Exhibit 10.3

 

Execution copy

 

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT, dated as of May __, 2020 (this “Agreement”),
by and among INVO Bioscience, Inc., a Nevada corporation (the “Company”), and
the investors identified on the signature page hereto (each an “Investor” and
collectively “Investors”).

 

R E C I T A L S

 

WHEREAS, pursuant to that certain Securities Purchase Agreement, dated as of the
date hereof, by and among the Company and the Investors (the “Purchase
Agreement”), the Investors, in the aggregate are purchasing up to Three Million
Five Hundred Thousand Dollars ($3,500,000) of principal amount of secured
convertible promissory notices of the Company (the “Notes”), which Notes are
convertible into shares (the “Conversion Shares”) of the Company’s common stock,
par value $0.0001 per share (the “Common Stock”), and unit purchase options (the
“Purchase Options”), to purchase units (“Units”) with each Unit consisting of
(A) shares of Common Stock (the “Option Shares”) and (B) warrants (“Warrants”)
to purchase shares of Common Stock (the “Warrant Shares”);

 

WHEREAS, pursuant to the Purchase Agreement, the Company and the Investors
agreed to cooperate in good faith to enter into a registration rights agreement
granting to the Investors piggyback registration rights with respect to the
Conversion Shares underlying the Notes, the Option Shares underlying the
Purchase Option and the Warrant Shares underlying the Warrants delivered
pursuant to the Purchase Agreement (collectively, the “Securities”); and

 

WHEREAS, in connection with the Purchase Agreement, the Company and the
Investors desire to define certain registration rights (“Registration Rights”)
with respect to the Securities on the terms and subject to the conditions herein
set forth.

 

NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the parties hereby agree as follows:

 

ARTICLE 1
DEFINITIONS

 

Section 1.1.     Definitions. As used in this Agreement, the following terms
have the respective meanings set forth below:

 

“Affiliate” (and any plural thereof) shall mean as to any Person, any other
Person which, directly or indirectly, is in control of, is controlled by, or is
under common control with, the first Person (including all Persons or entities
that at any time prior to the termination of this Agreement become Affiliates of
any person referred to in this Agreement). A Person shall be deemed to control
another Person if the controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of the
other Person, whether through the ownership of voting securities, by contract,
or otherwise;

 

“Agreement” shall have the meaning set forth in the Preamble hereof;

 

 

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“Associate” (and any plural thereof) has the meaning ascribed to such term under
Rule 12b-2 promulgated by the Commission under the Exchange Act and shall
include all persons or entities that at any time prior to the Termination of
this Agreement become Associates of any person or entity referenced in this
Agreement;

 

“Beneficial Ownership” and terms of similar import shall be as defined under and
determined pursuant to Rule 13d-3 promulgated under the Exchange Act;

 

“Commission” shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act;

 

“Common Stock” shall have the meaning set forth in the Recitals hereof;

 

“Company” shall have the meaning set forth in the Preamble hereof;

 

“Conversion Shares” shall have the meaning set forth in the Recitals hereof;

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended (or
any successor act), and the rules and regulations promulgated thereunder;

 

“FINRA” shall mean the Financial Industry Regulatory Authority;

 

“Holder” shall mean (a) each Investor, its Affiliates or Associates (solely in
their capacity as holders of Registrable Securities), and (b) any Permitted
Assignees under Section 3.5 hereof;

 

“Indemnified Party” shall have the meaning set forth in Section 2.5(c) hereof;

 

“Indemnifying Party” shall have the meaning set forth in Section 2.5(c) hereof;

 

“Investor” shall have the meaning set forth in the Preamble hereof;

 

“Issuer Free Writing Prospectus” shall mean an “Issuer Free Writing Prospectus”
as defined in Rule 433 under the Securities Act, relating to an offer of
Registrable Securities;

 

“Losses” shall have the meaning set forth in Section 2.5(a) hereof;

 

“Notes” shall have the meaning set forth in the Recitals hereof;

 

“Option Shares” shall have the meaning set forth in the Recitals hereof;

 

“Other Stockholders” shall mean Persons who by virtue of agreements with the
Company (other than this Agreement) are entitled to include their securities in
any registration of the offer or sale of securities pursuant to the Securities
Act;

 

“Participating Holders” shall mean any Holders participating in a Registration
relating to the Registrable Securities;

 

“Permitted Assignees” shall have the meaning set forth in Section 3.5 hereof;

 

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“Person” shall mean an individual, partnership, joint-stock company,
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof;

 

“Piggyback Registration” shall have the meaning set forth in Section 2.2(a)
hereof;

