Document:

The
      securities represented by this Warrant and issuable upon exercise hereof have
      not been registered under the Securities Act of 1933, as amended (the "Act"),
      or
      under the provisions of any applicable state securities laws, but have been
      acquired by the registered holder hereof for purposes of investment and in
      reliance on statutory exemptions under the Act, and under any applicable state
      securities laws. These securities and the securities issued upon exercise hereof
      may not be sold, pledged, transferred or assigned, nor may this Warrant be
      exercised, except in a transaction which is exempt under the provisions of
      the
      Act and any applicable state securities laws or pursuant to an effective
      registration statement.

     

    COMMON
      STOCK PURCHASE WARRANT

     

    Date
      of
      Issuance: August ___, 2005Certificate
      No. W-____

     

    For
      value
      received, ITec Environmental Group, Inc., a Delaware corporation (the
      "Company"),
      hereby grants to ________________, and he/she/its transferees and assigns
      ("Buyer"),
      the
      right to purchase from the Company a total of ______________ shares of the
      Company's common stock, par value $.001 per share ("Common
      Stock"),
      at a
      price per share equal to $.13 (the "Initial
      Exercise Price").
      The
      exercise price and number of shares of Common Stock issuable upon exercise
      of
      this Warrant (the “Warrant
      Shares”)
      (and
      the amount and kind of other securities) shall be subject to adjustment as
      provided in Section 2 hereof. This Warrant is being issued in connection with
      the Loan Agreement between Buyer and the Company of even date herewith (the
      "Loan
      Agreement").
      Certain capital-ized terms used herein are defined in Section 4 hereof.

     

    This
      Warrant is subject to the following provisions: 

     

    SECTION
      1.   Exercise
      of Warrant.
      

     

    (a)  Terms
      of Warrants; Exercise Period.
      Subject
      to the terms of this Agreement, the Registered Holder shall have the right,
      commencing on the date hereof and expiring on the 10 year anniversary hereof
      (the "Expiration
      Date"),
      to
      exercise this Warrant, in whole or in part, and receive from the Company the
      number of Warrant Shares which the Registered Holder may at the time be entitled
      to receive on exercise of this Warrant and payment of the Exercise Price then
      in
      effect for the Warrant Shares. To the extent not exercised prior to the
      Expiration Date, this Warrant shall become void and all rights thereunder and
      all rights in respect thereof under this Agreement shall cease as of such
      time.

     

    (b)  Exercise
      Procedure.

     

    (i)  This
      Warrant shall be deemed to have been exer-cised on the date specified in a
      written notice from the Registered Holder to the Company (the "Exercise
      Time")
      and
      within three business days following the Exercise Time, the Registered Holder
      shall deliver the following to the Company: 

     

    (A)  a
      completed Exercise Agreement, as described in Section 1(c)
      below;

     

    (B)  this
      Warrant;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (C)  if
      this
      Warrant is not registered in the name of the Registered Holder, an Assignment
      or
      Assignments in the form set forth in Exhibit
      II
      hereto
      evidencing the assignment of this Warrant to the Registered Holder, in which
      case the Registered Holder shall have complied with the pro-visions set forth
      in
      Section 6 hereof; and

     

    (D)  a
      check
      payable to the Company in an amount equal to the product of the Exercise Price
      (as such term is de-fined in Section 2) multiplied by the number of Warrant
      Shares being purchased upon such exercise (the "Aggregate
      Exercise Price").

     

    (ii)  Certificates
      for Warrant Shares purchased upon exercise of this Warrant shall be delivered
      by
      the Company to the Registered Holder within five business days after the date
      of
      the Exercise Time. Unless this Warrant has expired or all of the purchase rights
      represented hereby have been exercised, the Company shall prepare a new Warrant,
      substantially identical hereto, representing the rights formerly represented
      by
      this Warrant that have not expired or been exercised and shall, within such
      five
      day period, deliver such new Warrant to the Person designated for delivery
      in
      the Exercise Agreement. 

     

    (iii)  The
      Warrant Shares issuable upon the exercise of this Warrant shall be deemed to
      have been issued to the Registered Holder at the Exercise Time, and the
      Registered Holder shall be deemed for all purposes to have become the record
      holder of such Warrant Shares at the Exercise Time. 

     

    (iv)  The
      Company shall not close its books against the transfer of this Warrant or of
      any
      Warrant Shares issued or issuable upon the exercise of this Warrant in any
      manner which interferes with the timely exercise of this Warrant. 

     

    (v)  The
      Company shall assist and cooperate with the Registered Holder or any Registered
      Holder required to make any governmental filings or obtain any governmental
      approvals prior to or in connection with any exercise of this
      Warrant.

     

    (vi)  The
      Company shall at all times reserve and keep available out of its authorized
      but
      unissued capital stock, solely for the purpose of issuance upon the exercise
      of
      this Warrant, the maximum number of Warrant Shares issuable upon the exercise
      of
      this Warrant. All Warrant Shares which are so issuable shall, when issued and
      upon the payment of the Exercise Price therefor, be duly and validly issued,
      fully paid and nonassessable and free from all taxes, liens and charges. The
      Company shall take all such ac-tions as may be necessary to assure that all
      such
      Warrant Shares may be so issued without violation by the Company of any
      applica-ble law or governmen-tal regulation or any requirements of any domestic
      securities exchange upon which securities of the Company may be listed (except
      for official notice of issuance which shall be immediately deliv-ered by the
      Company upon each such issuance). 

