f8k0210ex10xviii_envision.htm


    Exhibit 10.18

     

    
      AMENDMENT
AGREEMENT

      


      This
Amendment Agreement (this “Agreement”),
dated as of October 30, 2009, is entered into by and among Envision Solar
International, Inc., a California corporation (“Company”),
Envision Solar Construction, Inc., a California corporation, Envision Solar
Residential, Inc., a California corporation, and Envision Africa, LLC, a
Delaware limited liability company, (collectively, the “Envision
Guarantors” or “Guarantors”),
and Gemini Master Fund, Ltd., a Cayman Islands corporation (the “Investor”),
and Gemini Strategies, LLC (“Collateral
Agent”).  The Company and the Guarantors are sometimes referred
to herein individually as an “Envision
Entity” and collectively as the “Envision
Entities”. Capitalized terms used herein, but not otherwise defined,
shall have the meanings ascribed to them in that certain Securities Purchase
Agreement, dated as of November 12, 2008, between the Company and the Investor
(the “Purchase
Agreement”).

      


      R E C I T A L S:

      


      WHEREAS, the Company and the Investor
are party to the Purchase Agreement, pursuant to which the Company issued to the
Investor a Secured Bridge Note, dated November 12, 2008, in the principal amount
of $591,770.83 (the “Note”);

      


      WHEREAS, the Guarantors have entered
into that certain Subsidiary Guarantee, dated as of November 12, 2008 (the
“Guarantee”),
pursuant to which each Guarantor has guaranteed the satisfaction of all the
obligations of the Company under the Transaction Documents;

      


      WHEREAS,
the Company and the Guarantors have entered into that certain Security Agreement
and that certain Intellectual Property Security Agreement, each dated as of
November 12, 2008 (collectively, the “Security
Agreements”), pursuant to which the Company and the Guarantors have each
granted a security interest in its assets and properties to the Investor and the
Collateral Agent to secure the satisfaction of all the obligations of the
Envision Entities under the Transaction Documents;

      


      WHEREAS,
the Company defaulted on the Note, and the Envision Entities and the Investor
entered into that certain Forbearance Agreement on or about April 11, 2009,
pursuant to which the Investor agreed to temporarily forbear from exercising its
rights and remedies under the Transaction Documents;

      


       WHEREAS,
the Company wishes to become subject to the reporting requirements of the
Exchange Act and have its Common Stock listed or quoted on the Over-The-Counter
Bulletin Board (“Bulletin
Board”) and requires approximately $125,000 to effect such registration
and listing; and

      


      WHEREAS,
the parties have agreed (a) to amend and restate the Note in the form of Exhibit
A attached hereto, pursuant to which, among other things, the Maturity Date of
the Note shall be extended and the Note shall be convertible into shares of
common stock of the Company, no par value per share (“Common
Stock”), in accordance with the terms thereof, and (b) the Investor shall
loan an additional $125,000 to the Company in consideration for the issuance of
a new Secured Bridge Note in the form of Exhibit A attached hereto (“New Note”
and together with the Note, the “Notes”),
each on the terms and conditions set forth herein;

       

       

      
        
           

        

        
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      A G R E E M E N
T:

      


      NOW, THEREFORE, in consideration of the
foregoing and subject to the terms and conditions herein contained, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

      


      1. ACKNOWLEDGMENTS.

      


      1.1. Acknowledgment of
Obligations. The Investor and the Envision Entities hereby acknowledge,
confirm and agree that as of the date hereof, the Company is indebted to
Investor in respect of the Note in the amount of $657,194.38
(the “Note
Amount”) (consisting of $591,770.83 principal amount plus $65,423.55
of accrued interest at the default rate under the Note between the Maturity Date
under the Note (April 12, 2009) and the date hereof.  The Note Amount
is unconditionally owing by Envision to the Investor, without offset, defense or
counterclaim of any kind, nature or description whatsoever.

