Document:

evsi_10q-ex1003.htm

EXHIBIT 10.3

 

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this "Agreement") is effective as of the 10th day of August 2011, by and between Envision Solar International, Inc., a Nevada corporation (the "Company"), and Christopher Caulson, an individual ("Employee"), and is made with respect to the following facts:

R E C I T A L S

A.           The Company and the Employee wish to ensure that the Company will receive the benefit of Employee's loyalty and service.

B.           In order to help ensure that the Company receives the benefit of Employee's loyalty and service, the parties desire to enter into this formal Employment Agreement to provide Employee with appropriate compensation arrangements and to assure Employee of employment stability.

C.           The parties have entered into this Agreement for the purpose of setting forth the terms of employment of the Employee by the Company.

   

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, THE PARTIES HERETO AGREE AS FOLLOWS:

1.           Employment of Employee and Duties. The Company hereby hires Employee and Employee hereby accepts employment upon the terms and conditions described in this Agreement. During the period from November 1, 2010 to present, the Company acknowledges that the Employee was providing services to the Company as a Chief Financial Officer.  Commencing on August 10, 2011, the Employee shall be named Chief Financial Officer of the Company with all of the duties, privileges and authorities usually attendant upon such office, including but not limited to responsibility for the day-to-day management of the Company’s financial and accounting operations.  Subject to (a) the general supervision by the Chief Executive Officer and the Board of Directors, and (b) the Employee's duty to report to the Chief Executive Officer and the Board of Directors periodically, as specified by them from time-to-time, Employee shall have all of the authority to perform his employment duties for the Company.

2.           Time and Effort.  Employee agrees to devote his full working time and attention to the management of the Company's business affairs, the implementation of its strategic plan as determined by the current Chief Executive Officer and the Board of Directors, and the fulfillment of his duties and responsibilities as the Company's Chief Financial Officer.  Expenditure of a reasonable amount of time for personal matters and business and charitable activities shall not be deemed to be a breach of this Agreement, provided that those activities do not materially interfere with the services required to be rendered to the Company under this Agreement.

3.           The Company's Authority.  Employee agrees to comply with the Company's rules and regulations as adopted by the Company's Board of Directors and Chief Executive Officer regarding performance of his duties, and to carry out and perform those orders, directions and policies established by the Company with respect to his engagement.  Employee shall promptly notify the Chief Executive Officer and/or the Company's Board of Directors of any objection he has to the Board's directives and the reasons for such objection.

    

  

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4.           Noncompetition by Employee.  During the term of this Agreement, the Employee shall not, directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, stockholder (in a private the Company), corporate officer, director, or in any other individual or representative capacity, engage or participate in any business that is in direct competition with the business of the Company or its affiliates.

5.           Term of Agreement.  This Agreement shall commence to be effective as of August 10, 2011 (the “Commencement Date”), and shall continue until January 1, 2016, unless terminated as provided in Section 15 of this Agreement.

6.           Confidential Information: Nondisclosure Covenant.

6.1.           Confidential Information.  As used herein the term “Confidential Information” shall mean all customer and contract lists, records, financial data, trade secrets, business and marketing plans and studies, manuals for employee and personnel policies, manufacturing and/or production manuals, computer programs and software, strategic plans, formulas, manufacturing and production processes and techniques (including without limitation types of machinery and equipment used together with improvements and modifications thereon), tools, applications for patents, designs, models, patterns, drawings, tracings, sketches, blueprints, and all other similar information developed and/or used by the Company in the course of its business and which is not known by or readily available to the general public.

6.2           Nondisclosure Covenant.  Employee acknowledges that, in the course of performing services for and on behalf of the Company, Employee has had and will continue to have access to Confidential Information.  Employee hereby covenants and agrees to maintain in strictest confidence all Confidential Information in trust for the Company, its successors and assigns, and to disclose such information only on a “need-to-know” basis in furtherance and for the benefit of the Company’s business.  During the period of Employee’s employment with the Company and at any and all times following Employee’s termination of employment for any reason, including without limitation, Employee’s voluntary resignation or involuntary termination with or without cause, Employee agrees to not misappropriate, utilize for any purpose other than for the direct benefit of the Company, or disclose or make available to anyone outside the Company’s organization, any Confidential Information or anything relating thereof without the prior written consent of the Company, which consent may be withheld by the Company for any reason or no reason at all.

