Document:

blkg_ex108.htm

EXHIBIT 10.8
  
 LICENSING AGREEMENT
  
 By and Among
  
 BLACK STALLION OIL & GAS, INC.
 A Corporation Incorporated in the State of Delaware,
  
 ACTIVE LAB INTERNATIONAL, INC.
 A Corporation Incorporated in the State of Wyoming
  
 Dated as of August 8, 2017
   	 
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 LICENSING AGREEMENT
  
 This LICENSING AGREEMENT (this “Agreement”) is entered into as of this 8th day of August, 2017 by and between ACTIVE LAB INTERNATIONAL, INC. (“ACTIVE LAB”), a Wyoming corporation; and BLACK STALLION OIL & GAS, INC. (“BLKG”), a Nevada corporation.
  
 Recitals
  
 WHEREAS, ACTIVE LAB is an established company providing various products, and ACTIVE LAB desires to license to BLKG the right to distribute and broker, as applicable, such products on the terms and conditions set forth herein. 
  
 WHEREAS, BLKG desires to license such right from ACTIVE LAB.
  
 NOW THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the parties to be derived here from, and intending to be legally bound hereby, it is hereby agreed as follows:
  
 I. 
 REPRESENTATIONS, COVENANTS, AND WARRANTIES OF ACTIVE LAB
  
 ACTIVE LAB hereby represents and warrants as follows:
  
 1. Organization. ACTIVE LAB is a corporation duly organized, validly existing, and in good standing under the laws of the State of Wyoming and has the corporate power and is duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of ACTIVE LAB’s articles of incorporation or bylaws. ACTIVE LAB has taken all actions required by law, its articles of incorporation, or otherwise to authorize the execution and delivery of this Agreement. ACTIVE LAB has full power, authority, and legal right and has taken all action required by law, its articles of incorporation, and otherwise to consummate the transactions herein contemplated.
  
 2. Litigation and Proceedings. There are no actions, suits, proceedings, or investigations pending or, to the knowledge of ACTIVE LAB, threatened against ACTIVE LAB, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind. ACTIVE LAB does not have any knowledge of any material default on its part with respect to any judgment, order, injunction, decree, award, rule, or regulation of any court, arbitrator, or governmental agency or instrumentality or of any circumstances which would result in the discovery of such a default.
  
 3. No Conflict With Other Instruments. The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the material breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of any material indenture, mortgage, deed of trust, or other material agreement or instrument to which ACTIVE LAB is a party or to which any of its assets, properties or operations are subject.
  
  	 
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 4. Compliance With Laws and Regulations. To the best of its knowledge, ACTIVE LAB has complied with all applicable statutes and regulations of any federal, state, or other governmental entity or agency thereof, except to the extent that noncompliance would not materially and adversely affect the business, operations, properties, assets, or condition of ACTIVE LAB or except to the extent that noncompliance would not result in the occurrence of any material liability for ACTIVE LAB. This compliance includes, but is not limited to, the filing of all reports to date with federal and state securities authorities.
  
 6. Approval of Agreement. The Board of Directors of ACTIVE LAB has authorized the execution and delivery of this Agreement by ACTIVE LAB and has approved this Agreement and the transactions contemplated hereby. This Agreement shall be subject to approval of ACTIVE LAB in accordance with the laws of the State of Wyoming, including any preemptive or dissenter’s rights under such State’s laws. 
  
 7. Valid Obligation. This Agreement and all agreements and other documents executed by ACTIVE LAB in connection herewith constitute the valid and binding obligation of ACTIVE LAB, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors' rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.
  
 8. ACTIVE LAB will take charge of all sales and marketing within the territory of all the brands and products listed in Exhibit A to its best capacity and all the expenses incurred in regards to the sales of the products shall be the responsibility of BLKG.
  
 II.
 REPRESENTATIONS, COVENANTS, AND WARRANTIES OF BLKG
  
 BLKG hereby represents and warrants as follows:
  
 1. Organization. BLKG is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada and has the corporate power and is duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of BLKG’s certificate of incorporation or bylaws. BLKG has taken all action required by law, its certificate of incorporation, its bylaws, or otherwise to authorize the execution and delivery of this Agreement, and BLKG has full power, authority, and legal right and has taken all action required by law, its certificate of incorporation, bylaws, or otherwise to consummate the transactions herein contemplated.
   	 