      


      1.2. Acknowledgment of Security
Interests.  The Envision Entities hereby acknowledge, confirm
and agree that the Investor has and shall continue to have valid, enforceable
and perfected Liens upon and security interests in the assets and properties of
the Envision Entities heretofore granted to the Investor pursuant to, and having
first priority as set forth in, the Security Agreements, securing all
obligations under the Transaction Documents, including without limitation the
Note (as amended and restated hereby) and the New Note.  The Envision
Entities hereby acknowledge, confirm and agree that the Investor has and shall
continue to have valid and enforceable assignments of the patents, trademarks
and other intellectual property and other assets assigned by the Envision
Entities, including without limitation those listed on the annexes to the
Security Agreements.

      


      2.           AMENDMENT
AND RESTATEMENT OF NOTE. The Note shall
be amended and restated in the form attached hereto as Exhibit A
(the “Amended and
Restated Note”), which shall provide, among other things, that (i) the
original principal face amount of the Note is $657,194.38, (ii) the Maturity
Date shall be extended until December 31, 2010, and (iii) the Note is
convertible into shares of Common Stock as set forth therein.  Such
amended and restated Note shall be executed by the Company and delivered to the
Investor in exchange for the surrender of the original issued Note within five
(5) Business Days following the date hereof.

      


      3.           NEW
NOTE.  The Investor has or shall prior to the close of business
on the date hereof advance $125,000 in loan proceeds to the Company, and the
Company shall execute, deliver and issue to the Investor the New Note within
five (5) Business Days following the date hereof to evidence the Company’s
obligations pursuant to such loan.  The Company agrees that
contemporaneously herewith it shall enter into an escrow agreement with the
Investor’s counsel, as escrow agent (“Escrow
Agent”), in the form of Exhibit C
attached hereto (“Escrow
Agreement”), pursuant to which all such funds advanced under the New Note
shall be deposited into an escrow account for the benefit of the Company (“Escrow
Account”) and distributed only in accordance with the terms of such
Escrow

       

      
        
           

        

        
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      Agreement
and Section 4.9 below.  To effect a disbursement under the Escrow
Agreement, the Company shall deliver written notice (which may be by email)
(“Disbursement
Notice”) to the Investor specifying (a) the amount of such disbursement,
(b) the name, address and wire transfer instructions of the Person to which such
disbursement is to be made on behalf of the Company, (c) a description of the
use of such proceeds, together with an explanation as to why such use of
proceeds is included within the parameters set forth in Section 4.9 below, and
(d) such other information as may be reasonably requested by the
Investor.  The Person to which such disbursement shall be made (i)
shall be the Person rendering services to the Company in connection with Section
4.1 or 4.9 and (ii) shall not be the Company or any direct or indirect Affiliate
of the Company.  Promptly following receipt of any Disbursement
Notice, if the Investor approves of such disbursement in accordance with Section
4.9 below, the Investor shall instruct the Escrow Agent to disburse the amount
set forth in such Distribution Notice to such Person providing services set
forth therein.  Upon the Company completing all expenses required in
connection with satisfying Section 4.1 below, it shall promptly notify the
Investor, and if any amount remains in the Escrow Account at such time, such
amount shall either be (1) disbursed to the Company, or (2) paid to the Investor
as repayment under the New Note, as may be elected by the Investor in its sole
discretion.  The Investor shall instruct the Escrow Agent to disburse
such remaining amount in accordance with such election.  If any amount
remains in the Escrow Account (x) on December 31, 2010 or (y) at any time
following any acceleration of the New Note by the Holder pursuant to Section
8(b) thereof, such amount shall be paid to the Investor as repayment under the
New Note, and the Investor shall so instruct the Escrow Agent to disburse such
remaining amount.  The term “Note” under the Security Documents and
Subsidiary Guaranty is hereby amended to also include the New Note, and the
Company’s and its Subsidiaries’ obligations under the New Note, Subsidiary
Guaranty and other Transaction Documents shall be secured by all the assets of
the Company and its Subsidiaries as set forth in the Security
Documents.