 

“Piggyback Registration Notice” shall have the meaning set forth in Section
2.2(a)(i) hereof;

 

“Prospectus” shall mean the prospectus (including any preliminary, final or
summary prospectus) included in any Registration Statement, all amendments and
supplements to such prospectus and all other material incorporated by reference
in such prospectus;

 

“Purchase Agreement” shall have the meaning set forth in the Recitals hereof;

 

“Purchase Options” shall have the meaning set forth in the Recitals hereof;

 

“Qualifying Employee Stock” shall mean (a) rights and options issued under
employee benefits plans of the Company or any predecessor or otherwise to
employees in compensation arrangements approved by the Board of Directors of the
Company or any predecessor and any securities issued after the date hereof upon
exercise of such rights and options and options issued to employees of the
Company or any predecessor as a result of adjustments to options in connection
with the reorganization of the Company or any predecessor, and (b) restricted
stock, restricted stock units and other such equity-linked securities and awards
issued after the date hereof under employee benefit plans and securities issued
after the date hereof in settlement thereof, if any;

 

“Register”, “Registered” and “Registration” shall mean a registration effected
by preparing and (a) filing a Registration Statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such Registration Statement,
or (b) filing a Prospectus and/or prospectus supplement in respect of an
appropriate effective Registration Statement;

 

“Registrable Securities” shall mean (a) the Securities acquired by any Holder
pursuant to the Purchase Agreement or (b) any securities of the Company or its
Affiliates issued as a dividend or other distribution with respect to, or in
exchange for or in conversion, exercise or replacement of or offered wholly or
partly in any tender or exchange offer in consideration of any Registrable
Securities described in (a); provided that as to any particular Registrable
Securities, such securities shall cease to qualify as Registrable Securities for
purposes of this Agreement upon the earliest to occur of: (i) the date on which
such securities are disposed of pursuant to an effective Registration Statement
under the Act; (ii) the date on which such securities are sold pursuant to Rule
144; (iii) with respect to the Registrable Securities held by any Holder, 90
days after the date in which such Holder or its Affiliates or Associates is an
Affiliate of the Company, assuming at such time the Holder has held the
Registrable Securities it intends to sell for at least six months and the Holder
is permitted to sell such Registrable Securities under Rule 144 (b)(1); and (iv)
the date on which such securities shall have ceased to be outstanding;

 

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“Registration Expenses” shall have the meaning set forth in Section 2.3 hereof;

 

“Registration Rights” shall have the meaning set forth in the Recitals hereof;

 

“Registration Statement” shall mean any registration statement of the Company on
Form S-3 that covers Registrable Securities pursuant to the provisions of this
Agreement filed with, or to be filed with, the Commission under the rules and
regulations promulgated under the Securities Act, including the related
Prospectus, amendments and supplements to such registration statement, including
pre- and post-effective amendments, and all exhibits, financial information and
all material incorporated by reference in such registration statement;

 

“Rule 144”; “Rule 144A” shall mean Rule 144 and Rule 144A, respectively, under
the Securities Act (or any successor provisions then in force);

 

“security”, “securities” shall have the meaning set forth in Section 2(a)(1) of
the Securities Act;

 

“Securities” shall have the meaning set forth in the Recitals hereof;

 

“Securities Act” shall mean the Securities Act of 1933, as amended (or any
successor statute thereto), and the rules and regulations promulgated
thereunder;

 

“Underwriter” shall mean a securities dealer who purchases any Registrable
Securities as principal in an underwritten offering and not as part of such
dealer’s market-making activities;

 

“Underwriters’ Maximum Number” shall mean, for any Piggyback Registration, that
number of securities to which such registration should, in the opinion of the
managing Underwriter(s) of such registration, in the light of marketing factors
(including an adverse effect on the per share offering price), be limited;

 

“Underwritten Offering Piggyback Notice” shall have the meaning set forth in
Section 2.1(b) hereof;

 

“Units” shall have the meaning set forth in the Recitals hereof;

 

“Warrant Shares” shall have the meaning set forth in the Recitals hereof; and

 

“Warrants” shall have the meaning set forth in the Recitals hereof.

 

ARTICLE 2
REGISTRATION RIGHTS

 

Section 2.1.     Registration Statements. Promptly following the closing of the
purchase and sale of the securities contemplated by the Purchase Agreement (the
“Closing Date”) but no later than thirty (30) days after the Closing Date, the
Company shall prepare and file with the Commission a Registration Statement on
Form S-1, covering the resale of the Registrable Securities. Such Registration
Statement also shall cover, to the extent allowable under the

 

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Securities Act and the rules promulgated thereunder (including Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock
splits, stock dividends or similar transactions with respect to the Registrable
Securities.

