EXHIBIT 10.3


SUBORDINATION AGREEMENT


This Subordination Agreement
(the "Agreement") is made as of October 30, 2015, by and between KESHIF
VENTURES, LLC ("Creditor"), and SILICON VALLEY BANK, a
California corporation, with its principal place of business at 3003 Tasman
Drive, Santa Clara, California 95054 ("Bank"). 


Recitals


A.                
ENVISION
SOLAR INTERNATIONAL, INC., a Nevada corporation, and ENVISION SOLAR CONSTRUCTION, INC., a
California corporation (individually and collectively, jointly and severally, "Borrower")
has requested and/or obtained certain loans or other credit accommodations from
Bank which are or may be from time to time secured by assets and property of
Borrower.


B.                
Creditor has
extended loans or other credit accommodations to Borrower, and/or may extend
loans or other credit accommodations to Borrower from time to time.


C.                
To induce Bank
to extend credit to Borrower and, at any time or from time to time, at Bank's
option, to make such further loans, extensions of credit, or other
accommodations to or for the account of Borrower, or to purchase or extend
credit upon any instrument or writing in respect of which Borrower may be
liable in any capacity, or to grant such renewals or extension of any such
loan, extension of credit, purchase, or other accommodation as Bank may deem
advisable, Creditor is willing to subordinate:  (i) all of Borrower's
indebtedness and other monetary obligations owing to Creditor (including,
without limitation, principal, premium (if any), interest, fees, charges,
expenses, costs, professional fees and expenses, and reimbursement
obligations), plus any cash dividends and/or cash distributions or other cash payments
pursuant to call, put, or conversion features in connection with equity
securities of Borrower issued to or held by Creditor, whether presently
existing or arising in the future (collectively, subject to the limitations set
forth below, the "Subordinated Debt") to all of Borrower's indebtedness
and obligations to Bank under the Loan Documents (as defined in the Loan Agreement
described below); and (ii) all of Creditor's security interests, if any in the
Collateral (as hereinafter defined) to all of Bank's security interests in the
Collateral.  Notwithstanding anything to the contrary contained herein, the
following are expressly excluded from the Subordinated Debt: (a) non-monetary
obligations under any warrant, option or similar agreements between Borrower
and Guarantor relating to the issuance of capital stock of Borrower; (b) all
non-monetary rights, privileges and benefits granted to Guarantor (or any of
its affiliates) under such agreements or in connection with the capital stock
issued or to be issued in connection therewith; (c) rights to receive customary
board of director fees (consistent with past business practices) and related
out-of-pocket expense reimbursements; and (d) rights to receive reasonable
out-of-pocket expense reimbursements arising in connection with Guarantor's
investments in Borrower.


NOW, THEREFORE, THE PARTIES
AGREE AS FOLLOWS:


1.                  
Until such time as all of the
following shall occur (such time, a "Termination Event"), (a) the Senior
Debt has been fully and indefeasibly paid in cash (other than inchoate
reimbursement and indemnity obligations) or assigned to Creditor, (b) Bank has
no commitment or obligation to lend any further funds to Borrower under the
Loan Documents, and (c) all Loan Documents between Bank and Borrower are
terminated or assigned to Creditor, Creditor subordinates to Bank any security
interest or lien that Creditor may have in any Collateral of Borrower. 
Notwithstanding the respective dates of attachment or perfection of the
security interests of Creditor and the security interests of Bank, all now
existing and hereafter arising security interests of Bank in the "Collateral",
as defined in a certain Loan and Security Agreement between Borrower and Bank
dated as of October __, 2015 (as may be amended, modified, 