      


      4.           OTHER
AGREEMENTS.

      


      4.1           Exchange Act Reporting
Requirements; Reverse Split.  The Company shall cause the
Company to be subject to the reporting requirements of the Exchange Act and
listed or quoted for trading on the Bulletin Board on or prior to April 1, 2010
and shall promptly take any and all actions necessary and appropriate to
effectuate such Exchange Act registration and Bulletin Board listing, including
without limitation having the requisite independent audit of its financial
statements, filing a Form 10 with the Securities and Exchange Commission (“Commission”)
(and promptly amending such Form 10 in response to Commission comments), and
securing a market maker to file a listing application with the Bulletin
Board.  At all times after such Form 10 becomes effective, the Company
shall have filed with the Commission all reports required to be filed by it
under the Exchange Act by issuers that are subject to the reporting requirements
of the Exchange Act (whether or not the Company is subject to the reporting
requirements of the Exchange Act), and the Company shall thereafter continue to
timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all such reports with the Commission. Prior to the
filing of such Form 10, the Company shall effect a forward stock split of the
Company’s Common Stock (“Split”)
whereby each share of Common Stock outstanding is subdivided into between 20 and
60 shares of Common Stock (such figure, the “Split
Factor”), provided that the Split Factor shall be subject to approval by
the Investor.  The Company 

       

       

      
        
           

        

        
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      shall not
engage in a Reverse Merger Transaction without the prior written consent of the
Investor (which consent may be withheld in its sole discretion and which may be
conditioned upon any terms imposed by the Investor).  The Company
shall not issue any equity securities or Common Stock Equivalents (as defined in
the Notes) without the prior written consent of the Investor, except for (i)
Common Stock issued or the issuance or grants of options to purchase Common
Stock pursuant to the Company’s stock option plans and employee stock purchase
plans outstanding as they exist on the date of this Agreement, (ii) Common Stock
issued to any of the Company’s creditors in connection with the satisfaction of
any of the Company’s Indebtedness to such creditors and (iii) equity securities
of the Company issued to investors in connection with a private placement or
series of private placements that result in aggregate proceeds to the Company of
up to $10 million, provided that (a) in each
case the Company shall notify the Investor in writing prior such issuance, and
(b) at the election of the Investor 25% of the proceeds of any such private
placement shall be paid directly to the Investor in repayment of the Amended and
Restated Note and New Note.  The Company covenants and agrees that,
after such Form 10 becomes effective, neither it nor any other Person acting on
its behalf will provide the Investor or its agents or counsel with any
information that the Company believes constitutes material non-public
information, unless prior thereto the Investor shall have executed a written
agreement regarding the confidentiality and use of such information (the Company
understands and confirms that the Investor shall be relying on such covenant in
effecting transactions in securities of the Company).  The Company
represents and warrants that it possesses, or believes it can obtain in a timely
manner, all documents and information necessary or appropriate for timely
complying with all terms contained in this paragraph, including without
limitation having the requisite financial statements prepared and audit
conducted.

      


      4.2           Reservation of Common
Stock.  At all times hereafter the Company shall cause to be
authorized and reserved for issuance to the Investor from its duly authorized
capital stock, for issuance upon conversion of the Notes, a number of shares of
Common Stock equal to 125% of the number of Conversion Shares (as defined in the
Notes) issuable upon the full conversion of the Notes (without regard to any
beneficial ownership limitation contained therein).

      


      4.3           References to Notes and
Transaction Documents.  All references in the Transaction
Documents and herein to (i) “Transaction Documents” shall be deemed to be
references to the Transaction Documents (as currently defined in the Purchase
Agreement and as amended by this Agreement), this Agreement, the Forbearance
Agreement, the Escrow Agreement, the New Note and the Lock-Up Agreements, and
(ii) “Note” or “Notes” shall be deemed to be references to collectively the
Note, as amended and restated hereby, and the New Note (together with any future
Notes issued to the Investor).

