January 10, 2006 Mr. Gary De Laurentiis Chief Executive Officer Itec Environmental Group, Inc. Riverbank, CA 95367 Dear Mr. De Laurentiis:
Exhibit
10.44
January
10, 2006
▇▇.
▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇
Chief
Executive Officer
Itec
Environmental Group, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
Riverbank,
CA 95367
Dear
Mr.
▇▇ ▇▇▇▇▇▇▇▇▇▇:
We
are
pleased to confirm the understanding and agreement under which KW Securities,
Inc. (“KWS”)
is
engaged by Itec Environmental Group, Inc. (the “Company”)
to act
as placement agent in connection with the private placement of the Company’s
securities (the “Agreement”).
1. Engagement.
The
Company hereby engages KWS as its non-exclusive placement agent in connection
with the placement, on a “best efforts” basis, of equity or equity-related
securities of the Company (the “Securities”),
on
terms
mutually acceptable to KWS and the Company (the “Proposed
Offering”).
KWS
hereby accepts the engagement as placement agent for the Proposed Offering
subject to, among other things, the satisfactory completion of KWS’s due
diligence investigation and the non-occurrence of any material adverse change
in
the business, prospects or financial condition of the Company, and on the terms
more fully set forth in this Agreement. This Agreement shall not give rise
to
any commitment by KWS or any other entity to purchase any securities of the
Company. KWS provides no guarantee that the Proposed Offering or any other
financing transaction will ever be completed or, if completed, as to the terms
of the Proposed Offering or such other transaction. KWS shall serve as placement
agent for a term of eighteen (18) months (the “Placement
Period”).
2. Services.
As
placement agent for the Proposed Offering, KWS shall, to the extent required
or
appropriate in connection with the Proposed Offering,
(a) advise
the Company on the structure and the terms of the Proposed
Offering;
(b) assist
the Company in preparing the investment documents and/or private placement
memorandum used in the Proposed Offering;
1
(c) contact
potential investors who might participate in the Proposed Offering, coordinate
follow-up activities with potential investors, and in general supervise the
investment consideration and placement process; and
(d) assist
the Company in negotiating the terms of the Proposed Offering.
3. Compensation
and Expenses.
(a) For
acting as placement agent in connection with the Proposed Offering, KWS shall
be
entitled to receive, and the Company shall pay to KWS (or its designee(s)),
the
following (collectively, the “Compensation”):
(i) a
warrant
(the “Placement
Warrant”)
to
purchase that number of shares of common stock of the Company equal to the
greater of (i) the aggregate of three (3) shares of common stock for each One
Dollar ($1.00) raised in the Proposed Offering, a form of the Placement Warrant
is attached hereto as Exhibit
A.
A
Placement Warrant shall be issued at the closing based on the number of
Securities sold at such closing. The terms of the Placement Warrant shall be
set
forth in the form of Placement Warrant provided to the Company prior to the
first closing of the Proposed Offering (but, at a minimum, the Placement Warrant
shall be exercisable from time to time, in whole or in part, during the ten
(10)
year period commencing on the initial closing of the Proposed Offering, and
shall contain registration rights and anti-dilution provisions satisfactory
to
KWS and its counsel).
(b) Whether
or not the Proposed Offering is consummated, the Company shall reimburse KWS
for
all of its out-of-pocket costs and expenses incurred in connection with its
services hereunder, including, but not limited to, fees and expenses of its
legal counsel and other professional advisors, travel expenses, data gathering
and due diligence expenses, document reproduction and shipping expenses, the
expenses related to meals or other expenses of meeting with potential investors
or others, tombstone preparation expenses, and other placement related expenses.
The foregoing costs and expenses will be paid by the Company to KWS promptly
upon receipt by the Company of each invoice from KWS relating thereto setting
forth in reasonable detail the items requiring reimbursement or payment, along
with reasonable proof of the same. All expenses shall be pre-approved by the
Company.
4. Board
Representation.
Upon
the date of this Agreement, KWS shall have the right to appoint a designee
to
the Company’s Board of Directors (the “Board”).
This
right shall terminate on the third anniversary of the date of this Agreement.
The Company shall nominate KWS’s designee for election to the Board at any and
all times that the shareholders of the Company take action (whether by meeting
or written consent) to elect members of the Board and shall use best efforts
to
secure the designee’s election to the Board.