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 2. Information. The information concerning BLKG provided in the due diligence materials and as set forth in this Agreement is complete and accurate in all material respects and does not contain any untrue statements of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading. 
  
 3. Litigation and Proceeding. There are no actions, suits, or proceedings pending or, to the knowledge of BLKG after reasonable investigation, threatened by or against BLKG or affecting BLKG or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind. BLKG has no knowledge of any default on its part with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator, or governmental agency or instrumentality or any circumstance, which after reasonable investigation would result in the discovery of such default.
  
 4. Contracts. BLKG is not a party to, and its assets, products, technology and properties are not bound by, any contract, franchise, license agreement, agreement, debt instrument or other commitments whether such agreement is in writing or oral which would impede or prevent entry into, performance of, or due enforcement of this Agreement.
  
 5. No Conflict With Other Instruments. The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of, any indenture, mortgage, deed of trust, or other material agreement or instrument to which BLKG is a party or to which any of its assets, properties or operations are subject.
  
 6. Compliance With Laws and Regulations. To the best of its knowledge, BLKG has complied with all applicable statutes and regulations of federal, state, or other applicable governmental entity or agency thereof, relevant in its compliance to labeling and approvals of their products to be sold within the laws of the market its being sold to as this remains its obligation for branded and private label products. 
  
 7. Approval of Agreement. The Board of Directors of BLKG has authorized the execution and delivery of this Agreement by BLKG and has approved this Agreement and the transactions contemplated hereby. 
  
 8. Valid Obligation. This Agreement and all agreements and other documents executed by BLKG in connection herewith constitute the valid and binding obligation of BLKG, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors' rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.
  
  	 
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 III.
 SPECIAL COVENANTS
  
 1. Closing. The closing of the transactions contemplated by this Agreement (the "Closing") shall occur no later than August 8, 2017, or as otherwise mutually agreed to by the parties hereto. Effective as of the Closing, ACTIVE LAB hereby grants unto BLKG an exclusive license to distribution the products identified on Exhibit B hereto in all regions of the world except for Canada, and BLKG shall pay ACTIVE LAB the fees identified on Exhibit A hereto.
  
 2. Initial Term & Renewal. The initial term of this Agreement and the license granted hereby shall be for ten (10) years from the Closing, subject to earlier termination and renewal on the terms set forth herein. At the expiration of the initial term, if all conditions set forth have been satisfied and this Agreement has not otherwise been terminated, this Agreement shall automatically renew for two additional 5-year terms. 
  
 3. Termination. This Agreement may be terminated by the Board of Directors of ACTIVE LAB only in the event that the conditions precedent set forth in this Agreement are not satisfied. This Agreement may be terminated by the Board of Directors of BLKG only in the event that the conditions precedent set forth are not satisfied. If this Agreement is terminated there shall be of no further force or effect, and no obligation, right or liability shall arise hereunder. The termination is required to be provided by either party to the other party with a 90 days’ written notice. Should either party terminate the Agreement for cause, the prevailing party shall have the rights to the customers and/or accounts of ACTIVE LAB. Termination shall be deemed effective upon one or more actions, including other conditions set forth in this Agreement, as follows:
  
 i. ACTIVE LAB cannot provide product, as defined in this Agreement, to BLKG, due to uncontrollable circumstances;
  
 ii. BLKG does not remain fully reporting in compliance with all filing requirements of the Securities Act of 1934, as amended;
  
 iii. BLKG does not comply with the licensing payments and/or other financial conditions as set forth in Exhibit A of this Agreement; and
  
 iv. BLKG does not comply to the various regulatory governing bodies, including, but not limited to, the financial obligations of all.
  
 4. Third-Party Consents and Certificates. BLKG and ACTIVE LAB agree to cooperate with each other in order to obtain any required third-party consents to this Agreement and the transactions herein contemplated.
  