6.3           Return of Property.  Upon Employee’s termination of his employment with the Company for any reason, including without limitation Employee’s voluntary resignation or involuntary termination with or without cause, Employee hereby agrees to promptly return to the Company’s possession all copies of any writings, computer discs or equipment, drawings or any other information relating to Confidential Information which are in Employee’s possession or control. Employee further agrees that, upon the request of the Company at any time during Employee’s period of employment with the Company, Employee shall promptly return to the Company all such copies of writings, computer discs or equipment, drawings or any other information relating to Confidential Information which are in Employee’s possession or control.

6.4           Rights to Inventions and Trade Secrets.  Employee hereby assigns to the Company all right, title and interest in and to any ideas, inventions, original works or authorship, developments, improvements or trade secrets which Employee solely or jointly has conceived or reduced to practice, or will conceive or reduce to practice, or cause to be conceived or reduced to practice during his employment with the Company.  All original works of authorship which are made by Employee (solely or jointly with others) within the scope of Employee’s services hereunder and which are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act.

    

  

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7.           Noninterference and Nonsolicitation Covenants.  In further reflection of the Company’s important interests in its proprietary information and its trade, customer, vendor and employee relationships, Employee agrees that, during the 12 month period following the termination of Employee’s employment with the Company for any reason, including without limitation Employee’s voluntary resignation or involuntary termination for cause, Employee will not directly or indirectly, for or on behalf of any person, firm, corporation or other entity, (a) interfere with any contractual or other business relationships that the Company has with any of its customers, clients, service providers or materials suppliers as of the date of Employee’s termination of employment, or (b) solicit or induce any employee of the Company to terminate his/her employment relationship with the Company.

8.           Compensation.  During the term of this Agreement, the Company shall pay the following compensation to Employee:

8.1           Annual Compensation.  Employee shall be paid a fixed salary of $165,000 per annum, which will be paid in twenty-four installments of $6,875 for periods that end on the fifteenth and last day of each month (“Annual Compensation”).

8.2           Additional Compensation.  In addition to the compensation set forth in Section 8.1 of this Agreement, Employee is eligible for a quarterly and annual bonus based on criteria which will be agreed to and defined through conversations with the Chief Executive Officer. Employee’s total bonus will be in the zero to fifty percent (50%) range, or greater, of the Annual Compensation in any given year based on the Chief Executive Officer’s evaluation of the Employee's definable efforts, accomplishments and similar contributions. The bonus will also be based on a consideration of increases in shareholder value, efforts made by the Employee to effect mergers or acquisitions for the Company, if applicable, and other positive results for shareholders based on efforts by the Employee. The Employee's individual performance goals will be set out in writing by the Chief Executive Officer and will result from strategic and tactical planning discussions between the Employee, the Chief Executive Officer and members of the Board of Directors. The distribution of the Employee's total bonus between quarterly and annual payments will be decided during the same discussions by the same stakeholders. Any quarterly bonus due will be paid following the end of each of the Company’s fiscal quarters.  Any annual bonus earned will be paid net of any quarterly bonuses paid. The Employee must be an active employee at the end of each fiscal quarter to receive bonuses.

8.3           Stock Incentives.  As of August 10, 2011, the Company will grant to the Employee 2,700,000 stock options to purchase 2,700,000 shares of the Company’s Common Stock, having an exercise price of $0.27 per share and an exercise period of ten years after the date of grant in accordance with the terms and conditions of the Company 2011 Stock Incentive Plan (the “Plan”), with a vesting schedule as follows: one third upon grant (deemed to be August 11, 2011) and one third on November 1, 2011 and one third on November 1, 2012 until the remaining stock options have vested. Upon recommendation of the Compensation Committee of the Company’s Board of Directors and approval of the Company’s full Board of Directors, the Employee may be granted additional stock options to purchase additional stock of the Company, depending on the achievement of Company operating milestones such as annual gross revenue and EBIDTA, or time served as an employee, to be established by the Board of Directors of the Company.

   

  

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9.           Fringe Benefits.  Employee shall be entitled to all fringe benefits that the Company or its subsidiaries may make available from time-to-time for persons with comparable positions and responsibilities.  Without limitation, such benefits shall include participation in any life and disability insurance programs, profit incentive plans, pension or retirement plans, and bonus plans as are maintained or adopted from time-to-time by the Company. The Company shall also provide Employee with any medical and dental group insurance coverage or equivalent coverage for Employee and his dependents as are maintained or adopted from time-to-time by the Company.  The medical and dental insurance coverage shall begin at such time as the Company adopts such plans and shall continue throughout the term of this Agreement.

