EMPLOYMENT AGREEMENT

This Employment Agreement dated as of October 6, 2006 (“ Agreement ”) is made by and between Itec Environmental Group, Inc ., a corporation duly organized and existing under the laws of the State of Delaware (the “ Company ”), and Mario Sandoval (“ Executive ”) (referred to collectively herein as the “ Parties ”).

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

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

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

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respect to the employment of Executive are deemed by the parties to be either canceled and void and/or are deemed to be superseded by this final written Agreement.

2.1.   Term of Employment . The employment of Executive under this Agreement shall be deemed effective on or before October 19, 2006 (the “ Effective Date ”). Executive’s employment shall be deemed to have commenced on or before November 6, 2006 and shall continue until terminated in accordance with Section 5 hereof (the “ Employment Term ”). This Agreement shall be deemed definitive upon the Effective Date.

2.2.  Position and Primary Responsibility .

(a)   The Executive shall serve as Chief Operating Officer and Executive Vice President of Operations.

(b)   In connection with the employment of Executive, Company agrees that, during the Employment Term, neither the Restated Certificate of Incorporation, nor the Bylaws, of the Company shall at any time be amended in a manner inconsistent with the foregoing or the additional provisions of this Agreement.

2.3.   Exclusivity . Executive agrees to devote his full time, attention, energies, solely and exclusively in the performance of his duties under the terms of this Agreement. However, the expenditure of reasonable amounts of time for educational, charitable, or professional

activities shall not be deemed a breach of this Agreement if those activities do not materially interfere with the services required under this Agreement, and shall not require the prior written consent of the Company’s Board of Directors. This Agreement shall not be interpreted to prohibit Executive from making passive personal investments or conducting private business affairs, or serving on the boards of directors of other companies or other entities, if those activities do not materially interfere with the services required under this Agreement and do not violate Sections 4, 8 and 10 of this Agreement.

3.1.   Base Salary . In consideration for the services rendered to the Company hereunder by Executive, the Company shall, during his employment, pay Executive a salary at the annual rate of Three Hundred Thousand Dollars ($300,000.00) (as may be adjusted pursuant to this Section 3.1 and/or Section 3.5, the “ Base Salary ”), less statutory deductions and withholdings, payable to Executive on a bi-monthly basis. In the event that the Company hires an executive, for any position other than the Chief Executive Officer position, with an annual base salary that exceeds the Base Salary (the “ New Executive Salary ”), then Executive’s Base Salary shall be increased to a Base Salary equal to a salary no less than five percent (5%) more than the New Executive Salary. In no event shall Executive’s Base Salary be (i) decreased pursuant to the preceding sentence; or (ii) increased to a total dollar amount greater than the Chief Executive Officer’s base salary.

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

3.3.   Reimbursement of Expenses . During the Employment Term, the Company shall reimburse Executive for all reasonable and necessary expenses incurred by Executive while performing his duties under this Agreement in accordance with the Company’s customary practices for its executive employees, subject to provision by Executive of documentation reasonably satisfactory to the Board of Directors.

3.4.   Cash Bonuses . Executive shall be eligible for a bonus entitlement during each calendar year (or portion thereof) of the Employment Term of no less than fifty percent (50%) but up to one hundred percent (100%) of his Base Salary for such year (or portion thereof). Within thirty (30) days of the Effective Date, the Company and Executive shall concur, within their respective reasonable discretion, on the criteria and procedures applicable to establishment of Executive’s entitlement to such amount for the then current calendar year; and, thereafter, within thirty (30) days prior to the commencement of each calendar year of the Employment Term, the Company and Executive shall concur, within their respective reasonable discretion, on the criteria and procedures applicable to establishment of Executive’s entitlement to such amount for the ensuing calendar year. Such criteria shall include, without limitation: (i) specified

revenue targets for the Company during the applicable period; (ii) specified EBITDA targets for the Company during the applicable period (as defined pursuant to consensus between the Company and Executive); and (iii) such additional specified targets as the Company and Executive mutually determine. Any such cash bonuses shall be paid by the Company no later than March 15 ^th of the taxable year commencing after the year in which the Executive’s right to such payment becomes vested.