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restated or
supplemented from time to time, the "Loan Agreement"), shall at all
times prior to a Termination Event be senior to the security interests of
Creditor in the Collateral.  Creditor hereby (a)
acknowledges and consents to (i) Borrower granting to Bank a security interest
in the Collateral pursuant to the Loan Agreement,
(ii) Bank filing any and all financing statements and other documents as deemed
necessary by Bank in order to perfect Bank's security interest in the
Collateral, and (iii) the entering into of the Loan Agreement and all documents
in connection therewith by Borrower, (b) acknowledges and agrees that the Senior
Debt (as hereinafter defined), the entering
into of the Loan Agreement and all documents in connection therewith by
Borrower, and the security interest granted by Borrower to Bank in the
Collateral pursuant to the Loan Agreement shall
be permitted under the provisions of the Subordinated Debt documents
(notwithstanding any provision of the Subordinated Debt documents to the
contrary), (c) acknowledges, agrees and covenants that Creditor shall not,
prior to a Termination Event, contest, challenge or
dispute the validity, attachment, perfection, priority or enforceability of
Bank's security interest in the Collateral, or the validity, priority or
enforceability of the Senior Debt, and (d)
acknowledges and agrees that, prior to a Termination Event, the provisions of this Agreement will apply fully and
unconditionally even in the event that Bank's security interest in the
Collateral (or any portion thereof) shall be unperfected.


2.                  
Except for any dividends,
distributions or other payments as may be permitted in the Loan Agreement, all
Subordinated Debt is subordinated in right of payment to the Obligations (as
defined in the Loan Agreement), together with all costs of collecting such Obligations
(including attorneys' fees), including, without limitation, all Obligations under
any agreement in connection with the provision by Bank to Borrower of products and/or credit services facilities, including,
without limitation, any letters of credit, cash management services (including,
without limitation, merchant services, direct deposit of payroll, business
credit cards, and check cashing services), interest rate swap arrangements, and
foreign exchange services, all interest accruing after the commencement
by or against Borrower of any bankruptcy, reorganization or similar proceeding
(such obligations, collectively, the "Senior Debt").


3.                  
Except for any dividends,
distributions or other payments as may be permitted in the Loan Agreement, Creditor
will not demand or receive from Borrower (and Borrower will not pay to
Creditor) all or any part of the Subordinated Debt, by way of payment,
prepayment, setoff, lawsuit or otherwise, nor will Creditor exercise any remedy
with respect to the Collateral, nor will Creditor accelerate the Subordinated
Debt, or commence, or cause to commence, prosecute or participate in any
administrative, legal or equitable action against Borrower relating to the
Subordinated Debt or the Collateral, until such time as a Termination Event
shall occur.  Nothing in this Agreement shall prohibit Creditor from converting
all or any part of the Subordinated Debt into equity securities of Borrower,
provided that, if such securities have any call, put or other conversion
features that would obligate Borrower to declare or pay cash dividends, make cash
distributions, or otherwise pay any money to the holder, Creditor hereby agrees
that Borrower may not declare, pay or make such cash dividends, cash distributions
or other payments to Creditor, and Creditor shall not accept any such cash dividends,
cash distributions or other cash payments, except as may be permitted in the
Loan Agreement..


4.                  
Creditor shall promptly deliver to
Bank in the form received (except for endorsement or assignment by Creditor
where required by Bank) for application to the Senior Debt any payment,
distribution, security or proceeds received by Creditor with respect to the
Subordinated Debt other than in accordance with this Agreement.


5.                  
In the event of Borrower's
insolvency, reorganization or any case or proceeding under any bankruptcy or
insolvency law or laws relating to the relief of debtors, including, without
limitation, any voluntary or involuntary bankruptcy, insolvency, receivership
or other similar statutory or common law proceeding or arrangement involving
Borrower, the readjustment of its liabilities, any assignment for the benefit
of its creditors or any marshalling of its assets or liabilities (each, an "Insolvency
Proceeding"), (a) this Agreement shall remain in full force and effect in
accordance with Section 510(a) of the United States 

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Bankruptcy Code, (b) the Collateral shall include, without limitation, all
Collateral arising during or after any such Insolvency Proceeding, and (c)
Bank's claims against Borrower and the estate of Borrower shall be paid in full
(other than inchoate reimbursement and indemnity obligations) before any payment
is made to Creditor.