     

    (c)  Exercise
      Agreement.
      Upon
      any exercise of this Warrant, the Registered Holder shall deliver an Exercise
      Agreement in the form set forth in Exhibit I
      hereto,
      except that if the Warrant Shares are not to be issued in the name of the Person
      in whose name this Warrant is registered, the Exercise Agreement shall also
      state the name of the Person to whom the certificates for the Warrant Shares
      are
      to be issued, and if the number of Warrant Shares to be issued does not include
      all the Warrant Shares purchasable here-under, it shall also state the name
      of
      the Person to whom a new Warrant for the unexer-cised portion of the rights
      hereunder is to be issued. Such Exercise Agreement shall be dated the actual
      date of execution thereof. 

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    SECTION
      2. Adjustment
      of Exercise Price and Number of Shares.
      The
      Exercise Price and the number of Warrant Shares shall be adjusted from time
      to
      time as follows:

     

    (a) Adjustment
      upon Issuance of Common Stock.
      If and
      whenever on or after the date of this Warrant, the Company issues or sells,
      or
      in accordance with this Section 2 is deemed to have issued or sold, any shares
      of Common Stock (including the issuance or sale of shares of Common Stock owned
      or held by or for the account of the Company but excluding Excluded Securities
      (as defined in the Loan Agreement of even date herewith)) for a consideration
      per share (the "New
      Securities Issuance Price")
      less
      than a price (the "Applicable
      Price")
      equal
      to the Exercise Price in effect immediately prior to such time (the foregoing,
      a
      "Dilutive
      Issuance"),
      then
      immediately after such issue or sale, the Exercise Price then in effect shall
      be
      reduced to an amount equal to the New Securities Issuance Price. Upon each
      such
      adjustment of the Exercise Price hereunder, the number of Warrant Shares shall
      be adjusted to the number of shares of Common Stock determined by multiplying
      the Exercise Price in effect immediately prior to such adjustment by the number
      of Warrant Shares acquirable upon exercise of this Warrant immediately prior
      to
      such adjustment and dividing the product thereof by the Exercise Price resulting
      from such adjustment. For purposes of determining the adjusted Exercise Price
      under this Section 2(a), the following shall be applicable:

     

    (b) Reorganization,
      Reclassification, Consolida-tion, Merger or Sale.
      In case
      of any reclassification, capital reorganization, consolidation, merger, sale
      of
      all or substan-tially all of the Company's assets to another Person or any
      other
      change in the Common Stock of the Company, other than as a result of a
      subdivision, combination, or stock dividend provided for in Section 2(c)
      below (any of which, a "Change
      Event"),
      then,
      as a condition of such Change Event, lawful provision shall be made, and duly
      executed documents evidencing the same from the Company or its successor shall
      be delivered to the Registered Holder, so that the Registered Holder shall
      have
      the right at any time prior to the expiration of this Warrant to purchase,
      at a
      total price equal to that payable upon the exercise of this Warrant (subject
      to
      adjustment of the Exercise Price as provided in Section 2), the kind and amount
      of shares of stock and other securities and property receivable in connection
      with such Change Event by a holder of the same number of shares of Common Stock
      as were purchasable by the Registered Holder immediately prior to such Change
      Event. In any such case appropriate provisions shall be made with respect to
      the
      rights and interest of the Registered Holder so that the provisions hereof
      shall
      thereafter be applicable with respect to any shares of stock or other securities
      and property deliverable upon exercise hereof, and appropriate adjustments
      shall
      be made to the purchase price per share payable hereunder, provided the
      aggregate purchase price shall remain the same.

     

    (c) Subdivisions,
      Combinations.
      If the
      Company shall at any time prior to the expiration of this Warrant (i) subdivide
      its Common Stock, by split-up or otherwise, or combine its Common Stock, or
      (ii)
      issue additional shares of its Common Stock or other equity securities as a
      dividend with respect to any shares of its Common Stock, the number of shares
      of
      Common Stock issuable on the exercise of this Warrant shall forthwith be
      proportionately increased in the case of a subdivision or stock, or
      proportionately decreased in the case of a combination. Appropriate adjustments
      shall also be made to the purchase price payable per share, but the aggregate
      purchase price payable for the total number of Warrant Shares purchasable under
      this Warrant (as adjusted) shall remain the same. Any adjustment under this
      Section 2(b) shall become effective at the close of business on the
      date
      the subdivision or combination becomes effective, or as of the record date
      of
      such dividend, or in the event that no record date is fixed, upon the making
      of
      such dividend.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (d)  Issuance
      of New Warrant.
      Upon
      the occurrence of any of the events listed in this Section 2 that results in
      an
      adjustment of the type, number or exercise price of the securities underlying
      this Warrant, the Registered Holder shall have the right to receive a new
      warrant reflecting such adjustment upon the Registered Holder tendering this
      Warrant in exchange. The new warrant shall otherwise have terms identical to
      this Warrant.

     

    (e)  Notices.
      

     

    (i)  The
      Company shall give written notice to the Regis-tered Holder of this Warrant
      at
      least 10 days prior to the date on which the Company closes its books or takes
      a
      record for determining rights to vote with respect to any event described
      in this Section 2 or any dissolu-tion or liquidation. 

     

    (ii)The
      Company shall also give written notice to the Registered Holder of this Warrant
      at least 10 days prior to the date on which any event described in this Section
      2 or any dissolution or liquidation shall take place.

     

    SECTION
      3. Registration
      Rights.
      

     

    (a)  The
      Company shall register the Registrable Securities in accordance with the terms
      set forth in Section 7.2 of the Loan Agreement.

     

    (b)  The
      Company shall furnish to each Registered Holder of such Registrable Securities
      such number of copies of such registration statement and of each such amendment
      and supplement thereto (in each case including each preliminary prospectus
      and
      summary prospectus) in conformity with the requirements of the Act, and such
      other documents as the Registered Holders may reasonably request in order to
      facilitate the disposition of the Registrable Securities by such Registered
      Holders.

     

    (c)  If
      the
      Company shall fail to comply with the provisions of Section 7.2 of the Loan
      Agreement, the Company shall, in addition to any other equitable or other relief
      available to the Registered Holder(s), be liable for any or all special and
      consequential damages sustained by the Registered Holder(s).