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

(a)   The Executive shall be entitled to a combination of (x) restricted grants of common stock, $0.001 par value (“ Common Stock ”), of the Company and (y) grants of “incentive stock options” (as defined under Section 422 of the Internal Revenue Code of 1986, as amended (the “ Code ”)), exercisable over a period of ten (10) years after grant with respect to shares of Common Stock, in the aggregate covering five percent (5%) of the Common Stock Equivalents (as defined below) (the “ Executive Shares ”) (such number of shares appropriately adjusted for any subsequent stock dividends, stock splits, combinations, reclassifications and the like), as required by this Section 3.6 and subject to adjustment as set forth in Section 3.6(d) below on the first anniversary of the Effective Date (the “ True Up Date ”). For purposes hereof, “ Common Stock Equivalents ” shall mean the number of shares of Common Stock then outstanding, plus the total maximum aggregate number of shares that are issuable pursuant to any rights to subscribe for or purchase, and any options or warrants for the purchase of, shares of Common Stock, plus the total maximum aggregate number of shares that are issuable pursuant to any stock or securities convertible into or exchangeable for shares of Common Stock and any options or warrants therefor (all of the foregoing calculated after giving effect to the operation of any and all provisions designed to protect against dilution contained in securities theretofore issued and other obligations theretofore entered into by the Company directly or indirectly triggered as a result of consummation of the transactions contemplated hereunder or any other event or circumstance).

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

(x)   a number of shares of Common Stock (the “ Restricted Shares ”), as determined by Executive with an aggregate Appraised Value of up to

___________($___________), such shares to be subject to repurchase by the Company at a purchase price per share equal to the Taxable Amount Per Share (as defined below). “ Taxable Amount Per Share ” shall mean the quotient obtained by dividing (i) the product of (1) the aggregate amount of income tax that Executive realizes pursuant to applicable federal, state and local tax laws as a result of receipt of the Restricted Shares multiplied by (2) Executive¹s marginal tax rate with respect to such income under applicable federal, state and local tax laws, divided by (ii) the total number of Restricted Shares issued to Executive (as appropriately adjusted to reflect stock splits, stock dividends and the like);

(y)   if the Restricted Shares do not equal five percent (5%) of the Common Stock Equivalents outstanding on the Original Issue Date, then the Company shall issue incentive stock options (the “ Initial Options ”) exercisable, over a period of ten (10) years after grant at a price per share equal to the Appraised Value per share of Common Stock on the date of grant, determined by such appraiser as aforesaid, exercisable for that number of shares of Common Stock (the “ Initial Option Shares ”) equal to the difference obtained by subtracting (i) the number of Restricted Shares from (ii) that number of shares equal to five percent (5%) of the Common Stock Equivalents outstanding on the Original Issue Date. The Initial Options shall also be subject to such additional terms and conditions (without, however, any additional conditions to exercisability as aforesaid) as shall be mutually acceptable to the Company and Executive, in their respective reasonable discretion; and

(z)   the Restricted Shares and Initial Options (if any) shall vest on the following schedule (i) the number of Restricted Shares equal to two and one half percent (2.5%) of the total number of Common Stock Equivalents outstanding on the Original Issue Date shall vest immediately upon issuance (the “ Initially Vested Shares ”); (ii) the number of Restricted Shares (or all of the remaining unvested Restricted Shares that Executive then holds if such number is less than one and one quarter percent (1.25%) of the total number of Common Stock Equivalents outstanding on such date) plus Initial Options (if the remaining unvested Restricted Shares that Executive then holds is less than one and one quarter percent (1.25%) of the total number of Common Stock Equivalents outstanding on such date), in the aggregate, equaling one and one quarter percent (1.25%) of the total number of Common Stock Equivalents outstanding on and as of the True Up Date shall vest on such date and (iii) any remaining unvested Restricted Shares and Initial Options as of the True Up Date shall vest on the second anniversary of the Effective Date (provided that all of the unvested Restricted Shares and Initial Options shall become fully vested upon a “Change-of-Control” (as defined below).

(c)   The Restricted Shares other than the Initially Vested Shares shall be subject to an irrevocable proxy exercisable by the Board of Directors of the Company (with Executive abstaining) until the True Up Date.

(d)   Subject to Section 3.6(b) above, on the True Up Date the total number of Executive Shares shall be adjusted pursuant to this Section 3.6(d) (the “ True Up ”) so that after giving effect to the True Up the Executive Shares shall represent five percent (5%) of the Common Stock Equivalents outstanding on the True Up Date.