      


      4.4           Rule
144.  The Company acknowledges and agrees that, for purposes of
Rule 144 promulgated under the Securities Act, the holding period for the
Conversion Shares issuable upon conversion of, or otherwise pursuant to, the
Note and/or the New Note shall have commenced on November 12, 2008 (the date of
original issuance of the Note, for the Note) and October 30, 2009 (the date of
original issuance of the New Note, for the New Note).  Without
limiting the foregoing, if at any time it is determined that such holding period
does not relate back to such date, the Company will

       

      
        
           

        

        
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      promptly,
but no later than 30 days thereafter, cause the registration of all such
Conversion Shares under the Securities Act (without regard to any beneficial
ownership or issuance limitations contained in the Notes).  In
connection with any registration of Conversion Shares pursuant to this Section,
the Company and the Investor shall enter into a registration rights agreement
containing customary and reasonable provisions regarding the registration of
securities under the Securities Act.

      


      4.6           Disclosure.  The
Company and the Investors shall consult with each other in issuing any other
press releases with respect to the transactions contemplated hereby and other
press releases to be issued by the Company (subject to Section 4.1
above).

       

      4.7           Security
Continued.  The Envision Entities’ obligations under all the
Transaction Documents, including without limitation this Agreement and the
Notes, shall be secured by all the assets of the Envision Entities pursuant to
the Security Agreements as if this Agreement, the Note (as amended and restated
hereby) and the New Note were each in effect at the time of execution of such
Security Agreements and referenced therein.  The Company shall execute
such other agreements, documents and financing statements reasonably requested
by the Investor, which will be filed at the Company’s expense with the
applicable jurisdictions and authorities.

      


      4.8           No
Legends.  After the date on which the Conversion Shares may be
sold without registration pursuant to Rule 144, the Company shall issue
certificates without any legends or restrictions thereon evidencing any
Conversion Shares, and any certificates with legends previously imprinted shall
be replaced with certificates without any legends.

      


      4.9           Use of
Proceeds.  The Company shall use the $125,000 in loan proceeds
from the advance made by the Investor hereunder, as evidenced by the New Note,
solely in connection with expenses incurred by the Company in connection with
complying with Section 4.1 above, which shall include, without limitation, legal
and audit fees (including amounts payable to counsel in connection with amending
current agreements, converting liabilities into equity or subordinated notes and
adopting corporate governance measures consistent with being a publicly listed
company and amounts payable to unaffiliated third party experts in connection
with preparing the Company’s financial statements for an audit) and
disbursements for Commission filings and financial statements and transfer agent
fees and be subject to the prior written approval of the Investor, provided that
such expenses shall not include any overhead or costs of Company personnel or
stock option plan expenses and shall be substantially in accordance with
Schedule 4.9 attached.

      


      4.10           IR/PR.  Contemporaneously
with the filing of the Form 10 with the Commission, the Company shall retain
NetGain Financial, Inc. as a consultant/advisor for public relations and
investor relations for the Company for one year on terms mutually acceptable to
the Company and NetGain Financial, Inc.

      


      4.11           Forbearance
Shares.  The Company acknowledges and agrees that is has issued
10,000 shares of Common Stock pursuant to Section 3.1(f) of the Forbearance
Agreement in consideration for the forbearance set forth therein (“Forbearance
Shares”), but has failed to deliver a stock  certificate
evidencing such Forbearance Shares.  The Company shall deliver a stock
certificate evidencing such Forbearance Shares, with an issuance date of April
11, 2009, within five (5) Business Days following the date
hereof.  The Company represents, acknowledges and agrees that (a) such


       

      
        
           

        

        
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      Forbearance
Shares have been and were duly and validly issued, fully paid and nonassessable,
and free and clear of all Liens, (b) upon the Split such Forbearance Shares will
be converted into such number of shares as is equal to 10,000 shares multiplied
by the Split Factor, and (c) for purposes of Rule 144 promulgated under the
Securities Act, the holding period for the Forbearance Shares shall have
commenced on April 11, 2009 (the date of the Forbearance
Agreement).

