Document:

Exhibit

AMENDMENT NO. 2 
TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Amendment No. 2 to Second Amended and Restated Loan and Security Agreement, dated as of April 5, 2019 (this “Amendment”), among ARLP REO I, LLC, on behalf of itself and with respect to QRS Series of ARLP REO I, LLC and TRS Series of ARLP REO I, LLC, ARLP REO II, LLC, on behalf of itself and with respect to QRS Series of ARLP REO II, LLC and TRS Series of ARLP REO II, LLC, ARLP REO III, LLC, on behalf of itself and with respect to QRS Series of ARLP REO III, LLC and TRS Series of ARLP REO III, LLC, ARLP REO IV, LLC, on behalf of itself and with respect to QRS Series of ARLP REO IV, LLC and TRS Series of ARLP REO IV, LLC, ARLP REO V, LLC, on behalf of itself and with respect to QRS Series of ARLP REO V, LLC and TRS Series of ARLP REO V, LLC, ARLP REO VI, LLC, on behalf of itself and with respect to QRS Series of ARLP REO VI, LLC and TRS Series of ARLP REO VI, LLC, ARLP REO VII, LLC, on behalf of itself and with respect to QRS Series of ARLP REO VII, LLC and TRS Series of ARLP REO VII, LLC,  ARLP REO 400, LLC, on behalf of itself and with respect to QRS Series of ARLP REO 400, LLC and TRS Series of ARLP REO 400, LLC and ARLP REO 500, LLC, on behalf of itself and with respect to QRS Series of ARLP REO 500, LLC and TRS Series of ARLP REO 500, LLC and each other Delaware limited liability company that is organized in series that may be subsequently added as a party thereto (individually, each a “Borrower” and collectively the “Borrowers”) and Nomura Corporate Funding Americas, LLC, a Delaware limited liability company (the “Lender”).
RECITALS

The Lender and the Borrowers are parties to that certain Second Amended and Restated Loan and Security Agreement, dated as of April 5, 2018, as amended by Amendment No. 1 to Second Amended and Restated Loan and Security Agreement, dated as of October 5, 2018 (together, the “Existing Loan Agreement”).  Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Loan Agreement. 

The Lender and the Borrowers have agreed, subject to the terms and conditions of this Amendment, that the Existing Loan Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Loan Agreement.  

Accordingly, the Lender and the Borrowers hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Loan Agreement is hereby amended as follows:

SECTION 1.Amendments to Existing Loan Agreement. 

1.1    The definitions of “Advance”, “Advance Amount”, “Advance Date”, “BPO Value”, “Funding Value”, “LIBOR Rate” and “Revolving Period” in Section 2 of the Existing Loan Agreement are hereby amended and restated in their respective entireties to read as follows:

“Advance” shall have the meaning set forth in Section 3(c)(i) hereof and shall include any Incremental Advances hereunder and any Amendment Date Incremental Advances hereunder.

“Advance Amount” shall mean, as of any date of determination, (A) with respect to each Rental Property in connection with any Advance other than an Incremental Advance and an Amendment Date Incremental Advance, an amount equal to the product of (x) the applicable Advance Rate multiplied by (y) the Funding Value, (B) with respect to each Converted Rental Property in connection with an Incremental Advance, an amount equal to the excess, if any, of (I) the product of (x) the applicable Advance Rate multiplied by (y) the Funding Value (based on a Post-Rehab BPO), over (II) the then outstanding Advance Amount, and (C) with respect to each Stabilized Rental Property in connection with any Amendment Date Incremental Advance, an amount equal to the result of (1) the product of (x) the applicable Advance Rate multiplied by (y) the Funding Value minus (2) the then outstanding Advance Amount and with respect to each of (A), (B) and (C), minus any Income which has been applied to the Advance Amount of such Advance (and allocated to the related Rental Property) pursuant to this Agreement and any payments made by any Borrower in reduction of the outstanding Advance Amount in each case before or as of such date of determination with respect to such Advance (and allocated to the related Rental Property).

“Advance Date” shall mean the date on which an Advance is made by Lender to a Borrower in accordance with this Agreement, and shall include any Incremental Advance Date pursuant to Section 3(i) hereof and the Amendment No. 2 Effective Date in respect of any Amendment Date Incremental Advances.

