0001065949-11-000164.txt : 20110909 0001065949-11-000164.hdr.sgml : 20110909 20110909164913 ACCESSION NUMBER: 0001065949-11-000164 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20110906 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20110909 DATE AS OF CHANGE: 20110909 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Envision Solar International, Inc. CENTRAL INDEX KEY: 0001398805 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING SERVICES [8711] IRS NUMBER: 208457250 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-53204 FILM NUMBER: 111083982 BUSINESS ADDRESS: STREET 1: 7675 DAGGET STREET STREET 2: SUITE 150 CITY: SAN DIEGO STATE: CA ZIP: 92111 BUSINESS PHONE: 858-799-4583 MAIL ADDRESS: STREET 1: 7675 DAGGET STREET STREET 2: SUITE 150 CITY: SAN DIEGO STATE: CA ZIP: 92111 FORMER COMPANY: FORMER CONFORMED NAME: Casita Enterprises, Inc. DATE OF NAME CHANGE: 20070508 8-K 1 envision8ksept2011.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 6, 2011 ENVISION SOLAR INTERNATIONAL, INC. ------------------------------------------------- (Exact name of registrant as specified in its charter) NEVADA 333-147104 26-1342810 ---------------------------- -------------------------- -------------------- (State or other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 7675 DAGGET STREET, SUITE 150, SAN DIEGO, CA 92111 -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (858) 799-4583 -------------------------------------------------------------------------------- (Former name or former address if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01: ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT ------------------------------------------------------ On September 6, 2011, Envision Solar International, Inc., a Nevada corporation (the "Company") entered into a loan agreement and corresponding convertible promissory note in the original principal amount of $1,000,000 with an investor (the "Lender"). The note bears simple interest at an annual rate of nine percent (9%) with all principal and accrued interest payable on or before December 31, 2012, unless sooner converted into common stock. The holder of the note can convert any amount due under the note into shares of the Company's common stock at a conversion price of $0.29 per share. On September 6, 2011, the Company entered into a selling agreement with Allied Beacon Partners, Inc. ("Allied Beacon"), a registered securities broker dealer, to place the $1,000,000 convertible note. The Lender is a customer of Allied Beacon. Allied Beacon will be compensated four percent (4%) of the note balance in cash upon execution, four percent (4%) in cash for any amount of the loan balance subsequently converted into shares of the Company's common stock, and an additional two percent (2%) of any converted shares payable in the equivalent number of warrants to purchase the Company's common stock, each with a five (5) year term and a $0.29 strike price. Copies of these agreements are attached hereto as exhibits 10.1, 10.2 and 10.3 and are incorporated herein by reference. ITEM 2.03: CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT -------------------------------------------------------------------------------- The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03. ITEM 9.01: FINANCIAL STATEMENTS AND EXHIBITS. ---------------------------------------------- (d) Exhibits 10.1 Loan agreement between Envision Solar International, Inc and Gerald Hickson. 10.2 Convertible Promissory Note between Envision Solar International, Inc. and Gerald Hickson. 10.3 Selling Agreement between Envision Solar International, Inc and Allied Beacon Partners, Inc. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ENVISION SOLAR INTERNATIONAL, INC. September 9, 2011 By: /s/ Desmond Wheatley ----------------------------------------- Desmond Wheatley, Chief Executive Officer -2- EX-10.1 2 ex101.txt LOAN AGREEMENT This Loan Agreement ("Agreement") is entered into on September 6th, 2011 by between Envision Solar International, Inc., a Nevada corporation (the "Borrower"), and Gerald Hickson, an individual (the "Lender"). Certain capitalized terms used herein are defined on Exhibit A of this Agreement. The parties agree as follows: 1. LOAN. (a) LOAN. Subject to the terms and conditions hereof, the Lender shall make a loan (the "Loan") to Borrower in the principal sum of $1,000,000. The Loan shall be evidenced by a Convertible Promissory Note issued by the Borrower to the Lender at the Closing (as defined below) in the form of Exhibit B hereto (the "Note"). (b) INTEREST. The Note and all other monetary Obligations shall bear interest at 9% per annum. Interest shall be payable in arrears on the Maturity Date as defined in this Agreement. Any interest not paid when due shall be added to the principal and shall thereafter bear like interest as the principal of the Note. Interest accruing after the Maturity Date shall be compounded annually, without waiving any rights or remedies of the Lender by reason of the failure to pay the same when due. (c) MATURITY DATE. Unless the Note is earlier converted into equity securities of the Borrower as provided in the Note, on December 31, 2012 (the "Maturity Date"), the entire outstanding principal balance of the Note and all accrued and unpaid interest thereon and all other monetary Obligations shall be due and payable. (d) PAYMENTS. For all purposes of this Agreement, any payments by Borrower will only be deemed received when received in immediately available funds, and any immediately available funds received later than 5:00 p.m. (California time) on any Business Day shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue during such period. (e) PREPAYMENT. The Borrower may at any time after 180 days of the execution of this note prepay all or any portion of the outstanding balance of the Note by giving at least three days prior notice to the Lender of the prepayment date. The Borrower shall pay to the Lender all or any portion of the outstanding principal and accrued interest due on this Note or shall, to the extent of the prepayment and if agreed in writing by the Lender, issue and deliver to the Lender a certificate representing a number of shares of the Borrower's common stock (the "Shares") into which such Note is convertible as of the prepayment date. The Borrower shall not, however, be obligated to make such payment or issue such Shares unless the Lender has delivered its original Note to Borrower or has notified Borrower that such Note has been lost, stolen or destroyed and executes an agreement satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with such lost, stolen or destroyed Note. The Lender shall have the right to exercise all of its rights under the Note, and interest shall continue to accrue, until payment in full is made hereunder, or the Note is converted into Shares as provided in the Note. The Note will be deemed converted on the date of written notice of election to convert, regardless of when the actual Note is submitted by the Lender for cancellation. -1- (f) CONVERSION. All or any portion of the entire outstanding balance of this Loan and the Note is convertible into Shares of Borrower's common stock in accordance with the terms and conditions of the Note and this Agreement. 