      


      4.12           Lock Up
Agreements.  Within thirty (30) days from the date hereof, the
Company shall use its best efforts to cause each stockholder of the Company
categorized under “Founder Shares”, “Generating Assets Shareholders” and
“Nexcore Capital / FWG”, as indicated on Schedule 5.7 attached hereto, to
execute and deliver to the Investor a “lock-up agreement” in the form set forth
as Exhibit B attached hereto, irrevocably agreeing not to sell or otherwise
dispose of any shares of Common Stock until June 30, 2010.

      


      4.13           Public Company
Shares.  In substitution for any shares of Common Stock which
would have been issued to the Investor in a Reverse Merger Transaction pursuant
to Section 4.8 of the Purchase Agreement, promptly following the Split
contemplated hereby the Company shall issue to the Investor 0.3125% of the
fully-diluted number of outstanding shares of Common Stock of the Company
(assuming conversion and exercise of all outstanding options, warrants and
convertible securities and including the issuance of any shares of Common Stock
or Common Stock Equivalents to NetGain Financial, Inc. or any other investor
relations or public relations firm) prior to the date thereof.  All
shares of Common Stock issued pursuant to this paragraph shall be duly and
validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company.

      


      5.           REPRESENTATIONS
AND WARRANTIES OF THE ENVISION ENTITIES.

      


      Each of the Envision Entities hereby
jointly and severally represents and warrants to the Investor as of the date
hereof:

      


      5.1           Organization.  Such
Envision Entity is duly organized, validly existing and in good standing under
the laws of its organization.

       

                     
5.2           Authorization.  Such
Envision Entity has the requisite corporate power and authority to execute,
deliver and perform this Agreement and the other Transaction Documents to which
it is a party.  All corporate action on the part of such Envision
Entity and by its officers, directors and shareholders necessary for the
authorization, execution and delivery of, and the performance by such Envision
Entity of its obligations under this Agreement, the New Note and the other
Transaction Documents to which it is a party has been taken, and no further
consent or authorization of any other party is required.

      


      5.3           Enforceability.  This
Agreement, the New Note and the other Transaction Documents to which such
Envision Entity is a party constitute such Envision Entity’s valid and legally
binding obligation, enforceable in accordance with its terms, subject to (i)
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws of general application relating to or affecting
the enforcement of creditors’ rights generally and (ii) general principles of
equity.

       

       

      
        
           

        

        
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      5.4           No
Conflicts.  The execution, delivery and performance of this
Agreement and the other Transaction Documents to which such Envision Entity is a
party, and the consummation of the transactions contemplated hereby and thereby,
will not result in any violation of any provisions of any of such Envision
Entity’s organizational documents or in a default under any provision of any
instrument or contract to which such Envision Entity is a party or by which any
of its assets are bound, or in violation of any provision of any governmental
requirement applicable to such Envision Entity or be in conflict with or
constitute, with or without the passage of time and giving of notice, either a
default under any such provision, instrument or contract or the triggering of
any preemptive or anti-dilution rights (including without limitation pursuant to
any “reset” or similar provisions) or rights of first refusal or first
offer.

      


      5.5           Valid
Issuance.  The Note, as amended and restated hereby, has been
duly authorized and duly and validly issued, free and clear of any Liens imposed
by or through any of the Envision Entities.  The New Note has been
duly authorized and, when issued and delivered in accordance with the terms of
this Agreement, will be duly and validly issued, free and clear of any Liens
imposed by or through any of the Envision Entities.

      


      5.6           Bring-Down of
Representations and Covenants.  The representations and
warranties of the Company contained in the Purchase Agreement are in all
material respects true and complete on and as of the date hereof as though made
on and as of the date hereof.  Each Envision Entity has in all
material respects complied with or performed all terms, covenants and conditions
to be complied with or performed by such party under the Transaction Documents
(except for repayment at the Maturity Date of the Note and the timely
deliverance of the Forbearance Shares).

