	
              Hughes
                Family Trust

            	 	 	 	 	 	 	 	 
	
              Hurwich
                Family Trust

            	 	 	 	 	 	 	 	 
	
              Itec
                Alaska Partnership

            	 	 	 	 	 	 	 	 
	
              Richard
                O. Johnson

            	 	 	 	 	 	 	 	 
	
              Susan
                G. Kief

            	 	 	 	 	 	 	 	 
	
              Charles
                J. Lidman

            	 	 	 	 	 	 	 	 
	
              Andrew
                and Campbell Loft

            	 	 	 	 	 	 	 	 
	
              Losson
                Family Revocable Trust

            	 	 	 	 	 	 	 	 
	
              Kelly
                Luthringshausen

            	 	 	 	 	 	 	 	 
	
              Fred
                & Ruth Lynch

            	 	 	 	 	 	 	 	 
	
              Mark
                Miller

            	 	 	 	 	 	 	 	 
	
              Nave
                Family Trust

            	 	 	 	 	 	 	 	 
	
              Johnathan
                Nicholas

            	 	 	 	 	 	 	 	 
	
              Andrew
                Paul IRA

            	 	 	 	 	 	 	 	 
	
              Carol
                A. Pochini

            	 	 	 	 	 	 	 	 
	
              Jim
                Rose

            	 	 	 	 	 	 	 	 
	
              Rodney
                S. Rougelot

            	 	 	 	 	 	 	 	 
	
              Arthur
                L. Ruoff

            	 	 	 	 	 	 	 	 
	
              Saratoga
                Capital Partners

            	 	 	 	 	 	 	 	 
	
              Lee
                S. Schwartz

            	 	 	 	 	 	 	 	 
	
              Ronald
                E. Schweitzer

            	 	 	 	 	 	 	 	 
	
              Barry
                Seidman

            	 	 	 	 	 	 	 	 
	
              Charles
                M. Spitz, DDS, MS

            	 	 	 	 	 	 	 	 
	
              Shamash
                Family Trust

            	 	 	 	 	 	 	 	 
	
              Danielle
                Simon

            	 	 	 	 	 	 	 	 
	
              Sirott
                Family Trust

            	 	 	 	 	 	 	 	 
	
              Dane
                Solomon

            	 	 	 	 	 	 	 	 
	
              Norma
                L. Taylor

            	 	 	 	 	 	 	 	 
	
              Elissa
                R. Wellikson

            	 	 	 	 	 	 	 	 
	
              Whittaker
                Family Trust

            	 	 	 	 	 	 	 	 
	
              Wong
                Family Trust

            	 	 	 	 	 	 	 	 
	
              Arnold
                Zousmer

            	 	 	 	 	 	 	 	 

    

    

      
        
          
          

        

        
          
          

          
            

          

        

         

      

    

     

    Exhibit
      C

    

    Form
      of Warrant

    

    THE
      SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
      ACT OF 1933 (THE “ACT”) OR APPLICABLE STATE SECURITIES LAWS, AND THE TRANSFER
      THEREOF IS PROHIBITED EXCEPT PURSUANT TO REGISTRATION UNDER THE ACT AND
      APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
      SUCH REGISTRATION. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT
      BE
      CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.

     

    Warrant
      To Purchase 20,000,000 Shares of Common Stock

    

    Itec
      Environmental Group, inc.

    

    Date
      of
      Issuance: August 14, 2006

    

    No.
      93

    

    THIS
      CERTIFIES that, for value received, Arbor Malone, LLC, or its assigns (in either
      case, the “Holder”) is entitled to purchase, subject to the provisions of this
      Warrant, from Itec Environmental Group, Inc., a Delaware corporation (the
“Company”), at the price per share set forth in Section 8 hereof, that number of
      shares of the Company’s common stock (the “Common Stock”) set forth in Section 7
      hereof. This Warrant is referred to herein as the “Warrant” and the shares of
      Common Stock issuable pursuant to the terms hereof are sometimes referred to
      herein as “Warrant Shares.”

     

    1. Holder
      Exercise of Warrant.
      This
      Warrant shall only be exercisable in whole. All shares of Common Stock issued
      upon the exercise of this Warrant at the time of issuance will be validly
      issued, fully paid, and nonassessable. To exercise this Warrant in whole, the
      Holder shall deliver to the Company at its principal office, (a) a written
      notice, in substantially the form of the exercise notice attached hereto as
      Exhibit
      A
      (the
“Exercise Notice”), of the Holder’s election to exercise this Warrant, which
      notice shall specify the number of shares of Common Stock to be purchased and
      be
      accompanied by a check for the full amount of the aggregate Exercise Price
      (as
      defined in Section 8(a) below) for the Warrant Shares so purchased and (b)
      this
      Warrant. The Company shall as promptly as practicable, and in any event within
      twenty (20) days after delivery to the Company of (i) the Exercise Notice
      together with payment of the Exercise Price, (ii) and this Warrant, execute
      and
      deliver or cause to be executed and delivered, in accordance with such notice,
      a
      certificate or certificates representing the aggregate number of Warrant Shares
      specified in such notice. Each certificate representing Warrant Shares shall
      bear the legend or legends required by applicable securities laws. The Company
      shall pay all expenses and other charges payable in connection with the
      preparation, issuance and delivery of such stock certificates except that,
      in
      case such stock certificates shall be registered in a name or names other than
      the name of the Holder, funds sufficient to pay all stock transfer taxes, if
      any, that are payable upon the issuance of such stock certificate or
      certificates shall be paid by the Holder at the time of delivering the Exercise
      Notice. 

    

    The
      Holder shall also have the right to convert this Warrant or any portion thereof
      (the "Conversion Right"), without payment by the Holder of the Exercise Price
      in
      cash or any other consideration (other than the surrender of rights to receive
      Warrant Shares hereunder), into shares of Common Stock as provided in this
      Section 1. Upon receipt by the Company of a duly executed and completed
      Conversion Notice in the form attached hereto as Exhibit
      B
      for the
      exercise of the Conversion Right with respect to a particular number of Warrant
      Shares (the "Converted Warrant Shares"), the Company shall deliver to the Holder
      (without payment by the Holder of the Exercise Price in cash or any other
      consideration (other than the surrender of rights to receive Warrant Shares
      hereunder)) that number of shares of Common Stock equal to the quotient obtained
      by dividing: (x) the difference between (i) the product of (A) the Current
      Market Price of a share of Common Stock multiplied by (B) the number of
      Converted Warrant Shares and (ii) the product of (A) the Exercise Price
      multiplied by (B) the number of the Converted Warrant Shares, in each case
      as of
      the Conversion Date, by (y) the Current Market Price of a share of Common Stock
      on the Conversion Date. The term “Conversion Date” shall be the date a duly
      executed and completed Conversion Notice is received by the Company. No
      fractional Warrant Shares shall be issuable upon exercise of the Conversion
      Right, and if the number of Warrant Shares to be issued determined in accordance
      with the following formula is other than a whole number, the Company shall,
      at
      its election, pay to the Holder an amount in cash equal to the Current Market
      Price of the resulting fractional Warrant Share on the Conversion Date or round
      up to the next nearest whole share. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    The
      term
      "Current Market Price" for the shares of Common Stock as of a specified date
      shall mean: (i) if the shares of Common Stock are publicly traded on such date,
      the average closing price per share over the preceding 10 trading days as
      reported on the principal stock exchange or quotation system on which the shares
      of Common Stock are then listed or quoted; (ii) if the shares of Common Stock
      are not so publicly traded on such date, the value determined in good faith
      by
      the Board of Directors of the Company; provided, that if Holder shall dispute
      such value determined by the Board of Directors the value shall be the appraised
      value per share of Common Stock as of such date determined by an investment
      banking firm of recognized standing selected by the Company and reasonably
      satisfactory to the Holder. In the event the appraised value is greater than
      120% of the value of determined by the Board of Directors, the cost of such
      appraisal shall be borne by the Company and in all other circumstances, the
      cost
      of such appraisal shall be borne by the Holder. 