2. REPRESENTATIONS AND WARRANTIES. Borrower represents to the Lender as of Closing Date (and the following representations shall be deemed continuing until the time set forth in Section 15 of this Agreement): (a) AUTHORIZATION; SUBSIDIARIES. (i) Borrower is and will continue to be duly organized, validly existing and in good standing under the laws of the State of Nevada, and Borrower is and will continue to be qualified and licensed to do business in all jurisdictions in which any failure to do so would result in a Material Adverse Change. The execution, delivery and performance by Borrower of this Agreement, and all other documents contemplated hereby have been duly and validly authorized by all necessary corporate action, and do not violate Borrower's Articles of Incorporation or Bylaws, or, in any material respect, any law or any material agreement or instrument which is binding upon Borrower or its property. This Agreement and the Note are, or when executed and delivered will be, valid and binding obligations of Borrower enforceable in accordance with their respective terms, except as the same may be limited by equitable principles and by bankruptcy, insolvency, moratorium and other laws of general application affecting the enforcement of creditors' rights. The reservation for potential issuance of the Shares pursuant to the terms of this Agreement and the Note has been approved by the Borrower's Board of Directors. (ii) Borrower has one wholly-owned subsidiary, Envision Construction, Inc. Borrower's correct name is set forth in the heading of this Agreement and if Borrower hereafter gives the Lender written notice within 15 days after any future change in Borrower's name, this representation shall not be deemed to be breached. True and correct copies of the Borrower's Articles of Incorporation and Bylaws have been delivered to the Lender. (b) FINANCIAL CONDITION, STATEMENTS AND REPORTS. All financial statements delivered to Lender have been prepared in conformity with generally accepted accounting principles (except for the absence of footnotes and subject to normal year-end adjustments with respect to unaudited financial statements, and except in the case of projections or forecasts, which Borrower represents and warrants have been be prepared in good faith utilizing assumptions it believes to be reasonable). All financial statements delivered to the Lender fairly reflect the financial condition of Borrower, at the times and for the periods therein stated. (c) TAX RETURNS AND PAYMENTS. Borrower has timely filed, and will timely file, all tax returns and reports required by applicable law, and Borrower has timely paid, and will timely pay, all applicable taxes, assessments, deposits and contributions now or in the future owed by Borrower. Borrower may, however, defer payment of any contested taxes, provided that Borrower (i) in good faith contests Borrower's obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, and (ii) notifies the Lender in writing of the commencement of, and any material development in, the proceedings. -2- (d) COMPLIANCE WITH LAW. To Borrower's knowledge, Borrower has complied, and will comply, in all material respects, with all provisions of all applicable laws and regulations, including, but not limited to, those relating to Borrower's ownership of real or personal property, the conduct of Borrower's business, and all environmental matters, except where the failure to do so would not result in a Material Adverse Change. (e) LITIGATION. There is no claim or litigation pending or (to Borrower's knowledge) threatened against Borrower, except as disclosed in its SEC Reports and additionally, a arbitration notice given to Envision related to a debt owed to a legal firm for past services. There is no action, proceeding or investigation pending, or to Borrower's knowledge threatened, against the Borrower or its officers or directors, or to the knowledge of Borrower, against employees or consultants of Borrower, or any basis therefore known to Borrower, involving the prior employment of any of the Borrower's employees, their use in connection with the Borrower's business of any Intellectual Property of their former employers, or their obligations under any agreements with prior employers, which individually or in the aggregate could result in a Material Adverse Change. (f) INFORMATION. All information provided to the Lender by or on behalf of Borrower by a duly authorized officer on or prior to the date of this Agreement is true and correct in all material respects, all information hereafter provided to the Lender by or on behalf of Borrower by a duly authorized officer will be true and correct in all material respects, and no representation or other statement made, previously, now or hereafter, to the Lender by or on behalf of Borrower by a duly authorized officer contains or will contain, at the time made, any untrue statement of a material fact or omits or will omit, at the time made, any material facts necessary to make any statements made to the Lender not misleading at the time made. For the purpose of this paragraph, "information" means written information that (i) relates to any material aspect of Borrower's business, operations or financial condition or (ii) which is provided by the Borrower to the Lender pursuant to this Agreement, except for the financial projections contained therein, which projections are subject to Section 2(b) of this Agreement. 3. INTELLECTUAL PROPERTY. Borrower is the sole and exclusive owner of all right, title and interest in and to all Intellectual Property necessary for its business as now conducted and as proposed to be conducted without any conflict with, or infringement with the rights of, others. The Borrower has not received any communications alleging that it has violated or, by conducting its business as proposed, would violate any Intellectual Property of any other Person. Borrower is not aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree, or order of any court or administrative agency, that would interfere with the use of such employee's best efforts to promote the interest of Borrower or that would conflict with Borrower's business as proposed to be conducted. Neither the execution or delivery of this Agreement, nor the carrying on of the Borrower's business as proposed, will, to the Borrower's knowledge after due inquiry, conflict with or result in a breach of the terms, conditions, or provisions of, or constitute a default under, any contract, covenant or instrument under which any such employee is now obligated. Borrower does not believe it is or will be necessary to use any inventions of any of its employees (or persons it currently intends to hire) made prior to their employment by Borrower. Borrower is not aware of any violation or infringement by a third party of any of its Intellectual Property. USE OF PROCEEDS. -3- Borrower will use the proceeds of the Loan for general operating purposes with particular emphasis on the operating capital requirements of the execution of the contracts to deploy 15 Solar Tree(R) structures, CleanCharge(TM) EV Charging, EnvisionTrack(TM) at Pier Lima in San Diego for the US Navy and to deploY 6 Solar Tree(R) structures, CleanCharge(TM) EV Charging, EnvisionTrack(TM) and battery storage for San Diego Gas aNd Electric in San Diego as well as adding business development resources to help in the growth of the business and shall not in any event use such proceeds for investment activities. 