10.           Office and Staff.  In order to enable Employee to discharge his obligations and duties pursuant to this Agreement, the Company agrees that it shall provide suitable office space for Employee in San Diego, California, together with all necessary and appropriate supporting staff and secretarial assistance, equipment, stationery, books and supplies as the Company can reasonably make available as it evolves.  Employee agrees that the office space and supporting staff presently in place is suitable for the purposes of this Agreement.

11.           Reimbursement of Expenses.  The Company shall reimburse Employee for all reasonable travel, mobile telephone, promotional and entertainment expenses incurred in connection with the performance of Employee's duties hereunder, subject to Section 12 of this Agreement with respect to automobile expenses.  Employee's reimbursable expenses shall be paid promptly by the Company upon presentment by Employee of an itemized list of invoices describing such expenses.  All compensation provided in Sections 8, 9, 11 and 12 of this Agreement shall be subject to customary withholding tax and other employment taxes, to the extent required by law.

12.           Automobile.  Notwithstanding anything else herein to the contrary, the Company shall pay to the Employee a fixed amount equal to the standard published governmental mileage rate per mile for each mile driven during the term of this Agreement as reimbursement to the Employee for all expenses incurred by the Employee for the use of his automobile for Company business purposes, including but not limited to depreciation, repairs, maintenance, gasoline and insurance. After the expiration of the first year of the term of this Agreement, the Company’s Board of Directors will review and may in its discretion determine to increase the Employee’s automobile allowance, or authorize the Company to lease an automobile for the Employee.  Employee shall not be entitled to any other reimbursement for the use of his automobile for business purposes.

13.           Vacation. Employee shall be entitled to four weeks of paid vacation per year or pro rata portion of each year of service by Employee under this Agreement, not to be taken consecutively without the prior approval of the Company’s Chief Executive Officer which will not be unreasonably withheld. The Employee shall be entitled to the holidays provided in the Company's established corporate policy for employees with comparable duties and responsibilities. Starting on the second anniversary of employment Employee will be entitled to five weeks of paid vacation and starting on the fifth anniversary Employee will be entitled to six weeks paid vacation. Vacation will be earned and accrued on a prorated basis throughout a given employment year.

14.           Rights In And To Inventions And Patents.

14.1           Description of Parties' Rights.  The Employee agrees that with respect to any inventions made by him or the Company during the term of this Agreement, solely or jointly with others, (i) which are made with the Company's equipment, supplies, facilities, trade secrets or time, or (ii) which relate to the business of the Company or the Company's actual or demonstrably anticipated research or development, or (iii) which result from any work performed by the Employee for the Company, such inventions shall belong to the Company.  The Employee also agrees that the Company shall have the right to keep such inventions as trade secrets, if the Company chooses.

   

  

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14.2           Disclosure Requirements.  For purposes of this Agreement, an invention is deemed to have been made during the term of this Agreement if, during such period, the invention was conceived or first actually reduced to practice.  In order to permit the Company to claim rights to which it may be entitled, the Employee agrees to disclose to the Company in confidence the nature of all patent applications filed by the Employee during the term of this Agreement.

15.           Termination.  This Agreement may be terminated in the following manner and not otherwise:

15.1           Mutual Agreement.   This Agreement may be terminated by the mutual written agreement of the Company and Employee to terminate.

15.2           Termination by Employee for Breach.  Employee may at his option and in his sole discretion terminate this Agreement for the material breach by the Company of the terms of this Agreement if the Company has not cured the breach within 30 days of receipt of written notice of the breach from the Employee.  In the event of such termination, Employee shall give the Company 30 day’s prior written notice.

15.3           Termination by the Company for Breach.  The Company may at its option terminate this Agreement in the event that the Employee breaches this Agreement, is convicted of committing a felony under federal, state or local law, commits gross negligence in the performance of his duties under this Agreement, or breaches his fiduciary duty to the Company, to the Board of Directors or to the Company’s shareholders; provided, however, that the Company shall give the Employee written notice of specific instances for the basis of any termination of this Agreement by the Company pursuant to Section 15.3 of this Agreement.  Employee shall have a period of 10 days after said notice in which to cease the alleged violations before the Company may terminate this Agreement.  If Employee ceases to commit the alleged violations within said 10 day period, the Company may not terminate this Agreement pursuant to this Section.  If Employee continues to commit the alleged violations after said 10-day period, the Company may terminate this Agreement immediately upon written notification to Employee.