 5. Obligations of Both Parties. From and after the date of this Agreement until the termination of the Agreement and, except as expressly permitted or contemplated by this Agreement, BLKG and ACTIVE LAB respectively, will each:
  
 i. carry on its business in substantially the same manner as it has heretofore;
  
 ii. maintain in full force and effect insurance comparable in amount and in scope of coverage to that now maintained by it;
   	 
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 iii. use its best efforts to maintain and preserve its business organization intact, to retain its key employees, and to maintain its relationship with its material suppliers and customers; and
  
 iv. fully comply with and perform in all material respects all obligations and duties imposed on it by all federal and state laws and all rules, regulations, and orders imposed by federal or state governmental authorities.
  
 6. Indemnification. ACTIVE LAB hereby agrees to indemnify BLKG and each of the officers, agents and directors of BLKG as of the date of execution of this Agreement against any loss, liability, claim, damage, or expense (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing, or defending against any litigation, commenced or threatened, or any claim whatsoever) (“Loss”), to which it or they may become subject arising out of or based on any inaccuracy appearing in or misrepresentations made under Article I of this Agreement. The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for one year following the Closing. BLKG hereby agrees to indemnify ACTIVE LAB and each of the officers, agents, and directors of ACTIVE LAB as of the date of execution of this Agreement against any Loss to which it or they may become subject arising out of or based on any inaccuracy appearing in or misrepresentation made under Article II of this Agreement. The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for one year following the Closing.
  
 IV.
 CONDITIONS PRECEDENT TO OBLIGATIONS OF BLKG
  
 The obligations of BLKG under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions:
  
 1. Accuracy of Representations and Performance of Covenants. The representations and warranties made by ACTIVE LAB in this Agreement shall be true in all material respects (other than representations and warranties which contain materiality standards, which representations and warranties shall be true and correct in all respects) at and as of the Closing Date (except for changes therein permitted by this Agreement). ACTIVE LAB shall have performed or complied with, in all material respects, all covenants and conditions required by this Agreement to be performed or complied with by ACTIVE LAB prior to or at the Closing. BLKG shall be furnished with a certificate, signed by a duly authorized executive officer of ACTIVE LAB and dated the Closing Date, to the foregoing effect.
  
 2. Officer's Certificate. BLKG shall have been furnished with a certificate dated the Closing Date and signed by a duly authorized officer of ACTIVE LAB to the effect that no litigation, proceeding, investigation, or inquiry is pending, or to the best knowledge of ACTIVE LAB threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement, or, which might result in any material adverse change in any of the assets, properties, business, or operations of ACTIVE LAB.
   	 
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 3. No Governmental Prohibition. No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the transactions contemplated hereby.
  
 4. Consents. All consents, approvals, waivers or amendments pursuant to all contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated herein, or for the continued operation of ACTIVE LAB after the Closing Date on the basis as presently operated shall have been obtained.
  
 V. 
 CONDITIONS PRECEDENT TO OBLIGATIONS OF ACTIVE LAB
  
 The obligations of ACTIVE LAB under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions:
  
 1. Accuracy of Representations and Performance of Covenants. The representations and warranties made by BLKG in this Agreement shall be true in all material respects (other than representations and warranties which contain materiality standards, which representations and warranties shall be true and correct in all respects) at and as of the Closing Date. Additionally, BLKG shall have performed and complied, in all material respects, with all covenants and conditions required by this Agreement to be performed or complied with by BLKG. 
  
 2. Officer's Certificate. ACTIVE LAB shall have been furnished with certificates dated the Closing Date and signed by duly authorized executive officers of BLKG, to the effect that no litigation, proceeding, investigation or inquiry is pending, or to the best knowledge of BLKG threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement or, to the extent not disclosed in the BLKG’s filings with the Securities and Exchange Commission, by or against BLKG, which might result in any material adverse change in any of the assets, properties or operations of BLKG.
  
 3. Good Standing. ACTIVE LAB shall have received a certificate of good standing from the Secretary of State of Wyoming or other appropriate office, dated as of a date within ten days prior to the Closing Date certifying that ACTIVE LAB is in good standing as a corporation in the State of Wyoming and has filed all tax returns required to have been filed by it to date and has paid all taxes reported as due thereon.
  
 4. No Governmental Prohibition. No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the transactions contemplated hereby.
  
