Exhibit 10.66
BROKER-DEALER PLACEMENT AGENT SELLING AGREEMENT
This agreement is made as of May ___, 2003 by and between Invisa, Inc.,
a corporation organized under the laws of the State of Nevada, with its
principal place of business at 0000 Xxxxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000
("Company") and Capstone Partners, L.C., a limited liability company organized
under the State of Utah, with its principal place of business at 0000 Xxxxx
Xxxx, Xxxxx 000, Xxxxxxx, XX 00000.
The Company hereby agrees with Broker as follows:
1. Broker is a registered broker-dealer and a member of the National
Association of Securities Dealers, Inc. ("NASD"), a part of whose
business consists of the sale or placement of securities. Broker is
also registered as a broker-dealer under the securities laws of one or
more states of the United States, including the State of Florida.
2. The Company intends to offer and sell to qualified investors, shares of
common stock or other of its securities ("Securities") upon the terms
and conditions set forth in negotiated financing transactions hereafter
to be developed and agreed upon by the Company with the assistance of
the Broker. At present, it is the intention of the parties that a
maximum of $1,000,000 aggregate offering amount will be raised through
the placement of an Equity Line of Credit for the Company, which is
intended to qualify as a private placement of Securities pursuant to
exemptions from registration afforded by the Securities Act of 1933 and
applicable state law exemptions consistent therewith. This Agreement
covers placement agent services and compensation solely with regard to,
and is limited to, the placement and finalization of the Equity Line of
Credit, including the Advance, as agreed by the Company in its term
sheet with BARBELL GROUP , INC providing for same dated April 25, 2003
(the "Equity Line of Credit").
3. Broker desires to participate in the placement of the Securities for
the Equity Line of Credit on a "best efforts" basis by soliciting,
through Broker's authorized personnel, or through other broker-dealers
selected as dealers acting as additional placement agents,
subscriptions for the purchase of the Securities in accordance with the
terms of the financing arrangements agreed upon with the Company. The
Company desires to authorize Broker to obtain such subscriptions and to
seek sources of financing consistent with the Company's interests and
it is the purpose of this Agreement to set forth the agreement of the
parties relative to such authorization.
4. Broker understands and acknowledges that the offering and sale of the
Securities to be offered by the Company have not been and will not be
registered with the U.S. Securities & Exchange Commission or any other
state regulatory agency, and the Securities will be offered and sold in
reliance upon the exemptions from registration contained in Section
4(2) of the Securities Act of 1933, as amended (the "Act") and
Regulation D (Rule 506) promulgated thereunder, as well as various
exemptions from registration or qualification afforded by the "blue
sky" laws of those jurisdictions in which the Securities are offered or
sold. Securities offered and sold in exchange for the Company's
financing shall only be made to and subscriptions accepted from
"accredited investors" as defined in Rule 501 of Regulation D
promulgated under the Act.
5. Broker shall solicit subscriptions to purchase the Securities in
compliance with all applicable Federal and state securities laws and
the provisions of this Agreement. Copies of any offering documents
authorized for distribution by the Company will be furnished to the
Broker in reasonable quantities upon specific request. All copies of
the offering documents and any other printed or written materials
furnished to Broker in connection with the offering shall remain the
property of the Company, shall be treated and cared for as set out in
this Agreement and shall be returned to the Company forthwith upon
request. Broker shall maintain a written record reflecting the
distribution and location of all materials furnished in connection with
the offering and the identity of all persons to whom such materials are
distributed. In addition, Broker shall use its best efforts to: (i)
assure that the materials furnished are treated as confidential and not
reproduced or redistributed; and (ii) secure the return of all
materials furnished to persons who
Page 1 of 7
do not subscribe for the Shares. Neither Broker nor any officer, agent
employee or other representative of Broker is authorized to utilize or
to display to any person, in connection with the solicitation of
subscriptions for the Securities any information or material other than
the offering documents and such other information or material as may be
authorized and actually furnished by the Company to Broker in
connection with the Offering.
6. The offering of the Securities will terminate in accordance with the
request of the Company, but may be continued by the Company within its
discretion. The Company shall have the right, in its sole discretion,
to accept or reject any subscriptions tendered by Broker in whole or in
part. Subscriptions need not be accepted in the order in which they are
received.