5. Cooperation.
The
Company shall cooperate with KWS in connection with the performance of its
due
diligence related to its engagement hereunder and shall make available to KWS
the Company’s management, employees, directors, accountants, counsel and other
outside advisors, consultants, service providers, vendors and customers and
such
documents, books, records, studies and other information as it shall reasonably
request in this respect. KWS’s willingness to proceed with the proposed
transaction is subject to satisfactory results of its on-going due
diligence.
2
6. Negotiation;
PPM.
The
Proposed Offering shall commence immediately upon the Company’s finalization, in
conjunction with KWS, of a private placement memorandum (the “PPM”),
subscription documents and other necessary materials. Such PPM and related
documentation (collectively, the “Offering
Materials”)
initially shall be drafted by the Company and include all customary and
necessary representations, warranties, disclosures and other Company information
and shall include audited
financial statements of the Company. The Company shall represent and warrant
in
writing to KWS that all such representations and warranties are true, complete
and correct, and that the Offering Materials do not contain any untrue statement
of a material fact or omit to state a material fact necessary to be stated
therein in order to make the information presented not misleading. The Company
shall be responsible for amending or supplementing the Offering Materials as
necessary to correct any untrue statement of a material fact or any omission
to
state a material fact necessary to make the statements therein not misleading.
The Company will not use any Offering Materials to which KWS reasonably objects.
7. Offering
to Prospective Investors; Compliance with Securities Laws.
The
Company reserves the right to reject an investment from any prospective
investor. The Company and KWS each agrees to conduct the Proposed Offering
in a
manner intended to qualify for the exemption from the registration requirements
of Section 5 of the Securities Act of 1933, as amended (the “Act”)
provided by Section 4(2) of the Act and/or Regulation D promulgated thereunder.
The Company agrees that the Proposed Offering is to be limited to “Accredited
Investors” as such defined is defined in Regulation D; therefore the Company and
KWS each agrees to limit offers to sell, and solicitations of offers to buy,
Securities to persons reasonably believed by it to be “Accredited Investors” as
so defined. The Company and KWS each agrees to conduct the Proposed Offering
in
a manner intended to comply with the registration or qualification requirements,
or available exemptions therefrom, of applicable state “bluesky” laws and
applicable securities laws of other relevant jurisdictions. KWS will be
responsible, at the expense of the Company, for registering or qualifying the
offer and sale of the Securities under applicable state “bluesky” laws, or
securing exemptions from such registration or qualification requirements, and
the Company will cooperate with KWS in connection therewith. The Company will
not, for a period of six months following the last closing date of the Proposed
Offering, offer for sale or sell any securities unless, in the opinion of
counsel to the Company, reviewed by counsel to KWS, who advise KWS that it
may
rely thereupon, such offering will not cause the issuance of the Securities
in
the Proposed Offering to be subject to the registration or qualification
requirements of applicable federal securities laws, state “bluesky” laws or the
securities laws of any other jurisdiction (by integration with any other
offering of securities or otherwise).
8. Indemnification.
The
Company shall indemnify and hold harmless KWS in accordance with KWS’s standard
indemnification agreement (a copy of which is attached hereto and is incorporate
by reference herein), which shall be executed by the Company concurrently
herewith.
3
9. No
Brokers.
The
Company represents and warrants to KWS that there are no brokers,
representatives or other persons who have an interest in the compensation
payable to KWS pursuant to the terms of this Agreement.
10. Successors
and Assigns; Binding Effect.
The
benefits of this Agreement shall, together with the separate indemnity
agreement, inure to the benefit of the respective successors and assigns of
the
parties hereto and of the indemnified parties hereunder and their successors
and
assigns and representatives, and the obligations and liabilities assumed in
this
Agreement by the parties hereto shall be binding upon their respective
successors and assigns. Neither the Company on the one hand, nor KWS on the
other hand, shall assign its interest in this Agreement without the prior
written consent of the other party, which consent shall not be unreasonably
withheld. The Company acknowledges that in rendering its services hereunder,
KWS
will be using and relying on the information provided to it by the Company
and
does not assume responsibility for the accuracy or completeness of any such
information.
11. Confidentiality.
(a) Except
as
contemplated by the terms of this Agreement or as may be required by law or
order of applicable regulatory authority (including the National Association
of
Securities Dealers Regulation, Inc.), KWS shall keep confidential and shall
not
disclose to any third party any confidential or proprietary information of
the
Company made available to it in connection with its engagement hereunder. Any
information that is confidential or proprietary shall be identified as such
to
KWS by the Company, either in writing or orally (and then confirmed as such
in
writing), at the time such information is disclosed by the Company to KWS.