     

    The
      Warrant shall expire on August 14, 2010 (the “Expiration Date”). The Holder may
      exercise the warrant at any time prior to the Expiration Date. 

    

    2. Reservation
      of Shares.
      The
      Company hereby covenants that at all times during the term of this Warrant
      there
      shall be reserved for issuance such number of shares of its Common Stock as
      shall be required to be issued upon exercise of this Warrant. 

    

    3.
       Fractional
      Shares.
      This
      Warrant may be exercised only for a whole number of shares of Common Stock,
      and
      no fractional shares or scrip representing fractional shares shall be issuable
      upon the exercise of this Warrant. 

    

    4.
       Transfer
      of Warrant and Warrant Shares.
      The
      Holder may sell, pledge, hypothecate, or otherwise transfer (“Transfer”) this
      Warrant, in whole or in part, only if such sale, pledge, hypothecation, or
      transfer is made in compliance with the Act or pursuant to an available
      exemption from registration under the Act relating to the disposition of
      securities. Subject to the preceding sentence, the Company agrees to issue
      to
      any successor or transferee of Holder a new Warrant or Warrants of like tenor
      promptly upon receipt of Holder’s notice of any such Transfer and shall issue to
      Holder a new Warrant representing any portion hereof that is not so Transferred.
      

    

    5.
       Loss
      of Warrant.
      Upon
      receipt by the Company of evidence satisfactory to it of the loss, theft, or
      destruction of this Warrant, and of indemnification satisfactory to it, or
      upon
      surrender and cancellation of this Warrant, if mutilated, the Company will
      execute and deliver a new warrant of like tenor. 

    

    6.
       Rights
      of the Holder.
      No
      provision of this Warrant shall be construed as conferring upon the Holder
      the
      right to vote, consent, receive dividends or receive notice other than as
      expressly provided herein. Prior to exercise, no provision hereof, in the
      absence of affirmative action by the Holder to exercise this Warrant, and no
      enumeration herein of the rights or privileges of the Holder, shall give rise
      to
      any liability of the holder for the purchase price of any warrant shares or
      as a
      stockholder of the Company, whether such liability is asserted by the Company
      or
      by creditors of the Company. 

    

    7.
       Number
      of Warrant Shares.
      This
      Warrant shall be exercisable for 20,000,000 shares of the Company’s Common
      Stock, as adjusted from time to time in accordance with this Agreement.

    

    8.
       Exercise
      Price; Adjustment of Warrants.
      

    

    a.
       Exercise
      Price.
      The per
      share purchase price (the “Exercise Price”) for each of the Warrant Shares
      purchasable under this Warrant shall be equal to $0.12, as adjusted from time
      to
      time in accordance with this Agreement. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    b. Adjustment
      for Mergers or Reorganization, etc.
      In case
      of any consolidation or merger of the Company with or into another corporation
      or the conveyance of all or substantially all of the assets of the Company
      to
      another corporation, this Warrant shall be exercisable into the number of shares
      of stock or other securities or property to which a holder of the number of
      shares of Common Stock of the Company deliverable upon exercise of this Warrant
      would have been entitled upon such consolidation, merger or conveyance; and,
      in
      any such case, appropriate adjustment (as determined by the Board of Directors
      of the Company) shall be made in the application of the provisions herein set
      forth with respect to the rights and interest thereafter of the holder of this
      Warrant, to the end that the provisions set forth herein shall thereafter be
      applicable, as nearly as reasonable may be, in relation to any shares of stock
      or other property thereafter deliverable upon the exercise of this Warrant.
      

    

    c. Adjustment
      in the Case of Certain Transactions or Events.
      The Exercise Price shall be adjusted downward in the event the Company issues
      Common Stock (or securities exercisable for or convertible into or exchangeable
      for common stock) at a price below the Exercise Price, to a price equal to
      such
      issue price. The preceding adjustment shall be effective immediately at the
      time
      of the issuance of any security issued (or of any reduction in effective price
      of any security). In addition, the Exercise Price and the number of Warrant
      Shares issuable upon exercise hereof shall be appropriately adjusted in the
      case
      of stock splits, stock dividends, recapitalizations and the like. 

     

    d.
       NO
      IMPAIRMENT.
      THE
      COMPANY WILL NOT, THROUGH ANY REORGANIZATION, TRANSFER OF ASSETS, CONSOLIDATION,
      MERGER, DISSOLUTION, ISSUE OR SALE OF SECURITIES OR ANY OTHER VOLUNTARY ACTION,
      AVOID OR SEEK TO AVOID THE OBSERVANCE OR PERFORMANCE OF ANY OF THE TERMS TO
      BE
      OBSERVED OR PERFORMED HEREUNDER BY THE COMPANY, BUT WILL AT ALL TIMES IN GOOD
      FAITH ASSIST IN THE CARRYING OUT OF ALL THE PROVISIONS OF THIS SECTION AND
      IN
      THE TAKING OF ALL SUCH ACTION AS MAY BE NECESSARY OR APPROPRIATE IN ORDER TO
      PROTECT THE EXERCISE RIGHTS OF THE HOLDER OF THIS WARRANT AGAINST IMPAIRMENT.
      

    

    e. Issue
      Taxes.
      The
      Company shall pay issue taxes that may be payable in respect of any issue or
      delivery of shares of Common Stock on exercise of this Warrant, in whole;
      provided, however, that the Company shall not be obligated to pay any transfer
      taxes resulting from any transfer requested by any holder in connection with
      any
      such exercise. 

    

    f.
       Reservation
      of Stock Issuable Upon Conversion.
      The
      Company shall at all times reserve and keep available out of its authorized
      but
      unissued shares of common stock, solely for the purpose of effecting the
      exercise of this Warrant, such number of its shares of common stock as shall
      from time to time be sufficient to effect the exercise of this Warrant; and
      if
      at any time the number of authorized but unissued shares of common stock shall
      not be sufficient to effect the exercise of this Warrant, the Company will
      take
      all appropriate corporate action as may, in the opinion of its counsel, be
      necessary to increase its authorized but unissued shares of common stock to
      such
      number of shares as shall be sufficient for such purpose. 

    

    9. Certain
      Distributions.
      In case
      the Company shall, at any time, prior to the Expiration Date, declare any
      distribution of its assets to holders of its common stock as a partial
      liquidation, distribution or by way of return of capital, other than as a
      dividend payable out of earnings or any surplus legally available for dividends,
      then the Holder shall be entitled, upon the proper exercise of this Warrant
      in
      whole prior to the effecting of such declaration, to receive, in addition to
      the
      shares of common stock issuable on such exercise, the amount of such assets
      (or
      at the option of the Company a sum equal to the value thereof at the time of
      such distribution to holders of common stock as such value is determined by
      the
      Board of Directors of the Company in good faith), which would have been payable
      to the Holder had it been a holder of record of such shares of common stock
      on
      the record date for the determination of those holders of Common Stock entitled
      to such distribution. 