7. If applicable to the transaction, all funds received by the Company
from subscriptions tendered by Broker and accepted by the Company shall
be deposited in an escrow account at a qualified "bank" in order to
comply with Rule 15c2-4 under the Securities Exchange Act of 1934
("Escrow Account") until subscription agreements relative to each
purchaser of Securities have been received and accepted by the Company.
Upon receipt and acceptance of one or more subscription agreements by
the Company, funds will be promptly released to the Company from the
above mentioned depository account for such accepted subscription
agreements for uses as set forth in any offering documents. In this
fashion, the offering will continue up to and including the termination
date or until the maximum aggregate amount of the offering is received
by the Company, whichever event occurs first.
Upon the acceptance of the Equity Line of Credit approved by the
Company, Broker will be entitled to receive compensation and/or
commissions as described below:
(i) Thirteen (13%) percent as a commission based on the
principal amount of investment funds actually
received by the Company from the Equity Line of
Credit that were placed through the direct and
indirect placement efforts of the Broker; provided
however;
(ii) Of the total commission due at the initial
closing of the initial $250,000 in aggregate
amount of investment proceeds received by
the Company, $17,500 shall be paid in cash
("Advance Fee") and the balance of $15,000
deferred for payment as set forth herein
("Deferred Fee"); of the total amount of the
Advance Fee payable hereunder, two-thirds or
66.7% of the Advance Fee shall be earned by
the Broker and one-third or 33.3% of the
Advance Fee shall be earned by and paid over
to Crescent Fund, Inc. by the Broker as a
finder's fee on behalf of Crescent Fund,
Inc.
(iii) The Deferred Fee shall be delivered to the
Broker at the closing of the initial
$250,000 in aggregate amount of investment
proceeds received by the Company in the form
of 6,000 shares of restricted common stock
to issue by the Company ("Stock Fee"). Of
the total amount of the Deferred Fee payable
hereunder, two-thirds or 66.7% of the
Advance Fee (4,000 shares of INSA common
stock) shall be earned by the Broker and
one-third or 33.3% of the Deferred Fee
(2,000 shares of INSA common stock) shall be
earned by and paid over to Crescent Fund,
Inc. by the Broker as a finder's fee on
behalf of Crescent Fund, Inc. By virtue of
this Agreement, the shares issued in payment
of the Stock Fee shall be included in the
registration statement to be required as
part of the Equity Line of Credit. The
Company shall have a right of redemption in
favor of the Company covering the 6,000
shares of common stock at a redemption price
equal to $15,000; and
Page 2 of 7
(iv) In the event that the shares issued in
payment of the Stock Fee are not covered by
an effective registration statement filed
with the SEC or, in the alternative, are not
redeemed by the Company within the earlier
of: (i) 120 days of the date of May 12,
2003; or (ii) the date that the Company pays
the Note, as defined in the Investment
Agreement covering the Equity Line of
Credit, then the record holders of said
shares shall have the right to "put" the
6,000 shares to the Company at $15,000 plus
10% per annum interest.
(v) Compensation to be paid to the Broker on all
investment amounts received by the Company
under the Equity Line of Credit, except the
conversion of the initial $250,000 Advance,
shall be paid to Broker out of the proceeds
of all Put Amounts as defined in the Equity
Line of Credit Investment Agreement, and
shall equal 13% in cash on the Put Amounts
received. Of the total amount of the
compensation payable under the Equity Line
of Credit, two-thirds or 66.7% of the fees
shall be earned by the Broker and one-third
or 33.3% of the fees shall be earned by and
paid over to Crescent Fund, Inc. by the
Broker as a finder's fee on behalf of
Crescent Fund, Inc.
The Company shall have no liability or obligation to Broker for any
amount other than the cash commissions and Stock Fee provided for
herein. The cash commissions and Stock Fee shall be deliverable only
if, as, and when investor's funds are received by the Company pursuant
to this section and pursuant to the financing to be placed by the
Broker.
8. The Company represents and warrants to Broker and agrees as follows:
(a) The Company is a "C" corporation duly organized and validly
existing under the laws of the State of Nevada with all the
requisite power and authority to enter into and perform this
Agreement.