4. CLOSING. (a) CLOSING DATE. The closing of the Loan (the "Closing") will take place at the offices of Envision Solar International at 7675 Dagget Street, Suite 150, San Diego 92111 at 1:00 p.m. (local time) on the date that the parties may mutually agree in writing, but in no event later than as of September 10th, 2011 (the "Closing Date"), unless extended by mutual written agreement of the parties. (b) DELIVERY. Subject to the terms of this Agreement, at the Closing the Borrower will deliver an executed Note to the Lender against payment of the purchase price therefore by, at the option of the Lender, a check or checks payable to the order of the Company or by wire transfer. (c) CONDITIONS TO THE LENDER'S OBLIGATIONS. The obligation of the Lender to make its Loan at the Closing is subject to the fulfillment to its satisfaction, on or prior to the ClOSING DATE, OF THE FOLLOWING CONDitions, any of which may be waived by the Lender in writing: (i) REPRESENTATIONS AND WARRANTIES CORRECT; PERFORMANCE OF OBLIGATIONS. The representations and warranties made by the Borrower in Section 2 hereof shall be true and correct on and as of the Closing Date. Borrower shall have performed all Obligations and conditions herein required to be performed or observed by it on or prior to the Closing Date. (ii) CONSENTS AND WAIVERS. Borrower shall have obtained in a timely fashion any and all consents, permits, and waivers necessary or appropriate for consummation of the transactions contemplated by this Agreement and the same shall be effective as of the Closing Date. 5. EVENTS OF DEFAULT. Any one or more of the following shall constitute an event of default ("Event of Default") under the Loan Documents: (a) Borrower shall fail to pay any principal of or interest on the Loan or any other monetary Obligations within five Business Days after the date due; or (b) Borrower shall fail to comply with or perform any other provision of this Agreement, the Loan Documents or any other non-monetary Obligation, which failure is not cured within ten Business Days after such failure occurs; or (c) Borrower shall breach any of Borrower's representations or warranties, contained in this Agreement, or any Loan Document, which breach is not cured within ten Business Days after such breach occurs; or (d) Dissolution, termination of existence, or insolvency of Borrower; or appointment of a receiver, trustee or custodian, for all or any material part of the property of, assignment for the benefit of creditors by, or the commencement of any proceeding by or against Borrower under any reorganization, bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, now or in the future in effect (except that, in the case of a proceeding commenced against Borrower, Borrower shall have 30 days after the date such proceeding was commenced to have it dismissed). -4- 6. REMEDIES. (a) REMEDIES. Upon the occurrence and during the continuance of any Event of Default, the Lender may (at its option), without notice except for such notices as are required by law and as provided in this Agreement, accelerate and declare the Note and the other Obligations to be immediately due, payable, and performable, notwithstanding any deferred or installment payments allowed by any instrument evidencing or relating to any Obligation. (b) SET-OFF. Upon the occurrence and during the continuance of any Event of Default, the Lender is hereby authorized at any time and from time to time, without notice to the Borrower (any such notice being expressly waived by the Borrower, except as expressly set forth below), to set-off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Lender to or for the credit or the account of the Borrower against any and all of the Obligations, irrespective of whether or not the Lender shall have made any demand under this Agreement or the Lender's Note, and although such Obligations may be unmatured. The Lender agrees promptly to notify the Borrower after any such set-off and application, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Lender under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Lender may have. (c) REMEDIES CUMULATIVE. Exercise or partial exercise by the Lender of one or more of such rights or remedies shall not be deemed an election, nor bar the Lender from subsequent exercise or partial exercise of any other rights or remedies. The failure or delay of the Lender to exercise any such rights or remedies shall not operate as a waiver thereof, but all such rights and remedies shall continue in full force and effect until all of the Obligations have been fully paid and performed. No Event of Default or exercise of rights or remedies as a result thereof shall affect the Lender's other rights under this Agreement, all of which shall continue in full force and effect. 7. WAIVERS AND AMENDMENTS. (a) The failure of the Lender at any time or times to require Borrower to strictly comply with any of the provisions of this Agreement or any other present or future agreement between Borrower and the Lender shall not waive or diminish any right of the Lender later to demand and receive strict compliance with such provisions. Any waiver of any default shall not waive or affect any other default, whether prior or subsequent, and whether or not similar. (b) Borrower waives demand, protest, notice of protest and notice of default or dishonor, notice of payment and nonpayment, release, compromise, settlement, extension or renewal of any commercial paper, instrument, account, general intangible, document or guaranty at any time held by the Lender on which Borrower is or may in any way be liable, and notice of any action taken by the Lender, unless expressly required by this Agreement. 8. INDEMNITY. If either the Lender or Borrower files any lawsuit against the other predicated on a breach of this Agreement, the prevailing party in such action shall be entitled to recover its reasonable costs, including (but not limited to) reasonable attorneys' fees incurred in connection with such action. Borrower shall indemnify the Lender for any losses, claims, actions, causes of action, penalties, and reasonable costs and expenses (including reasonable attorneys' fees), which the Lender may sustain or incur based upon, -5- arising out of, or relating to a breach by the Borrower of this Agreement, any of the Obligations or the Loan Documents, except any such amounts sustained or incurred as the result of the gross negligence or willful misconduct of the person to be indemnified or any of its directors, officers, employees, agents, attorneys, or any other person affiliated with or representing such person. The indemnity agreement set forth in this Section shall survive any termination of this Agreement and shall continue in full force and effect. 9. CONFIDENTIALITY. In handling any confidential non-public information provided to the Lender by Borrower, the Lender shall exercise the same degree of care that it exercises with respect to its own proprietary information to maintain the confidentiality of the same, except that disclosure of such information may be made (i) to Affiliates of the Lender, or to prospective transferees or purchasers of any interest in the Obligations, provided that they have entered into a comparable confidentiality agreement with respect thereto, (ii) as required by law, regulations, rule or order, subpoena, judicial order or similar order (provided that, in the case of a subpoena, judicial order or similar order, the Lender shall, if practical, give written notice thereof to the Borrower so that Borrower may take appropriate action to prevent such disclosure if it wishes), and (iv) as may be commercially reasonable in connection with the exercise of any remedies by Lender under this Agreement. Confidential information hereunder shall not include information that either: (a) is in the public domain, or becomes part of the public domain through no fault of the Lender; or (b) is disclosed to the Lender by a third party, which does not have a duty of confidentiality to the Borrower. 