KWS
will use such confidential information only in connection with its engagement
hereunder; provided, however, such confidentiality obligation shall not extend
to (i) any information available to or in the possession of KWS prior to the
date of its disclosure to KWS by or on behalf of the Company, (ii) any
information generally available to the public, or (iii) any information which
becomes available to KWS on a non-confidential basis from a third party who
is
not bound by a confidentiality obligation to the Company; and provided, further,
such confidential information may be disclosed to KWS’s officers, directors,
employees, consultants, agents, advisors or representatives in connection with
the engagement hereunder provided that such persons are made aware of the
obligations under this Section 11.
(b) Any
written or oral advice, analyses or reports provided by KWS to the Company
in
connection with its engagement hereunder are exclusively for the information
of
the Board of Directors and management of the Company (including the Company’s
attorneys, accountants and other professional advisors) and may not be disclosed
(in any form whatsoever) to or relied upon by any other party without the
express prior written consent of KWS. Any description of or reference to KWS
in
the Offering Materials must be approved by KWS in writing prior to use, which
approval will not be unreasonably withheld.
12. Closing
Matters.
The
Company will, at the closing of the Proposed Offering, provide KWS with a copy
of the same favorable opinion of its counsel as is furnished to the investors
participating in such closing (if such an opinion is provided as part of the
transaction), together with a letter from such counsel that its opinion to
investors may be relied upon by KWS as if addressed to it. In addition, at
the
closing, the Company will provide KWS and participating investors with
certificates of officers of the Company and such other representatives,
warranties, undertakings, and other documents as KWS or its counsel may
reasonably request, in form and substance satisfactory to KWS and its counsel.
The essence of this requirement will be to confirm compliance with securities
laws, to confirm information provided to investors, and to confirm that the
terms of the Proposed Offering to which investors subscribed remain as presented
to them.
4
13. Miscellaneous.
(a) This
Agreement may not be amended or modified except in writing signed by the
parties.
(b) This
Agreement and the transactions contemplated hereby shall be governed as to
validity, interpretation, construction, effect and in all other respects by
the
internal laws of the State of California. Each of KWS and the Company (i) agrees
that any legal suit, action or proceeding arising out of or relating to this
Agreement and/or the transactions contemplated hereby, including without
limitation, any such legal suit, action or proceeding against any present or
former officer, partner, employee or agent of KWS, each of whom is intended
to
be a third-party beneficiary of the agreement contained in this Section, shall
be instituted exclusively in California Supreme Court or in the United States
District Court for the Southern District of California, (ii) waives any
objection which it may have or hereafter to the venue of any such suit, action
or proceeding, and (iii) irrevocably consents to the jurisdiction of the
California Supreme Court, and the United States District Court for the Southern
District of California in any such suit, action or proceeding. Each of KWS
and
the Company further agrees to accept and acknowledge service of any and all
process which may be served in any such suit, action or proceeding in the
California Supreme Court or in the United States District Court for the Southern
District of California, and agrees that (x) service of process upon the Company
mailed by certified mail to the Company’s address on the first page of this
Agreement shall be deemed in every respect effective service of process upon
the
Company in any such suit, action or proceeding, and (y) service of process
upon
KWS mailed by certified mail to ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇ and shall be deemed in every respect effective service process upon KWS
in
any such suit, action or proceeding.
(c) Notwithstanding
anything herein to the contrary, the representations, warranties and covenants
set forth herein will remain in full force and effect regardless of any
investigation made by or on behalf of KWS or any other entity or persons and,
along with the compensation, reimbursement, future services, indemnification,
contribution and confidentiality provisions hereof, shall survive this Agreement
and KWS’s engagement hereunder.
(d) If
KWS
incurs legal or other costs in collecting amounts due to it hereunder, such
costs shall be reimbursed by the Company.
(e) The
captions in this Agreement are used for convenience only and shall not be
considered in interpreting this Agreement.
5
(f) This
Agreement may be executed in counterparts, all of which together shall
constitute one binding agreement between KWS and the Company. Signatures on
documents delivered by facsimile/telecopier shall be deemed original
signatures.
(g) All
references herein to the date of this Agreement shall be deemed to mean the
date
on which this Agreement is countersigned by the Company as set forth
below.