      


      5.7           Capitalization and
Indebtedness.  The current capitalization of the Company is as
set forth on Schedule 5.7 attached hereto, which includes, without limitation
(a) a list of all holders of Common Stock by name and number of shares held, (b)
a list of all holders of warrants and options by name and number of warrants and
options held, and (c) a list of holders of all other Common Stock Equivalents by
name and number and type of security held.  Other than the Notes, the
Company does not have any Indebtedness except as set forth on Schedule 5.7
attached hereto.  The Company shall cause all Indebtedness (other than
the Notes and the other items indicated on Schedule 5.7 as “Permitted
Indebtedness”) to be converted into Common Stock, at an effective price equal to
or greater than $10.00 per share (as such figure shall be appropriately and
equitably adjusted upon any stock split, stock dividend, recapitalization or
similar transaction), on or prior to the filing of the Form 10 as contemplated
in Section 4.1 above.  Such items indicated on Schedule 5.7 as
“Permitted Indebtedness” shall be included as “Permitted Indebtedness” under the
Notes (provided such Indebtedness shall not be (a) secured, (b) paid or payable
prior to repayment in full of the Notes, (c) bear interest at a rate higher than
the Notes, or (d) have any terms more favorable than the Notes, except for the
credit card debt owed to Company executives indicated
thereon).  Schedule 5.7 shall also include a schedule of all accounts
payable, broken down by creditor, amount owed, and approximate number of days
outstanding as of the date hereof.

       

       

      
        
           

        

        
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      5.8           No
Novation.  The amended and restated Note is being issued in
substitution for and not in satisfaction of the Note.  The amended and
restated Note shall not constitute a novation or satisfaction and accord of the
Note.  The Company hereby acknowledges and agrees that the amended and
restated Note shall amend, restate, modify, extend, renew and continue the terms
and provisions contained in the Note and shall not extinguish or release the
Company or any of its Subsidiaries under any Transaction Document or otherwise
constitute a novation of its obligations thereunder.

      


      5.9.           Compliance.  Since
the date of original issuance of the Note, the Company and its subsidiaries have
not (a) other than Permitted Indebtedness, entered into, created, incurred,
assumed, guaranteed or suffered to exist any Indebtedness of any kind, or (b)
other than Permitted Liens (as defined in the Notes), entered into, created,
incurred, assumed or suffered to exist any Liens of any kind, on or with respect
to any of its or their property or assets now owned or hereafter acquired or any
interest therein or any income or profits therefrom.  Without limiting
the foregoing, the convertible notes issued by the Company to John Evey are not
secured notwithstanding anything set forth therein, and the Company agrees to
cause John Evey to promptly enter into a written subordination agreement with
the Investor that is acceptable to the Investor in its sole and absolute
discretion.

      


      6.           REPRESENTATIONS
AND WARRANTIES OF THE INVESTOR.

      


      The Investor represents and warrants to
the Company as of the date hereof:

      


      6.1           Organization.  The
Investor is duly organized, validly existing and in good standing under the laws
of its organization.

      


      6.2           Authorization.  The
Investor has the requisite corporate power and authority to execute, deliver and
perform this Agreement and the other Transaction Documents to which it is a
party.  All corporate action on the part of the Investor and by its
officers, directors and shareholders necessary for the authorization, execution
and delivery of, and the performance by the Investor of its obligations under
this Agreement and the other Transaction Documents to which it is a party has
been taken, and no further consent or authorization of any other party is
required.

      


      6.3           Enforceability.  This
Agreement and the other Transaction Documents to which the Investor is a party
constitute the Investor’s valid and legally binding obligation, enforceable in
accordance with its terms, subject to (i) applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws of general
application relating to or affecting the enforcement of creditors’ rights
generally and (ii) general principles of equity.