10. NOTICES. (a) All notices under this Agreement shall be in writing and shall be deemed to have been given (a) upon receipt, when delivered by hand or by electronic facsimile transmission or email if sent during normal business hours and, if not, then the next Business Day, or (b) upon receipt, when delivered by overnight courier, or (c) five days after mailing by certified mail return receipt requested, addressed to each party at the addresses indicated below their signatures below. (b) NOTICES OF RECORD DATE. If the Borrower shall propose at any time: (i) to declare any distribution upon its shares of common stock; (ii) to effect any reclassification or recapitalization of its shares of common stock; or (iii) to merge or consolidate with or into any other corporation, or sell, lease or convey all or substantially all its property or business, or to liquidate, dissolve or wind up; then, in connection with each such event Borrower shall send to the Lender: (1) at least ten (10) days' prior written notice of the date on which a record shall be taken for such distribution (and specifying the date on which the holders of Shares shall be entitled thereto); and (2) in the case of the matters referred to in (ii) and (iii) above, at least ten (10) days' prior written notice of the date when the same shall take place (and specifying the date on which the holders of Shares shall be entitled to exchange their Shares for securities or other property deliverable upon the occurrence of such event). -6- 11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE LENDER. (a) The Lender represents and warrants to Borrower as of Closing Date and as of the date the Lender acquires Shares, if it acquires Shares, as follows: (1) It has full power and authority and has taken all required action necessary to permit it to execute and deliver and to carry out the terms of this Agreement and all other documents or instruments required by this Agreement. (2) It is its present intention to acquire the Note and the Shares for its own account and that its Note and the securities into which the Note is convertible (together, its "Securities") are being or will be acquired by it for the purpose of investment and not with a view to distribution. The Lender agrees that it will not sell or transfer any of its Securities without registration under applicable federal and state securities laws, or the availability of exemptions therefrom. The Lender agrees that the documents evidencing the Securities will each bear a restrictive legend stating that the Securities represented thereby have not been registered under applicable federal and state securities laws and referring to restrictions on their transferability and sale. (3) It is an "accredited investor" (as defined in Rule 501(a) under the Securities Act) and it acknowledges that it currently has, and had immediately prior to its Loan hereunder, such knowledge, sophistication and experience in financial and business matters that it is capable of evaluating the merits and risks of this investment and further acknowledges that it is able to bear the economic risk of this investment for an indefinite period of time. During the course of this transaction and prior to the sale to the Lender of the Note hereunder, it acknowledges that it had the opportunity to ask questions of, and receive answers from, management of the Borrower concerning the terms and conditions of this investment and to obtain any additional information of the same kind that is specified in Rule 502 of Regulation D of the Securities Act, or that is necessary to verify the accuracy of the other information obtained. It has received such information as it deems necessary to enable it to make its investment decision. In particular, Lender has carefully reviewed all of Borrower's SEC Reports and the risk factors and other information furnished to the Lender by the Borrower supplementally. Lender further acknowledges that Allied Beacon Partners, Inc., a registered broker-dealer with the Financial Industry National Regulatory Association ("FINRA"), will earn a selling commission in the form of cash and equity in connection with the Lender's Loan to the Borrower. (b) RESTRICTIONS ON DISPOSITION. Without in any way limiting the representations set forth in Section 11(a) above, during the period from the Closing Date until the second anniversary of the Closing Date, the Lender further agrees not to make any disposition of all or any portion of the Shares without the prior written approval of the Borrower, provided that such prior written approval of the Borrower shall not be required (i) for transfers or sales where the number of Shares being conveyed do not exceed, in any single day, fifteen percent (15%) of the daily average volume of such prior week sales as reported by such applicable exchange , (ii) for transfers to Affiliates of the Lender, or (iii) if the Borrower has breached a material obligation under this Agreement. Certificates evidencing the Shares will bear an appropriate legend reflecting such restrictions on transfer. -7- (c) LOCK-UP PROVISION. Upon receipt of a written request by Borrower's underwriters, the Lender shall not sell, sell short, grant an option to buy, or otherwise dispose of any of the Securities (except for any such Securities included in the registration) for a period of up to one hundred and eighty (180) days following the effective date of a registration of the Borrower's securities; provided, however, that the Lender shall have no obligation to enter into the agreement described in this Section 11(c) unless all executive officers and directors of Borrower and all other holders of other registration rights from Borrower enter into similar agreements. Borrower may impose stop-transfer instructions with respect to the Securities subject to the foregoing restriction until the end of said maximum 180-day period. 12. GOVERNING LAW. This Agreement and all acts and transactions hereunder and all rights and obligations of the Lender and Borrower shall be governed by the internal laws of the State of California. 13. GENERAL. Should any provision of this Agreement be held by any court of competent jurisdiction to be void or unenforceable, such defect shall not affect the remainder of this Agreement, which shall continue in full force and effect. This Agreement and such other written agreements, documents and instruments as may be executed in connection herewith are the final, entire and complete agreement between Borrower and the Lender, and supersede all prior and contemporaneous negotiations and oral representations and agreements, all of which are merged and integrated in this Agreement. There are no oral understandings, representations or agreements between the parties which are not set forth in this Agreement or in other written agreements signed by the parties in connection with this Agreement. Subject to Section 11(b), the Lender may assign all or any part of its interest in the Note and this Agreement and the Obligations to any person or entity, or grant a participation in, or security interest in, any interest in this Agreement or the Note, without notice to, or consent of, Borrower. Borrower may not assign any rights under or interest in this Agreement without the Lender's prior written consent. This Agreement shall be binding upon, and inure to the benefit of, the respective parties' heirs, executors, administrators, assigns and successors. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one agreement. 14. TERMINATION OF CERTAIN PROVISIONS. All representations in Section 2 shall cease to be continuing on the date the entire Note is paid in full or converted into Shares. 