EXHIBIT D to Subscription Agreement REGISTRATION RIGHTS AGREEMENT
Exhibit 10.57
EXHIBIT
D
to
Subscription Agreement
AGREEMENT
dated as
of August
31,
2005,
between the entities set forth on the signature page hereto (collectively,
the
“Funds”)
and
M.A.G. Capital, LLC (“MAG”)
(the
Funds and MAG are referred to individually as a “Holder” and collectively as the
“Holders”),
and
Invisa, Inc., a Nevada corporation (the “Company”).
WHEREAS,
the
Funds have purchased, for an aggregate of $1,000,000, an aggregate of 10,000
shares of Series B Convertible Preferred Stock (the “Series
B Stock”)
from
the Company, and have the right to cause their Series B Stock to be converted
into shares of Common Stock, $.001 par value (the “Common
Stock”),
of
the Company, pursuant to the conversion formula set forth in the Series B
Certificate of Designations;
WHEREAS,
each
Fund and MAG have acquired Warrants (together, the “Warrants”)
from
the Company, pursuant to which the Holders have the right to purchase in
the
aggregate up to 2,500,000 shares of the Common Stock through the exercise
of the
Warrants;
WHEREAS,
the
Company may, as provided in the Certificate of Designations issue shares
of
Common Stock for payment of the dividend due to the holders of the Series
B
Stock (the “Dividend”);
WHEREAS,
the
Company has agreed to register an additional 3,815,790 shares of Common Stock
issuable upon conversion of the Series A Preferred Stock (the “Additional Series
A Conversion Shares”) pursuant to the formula set forth in the Amendment to the
Series A Certificate of Designations;
WHEREAS,
the
Company desires to grant to the Holders the registration rights set forth
herein
with respect to the shares of Common Stock issuable upon the conversion of
the
Series B Stock and the exercise of the Warrants.
NOW,
THEREFORE,
the
parties hereto mutually agree as follows:
1. Registrable
Securities. As used herein the terms “Registrable Security”
means each of the shares of Common Stock (i) issued upon the conversion of
the
Series B Stock (the “Conversion Shares”), (ii) upon exercise of the
Warrants (the “Warrant Shares”), (iii) issued to pay the Dividend, or
(iv) issued as Additional Series A Conversion Shares, provided, however,
that
with respect to any particular Registrable Security, such security shall
cease
to be a Registrable Security when, as of the date of determination that
(a) it has been effectively registered under the Securities Act of
1933, as
amended (the “Securities Act”), and disposed of pursuant thereto, or
(b) registration under the Securities Act is no longer required for
the
immediate public distribution of such security. The term “Registrable
Securities” means any and/or all of the securities falling within the
foregoing definition of a “Registrable Security.” In the event of any merger,
reorganization, consolidation, recapitalization or other change in corporate
structure affecting the Common Stock, such adjustment shall be made in the
definition of “Registrable Security” as is appropriate in order to prevent any
dilution or enlargement of the rights granted pursuant to this Section 1.
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2. Registration.
(a) The
Company shall file a
registration statement (the “Registration Statement”) with the Securities
and Exchange Commission (the “SEC”) within thirty (30) days after the
date of this Agreement in order to register the resale of the Registrable
Securities under the Securities Act. Once effective, the Company shall maintain
the effectiveness of the Registration Statement until the earlier of
(i) the date that all of the Registrable Securities have been sold,
or
(ii) the date that the Company receives an opinion of counsel to the
Company that all of the Registrable Securities may be freely traded without
registration under the Securities Act, under Rule 144 promulgated
under the
Securities Act or otherwise.
(b) The
Company
will initially include in the Registration Statement as Registrable Securities
Fifteen
Million One Hundred Forty-Nine Thousand One Hundred Twenty-Three (15,149,123)
shares of Common Stock.
3. Covenants
of the Company with Respect to Registration.
The
Company covenants and agrees as follows:
(a) The
Company shall use best efforts to cause the Registration Statement to become
effective with the SEC as promptly as possible and in no event more than
100 days after initial filing of the Registration Statement with the
SEC.