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (d)  The
      Company shall prepare and file with the SEC such amendments and supplements
      to
      such registration statement and the prospectus used in connection therewith
      as
      may be reasonably necessary to keep such registration statement effective for
      at
      least 12 months (or such longer period as permitted by the Act), and to comply
      with the provisions of the Act with respect to the disposition of all securities
      covered by such registration statement during such period in accordance with
      the
      intended methods of disposition by the Registered Holder or Registered Holders
      of Registrable Securities set forth in such registration statement. If at any
      time the SEC should institute or threaten to institute any proceedings for
      the
      purpose of issuing a stop order suspending the effectiveness of any such
      registration statement, the Company will promptly notify each Registered Holder
      of Registrable Securities and will use all reasonable efforts to prevent the
      issuance of any such stop order or to obtain the withdrawal thereof as soon
      as
      possible. The Company will use its good faith reasonable efforts and take all
      reasonably necessary action which may be required in qualifying or registering
      the Registrable Securities included in a registration statement for offering
      and
      sale under the securities or blue sky laws of such states as reasonably are
      required by the Registered Holder(s), provided that the Company shall not be
      obligated to execute or file any general consent to service of process or to
      qualify as a foreign corporation to do business under the laws of any such
      jurisdiction. The Company shall use its good faith reasonable efforts to cause
      such Registrable Securities covered by such registration statement to be
      registered with or approved by such other governmental agencies or authorities
      of the United States or any state thereof as may be reasonably necessary to
      enable the Registered Holder(s) thereof to consummate the disposition of such
      Registrable Securities.

     

    (e)  The
      Company shall indemnify the Registered Holder(s) of the Registrable Securities
      to be sold pursuant to any registration statement and each person, if any,
      who
      controls such Registered Holders within the meaning of Section 15 of the Act
      or
      Section 20(a) of the Exchange Act against all loss, claim, damage, expense
      or
      liability (including all expenses reasonably incurred in investigating,
      preparing or defending against any claim whatsoever) to which any of them may
      become subject under the Act, the Exchange Act or otherwise, arising from such
      registration statement.

     

    (f)  If
      requested by the Company prior to the filing of any registration statement
      covering the Registrable Securities, each of the Registered Holder(s) of the
      Registrable Securities to be sold pursuant to a registration statement, and
      their successors and assigns, shall severally, and not jointly, indemnify the
      Company, its officers and directors and each person, if any, who controls the
      Company within the meaning of Section 15 of the Act or Section 20(a) of the
      Exchange Act, against all loss, claim, damage or expense or liability (including
      all expenses reasonably incurred in investigating, preparing or defending
      against any claim whatsoever) to which they may become subject under the Act,
      the Exchange Act or otherwise, arising from written information furnished by
      such Registered Holder, or their successors or assigns, for specific inclusion
      in such registration statement, except that the maximum amount which may be
      recovered from each Registered Holder pursuant to this paragraph or otherwise
      shall be limited to the amount of net proceeds received by the Registered Holder
      from the sale of the Registrable Securities.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (g)  Nothing
      contained in this Agreement shall be construed as requiring the Registered
      Holder(s) to exercise their Warrants prior to the filing of any registration
      statement or the effectiveness thereof.

     

    (h)  The
      Company shall furnish to each Registered Holder participating in an offering
      and
      to the managing underwriter, if any, a signed counterpart, addressed to such
      Registered Holder or underwriter, of (i) an opinion of counsel to the
      Company, dated the effective date of such registration statement (and, if such
      registration includes an underwritten public offering, an opinion dated the
      date
      of the closing under the underwriting agreement), and (ii) a "Cold Comfort"
      letter dated the effective date of such registration statement (and, if such
      registration includes an underwritten public offering, a letter dated the date
      of the closing under the underwriting agreement) signed by the independent
      public accountants who have issued a report on the Company's financial
      statements included in such registration statement, in each case covering
      substantially the same matters with respect to such registration statement
      (and
      the prospectus included therein) and, in the case of such accountants' letter,
      with respect to events subsequent to the date of such financial statements,
      as
      are customarily covered in opinions of issuer's counsel and in accountants'
      letters delivered to underwriters in underwritten public offerings of
      securities.

     

    (i)  The
      Company shall deliver promptly to each Registered Holder participating in an
      offering and to the managing underwriter, if any, copies of all correspondence
      between the SEC and the Company, its counsel or auditors and all non-privileged
      memoranda relating to discussions with the SEC or its staff with respect to
      the
      registration statement and permit each Registered Holder and underwriter to
      do
      such investigation, upon reasonable advance notice, with respect to information
      contained in or omitted from the registration statement as it deems reasonably
      necessary to comply with applicable securities laws or rules of the NASD. Such
      investigation shall include access to books, records and properties and
      opportunities to discuss the business of the Company with its officers and
      independent auditors, all to such reasonable extent and at such reasonable
      times
      and as often as any such Registered Holder shall reasonably
      request.

     

    (j)  The
      Company shall not, directly or indirectly, enter into any merger, business
      combination or consolidation in which (i) the Company shall not be the surviving
      corporation and (ii) the shareholders of the Company are to receive, in whole
      or
      in part, capital stock or other securities of the surviving corporation, unless
      the surviving corporation shall, prior to such merger, business combination
      or
      consolidation, agree in writing to assume the obligations of the Company under
      this Agreement, and for that purpose references hereunder to "Registrable
      Securities"
      shall
      be deemed to include the securities which the Registered Holders would be
      entitled to receive in exchange for Registrable Securities under any such
      merger, business combination or consolidation, provided that to the extent
      such
      securities to be received are convertible into shares of Common Stock of the
      issuer thereof, then any such shares of Common Stock as are issued or issuable
      upon conversion of said convertible securities shall also be included within
      the
      definition of "Registrable
      Securities."