 5. Consents. All consents, approvals, waivers or amendments pursuant to all contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated herein, or for the continued operation of BLKG after the Closing Date on the basis as presently operated shall have been obtained.
   	 
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 VI. 
 MISCELLANEOUS
  
 1. Governing Law. This Agreement shall be governed by, enforced, and construed under and in accordance with the laws of the State of Nevada. The Parties have consented to arbitration. Except as provided in this Agreement, any dispute, controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration heard by three (3) arbitrator, in accordance with The National Academy of Distinguished Neutrals (the “NADN”). The applicable laws shall be those of the United States, specifically the State of Nevada. The arbitration shall take place in a mutually agreed upon city in the State of Nevada, where the arbitration award will be issued. The language of the arbitration shall be in English. The arbitrators shall be empowered to award only those damages which are permitted in this Agreement, subject to any disclaimers of damages and liability limits set forth in this Agreement, but the arbitrators shall not have the authority to reform, modify or materially change this Agreement. The arbitration award shall include costs of the arbitration, reasonable attorneys’ fees and reasonable costs for experts and other witnesses. The Parties agree that the arbitrators shall have the authority to issue measures necessary to protect either party’s name, proprietary information, trade secrets, know-how, or any other proprietary right. The award of the arbitrators shall be final and binding upon the parties without appeal or review except as allowed by applicable United States federal law. In connection with any application to confirm, correct or vacate the arbitration award, any appeal of any order rendered pursuant to any such application, or any other action required to enforce the arbitration award, the prevailing party shall be entitled to recover its reasonable attorneys’ fees, disbursements and costs incurred in any post-arbitration award activities.
  
 2. Notices. Any notice or other communications required or permitted hereunder shall be in writing and shall be sufficiently given if personally delivered to it or sent by telecopy, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows:
  
  	  
	 If to ACTIVE LAB:
	 Richard Pucci
 Chief Executive Officer
 3651 Lindell Road, Suite D395
 Las Vegas, NV 89103
 Telephone: (702) 318-7525
 Email: rfpucci@activelaboratoryinc.com 

	  
	    
	 

	  
	 If to BLKG:
	 Ira Morris
 Chief Executive Officer
 50 Fountain Plaza
 Suite 1400
 Buffalo, NY 14202
 Tel: (716) 961-3244
 Email: ira.morris@sympatico.ca 

  
  	 
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 For such other addresses as shall be furnished in writing by any party in the manner for giving notices hereunder, and any such notice or communication shall be deemed to have been given (i) upon receipt, if personally delivered, (ii) on the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if transmitted by telecopy and receipt is confirmed by telephone, and (iv) three (3) days after mailing, if sent by registered or certified mail.
  
 3. Attorney's Fees. In the event that either party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the prevailing party shall be reimbursed by the losing party for all costs, including reasonable attorney's fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.
  
 4. Confidentiality. Each party hereto agrees with the other that, unless and until the transactions contemplated by this Agreement have been consummated, it and its representatives will hold in strict confidence all data and information obtained with respect to another party or any subsidiary thereof from any representative, officer, director or employee, or from any books or records or from personal inspection, of such other party, and shall not use such data or information or disclose the same to others, except (i) to the extent such data or information is published, is a matter of public knowledge, or is required by law to be published; or (ii) to the extent that such data or information must be used or disclosed in order to consummate the transactions contemplated by this Agreement. In the event of the termination of this Agreement, each party shall return to the other party all documents and other materials obtained by it or on its behalf and shall destroy all copies, digests, work papers, abstracts or other materials relating thereto, and each party will continue to comply with the confidentiality provisions set forth herein.
  
 5. Third-Party Beneficiaries. This contract is strictly between BLKG and ACTIVE LAB, and, except as specifically provided, no director, officer, stockholder, employee, agent, independent contractor or any other person or entity shall be deemed to be a third-party beneficiary of this Agreement.
  
 6. Expenses. Subject to this Agreement, each of BLKG and ACTIVE LAB will bear their own respective expenses, including legal, accounting and professional fees, incurred in connection with this transaction contemplated hereby.
  