(b) The Company is not in violation of its Articles of
Incorporation; the Company is not in default in the
performance or observance of any material obligation
agreement, covenant or condition contained in any material
contract, indenture mortgage, loan agreement, note, lease, tax
return or other agreement or instrument to which it is a party
or by which it or any of its properties is bound; and the
execution and delivery of this Agreement, the consummation of
the transactions contemplated herein and compliance with the
terms hereof have been duly authorized by all necessary action
and do not and will not result in any violation of the
Articles of Incorporation of the Company and do not and will
not conflict with, or result in a breach of any of the tenets
or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company under, any material
indenture, mortgage loan agreement, note, lease, or other
agreement or instrument to which the Company is a party or by
which it or any of its properties is bound, or any existing
applicable law, rule, regulation, judgment, order or decree of
any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company or
any of its properties.
(c) This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation,
enforceable in accordance with its terms.
(d) Except as may be provided in the Equity Line of Credit, the
offer and sale of the Securities has not been and will not be
registered with the Securities and Exchange Commission or any
other regulatory agency; and insofar as such matters may be
subject to the control of the Company, the Securities will be
offered in compliance with the requirements of Sections 4(2)
and/or 4(6) of the Act and Regulation D promulgated
Page 3 of 7
there under, various exemptions from registration or
qualification afforded by the "blue sky" laws of those
jurisdictions in which the Securities are offered or sold and
all other applicable laws, with a view to ensuring that the
offering and sale of the Securities will be exempt from the
registration or qualification requirements of the Federal and
applicable state securities laws as a transaction not
involving any public offering. The Company warrants that all
appropriate state notices and related filings have been or
will be timely filed in accord with all appropriate "blue sky"
requirements of each state or other jurisdiction wherein the
offering and sale of the Securities shall occur.
(e) All offering documents and all amendments thereto, and all
collateral sales materials, will not, as of its date, include
any untrue statement of a material fact or omit to state any
material fact required to be stated or necessary to make the
statements made therein not misleading.
(f) The Company shall provide to Broker and to each offeree and
his purchaser representative any such information, documents
and instruments as may be reasonably requested pursuant to
Regulation D and to otherwise comply with such requirements of
that rule.
(g) The Company agrees not to accept subscriptions for the
Securities from persons that do not qualify as "accredited
investors" within the definition contained in Rule 501 of
Regulation D promulgated under the Securities Act of 1933.
(h) The Company, as well as its affiliates, acknowledges that the
chief executive officer and controlling shareholder of the
Broker, is an attorney licensed to practice law in one or more
states and has rendered legal services to the Company, as well
as the Company's corporate predecessor(s) in the areas of
Federal and state securities law and regulation prior to the
date of this Agreement. Accordingly, the Company acknowledges
that this Agreement does not provide for the delivery of legal
services by the Broker or its chief executive officer, nor are
any such legal services contemplated or to be delivered to the
Company by separate agreement. Further, that the Company
represents and warrants that it intends to rely upon and
obtain separate legal representation and advice concerning any
and all aspects of the Offering and the Offering Documents.
9. Broker represents and warrants to the Company and agrees as follows:
(a) Broker is a limited liability company duly organized and
validly existing under the laws of the State of Utah with
corporate power and authority to enter into and perform all of
its obligations under this Agreement.
(b) Broker, if a corporation or limited liability company, is not
in violation of its Certificate of Incorporation, Agreement,
or By-laws; Broker is not in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any material contract, indenture,
mortgage, loan agreement, note, lease, tax return or other
agreement or instrument to which it is a party or by which it
or any of its properties is bound; and the execution and
delivery of this Agreement, the consummation of the
transactions contemplated herein and compliance with the terms
hereof have been duly authorized by all necessary action and
do not and will not result in any violation of the Certificate
of Incorporation, Agreement, or By-laws of Broker, if any, and
do not and will not conflict with, or result in a breach of
any of the tenets or provisions of, or constitute a default
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of Broker
under, any material indenture, mortgage, loan agreement, note,
lease or other agreement or instrument to which Broker is a
party or by which it or any of its properties is bound, or any
existing applicable law, rule, regulation, judgment, order or
decree of any government,
Page 4 of 7
governmental instrumentality or court, domestic or foreign,
having jurisdiction over Broker or any of its properties.