“BPO Value” shall mean the value of a Rental Property as set forth in the most recent BPO (which in the case of the BPO that is to be delivered on or prior to the related Advance Date for a Stabilized Rental Property (including a Converted Rental Property) shall include a Post-Rehab BPO) obtained by or on behalf of Borrowers; provided, however, that if such determined value is not acceptable to Lender in its sole, good faith discretion, then Lender may require Borrowers to obtain an additional BPO from a third-party BPO provider selected by Lender in its sole discretion; and provided further, that the BPO Value for any Financed Rental Property shall be deemed to be zero following written notice from Lender to Borrowers that a Value Reduction Event shall have occurred with respect to such Financed Rental Property.

“Funding Value” shall mean, as of any date of determination, 

(1)     with respect to all Rental Properties that are Financed Rental Properties as of the Amendment No. 2 Effective Date:

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(i)          for each such Rental Property that is a Stabilized Rental Property, the then-current BPO Value of such Rental Property; and

(ii)          for each such Rental Property that is a Non-Stabilized Rental Property, (A) if such Non-Stabilized Rental Property was foreclosed on by or on behalf of the applicable Borrower or an Affiliate thereof, the product of (x) ninety percent (90%) and (y) the then-current BPO Value of such Non-Stabilized Rental Property, or (B) if such Non-Stabilized Rental Properties were acquired through a bulk or mini-bulk sale or a multiple listing service, one hundred percent (100%) of the lesser of (a) the aggregate BPO Value of such Non-Stabilized Rental Properties on the date of acquisition and (b) the aggregate purchase price of such Non-Stabilized Rental Properties; and

(2)     with respect to all Rental Properties that are not Financed Rental Properties as of the Amendment No. 2 Effective Date:

(i)    for each such Rental Property that is a Stabilized Rental Property, the lower of (i) the then-current BPO Value (based on a Post-Rehab BPO) of such Stabilized Rental Property and (ii) the Current Landed Cost of such Stabilized Rental Property; and

(ii)     for each such Rental Property that is a Non-Stabilized Rental Property, the lower of (i) the then-current BPO Value of such Non-Stabilized Rental Property and (ii) the Acquisition Price of such Non-Stabilized Rental Property.

For the avoidance of doubt, the Funding Value, calculated as provided in this definition, shall apply to all Rental Properties that may become subject to an Advance, as well as all Financed Rental Properties that are currently subject to an Advance. 

“LIBOR Rate” shall mean, with respect to each Interest Rate Period, the rate of interest (calculated on a per annum basis) equal to the one month ICE Benchmark Administration (or any successor institution or replacement institution used to administer the London Inter-Bank Offered Rate “LIBOR”) as reported on the display designated as “BBAM” “Page DG8 4a” on Bloomberg (or such other display as may replace “BBAM” “Page DG8 4a” on Bloomberg) on related Interest Rate Determination Date, and if such rate is not available at such time for any reason, then the LIBOR Rate for the relevant Interest Rate Period shall be the rate at which one (1) month U.S. dollar deposits are offered in immediately available funds by the principal London office of a major bank in the London interbank market, selected by the Lender in its sole discretion, at approximately 11:00 a.m. London time on that day.  

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“Revolving Period” shall mean the period beginning on the Effective Date and ending on the Maturity Date.

1.2    Section 2 of the Existing Loan Agreement is hereby further amended by adding the following new definitions thereto in proper alphabetical order:

“Acquisition Price” shall mean the purchase price paid by or on behalf of a Borrower for a Rental Property, which shall include the reasonable and customary costs incurred by such Borrower in connection with such acquisition (subject to a maximum of three percent (3%) of the related Acquisition Price for such Rental Property).  

“Amendment Date Incremental Advance” shall mean, with respect to any Stabilized Rental Property that is a Financed Rental Property as of the Amendment No. 2 Effective Date, an additional Advance that is made to the applicable Borrower on the Amendment No. 2 Effective Date with respect to each such Stabilized Rental Property in an amount equal to the applicable Advance Amount.

“Amendment No. 2 Effective Date” shall mean April 5, 2019.

“Completed Renovation Expenses” shall mean all reasonable costs and expenses incurred in connection with renovation work that has been completed in a good and workmanlike manner and customary in light of the applicable Borrower’s business plan with respect to the redevelopment of such Rental Property.