     

    (k)  All
      expenses incident to the Company's performance of or compliance with this
      Agreement, including without limitation all registration and filing fees, fees
      and expenses of compliance with securities or blue sky laws, printing expenses,
      messenger and delivery expenses, and fees and disbursements of counsel for
      the
      Company and all independent certified public accountants, underwriters
      (excluding discounts and commissions) and other Persons retained by the Company
      will be borne by the Company. In no event shall the Company be obligated to
      be
      pay any discounts or commissions with respect to the shares sold by any holder
      of Registrable Securities. In connection with each Registration Document, the
      Company will reimburse the holders of Registrable Securities covered by such
      registration for the reasonable fees and disbursements of one counsel chosen
      by
      the holders of a majority of the Registrable Securities initially requesting
      such registration.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    SECTION
      4. Definitions.
      The
      following terms have the meanings set forth below: 

     

    “Act”
      means
      the Securities Act of 1933, as amended.

     

    "Convertible
      Securities"
      means
      any evidence of indebtedness, shares or other securities convertible into or
      exchangeable for Common Stock.

     

    “Exchange
      Act”
      means
      the Securities Exchange Act of 1934, as amended.

     

    "Fair
      Market Value"
      shall
      be determined on a per Share basis as of the close of the business day preceding
      the date of exercise, which determination shall be made as follows: (a) if
      the
      Common Stock is listed on a national securities exchange or admitted to unlisted
      trading privileges on such an exchange or quoted on either the National Market
      System or the Small Cap Market of the automated quotation service operated
      by
      The Nasdaq Stock Market, Inc., the Fair Market Value shall be the last reported
      sale price of that security on such exchange or system on the day for which
      the
      current market price is to be determined or, if no such sale is made on such
      day, the average of the highest closing bid and lowest asked price for such
      day
      on such exchange or system; (b) if the Common Stock is not so listed or quoted
      or admitted to unlisted trading privileges, the Fair Market Value shall be
      the
      average of the last reported highest bid and lowest asked prices quoted on
      the
      Nasdaq Electronic Bulletin Board, or, if not so quoted, then by the National
      Quotation Bureau, Inc. on the last business day prior to the day for which
      the
      Fair Market Value is to be determined; or (c) if the Common Stock is not so
      listed or quoted or admitted to unlisted trading privileges and bid and asked
      prices are not reported, the Fair Market Value shall be determined by the
      Company's Board of Directors in its reasonable, good faith
      judgment.

     

    "Options"
      means
      rights, options, or warrants to subscribe for, purchase or otherwise acquire
      either Common Stock or Convertible Securities.

     

    "Person"
      means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization and a government or any
      department or agency thereof. 

     

    "Registered
      Holders"
      means,
      collectively, Buyer and each other holder of a Warrant or Warrant Shares, if
      any, reflected as such on the books of the Company.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    "Registrable
      Securities"
      means
      the Warrant Shares.

     

    "Warrant"
      means
      the right to purchase one or more Warrant Shares pursuant to the terms of this
      Warrant, as the same may be transferred, divided or exchanged pursuant to the
      terms hereof.

     

    "Warrant
      Shares"
      means
      shares of the Common Stock issuable upon exercise of the Warrant; provided,
      however, that if there is a change such that the securities issuable upon
      exercise of the Warrant are issued by an entity other than the Company or there
      is a change in the class of securities so issuable, then the term "Warrant
      Shares" shall mean shares of the security issuable upon exercise of the Warrant
      if such security is issuable in shares, or shall mean the equivalent units
      in
      which such security is issuable if such security is not issuable in
      shares.

     

    SECTION
      5.  No
      Voting Rights; Limitations of Liability.
      This
      Warrant shall not entitle the holder hereof to any voting rights or other rights
      as a stockholder of the Company. No provision hereof, in the absence of
      affirmative action by the Registered Holder to purchase Warrant Shares, and
      no
      enumeration herein of the rights or privileges of the Registered Holder shall
      give rise to any liability of such holder for the Exercise Price of Warrant
      Shares acquirable by exercise hereof or as a stockholder of the Company.

     

    SECTION
      6. Warrant
      Transferable.
      Subject
      to compliance with applicable securities laws and the terms of this Section
      6,
      this Warrant and all rights hereunder are transferable, in whole or in part,
      without charge to the Registered Holder upon surrender of this Warrant with
      a
      properly executed Assignment (in the form of Exhibit II
      hereto)
      at the principal office of the Company.

     

    SECTION
      7. Warrant
      Exchangeable for Different Denominations.
      This
      Warrant is exchangeable, upon the surrender hereof by the Registered Holder
      at
      the principal office of the Company, for new Warrants of like tenor representing
      in the aggregate the purchase rights hereunder, and each of such new Warrants
      shall represent such portion of such rights as is designated by the Registered
      Holder at the time of such surrender. The date the Company initially issues
      this
      Warrant shall be deemed to be the "Date of Issuance" hereof regardless of the
      number of times new certificates representing the unexpired and unexercised
      rights formerly represented by this Warrant shall be issued. All Warrants
      representing portions of the rights hereunder are referred to herein as the
      "Warrants." 

     

    SECTION
      8. Replacement.
      Upon
      receipt of evidence reasonably satisfactory to the Company of the ownership
      and
      the loss, theft, destruction or mutilation of any certificate evidencing this
      Warrant, and in the case of any such loss, theft or destruction, upon receipt
      of
      indemnity reasonably satisfactory to the Company, or, in the case of any such
      mutilation upon surrender of such certificate, the Company shall (at the expense
      of the Registered Holder) execute and deliver in lieu of such certificate a
      new
      certificate of like kind representing the same rights represented by such lost,
      stolen, destroyed or mutilated certificate and dated the date of such lost,
      stolen, destroyed or mutilated certificate. 