Upon effectiveness and in no event more than 100 days after the initial filing
of the Registration Statement with the SEC, the Company shall file the final
prospectus with the SEC pursuant to Rule 424(b) and provide copies to Purchaser
and MAG. If any stop order shall be issued by the SEC in connection therewith,
the Company shall use best efforts to obtain promptly the removal of such
order.
Following the effective date of the Registration Statement, the Company shall,
upon the request of any Holder, forthwith supply such reasonable number of
copies of the Registration Statement, preliminary prospectus and prospectus
meeting the requirements of the Securities Act, and any other documents
necessary or incidental to the public offering of the Registrable Securities,
as
shall be reasonably requested by the Holder to permit the Holder to make
a
public distribution of the Holder's Registrable Securities. The obligations
of
the Company hereunder with respect to the Holder's Registrable Securities
are
subject to the Holder's furnishing to the Company such appropriate information
concerning the Holder, the Holder's Registrable Securities and the terms
of the
Holder's offering of such Registrable Securities as the Company may reasonably
request in writing.
(b) The
Company shall pay all
costs, fees and expenses in connection with the Registration Statement filed
pursuant to Section 2 hereof including, without limitation, the Company's
legal and accounting fees, printing expenses, and blue sky fees and expenses;
provided, however, that each Holder shall be solely responsible for the fees
of
any counsel retained by the Holder in connection with such registration and
any
transfer taxes or underwriting discounts, commissions or fees applicable
to the
Registrable Securities sold by the Holder pursuant thereto.
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(c) The
Company will take all
actions which may be required to qualify or register the Registrable Securities
included in the Registration Statement for the offer and sale under the
securities or blue sky laws of such states as are reasonably requested by
each
Holder of such securities, provided that the Company shall not be obligated
to
execute or file any general consent to service of process or to qualify as
a
foreign corporation to do business under the laws of any such jurisdiction.
4. Additional
Terms.
(a) The
Company shall
indemnify and hold harmless the Holders and each underwriter, within the
meaning
of the Securities Act, who may purchase from or sell for any Holder, any
Registrable Securities, from and against any and all losses, claims, damages
and
liabilities caused by any untrue statement of a material fact contained in
the
Registration Statement, any other registration statement filed by the Company
under the Securities Act with respect to the registration of the Registrable
Securities, any post-effective amendment to such registration statements,
or any
prospectus included therein or caused by any omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission based upon
information furnished or required to be furnished in writing to the Company
by
the Holders or underwriter expressly for use therein, which indemnification
shall include each person, if any, who controls any Holder or underwriter
within
the meaning of the Securities Act and each officer, director, employee and
agent
of each Holder and underwriter; provided, however, that the indemnification
in
this Section 4(a) with respect to any prospectus shall not inure to
the
benefit of any Holder or underwriter (or to the benefit of any person
controlling any Holder or underwriter) on account of any such loss, claim,
damage or liability arising from the sale of Registrable Securities by the
Holder or underwriter, if a copy of a subsequent prospectus correcting the
untrue statement or omission in such earlier prospectus was provided to such
Holder or underwriter by the Company prior to the subject sale and the
subsequent prospectus was not delivered or sent by the Holder or underwriter
to
the purchaser prior to such sale and provided further, that the Company shall
not be obligated to so indemnify any Holder or any such underwriter or other
person referred to above unless the Holder or underwriter or other person,
as
the case may be, shall at the same time indemnify the Company, its directors,
each officer signing the Registration Statement and each person, if any,
who
controls the Company within the meaning of the Securities Act, from and against
any and all losses, claims, damages and liabilities caused by any untrue
statement of a material fact contained in the Registration Statement, any
registration statement or any prospectus required to be filed or furnished
by
reason of this Agreement or caused by any omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or omission based upon information furnished
in
writing to the Company by the Holder or underwriter expressly for use therein.
(b) If
for any reason the
indemnification provided for in the preceding section is held by a court
of
competent jurisdiction to be unavailable to an indemnified party with respect
to
any loss, claim, damage, liability or expense referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by the indemnified
party as a result of such loss, claim, damage or liability in such proportion
as
is appropriate to reflect the relative fault of the indemnified party and
the
indemnifying party, as well as any other relevant equitable considerations.