“Current Landed Cost” shall mean for a Rental Property the sum of (i) the Acquisition Price for such Rental Property, (ii) the reasonable and customary acquisition costs (subject to a maximum of three percent (3%) of the related Acquisition Price for such Rental Property) incurred by the applicable Borrower as at the end of the most recent accounting period for such Borrower, and (iii) if a Post-Rehab BPO has been obtained for such Rental Property, the Completed Renovation Expenses with respect to such Rental Property incurred by or on behalf of the applicable Borrower. 

“Delaware LLC Act” shall mean Chapter 18 of the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq., as amended.

“Division/Series Transaction” shall mean, with respect to any Person that is a limited liability company organized under the laws of the State of Delaware, that any such Person (a) divides into two or more Persons (whether or not the original Person or Subsidiary thereof survives such division) or (b) creates, or reorganizes into, one or more series, in each case, as contemplated under the laws of the State of Delaware, including without limitation Section 18-217 of the Delaware LLC Act.

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“Funding Fee” shall have the meaning set forth in the Pricing Side Letter.
“LIBOR” shall have the meaning set forth in the definition of “LIBOR Rate”.

“Post-Rehab BPO” shall mean, with respect to any Rental Property, an interior BPO that captures the value of any related rehabilitation and other Improvements performed in respect of such Rental Property.

“Successor Rate” shall mean a rate determined by Lender in accordance with Section 3(k) hereof.

“Successor Rate Conforming Changes” shall mean, with respect to any proposed Successor Rate, any spread adjustments or other conforming changes to the timing and frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the discretion of Lender, to reflect the adoption of such Successor Rate and to permit the administration thereof by Lender in a manner substantially consistent with market practice.

1.3    Section 2 of the Existing Loan Agreement is hereby further amended by deleting the definitions of “Extended Revolving Period End Date”, “Extension Period”, “Facility Fee”, “Initial Maturity Date”, “Initial Revolving Period End Date”, “Minimum Yield” and “Unused Fee” in their respective entireties and all references thereto.

1.4    Section 3(b)(xxiv) of the Existing Loan Agreement is hereby amended and restated in its entirety to read as follows:

(xxiv)      No Material Adverse Change.  None of the following shall have occurred and/or be continuing, each as determined by Lender in its good faith, and as applied by Lender in the same manner it applies such provision to other similarly-situated borrowers in similar credit facilities for the financing of single family rental properties:

(A)    an event or events shall have occurred resulting in the effective absence of a “repo market” or comparable “lending market” for financing debt obligations secured by securities or an event or events shall have occurred resulting in Lender not being able to finance Rental Properties through the “repo market” or “lending market” with traditional counterparties at rates which would have been commercially reasonable prior to the occurrence of such event or events; or

(B)    an event or events shall have occurred resulting in the effective absence of a “securities market” for securities backed by Rental Properties at prices which would have been commercially reasonable prior to such event or events; or

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(C)    there shall have occurred a material adverse change in the financial condition of Lender which affects (or can reasonably be expected to affect) materially and adversely the ability of Lender to fund its obligations under this Agreement;

1.5    Section 3(c)(i) of the Existing Loan Agreement is hereby amended by deleting the first sentence thereof in its entirety and replacing it with the following:

From time to time, Lender shall make one or more loans (individually, each an “Advance” and collectively, the “Advances”) to Borrowers; provided that the amount of each such Advance (together with any Incremental Advances and Amendment Date Incremental Advances to be made on such date) is not less than $5,000,000.

1.6    Section 3(k) of the Existing Loan Agreement is hereby amended and restated in its entirety to read as follows:

(k)    Alternative Rate. If prior to any Payment Date, Lender determines in its sole discretion that, (i) by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining LIBOR, (ii) LIBOR is no longer in existence, or (iii) the administrator of the LIBOR Rate or a Governmental Authority having jurisdiction over Lender has made a public statement identifying a specific date after which LIBOR shall no longer be made available or used for determining the interest rate of loans, Lender may give prompt notice thereof to Borrowers, whereupon the rate for such period that will replace LIBOR, and for all subsequent periods until such notice has been withdrawn by Lender, shall be the greater of (i) an alternative benchmark rate (including any mathematical or other adjustments to the benchmark rate (if any) incorporated therein) and (ii) zero, together with any proposed Successor Rate Conforming Changes, as determined by Lender in its sole discretion (any such rate, a “Successor Rate”). In agreeing upon a Successor Rate, Lender shall make such determination consistent with its determinations with respect to other lending facilities that are substantially the same with similarly situated counterparties and with substantially similar assets subject thereto; provided, that the foregoing shall only apply to lending transactions that are under the supervision of the New York structured finance group of Lender that administers the Advances.