      


      6.4           No
Conflicts.  The execution, delivery and performance of this
Agreement and the other Transaction Documents to which the Investor is a party,
and the consummation of the transactions contemplated hereby and thereby, will
not result in any violation of any provisions of any of the Investor’s
organizational documents or in a default under any provision of any instrument
or contract to which the Investor is a party or by which any of its assets are
bound, or in violation of any provision of any governmental requirement
applicable to the Investor or be in conflict with or constitute, with or without
the passage of time and giving of notice, a default under any such provision,
instrument or contract.

       

       

      
        
           

        

        
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      6.5           Investor Status. At
the time the Investor was offered the Notes, the Conversion Shares and the
Forbearance Shares, it was, and at the date hereof it is, and on each date on
which it converts any Notes it will be either: (i) an “accredited investor” as
defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities
Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under
the Securities Act. The Investor is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.

       
 

      6.6           Experience of
Investor. The Investor, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Notes and the Conversion Shares, and has so
evaluated the merits and risks of such investment. The Investor is able to bear
the economic risk of an investment in the Notes and Conversion Shares and, at
the present time, is able to afford a complete loss of such
investment.

       
 

      6.7           General Solicitation.
The Investor is not purchasing the Notes or Conversion Shares as a result of any
advertisement, article, notice or other communication regarding the Notes or
Conversion Shares published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement..

       

      7.    MISCELLANEOUS



      7.1           Effect of this
Agreement.  Except as modified pursuant hereto, no other
changes or modifications to the original Transaction Documents are intended or
implied and in all other respects the original Transaction Documents are hereby
specifically ratified, restated and confirmed by all parties hereto as of the
effective date hereof.  To the extent of conflict between the terms of
this Agreement and the original Transaction Documents, the terms of this
Agreement shall control.  The Transaction Documents, including without
limitation this Agreement, shall be read and construed as one
agreement.

      


      7.2           Costs and
Expenses.  The Company, the Envision Guarantors and the
Investor each absolutely and unconditionally agree to pay all of their own
expenses, including all fees and disbursements of any counsel in connection with
the preparation, negotiation, execution or delivery of this Agreement and any
agreements delivered in connection with the transactions contemplated hereby or
any of its directors, officers, members, managers, partners, employees, agents
or other representatives as a consequence of or in any way in connection with
the preparation, negotiation, execution or delivery of this Agreement and any
agreements prepared, negotiated, executed or delivered in connection with the
transactions contemplated hereby, provided, however, that the
Company shall pay the Investor $5,000 for its expenses incurred or to be
incurred by it in connection with the negotiation and preparation of this
Agreement and the other Transaction Documents to be delivered in connection
herewith and $2,500 for Escrow Agent fees, which amounts may be withheld from
the $125,000 being advanced by the Investor hereunder.

      


      7.3           Further
Assurances.  The parties hereto shall execute and deliver such
additional documents and take such additional action as may be reasonably
necessary or desirable to effectuate the provisions and purposes of this
Agreement.

       

       

      
        
           

        

        
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      7.4           Merger.  This
Agreement and the documents executed in connection herewith represent the entire
expression of the agreement of Company, the Envision Guarantors and Investor
regarding the matters set forth herein.  No modification, rescission,
waiver, release or amendment of any provision of this Agreement shall be made,
except by a written agreement signed by Company, the Envision Guarantors and
Investor.

      


      7.5           Governing
Law.  The rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with the internal laws of the State of New York without regard to principle of
conflicts of laws, but excluding any rule of law that would cause the
application of the law of any jurisdiction other than the laws of the State of
New York.

      


      7.6           Binding
Effect.  This Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns, as the case may
be.

      


      7.7           Survival of Representations
and Warranties.  All representations and warranties made in
this Agreement or any other document furnished in connection with this Agreement
shall survive the execution and delivery of this Agreement and the other
documents, and no investigation by Investor or any closing shall affect the
representations and warranties or the right of Investor to rely upon
them.