 7. Entire Agreement. This Agreement represents the entire agreement between the parties relating to the subject matter thereof and supersedes all prior agreements, understandings and negotiations, written or oral, with respect to such subject matter.
  
 8. Survival; Termination. The representations, warranties, and covenants of the respective parties shall survive the Closing Date and the consummation of the transactions herein contemplated for a period of one year.
   	 
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 9. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument.
  
 10. Amendment or Waiver. Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. At any time prior to the Closing Date, this Agreement may by amended by a writing signed by all parties hereto, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance may be extended by a writing signed by the party or parties for whose benefit the provision is intended.
  
 11. Best Efforts. Subject to the terms and conditions herein provided, each party shall use its best efforts to perform or fulfill all conditions and obligations to be performed or fulfilled by it under this Agreement so that the transactions contemplated hereby shall be consummated as soon as practicable. Each party also agrees that it shall use its best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective this Agreement and the transactions contemplated herein.
  
 IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to be executed by their respective officers, hereunto duly authorized, as of the date first-above written.
  
  	 	 ACTIVE LAB, Inc.,
 A Wyoming Corporation
	
	 	   	 	 
		By:	/s/ Richard Pucci	
	  
	 Name: 
	Richard Pucci	 
	 	Title: 	Chief Executive Officer	 
	  
	  
	  
	  

	  
	 Black Stallion Oil & Gas, Inc.,
 A Nevada Corporation
	  

	  
	  
	  
	  

	  
	 By: 
	 /s/ Ira Morris
	  

	  
	 Name: 
	 Ira Morris 
	  

	  
	 Title: 
	 Chief Executive Officer 
	  

  
  	 
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 EXHIBIT A
  
 The licensing fees payable by BLKG to ACTIVE LAB shall be as follows:
  
 BLKG shall compensate ACTIVE LAB $1,000,000, in cash, common stock of the Company, or a combination as determined by BLKG management, as follows:
  
  	  
	·	$150,000 by November 15, 2017
	  
	·	$150,000 by January 31, 2018
	  
	·	$150,000 by March 31, 2018
	  
	·	$150,000 by May 31, 2018
	  
	·	$150,000 by July 31, 2018
	  
	·	$150,000 by September 30, 2018
	  
	·	$100,000 by November 30, 2018

 
 
 
 ACTIVE LAB shall make sales and the accounting shall be as follows:
  
  	  
	·	ACTIVE LAB shall make a sale to a third-party and record the sale and cost of sales accordingly.
	  
	·	BLKG shall bill ACTIVE LAB a royalty rate of 95% of the recorded revenue of the sale.
	  
	·	BLKG shall record 100% of the cost of sales for the sale, as recorded by ACTIVE LAB.
	  
	·	ACTIVE LAB shall bill BLKG for expenses, including personnel, not to exceed 42.75% of the revenue, as recorded by BLKG.

 
 
 ACTIVE LAB shall receive all cash payments and make the net payment to BLKG on a monthly basis, within ten (10) business days after the month.
  
 ACTIVE LAB shall maintain its accounting records in accordance with United States generally accepted accounting principles (“GAAP”). 
   	 
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 EXHIBIT B
  
 The following products under this Agreement to be provided to BLKG exclusively on a worldwide basis from ACTIVE LAB are as follows (additional products may be added from time to time and are not required to be added as an addendum to this Agreement) for distribution and brokerage, as stated within this Agreement. 
  
  	  
	·	Synapset
	  
	·	Citrus Defence
	  
	·	Other Products

 
 
 
  
  	12Exhibit 10.1 

 

REVOLVING CONVERTIBLE

PROMISSORY NOTE

 

 

 

Up to $3,000,000

September 18, 2017

San Diego, California

 

 