6.                  
Creditor shall give Bank prompt
written notice of the occurrence of any default or event of default under any
document, instrument or agreement evidencing or relating to the Subordinated
Debt, and shall, simultaneously with giving any notice of default to Borrower,
provide Bank with a copy of any notice of default given to Borrower. 


7.                  
Until such time as a Termination
Event shall occur, Creditor irrevocably appoints Bank as Creditor's
attorney-in-fact, and grants to Bank a power of attorney with full power of
substitution, in the name of Creditor or in the name of Bank, for the use and
benefit of Bank, without notice to Creditor, to perform at Bank's option the
following acts in any Insolvency Proceeding involving Borrower:


a) 
To file the appropriate claim or
claims in respect of the Subordinated Debt on behalf of Creditor if Creditor
does not do so prior to 30 days before the expiration of the time to file
claims in such Insolvency Proceeding and if Bank elects, in its sole
discretion, to file such claim or claims; and


b) 
To accept or reject any plan of
reorganization or arrangement on behalf of Creditor and to otherwise vote
Creditor's claims in respect of any Subordinated Debt in any manner that Bank
deems appropriate for the enforcement of its rights hereunder.


In
addition to and without limiting the foregoing: (x) until the Senior Debt has
been fully paid in cash and Bank's obligations to lend any funds to Borrower
have been terminated, Creditor shall not commence or join in any involuntary
bankruptcy petition or similar judicial proceeding against Borrower, and (y) if
an Insolvency Proceeding occurs: (i) Creditor shall not assert, without the
prior written consent of Bank, any claim, motion, objection or argument in
respect of the Collateral in connection with any Insolvency Proceeding which
could otherwise be asserted or raised in connection with such Insolvency
Proceeding, including, without limitation, any claim, motion, objection or argument
seeking adequate protection or relief from the automatic stay in respect of the
Collateral, (ii) Bank may consent to the use of cash collateral on such terms
and conditions and in such amounts as it shall in good faith determine without
seeking or obtaining the consent of Creditor as (if applicable) holder of an
interest in the Collateral, (iii) if use of cash collateral by Borrower is
consented to by Bank, Creditor shall not oppose such use of cash collateral on
the basis that Creditor's interest in the Collateral (if any) is impaired by
such use or inadequately protected by such use, or on any other ground, and
(iv) Creditor shall not object to, or oppose, any sale or other disposition of
any assets comprising all or part of the Collateral, free and clear of security
interests, liens and claims of any party, including Creditor, under Section 363
of the United States Bankruptcy Code or otherwise, on the basis that the
interest of Creditor in the Collateral (if any) is impaired by such sale or
inadequately protected as a result of such sale, or on any other ground (and,
if requested by Bank, Creditor shall affirmatively and promptly consent to such
sale or disposition of such assets), if Bank has consented to, or supports,
such sale or disposition of such assets.


8.                  
Creditor represents and warrants
that Creditor has provided Bank with true and correct copies of all of the
documents evidencing or relating to the Subordinated Debt.  Upon Bank's
reasonable request, Creditor shall immediately affix a legend to the
instruments evidencing the Subordinated Debt stating that the instruments are
subject to the terms of this Agreement.  By the execution of this Agreement,
Creditor hereby authorizes Bank to amend any financing statements filed by
Creditor against Borrower as follows: "In accordance with a certain
Subordination Agreement by and among the Secured Party, the Debtor and Silicon
Valley Bank, the Secured Party has subordinated any security interest or lien
that Secured Party may have in any property of the Debtor to the security
interest of Silicon Valley Bank in all assets of the Debtor, notwithstanding
the respective dates of attachment or perfection of the security interest of
the Secured Party and Silicon Valley Bank."