(h) This
Agreement, together with the Exhibit hereto, contains the entire agreement
between the Company and KWS concerning the subject matter hereof and supersedes
any prior understanding or agreement with respect thereto. Any waiver of any
right or obligation hereunder must be in writing signed by the party against
whom enforcement is sought.
If
the
terms of our engagement as set forth in this Agreement are satisfactory to
you,
kindly sign and date the enclosed copy of this Agreement and indemnification
agreement and return them to the undersigned. If this Agreement is not executed
by the Company within ten (10) days of the date hereof it shall cease to be
a
valid offer by KWS to act as the exclusive placement agent to the Company and
it
shall be deemed withdrawn.
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Very
truly yours,
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|
KW
SECURITIES, INC.
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| By: | /s/ | |
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Name:
▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
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| Title: | ||
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Date:
January 10, 2006
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ACCEPTED
AND AGREED
ITEC
ENVIRONMENTAL GROUP, INC.:
| By: | |||
|
Name:
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
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|||
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Title:
President and CEO
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| Date: January 10, 2006 |
6
Exhibit
A
Form
of
Warrant
WARRANT
THE
SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933 (THE “ACT”) OR APPLICABLE STATE SECURITIES LAWS, AND THE TRANSFER
THEREOF IS PROHIBITED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION
S
UNDER THE ACT, PURSUANT TO REGISTRATION UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS
IN
COMPLIANCE WITH THE ACT
Warrant
To Purchase ________ Shares of Common Stock
ITEC
ENVIRONMENTAL
GROUP,
INC.
Date
of
Issuance: ________, 2006
No.
_______
THIS
CERTIFIES that, for value received, ___________________________________, or
its
assigns (in either case, the “Holder”) is entitled to purchase, subject to the
provisions of this Warrant, from Itec Environmental Group, Inc., a Delaware
corporation (the “Company”), at the price per share set forth in Section 8
hereof, that number of shares of the Company’s common stock (the “Common Stock”)
set forth in Section 7 hereof. This Warrant is referred to herein as the
“Warrant” and the shares of Common Stock issuable pursuant to the terms hereof
are sometimes referred to herein as “Warrant Shares.”
1. Holder
Exercise of Warrant.
This
Warrant shall only be exercisable in whole. To exercise this Warrant in whole,
the Holder shall deliver to the Company at its principal office, (a) a written
notice, in substantially the form of the exercise notice attached hereto as
Exhibit
A
(the
“Exercise Notice”), of the Holder’s election to exercise this Warrant, which
notice shall specify the number of shares of Common Stock to be purchased,
(b) a
check in the amount of the aggregate exercise price for the Warrant Shares
being
purchased, and (c) this Warrant. The Company shall as promptly as practicable,
and in any event within twenty (20) days after delivery to the Company of (i)
the Exercise Notice, (ii) the check mentioned above, and (iii) this Warrant,
execute and deliver or cause to be executed and delivered, in accordance with
such notice, a certificate or certificates representing the aggregate number
of
shares of Common Stock specified in such notice, provided this Warrant has
vested on or prior to the date such notice is delivered. Each certificate
representing Warrant Shares shall bear the legend or legends required by
applicable securities laws as well as such other legend(s) the Company requires
to be included on certificates for its Common Stock. The Company shall pay
all
expenses and other charges payable in connection with the preparation, issuance
and delivery of such stock certificates except that, in case such stock
certificates shall be registered in a name or names other than the name of
the
Holder, funds sufficient to pay all stock transfer taxes that are payable upon
the issuance of such stock certificate or certificates shall be paid by the
Holder at the time of delivering the Exercise Notice. All shares of Common
Stock
issued upon the exercise of this Warrant shall be validly issued, fully paid,
and nonassessable.
The
Warrant shall expire on _________________ (the “Expiration Date”). The Investor
may exercise the warrant at any time prior to the Expiration Date. The Company
has no restriction on the sale or transfer of the Warrant or Warrant Shares;
however, the Investor is required to comply with all state and U.S. laws and
regulations relating to security sales and transfers.
2. Reservation
of Shares.
The
Company hereby covenants that at all times during the term of this Warrant
there
shall be reserved for issuance such number of shares of its Common Stock as
shall be required to be issued upon exercise of this Warrant.
7
3.
Fractional
Shares.
This
Warrant may be exercised only for a whole number of shares of Common Stock,
and
no fractional shares or scrip representing fractional shares shall be issuable
upon the exercise of this Warrant.