FOR VALUE RECEIVED,
Envision Solar International, Inc., a Nevada corporation (“Borrower”), hereby promises to pay to the order of SFE
VCF, LLC, a California limited liability company (“Lender”) at P.O. Box
5005 PMB 134, Rancho Santa Fe, CA 92067, pursuant to the terms of this Revolving Convertible Promissory Note (the “Note”),
the principal sum equal to the amount outstanding from time to time indicated on Schedule A of this Note reflecting advances made
by the Lender from time to time to the Borrower under this Note until a date 300 days from the date of this Note first above written
(the “Termination Date”), not to exceed a maximum outstanding principal amount of Three Million Dollars ($3,000,000),
bearing simple interest on outstanding principal at the floating rate per annum equal to the 12 month USD LIBOR index rate quoted
from time to time in New York, New York by the Bloomberg Service plus 600 basis points (the “Interest Rate”). The Interest
Rate will be adjusted on the first day of each calendar month during the term of this Note to reflect any changes in the 12 month
LIBOR rate as quoted at 1:00 pm Eastern Time in New York, New York on that day, or if that day is not a business day, on the next
business day thereafter. Interest will only accrue on outstanding principal. Principal and accrued interest are payable in accordance
with the terms of this Note.

 

1.                 
Advances, Maturity, and Payment. Subject to Lender’s agreement to each draw,
Borrower has the right to draw on this Note and make borrowings from Lender in amounts of up to 70% of the value of any specific
purchase order (each a “PO”) received by Borrower from a credit worthy customer (each a “Draw Down”), up
to a maximum of $3,000,000, commencing on the date of this Note and terminating on the Termination Date, by giving five (5) business
days written notice to the Lender of a request for borrowings (the “Evaluation Period”). During the Evaluation Period,
if Lender determines in its commercially reasonable judgement that the customer (“Customer”) is not credit worthy,
Lender may refuse to advance the Draw Down. Borrower will use commercially reasonable efforts to ensure the credit worthiness of
each Customer for which a Draw Down on this Note is proposed. The principal amount outstanding on this Note from time to time is
set forth on Schedule A hereto, which will be updated by the Lender as Draw Downs under this Note are made and outstanding amounts
owed are repaid. The principal and accrued unpaid interest with respect to each Draw Down is due and payable within five (5) business
days of receipt from the Customer by Borrower of a payment due under the applicable PO (with respect to each Draw Down, the “Maturity
Date”). Principal and accrued unpaid interest are payable in cash on the Maturity Date unless sooner converted by Lender
into Borrower’s equity in accordance with Paragraph 7 of this Note, or unless Lender elects in its sole discretion to have
the principal and/or interest payment made in shares of the Borrower’s common stock, as provided in Paragraph 8 of this Note.
After the Termination Date, no further Draw Downs are permitted on the Note unless mutually agreed in writing by the Lender and
the Borrower, and all outstanding balances on the Note will become due and payable on the earliest to occur of (i) within five
(5) business days of receipt from the Customer by Borrower of a payment due under the applicable PO, (ii) 30 days after

    	1 

    	 

    

the due date of a Customer payment on
a PO with respect to unpaid POs, or (iii) 60 days after the Termination Date.

 

2.                 
Security. Each Draw Down is secured by a perfected recorded second priority security
interest in all of the Borrower’s assets (the “Collateral”), as set forth in that certain Security Agreement
by and between Borrower and Lender, dated September 14, 2017 (the “Security Agreement”). While each PO is included
in the Collateral pledged as security for a Draw Down, the Lender may foreclose on the PO or any other assets of the Borrower in
the event of a default by the Borrower under this Note with respect to the Draw Down, subject to the senior lien in favor of the
Lender (the “Affiliate Senior Lien”) securing that certain Convertible Secured Promissory Note of even date herewith,
having Lender as the lender and Borrower as the borrower, and the conditions in Paragraph 3 of this Note. The Borrower shall have
no right to have any portion of the PO released from the security interest until the corresponding Draw Down is repaid in full.
Borrower will not cause any liens to be incurred by it that are senior to the Affiliate Senior Lien. 

 

3.                 
Default. Any of the following shall constitute a default by Borrower hereunder:

 

(a)       The
failure of Borrower to make any payment of principal or interest required hereunder within five (5) business days of the due date
for such payment; or

 

(b)       The
failure of Borrower to fully perform any other material covenants and agreements under this Note and continuance of such failure
for a period of ten (10) days after written notice of the default by Lender to the Borrower.