15.4           Termination Upon Death.  This Agreement shall terminate upon the death of the Employee.

15.5           Termination Upon the Disability of the Employee.  This Agreement shall terminate upon the disability of the Employee.  As used in the previous sentence, the term "disability" shall mean the complete disability to discharge Employee's duties and responsibilities for a continuous period of not less than six months during any calendar year.  Any physical or mental disability which does not prevent Employee from discharging his duties and responsibilities in accordance with usual standards of conduct as determined by the Company in its reasonable opinion shall not constitute a disability under this Agreement.

15.6           Termination As A Result of A Change in Control of the Company.  “Change of Control” is defined as a sale of all or substantially all of the Company’s assets or more than fifty percent (50%) of the Company’s outstanding stock, to a purchaser, in a single transaction or a series of related transactions, or a merger pursuant to which the Company is not the surviving corporation, with any entity which is unaffiliated with the Company. In the event of a Change in Control of the Company, if the Employee, negotiating in good faith, is unable to come to an agreement with the surviving Company regarding an employment agreement, then the Employee may terminate this Agreement.

    

  

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15.7           Other Termination by Employee.  If this Agreement is terminated by Employee in writing for a reason other than the Company’s breach of this Agreement (i.e. voluntary resignation) then (a) Employer shall not be entitled to assert any claim against the Employee for consequential or indirect damages or for lost profits as a result of the termination; and (b) Employee shall not be entitled to any rights set forth in Section 16 of this Agreement except that Employee shall be entitled to the right to exercise vested options, if any, for a period of 90 days after the date of the written notification of termination by the Employee.

16.           Improper Termination.  If this Agreement is terminated by Employee for any reason pursuant to Section 15.2 or 15.6 of this Agreement or by the Company in any manner except specifically in accordance with Section 15.1, 15.3, 15.4 or 15.5 of this Agreement, then (i) the Company shall immediately pay to the Employee a lump sum payment equal to the sum of the Employee’s entire Annual Compensation and 100% of his bonus potential except that in the event of a termination as a result of a  Change in Control of the Company, the Company shall immediately pay to Employee a lump sum equal to the sum of two years of Employee's entire Annual Compensation and 100% of his bonus potential for such two year period,  (ii) Employee shall be entitled to all of the benefits under Section 7 of this Agreement, as amended, for a period of two years from the termination, and (iii) if applicable, all unvested stock options owned by Employee will immediately vest, Employee shall be entitled to exercise all vested stock options which he owns for the entire remaining exercise period of the stock options, no such stock options shall terminate prior to said expiration dates, and no “severance” shall be deemed to have occurred under the Company’s Plan or under existing Stock Option Agreements covering said stock options. It is specifically agreed that in such event Employee shall have no duty to mitigate his damages by seeking comparable, inferior or different employment.

17.           Assignability of Benefits.  Except to the extent that this provision may be contrary to law, no assignment, pledge, collateralization or attachment of any of the benefits under this Agreement shall be valid or recognized by the Company.  Except as provided by law, payment provided for by this Agreement shall not be subject to seizure for payment of any debts or judgments against the Employee, nor shall the Employee have any right to transfer, modify, anticipate or encumber any rights or benefits hereunder; provided that any stock issued by the Company to the Employee pursuant to this Agreement shall not be subject to Section 16 of this Agreement.

18.           Indemnification of Employee.  Pursuant to the provisions and subject to the limitations of the California Corporations Code, and in particular Sections 204 and 317 therein, the Company shall indemnify and hold Employee harmless as provided in Sections 18.1, 18.2 and 18.3 of this Agreement.  The Company shall, upon the request of Employee, assume the defense and directly bear all of the expense of any action or proceedings which may arise for which Employee is entitled to indemnification pursuant to this Section.

18.1           Indemnification of Employee for Actions by Third Parties.  The Company hereby agrees to indemnify and hold Employee harmless from any liability, claims, fines, damages, losses, expenses, judgments or settlements actually incurred by him, including but not limited to reasonable attorneys' fees and costs actually incurred by him as they are incurred, as a result of Employee being made at any time a party to, or being threatened to be made a party to, any proceeding (other than an action by or in the right of the Company, which is addressed in Section 18.2 of this Agreement), relating to actions Employee takes within the scope of his employment as the Chief Financial Officer of the Company or in any other employment capacity, or in his role as a director of the Company, provided that Employee acted in good faith and in a manner he reasonably believed to be in the best interest of the Company and, in the case of a criminal proceeding, had no reasonable cause to believe his conduct was unlawful.