    

    10. Dissolution
      or Liquidation.
      In case
      the Company shall, at any time prior to the Expiration Date, dissolve, liquidate
      or wind up its affairs, the Holder shall be entitled, upon the proper exercise
      of this Warrant in whole and prior to any distribution associated with such
      dissolution, liquidation, or winding up, to receive on such exercise, in lieu
      of
      the shares of Common Stock to which the Holder would have been entitled, the
      same kind and amount of assets as would have been distributed or paid to the
      Holder upon any such dissolution, liquidation or winding up, with respect to
      such shares of Common Stock had the Holder been a holder of record of such
      share
      of Common Stock on the record date for the determination of those holders of
      Common Stock entitled to receive any such dissolution, liquidation, or winding
      up distribution. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    11.
       Reclassification
      or Reorganization.
      In case
      of any reclassification, capital reorganization or other change of outstanding
      shares of common stock of the Company (other than a change in par value, or
      from
      par value to no par value, or from no par value to par value, or as a result
      of
      an issuance of common stock by way of dividend or other distribution or of
      a
      subdivision or combination), the Company shall cause effective provision to
      be
      made so that the Holder shall have the right thereafter by exercising this
      Warrant, to receive the kind and amount of shares of stock and other securities
      and property
      receivable upon such reclassification, capital reorganization or other change,
      that a holder of the number of shares of common stock which might have been
      purchased upon exercise of this warrant immediately prior to such
      reclassification or change would have received. Any such provision shall include
      provision for adjustments which shall be as nearly equivalent as may be
      practicable to the adjustments provided for in this warrant. The foregoing
      provisions of this Section 11 shall similarly apply to successive
      reclassifications, capital reorganizations and changes of shares of common
      stock. in the event that in any such capital reorganization, reclassification,
      or other change, additional shares of common stock shall be issued in exchange,
      conversion, substitution or payment, in whole, for or of a security of the
      company other than common stock, any amount of the consideration received upon
      the issue thereof being determined by the board of directors of the company
      shall be final and binding on the holder.
      

     

    12.
       Miscellaneous.
      

    

    a.
       Successors
      and Assigns.
      The
      terms and conditions of this Agreement shall inure to the benefit of, and be
      binding upon, the respective successors and assigns of the parties, except
      to
      the extent otherwise provided herein. Nothing in this Agreement, express or
      implied, is intended to confer upon any party, other than the parties hereto
      or
      their respective successors and assigns, any rights, remedies, obligations
      or
      liabilities under or by reason of this Agreement, except as expressly provided
      in this Agreement. 

    

    b.
       Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of California without regard to the principles of conflict of laws
      thereof. 

    

    c. Counterparts;
      Delivery by Facsimile.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument. Delivery of this Agreement may be effected by facsimile.

    

    d.
       Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this Agreement.

    

    e.
      Notices.
      Unless
      otherwise provided, any notice required or permitted hereunder shall be given
      by
      personal service upon the party to be notified by certified mail, return receipt
      requested and: (i) if to the Company, addressed to Itec Environmental Group,
      Inc., 5300 Claus Road, Riverbank, California 95367, or at such other address
      as
      the Company may designate by notice to the Holder in accordance with the
      provisions of this Section; and (ii) if to the Holder, at the address indicated
      on the signature page hereof, or at such other addresses as the Holder may
      designate by notice to the Company in accordance with the provisions of this
      Section. 

    

    f.
       Amendments
      and Waivers.
      Any
      term of this Agreement may be amended and the observance of any term of this
      Agreement may be waived (either generally or in a particular instance and either
      prospectively or retroactively), only with the written consent of the Company
      and the Holder. 

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    IN
      WITNESS WHEREOF, the undersigned hereby sets is hand and seal this
      14th
      day of
      August, 2006. 

     

    Itec
      Environmental Group, Inc. 

    

    

    By:  

    
      

    

    Name:
      Gary De Laurentiis

    Title:
      President and Chief Executive Officer

     

    Holder
      Name: ____________________________________

    

    Holder
      Address: __________________________________

    

    _________________________________________________

    

    _________________________________________________

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    EXHIBIT
      A

    

    NOTICE
      OF EXERCISE

    

    (To
      be
      signed only upon exercise of the Warrant)

     

    TO:
      Itec
      Environmental Group, Inc.

     

    The
      undersigned, hereby irrevocably elects to exercise the purchase rights
      represented by the Warrant granted to the undersigned on ______________ and
      to
      purchase thereunder __________* shares of Common Stock of Itec Environmental
      Group, Inc. (the “Company”).

    

    Dated:
      ________________

     

    _________________________________________

    (Signature
      must conform in all respects to name 

    of
      holder
      as specified on the face of the Warrant)

    

    _________________________________________

    (Please
      Print Name)

    

    _________________________________________

    (Address)

    

    *
      Insert
      here the number of shares being exercised, without making any adjustment for
      additional Common Stock of the Company, other securities or property which,
      pursuant to the adjustment provisions of the Warrant, may be deliverable upon
      exercise. 

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    EXHIBIT
      B

    

    (FORM
      OF
      CONVERSION NOTICE TO BE EXECUTED

    UPON
      EXERCISE OF WARRANT)

    

    CONVERSION
      NOTICE

    

    The
      undersigned, the registered holder of Warrant No. _______ (the "Warrant"),
      issued Itec Environmental Group, Inc. (the "Company"), hereby (1) irrevocably
      elects to convert the Warrant into such number of shares of Common Stock of
      the
      Company as is determined pursuant to Section 1 of the Warrant, which conversion
      shall be effected pursuant to the terms and conditions of the Warrant, and
      (2)
      directs that the certificates for such shares of Common Stock issuable upon
      exercise of the Warrant be issued in the name of and 

     

    delivered
      to:
      _________________________________________________________________

     

    whose
      address is
      _____________________________________________________________.

     

    The
      undersigned represents that the aforesaid shares of Common Stock are being
      acquired for the account of the undersigned for investment and not with a view
      to, or for resale in connection with the distribution thereof and that the
      undersigned has no present intention of distributing or reselling such
      shares.

    
      	 	 	 
	
            	  	 
	 	
              
                

              

              (Name)

               

            
	 	
              

              (Address)

            
	 	 
	 	
              
 

    

     

    SIGNATURE:

    

    Dated:
      ________________.

     

    NOTICE:
      The signature on this Conversion Notice must correspond with the name as written
      upon the face of the Warrant, or upon an assignment form attached
      hereto.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    AMENDMENT
      NO. 1 TO LOAN AGREEMENT

    

    THIS
      AMENDMENT NO. 1 TO LOAN AGREEMENT (this "Amendment"),
      is
      executed as of September 7, 2006, by and between Itec Environmental Group,
      Inc.,
      a Delaware corporation (the "Company"),
      and
      Arbor Malone, LLC, a Delaware limited liability company (the "Lender").

     

    WHEREAS,
      the Company and the Lender entered into a Loan Agreement on August 14, 2006
      (the
“Loan
      Agreement”)
      pursuant to which the parties effected the First Closing thereunder at which
      time Lender advanced an initial Loan in the amount of $1,000,000;
      and

     

    WHEREAS,
      the Lender is willing to increase its loan commitment under the Loan Agreement
      to an aggregate of $2,300,000; and

     

    WHEREAS,
      the Lender is willing to provide such additional financing on terms and
      conditions as set forth herein.

     

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

     

    1.
      Amendment to Section 2.1. The parties agree that the first sentence of Section
      2.1 of the Loan Agreement is amended to read as follows: 

     

    “According
      to the terms and subject to the conditions of this Agreement, the Lender shall
      loan to the Company the aggregate amount of Two Million Three Hundred Thousand
      Dollars ($2,300,000.00) (the "Loan").”
      