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(c) Neither
the filing of a
Registration Statement by the Company pursuant to this Agreement nor the
making
of any request for prospectuses by the Holder shall impose upon any Holder
any
obligation to sell the Holder's Registrable Securities.
(d) Each
Holder, upon receipt
of notice from the Company that an event has occurred which requires a
Post-Effective Amendment to the Registration Statement or a supplement to
the
prospectus included therein, shall promptly discontinue the sale of Registrable
Securities until the Holder receives a copy of a supplemented or amended
prospectus from the Company, which the Company shall provide as soon as
practicable after such notice.
(e) If
the Company fails to
keep the Registration Statement referred to above continuously effective
during
the requisite period, then the Company shall, promptly upon the request of
any
Holder, use best efforts to update the Registration Statement or file a new
registration statement covering the Registrable Securities remaining unsold,
subject to the terms and provisions hereof.
(f) Each
Holder agrees to
provide the Company with any information or undertakings reasonably requested
by
the Company in order for the Company to include any appropriate information
concerning the Holder in the Registration Statement or in order to promote
compliance by the Company or the Holder with the Securities Act.
(g) The
Company agrees that it shall cause each of its directors, officers and
shareholders owning ten percent (10%) or more of the Company’s outstanding
Common Stock to refrain from selling any shares of the Company’s Common Stock
except under pre-existing filed plans until the Registration Statement has
been
declared effective.
(h) Commencing
on the date hereof and continuing until such time as the Series B Stock and
Warrants are no longer outstanding
each
Holder, on behalf of itself and its affiliates, hereby covenants and agrees
not
to offer to "short sell", or contract to "short sell" the securities of the
Company against the unconverted Series B Stock or the un-exercised Warrants.
In
the event that the Registration Statement is not deemed effective within
5
months after the Closing Date or if at anytime after initial effectiveness
the
Registration Statement is ineffective, then this covenant shall toll until
such
time as the Registration Statement is effective.
(i) Except
as
set forth on Exhibit
“A”
attached hereto and incorporated herein by reference, other than the Registrable
Securities, the Company shall not include any other securities for registration
in the Registration Statement or file any other registration statement unless
the Registration Statement is effective.
5. Governing
Law. The Registrable Securities will be, if and when issued,
delivered in California. This Agreement shall be deemed to have been made
and
delivered in the State of California and shall be governed as to validity,
interpretation, construction, effect and in all other respects by the internal
substantive laws of the State of California, without giving effect to the
choice
of law rules thereof.
4
6. Amendment.
This
Agreement may only be amended by a written instrument executed by the Company
and the Holders.
7. Entire
Agreement.
This
Agreement constitutes the entire agreement of the parties hereto with respect
to
the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
8. Execution
in
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
document.
9. Notices.
All
communications hereunder shall be in writing and shall be hand delivered,
mailed
by first-class mail, couriered by next-day air courier or by facsimile at
the
addresses set forth below.
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If
to the Holders
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M.A.G.
Capital, LLC
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000
Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
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Xxx
Xxxxxxx, Xx 00000
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Attention:
Xxxxx Xxxxxxxxx
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With
a copy to:
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Xxxxxxxx
Xxxxxx Xxxxxxx & Hampton, LLP
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000
Xxxxx Xxxx Xxxxxx
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00xx
Xxxxx
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Xxx
Xxxxxxx, XX 00000-0000
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Telephone
No.: (000) 000-0000
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Facsimile
No.: (000) 000-0000
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Attention:
Xxxxx X. Xxxxx
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Asset
Managers International, Ltd.
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00
Xxxxx Xxxxxx,
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Xxxxxx,
X0 U 6TQ, UK,
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Attention:
Xxxxx Xxxxxxx;
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With
a copy to:
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Asset
Managers Int’l Ltd.,
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c/o
Olympia Capital (Ireland) Limited,
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Harcourt
Center, 0xx Xxxxx,
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Xxxxx
0, Xxxxxxxx Xxxx,
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Xxxxxx
0, Xxxxxxx
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Facsimile:
00(000) 000-0000
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If
to the Company
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Invisa,
Inc.