15. SURVIVAL. The representations, warranties and covenants of Borrower and the Lender contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement, any Closing Date, and any conversion of the Note into Shares for so long as the applicable statute of limitations. IN WITNESS WHEREOF, this Agreement has been entered into as of the date first above written. LENDER: BORROWER: GERALD HICKSON ENVISION SOLAR INTERNATIONAL, INC. /s/ Desmond Wheatley --------------------------------- ---------------------------------------- By: Gerald Hickson By: Desmond Wheatley Title: Chief Executive Officer Address for notices: Address for notices: 403 Hazeltine Dr. 7675 Dagget Street, Suite 150 Austin, TX 78734 San Diego, California 92111 Email: jerryhickson@sbcglobal.net Email: desmond.wheatley@envisionsolar.com -8- EXHIBIT A CERTAIN DEFINITIONS As used in this Agreement, the following terms have the following meanings: 1. "Affiliate" means as to any Person, any other Person who directly or indirectly controls, is under common control with, is controlled by or is a director or officer of such Person. As used in this definition, "control" (including its correlative meanings, "controlled by" and "under common control with") means possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of voting securities or partnership or other ownership interests, by contract or otherwise), provided that, in any event, any Person who owns directly or indirectly ten percent (10%) or more of the securities having ordinary voting power for the election of the members of the board of directors or other governing body of a corporation, limited liability company or partnership or other ownership interests of any other Person will be deemed to control such corporation, limited liability company, partnership or other Person. 2. "Business Day" means any day other than a Saturday, Sunday or any other day on which commercial banks in Los Angeles, California are required or permitted by law to close. 3. "Intellectual Property" means all (a) copyrights, copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work thereof, whether published or unpublished, (b) trade secret and proprietary rights, including all rights to unpatented inventions and know-how, and confidential information; (c) mask work or similar rights available for the protection of technology; (d) patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same; (e) trademarks, service marks, trade styles, and trade names, whether or not any of the foregoing are registered, and all applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by any such trademarks; (f) computer software and computer software products; (g) designs and design rights; (h) technology; (i) all claims for damages by way of past, present and future infringement of any of such rights; and (j) all licenses or other rights to use any property or rights of a type described above in this definition. 4. "Loan Document" means any present or future document, instrument or agreement relating to this Agreement, including without limitation the Note. 5. "Material Adverse Change" means (i) any effect that is materially adverse to the scope of Borrower's business, or to the results of operations, assets, liabilities or financial or other condition of Borrower or (ii) the material impairment of Borrower's ability to perform its Obligations or of Lender's ability to enforce the Obligations. 6. "Obligations" mean any amounts owed by the Borrower to the Lender under any of the Loan Documents. 7. "Person" means any individual, sole proprietorship, partnership, joint venture, limited liability company, trust, unincorporated organization, joint stock company, association, corporation, institution, entity, party or government (including any division, agency or department thereof) or any other legal entity, whether acting in an individual, fiduciary or other capacity, and, as applicable, their successors, heirs and assigns. -1- 8. "Publicly Traded" means that the Borrower's shares of common stock are listed and trading on the OTC Bulletin Board, the Nasdaq Stock Market, or a national securities exchange or public securities trading market. 9. "SEC Reports" means all reports, financial statements and other information and disclosures filed by the Borrower with the United States Securities and Exchange Commission. -2- EXHIBIT B Convertible Promissory Note EXHIBIT C Exceptions 2. (a) List of wholly-owned or partially owned subsidiaries, partnerships or joint ventures of or with the Company: See SEC Reports. 2. (b) Liabilities of the Company: See SEC Reports 2. (e) List of legal claims or litigation pending or (to Borrower's knowledge) threatened against Borrower: See SEC Reports. EX-10.2 3 ex102.txt THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE PLEDGED, SOLD, ASSIGNED OR OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW HAS BECOME EFFECTIVE WITH RESPECT THERETO, OR (2) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT OR APPLICABLE STATE SECURITIES LAW IS NOT REQUIRED IN CONNECTION WITH THE PROPOSED TRANSFER. CONVERTIBLE PROMISSORY NOTE $1,000,000 September 6th, 2011 FOR VALUE RECEIVED, ENVISION SOLAR INTERNATIONAL, INC., a Nevada corporation (the "Company"), promises to pay to the order of Gerald Hickson, an individual ("Holder"), at such address as the Holder shall direct, the principal sum of One Million Dollars ($1,000,000) plus accrued but unpaid interest on December 31st, 2012, or such other date as provided in the Loan Agreement (as defined below) (the "Maturity Date"), to the extent that this Note has not been converted as provided in Section 3 of this Note. This Note is subject to the following terms and conditions: 1. LOAN AGREEMENT; PAYMENTS. This Note is issued pursuant to and is subject to the terms and conditions of that certain Loan Agreement between the Company and the Holder of even date with this Note (the "Loan Agreement"). Capitalized terms used herein, which are not defined, shall have the meanings set forth in the Loan Agreement. This Note may be prepaid only in accordance with the terms of the Loan Agreement. Payments on this Note shall be applied first to accrued, unpaid interest and thereafter to reduce the outstanding principal amount. 2. INTEREST. This Note shall bear interest on the unpaid principal balance hereof from time to time outstanding at the simple rate of nine percent (9%) per annum, subject to the terms and conditions of the Loan Agreement. Accrued interest shall be payable on the Maturity Date, and any accrued interest not paid when due shall thereafter bear interest at the same rate as the principal of this Note. 3. CONVERSION. (a) RIGHT TO CONVERT. The entire principal amount of this Note and all accrued interest hereon (the "Conversion Amount"), or any portion hereof, shall be convertible, at the option of the Holder, at any time after the date of this Note at the office of the Company or any transfer agent for its shares of common stock ("Shares"), into such number of fully paid and nonassessable Shares as is determined by dividing the Conversion Amount by the Conversion Price. The Conversion Price shall be $0.29 (twenty-nine cents) per Share. (b) INTENTIONALLY LEFT BLANK. -1- (c) MECHANICS OF CONVERSION. No fractional Shares shall be issued upon conversion of this Note. In lieu of any fractional Shares to which the Holder would otherwise be entitled, the Company shall pay cash equal to such fraction multiplied by the then effective Conversion Price. Before any Holder shall be entitled to convert the Note into Shares pursuant to Section 3(a), such Holder shall surrender the Note, at the office of the Company or of any transfer agent for such Shares, and shall give written notice to the Company at its principal corporate office of the election to convert the same and the amount of principal and/or interest being converted. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the Note, or if the Note is reported lost, stolen or destroyed, on the date of receipt by the Company of Holder's written election to convert plus any additional documents requested by the Company and reasonably satisfactory to it, including but not limited to an agreement by the Holder to indemnify the Company from any loss incurred by it in connection with such lost, stolen or destroyed Note. The Company shall, as soon as practicable thereafter, issue and deliver to such address as the Holder may direct, a certificate or certificates for the number of Shares to which such Holder shall be entitled and, if applicable, a new Note in the principal amount which has not been converted pursuant to Section 3(a). (d) ADJUSTMENTS FOR REORGANIZATIONS, MERGERS, RECLASSIFICATIONS OR SIMILAR EVENTS. If the Shares shall be changed into the same or a different number of Shares or other securities or property, whether by capital reorganization, merger, reclassification or otherwise, then the Note shall thereafter be convertible into the number of Shares or other securities or property to which a holder of the number of Shares of the Company deliverable upon conversion of the Note shall have been entitled upon such reorganization, merger, reclassification or other event. (e) NO IMPAIRMENT. The Company will not, by amendment of its Articles of Incorporation or 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 Note and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder set forth herein and in the Shares against impairment. 4. RESERVATION OF SECURITIES. The Company shall reserve, so long as this Note is outstanding, such securities as the Holder is entitled to receive upon conversion of this Note. 5. DEFAULT. Upon the occurrence of any Event of Default (as defined in the Loan Agreement), the entire unpaid principal balance of this Note and all accrued and unpaid interest shall become or may be declared to be immediately due and payable, as provided in the Loan Agreement. 6. GENERAL. Principal of and interest on this Note shall be payable in lawful money of the United States of America. If a payment hereunder becomes due and payable on a Saturday, Sunday, or legal holiday, the due date thereof shall be extended to the next succeeding Business Day, and interest shall be payable thereon during such extension. The Company agrees to pay all costs and expenses (including without limitation reasonable attorney's fees) incurred by Holder in connection with the enforcement of this Note. The Company hereby waives presentment, demand for payment, notice of dishonor, notice of nonpayment, protest, notice of protest, and any and all other notices and demands in connection with the delivery, acceptance, performance, default, or enforcement -2- of this Note. Nothing herein shall be deemed to limit any of the terms or provisions of the Loan Agreement or any other present or future document, instrument or agreement, between the Company and the Holder and all of Holder's rights and remedies hereunder and thereunder are cumulative. In the event any one or more of the provisions of this Note shall for any reason be held to be invalid, illegal or unenforceable, the same shall not affect any other provision of this Note and the remaining provisions of this Note shall remain in full force and effect. This Note is payable in, and shall be governed by the laws of, the State of California. Any notices which the Company or the Holder is required or desires to give to the other shall be in writing and shall be deemed to have been given when given as provided in the Loan Agreement. This Note, and the obligations of the Company hereunder shall be binding upon the Company, and shall inure to the benefit of the Holders, and their respective heirs, executors, administrators, successors and assigns. 7. NO SHAREHOLDER RIGHTS. Nothing contained in this Note shall be construed as (a) conferring upon the Holder or any other person the right to vote or to consent or to receive notice as a shareholder with respect to meetings of shareholders for any matters or any rights as a shareholder of the Company, and (b) no distributions by the Company shall be payable or accrued in respect of this Note or the interest represented hereby, or the equity securities into which this Note may be converted, until, and only to the extent that, this Note is converted as provided in this Note and the Loan Agreement. ENVISION SOLAR INTERNATIONAL, INC. a Nevada corporation By:/s/ Desmond Wheatley ____________________________________________ Desmond Wheatley, Chief Executive Officer -3- EX-10.3 4 ex103.txt SELLING AGREEMENT September 06, 2011 Mr. Desmond Wheatley Chief Executive Officer Envision Solar International, Inc. RE: OFFERING OF 9% CONVERTIBLE PROMISSORY NOTE Gentlemen: Envision Solar International, Inc. ("ENVISION" or "the Company") is a Nevada corporation engaged in the business of developing and commercializing carport and other structures with integrative photovoltaic arrays in the United States and internationally. ENVISION desires to raise up to $1,000,000 through the sale of a $1,000,000 convertible promissory note bearing simple interest at a rate of 9% per annum ("Note") to a single Accredited Investor (the "Investor"), convertible at a rate of $0.29 per share of the Company's common stock at any time on or before the maturity date of the Note, pursuant to Regulation D of the Securities Act of 1933, as amended (the "Offering"). ENVISION hereby confirms as follows its agreement with Allied Beacon Partners, Inc. ("BEACON"), a registered member in good standing of the Financial Industry National Regulatory Association ("FINRA"), formerly the National Association of Securities Dealers, Inc., under which BEACON will act as a nonexclusive agent for ENVISION in connection with the Offering. 1. MEMORANDUM. ENVISION has caused the preparation of loan documents and disclosure materials (collectively, "Memorandum") relating to the sale of the Note. 2. APPOINTMENT OF AGENT. On the basis of the representations, warranties and covenants herein contained, and subject to the terms and conditions herein set forth, BEACON is hereby appointed as a non-exclusive agent (except as provided in Section 3) of ENVISION to offer and sell the Note to a single Accredited Investor. BEACON covenants to offer and sell the Note on a "best efforts" basis on behalf of ENVISION in accordance with the terms of this Agreement and the Memorandum, and not to misrepresent orally or in writing any of the facts regarding ENVISION, its business, or the Offering. BEACON covenants to closely supervise all of its representatives in the Offering of the Note and to comply with all applicable federal and state securities laws and FINRA rules and regulations. BEACON is not responsible for the contents of the Memorandum. BEACON covenants not to use any written material or oral statements in offering or selling the Note which are not specifically authorized by ENVISION, provided, that BEACON is specifically authorized to use the Memorandum. Subject to the performance by ENVISION of its obligations to be performed hereunder, and to the accuracy of all the representations and warranties contained herein, BEACON hereby accepts such agency and agrees to perform its obligations hereunder. 