1.7    Section 5(b) of the Existing Loan Agreement is hereby amended by deleting paragraphs (iii) and (iv) thereof in their respective entities and replacing such deleted paragraphs with the following:

(iii)    third, to Lender on account of unpaid fees (including any Funding Fee), expenses, LIBOR Rate breakage costs, and indemnity amounts and any other amounts due to Lender from any Borrower Party under the Facility Documents;

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(iv)    fourth, to Lender in an amount equal to any unpaid Repayment Amounts then due and owing to Lender under Section 3(e) or 3(f) hereof; and 

1.8    Section 11 of the Existing Loan Agreement is hereby amended and restated in its entirety to read as follows:

Fees.   Borrowers shall pay to Lender in immediately available funds, due and owing as set forth in the Pricing Side Letter, including the Funding Fee.  Each payment of the Funding Fee is and shall be deemed to be fully earned and non-refundable when paid, and such payment shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Lender at such account designated by Lender.  

1.9    Section 13(o) of the Existing Loan Agreement is hereby amended and restated in its entirety to read as follows:

(o)    New Markets.  No Borrower shall acquire Rental Properties located in any New Market on any date if the acquisition of such Rental Property would cause the aggregate percentage of Rental Properties acquired in New Markets (by BPO Value) as of such date to equal or exceed fifteen percent (15%) of the Aggregate Advance Amount. 

1.10    Section 13(ff) of the Existing Loan Agreement is hereby amended and restated in its entirety to read as follows:

(ff)    Additional Series. No Borrower shall (x) form any additional Series other than the Series that are Borrowers hereunder, unless such Series is added as an Additional Borrower in accordance with Section 3(b)(xxv) or (y) otherwise from and after the Amendment No. 2 Effective Date (i) enter into (or agree to enter into) any Division/Series Transaction, or permit any of its respective Subsidiaries to enter into (or agree to enter into), any Division/Series Transaction and (ii) none of the provisions in this Agreement nor any other Facility Document, shall be deemed to permit any Borrower or any of its Subsidiaries to enter into (or agree to enter into) any Division/Series Transaction.

1.11    Section 19(c) of the Existing Loan Agreement is hereby amended and restated in its entirety to read as follows:

(c)    Without limiting the generality of the foregoing, each Borrower acknowledges that Lender may make Advances (including Incremental Advances and Amendment Date Incremental Advances) to Borrowers secured by Collateral based solely upon the information provided by Borrowers to Lender in the Asset Schedule and the representations, warranties and covenants contained herein, and that Lender, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Rental Properties pledged to secure an Advance, including (i) ordering BPOs, new 

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credit reports, lien searches and new appraisals on the related Rental Property, (ii) conducting diligence on a Sample Set, which diligence shall include a review of the BPOs for such Sample Set, (iii) conducting lien and litigation searches from time to time on Rental Properties that are Eligible Non-Mortgaged Rental Properties, (iv) otherwise re‐generating the information used to originate such Rental Property, and (v) perform limited underwriting of the Rental Properties to confirm (x) that the costs of Improvements previously incurred with respect to a Rental Property are reflected in the current BPO Value of such Rental Property and (y) with respect to Stabilized Rental Properties, that the related Tenant is occupying the Rental Property.  Each Borrower agrees to and, to the extent it controls such other Borrower Party, agrees to cause each other Borrower Party and any third party underwriter in connection with such underwriting, to provide Lender and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Rental Property in the possession, or under the control, of such Borrower.

1.12    The Existing Loan Agreement is hereby amended by replacing any references to “ussecurtizedloansupport@nomura.com” therein with “wholeloanmosupport@nomura.com”.

SECTION 2.    Condition Precedent.  This Amendment shall become effective as of the date hereof (the “Amendment No. 2 Effective Date”), subject to the satisfaction of the following condition precedent:

2.1    Delivered Documents.  On the Amendment No. 2 Effective Date, the Lender shall have received the following document, which shall be satisfactory to the Lender in form and substance:

(a)    this Amendment, executed and delivered by the Borrowers and the Lender; and

(b)    Amendment No. 1 to Third Amended and Restated Pricing Side Letter, executed and delivered by the Borrowers, Front Yard Residential Corporation and the Lender.