    

  

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18.2           Indemnification of Employee for Actions in the Right of the Company. The Company hereby agrees to indemnify and hold Employee harmless from any liability, claims, damages, losses, expenses, judgments or settlements actually incurred by him, including but not limited to reasonable attorneys' fees and costs actually incurred by him as they are incurred, as a result of Employee being made a party to, or being threatened to be made a party to, any proceeding by or in the right of the Company to procure a judgment in its favor by reason of any action taken by Employee as an officer, director or agent of the Company, provided that Employee acted in good faith in a manner he reasonably believed to be in the best interests of the Company and its shareholders, and provided further, that no indemnification by the Company shall be required pursuant to this Section 18.2 (i) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) for acts or omissions that Employee believed to be contrary to the best interests of the Company or its shareholders or that involve the absence of good faith on the part of Employee, (iii) for any transaction from which Employee derived an improper personal benefit, (iv) for acts or omissions that show a reckless disregard by Employee of his duties to the Company or its shareholders in circumstances in which Employee was aware, or should have been aware, in the ordinary course of performing his duties, of a risk of serious injury to the Company or its shareholders, (v) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of Employee's duties to the Company or its shareholders, or (vi) for any other act by Employee for which Employee is not permitted to be indemnified under the California Corporations Code.  Furthermore, the Company has no obligation to indemnify Employee pursuant to this Section 18.2 in any of the following circumstances:

A.   In respect of any claim, issue, or matter as to which Employee is adjudged to be liable to the Company in the performance of his duties to the Company and its shareholders, unless and only to the extent that the court in which such action was brought determines upon application that, in view of all the circumstances of the case, he is fairly and reasonably entitled to indemnity for the expenses and then only in the amount that the court shall determine.

B.   In the event of the application of Section 18.2(A), then for amounts paid in settling or otherwise disposing of a threatened or pending action without court approval.

C.   In the event of the application of Section 18.2(A), then for expenses incurred in defending a threatened or pending action which is settled or otherwise disposed of without court approval.

18.3           Reimbursement.  In the event that it is determined by a trier of fact that Employee is not entitled to indemnification by the Company pursuant to Sections 18.1 or 18.2 of this Agreement, then Employee is obligated to reimburse the Company for all amounts paid by the Company on behalf of Employee pursuant to the indemnification provisions of this Agreement.  In the event that Employee is successful on the merits in the defense of any proceeding referred to in Sections 18.1 or 18.2 of this Agreement, or any related claim, issue or matter, then the Company will indemnify and hold Employee harmless from all fees, costs and expenses actually incurred by him in connection with the defense of any such proceeding, claim, issue or matter.

19.           Directors' and Officers' Liability Insurance.  The Company will utilize its best efforts in good faith to purchase directors' and officers' liability insurance for the officers and directors of the Company, which would include the same coverage for Employee.  The Company covenants to maintain in effect a directors’ and officers’ liability insurance policy on the same terms and conditions as applicable to all other officers and directors of the Company.

   

  

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20.           Notice.  All notices and other communications required or permitted hereunder shall be in writing or in the form of an e-mail (confirmed in writing) to be given only during the recipient’s normal business hours unless arrangements have otherwise been made to receive such notice by e-mail outside of normal business hours, and shall be mailed by registered or certified mail, postage prepaid, or otherwise delivered by hand, messenger, or e-mail (as provided above) addressed (a) if to the Employee, at the address for such Employee set forth on the signature page hereto or at such other address as such Employee shall have furnished to the Company in writing or (b) if to the Company, to its principal executive offices and addressed to the attention of the Chief Executive Officer, or at such other address as the Company shall have furnished in writing to the Employee.

In case of the Company:

Envision Solar International

7675 Dagget Street

Suite 150

San Diego, CA 92111

Attention: Chief Executive Officer

In case of the Employee:

Christopher Caulson

the address on file with the Company as supplied by Employee.

21.           Attorneys' Fees.  In the event that any of the parties must resort to legal action in order to enforce the provisions of this Agreement or to defend such suit, 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 suit.

22.           Entire Agreement.  This Agreement embodies the entire understanding among the parties and merges all prior discussions or communications among them, and no party shall be bound by any definitions, conditions, warranties, or representations other than as expressly stated in this Agreement or as subsequently set forth in a writing signed by the duly authorized representatives of all of the parties hereto.