4.
Transfer
of Warrant and Warrant Shares.
The
Holder may sell, pledge, hypothecate, or otherwise transfer this Warrant, in
whole, in accordance with and subject to the terms and conditions set forth
in
the Subscription Agreement and then only if such sale, pledge, hypothecation,
or
transfer is made in compliance with the Act or pursuant to an available
exemption from registration under the Act relating to the disposition of
securities.
5.
Loss
of Warrant.
Upon
receipt by the Company of evidence satisfactory to it of the loss, theft, or
destruction of this Warrant, and of indemnification satisfactory to it, or
upon
surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new warrant of like tenor.
6.
Rights
of the Holder.
No
provision of this Warrant shall be construed as conferring upon the Holder
the
right to vote, consent, receive dividends or receive notice other than as
expressly provided herein. Prior to exercise, no provision hereof, in the
absence of affirmative action by the Holder to exercise this Warrant, and no
enumeration herein of the rights or privileges of the Holder, shall give rise
to
any liability of the holder for the purchase price of any warrant shares or
as a
stockholder of the Company, whether such liability is asserted by the Company
or
by creditors of the Company.
7.
Number
of Warrant Shares.
This
Warrant shall be exercisable for _______ shares of the Company’s Common Stock,
as adjusted in accordance with this Agreement.
8.
Exercise
Price; Adjustment of Warrants.
a.
Determination
of Exercise Price.
The per
share purchase price (the “Exercise Price”) for each of the Warrant Shares
purchasable under this Warrant shall be equal to $0.06.
b. Adjustment
for Mergers or Reorganization, etc.
In case
of any consolidation or merger of the Company with or into another corporation
or the conveyance of all or substantially all of the assets of the Company
to
another corporation, this Warrant shall be exercisable into the number of shares
of stock or other securities or property to which a holder of the number of
shares of Common Stock of the Company deliverable upon exercise of this Warrant
would have been entitled upon such consolidation, merger or conveyance; and,
in
any such case, appropriate adjustment (as determined by the Board of Directors
of the Company) shall be made in the application of the provisions herein set
forth with respect to the rights and interest thereafter of the holder of this
Warrant, to the end that the provisions set forth herein shall thereafter be
applicable, as nearly as reasonable may be, in relation to any shares of stock
or other property thereafter deliverable upon the exercise of this Warrant.
c.
NO
IMPAIRMENT.
THE
COMPANY WILL NOT, THROUGH ANY REORGANIZATION, TRANSFER OF ASSETS, CONSOLIDATION,
MERGER, DISSOLUTION, ISSUE OR SALE OF SECURITIES OR ANY OTHER VOLUNTARY ACTION,
AVOID OR SEEK TO AVOID THE OBSERVANCE OR PERFORMANCE OF ANY OF THE TERMS TO
BE
OBSERVED OR PERFORMED HEREUNDER BY THE COMPANY, BUT WILL AT ALL TIMES IN GOOD
FAITH ASSIST IN THE CARRYING OUT OF ALL THE PROVISIONS OF THIS SECTION AND
IN
THE TAKING OF ALL SUCH ACTION AS MAY BE NECESSARY OR APPROPRIATE IN ORDER TO
PROTECT THE EXERCISE RIGHTS OF THE HOLDER OF THIS WARRANT AGAINST IMPAIRMENT.
d. Issue
Taxes.
The
Company shall pay issue taxes that may be payable in respect of any issue or
delivery of shares of Common Stock on exercise of this Warrant, in whole;
provided, however, that the Company shall not be obligated to pay any transfer
taxes resulting from any transfer requested by any holder in connection with
any
such exercise.
e.
Reservation
of Stock Issuable Upon Conversion.
The
Company shall at all times reserve and keep available out of its authorized
but
unissued shares of common stock, solely for the purpose of effecting the
exercise of this Warrant, such number of its shares of common stock as shall
from time to time be sufficient to effect the exercise of this Warrant; and
if
at any time the number of authorized but unissued shares of common stock shall
not be sufficient to effect the exercise of this Warrant, the Company will
take
all appropriate corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of common stock to
such
number of shares as shall be sufficient for such purpose.
8
9. Certain
Distributions.