     

    SECTION
      9. Notices.
      All
      notices, requests, deliveries, consents and other communications provided for
      herein shall be in writing and shall be effective upon delivery in person,
      faxed, or mailed by certified or registered mail, return receipt requested,
      postage pre-paid, addressed as follows:

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    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
      Buyer, to:

     

    Attn:  

    Fax:
       

     

    or,
      in
      any case, at such other address or addresses as shall have been furnished in
      writing to the Company (in the case of a Registered Holder of Warrants) or
      to
      the Registered Holders of Warrants (in the case of the Company) in accordance
      with the provisions of this paragraph.

     

    SECTION
      10. Amendment
      and Waiver.
      Except
      as otherwise provided herein, the provisions of the Warrants may be amended
      and
      the Company may take any action herein prohibited, or omit to perform any act
      herein required to be performed by it, only if the Company has obtained the
      written consent of the Registered Holders of Warrants representing a majority
      of
      the Warrant Shares obtainable upon exercise of the then-outstanding Warrants;
      provided, however, that no such action may change the Exercise Price of the
      Warrants or the number of shares or class of capital stock obtainable upon
      exercise of each Warrant without the written consent of all Registered
      Holders.

     

    SECTION
      11. Descriptive
      Headings; Governing Law. 

     

    (a)  The
      descriptive headings of the several Sections of this Warrant are inserted for
      convenience only and do not constitute a part of this Warrant. 

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (b)  All
      issues and questions concerning the construction, validity, enforcement and
      interpretation of this Agreement shall be governed by, and construed in
      accordance with, the laws of the State of California, without giving effect
      to
      any choice of law or conflict of law rules or provisions (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.

     

    SECTION
      12. Warrant
      Register.
      The
      Company shall maintain at its principal executive office books for the
      registration and the registration of transfer of this Warrant. The Company
      may
      deem and treat the Registered Holder as the absolute owner hereof
      (notwithstanding any notation of ownership or other writing thereon made by
      anyone) for all purposes and shall not be affected by any notice to the
      contrary.

     

    SECTION
      13. Fractions
      of Shares.
      The
      Company may, but shall not be required, to issue a fraction of a Warrant Share
      upon the exercise of this Warrant in whole or in part. As to any fraction of
      a
      share which the Company elects not to issue, the Company shall make a cash
      payment in respect of such fraction in an amount equal to the same fraction
      of
      the market price of a Warrant Share on the date of such exercise (as determined
      by the board of directors in its reasonable discretion).

     

    *
      * * * *

     

    

     

    
      
        
          

           

        

         

      

      
        10

        
          

        

      

      
         

        
        

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be signed and attested
      by its duly authorized officers and to be dated as of the Date of Issuance
      hereof. 

     

    

     

    ITEC
      ENVIRONMENTAL GROUP, INC.

     

    

     

    

     

    By: __________________________________

    Name:
      Gary M. De Laurentiis 

    Title: Chief
      Executive Officer

     

    

     

    

     

    
      
        
           

        

         

      

      
        11

        
          

        

      

      
         

        
        

      

    

    EXHIBIT
      I

     

    EXERCISE
      AGREEMENT

     

    

     

    To: Dated:
      

     

    

     

    The
      undersigned, pursuant to the provisions set forth in the attached Warrant
      (Certificate No. W-15), hereby agrees to subscribe for the purchase of ______
      Warrant Shares covered by such Warrant and makes payment herewith in full
      therefor at the price per share provided by such Warrant. Please issue the
      Warrant Shares in the following names and amounts:

     

    

     

    
      	
               Name

            	 Number of Warrant
              Shares

    

     

     

    

     

    

     

    

     

    

     

    Signature
      ____________________

     

    

     

    Address
      ______________________

     

    

     

    

     

    
      
        
           

        

         

      

      
        12

        
          

        

      

      
         

        
        

      

    

    EXHIBIT
      II

     

    ASSIGNMENT

     

    

     

    FOR
      VALUE
      RECEIVED, _____________________________ hereby sells, assigns and transfers
      all
      of the rights of the undersigned under the attached Warrant (Certificate No.
      W-15) with respect to the number of the Warrant Shares covered thereby set
      forth
      below, unto: 

     

     

     

    
      	 Names of Assignee	 Address	 No. of Shares
	 	 	 
	 Dated:	 Signature
              ___________________________	 
	 	 	 
	 	 Witness
              ____________________________	 
	 	 	 
	 	 	 
	 The Assignee agrees to be bound by
              the terms of the Warrant.	 	 
	 	 	 
	 	 Signature
              ____________________________	 
	 	 	 
	 	 Witness
              _____________________________	 

       

       

    

     

     

    
      
         

      

      
        13LOAN
        AGREEMENT

       

      THIS
        LOAN
        AGREEMENT (this "Agreement"),
        is
        executed as of September ___, 2005, by and between Itec Environmental Group,
        Inc., a Delaware corporation (the "Company"),
        and
        the Lenders whose names appear on the signature page hereto (the "Lenders").

       

      WHEREAS,
        the Company is preparing to conduct a private placement whereby it will offer
        $7,500,000 of senior cumulative debentures and warrants (the "Private
        Placement");

       

      WHEREAS,
        in order to fund the Company’s operations until such Private Placement is
        completed, the Company wishes to borrow $150,000 from the Lenders
        as a
        short term bridge loan; and

       

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

       

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

       

      ARTICLE
        1

      DEFINITIONS

       

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

       

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

       

      “Closing
        Date”
        shall
        mean the date upon which the Loan is made to the Company.