23.           No Oral Change; Amendment.  This Agreement may only be changed or modified and any provision hereof may only be waived by a writing signed by the party against whom enforcement of any waiver, change or modification is sought.  This Agreement may be amended only in writing by mutual consent of the parties.

24.           Severability.  In the event that any provision of this Agreement shall be void or unenforceable for any reason whatsoever, then such provision shall be stricken and of no force and effect.  The remaining provisions of this Agreement shall, however, continue in full force and effect, and to the extent required, shall be modified to preserve their validity.

25.           Applicable Law.  This Agreement shall be construed as a whole and in accordance with its fair meaning.  This Agreement shall be interpreted in accordance with the laws of the State of California, and venue for any action or proceedings brought with respect to this Agreement shall be in the County of Los Angeles in the State of California.

    

  

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26.           Successors and Assigns.  Each covenant and condition of this Agreement shall inure to the benefit of and be binding upon the parties hereto, their respective heirs, personal representatives, assigns and successors in interest.  Without limiting the generality of the foregoing sentence, this Agreement shall be binding upon any successor to the Company whether by merger, reorganization or otherwise.

[SIGNATURES ON FOLLOWING PAGE]

 

 

  

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.

       

	THE COMPANY:	
Envision Solar International, Inc.

A Nevada corporation

	 	 
	Attest:	/s/ Robert Noble
	 	
Robert Noble

Chairman

	/s/ Jay Potter                                	 
	Director	 
	 	 
	 	 
	 	 
	EMPLOYEE:	By: /s/ Christopher Caulson
	 	Christopher Caulson

 

 

 

 

10evsi_10q-ex1004.htm

 EXHIBIT 10.4

    

FINANCIAL ADVISORY AGREEMENT

     

This Financial Advisory Agreement (the “Agreement) is made this 10th day of August 2011, by and between Envision Solar International, Inc., a Nevada corporation (the “Company”), and Fulcrum Enterprises, Inc., a California corporation (the “Advisor”), with respect to the following facts:

A.           The Company is engaged in the business of developing, designing, manufacturing and marketing commercial solar structures and integrated EV charging.

B.           The Company is engaged in a private placement of its securities pursuant to which it is raising capital.

C.           The Company desires to have the Advisor provide certain financial advisory services to it (collectively, the “Services”), as described in Paragraph 2 of this Agreement, pursuant to the terms and conditions of this Agreement.

D.           The Advisor is willing to provide the Services to the Company pursuant to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, THE PARTIES HERETO AGREE AS FOLLOWS:

1.           APPOINTMENT OF ADVISOR.  The Company grants to the Advisor, on an exclusive basis for the term of this Agreement, the authority to provide the Services upon the terms and conditions set forth in this Agreement.

2.           ADVISOR SERVICES.  The Advisor, as an independent contractor, will provide the following Services to the Company during the term of this Agreement as reasonably requested or required by the Company:

(a)           Advice and consultation with respect to such items as the Company’s business and strategic plans, financing alternatives, financial modeling, and capital requirements;

(b)           Advice and consultation with respect to potential sources of additional financing and capital for the Company to enable it to implement its business plan and conduct its operations;

(c)           Introductions, on a non-exclusive basis, to potential sources of capital and to other parties who can make such introductions;

(d)           Advice and consultation with respect to the structure of potential transactions pursuant to which the Company may obtain financing or additional capital for its business; and

(e)           Advice, consultation and assistance with long-term planning with respect to the Company’s growth as a public company.

   

  

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The Company acknowledges that the Advisor will limit its role under this Agreement to that of a financial consultant, and that the Advisor is not, and will not become, engaged in the business of (i) effecting securities transactions for or on the account of the Company, (ii) providing investment advisory services as defined in the Investment Advisors Act of 1940, or (iii) providing any tax, legal or other services except as specifically set forth in this Agreement.

3.           COMPENSATION TO ADVISOR.  In consideration for the Services performed and to be performed by the Advisor for the Company, the Company shall pay to the Advisor a one time fee of $6,000 to offset expenses related to the fulfillment of this agreement and a fee equal to a total of 600,000 warrants to purchase 600,000 shares of the Company’s common stock at an exercise price of $0.25 per share exercisable until July 25, 2016, payable by the vesting of 120,000 warrants on the last day of each month for Services provided during such month, commencing on July 25, 2011.