3. REPRESENTATIONS AND WARRANTIES OF ENVISION. ENVISION represents, warrants and agrees with BEACON for BEACON's benefit that: (a) All action required to be taken by ENVISION as a condition to sale of the Note has been taken. -1- (b) ENVISION is duly and validly organized, existing and in good standing as a corporation under the laws of the State of Nevada, with full power and authority to conduct its business and proposed business as described in the Memorandum. ENVISION has all government licenses and permits necessary to conduct its business, and is duly qualified to conduct its business in all jurisdictions in which such qualification is necessary. (c) From the commencement of the Offering through the termination or expiration of the Offering, the Memorandum will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. (d) This Agreement has been duly and validly authorized, executed and delivered by or on behalf of ENVISION, and constitutes the valid, binding and enforceable agreement of ENVISION. (e) No federal or state securities agency has issued an order preventing or suspending the Offering or the use of the Memorandum with respect to the sale of the Note. ENVISION will promptly notify BEACON upon the issuance of any such order and furnish BEACON with a copy thereof. The Memorandum and any amendment or supplement thereto will comply and will continue to comply with all applicable requirements of the Securities Act of 1933, as amended (the "Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and any other applicable federal and state laws and regulations at all times during the term of this Agreement. (f) No consent, approval, authorization or other order of any governmental authority is required in connection with the execution, delivery or performance by ENVISION of this Agreement. (g) The execution and delivery of this Agreement will not constitute a breach of, or default under, any instrument by which ENVISION is bound or, to the best of their knowledge, any order, rule or regulation of any court or any governmental body or administrative agency having jurisdiction over ENVISION. 4. BEACON REPRESENTATIONS AND WARRANTIES. BEACON represents and warrants that it is duly and fully licensed under the rules and regulations of the FINRA and is capable of performing and satisfying its obligations under this Agreement. BEACON further represents and warrants that BEACON's execution and performance of this Agreement will not cause BEACON to be in default under or to violate any agreement, law, rule, regulation, order or judgment applicable to it. 5. COMPENSATION TO BEACON. In consideration for BEACON's services hereunder, ENVISION covenants to pay BEACON (a) an initial selling commission equal to four percent (4%) of the total purchase price of the Note sold in the Offering by or through BEACON or by or through other FINRA licensed entities referred by BEACON, and (b) a subsequent selling commission equal to four percent (4%) of the total amount of the Note converted on or before the maturity date. The initial selling commission payable to BEACON will be paid within five (5) business days after the purchase of the Note. The subsequent selling commission payable to BEACON will be paid within five (5) business days after any conversion of the Note into shares of the Company's common stock (the "Shares"). BEACON shall not be entitled to a selling commission for any Note not sold by or through BEACON or by or through other FINRA entities referred by -2- BEACON, but which are instead sold by ENVISION itself or by a third party not referred by BEACON. In addition, as non-cash incentive compensation for BEACON, ENVISION shall also compensate BEACON by issuing to it Warrants to purchase Envision Solar Shares equal to two percent (2%) of the total number of shares resulting from the conversion of any portion of the Note which is converted on or before the maturity date. The Warrants shall have a strike price of $0.29 cents each Share and shall be valid for a period of five (5) years from the date of issuance. The incentive Warrants will be issued to BEACON within five (5) business days after the issuance of the conversion Shares to the holder of the Note. BEACON shall be provided with piggy-back registration rights for such incentive Shares issued to it. 6. OFFERING COSTS. ENVISION will pay all legal, accounting, printing and other Offering expenses incurred by the Company from its existing general working capital. 7. COVENANTS OF THE COMPANY. ENVISION covenants with BEACON that: (a) The term of this Agreement will commence on the date first above written and will terminate on the date ("Termination Date") which is 90 days after the date the Memorandum is first provided by BEACON to a third party, unless sooner terminated or extended by the written agreement of both parties to this Agreement. (b) If any event relating to the Company occurs which requires, in the opinion of ENVISION's counsel, an amendment or supplement to the Memorandum in order that the Memorandum will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a subscriber, ENVISION will forthwith prepare the amendment or supplement to the Memorandum and deliver a copy thereof to BEACON. Furthermore, ENVISION will furnish such information to BEACON as BEACON may from time to time reasonably request. (c) ENVISION will endeavor in good faith to qualify the Note for offering and sale under, or to establish the exemption of the Offering and sale of the Note from qualification or registration under, applicable state securities or "blue sky" laws. ENVISION will pay all legal fees and related expenses in connection with qualifying the Note under said "blue sky" laws. (d) ENVISION will not offer to sell the Note in any state in which such offer would be unlawful. ENVISION will bear all of the costs and liability incurred by it or BEACON as a result of the unlawful offer of the Note by the Company in any state, unless BEACON directly causes such unlawful offer without the participation of ENVISION. (e) ENVISION covenants to issue financial statements and reports of the Company in accordance with the Memorandum. (f) BEACON will have reasonable review and approval rights with respect to the Memorandum and its contents. (g) ENVISION covenants not to terminate the Offering before the Offering Termination Date, as defined in the Memorandum, and BEACON shall have at least the full Offering period to sell the Note. -3- (h) ENVISION covenants that BEACON shall have the right to obtain the equity or financing for ENVISION from to an entity affiliated with BEACON, such as, by way of illustration but not of limitation, The Greencore Capital Equity Fund, LLC. 8. PAYMENT OF EXPENSES AND FEES. Except as provided in Section 5 of this Agreement, BEACON and ENVISION will each pay their own expenses incident to the transactions contemplated by this Agreement. ENVISION will bear all of the fees and expenses incurred in printing of the Memorandum. 9. NONCIRCUMVENTION. ENVISION shall not directly or indirectly circumvent BEACON or any of its affiliates with respect to any investor relationships introduced or made known to the Company by BEACON as a direct or indirect result of this Agreement without the prior written consent of BEACON. In the event of a breach of this section by ENVISION, BEACON will have all injunctive and equitable relief available, as well as all other remedies at law or in equity. 10. CONDITIONS TO BEACON'S OBLIGATIONS. BEACON's obligations hereunder are subject to the accuracy of and compliance with the representations and warranties of ENVISION in this Agreement, and to the performance by ENVISION of its obligations hereunder. 11. CONDITIONS TO THE OBLIGATIONS OF ENVISION. The obligations of ENVISION hereunder are subject to the accuracy of and the compliance with BEACON's representations and warranties in this Agreement, and to the performance by BEACON of its obligations hereunder. 