     

    2.
      Conditions
      Precedent to the Loan.
      Section
      2.4 (b) of the Loan Agreement shall be amended to read as follows: 

     

    (b)
      The
      Company shall have duly authorized, executed, and delivered to the Lender a
      security agreement in the form attached hereto as Exhibit
      B
      (the
“Security
      Agreement”)
      to
      secure the repayment of the Loan and granting the Lender a continuing security
      interest in all presently existing and hereafter acquired assets and property
      of
      the Company of whatever nature and wherever located which such Security Interest
      shall be senior to all other security interests or Encumbrances against the
      assets and property of the Company other than Senior Debt (as hereafter
      defined). Lender shall be entitled to a security interest pari
      passu on
      a
      pro-rata basis with the investors participating in private placement pursuant
      to
      the 2006 Private Placement Memorandum (the “PPM”)
      of the
      Company and, except as set forth above, Lender’s security interest shall be
      senior to any other indebtedness of the Company, whether now existing or created
      or incurred in the future. “Senior
      Debt”
shall
      mean all indebtedness for all principal,
      fees, expenses, interest, penalties, post-bankruptcy petition interest, and
      all
      other amounts payable for money borrowed from banking or other financial
      institutions or governmental lending facilities that is not convertible into
      equity securities of the Company, including, but not limited to the $2,000,000
      loan from the California Integrated Waste Management Board (the “CIWMB
      Loan”)
      and
      the remaining amount due and owing under the forbearance agreement by and
      between the Company and the Elevation Fund, LLC (the “Forbearance
      Agreement”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.
      Other
      Indebtedness.
      Section
      3.8 of the Loan Agreement shall be amended to read as follows: 

     

    “3.8.
      Other
      Indebtedness.
      On and
      as of the date hereof and on and as of each Closing Date, the Company does
      not
      and will not have any outstanding Senior Debt other than the CIWMB Loan and
      the
      amount due and owning pursuant to the Forbearance Agreement. For so long as
      the
      Note (or any note issued upon transfer of the Note, in whole or in part) remains
      outstanding, the Company shall not incur, create or enter into any agreement
      to
      incur or create indebtedness ranking on a parity or parri
      passu
      with the
      Notes (“Parity
      Indebtedness”),
      other
      than the investors participating in the financing under the Company’s 2006
      Private Placement Memorandum and certain other lenders, identified in
Schedule
      A
      to the
      Security Agreement, as defined below, without the prior written consent of
      the
      Lender, which consent shall not be unreasonably withheld.”

     

    4.
      Events
      of Default.
      Section
      5.1(e) shall be amended to read as follows: 

     

    “(e)
      The
Effective
      Date
      under the Rougelot Employment Agreement shall not have occurred on or prior
      to
      September 15, 2006 or Mr. Rougelot shall no longer serve as the Chief Executive
      Officer of the Company for any reason other than his death or disability,
      Voluntary departure or removal for Cause (as such terms are defined in the
      Rougelot Employment Agreement); and” 

     

    5.
      Issuance
      of Warrants.
      The
      first sentence of Section 6.1 shall be amended to read as follows: 

     

    “The
      Company shall issue to the Lender one or more warrants to purchase a combined
      total of twenty-three million (23,000,000) shares of common stock of the Company
      in the form attached hereto as Exhibit
      C
      (referred to herein collectively as the “Warrant”).”
      

     

    6.
      Effect
      of Amendment.
      Except
      as specifically amended hereby, the Loan Agreement shall remain in full force
      and effect as originally written. This Amendment shall be deemed to be
      incorporate in and a part of the Loan Agreement. 

     

    7.
      Titles
      and Subtitles; Defined Terms.
      The
      titles and subtitles of the Sections of this Amendment are used for convenience
      only and shall not be considered in construing or interpreting this agreement.
      Capitalized terms used but not otherwise defined in this Amendment shall have
      the specific meanings set forth in the Loan Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, each of the parties has caused this Amendment No. 1 to Loan
      Agreement to be signed in its name on the date first set forth
      above.

    
      	 	 	 
	 	
              ITEC
                ENVIRONMENTAL GROUP, INC.

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Gary
                M. De Laurentiis 

              Chief
                Executive Officer 

            

    
      
        	 	 	 
	 	
                
                  ARBOR
                    MALONE, LLC 

                

              
	 
 	 
 	 
 
	
              	By:  	
              
	 	
                

                
                  Name: Ronald
                    M. Domingue

                  Title:
                    ManagerExhibit
      4.13

    Form
      of Common Stock Warrants issued To Excipio Group, S.A.

    

    WARRANT

    

    THE
      SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
      ACT OF 1933 (THE “ACT”) OR APPLICABLE STATE SECURITIES LAWS, AND THE TRANSFER
      THEREOF IS PROHIBITED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION
      S
      UNDER THE ACT, PURSUANT TO REGISTRATION UNDER THE ACT AND APPLICABLE STATE
      SECURITIES LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
      HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS
      IN
      COMPLIANCE WITH THE ACT

     

    Warrant
      To Purchase 1,440,000 Shares of Common Stock

    

    Itec
      Environmental Group, inc.

    

    Date
      of
      Issuance: November 6, 2006

    

    No.
      148

    

    THIS
      CERTIFIES that, for value received, Excipio Group, S.A., or its assigns (in
      either case, the “Holder”) is entitled to purchase, subject to the provisions of
      this Warrant, from Itec Environmental Group, Inc., a Delaware corporation (the
      “Company”), at the price per share set forth in Section 8 hereof, that number of
      shares of the Company’s common stock (the “Common Stock”) set forth in Section 7
      hereof. This Warrant is referred to herein as the “Warrant” and the shares of
      Common Stock issuable pursuant to the terms hereof are sometimes referred to
      herein as “Warrant Shares.”

    

    1. Holder
      Exercise of Warrant.
      This
      Warrant shall only be exercisable in whole. To exercise this Warrant in whole,
      the Holder shall deliver to the Company at its principal office, (a) a written
      notice, in substantially the form of the exercise notice attached hereto as
      Exhibit
      A
      (the
“Exercise Notice”), of the Holder’s election to exercise this Warrant, which
      notice shall specify the number of shares of Common Stock to be purchased and
      (b) this Warrant. The Company shall as promptly as practicable, and in any
      event
      within twenty (20) days after delivery to the Company of (i) the Exercise
      Notice, (ii) and this Warrant, execute and deliver or cause to be executed
      and
      delivered, in accordance with such notice, a certificate or certificates
      representing the aggregate number of shares of Common Stock specified in such
      notice, provided this Warrant has vested on or prior to the date such notice
      is
      delivered. Each certificate representing Warrant Shares shall bear the legend
      or
      legends required by applicable securities laws as well as such other legend(s)
      the Company requires to be included on certificates for its Common Stock. The
      Company shall pay all expenses and other charges payable in connection with
      the
      preparation, issuance and delivery of such stock certificates except that,
      in
      case such stock certificates shall be registered in a name or names other than
      the name of the Holder, funds sufficient to pay all stock transfer taxes that
      are payable upon the issuance of such stock certificate or certificates shall
      be
      paid by the Holder at the time of delivering the Exercise Notice. All shares
      of
      Common Stock issued upon the exercise of this Warrant shall be validly issued,
      fully paid, and nonassessable. 

    

    The
      Warrant shall expire on April 15, 2015 (the “Expiration Date”). The Investor may
      exercise the warrant at any time prior to the Expiration Date and after the
      Vesting Date. The Company has no restriction on the sale or transfer of the
      Warrant or Warrant Shares; however, the Investor is required to comply with
      all
      state and U.S. laws and regulations relating to security sales and
      transfers.

    

    2. Reservation
      of Shares.
      The
      Company hereby covenants that at all times during the term of this Warrant
      there
      shall be reserved for issuance such number of shares of its Common Stock as
      shall be required to be issued upon exercise of this Warrant. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3.
       Fractional
      Shares.
      This
      Warrant may be exercised only for a whole number of shares of Common Stock,
      and
      no fractional shares or scrip representing fractional shares shall be issuable
      upon the exercise of this Warrant. 

    

    4.
       Transfer
      of Warrant and Warrant Shares.
      The
      Holder may sell, pledge, hypothecate, or otherwise transfer this Warrant, in
      whole, in accordance with and subject to the terms and conditions set forth
      in
      the Subscription Agreement and then only if such sale, pledge, hypothecation,
      or
      transfer is made in compliance with the Act or pursuant to an available
      exemption from registration under the Act relating to the disposition of
      securities.