4.           TERM OF AGREEMENT.  The term of this Agreement shall be for a period of six (6) months, commencing on the date first written above and, except as provided in Paragraph 5 of this Agreement, continuing until the earlier to occur of (a) the election of the non-breaching party, upon a material breach of this Agreement by the other party and the failure by such party to cure said breach within thirty (30) days after receiving written notice of the breach from the other party, or (b) December 25, 2011.

5.           EFFECT OF TERMINATION.  The termination of this Agreement for any reason whatsoever shall not release or discharge either party hereto from any obligation, debt or liability which may previously have accrued and remains to be performed upon the date of termination.  The covenants in this Agreement will survive the termination of this Agreement, unless otherwise specifically provided for in this Agreement.

6.           COMPLIANCE WITH LAWS.  In the course of performing its Services and covenants under this Agreement, each party agrees to comply with all applicable federal, state and local securities and other laws, rules and regulations.  Advisor represents and warrants that as a company whose principals are registered representatives with a securities firm that is a registered member of the Financial Industry National Regulatory Authority (“FINRA”), its affiliated principals have and will comply with all applicable FINRA rules and regulations.

7.           REPRESENTATIONS OF THE COMPANY.  The Company represents and warrants to the Advisor that the disclosure documents regarding the Company and its business, assets and liabilities are and will be true and correct and contain and will contain no material omission or misstatement of the facts. The Company agrees to keep the Advisor currently informed as to any changes in material facts regarding the Company, its proposed business, its assets and liabilities, or any other matters referred to in the disclosure documents provided by the Company.

8.           INDEPENDENT CONTRACTOR.  The Advisor shall act at all times hereunder as an independent contractor with respect to the Company, and not as an employee, partner, agent or co-venturer of or with the Company.  Except as set forth herein, the Company shall neither have nor exercise control or direction whatsoever over the operations of the Advisor, and the Advisor shall neither have nor exercise any control or direction whatsoever over the employees, agents or subcontractors hired by the Company.

    

  

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9.           NO AGENCY CREATED.  No agency, employment, partnership or joint venture is intended to be created by this Agreement.  The Advisor shall have no authority as an agent of the Company or to otherwise bind the Company to any agreement, commitment, obligation, contract, instrument, undertaking, arrangement, certificate or other matter.  Each party hereto shall refrain from making any representation tending to create an apparent agency, employment, partnership or joint venture relationship between the parties.

10.           INDEMNIFICATION.

(a)           Indemnity by the Advisor.  The Advisor hereby indemnifies and holds harmless the Company and each person who controls the Company (within the meaning of Section 15 of the Securities Act of 1933, as amended) against any and all losses, claims, damages, liabilities and expenses (including reasonable costs and investigation and counsel fees) arising out of or based upon:

(i)           Any breach by the Advisor of its representations, warranties or covenants contained in or made pursuant to this Agreement;

(ii)           Any violations of laws, rules or regulations by the Advisor or the Advisor’s agents, employees, representatives or affiliates.  This indemnity agreement shall be in addition to any liability the Advisor may otherwise have under this Agreement.

(b)           Indemnity by the Company.  The Company hereby indemnifies and holds harmless the Advisor and each person who controls the Advisor (within the meaning of Section 15 of the Securities Act of 1993, as amended) against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and counsel fees) arising out of or based upon:

(i)           Any breach by the Company of its representations, warranties or covenants contained in or made pursuant to this Agreement;

(ii)           Any violations of laws, rules or regulations by the Company or the Company’s agents, employees, representatives or affiliates.  This indemnity agreement shall be in addition to any liability the Company may otherwise have under this Agreement.

(c)           Actions Relating to Indemnity.  If any action or claim shall be brought or asserted against party entitled to indemnification hereunder (the “Indemnified Party”) or any person controlling such party and in respect of which indemnity may be sought from the party obligated to indemnify the Indemnified Party pursuant to paragraphs 11(a) and 11(b) hereof (the “Indemnifying Party”), the Indemnified Party shall promptly notify the Indemnifying Party in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel and the payment of all expenses.  The Indemnified Party or any such controlling person shall have the right to employ separate counsel in any such action and participate in the defense thereof and to be indemnified for the reasonable fees and expenses thereof.  This paragraph shall survive any termination of this Agreement

    

  

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11.           NOTICES.  Any notice required or permitted to be given pursuant to this Agreement shall be in writing and shall be:

    

(a)           sent by email or facsimile transmission (in which case it shall be deemed delivered upon actual receipt); or,

(b)           placed in the United States mail, certified mail, return receipt requested, postage prepaid and addressed as provided in this paragraph (in which case, it shall be deemed delivered five (5) days after such mailing); or,

(c)           personally delivered (in which case it shall be deemed delivered upon actual receipt) to, in all cases under Paragraphs 12(a), (b) and (c) of this Agreement, the name, address, email address, telephone and/or facsimile numbers set forth below the signatures lines for each party to this Agreement.