       

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

       

      “Excluded
        Securities”
        shall
        mean (i) securities issued in connection with the Private Placement; (ii)
        securities issued upon conversion of any securities outstanding on the Closing
        Date; (iii) securities issued pursuant to the acquisition of another business
        or
        business segment of any such entity by the Company by merger, purchase of
        substantially all the assets or other reorganization whereby the Company
        will
        own more than fifty percent (50%) of the voting power of such business entity
        or
        business segment of any such entity; (iv) securities issued to employees,
        consultants, officers, directors or advisors of the Company pursuant to any
        stock option, stock purchase or stock bonus plan, agreement or arrangement
        approved by the Board of Directors of the Company; (v) securities issued
        in
        connection with obtaining lease financing, whether issued to Lenders, lessor,
        guarantor or other person and approved by the Board of Directors of the Company;
        (vi) securities issued to leasing companies, landlords and other providers
        of
        goods and services to the Company and approved by the Board of Directors;
        (vii)
        securities issued in connection with any stock split, stock dividend or
        recapitalization of the Company; (viii) securities issued in connection with
        strategic transactions involving the Company and other entities, including
        (A)
        joint ventures, manufacturing, marketing or distribution arrangements or
        (B)
        technology license, transfer or development arrangements; provided that such
        strategic transactions and the issuance of shares therein, have been approved
        by
        the Board of Directors of the Company; and (ix) any right, option or warrant
        to
        acquire any security convertible into the securities pursuant to subsections
        (i)
        through (viii) above.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

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

       

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

       

      ARTICLE
        2

      THE
        LOAN

       

      2.1  Loan.
        According to the terms and subject to the conditions of this Agreement, the
        Lenders shall loan to the Company on the Closing Date in the aggregate amount
        of
        $150,000 (the "Loan").
        The
        Loan shall be evidenced by a promissory note in the form attached hereto
        as
Exhibit
        A
        ("Note"),
        duly
        executed on behalf of the Company and dated as of the Closing Date.

       

      2.2  Interest.
        

       

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

       

      (b)  Default
        Interest.
        Upon
        the occurrence of an Event of Default and for so long as such Event of Default
        continues, Interest shall accrue on the outstanding Loan amount at the rate
        per
        annum equal to the lower of 18% or the maximum rate of interest permissible
        under applicable law at any time (the "Default
        Interest Rate").
        The
        term "Interest"
        shall
        include both the interest rate described in Section 2.3(a) and the Default
        Interest Rate.

       

      2.3  Conversion
        of the Loan.
        The
        Loan may be converted into the common stock of the Company pursuant to the
        provisions of Section 8.7 hereof. 

       

      2.4  Maturity
        Date.
        Unless
        the Loan is earlier accelerated pursuant to the terms hereof or converted
        into
        common stock pursuant to the provisions of Section 8.7 hereof, the Loan and
        all
        accrued Interest thereon shall be due and payable in full on the earlier
        of (a)
        the date that is 120 days following the Closing Date or (b) the closing date
        of
        the Private Placement (the “Maturity
        Date”).
        In
        the event that the Private Placement is not consummated within 120 days after
        the Closing Date, the Lenders may, at the Lenders' option, extend the Maturity
        Date on such terms and conditions as determined by the Lenders in their sole
        discretion.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      ARTICLE
        3

      CONDITIONS
        PRECEDENT TO THE LOAN

       

      3.1  Conditions
        on the Closing Date.
        The
        obligation of the Lenders to make the Loan pursuant to Section 2.1 shall
        be
        subject to the satisfaction, on or before the Closing Date, of the conditions
        set forth in this Section. If the conditions set forth in this Section are
        not
        met on or prior to the Closing Date, the Lenders shall have no obligation
        to
        make the Loan. 

       

      (a)  The
        Company shall have duly executed and delivered to the Lenders the Notes
        representing the Loan.

       

      ARTICLE
        4

      REPRESENTATIONS
        AND WARRANTIES

       

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

       

      4.2  Capitalization.
        All of
        the Company's authorized and outstanding equity securities (including securities
        convertible into equity securities) are identified on Exhibit
        B
        attached
        hereto (the “Company
        Securities”).
        Other
        than as set forth on Exhibit
        B,
        there
        are no outstanding shares of capital stock or any options, warrants or other
        preemptive rights, rights of first refusal or similar rights to purchase
        equity
        securities of the Company. There are no outstanding obligations of the Company
        to repurchase, redeem or otherwise acquire any securities of the Company
        or pay
        any dividend or make any other distribution in respect thereof. Except as
        set
        forth in Section 4.3, the Company owns no securities of any other entity
        and no
        rights to acquire any securities from any other entity. All outstanding Company
        Securities have been duly authorized and validly issued and are fully paid,
        non-assessable and free and clear of all Encumbrances. Upon issuance, the
        Warrant issued to the Lenders pursuant to Section 7.1 will be duly authorized,
        validly issued, fully paid, non-assessable and free and clear of all
        Encumbrances. 

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      4.3  Subsidiaries.
        With
        the exception of the one share of common stock of ITec Acquisitions, Inc.,
        a
        Delaware corporation and wholly-owned subsidiary of the Company, held by
        the
        Company, the Company owns no securities of any other entity, and, except
        as set
        forth in this Section 4.3, there are no outstanding shares of capital stock
        or
        any options, warrants or other preemptive rights, rights of first refusal
        or
        similar rights to purchase equity securities of any other entity. 

       

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

       

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

       

      4.6  Litigation
        and Taxes.
        There
        is no
        litigation or governmental proceeding pending, or to the best knowledge of
        the
        Company after due inquiry, threatened, against the Company. The Company has
        duly
        filed all applicable income or other tax returns and has paid all material
        income or other taxes when due. There is no controversy or objection pending,
        or
        to the best knowledge of the Company after due inquiry, threatened in respect
        of
        any tax returns of the Company.