SECTION 3.    Limited Effect.  Except as expressly amended and modified by this Amendment, the Existing Loan Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms and the execution of this Amendment.

SECTION 4.    Representations and Warranties.  Each Borrower hereby represents and warrants to the Lender that it is in compliance with all the terms and provisions set forth in the Existing Loan Agreement on its part to be observed or performed, and that no Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in the Existing Loan Agreement (including Section 12 thereof). 

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SECTION 5.    Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

SECTION 6.    Counterparts.  This Amendment may be executed by each of the parties hereto in any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.  Counterparts may be delivered electronically.

SECTION 7.    GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH SHALL GOVERN.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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IN WITNESS WHEREOF, the undersigned have caused this Amendment No. 2 to the Second Amended and Restated Loan and Security Agreement to be duly executed as of the date first above written.

	
						
	 
	 
	NOMURA CORPORATE FUNDING AMERICAS, LLC

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Sanil Patel
	 

	 
	 
	 
	Name:
	Sanil Patel
	 

	 
	 
	 
	Title:
	Managing Director
	 

Signature Page to Amendment No. 2 to Second Amended and Restated Loan and Security Agreement

	
						
	 
	 
	ARLP REO I, LLC, on behalf of itself and each of its Series

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	ARLP I, LLC,
	 

	 
	 
	 
	as manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential, L.P.,
	 

	 
	 
	 
	its manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential GP, LLC,
	 

	 
	 
	 
	its general partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential Corporation,
	 

	 
	 
	 
	its sole member
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Robin N. Lowe
	 

	 
	 
	 
	Name:
	Robin N. Lowe
	 

	 
	 
	 
	Title:
	Chief Financial Officer
	 

	
						
	 
	 
	ARLP REO II, LLC, on behalf of itself and each of its Series

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	ARLP I, LLC,
	 

	 
	 
	 
	as manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential, L.P.,
	 

	 
	 
	 
	its manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential GP, LLC,
	 

	 
	 
	 
	its general partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential Corporation,
	 

	 
	 
	 
	its sole member
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Robin N. Lowe
	 

	 
	 
	 
	Name:
	Robin N. Lowe
	 

	 
	 
	 
	Title:
	Chief Financial Officer
	 

Signature Page to Amendment No. 2 to Second Amended and Restated Loan and Security Agreement

	
						
	 
	 
	ARLP REO III, LLC, on behalf of itself and each of its Series

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	ARLP I, LLC,
	 

	 
	 
	 
	as manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential, L.P.,
	 

	 
	 
	 
	its manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential GP, LLC,
	 

	 
	 
	 
	its general partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential Corporation,
	 

	 
	 
	 
	its sole member
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Robin N. Lowe
	 

	 
	 
	 
	Name:
	Robin N. Lowe
	 

	 
	 
	 
	Title:
	Chief Financial Officer
	 

	
						
	 
	 
	ARLP REO IV, LLC, on behalf of itself and each of its Series

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	ARLP I, LLC,
	 

	 
	 
	 
	as manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential, L.P.,
	 

	 
	 
	 
	its manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential GP, LLC,
	 

	 
	 
	 
	its general partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential Corporation,
	 

	 
	 
	 
	its sole member
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Robin N. Lowe
	 

	 
	 
	 
	Name:
	Robin N. Lowe
	 

	 
	 
	 
	Title:
	Chief Financial Officer
	 

Signature Page to Amendment No. 2 to Second Amended and Restated Loan and Security Agreement

	
						
	 
	 
	ARLP REO V, LLC, on behalf of itself and each of its Series

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	ARLP I, LLC,
	 

	 
	 
	 
	as manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential, L.P.,
	 

	 
	 
	 
	its manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential GP, LLC,
	 

	 
	 
	 
	its general partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential Corporation,
	 

	 
	 
	 
	its sole member
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Robin N. Lowe
	 

	 
	 
	 
	Name:
	Robin N. Lowe
	 

	 
	 
	 
	Title:
	Chief Financial Officer
	 

	
						
	 
	 
	ARLP REO VI, LLC, on behalf of itself and each of its Series

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	ARLP I, LLC,
	 

	 
	 
	 
	as manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential, L.P.,
	 

	 
	 
	 
	its manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential GP, LLC,
	 

	 
	 
	 
	its general partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential Corporation,
	 