    

    5.
       Loss
      of Warrant.
      Upon
      receipt by the Company of evidence satisfactory to it of the loss, theft, or
      destruction of this Warrant, and of indemnification satisfactory to it, or
      upon
      surrender and cancellation of this Warrant, if mutilated, the Company will
      execute and deliver a new warrant of like tenor. 

    

    6.
       Rights
      of the Holder.
      No
      provision of this Warrant shall be construed as conferring upon the Holder
      the
      right to vote, consent, receive dividends or receive notice other than as
      expressly provided herein. Prior to exercise, no provision hereof, in the
      absence of affirmative action by the Holder to exercise this Warrant, and no
      enumeration herein of the rights or privileges of the Holder, shall give rise
      to
      any liability of the holder for the purchase price of any warrant shares or
      as a
      stockholder of the Company, whether such liability is asserted by the Company
      or
      by creditors of the Company. 

    

    7.
       Number
      of Warrant Shares.
      This
      Warrant shall be exercisable for 1,440,000 shares of the Company’s Common Stock,
      as adjusted in accordance with this Agreement. 

    

    8.
       Exercise
      Price; Adjustment of Warrants.
      

    

    a.
       Determination
      of Exercise Price.
      The per
      share purchase price (the “Exercise Price”) for each of the Warrant Shares
      purchasable under this Warrant shall be equal to $0.06. 

     

    b.
      Net
      Issue Exercise.
      In lieu
      of exercising this Warrant, the Holder may elect to receive Shares equal to
      the
      value of this Warrant (or the portion thereof being canceled) by surrender
      of
      this Warrant at the principal office of the Company together with notice of
      such
      election, in which event the Company shall issue to the Holder a number of
      Shares computed using the following formula:

    

    X
      = Y
      (A-B)

    -------

    A

    

    Where
      X
 =
      the
      number of the Shares to be issued to the Holder.

    

    Y
      =
      the
      number of the Shares purchasable under this Warrant.

    

    A
      =
      the
      fair market value of one Share on the date of determination.

    

    B
      =
      the per
      share Exercise Price (as adjusted to the date of such calculation).

    

    Fair
      Market Value.
      For
      purposes of this section, the per share fair market value of the Shares shall
      mean:

    

    (i)
       If
      the
      Company's Common Stock is publicly traded, the per share fair market value
      of
      the Shares shall be the average of the closing prices of the Common Stock as
      quoted on the Nasdaq National Market or the principal exchange on which the
      Common Stock is listed, or if not so listed then the fair market value shall
      be
      the average of the closing bid prices of the Common Stock as published in The
      Wall Street Journal, in each case for the fifteen (15) trading days ending
      five
      (5) trading days prior to the date of determination of fair market
      value;

    

    (ii)
       If
      the
      Company's Common Stock is not so publicly traded, the per share fair market
      value of the Shares shall be such fair market value as is determined in good
      faith by the Board of Directors of the Company after taking into consideration
      factors it deems appropriate, including, without limitation, recent sale and
      offer prices of the capital stock of the Company in private transactions
      negotiated at arm's length.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    c.
      Adjustment
      for Mergers or Reorganization, etc.
      In case
      of any consolidation or merger of the Company with or into another corporation
      or the conveyance of all or substantially all of the assets of the Company
      to
      another corporation, this Warrant shall be exercisable into the number of shares
      of stock or other securities or property to which a holder of the number of
      shares of Common Stock of the Company deliverable upon exercise of this Warrant
      would have been entitled upon such consolidation, merger or conveyance; and,
      in
      any such case, appropriate adjustment (as determined by the Board of Directors
      of the Company) shall be made in the application of the provisions herein set
      forth with respect to the rights and interest thereafter of the holder of this
      Warrant, to the end that the provisions set forth herein shall thereafter be
      applicable, as nearly as reasonable may be, in relation to any shares of stock
      or other property thereafter deliverable upon the exercise of this Warrant.
      

    

    d.
       NO
      IMPAIRMENT.
      THE
      COMPANY WILL NOT, THROUGH ANY REORGANIZATION, TRANSFER OF ASSETS, CONSOLIDATION,
      MERGER, DISSOLUTION, ISSUE OR SALE OF SECURITIES OR ANY OTHER VOLUNTARY ACTION,
      AVOID OR SEEK TO AVOID THE OBSERVANCE OR PERFORMANCE OF ANY OF THE TERMS TO
      BE
      OBSERVED OR PERFORMED HEREUNDER BY THE COMPANY, BUT WILL AT ALL TIMES IN GOOD
      FAITH ASSIST IN THE CARRYING OUT OF ALL THE PROVISIONS OF THIS SECTION AND
      IN
      THE TAKING OF ALL SUCH ACTION AS MAY BE NECESSARY OR APPROPRIATE IN ORDER TO
      PROTECT THE EXERCISE RIGHTS OF THE HOLDER OF THIS WARRANT AGAINST IMPAIRMENT.
      

    

    e. Issue
      Taxes.
      The
      Company shall pay issue taxes that may be payable in respect of any issue or
      delivery of shares of Common Stock on exercise of this Warrant, in whole;
      provided, however, that the Company shall not be obligated to pay any transfer
      taxes resulting from any transfer requested by any holder in connection with
      any
      such exercise. 

    

    f.
       Reservation
      of Stock Issuable Upon Conversion.
      The
      Company shall at all times reserve and keep available out of its authorized
      but
      unissued shares of common stock, solely for the purpose of effecting the
      exercise of this Warrant, such number of its shares of common stock as shall
      from time to time be sufficient to effect the exercise of this Warrant; and
      if
      at any time the number of authorized but unissued shares of common stock shall
      not be sufficient to effect the exercise of this Warrant, the Company will
      take
      all appropriate corporate action as may, in the opinion of its counsel, be
      necessary to increase its authorized but unissued shares of common stock to
      such
      number of shares as shall be sufficient for such purpose. 

    

    g.
       Adjustment.
      The
      Exercise Price shall be adjusted downward in the event the Company issues common
      stock (or securities exercisable for or convertible into or exchangeable for
      common stock) at a price below the Exercise Price, to a price equal to such
      issue price.

    

    9. Certain
      Distributions.
      In case
      the Company shall, at any time, prior to the Expiration Date, declare any
      distribution of its assets to holders of its common stock as a partial
      liquidation, distribution or by way of return of capital, other than as a
      dividend payable out of earnings or any surplus legally available for dividends,
      then the Holder shall be entitled, upon the proper exercise of this Warrant
      in
      whole prior to the effecting of such declaration, to receive, in addition to
      the
      shares of common stock issuable on such exercise, the amount of such assets
      (or
      at the option of the Company a sum equal to the value thereof at the time of
      such distribution to holders of common stock as such value is determined by
      the
      Board of Directors of the Company in good faith), which would have been payable
      to the Holder had it been a holder of record of such shares of common stock
      on
      the record date for the determination of those holders of Common Stock entitled
      to such distribution. 