       

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

       

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

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

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

       

      ARTICLE
        5  

       

      COVENANTS

       

      5.1  Negative
        Covenants of the Company.
        The
        Company covenants and agrees that, from the Closing Date until the Maturity
        Date
        (and, in any event, during such time as any portion of the Loan or any Interest
        thereon is outstanding), without the consent of the Lenders, the Company
        will
        not:

       

      (a)  create,
        incur, assume or suffer to exist any indebtedness that is in any way senior
        or
        superior to this Agreement or the indebtedness represented hereby except
        as set
        forth in Section 3.1(b);

       

      (b)  merge
        or
        consolidate with or into any other corporation or sell or otherwise convey
        25%
        or more of its assets; provided, however, that notwithstanding anything in
        this
        Agreement or the Note to the contrary, the Company shall not be prohibited
        from
        consummating that certain Agreement and Plan of Merger by and among the Company,
        ITec Acquisitions, Inc. and Rose Waste Systems, Inc. (the “Merger”);

       

      (c)  in
        a
        single transaction or series of related transactions, effect a significant
        acquisition of any business or entity (for purposes hereof, a “significant”
        acquisition shall be determined in accordance with Instructions 2, 3 and
        4 or
        Item 2 of Form 8-K of the Securities and Exchange Commission); provided,
        however, that notwithstanding anything in this Agreement or the Note to the
        contrary, the Company shall not be prohibited from consummating the
        Merger;

       

      (d)  engage
        in
        any business other than the business conducted by the Company on the Closing
        Date;

       

      (e)  declare,
        set aside or pay any dividend or other distribution on any of its capital
        stock;

       

      (f)  engage
        in
        any transaction with any Affiliate (as such term is defined in Rule 501(b)
        of
        the Securities Act of 1933, as amended) on terms less favorable to the Company
        than could be obtained from an unrelated party; or

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      (g)  amend
        its
        Certificate of Incorporation or Bylaws in any manner that adversely affects
        the
        rights associated with this Agreement, the Warrant issued to the Lenders
        pursuant to Section 7.1 hereof or the Registrable Securities.

       

      The
        Company will give notice to the Lenders of any default under any provisions
        of
        this Agreement within three business days after the discovery by the Company
        of
        such default. 

       

      5.2  Affirmative
        Covenants of the Company.
        The
        Company covenants and agrees that, from the Closing Date until the Maturity
        Date
        (and, in any event, during such time as any portion of the Loan or any Interest
        thereon is outstanding), the Company shall:

       

      (a)  operate
        its business only in the ordinary course and maintain its properties and
        assets
        in good repair, working order and condition;

       

      (b)  cause
        to
        be done all things reasonably necessary to maintain, preserve and renew its
        corporate existence and all material licenses, authorizations and permits
        necessary to the conduct of its businesses;

       

      (c)  comply
        with all applicable laws, rules and regulations of all governmental authorities,
        the violation of which could reasonably be expected to have a material adverse
        effect on its business, properties or prospects;

       

      (d)  deliver
        to the Lenders within 10 days after the end of each fiscal month and within
        30
        days of the end of each fiscal quarter, unaudited consolidated financial
        statements (including balance sheets, statements of income and loss, statements
        of cash flow and statements of shareholders' equity) all in reasonable detail,
        fairly presenting the financial position and the results of operations of
        the
        Company as of the end of and through such periods, prepared in accordance
        with
        generally accepted accounting principles, consistently applied in the United
        States and consistent with past practice;

       

      (e)  deliver
        to the Lenders the Company's audited annual financial statements and the
        Company's annual budget, and allow the Lenders reasonable access during normal
        business hours to visit the Company and inspect the financial records of
        the
        Company; and

       

      (f)  provide
        the Lenders with at least 10 days' written notice of any meeting of the Board
        of
        Directors of the Company and permit the Lenders to designate an individual
        to
        attend such meeting, including any adjournment thereof, as an observer. In
        addition, the Lenders' designees shall receive all written material disseminated
        to the Board of Directors in advance, during or following any meeting, whether
        or not the designee was in attendance. The Lenders' designees shall receive
        the
        same compensation as is paid to the members of the Board of Directors in
        connection with such designee's attendance of meetings of the Board of
        Directors.

       

      5.3  Additional
        Covenant Regarding Registration Statements on Form S-8.
        During
        the period from the Closing Date until the date that is 30 days following
        the
        closing of the Private Placement, the Company shall not issue any stock options
        or warrants that are subject to or covered by the Company’s registration
        statements on Form S-8 on file with the Securities and Exchange
        Commission.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      ARTICLE
        6

      DEFAULT

       

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

       

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

       

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

       

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

       

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

       

      ARTICLE
        7

      ISSUANCE
        OF STOCK

       

      7.1 Issuance
        of Warrant.
        Unless
        the Loan is converted into common stock pursuant to the provisions of Section
        8.7 hereof, the Company shall issue to the Lender on a pro-rata basis warrant
        to
        purchase in the aggregate, the Company shall issue to the Lenders on a pro-rate
        basis warrant to purchase in the aggregate 150,000 shares of common stock
        of the
        Company in the form attached hereto as Exhibit
        C
        (the
“Warrant”).
        The
        Warrant shall be immediately exercisable by the Lenders (or their assigns)
        at an
        exercise price of $.13 per share. The Warrant shall be exercisable for a
        period
        of ten years following the Effective Date.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      

       

      7.2 Registration
        of Registrable Securities. 

       