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0000
00xx
Xxxxxx Xxxx, Xxxxx 000
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Xxxxxxxx,
XX 00000
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Telephone
No.: 000-000-0000
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Facsimile
No.: 000-000-0000
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Attention:
Xxxx Xxxxx
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With
a copy to:
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Xx
Xxxx
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0000
Xxxxx Xxxxx Xxxx
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Xxxxx,
XX 00000
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Telephone
No.: 000-000-0000
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Facsimile
No.: 000-000-0000
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Attention:
Xx Xxxx, CFO
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5
All
such
notices and communications shall be deemed to have been duly given: (i) three
(3) days after it is received if sent by facsimile at the address and number
set
forth above; provided that notices given by facsimile shall not be effective,
unless either (a) a duplicate copy of such facsimile notice is promptly given
by
depositing the same in the mail, postage prepaid and addressed to the party
as
set forth below or (b) the receiving party delivers a written confirmation
of
receipt for such notice by any other method permitted under this paragraph;
and
further provided that any notice given by facsimile received after 5:00 p.m.
(recipient’s time) or on a non-business day shall be deemed received on the next
business day; (ii) five (5) business days after deposit in the United States
mail, certified, return receipt requested, postage prepaid, and addressed
to the
party as set forth below; or (iii) the next business day after deposit with
an
international overnight delivery service, postage prepaid, addressed to the
party as set forth below with next business day delivery guaranteed; provided
that the sending party receives confirmation of delivery from the delivery
service provider.
10. Binding
Effect; Benefits. Any Holder may assign its rights hereunder. This
Agreement shall inure to the benefit of, and be binding upon, the parties
hereto
and their respective heirs, legal representatives, successors and assigns.
Nothing herein contained, express or implied, is intended to confer upon
any
person other than the parties hereto and their respective heirs, legal
representatives and successors, any rights or remedies under or by reason
of
this Agreement.
11. Headings.
The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of
any of
the terms or provisions of this Agreement.
12. Severability.
Any
provision of this Agreement which is held by a court of competent jurisdiction
to be prohibited or unenforceable in any jurisdiction(s) shall be, as to
such
jurisdiction(s), ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
13. Jurisdiction.
Each
of
the parties irrevocably agrees that any and all suits or proceedings based
on or
arising under this Agreement may be brought only in and shall be resolved
in the
federal or state courts located in the City of Los Angeles, California
and
consents to the jurisdiction of such courts for such purpose. Each of the
parties irrevocably waives the defense of an inconvenient forum to the
maintenance of such suit or proceeding in any such court. Each of the parties
further agrees that service of process upon such party mailed by first class
mail to the address set forth in Section 9 shall be deemed in every respect
effective service of process upon such party in any such suit or proceeding.
Nothing herein shall affect the right of either party
to serve
process in any other manner permitted by law. Each of the parties agrees
that a
final non-appealable judgment in any such suit or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on such judgment or
in
any
other lawful manner.
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14. Attorneys'
Fees and Disbursements.
If any
action at law or in equity is necessary to enforce or interpret the terms
of
this Agreement, the prevailing party or parties shall be entitled to receive
from the other party or parties reasonable attorneys’ fees and disbursements in
addition to any other relief to which the prevailing party or parties may
be
entitled.
IN
WITNESS
WHEREOF,
this
Agreement has been executed and delivered by the parties hereto as of the
date
first above written.
| INVISA, INC. | ||
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| By: | /s/ Xxxxxxx X. Xxxxxxx | |
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Xxxxxxx A. Xxxxxxx |
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| Its: President | ||
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M.A.G.
Capital, LLC
By:_____________________
Name:
Xxxxx Xxxxxxxxx
Its:
Managing Member
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Mercator
Momentum Fund III, LP
By: M.A.G.
Capital, LLC
Its: General
Partner
_____________________
Xxxxx
Xxxxxxxxx
Managing
Member
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Asset
Managers International, Ltd.
a
British Virgin Islands international business company
By:
______________________________
Print
Name: _______________________
Title:
_____________________________
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Monarch
Pointe Fund, Ltd.
By:_____________________
Name:
Xxxxx Xxxxxxxxx
Its:
President
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