      


      7.8           Severability.  Any
determination that any provision of this Agreement or any application thereof is
invalid, illegal or unenforceable in any respect in any instance shall not
affect the validity, legality or enforceability of such provision in any other
instance, or the validity, legality or enforceability of any other provision of
this Agreement.

      


      7.9           Reviewed by
Attorneys.  Company and the Envision Guarantors represent and
warrant that they (a) understand fully the terms of this Agreement and the
consequences of the execution and delivery of this Agreement, (b) have been
afforded an opportunity to have this Agreement reviewed by, and to discuss this
Agreement and all documents executed in connection herewith with, such attorneys
and other persons as Company may wish, and (c) have entered into this Agreement
and executed and delivered all documents in connection herewith of its own free
will and accord and without threat, duress or other coercion of any kind by any
person.  The parties hereto acknowledge and agree that neither this
Agreement nor the other documents executed pursuant hereto shall be construed
more favorably in favor of one than the other based upon which party drafted the
same, it being acknowledged that all parties hereto contributed substantially to
the negotiation and preparation of this Agreement and the other documents
executed pursuant hereto or in connection herewith.

       

       

      
        
           

        

        
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      7.10           Mutual Waiver of Right of
Jury Trial. THE COMPANY, THE ENVISION GUARANTORS, AND THE INVESTOR HEREBY
WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING
OUT OF, OR IN ANY WAY RELATING TO:  (A) THIS AGREEMENT, OR ANY OF THE
AGREEMENTS, INSTRUMENTS OR DOCUMENTS REFERRED TO HEREIN; (B) ANY OTHER PRESENT
OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN THEM; OR (C) ANY CONDUCT, ACTS OR
OMISSIONS OF INVESTOR, ENVISION GUARANTORS OR COMPANY OR ANY OF THEIR RESPECTIVE
DIRECTORS, OFFICERS, MANAGERS, MEMBERS, PARTNERS, EMPLOYEES, AGENTS, ATTORNEYS
OR AFFILIATES; IN EACH OF THE FOREGOING CASES, WHETHER IN CONTRACT OR TORT OR
OTHERWISE.

      


      7.11           Counterparts.  This
Agreement may be executed in any number of counterparts, but all of such
counterparts shall together constitute but one and the same
agreement.  In making proof of this Agreement, it shall not be
necessary to produce or account for more than one counterpart thereof signed by
each of the parties hereto.  Delivery of an executed counterpart of
this Agreement by telefacsimile or .pdf shall have the same force and effect as
delivery of an original executed counterpart of this Agreement.

      


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          11

          
            

          

        

        
           

        

      

      
 

                 IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the day and year first above written.

      


      ENVISION SOLAR INTERNATIONAL,
INC., a California corporation

      


      


      By:______/s/ Robert
Noble____________________________________

      Name:  Robert
Noble

      Title:    CEO

      


      ENVISION SOLAR CONSTRUCTION,
INC., a California corporation

      


      


      By:______/s/ Robert
Noble____________________________________

      Name:  Robert
Noble

      Title:    CEO

      


      ENVISION SOLAR RESIDENTIAL,
INC., a California corporation

      


      


      By:______/s/ Robert
Noble____________________________________

      Name:  Robert
Noble

      Title:    CEO

      


      ENVISION AFRICA, LLC, a
Delaware limited liability company

      


      


      By:______/s/ Robert
Noble____________________________________

      Name:  Robert
Noble

      Title:    CEO

      


      


      
        	
                 
      

              	
                GEMINI
      MASTER FUND, LTD.

              


      

      
        	
                 
      

              	
                By:
      GEMINI STRATEGIES, LLC, as investment
manager

              


      

      


      


      By: /s/ Steven
Winters                                                          

      Name:  Steven
Winters

      Title:  Managing
Member

       

      
        	
                 
      

              	
                GEMINI STRATEGIES, LLC,
      as Agent

              


      

      


      By: /s/ Steven
Winters                                                          

      Name:  Steven
Winters

                
Title:  Managing Member