(c) This Agreement has been duly executed and delivered by Broker
and constitutes the legal, valid and binding obligations of
Broker, enforceable against it in accordance with its terms.
(d) Broker is duly registered pursuant to the provisions of the
Securities Exchange Act of 1934 as a dealer and it is duly
registered as a broker-dealer in such states that it is
required to be so registered in order to carry out the
offering contemplated by this Agreement.
(e) Broker will: (i) conduct the offering and sale of the
Securities in accordance with the provisions of Federal and
applicable state securities laws and preserve for the Company
the exemption from registration or qualification provided by
Sections 4 (2) and/or 4(6) of the Act and/or Regulation D
promulgated under the Act and under comparable state
securities laws; and (ii) limit the offering of the Securities
to persons who meet the suitability standards set forth in the
Offering Documents and, prior to any offer of the Securities
to any such persons, have reasonable grounds to believe, and
in fact believe, that such person meets such standards and
maintain memoranda and other appropriate records
substantiating the foregoing.
(f) If Broker or agents or salesmen of Broker act as a purchaser
representative with respect to the Securities, such person
shall comply with the requirements of appointment, notice and
disclosure contained in Regulation D.
(g) Broker will limit the offering of the Securities to
solicitations of subscriptions in accordance with Sections
4(2) and/or 4(6) of the Act or Rule 506 of Regulation D
promulgated under the Act, and will provide each offeree with
a complete copy of the Offering Documents (including all
supplements, amendments and exhibits thereto) during the
course of the Offering and prior to sale.
(h) Broker will, prior to sale afford each offeree and his
purchaser representative, if any, the opportunity to ask
questions of and receive answers from the Company concerning
the terms and conditions of the offering and to obtain any
additional information, to the extent possessed by the Company
or obtainable by it without unreasonable effort or expense,
necessary to verify the accuracy of the information contained
in the Offering Documents.
(i) Broker will not use or employ any information or materials in
connection with the offering and sale of the Securities other
than the offering documents, unless the same shall have been
provided by the Company, and then only if the same are
accompanied or preceded by the offering documents.
(j) Broker will obtain and forward to the Company all
documentation required to accompany subscriptions for
Securities, fully and properly completed.
10. Indemnification:
(a) The Company shall indemnify, and hold harmless, Broker and
each person, if any, who controls Broker, as well as any and
all employees, agents, representatives and joint venture
affilates of the Broker (within the meaning of either the Act
or the Securities Exchange Act of 1934), as follows:
(i) Against any and all loss, claim, damage, liability
and expense, whatsoever arising out of any untrue
statement of a material fact contained in the
Offering
Page 5 of 7
Documents (or any amendment or supplement thereto),
or the omission or alleged omission there from of a
material fact required to be stated therein or
necessary to make the statements therein not
misleading;
(ii) Against any and all loss, liability, claim, damage
and expense whatsoever to the extent of the aggregate
amount paid in settlement of any litigation, or
investigation or proceeding by any governmental
agency or body, commenced or threatened, or any such
alleged untrue statement or omission, if such
settlement is effected with the written consent of
the Company; and against any and all expense
whatsoever (including fees and disbursements of
counsel chosen by Broker and approved by the Company,
which approval shall not be unreasonably withheld)
reasonably incurred in investigating, preparing or
defending against any litigation or investigation or
proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or
any such alleged untrue statement or omission or
based upon any "blue sky" filings, or lack thereof.
It shall be the Company's responsibility to only
accept subscription in states where the Company's
securities attorney has properly filed Form D with
the state of residence of the subscriber or in States
where the offer and sale of the Securities would be
otherwise permissible pursuant to the securities laws
and regulations governing offers and sales of such
securities in such states; and
(iii) Against any claim or obligation made by Crescent
Fund, Inc., a Texas corporation ("Crescent"), whose
address is 00 Xxxx Xxxxxx, Xxx Xxxx, XX 00000 against
the Company for compensation that Crescent may claim
under that certain Consulting Agreement entered into
between Crescent and the Company dated March 6, 2003
as a result of the Broker's success in locating one
or more sources of investment capital for the
Company.
