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RESERVE EQUITY FINANCING
THIS AGREEMENT dated as of the 28 day of
October, 2009 (the "Agreement") between AGS Capital Group, LLC a New York limited liability
corporation (the "Investor"), and INVO
Bioscience, Inc., a corporation organized and existing under the laws of
the State of Nevada (the "Company").
WHEREAS, the parties desire that, upon the
terms and subject to the conditions contained herein, the Company shall issue
and sell to the Investor, from time to time as provided herein, and the Investor
shall purchase from the Company up to Ten Million Dollars ($10,000,000) of the
Company's common stock, par value $.0001 per share (the "Common Stock"), which
shares of Common Stock shall be registered for resale pursuant to the
Registration Rights Agreement (defined herein); and
WHEREAS, such investments will be made in
reliance upon the provisions of Regulation D ("Regulation D") of the
Securities Act of 1933, as amended, and the regulations promulgated thereunder
(the "Securities Act"), and or upon such other exemption from the registration
requirements of the Securities Act as may be available with respect to any or
all of the investments to be made hereunder.
NOW, THEREFORE, the parties hereto agree as
mean the portion of the Commitment Amount requested by the Company in the
shall mean the first Trading Day after expiration of the applicable Pricing
Period for each Advance.
Notice" shall mean a written notice in the form of Exhibit A attached
hereto to the Investor executed by an officer of the Company and setting forth
the Advance amount that the Company requests from the Investor.
Date" shall mean each date the Company delivers (in accordance with
Section 2.2(b) of this Agreement) to the Investor an Advance Notice
requiring the Investor to purchase the number of shares of Common Stock
specified in the Advance Notice, subject to the terms of this Agreement. No
Advance Notice Date shall be less than five (5) calendar days after the prior
Advance Notice Date.
shall mean, on any date, the closing bid price (as reported by Bloomberg L.P. or
other comparable reporting service) of the Common Stock on the Principal Market
or if the Common Stock is not traded on a Principal Market, the highest reported
bid price for the Common Stock, as furnished by the Financial Industry
Regulatory Authority.
Section 1.6. "Closing" shall mean
one of the closings of a purchase and sale of Common Stock pursuant to
Amount" shall mean the aggregate amount of up to Ten Million Dollars
($10,000,000) which the Investor has agreed to provide to the Company in order
to purchase the Company's Common Stock pursuant to the terms and conditions of
Period" shall mean the period commencing on the Effective Date, and
expiring upon the termination of this Agreement in accordance with
shall mean the Company's common stock, par value $.0001 per share.
Satisfaction Date" shall have the meaning set forth in
mean any loss, claim, damage, liability, costs and expenses (including, without
limitation, reasonable attorney's fees and disbursements and costs and expenses
of expert witnesses and investigation).
Date" shall mean the date on which the SEC first declares effective a
Registration Statement registering the resale of the Registrable Securities as
set forth in Section 7.2(a).
shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
Effect" shall mean any condition, circumstance, or situation that may
result in, or reasonably be expected to result in (i) a material adverse
effect on the legality, validity or enforceability of the Agreement, (ii) a
material adverse effect on the results of operations, assets, business or
condition (financial or otherwise) of the Company, taken as a whole, or
(iii) a material adverse effect on the Company's ability to perform in any
material respect on a timely basis its obligations under the
shall mean the VWAP of the Common Stock during the Pricing Period.
Amount" shall equal 100% of the average daily trading volume for the 5
days as reported by Bloomberg or comparable financial news service (U.S market
only) ("ADV") immediately preceding the Advance Notice Date.
mean the Financial Industry Regulatory Authority.
mean an individual, a corporation, a partnership, an association, a trust or
other entity or organization, including a government or political subdivision or
an agency or instrumentality thereof.
Section 1.20. "Pricing Period" shall
mean the five (5) consecutive Trading Days after the Advance Notice
Market" shall mean the Nasdaq Global Select Market, the Nasdaq Global
Market, the Nasdaq Capital Market, the American Stock Exchange, the OTC Bulletin
Board, or the New York Stock Exchange, whichever is at the time the principal
trading exchange or market for the Common Stock.
Price" shall mean ninety two percent (92%) of the Market Price during the
Securities" shall mean the shares of Common Stock to be issued hereunder
(i) in respect of which the Registration Statement has not been declared
effective by the SEC, (ii) which have not been sold under circumstances
meeting all of the applicable conditions of Rule 144 (or any similar
provision then in force) under the Securities Act ("Rule 144") or
(iii) which have not been otherwise transferred to a holder who may trade
such shares without restriction under the Securities Act, and the Company has
delivered a new certificate or other evidence of ownership for such securities
not bearing a restrictive legend.
"Registration Rights
Agreement" shall mean the Registration Rights Agreement dated the date
hereof, regarding the filing of the Registration Statement for the resale of the
Registrable Securities, entered into between the Company and the
Statement" shall mean a registration statement on Form S-1 or Form S-3
(if use of such form is then available to the Company pursuant to the rules of
the SEC and, if not, on such other form promulgated by the SEC for which the
Company then qualifies and which counsel for the Company shall deem appropriate,
and which form shall be available for the resale of the Registrable Securities
to be registered thereunder in accordance with the provisions of this Agreement
and the Registration Rights Agreement, and in accordance with the intended
method of distribution of such securities), for the registration of the resale
by the Investor of the Registrable Securities under the Securities
shall have the meaning set forth in the recitals of this Agreement.
mean the United States Securities and Exchange Commission.