	 
	 
	 
	its sole member
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Robin N. Lowe
	 

	 
	 
	 
	Name:
	Robin N. Lowe
	 

	 
	 
	 
	Title:
	Chief Financial Officer
	 

Signature Page to Amendment No. 2 to Second Amended and Restated Loan and Security Agreement

	
						
	 
	 
	ARLP REO VII, LLC, on behalf of itself and each of its Series

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	ARLP I, LLC,
	 

	 
	 
	 
	as manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential, L.P.,
	 

	 
	 
	 
	its manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential GP, LLC,
	 

	 
	 
	 
	its general partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential Corporation,
	 

	 
	 
	 
	its sole member
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Robin N. Lowe
	 

	 
	 
	 
	Name:
	Robin N. Lowe
	 

	 
	 
	 
	Title:
	Chief Financial Officer
	 

	
						
	 
	 
	ARLP REO 400, LLC, on behalf of itself and each of its Series

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	ARLP I, LLC,
	 

	 
	 
	 
	as manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential, L.P.,
	 

	 
	 
	 
	its manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential GP, LLC,
	 

	 
	 
	 
	its general partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential Corporation,
	 

	 
	 
	 
	its sole member
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Robin N. Lowe
	 

	 
	 
	 
	Name:
	Robin N. Lowe
	 

	 
	 
	 
	Title:
	Chief Financial Officer
	 

Signature Page to Amendment No. 2 to Second Amended and Restated Loan and Security Agreement

	
						
	 
	 
	ARLP REO 500, LLC, on behalf of itself and each of its Series

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	ARLP I, LLC,
	 

	 
	 
	 
	as manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential, L.P.,
	 

	 
	 
	 
	its manager
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential GP, LLC,
	 

	 
	 
	 
	its general partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	Front Yard Residential Corporation,
	 

	 
	 
	 
	its sole member
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Robin N. Lowe
	 

	 
	 
	 
	Name:
	Robin N. Lowe
	 

	 
	 
	 
	Title:
	Chief Financial Officer
	 

Signature Page to Amendment No. 2 to Second Amended and Restated Loan and Security AgreementExhibit 4.2

COMMON STOCK PURCHASE WARRANT

 

ENVISION
SOLAR INTERNATIONAL, INC.

 

	Warrant Shares: [_______]	Initial Exercise Date: [_______, 2019

 

 

THIS COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on
or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on
[_____], 20231 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Envision
Solar International, Inc., a company incorporated under the laws of the State of Nevada (the “Company”), up
to [___] shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b). This Warrant
shall initially be issued and maintained in the form of a security held in book-entry form and the Depository Trust Company or
its nominee (“DTC”) shall initially be the sole registered holder of this Warrant, subject to a Holder’s
right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement, in which case
this sentence shall not apply.

 

Section 1.Definitions.
In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:

 

“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on
a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as
applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock
are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.

 

“Board
of Directors” means the board of directors of the Company.

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.

 

“Commission”
means the United States Securities and Exchange Commission.

 

 

 

 

1 Insert the date that is the 5th year
anniversary of the Initial Exercise Date; provided, however, that, if such date is not a Trading Day, insert the immediately following
Trading Day.

 

    	 	1	 

     

    

 

“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.

 

“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Registration
Statement” means the Company’s registration statement on Form S-1, as amended (File No. 333-226040).

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).

 

“Transfer
Agent” means Corporate Stock Transfer, Inc., the current transfer agent of the Company, with a mailing address of 3200
Cherry Creek South Drive # 430, Denver, CO 80209 and a facsimile number of [_______________], and any successor transfer
agent of the Company.

 

“Underwriting
Agreement” means the underwriting agreement, dated as of [___], 2019 among the Company and Maxim Group LLC as representative
of the underwriters named therein, as amended, modified or supplemented from time to time in accordance with its terms.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.

 

“Warrant
Agency Agreement” means that certain warrant agency agreement, dated on or about the Initial Exercise Date, between the
Company and the Warrant Agent.

 

“Warrant
Agent” means the Transfer Agent and any successor warrant agent of the Company.

 

 

 

 

    	 	2	 

     

    

 

“Warrants”
means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.

 

Section 2.Exercise.