    

    10. Dissolution
      or Liquidation.
      In case
      the Company shall, at any time prior to the Expiration Date, dissolve, liquidate
      or wind up its affairs, the Holder shall be entitled, upon the proper exercise
      of this Warrant in whole and prior to any distribution associated with such
      dissolution, liquidation, or winding up, to receive on such exercise, in lieu
      of
      the shares of Common Stock to which the Holder would have been entitled, the
      same kind and amount of assets as would have been distributed or paid to the
      Holder upon any such dissolution, liquidation or winding up, with respect to
      such shares of Common Stock had the Holder been a holder of record of such
      share
      of Common Stock on the record date for the determination of those holders of
      Common Stock entitled to receive any such dissolution, liquidation, or winding
      up distribution. 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    11.
       Reclassification
      or Reorganization.
      In case
      of any reclassification, capital reorganization or other change of outstanding
      shares of common stock of the Company (other than a change in par value, or
      from
      par value to no par value, or from no par value to par value, or as a result
      of
      an issuance of common stock by way of dividend or other distribution or of
      a
      subdivision or combination), the Company shall cause effective provision to
      be
      made so that the Holder shall have the right thereafter by exercising this
      Warrant, to purchase the kind and amount of shares of stock and other securities
      and PROPERTY RECEIVABLE UPON SUCH RECLASSIFICATION, CAPITAL REORGANIZATION
      OR
      OTHER CHANGE, BY A HOLDER OF THE NUMBER OF SHARES OF COMMON STOCK WHICH MIGHT
      HAVE BEEN PURCHASED UPON EXERCISE OF THIS WARRANT IMMEDIATELY PRIOR TO SUCH
      RECLASSIFICATION OR CHANGE. ANY SUCH PROVISION SHALL INCLUDE PROVISION FOR
      ADJUSTMENTS WHICH SHALL BE AS NEARLY EQUIVALENT AS MAY BE PRACTICABLE TO THE
      ADJUSTMENTS PROVIDED FOR IN THIS WARRANT. THE FOREGOING PROVISIONS OF THIS
      SECTION 12 SHALL SIMILARLY APPLY TO SUCCESSIVE RECLASSIFICATIONS, CAPITAL
      REORGANIZATIONS AND CHANGES OF SHARES OF COMMON STOCK. IN THE EVENT THAT IN
      ANY
      SUCH CAPITAL REORGANIZATION, RECLASSIFICATION, OR OTHER CHANGE, ADDITIONAL
      SHARES OF COMMON STOCK SHALL BE ISSUED IN EXCHANGE, CONVERSION, SUBSTITUTION
      OR
      PAYMENT, IN WHOLE, FOR OR OF A SECURITY OF THE COMPANY OTHER THAN COMMON STOCK,
      ANY AMOUNT OF THE CONSIDERATION RECEIVED UPON THE ISSUE THEREOF BEING DETERMINED
      BY THE BOARD OF DIRECTORS OF THE COMPANY SHALL BE FINAL AND BINDING ON THE
      HOLDER. 

    

    12.
       Miscellaneous.
      

    

    a.
       Successors
      and Assigns.
      The
      terms and conditions of this Agreement shall inure to the benefit of, and be
      binding upon, the respective successors and assigns of the parties, except
      to
      the extent otherwise provided herein. Nothing in this Agreement, express or
      implied, is intended to confer upon any party, other than the parties hereto
      or
      their respective successors and assigns, any rights, remedies, obligations
      or
      liabilities under or by reason of this Agreement, except as expressly provided
      in this Agreement. 

    

    b.
       Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of California without regard to the principles of conflict of laws
      thereof. 

    

    c. Counterparts;
      Delivery by Facsimile.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument. Delivery of this Agreement may be effected by facsimile.

    

    d.
       Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this Agreement.

    

    e.
      Notices.
      Unless
      otherwise provided, any notice required or permitted hereunder shall be given
      by
      personal service upon the party to be notified by certified mail, return receipt
      requested and: (i) if to the Company, addressed to Itec Environmental Group,
      Inc., 5300 Claus Road, Riverbank, California 95367, or at such other address
      as
      the Company may designate by notice to each of the Investors in accordance
      with
      the provisions of this Section; and (ii) if to the Warrant holder, at the
      address indicated on the signature page hereof, or at such other addresses
      as
      such Holder may designate by notice to the Company in accordance with the
      provisions of this Section. 

    

    f.
       Amendments
      and Waivers.
      Any
      term of this Agreement may be amended and the observance of any term of this
      Agreement may be waived (either generally or in a particular instance and either
      prospectively or retroactively), only with the written consent of the Company
      and a majority in interest of the Holders. 

    

    g.
       Entire
      Agreement.
      This
      Agreement, the Memorandum (including the appendices and schedules thereto)
      by
      and between the Company and the Holder, constitute the entire agreement among
      the parties hereto with respect to the subject matter hereof and thereof and
      supersede all prior agreements, understandings, negotiations and discussions,
      whether oral or written, of the parties hereto. 

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, the undersigned hereby sets is hand and seal this ___ day
      of
      __________, 2006. 

     

    Itec
      Environmental Group, Inc. 

    
      	 	 	 	 
	 	 	 	 
	By:
	 	 	
            
	
              
                

              

              Name:
                Rodney S. Rougelot

            	 	 	
            
	
              Title:
                Chief Executive Officer

            	 	 	
            

    

     

    Investor
      Name: ____________________________________

    

    Investor
      Address: __________________________________

    

    _________________________________________________

    

    _________________________________________________

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

    

    NOTICE
      OF EXERCISE

    

    (To
      be
      signed only upon exercise of the Warrant)

    

    TO:
      Itec
      Environmental Group, Inc.

     

    The
      undersigned, hereby irrevocably elects to exercise the purchase rights
      represented by the Warrant granted to the undersigned on ______________ and
      to
      purchase thereunder __________* shares of Common Stock of Itec Environmental
      Group, Inc. (the “Company”).

    

    Dated:
      ________________

    
      	 	 	 
	 	 	 
	 	
              

              (Signature
                must conform in all respects to name
                
                of
                  holder as specified on the face of the
                  Warrant)

              

            
	 	
            
	 	
              

              (Please
                Print Name)

            
	 	
            
	 	
              

              (Address)

            

    

    

    *
      Insert
      here the number of shares being exercised, without making any adjustment for
      additional Common Stock of the Company, other securities or property which,
      pursuant to the adjustment provisions of the Warrant, may be deliverable upon
      exercise. 

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    WARRANT

    

    THE
      SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
      ACT OF 1933 (THE “ACT”) OR APPLICABLE STATE SECURITIES LAWS, AND THE TRANSFER
      THEREOF IS PROHIBITED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION
      S
      UNDER THE ACT, PURSUANT TO REGISTRATION UNDER THE ACT AND APPLICABLE STATE
      SECURITIES LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
      HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
      COMPLIANCE WITH THE ACT

     

    Warrant
      To Purchase 3,748,000 Shares of Common Stock

    

    Itec
      Environmental Group, inc.

    

    Date
      of
      Issuance: November 6, 2006

    

    No.
      149

    

    THIS
      CERTIFIES that, for value received, Excipio Group, S.A., or its assigns (in
      either case, the “Holder”) is entitled to purchase, subject to the provisions of
      this Warrant, from Itec Environmental Group, Inc., a Delaware corporation (the
      “Company”), at the price per share set forth in Section 8 hereof, that number of
      shares of the Company’s common stock (the “Common Stock”) set forth in Section 7
      hereof. This Warrant is referred to herein as the “Warrant” and the shares of
      Common Stock issuable pursuant to the terms hereof are sometimes referred to
      herein as “Warrant Shares.”