12. TERM OF AGREEMENT. The term of this Agreement will commence on the date first above written and will terminate on the Termination Date. 13. INDEMNIFICATION. (a) ENVISION hereby indemnifies and holds BEACON, BEACON's affiliates, officers, directors, shareholders, agents, employees, accountants and attorneys, and each of them, harmless from and against all liabilities, claims, damages, losses, costs, attorneys fees and expenses arising directly or indirectly from (a) the conduct of ENVISION's business, (b) the manner and conduct of any offer or sale of securities by persons or entities other than BEACON which conduct any business with ENVISION, (c) any financial statements or other financial information prepared, provided, published, or disseminated by ENVISION, or (d) the source or manner of solicitation of any prospective Investors referred by ENVISION to BEACON. In addition, ENVISION hereby indemnifies and holds BEACON, BEACON's affiliates, officers, directors, shareholders, agents, employees, consultants and attorneys, and each of them, harmless from and against any loss, expense, claim, damage or liability to which BEACON or said other parties may become subject under any securities act, common law concept, or otherwise, insofar as such loss, expense, claim, damage or liability or action in respect thereof, arises out of or is based in whole or in part on any untrue statement or alleged untrue statement of any material fact made by ENVISION, any employee of the Company, or in the Memorandum, or the omission thereby of any material fact required to be stated or necessary to make the statement made to a prospective investor not misleading. ENVISION shall promptly reimburse the indemnified parties for any reasonable legal or other expenses incurred by them in connection with any such indemnified action or claim. -4- (b) ENVISION will not be liable under this indemnity agreement with respect to any claim made against BEACON or any of said other persons related to BEACON unless ENVISION is notified in writing of the nature of the claim. ENVISION shall be entitled to participate at its own expense in the defense or, if it so elects within a reasonable time after receipt of such notice, to assume the defense of any such claims, which defense shall be conducted by counsel chosen by it and reasonably satisfactory to BEACON and the other said person or persons related to BEACON who are defendants in any suit so brought. In the event that the ENVISION elects to assume the defense of any such suit and retain such counsel, BEACON or the person or persons who are defendants in the suit shall bear the fees and expenses of any additional counsel thereafter retained by BEACON or them. ENVISION agrees to promptly notify BEACON of the assertion of any claim against it or against any person who is a control person of ENVISION in connection with the sale of the Note. (c) BEACON agrees to indemnify and hold harmless ENVISION and its affiliates, officers, directors, shareholders, agents, employees, attorneys and accountants against any and all loss, liability, claim, damage and expense whatsoever directly or indirectly resulting from material violations by BEACON or its representatives of any of BEACON's representations, warranties or covenants in this Agreement, or of any applicable law, rule or regulation. In case any action is brought against ENVISION or any of its affiliates under such laws, regulations or rules on account of such material violation of such representations, warranties or covenants, BEACON shall have the rights and duties given to ENVISION, and ENVISION shall have the rights and duties given to BEACON, by the provisions of Section 15(b). 14. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All representations, warranties and agreements shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of BEACON or any person who controls BEACON, or by or on behalf of ENVISION or any person who controls ENVISION, for a period of four years after the Termination Date. 15. NOTICES. All notices, requests, demands and other communications hereunder shall be deemed to have been duly given if delivered, faxed, or mailed by first class mail: If to ENVISION: Envision Solar International, Inc. 7675 Dagget St, Suite 150 San Diego, California 92111 Facsimile:(858) 799-4592 Attn: Desmond Wheatley, Chief Executive Officer With a copy (which shall not Mark Richardson, Esq. constitute notice) to: Richardson and Associates 1453 Third Street Promenade, Suite 315 Santa Monica, California 90401 Facsimile: (310) 393-2004 If to BEACON: Allied Beacon Partners, Inc. 7501 Boulders View Drive #601 Richmond, Virginia 23225 Fax (804) 323-1718 Attn: James Hintz, Chief Executive Officer -5- 16. PARTIES. This Agreement shall inure to the benefit of and be binding upon BEACON, ENVISION, and their respective successors and assigns. 17. ENTIRE AGREEMENT. This Agreement represents the entire agreement among the parties hereto and may not be amended except by a writing signed by the party against whom enforcement of the provision is sought. 18. INJUNCTIVE RELIEF. Each party acknowledges that it would be impossible to measure in money the damages to the other party if there is a failure to comply with any covenants or provisions of this Agreement, and agrees that in the event of any breach of any covenant or provision, the other party to this Agreement will not have an adequate remedy at law. It is therefore agreed that the other party to this Agreement who is entitled to the benefit of the covenants or provisions of this Agreement which have been breached, in addition to any other rights or remedies which they may have, shall be entitled to immediate injunctive relief to enforce such covenants and provisions, and that in the event that any such action or proceeding is brought in equity to enforce them, the defaulting or breaching party will not urge a defense that there is an adequate remedy at law. 19. WAIVERS. If any party shall at any time waive any rights hereunder resulting from any breach by the other party of any of the provisions of this Agreement, such waiver is not to be construed as a continuing waiver of other breaches of the same or other provisions of this Agreement. Resort to any remedies referred to herein shall not be construed as a waiver of any other rights and remedies to which such party is entitled under this Agreement or otherwise. 20. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California, and the venue for any action hereunder shall be in the appropriate forum in the County of San Diego, State of California. 21. COUNTERPARTS. This Agreement may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute but one and the same instrument. 22. ATTORNEYS' FEES AND COSTS. In the event that either party must resort to legal action in order to enforce the provisions of this Agreement or to defend such action, the prevailing party shall be entitled to receive reimbursement from the nonprevailing party for all reasonable attorneys' fees and all other costs incurred in commencing or defending such action, or in enforcing this Agreement, including but not limited to post-judgment costs. 23. FURTHER ACTS. The parties to this Agreement hereby agree to execute any other documents and take any further actions which are reasonably necessary or appropriate in order to implement the transactions contemplated by this Agreement. 24. TIME OF ESSENCE. Time is of the essence in the performance of the obligations under this Agreement. -6- 25. AUTHORIZED SIGNATURES. Each party to this Agreement hereby represents that the persons signing below are duly authorized to execute this Agreement on behalf of their respective party. 26. EXECUTION. If the foregoing is in accordance with your understanding of our Agreement, kindly sign and return to us a counterpart hereof, whereupon this Agreement along with all counterparts will become a binding Agreement between BEACON and ENVISION in accordance with its terms. Very truly yours, ALLIED BEACON PARTNERS, INC. a Florida Corporation By: ------------------------------ James Hintz Chief Executive Officer CONFIRMED AND ACCEPTED: ENVISION SOLAR INTERNATIONAL, INC., a Nevada Corporation By: /s/ Desmond Wheatley -------------------------------- Desmond Wheatley Chief Executive Officer -7-