 

a)                  
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any
time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly
executed facsimile copy (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).
Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as
defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise
Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United
States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise.
No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically
surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant
has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three
(3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering
the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The
Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph,
following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder
at any given time may be less than the amount stated on the face hereof.

 

Notwithstanding the foregoing
in this Section 2(a), a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this Warrant
held in book-entry form through DTC (or another established clearing corporation performing similar functions), shall effect exercises
made pursuant to this Section 2(a) by delivering to DTC (or such other clearing corporation, as applicable) the appropriate instruction
form for exercise, complying with the procedures to effect exercise that are required by DTC (or such other clearing corporation,
as applicable), subject to a Holder’s right to elect to receive a Definitive Certificate as defined in and pursuant to the
terms of the Warrant Agency Agreement, in which case this sentence shall not apply.

 

b)                  
Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $[_____]2, subject
to adjustment hereunder (the “Exercise Price”).

 

c)                  
Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus
contained therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised,
in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive
a number of Warrant Shares equal to the quotient obtained by dividing ((A-B)(X)) by (A), where:

 

(A) = as applicable:
(i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise
is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and
delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined
in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of
the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the
Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s
execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours”
on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular
trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of
Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant
to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;

 

 

 

 

 

2 Insert [__]% of
the price of each share of common stock sold in the Offering.

 

    	 	3	 

     

    

 

(B) = the
Exercise Price of this Warrant, as adjusted hereunder; and

 

(X) =
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant
if such exercise were by means of a cash exercise rather than a cashless exercise.

 

If Warrant
Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees
not to take any position contrary to this Section 2(c).

 

Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).

 

d)                  
Mechanics of Exercise.

 

		i.	Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased
hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s
balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”)
if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the
issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless
exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of
the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address
specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery
to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company
and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice
of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder
shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this
Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate
Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii)
the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company
fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery
Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares
subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading
Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading
Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company
agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable.
As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of
Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery
of the Notice of Exercise.

 

ii.           
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request
of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder
a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which
new Warrant shall in all other respects be identical with this Warrant.

 

iii.           
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

 

 

    	 	4	 

     

    

 

iv.           
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available
to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with
the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such
date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage
firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to
the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for
the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the
Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order
giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the
Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed
rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied
with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price
giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be
required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder
in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s
right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.

 

v.           
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.

 

vi.           
Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer
tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid
by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed
by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer
tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise
and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required
for same-day electronic delivery of the Warrant Shares.

 

vii.           
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.

 

 

 

    	 	5	 

     

    

 

e)                  
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have
the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to
such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates,
and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes
of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution
Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining,
nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii)
exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation,
any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its Affiliates or Attribution Parties.  Except as set forth in the preceding sentence,
for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing
to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible
for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e)
applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together
with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion
of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this
Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties)
and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder
may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual
report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent
written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon
the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the
number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder
or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported.
The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of
any Warrants, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of
shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease
the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares
of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply.
Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered
to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with
the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

 

 

    	 	6	 

     

    

 

Section 3.Certain
Adjustments.

 

a)      
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company
upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by
reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares,
if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted
such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a)
shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend
or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b)      
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the
record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to
any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date
on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such
extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase
Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in
the Holder exceeding the Beneficial Ownership Limitation).

 

c)      
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of
capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by
way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a
"Distribution"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be
entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record
is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock
are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder's
right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the
Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of
Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for
the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).

 

 

 

    	 	7	 

     

    

 

d)      
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the
outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property, or (v) the Company,
directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group
of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any
shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other
Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction,
at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares
of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder
of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion
the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components
of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of
a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable
at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date
of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder
an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of the consummation
of such Fundamental Transaction; provided, however, if the Fundamental Transaction is not within the Company's control,
including not approved by the Company's Board of Directors, the Holder shall only be entitled to receive from the Company or any
Successor Entity, as of the date of consummation of such Fundamental Transaction, the same type or form of consideration (and in
the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to
the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the
form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among
alternative forms of consideration in connection with the Fundamental Transaction. “Black Scholes Value” means
the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg,
L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing
purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility
equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately
following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation
shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration,
if any, being offered in such Fundamental Transaction and (ii) the greater of (x) the last VWAP immediately prior to the public
announcement of such Fundamental Transaction and (y) the last VWAP immediately prior to the consummation of such Fundamental Transaction
and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction
and the Termination Date. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within
five Business Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction). The Company
shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions
of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by
the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to
the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar
in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor
Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant
(without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise
price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of
the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number
of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately
prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder.
Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that
from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.