    

    1. Holder
      Exercise of Warrant.
      This
      Warrant shall only be exercisable in whole. To exercise this Warrant in whole,
      the Holder shall deliver to the Company at its principal office, (a) a written
      notice, in substantially the form of the exercise notice attached hereto as
      Exhibit
      A
      (the
“Exercise Notice”), of the Holder’s election to exercise this Warrant, which
      notice shall specify the number of shares of Common Stock to be purchased and
      (b) this Warrant. The Company shall as promptly as practicable, and in any
      event
      within twenty (20) days after delivery to the Company of (i) the Exercise
      Notice, (ii) and this Warrant, execute and deliver or cause to be executed
      and
      delivered, in accordance with such notice, a certificate or certificates
      representing the aggregate number of shares of Common Stock specified in such
      notice, provided this Warrant has vested on or prior to the date such notice
      is
      delivered. Each certificate representing Warrant Shares shall bear the legend
      or
      legends required by applicable securities laws as well as such other legend(s)
      the Company requires to be included on certificates for its Common Stock. The
      Company shall pay all expenses and other charges payable in connection with
      the
      preparation, issuance and delivery of such stock certificates except that,
      in
      case such stock certificates shall be registered in a name or names other than
      the name of the Holder, funds sufficient to pay all stock transfer taxes that
      are payable upon the issuance of such stock certificate or certificates shall
      be
      paid by the Holder at the time of delivering the Exercise Notice. All shares
      of
      Common Stock issued upon the exercise of this Warrant shall be validly issued,
      fully paid, and nonassessable. 

    

    The
      Warrant shall expire on April 15, 2010 (the “Expiration Date”). The Investor may
      exercise the warrant at any time prior to the Expiration Date and after the
      Vesting Date. The Company has no restriction on the sale or transfer of the
      Warrant or Warrant Shares; however, the Investor is required to comply with
      all
      state and U.S. laws and regulations relating to security sales and
      transfers.

    

    2. Reservation
      of Shares.
      The
      Company hereby covenants that at all times during the term of this Warrant
      there
      shall be reserved for issuance such number of shares of its Common Stock as
      shall be required to be issued upon exercise of this Warrant. 

    

    3.
       Fractional
      Shares.
      This
      Warrant may be exercised only for a whole number of shares of Common Stock,
      and
      no fractional shares or scrip representing fractional shares shall be issuable
      upon the exercise of this Warrant. 

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    4.
       Transfer
      of Warrant and Warrant Shares.
      The
      Holder may sell, pledge, hypothecate, or otherwise transfer this Warrant, in
      whole, in accordance with and subject to the terms and conditions set forth
      in
      the Subscription Agreement and then only if such sale, pledge, hypothecation,
      or
      transfer is made in compliance with the Act or pursuant to an available
      exemption from registration under the Act relating to the disposition of
      securities.

    

    5.
       Loss
      of Warrant.
      Upon
      receipt by the Company of evidence satisfactory to it of the loss, theft, or
      destruction of this Warrant, and of indemnification satisfactory to it, or
      upon
      surrender and cancellation of this Warrant, if mutilated, the Company will
      execute and deliver a new warrant of like tenor. 

    

    6.
       Rights
      of the Holder.
      No
      provision of this Warrant shall be construed as conferring upon the Holder
      the
      right to vote, consent, receive dividends or receive notice other than as
      expressly provided herein. Prior to exercise, no provision hereof, in the
      absence of affirmative action by the Holder to exercise this Warrant, and no
      enumeration herein of the rights or privileges of the Holder, shall give rise
      to
      any liability of the holder for the purchase price of any warrant shares or
      as a
      stockholder of the Company, whether such liability is asserted by the Company
      or
      by creditors of the Company. 

    

    7.
       Number
      of Warrant Shares.
      This
      Warrant shall be exercisable for 3,748,000 shares of the Company’s Common Stock,
      as adjusted in accordance with this Agreement. 

    

    8.
       Exercise
      Price; Adjustment of Warrants.
      

    

    a.
       Determination
      of Exercise Price.
      The per
      share purchase price (the “Exercise Price”) for each of the Warrant Shares
      purchasable under this Warrant shall be equal to $0.12. 

     

    b.
      Net
      Issue Exercise.
      In lieu
      of exercising this Warrant, the Holder may elect to receive Shares equal to
      the
      value of this Warrant (or the portion thereof being canceled) by surrender
      of
      this Warrant at the principal office of the Company together with notice of
      such
      election, in which event the Company shall issue to the Holder a number of
      Shares computed using the following formula:

    

    X
      = Y
      (A-B)

    -------

    A

    

    Where
      X
 =
      the
      number of the Shares to be issued to the Holder.

    

    Y
      =
      the
      number of the Shares purchasable under this Warrant.

    

    A
      =
      the
      fair market value of one Share on the date of determination.

    

    B
      =
      the per
      share Exercise Price (as adjusted to the date of such calculation).

    

    Fair
      Market Value.
      For
      purposes of this section, the per share fair market value of the Shares shall
      mean:

    

    (i)
       If
      the
      Company's Common Stock is publicly traded, the per share fair market value
      of
      the Shares shall be the average of the closing prices of the Common Stock as
      quoted on the Nasdaq National Market or the principal exchange on which the
      Common Stock is listed, or if not so listed then the fair market value shall
      be
      the average of the closing bid prices of the Common Stock as published in The
      Wall Street Journal, in each case for the fifteen (15) trading days ending
      five
      (5) trading days prior to the date of determination of fair market
      value;

    

    (ii)
       If
      the
      Company's Common Stock is not so publicly traded, the per share fair market
      value of the Shares shall be such fair market value as is determined in good
      faith by the Board of Directors of the Company after taking into consideration
      factors it deems appropriate, including, without limitation, recent sale and
      offer prices of the capital stock of the Company in private transactions
      negotiated at arm's length.

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    c.
      Adjustment
      for Mergers or Reorganization, etc.
      In case
      of any consolidation or merger of the Company with or into another corporation
      or the conveyance of all or substantially all of the assets of the Company
      to
      another corporation, this Warrant shall be exercisable into the number of shares
      of stock or other securities or property to which a holder of the number of
      shares of Common Stock of the Company deliverable upon exercise of this Warrant
      would have been entitled upon such consolidation, merger or conveyance; and,
      in
      any such case, appropriate adjustment (as determined by the Board of Directors
      of the Company) shall be made in the application of the provisions herein set
      forth with respect to the rights and interest thereafter of the holder of this
      Warrant, to the end that the provisions set forth herein shall thereafter be
      applicable, as nearly as reasonable may be, in relation to any shares of stock
      or other property thereafter deliverable upon the exercise of this Warrant.
      

    

    d.
       NO
      IMPAIRMENT.
      THE
      COMPANY WILL NOT, THROUGH ANY REORGANIZATION, TRANSFER OF ASSETS, CONSOLIDATION,
      MERGER, DISSOLUTION, ISSUE OR SALE OF SECURITIES OR ANY OTHER VOLUNTARY ACTION,
      AVOID OR SEEK TO AVOID THE OBSERVANCE OR PERFORMANCE OF ANY OF THE TERMS TO
      BE
      OBSERVED OR PERFORMED HEREUNDER BY THE COMPANY, BUT WILL AT ALL TIMES IN GOOD
      FAITH ASSIST IN THE CARRYING OUT OF ALL THE PROVISIONS OF THIS SECTION AND
      IN
      THE TAKING OF ALL SUCH ACTION AS MAY BE NECESSARY OR APPROPRIATE IN ORDER TO
      PROTECT THE EXERCISE RIGHTS OF THE HOLDER OF THIS WARRANT AGAINST IMPAIRMENT.
      

    

    e. Issue
      Taxes.
      The
      Company shall pay issue taxes that may be payable in respect of any issue or
      delivery of shares of Common Stock on exercise of this Warrant, in whole;
      provided, however, that the Company shall not be obligated to pay any transfer
      taxes resulting from any transfer requested by any holder in connection with
      any
      such exercise. 

    

    f.
       Reservation
      of Stock Issuable Upon Conversion.
      The
      Company shall at all times reserve and keep available out of its authorized
      but
      unissued shares of common stock, solely for the purpose of effecting the
      exercise of this Warrant, such number of its shares of common stock as shall
      from time to time be sufficient to effect the exercise of this Warrant; and
      if
      at any time the number of authorized but unissued shares of common stock shall
      not be sufficient to effect the exercise of this Warrant, the Company will
      take
      all appropriate corporate action as may, in the opinion of its counsel, be
      necessary to increase its authorized but unissued shares of common stock to
      such
      number of shares as shall be sufficient for such purpose. 