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9.                  
No amendment of the documents
evidencing or relating to the Subordinated Debt shall directly or indirectly
modify the provisions of this Agreement in any manner which would reasonably be
expected to terminate or impair the subordination of the Subordinated Debt or
the subordination of the security interest or lien that Creditor may have in the
Collateral.  Prior to a Termination Event, Bank shall have the sole and
exclusive right to restrict or permit, or approve or disapprove, the sale,
transfer or other disposition of Collateral except in accordance with the terms
of the Senior Debt. Upon written notice from Bank to Creditor of Bank's
agreement to release its lien on all or any portion of the Collateral in
connection with the sale, transfer or other disposition thereof by Bank (or by
Borrower with consent of Bank), Creditor shall be deemed to have also,
automatically and simultaneously, released its lien on the Collateral, and
Creditor shall upon written request by Bank, promptly take such action as shall
be necessary or appropriate to evidence and confirm such release.  All proceeds
resulting from any such sale, transfer or other disposition shall be applied
first to the Senior Debt until payment in full thereof (other than inchoate
reimbursement and indemnity obligations), with the balance, if any, to the
Subordinated Debt, or to any other entitled party.  If Creditor fails to
release its lien as required hereunder, Creditor hereby appoints Bank as
attorney in fact for Creditor with full power of substitution to release
Creditor's liens as provided hereunder.  Such power of attorney being coupled
with an interest shall be irrevocable.


10.              
All necessary action on the part
of Creditor, its officers, directors, partners, members and shareholders, as
applicable, necessary for the authorization of this Agreement and the
performance of all obligations of Creditor hereunder has been taken.  This
Agreement constitutes the legal, valid and binding obligation of Creditor,
enforceable against Creditor in accordance with its terms, except as the
enforceability thereof may be subject to or limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws relating to or
affecting the rights of creditors generally or by equitable principles relating
to enforceability.  The execution, delivery and performance of and compliance
with this Agreement by Creditor will not (a) result in any material violation
or default of any term of any of Creditor's charter, formation or other
organizational documents (such as Articles or Certificate of Incorporation,
bylaws, partnership agreement, operating agreement, etc.) or (b) violate any
material applicable law, rule or regulation.  


11.              
If, at any time after payment in
full of the Senior Debt any payments of the Senior Debt must be disgorged by
Bank for any reason (including, without limitation, any Insolvency Proceeding),
this Agreement and the relative rights and priorities set forth herein shall be
reinstated as to all such disgorged payments as though such payments had not
been made and Creditor shall immediately pay over to Bank all payments received
with respect to the Subordinated Debt to the extent that such payments would
have been prohibited hereunder.  At any time and from time to time, without
notice to Creditor, Bank may take such actions with respect to the Senior Debt
as Bank, in its sole discretion, may deem appropriate, including, without
limitation, terminating advances to Borrower, increasing the principal amount,
extending the time of payment, increasing applicable interest rates, renewing,
compromising or otherwise amending the terms of any documents affecting the
Senior Debt and any collateral securing the Senior Debt, and enforcing or
failing to enforce any rights against Borrower or any other person.  No such
action or inaction shall impair or otherwise affect Bank's rights hereunder. 
Creditor waives any benefits of California Civil Code Sections 2809, 2810,
2819, 2845, 2847, 2848, 2849, 2850, 2899 and 3433.


12.              
This Agreement shall bind any successors or assignees of Creditor and shall
benefit any successors or assigns of Bank, provided, however, Creditor agrees
that, prior and as conditions precedent to Creditor assigning all or any portion
of the Subordinated Debt: (a) Creditor shall give Bank prior written notice of
such assignment, and (b) such successor or assignee, as applicable, shall
execute a written agreement whereby such successor or assignee expressly agrees
to assume and be bound by all terms and conditions of this Agreement with
respect to Creditor.  This Agreement shall remain effective until
terminated in writing by Bank. This Agreement is solely for the benefit of
Creditor and Bank and not for the benefit of Borrower or any other party. 
Creditor further 

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agrees that if Borrower is in the process of refinancing any portion of the
Senior Debt with a new lender, and if Bank makes a request of Creditor, Creditor
shall agree to enter into a new subordination agreement with the new lender on
substantially the terms and conditions of this Agreement.