(x)   In the event that Executive is entitled to receive additional Executive Shares pursuant to the True Up, the Company shall grant Executive additional incentive stock options (the “ Additional Options ”) exercisable, over a period of ten (10) years after grant at a price per share equal to the fair market value per share of Common Stock on the date of grant determined by the appraiser as aforesaid, with respect to a number of shares of Common Stock (the “ Additional Option Shares ”) equal to the difference, if any, obtained by subtracting (i) the sum of the number of Restricted Shares plus the Initial Option Shares from (ii) a number of shares that equals five percent (5%) of the Common Stock Equivalents outstanding on the True Up Date. The Additional Options shall vest and become exercisable on a monthly basis such that the Additional Options shall be fully vested on the second anniversary of the Effective Date (provided that all such options shall become immediately exercisable upon a Change-of Control), such options to be subject to such additional terms and conditions as heretofore determined with respect to the Initial Options, applied mutatis mutandis.

(y)   In the event that number of Executive Shares are to be reduced pursuant to the True Up, Executive shall forfeit Initial Options and/or Restricted Shares representing the right to purchase the difference obtained from subtracting (i) a number of shares that equals five percent (5%) of the Common Stock Equivalents outstanding on the True Up Date (ii) the sum of the number of Restricted Shares plus the Initial Option Shares. In the event Executive must forfeit Initial Options or Restricted Shares pursuant to clause (c) or (d) of this Section 3.6, Executive shall first forfeit unexercised Initial Options (pro rata across vested and unvested Initial Options), then, to the extent additional shares must be forfeited by the Executive to reach the applicable percentage, the Company shall have the right to repurchase from Executive any shares issued upon exercise of the Initial Options at a purchase price equal to the exercise price paid by Executive or Restricted Shares at the Taxable Amount Per Share, as applicable, and the Executive shall forfeit, waive or forego any claim of right, title or interest to such shares.

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

(f)   On or prior to the first anniversary of the date hereof (or as soon as reasonably practicable following a termination for Good Reason or Without Cause), the Company shall, at its expense, register with the Securities and Exchange Commission pursuant to one or more effective registration statements under the Securities Act of 1933, as amended, in the manner prescribed by Executive, any and all shares now owned or hereafter acquired by Executive (the “ Registrable Securities ”), including all Restricted Shares, Initial Option Shares, Additional Option Shares, and shall maintain the effectiveness and currency of each such registration statement, including any related prospectus until the resale of such shares by Executive or any successor thereof; and shall take all such further action (including, without limitation, any registration of such shares under applicable state securities laws and the listing of

such shares on any and all trading markets or stock exchanges as the Company¹s Common Shares may trade from time to time) as shall permit the resale of such shares, or any portion thereof, as aforesaid. The Company shall from time to time furnish to Executive sufficient copies of any such prospectus, and any supplements thereto, so as to permit the resale of such shares, or any portion thereof, in the manner prescribed by Executive. In addition, prior to the grant of the Initial Options, the Company shall enter into an additional agreement with Executive extending to Executive incidental registration rights covering the resale of the Registrable Securities on terms no less favorable to Executive than have then been extended to any other stockholder of the Company. The Company shall pay the costs and expenses incurred by Executive in connection with any such registration, including the reasonable legal fees and expenses that Executive may incur in connection therewith. The obligations of the Company pursuant to this Section 3.6(f) are referred to herein as the “ Registration Obligations .”(g) On or prior to the True Up Date, the Company and Executive shall have concurred, in their respective reasonable discretion, on the terms and conditions of a long-term equity incentive award program pursuant to which Executive and the other members of executive management of the Company shall be entitled to grants of shares of Common Stock based upon achievement of specified performance objectives.

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

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

3.7   Relocation Expenses .   In connection with the employment of Executive, the Company shall provide relocation expenses in the amount of One Hundred Thousand Dollars $100,000 (the “ Relocation Expenses ”) in connection with Executive’s move to a new permanent residence. The Relocation Expenses shall be paid to Executive on June ___, 2007. Executive shall only receive Relocation Expenses upon completion of Executive’s relocation to a new permanent residence.

(a)   Executive may, at his discretion, elect to convert, via written notice to the Company within thirty (30) days of the Effective Date, the full amount of the Relocation Expenses into six (6) Units, as defined in and pursuant to the terms of the Company's 2006 Private Placement Memorandum (attached hereto as Exhibit B ). Each Unit shall consist of (a) a ten percent (10%) convertible debenture in the initial principal amount of Twenty-Five Thousand Dollars ($25,000) and (b) a warrant to purchase seventy five thousand (75,000) shares of restricted common stock of the Company at an exercise price of Six Cents ($0.06) per share.

