Subscription Agreement (2004)Full Document 

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                                  INVISA, INC.

    SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK AND COMMON STOCK WARRANTS

                             SUBSCRIPTION AGREEMENT

                                                                 August 16, 2004

Mercator Advisory Group LLC
Mercator Momentum Fund, LP
Monarch Pointe Fund, Ltd.
555 South Flower Street, Suite 4500
Los Angeles, California 90071

Ladies and Gentlemen:

Invisa,  Inc.,  a  Nevada  corporation  (the  "COMPANY"),  hereby  confirms  its
agreement  with  Mercator  Momentum  Fund,  LP, and Monarch  Pointe  Fund,  Ltd.
(collectively,  the "PURCHASERS")  and Mercator Advisory Group, LLC ("MAG"),  as
set forth below.

         1.  The  Securities.   Subject  to  the  terms  and  conditions  herein
contained, the Company proposes to issue and sell to the Purchasers an aggregate
of Twenty-Two  Thousand  (22,000)  shares of its Series A Convertible  Preferred
Stock (the  "SERIES A STOCK"),  which  shall be  convertible  into  shares  (the
"CONVERSION  SHARES") of the  Company's  Common  Stock (the  "COMMON  STOCK") in
accordance with the formula set forth in the Certificate of Designations further
described  below and to  Purchasers  and MAG for no additional  compensation  an
aggregate   of  One  Million  Five  Hundred   Thousand   (1,500,000)   warrants,
substantially  in the form  attached  hereto at Exhibit A (the  "WARRANTS"),  to
acquire up to One Million Five  Hundred  Thousand  (1,500,000)  shares of Common
Stock (the "WARRANT  SHARES").  The rights,  preferences  and  privileges of the
Series A Stock are as set forth in the  Certificate of  Designations of Series A
Preferred Stock as filed with the Secretary of State of the State of Nevada (the
"CERTIFICATE  OF  DESIGNATIONS")  in the form attached  hereto as Exhibit B. The
number of Conversion Shares and Warrant Shares that any Purchaser may acquire at
any time are subject to limitation in the Certificate of Designations and in the
Warrants,  respectively,  so that the aggregate number of shares of Common Stock
of which such  Purchaser and all persons  affiliated  with such  Purchaser  have
beneficial  ownership  (calculated  pursuant  to Rule  13d-3  of the  Securities
Exchange  Act of 1934,  as  amended)  does not at any time  exceed  9.99% of the
Company's then outstanding Common Stock.

         The Series A Stock and the Warrants are sometimes  herein  collectively
referred  to  as  the  "SECURITIES."  This  Agreement,   the  Warrants  and  the
Certificate of Designations are sometimes herein collectively referred to as the
"TRANSACTION DOCUMENTS."


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         The Securities will be offered and sold to the Purchasers  without such
offers and sales being  registered  under the Securities Act of 1933, as amended
(together  with  the  rules  and  regulations  of the  Securities  and  Exchange
Commission  (the  "SEC")  promulgated  thereunder,  the  "SECURITIES  ACT"),  in
reliance on exemptions therefrom.

         In  connection  with the sale of the  Securities,  the Company has made
available  (including  electronically  via the SEC's EDGAR system) to Purchasers
and the  Purchasers  have  reviewed  its periodic  and current  reports,  forms,
schedules,  proxy  statements and other  documents  (including  exhibits and all
other  information  incorporated  by  reference)  filed  with the SEC  under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"). These reports,
forms,   schedules,   statements,   documents,   filings  and  amendments,   are
collectively  referred to as the "DISCLOSURE  DOCUMENTS." All references in this
Agreement to financial  statements and schedules and other  information which is
"contained,"  "included"  or  "stated"  in the  Disclosure  Documents  (or other
references  of like  import)  shall  be  deemed  to mean  and  include  all such
financial  statements and schedules,  documents,  exhibits and other information
which is incorporated by reference in the Disclosure Documents.