In case
the Company shall, at any time, prior to the Expiration Date, declare any
distribution of its assets to holders of its common stock as a partial
liquidation, distribution or by way of return of capital, other than as a
dividend payable out of earnings or any surplus legally available for dividends,
then the Holder shall be entitled, upon the proper exercise of this Warrant
in
whole prior to the effecting of such declaration, to receive, in addition to
the
shares of common stock issuable on such exercise, the amount of such assets
(or
at the option of the Company a sum equal to the value thereof at the time of
such distribution to holders of common stock as such value is determined by
the
Board of Directors of the Company in good faith), which would have been payable
to the Holder had it been a holder of record of such shares of common stock
on
the record date for the determination of those holders of Common Stock entitled
to such distribution.
10. Dissolution
or Liquidation.
In case
the Company shall, at any time prior to the Expiration Date, dissolve, liquidate
or wind up its affairs, the Holder shall be entitled, upon the proper exercise
of this Warrant in whole and prior to any distribution associated with such
dissolution, liquidation, or winding up, to receive on such exercise, in lieu
of
the shares of Common Stock to which the Holder would have been entitled, the
same kind and amount of assets as would have been distributed or paid to the
Holder upon any such dissolution, liquidation or winding up, with respect to
such shares of Common Stock had the Holder been a holder of record of such
share
of Common Stock on the record date for the determination of those holders of
Common Stock entitled to receive any such dissolution, liquidation, or winding
up distribution.
11.
Reclassification
or Reorganization.
In case
of any reclassification, capital reorganization or other change of outstanding
shares of common stock of the Company (other than a change in par value, or
from
par value to no par value, or from no par value to par value, or as a result
of
an issuance of common stock by way of dividend or other distribution or of
a
subdivision or combination), the Company shall cause effective provision to
be
made so that the Holder shall have the right thereafter by exercising this
Warrant, to purchase the kind and amount of shares of stock and other securities
and property receivable upon such reclassification, capital reorganization
or
other change, by a holder by the number of shares of common stock which might
have been purchased upon exercise of this warrant immediately prior to such
reclassification or change. Any such provision shall include provisions for
adjustment which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this warrant. The foregoing provisions of this
Section 12 shall similarly apply to successive reclassifications, capital
reorganizations and changes of shares of common stock. In the event that in
any
such capital reorganization, reclassification, or other change, additional
shares of common stock shall be issued in exchange, conversion, substitution
or
payment, in whole, for or of a security of the Company other than common stock,
any amount of the consideration received upon the issue thereof being determined
by the Board of Directors of the Company shall be final and binding on the
Holder.
12.
Miscellaneous.
a.
Successors
and Assigns.
The
terms and conditions of this Agreement shall inure to the benefit of, and be
binding upon, the respective successors and assigns of the parties, except
to
the extent otherwise provided herein. Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto
or
their respective successors and assigns, any rights, remedies, obligations
or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
b.
Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of California without regard to the principles of conflict of laws
thereof.
c. Counterparts;
Delivery by Facsimile.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. Delivery of this Agreement may be effected by facsimile.
9
d.
Titles
and Subtitles.
The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this Agreement.
e.
Notices.
Unless
otherwise provided, any notice required or permitted hereunder shall be given
by
personal service upon the party to be notified by certified mail, return receipt
requested and: (i) if to the Company, addressed to Itec Environmental Group,
Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other address
as
the Company may designate by notice to each of the Investors in accordance
with
the provisions of this Section; and (ii) if to the Warrant holder, at the
address indicated on the signature page hereof, or at such other addresses
as
such Holder may designate by notice to the Company in accordance with the
provisions of this Section.
f.
Amendments
and Waivers.
Any
term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
prospectively or retroactively), only with the written consent of the Company
and a majority in interest of the Holders.
g.
Entire
Agreement.
This
Agreement, the Memorandum (including the appendices and schedules thereto)
by
and between the Company and the Holder, constitute the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof and
supersede all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties hereto.
IN
WITNESS WHEREOF, the undersigned hereby sets is hand and seal this ___ day
of
_________, 2006.
|
Itec
Environmental Group, Inc.
|
|||
| By: | |||
|
Name:
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
|
|||
|
Title:
President and Chief Executive Officer
|
Investor
Name: ____________________________________
Investor
Address: __________________________________
_________________________________________________
_________________________________________________
10
EXHIBIT
A
NOTICE
OF EXERCISE
(To
be
signed only upon exercise of the Warrant)
TO:
Itec
Environmental Group, Inc.