(b)   In the event that Executive is terminated pursuant to Section 5 prior to the first anniversary of the Effective Date, the Relocation Expenses or the conversion of the Relocation Expenses shall be subject to forfeiture.

3.8   Travel Expenses .   In connection with the employment of Executive, the Company shall provide travel expenses in the amount of Two Thousand Dollars ($2,000) (the “ Travel Expenses ”) every month for Executive’s costs of traveling from Denver, Colorado to the Company’s offices in Riverbank, California through the duration of the Employment Term.

3.9   Temporary Housing.   The Company will employ its best efforts to locate and procure temporary housing (the “ Temporary Housing ”), satisfactory to both the Company and the Executive, at no cost to the Executive for the exclusive use of the Executive while working at the Company’s Riverbank, California offices. The Temporary Housing will be made available to the Executive no later than thirty (30) days beyond the effective date of the Agreement and will be provided through the duration of the Employment Term.

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

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

5.1.   Death or Disability . Immediately upon the death of Executive or after six (6) months of Executive’s inability to perform the essential functions of his duties, with or without reasonable accommodation (defined under applicable law), due to a mental or physical illness or incapacity (“ Disability ”) (termination pursuant to this Section 5.1 being referred to herein as termination for “ Death or Disability ”). Upon the Death of Executive, Executive’s heirs or assigns shall be entitled to (i) fifty percent (50%) of the Base Salary and (ii) on pro-rated amount of any and all outstanding Executive Shares that Executive is entitled to receive from the Effective Date to the date of Death (the “ Earnings Entitlement ”). In the event Executive commits suicide, Executive’s heirs or assigns shall not be entitled to the Earnings Entitlement.

5.2.   Termination for Good Reason . Immediately following notice of termination for “ Good Reason ” (as defined below), specifying such Good Reason, given by Executive (termination pursuant to this Section 5.2 being referred to as termination for “ Good Reason ”). As used herein, “Good Reason” means (i) any reduction in Base Salary or other benefits specified hereunder; (ii) a substantial diminution or dilution of the responsibilities, functions and duties attached to the position with the Company held by Executive; (iii) the Company fails to provide any of the compensation or other benefits required hereunder; (iv) any representation made by the Company herein is materially untrue or the Company otherwise is in material breach of this Agreement; or (v) the Company and Executive fail to effectuate the matters contemplated by Sections 3.4, 3.6 or 4 within the respective periods contemplated thereunder.

5.3.   Voluntary Termination . Thirty (30) days following Executive’s written notice to the Company of voluntary termination of employment other than for Good Reason; provided, however, that the Company may suspend, with no reduction in pay or benefits (including, without limitation, bonuses, options and vesting), Executive from his duties as set forth herein (including, without limitation, Executive’s position as a representative and agent of the Company) until the 30 ^th day following Notice of Voluntary termination) (termination pursuant to this Section 5.3 being referred to herein as “ Voluntary ” termination).

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

5.5.   Termination Without Cause . Notwithstanding any other provisions contained herein, the Company may terminate Executive’s employment thirty (30) days following notice of termination without Cause given by the Company; provided, however, that during any such thirty (30) day notice period, the Company may suspend, with no reduction in pay or benefits (including, without limitation, bonuses, options and vesting), Executive from his duties as set forth herein (including, without limitation, Executive’s position as a representative and agent of the Company) (termination pursuant to this Section 5.5 being referred to herein as termination “ Without Cause ”).

5.6.   Other Remedies . Termination pursuant to Section 5.2 above shall be in addition to and without prejudice to any other right or remedy to which Executive may be entitled at law, in equity, or under this Agreement. Termination pursuant to Section 5.4 above shall be in addition to and without prejudice to any other right or remedy to which the Company may be entitled at law, in equity, or under this Agreement.

5.7.   Salary Continuation During Disability . Notwithstanding Section 5.1 above, if Executive suffers any physical or mental disability that would prevent the performance of his essential job duties, the Company agrees to pay Executive one hundred percent (100%) of Executive’s salary and other benefits (including, without limitation, bonuses, options and vesting), payable in the same manner as provided for the payment of salary and benefits

(including, without limitation, bonuses, options and vesting) herein, for the duration of the disability, or six (6) months, whichever is less.

6.1.   Voluntary Termination , Termination for Cause, Termination for Death or Disability . In the case of a termination of Executi