13.              
Creditor hereby agrees to execute
such documents and/or take such further action as Bank may at any time or times
reasonably request in order to carry out the provisions and intent of this
Agreement, including, without limitation, ratifications and confirmations of
this Agreement from time to time hereafter, as and when requested by Bank.


14.              
This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original and all of
which together shall constitute one instrument.


15.              
This Agreement shall be governed
by and construed in accordance with the laws of the State of California,
without giving effect to conflicts of laws principles.  Creditor and Bank
submit to the exclusive jurisdiction of the state and federal courts located in
Santa Clara County, California in any action, suit, or proceeding of any kind,
against it which arises out of or by reason of this Agreement.  CREDITOR AND
BANK WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN.


WITHOUT INTENDING IN ANY WAY TO LIMIT THE
PARTIES' AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the
above waiver of the right to a trial by jury is not enforceable, the parties
hereto agree that any and all disputes or controversies of any nature between
them arising at any time shall be decided by a reference to a private judge,
mutually selected by the parties (or, if they cannot agree, by the Presiding
Judge of the Santa Clara County, California Superior Court) appointed in
accordance with California Code of Civil Procedure Section 638 (or pursuant to
comparable provisions of federal law if the dispute falls within the exclusive
jurisdiction of the federal courts), sitting without a jury, in Santa Clara
County, California; and the parties hereby submit to the jurisdiction of such
court.  The reference proceedings shall be conducted pursuant to and in
accordance with the provisions of California Code of Civil Procedure §§ 638
through 645.1, inclusive.  The private judge shall have the power, among
others, to grant provisional relief, including without limitation, entering
temporary restraining orders, issuing preliminary and permanent injunctions and
appointing receivers.  All such proceedings shall be closed to the public and
confidential and all records relating thereto shall be permanently sealed.  If
during the course of any dispute, a party desires to seek provisional relief,
but a judge has not been appointed at that point pursuant to the judicial
reference procedures, then such party may apply to the Santa Clara County,
California Superior Court for such relief.  The proceeding before the private
judge shall be conducted in the same manner as it would be before a court under
the rules of evidence applicable to judicial proceedings.  The parties shall be
entitled to discovery which shall be conducted in the same manner as it would
be before a court under the rules of discovery applicable to judicial
proceedings.  The private judge shall oversee discovery and may enforce all
discovery rules and order applicable to judicial proceedings in the same manner
as a trial court judge.  The parties agree that the selected or appointed
private judge shall have the power to decide all issues in the action or proceeding,
whether of fact or of law, and shall report a statement of decision thereon
pursuant to the California Code of Civil Procedure § 644(a).  Nothing in this
paragraph shall limit the right of any party at any time to exercise self-help
remedies, foreclose against collateral, or obtain provisional remedies.  The
private judge shall also determine all issues relating to the applicability,
interpretation, and enforceability of this paragraph.


16.              
This Agreement represents the
entire agreement with respect to the subject matter hereof, and supersedes all
prior negotiations, agreements and commitments.  Creditor is not relying on any
representations by Bank or Borrower in entering into this Agreement, and
Creditor has kept and will continue to keep itself fully apprised of the
financial and other condition of Borrower.  This Agreement may be amended only
by written instrument signed by Creditor and Bank.


 [Signature page follows]


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IN WITNESS WHEREOF, the undersigned have
executed this Agreement as of the date first above written.


"Creditor"                                                                     "Bank"


KESHIF VENTURES, LLC                                          SILICON
VALLEY BANK




By: /s/ Taner Halicioglu                                                   
By: /s/ Cody Nenadal


Name: Taner Halicioglu                                                   
Name: Cody Nenadal




Title: Manager                                                                 
Title: Vice President


                                                                                                


                                                            


The undersigned approves
of the terms of this Agreement.


"Borrower"


ENVISION SOLAR
INTERNATIONAL, INC.


By:/s/ Desmond Wheatley


Name: Desmond Wheatley


Title: Chief Executive Officer


 


ENVISION SOLAR
CONSTRUCTION, INC.


By: /s/ Desmond Wheatley


Name: Desmond Wheatley


Title: Chief Executive Officer






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