         2.  Representations and Warranties of the Company.  Except as set forth
on the Disclosure Schedule (the "DISCLOSURE  SCHEDULE") delivered by the Company
to Purchasers  on the Closing Date (as defined in Section 3 below),  the Company
represents and warrants to and agrees with Purchasers and MAG as follows:

                  (a) The Disclosure  Documents as of their respective dates did
not, and will not (after giving effect to any updated disclosures therein) as of
the Closing  Date,  contain any untrue  statement of a material  fact or omit to
state a material fact necessary to make the statements  therein, in the light of
the  circumstances  under which they were made, not  misleading.  The Disclosure
Documents  and the  documents  incorporated  or  deemed  to be  incorporated  by
reference  therein,  at the time they were filed or hereafter are filed with the
SEC,  complied and will comply,  at the time of filing, in all material respects
with the requirements of the Securities Act and/or the Exchange Act, as the case
may be, as applicable.

                  (b) Schedule A attached  hereto sets forth a complete  list of
the  subsidiaries of the Company (the  "SUBSIDIARIES").  Each of the Company and
its Subsidiaries has been duly  incorporated or oganized and each of the Company
and the  Subsidiaries  is validly  existing in good standing as a corporation or
other  entity  under  the  laws  of  its   jurisdiction  of   incorporation   or
organization,  with the  requisite  corporate  power  and  authority  to own its
properties  and  conduct its  business  as now  conducted  as  described  in the
Disclosure Documents and is duly qualified to do business as a foreign entity in
good standing in all other  jurisdictions  where the ownership or leasing of its
properties or the conduct of its business  requires such  qualification,  except
where  the  failure  to  be so  qualified  would  not,  individually  or in  the
aggregate, have a material adverse effect on the business,  condition (financial
or other), properties, prospects or results of operations of the Company and the
Subsidiaries, taken as a whole (any such event, a "MATERIAL ADVERSE Effect"); as
of  the  Closing  Date,  the  Company  will  have  the  authorized,  issued  and
outstanding  capitalization  set forth in on  Schedule  B attached  hereto  (the
"COMPANY CAPITALIZATION"); except as set forth in the Disclosure Documents or on
Schedule  A, the  Company  does not have any  subsidiaries  or own  directly  or
indirectly any of the capital stock or other equity or long-term debt securities


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of or have any  equity  interest  in any other  person;  all of the  outstanding
shares of  capital  stock of the  Company  and the  Subsidiaries  have been duly
authorized and validly  issued,  are fully paid and  nonassessable  and were not
issued in violation of any  preemptive or similar  rights and are owned free and
clear of all liens, encumbrances,  equities, and restrictions on transferability
(other than those  imposed by the  Securities  Act and the state  securities  or
"Blue Sky" laws) or voting; except as set forth in the Disclosure Documents, all
of the  outstanding  shares of  capital  stock of the  Subsidiaries  are  owned,
directly or  indirectly,  by the Company;  except as set forth in the Disclosure
Documents, no options,  warrants or other rights to purchase from the Company or
any Subsidiary, agreements or other obligations of the Company or any Subsidiary
to issue or other  rights to  convert  any  obligation  into,  or  exchange  any
securities for, shares of capital stock of or ownership interests in the Company
or any  Subsidiary  are  outstanding;  and except as set forth in the Disclosure
Documents or on Schedule C, there is no agreement,  understanding or arrangement
among the Company or any Subsidiary and each of their respective stockholders or
any other person  relating to the ownership or  disposition of any capital stock
of the Company or any  Subsidiary or the election of directors of the Company or
any Subsidiary or the governance of the Company's or any  Subsidiary's  affairs,
and,  if any,  such  agreements,  understandings  and  arrangements  will not be
breached  or  violated  as a result of the  execution  and  delivery  of, or the
consummation of the transactions contemplated by, the Transaction Documents.

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