12.           ASSIGNMENT.  This Agreement shall not be assigned, pledged or transferred in any way by either party hereto without the prior written consent of the other party, except that the parties shall have the right to assign their rights hereunder to any affiliate or any successor in interest whether by merger, consolidation, purchase of assets or otherwise.  Any attempted assignment, pledge, transfer or other disposition of this Agreement or any rights, interests or benefits herein contrary to the foregoing provisions shall be null and void.

13.           CONFLICTING AGREEMENTS.  The Advisor and the Company represent and warrant to each other that the entry into this Agreement and the obligations and duties undertaken hereunder will not conflict with, constitute a breach of or otherwise violate the terms of any agreement or court order to which either party is a party, and that each party is not required to obtain the consent of any person, firm, corporation or other entity in order to enter into this Agreement.

14.           NO WAIVER.  No terms or conditions of this Agreement shall be deemed to have been waived, nor shall any party hereto be stopped from enforcing any provisions of the Agreement, except by written instrument of the party charged with such waiver or estoppel.  Any written waiver shall not be deemed a continuing waiver unless specifically stated, shall operate only as to the specific term or condition waived, and shall not constitute a waiver of such term or condition for the future or as to any act other than specifically waived.

15.           GOVERNING LAW.  This Agreement shall be governed by and construed in accordance with the laws of the State of California.  The venue for any legal proceedings conducted pursuant to this Agreement will be in the appropriate forum in the City of San Diego, State of California.

16.           ENTIRE AGREEMENT.  This Agreement contains the entire agreement of the parties hereto in regard to the subject matter hereof and may not be changed orally but only by written document signed by the party against whom enforcement of the waiver, change, modification, extension or discharge is sought.  This Agreement supersedes all prior written or oral agreements by and among the Company or any of its subsidiaries or affiliates and the Advisor or any of its affiliates with respect to the subject matter of this Agreement.

17.           PARAGRAPH HEADINGS.  Headings contained therein are for convenient reference only.  They are not a part of this Agreement and are not to affect in any way the substance or interpretation of this Agreement.

    

  

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18.           SURVIVAL OF PROVISIONS.  In case any one or more of the provisions or any portion of any provision set forth in this Agreement should be found to be invalid, illegal or unenforceable in any respect, such provision(s) or portion(s) thereof shall be modified or deleted in such manner as to afford the parties the fullest protection commensurate with making this Agreement, as modified, legal and enforceable under applicable laws.  The validity, legality and enforceability of any such provisions shall not in any way be affected or impaired thereby and such remaining provisions shall be construed as severable and independent thereof.

19.           BINDING EFFECT.  This Agreement is binding upon and inures to the benefit of the parties hereto and their respective successors and assigns, subject to the restriction on assignment contained in Paragraph 13 of this Agreement.

20.           ATTORNEY'S FEES. The prevailing party of any legal proceeding arising out of or resulting from this Agreement shall be entitled to recover its costs and fees, including, but not limited to, reasonable attorneys' fees and post judgment costs, from the other party.

21.           GENDER; PRONOUNS.  The use of the masculine shall refer to the feminine or neuter in circumstances in which the context otherwise requires and the singular shall refer to the plural in circumstances in which the context otherwise requires.

22.           AUTHORIZED AGENT.  The persons executing this Agreement on behalf of the Company and The Advisor hereby represents and warrant to each other that they are the duly authorized representatives of their respective entities and that each has taken all necessary corporate or partnership action to ratify and approve the execution of this Agreement in accordance  with its terms.

23.           ADDITIONAL DOCUMENTS.  Each of the parties to this Agreement agrees to provide such additional duly executed (in recordable form, where appropriate) agreements, documents and instruments as may be reasonably requested by the other party in order to carry out the purposes and intent of this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above indicated.

 

    

	THE COMPANY:	ENVISION SOLAR INTERNATIONAL, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ Desmond Wheatley	 
	 	 	Desmond Wheatley, President	 
	 	 	 	 

    

	THE ADVISOR:	FULCRUM ENTERPRISES, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ Jay S. Potter	 
	 	 	Jay S. Potter, President	 
	 	 	 	 
	 	 	 	 

5

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