 

 

 

    	 	8	 

     

    

 

e)      
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

f)       
Notice to Holder.

 

i.     
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and
any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii.     
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)
on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock,
(C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required
in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile
or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company,
at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record
is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such
notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the
date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

Section 4.Transfer
of Warrant.

 

a)      
Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with
a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney
and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything
herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder
has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading
Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if
properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.

 

 

 

    	 	9	 

     

    

 

b)      
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office
of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed
by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial
issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant
thereto.

 

c)      
Warrant Register. The Warrant Agent (or, in the event a Holder elects to receive a Definitive Certificate (as defined in
the Warrant Agency Agreement), the Company) shall register this Warrant, upon records to be maintained by the Warrant Agent (or,
in the event a Holder elects to receive a Definitive Certificate, the Company) for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time. The Company and the Warrant Agent may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary.

 

Section 5.Miscellaneous.

 

a)      
No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other
rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth
in Section 3.

 

b)      
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of
the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.

 

c)      
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next
succeeding Business Day.

 

d)      
Authorized Shares.

 

 

The Company
covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged
with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be
listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by
the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such
issue).

 

Except and
to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions
as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting
the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant
and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

 

 

    	 	10	 

     

    

 

Before taking
any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.

 

e)      
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. The Company agrees that it hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein that is brought against a party hereto
(or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents), and the Company hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not subject to the jurisdiction
of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party
hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant,
the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

 f)       
Reserved. 

 

g)      
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered,
and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

h)      
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting
any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to
cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

 

 

 

    	 	11	 

     

    

 

i)        
Notices. Any and all notices or other communications or deliveries to be provided by the Holders
hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, or e-mail, or sent
by a nationally recognized overnight courier service, addressed to the Company, at 5660 Eastgate Dr., San Diego, California 92121,
Attention: Desmond Wheatley, email address: Desmond.Wheatley@EnvisionSolar.com, or such other facsimile number, email address or
address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries
to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally
recognized overnight courier service addressed to each Holder at the facsimile number, e-mail address or address of such Holder
appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective
on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number
or via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next
Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number
or via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York
City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent
that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.

 

j)       
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability
of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.

 

k)      
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

l)        
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant
and shall be enforceable by the Holder or holder of Warrant Shares.

 

m)    
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company,
on the one hand, and the Holder or the beneficial owner of this Warrant, on the other hand.

 

n)      
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or
the remaining provisions of this Warrant.

 

o)      
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be
deemed a part of this Warrant.

 

p)      
Warrant Agency Agreement. If this Warrant is held in global form through DTC (or any successor depositary), this Warrant
is issued subject to the Warrant Agency Agreement. To the extent any provision of this Warrant conflicts with the express provisions
of the Warrant Agency Agreement, the provisions of this Warrant shall govern and be controlling.

 

 

 

    	 	12	 

     

    

 

 

IN WITNESS WHEREOF, the
Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

	
        ENVISION SOLAR INTERNATIONAL,
        INC.

         

         

	
        By:__________________________________________

        Name:

        Title:

         

 

 

 

 

 

    	 	13	 

     

    

 

 

 

NOTICE OF EXERCISE

 

To:ENVISION
SOLAR INTERNATIONAL, INC.

 

(1)   The undersigned
hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2)   Payment
shall take the form of (check applicable box):

 

[ ] in lawful money of the United
States; or

 

[ ] [if permitted the cancellation
of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth
in subsection 2(c).

 

(3)   Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

 

The Warrant Shares shall be delivered to
the following DWAC Account Number:

 

_______________________________

 

_______________________________

 

_______________________________

 

 

[SIGNATURE
OF HOLDER]

 

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity:
_________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

 

 

 

 

 

    	 	14	 

     

    

  

ASSIGNMENT FORM

 

(To assign the
foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	Name:	
	 	(Please Print)
	Address:	
	
         

        Phone Number:

        Email Address:
	
        (Please Print)

        ______________________________________

        ______________________________________

	Dated: _______________ __, ______	 
	Holder’s
    Signature:_______________	 
	Holder’s
Address:_______________	 

 

 

 

 

    	 	15

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