 

Upon the occurrence
of a default hereunder, Lender may, at its option, declare immediately due and payable the entire unpaid outstanding balance of
principal and interest of this Note owing at the time of such declaration pursuant to this Note. In the event of a default by Borrower
under Paragraph 3(a) of this Note, commencing on the first day of the default and continuing thereafter until the default is cured,
interest will accrue on unpaid outstanding principal at the rate equal to 500 basis points over the Interest Rate on this Note.

 

4.                 
Right of Prepayment. Borrower has the right to prepay all or any portion of any Draw
Down at any time during the term of the Note without penalty. Lender will have three (3) business days from receipt of notice of
prepayment by the Borrower in which to convert the Draw Down into Borrower’s common stock before the Draw Down is deemed
to be repaid.

 

5.                 
Rights of Lender. Lender has the right to audit all POs, invoices, and Customer payments
related to the Draw Downs.

 

6.                 
Covenants of Borrower. Borrower will maintain and deliver to Lender on a monthly basis
a ledger detailing the current status of each Draw Down, its corresponding PO, and all related invoices and Customer payments.

 

7.                 
Conversion. Lender will have the right at any time until the Maturity Date of a Draw
Down, provided Lender gives Borrower written notice of Lender’s election to convert prior to any prepayment of such Draw
Down by the Borrower with respect to converting that portion of such Draw Down covered by the prepayment, to convert all or any
portion of the outstanding principal and accrued unpaid interest (the “Conversion Amount”), into such number of fully
paid

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and nonassessable shares of the Borrower’s
common stock as is determined by dividing the Conversion Amount by the greater of (i) fifteen cents ($0.15) or (ii) 75% of the
Volume Weighted Average Price of the Borrower’s common stock that is quoted on a public securities trading market (if more
than one, the one with the then highest trading volume), during the five (5) consecutive trading days immediately prior to the
date of Lender’s written notice of Lender’s election to convert.

 

8.                 
Payment of Interest and Principal. All principal and accrued unpaid interest with respect
to each Draw Down is payable in cash on the applicable Maturity Date or, in those instances where the Lender specifically elects
(by delivering written notice to Borrower at least one (1) business day before the due date for the payment) to be paid in shares
of the Borrower’s common stock rather than in cash, principal and accrued unpaid interest will be payable to Lender into
such number of fully paid and nonassessable shares of the Borrower’s common stock as is determined by dividing the amount
of principal and accrued unpaid interest due, by the greater of (i) fifteen cents ($0.15) or (ii) 75% of the Volume Weighted Average
Price of the Borrower’s common stock that is quoted on a public securities trading market (if more than one, the one with
the then highest trading volume), during the five (5) consecutive trading days immediately prior to each applicable Maturity Date.
All payments on this Note are credited first to amounts due to Lender pursuant to Paragraph 11 of this Note, if any, then to accrued
unpaid interest, then to outstanding principal.

 

9.                 
Additional Consideration. As additional consideration for the loan made by the Lender
to the Borrower as evidenced by this Note, the Borrower hereby agrees to issue to Lender common stock purchase warrants exercisable
for a period of three years from the date of issuance with an exercise price equal to the greater of (i) $0.15 per share or (ii)
75% of the Volume Weighted Average Price of the Borrower’s common stock that is quoted on a public securities trading market
(if more than one, the one with the then highest trading volume), during the five (5) consecutive trading days immediately prior
to the date of the applicable Draw Down. The number of warrants issuable to Lender pursuant to this Paragraph 9 of the Note will
equal 25% of the increase over the highest amount previously drawn down by Borrower on the Note divided by the greater of (i) fifteen
cents ($0.15) or (ii) 75% of the Volume Weighted Average Price of the Borrower’s common stock that is quoted on a public
securities trading market (if more than one, the one with the then highest trading volume), during the five (5) consecutive trading
days immediately prior to the date of the applicable Draw Down which causes the increase over the previous highest amount borrowed.
The warrants will be issued to the Lender within five (5) business days after the date of the applicable Draw Down.

 

10.             
Use of Proceeds. Borrower covenants to use the proceeds of each Draw Down for costs
related to supplies, inventory, labor and other direct costs and overhead required to fulfill the PO related to the Draw Down.