The
undersigned, hereby irrevocably elects to exercise the purchase rights
represented by the Warrant granted to the undersigned on ______________ and
to
purchase thereunder __________* shares of Common Stock of Itec Environmental
Group, Inc. (the “Company”) and herewith encloses either payment of
$____________ or instructions regarding the manner of exercise permitted under
Section 1 of the Warrant, in full payment of the purchase price of such shares
being purchased.
Dated:
________________
|
(Signature
must conform in all respects to name
of
holder as specified on the face of the Warrant)
|
||
|
(Please
Print Name)
|
||
|
(Address)
|
||
| * |
Insert
here the number of shares being exercised, without making any adjustment
for additional Common Stock of the Company, other securities or property
which, pursuant to the adjustment provisions of the Warrant, may
be
deliverable upon exercise.
|
11
Itec
Environmental Group, Inc.
P.O.
Box
760
Riverbank,
CA 95367
Tel:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇)
▇▇▇-▇▇▇▇
December
1, 2006
▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
KW
Securities Corporation
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
San
Bruno, CA 94066
Re:
Amendment to Engagement Agreement
Dear
▇▇.
▇▇▇▇▇▇,
This
agreement (the “Amended
Engagement Agreement”)
amends
that certain engagement agreement dated January 10, 2006 (the “Agreement”)
by and
between KW Securities Corporation, (“KW”)
and
Itec Environmental Group, Inc., a Delaware corporation (“Itec”).
A
copy of the Agreement is attached hereto as Exhibit
A.
The
amendment is as follows:
| 1. |
Compensation
and Expenses.
Section 3(a)(i) shall be deleted in its entirety and substituted
therefore
shall be the following:
|
(i) a
warrant (the “Placement
Warrant”)
to purchase that number of shares of common stock of the Company pursuant to
the
following:
(A) for
the initial Five Million Dollars ($5,000,000) raised under the Proposed
Offering, KW shall receive one (1) warrant share for each One Dollar ($1.00)
raised by KW with a strike price of $0.06 per share/cashless;
(B) for
the remaining amount raised under the Proposed Offering, up to a maximum of
Four
Million Dollars ($4,000,000), KW shall receive 1.875 warrant shares for each
One
Dollar ($1.00) raised by KW with a strike price of $0.06 per share/cashless;
and
12
(C) in
connection with the Arbor ▇▇▇▇▇▇, LLC investment of Two Million Three Hundred
Thousand Dollars ($2,300,000), KW shall receive four million (4,000,000) warrant
shares with a strike price of $0.06 per share/cashless.
A
Placement Warrant shall be issued at the closing based on the number of
Securities sold at such closing. The terms of the Placement Warrant shall be
set
forth in the form of Placement Warrant provided to the Company prior to the
first closing of the Proposed Offering (but, at a minimum, the Placement Warrant
shall be exercisable from time to time, in whole or in part, during the ten
(10)
year period commencing on the initial closing of the Proposed Offering, and
shall contain registration rights and anti-dilution provisions satisfactory
to
KWS and its counsel). A form of the Placement Warrant is attached hereto as
Exhibit
A.
This
Amended Engagement Agreement and the Agreement, as attached hereto as
Exhibit
A,
contain
all of the terms and conditions agreed upon by Itec and KW relating to the
subject matter of this Amended Engagement Agreement and supersedes all prior
agreements, negotiations, correspondence, undertakings, and communications
of
the parties, whether oral or written, respecting this subject
matter.
Except
as
specifically amended hereby, the Agreement shall remain in full force and effect
as originally written. This Amended Engagement Agreement shall be deemed to
be
incorporated in and a part of the Agreement.
The
titles and subtitles of the sections of this Amended Engagement Agreement are
used for convenience only and shall not be considered in construing or
interpreting this agreement. Capitalized terms used but not otherwise defined
in
this Amended Engagement Agreement shall have the specific meanings set forth
in
the Agreement.
If
the
foregoing accurately sets forth your understanding concerning this matter,
please acknowledge your concurrence by signing this letter in the space
indicated below.
| Very truly yours, | ||
| ITEC ENVIRONMENTAL GROUP, INC. | ||
| |
|
|
| By: | ||
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
||
|
Title:
Chief Executive Officer
|
||
13
AGREED
AND ACCEPTED:
Dated:
December ____, 2006
KW
SECURITIES CORPORATION
| By: | |||
|
Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|||
|
Title:
Principal
|
14