    

    g.
       Adjustment.
      The
      Exercise Price shall be adjusted downward in the event the Company issues common
      stock (or securities exercisable for or convertible into or exchangeable for
      common stock) at a price below the Exercise Price, to a price equal to such
      issue price.

    

    9. Certain
      Distributions.
      In case
      the Company shall, at any time, prior to the Expiration Date, declare any
      distribution of its assets to holders of its common stock as a partial
      liquidation, distribution or by way of return of capital, other than as a
      dividend payable out of earnings or any surplus legally available for dividends,
      then the Holder shall be entitled, upon the proper exercise of this Warrant
      in
      whole prior to the effecting of such declaration, to receive, in addition to
      the
      shares of common stock issuable on such exercise, the amount of such assets
      (or
      at the option of the Company a sum equal to the value thereof at the time of
      such distribution to holders of common stock as such value is determined by
      the
      Board of Directors of the Company in good faith), which would have been payable
      to the Holder had it been a holder of record of such shares of common stock
      on
      the record date for the determination of those holders of Common Stock entitled
      to such distribution. 

    

    10. Dissolution
      or Liquidation.
      In case
      the Company shall, at any time prior to the Expiration Date, dissolve, liquidate
      or wind up its affairs, the Holder shall be entitled, upon the proper exercise
      of this Warrant in whole and prior to any distribution associated with such
      dissolution, liquidation, or winding up, to receive on such exercise, in lieu
      of
      the shares of Common Stock to which the Holder would have been entitled, the
      same kind and amount of assets as would have been distributed or paid to the
      Holder upon any such dissolution, liquidation or winding up, with respect to
      such shares of Common Stock had the Holder been a holder of record of such
      share
      of Common Stock on the record date for the determination of those holders of
      Common Stock entitled to receive any such dissolution, liquidation, or winding
      up distribution. 

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    11.
       Reclassification
      or Reorganization.
      In case
      of any reclassification, capital reorganization or other change of outstanding
      shares of common stock of the Company (other than a change in par value, or
      from
      par value to no par value, or from no par value to par value, or as a result
      of
      an issuance of common stock by way of dividend or other distribution or of
      a
      subdivision or combination), the Company shall cause effective provision to
      be
      made so that the Holder shall have the right thereafter by exercising this
      Warrant, to purchase the kind and amount of shares of stock and other securities
      and PROPERTY RECEIVABLE UPON SUCH RECLASSIFICATION, CAPITAL REORGANIZATION
      OR
      OTHER CHANGE, BY A HOLDER OF THE NUMBER OF SHARES OF COMMON STOCK WHICH MIGHT
      HAVE BEEN PURCHASED UPON EXERCISE OF THIS WARRANT IMMEDIATELY PRIOR TO SUCH
      RECLASSIFICATION OR CHANGE. ANY SUCH PROVISION SHALL INCLUDE PROVISION FOR
      ADJUSTMENTS WHICH SHALL BE AS NEARLY EQUIVALENT AS MAY BE PRACTICABLE TO THE
      ADJUSTMENTS PROVIDED FOR IN THIS WARRANT. THE FOREGOING PROVISIONS OF THIS
      SECTION 12 SHALL SIMILARLY APPLY TO SUCCESSIVE RECLASSIFICATIONS, CAPITAL
      REORGANIZATIONS AND CHANGES OF SHARES OF COMMON STOCK. IN THE EVENT THAT IN
      ANY
      SUCH CAPITAL REORGANIZATION, RECLASSIFICATION, OR OTHER CHANGE, ADDITIONAL
      SHARES OF COMMON STOCK SHALL BE ISSUED IN EXCHANGE, CONVERSION, SUBSTITUTION
      OR
      PAYMENT, IN WHOLE, FOR OR OF A SECURITY OF THE COMPANY OTHER THAN COMMON STOCK,
      ANY AMOUNT OF THE CONSIDERATION RECEIVED UPON THE ISSUE THEREOF BEING DETERMINED
      BY THE BOARD OF DIRECTORS OF THE COMPANY SHALL BE FINAL AND BINDING ON THE
      HOLDER. 

    

    12.
       Miscellaneous.
      

    

    a.
       Successors
      and Assigns.
      The
      terms and conditions of this Agreement shall inure to the benefit of, and be
      binding upon, the respective successors and assigns of the parties, except
      to
      the extent otherwise provided herein. Nothing in this Agreement, express or
      implied, is intended to confer upon any party, other than the parties hereto
      or
      their respective successors and assigns, any rights, remedies, obligations
      or
      liabilities under or by reason of this Agreement, except as expressly provided
      in this Agreement. 

    

    b.
       Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of California without regard to the principles of conflict of laws
      thereof. 

    

    c. Counterparts;
      Delivery by Facsimile.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument. Delivery of this Agreement may be effected by facsimile.

    

    d.
       Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this Agreement.

    

    e.
      Notices.
      Unless
      otherwise provided, any notice required or permitted hereunder shall be given
      by
      personal service upon the party to be notified by certified mail, return receipt
      requested and: (i) if to the Company, addressed to Itec Environmental Group,
      Inc., 5300 Claus Road, Riverbank, California 95367, or at such other address
      as
      the Company may designate by notice to each of the Investors in accordance
      with
      the provisions of this Section; and (ii) if to the Warrant holder, at the
      address indicated on the signature page hereof, or at such other addresses
      as
      such Holder may designate by notice to the Company in accordance with the
      provisions of this Section. 

    

    f.
       Amendments
      and Waivers.
      Any
      term of this Agreement may be amended and the observance of any term of this
      Agreement may be waived (either generally or in a particular instance and either
      prospectively or retroactively), only with the written consent of the Company
      and a majority in interest of the Holders. 

    

    g.
       Entire
      Agreement.
      This
      Agreement, the Memorandum (including the appendices and schedules thereto)
      by
      and between the Company and the Holder, constitute the entire agreement among
      the parties hereto with respect to the subject matter hereof and thereof and
      supersede all prior agreements, understandings, negotiations and discussions,
      whether oral or written, of the parties hereto. 

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, the undersigned hereby sets is hand and seal this ___ day
      of
      __________, 2006. 

    
      	 	 	 	 
	
              Itec
                Environmental Group, Inc. 

            	 	 	 
	 	 	 	 
	 	 	 	 
	By:
	 	 	
            
	
              
                

              

              Name:
                Rodney S. Rougelot

            	 	 	
            
	
              Title:
                Chief Executive Officer

            	 	 	
            

    

    

    Investor
      Name: ____________________________________

    

    Investor
      Address: __________________________________

    

    _________________________________________________

    

    _________________________________________________

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

    

    NOTICE
      OF EXERCISE

    

    (To
      be
      signed only upon exercise of the Warrant)

     

    TO:
      Itec
      Environmental Group, Inc.

     

    The
      undersigned, hereby irrevocably elects to exercise the purchase rights
      represented by the Warrant granted to the undersigned on ______________ and
      to
      purchase thereunder __________* shares of Common Stock of Itec Environmental
      Group, Inc. (the “Company”).

    

    Dated:
      ________________

    
      	 	 	 
	
            	
            	
            
	 	
              

              (Signature
                must conform in all respects to name
                
                of
                  holder as specified on the face of the
                  Warrant)

              

            
	 	
            
	 	
              

              (Please
                Print Name)

            
	 	 
	 	
              

              (Address)

            

    

    

    *
      Insert
      here the number of shares being exercised, without making any adjustment for
      additional Common Stock of the Company, other securities or property which,
      pursuant to the adjustment provisions of the Warrant, may be deliverable upon
      exercise. 

    

    
      
         

      

      
        12

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