      (a) The
        Company shall prepare and, as soon as practicable, but in no event later
        than 75
        days following the closing date of the Private Placement (the “Filing
        Deadline”),
        file
        with the Securities and Exchange Commission (the “SEC”)
        a
        registration statement on Form SB-2 covering the resale of all shares of
        common
        stock underlying the Note (the “Note
        Shares”);
        provided,
        however;
        that in
        the event the Loan is not converted prior to the Maturity Date (the “Note
        Repayment”), the registration statement on Form SB-2 shall cover instead the
        shares of common stock underlying the Warrant (the “Warrant
        Shares”)
        (the
        shares of common stock required to be registered pursuant to this Section
        7.2(a), the “Registrable
        Securities”).
        In
        the event that Form SB-2 is unavailable for such a registration, the
        Company
        shall
        register the resale of the Registrable Securities on another appropriate
        form
        reasonably acceptable to the holders of at least a majority of the Registrable
        Securities and undertake to register the Registrable Securities on Form SB-2
        as
        soon as such form is available, provided that the Company
        shall
        maintain the effectiveness of the Registration Statement then in effect until
        such time as a Registration Statement on Form SB-2 covering the Registrable
        Securities has been declared effective by the SEC.
        The
        Company shall use its reasonable best efforts to have such registration
        statement declared effective by the SEC as soon as practicable, but in no
        event
        later than the date which is 180 days following the closing date of the Private
        Placement (the “Effectiveness
        Deadline”).

       

      (b) In
        the
        event the registration statement required to be filed with the SEC pursuant
        to
        Section 7.2(a) is not filed with the SEC by the Filing Deadline, (a
        "Filing
        Failure"),
        then,
        as partial relief for the damages to any holder by reason of any such delay
        in
        or reduction of its ability to sell the Registrable Securities (which remedy
        shall not be exclusive of any other remedies available at law or in equity),
        the
        Company shall pay to Lenders an amount in stock equal to one and one-half
        percent (1.5%) of the Loan on the following dates the day of a Filing Failure
        and on every thirtieth day (pro rated for periods totaling less than thirty
        days) thereafter until such Filing Failure is cured. The payments to which
        the
        Lenders shall be entitled pursuant to this Section 7.2(b) are referred to
        herein
        as "Filing
        Failure Delay Payments."
        Filing
        Failure Delay Payments shall be paid on the earlier of (I) the last day of
        the
        calendar month during which such Filing Failure Delay Payments are incurred
        and
        (II) the third Business Day after the event or failure giving rise to the
        Filing
        Failure Delay Payments is cured. In the event the Company fails to make Filing
        Failure Delay Payments in a timely manner, such Registration Delay Payments
        shall bear interest at the rate of 1.5% per month (prorated for partial months)
        until paid in full.

       

      (c) All
        expenses incident to the filing of the registration statement required by
        Section 7.2, including without limitation all registration and filing fees,
        fees
        and expenses of compliance with securities or blue sky laws, printing expenses,
        messenger and delivery expenses, and fees and disbursements of counsel for
        the
        Company and all independent certified public accountants, underwriters
        (excluding discounts and commissions) and other professionals retained by
        the
        Company will be borne by the Company. In no event shall the Company be obligated
        to pay any discounts or commissions with respect to the shares sold by any
        holder of Registrable Securities. In connection with any registration statement,
        the Company shall reimburse the holders of Registrable Securities covered
        by
        such registration for the reasonable fees and disbursements of one counsel
        chosen by the holders of a majority of the Registrable Securities initially
        requesting such registration. 

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      ARTICLE
        8

      MISCELLANEOUS

       

      8.1  Successors
        and Assigns; Third Party Beneficiary.
        Subject
        to the exceptions specifically set forth in this Agreement, the terms and
        conditions of this Agreement shall inure to the benefit of and be binding
        upon
        the respective executors, administrators, heirs, successors and permitted
        assigns of the parties. This Agreement may not be assigned (whether by operation
        of law or otherwise) by the Company without the prior written consent of
        the
        Lenders. This Agreement may be assigned by the Lenders without the consent
        of
        the Company.

       

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

       

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

       

      

      if
        to
        the Company, to:

      

      ITec
        Environmental Group, Inc.

      5300
        Claus Road, Box 760

      Riverbank,
        CA 95367

      Attn: Gary
        M.
        De Laurentiis

      Fax: (209)
        881-3529

      

      with
        a
        copy to:

      

      The
        Otto
        Law Group, PLLC

      601
        Union
        Street, Suite 4500

      Seattle,
        WA 98101

      Attn:
         David
        M.
        Otto

      Fax: (206)
        262-9513

      

      if
        to
        the Lenders, to:

      

      The
        address set forth 

      on
        the
        signature page hereto 

      

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

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

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

       

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

       

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

       

      8.7  Conversion.
        In the
        event the Lenders elects to convert the Note, all principal and interest
        due
        pursuant to the Note shall convert into common stock of the Company at a
        price
        per share of the lesser of seventy five percent (75%) of (i) $.13, or (ii)
        the
price
        of
        the common stock of the Company on the Over The Counter Bulletin Board on
        the
        day the Lenders elect to convert.

       

      [the
        remainder of this page intentionally left blank]

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      

       

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

      

      

      

      ITEC
        ENVIRONMENTAL GROUP, INC.

      

      

      By: ________________________ 

               Gary
        M.
        De Laurentiis 

               Chief
        Executive Officer 

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

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

      

      

      

      

      

      By: ________________________ 

              Name: James
        W.
        Rose

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      Schedule
        of Lenders

      

      
        	
                Name
                  of Lender

              	
                Amount
                  of Loan

              	
                Contact
                  Information

              	
                Amount
                  of Warrants

              	
                Legal
                  Representative

              
	 	 	
                Address:

                 

                 

                Fax:

              	 	
                Address:

                 

                 

                Fax:

              
	 	 	
                Address:

                 

                 

                Fax:

              	 	
                Address:

                 

                 

                Fax:

              
	 	 	
                Address:

                 

                 

                Fax:

              	 	
                Address:

                 

                 

                Fax:

              
	 	 	
                Address:

                 

                 

                Fax:

              	 	
                Address:

                 

                 

                Fax:

              

      

      

              

      

      

      

      
        
           

        

        
          13

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