 

11.             
Costs of Collections. Lender shall be entitled to collect reasonable attorney's fees
and costs from Borrower, as well as other costs and expenses reasonably incurred, in curing any default or attempting collection
of any payment due on this Note.

 

12.             
Payment. This Note shall be payable at the option of the Lender in lawful money of
the United States or cancellation of debt owed by Lender to Borrower for inventory purchases made by Lender. 

 

    	3 

    	 

    

13.             
Place of Payment. All payments on this Note are to be made or given to Lender at the
address first above written or to such other place as Borrower and Lender may from time to time agree by written agreement.

 

14.             
Nonrecourse. In the event that the Borrower defaults on this Note, Lender shall look
solely to the Borrower and its assets for repayment and none of the shareholders, officers, directors or affiliates of the Borrower
shall have any personal liability for payment under this Note.

 

15.             
Waiver. Borrower, for itself and its successors, transfers and assigns, waives presentment,
dishonor, protest, notice of protest, demand for payment and dishonor in nonpayment of this Note, bringing of suit or diligence
of taking any action to collect any sums owing hereunder or in proceeding against any of the rights and properties securing payment
hereunder.

 

16.             
Severability. If any provision of this Note or the application thereof to any persons
or entities or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Note shall not be deemed
affected thereby and every provision of this Note shall be valid and enforceable to the fullest extent permitted by law.

 

17.             
No Partner. Lender shall not become or be deemed to be a partner or joint venturer
with Borrower by reason of any provision of this Note. Nothing herein shall constitute Borrower and Lender as partners or joint
venturers or require Lender to participate in or be responsible or liable for any costs, liabilities, expenses or losses of Borrower.

 

18.             
No Waiver. The failure to exercise any rights herein shall not constitute a waiver
of the right to exercise the same or any other right at any subsequent time in respect of the same event or any other event.

 

19.             
Governing Law. This Note shall be governed by and construed solely in accordance with
the laws of the State of California.

 

20.             
Entire Agreement. This Note contains the entire understanding and agreement between
the parties with respect to the subject matter herein and may not be altered or amended except by the written agreement of the
parties.

 

21.       Management
Rights. During any time when this Note is outstanding, or when the Lender holds any stock, or any warrants to acquire stock
where the combination of both could result in the Lender owning stock with a current value of one million dollars or greater, in
the Borrower, Lender shall have the following rights:

 

a.       Lender
shall be entitled to consult with and advise management of the Borrower on significant business issues, including management’s
proposed annual operating plans, and management will meet with Lender regularly during each year at the Borrower’s facilities
at mutually agreeable times for such consultation and advice and to review progress in achieving said plans.

 

b.       Lender
may examine the books and records of the Borrower and inspect its facilities and may request information at reasonable times and
intervals concerning the general status of the Borrower’s financial condition and operations, provided that access to

    	4 

    	 

    

highly confidential proprietary
information and facilities need not be provided.

 

c.       The
Borrower shall, concurrently with delivery to the board of directors, give a representative of Lender copies of all notices, minutes,
consents and other material that the Borrower provides to its directors, except that the representative may be excluded from access
to any material or meeting or portion thereof if the board of directors determines in good faith, upon advice of counsel, that
such exclusion is reasonably necessary to preserve the attorney-client privilege, to protect highly confidential proprietary information,
or for other similar reasons.  Upon reasonable notice and at a scheduled meeting of the board or such other time, if any,
as the board may determine in its sole discretion, such representative may address the board with respect to Lender’s concerns
regarding significant business issues facing the Borrower.

 

IN WITNESS WHEREOF,
Borrower has executed this Note as of the date first hereinabove written.

 

BORROWER:

 

Envision Solar
International, Inc.

a Nevada corporation

 

 

By: /s/ Desmond
Wheatley

Desmond Wheatley,
Chief Executive Officer

 

 

		LENDER:	SFE VCF, LLC

a California limited liability
company

 

 

By: /s/ Lender

[ ]

    	5 

    	 

    

Schedule A to Note

Dated September 14, 2017

Payable By Envision Solar International,
Inc.

to SFE
VCF, LLC

 

 

	Date
    of Advance 	Amount
    of Advance	Amount
    of Repayment	Date
    of Repayment	Cumulative
    Outstanding Balance

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