(b) Broker shall indemnify and hold harmless the Company, each
director and officer of the Company, and each person who
controls the Company (within the meaning of either the Act or
the Securities Exchange Act of 1934), each consultant or
financial advisor of the Company, and each agent, attorney, or
representative of the Company, in the same manner and to the
extent set forth in subsection 11(a), against any and all
loss, claim, damage, liability and expense described in
subsection 11(a), but only with respect to false or misleading
statements, or alleged false or misleading statements, made by
Broker, or any officer, director, employee or agent of Broker,
not contained in the offering documents.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but
failure to so notify any indemnifying party shall not relieve
it from any liability which it may have otherwise than on
account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of such action.
In no event shall the indemnifying parties be liable for the
fees and expenses of more than one counsel for all indemnified
parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances.
(d) If the indemnification provided for in Section 10(a) or 10(b)
hereof is unenforceable although applicable in accordance with
its terms, then the parties agree that in order to provide for
just and equitable contribution, they each shall
proportionately contribute to the aggregate losses, claims,
damages, liabilities or expenses contemplated by such
indemnity agreement incurred by each of them, provided,
however, that no person guilty of fraudulent misrepresentation
(within the meaning of Section 9(f) of the Act)
Page 6 of 7
shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of
this Section 11, each person, if any, who controls the Company
or Broker within the meaning of either the Act or the
Securities Exchange Act of 1934 shall have the same rights to
contribution as the Company and Broker.
12. All representations, warranties, covenants and agreements made herein
or in certificates and instruments delivered pursuant hereto, as well
as the indemnification provisions contained in Section 11 hereof, shall
remain in full force and effect regardless of any investigation made by
or on behalf of Broker and its controlling persons, or the Company and
its controlling persons, or any agent of any of them, and shall survive
sale and delivery of the Securities to be offered under any offering
documents and this Agreement.
13. All notices hereunder shall be in writing, and shall be personally
delivered or sent by first class registered or certified mail, postage
prepaid, to the parties at their respective addresses shown below, or
such other addresses as may be so designated.
14. Time shall be of the essence of this Agreement.
15. This Agreement (other than those portions that survive) may be
terminated by either party at any time by written notice to the other
party.
16. Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, or its interpretation or effectiveness, and
which is not settled between the parties themselves, shall be settled
by binding arbitration in Xxxxxx County, Georgia in accordance with the
rules of the American Arbitration Association and judgment upon the
award may be entered in any court having jurisdiction thereof. The
prevailing party in any litigation, arbitration or mediation relating
to collection of fees, or any other matter under this Agreement, shall
be entitled to recover all its costs, if any, including without
limitation reasonable attorney's fees, from the other party for all
matters, including, but not limited to, appeals. This Agreement is made
in the State of Georgia, and all questions related to the execution,
construction, validity, interpretation and performance of this
Agreement and to all other issues or claims arising hereunder, should
be governed and controlled by the laws of the State of Georgia.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Company: Broker Dealer
Invisa, Inc. Capstone Partners, L.C.
A Nevada corporation A Utah limited liability company
By: Xxxxxxx X. Xxxxxxx, President By: Xxxxxxx Xxxxxx
----------------------------- ---------------------------------
Xxxxx Xxxxxxx, President Xxxxxxx Xxxxxx, CEO
Agreed To And Accepted By:
Crescent Fund, Inc, (as to Section 7 Only). By execution hereof, Crescent Fund,
Inc agrees that the compensation to be paid by Invisa, Inc. to Capstone
Partners, LC as provided herein fully and completely satisfies Invisa, Inc.'s
obligation to Crescent Fund, Inc, under the Agreement between Crescent Fund, Inc
and Invisa, Inc. dated March 6,2003, with regard to any compensation due to
Crescent Fund, Inc, arising out of or relating to the Equity Line of Credit
defined herein and funding from Barbell group, Inc.
By: Xxxxxxx Xxxxx
-----------------------------
Xxxx Xxxxx, Its _____________
Page 7 of 7