 

Section 2.2.     Piggyback Registration.

 

(a)     If the Company shall determine to register the offer or sale of any of
its capital stock either (x) for its own account, (y) for the account of any
Holder or (z) for the account of Other Stockholders (other than (i) a
registration relating solely to Qualifying Employee Stock, (ii) a registration
relating solely to a Rule 145 transaction under the Securities Act or otherwise
made in connection with mergers, acquisitions, exchange offers, subscription
offers or dividend reinvestment plans or (iii) a registration on any
registration form which does not permit secondary sales or does not include
substantially the same information as would be required to be included in a
registration statement) (each such registration not withdrawn or abandoned prior
to the effective date thereof being herein called a “Piggyback Registration”),
the Company will, subject to the conditions set forth in this Section 2.2:

 

(i)     promptly, but in any event not less than 10 days (2 business days in the
event of an “overnight” offering or “bought” deal) prior to filing the
applicable Registration Statements, give to each of the Holders a written notice
thereof (the “Piggyback Registration Notice”); and

 

(ii)     subject to Section 2.2(b) below and any transfer restrictions any
Holder may be a party to, include in such Piggyback Registration (and any
related qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made by the Holders. Such written request must
specify the specific amount of the Holders’ Registrable Securities for which
inclusion is requested and the intended method of disposition thereof and shall
be received by the Company within 10 days (two business days in the case of an
“overnight” offering or “bought” deal) after written notice from the Company is
given under Section 2.2(a)(i) above. In the event that any Holder makes such
written request, the Holder may withdraw its Registrable Securities from such
Piggyback Registration by giving written notice to the Company and the managing
underwriter, if any, at any time at least two (2) business days prior to the
effective date of the Registration Statement relating to such Piggyback
Registration. In the event any Holder requests inclusion in a Piggyback
Registration pursuant to this Section 2.2 in connection with a distribution of
Registrable Securities to its partners or members, the Piggyback Registration
shall provide for the resale by such partners or members, if requested by such
Holder.

 

(b)     Underwriting. If the Piggyback Registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 2.2(a)(i) above (the “Underwritten Offering Piggyback
Notice”). In such event, the right of each of the Holders to a Piggyback
Registration pursuant to this Section 2.2 shall be conditioned upon such
Holders’ participation in such underwriting and the inclusion of such Holders’
Registrable Securities in the underwriting to the extent provided herein. The
Holders whose Registrable Securities are to

 

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be included in such Piggyback Registration shall (together with the Company and
any Other Stockholders distributing their securities through such underwriting)
enter into an underwriting agreement in customary form for secondary public
offerings with the managing underwriter or underwriters selected for
underwriting by the Company; provided, however, that such underwriting agreement
shall not provide for indemnification or contribution obligations on the part of
any Holder or Other Stockholder greater than the obligations of the Holders
under Section 2.3(b) or Section 2.3(e) except as may be customary and
reasonable.

 

(c)     Priority on Piggyback Registrations. If a Piggyback Registration is an
underwritten registration, and the managing Underwriter(s) shall give written
advice to the Company of an Underwriters’ Maximum Number, then securities will
be included in the following order of priority: (i) equity securities proposed
to be included in such Piggyback Registration by the Company for its own
account, and (ii) if the Underwriters’ Maximum Number exceeds the number of
securities proposed to be included pursuant to clause (i), then such excess, up
to the Underwriters’ Maximum Number shall first be deducted from any shares to
be included by Other Stockholders and to the extent such amount is insufficient,
then shares shall be deducted from the amount sold by Participating Holders.

 

Section 2.3.     Expenses of Registration. Except as otherwise provided in this
Agreement, all expenses incurred by the Company incidental to the Company’s
performance of or compliance with this Agreement (the “Registration Expenses”),
including (a) all Registration and filing fees (including (i) with respect to
Company filings required to be made with the Commission, all applicable
securities exchanges and/or FINRA and (ii) compliance with securities or blue
sky laws including any fees and disbursements of counsel for the underwriter(s)
in connection with blue sky qualifications of the Registrable Securities); (b)
word processing, duplicating and printing expenses; (c) messenger, telephone and
delivery expenses; (d) fees and disbursements of counsel for the Company; (e)
fees and disbursements of the Company’s independent certified public accountants
(including, without limitation, the fees and disbursements in connection with
any “comfort” letters pursuant to Section 2.4(j) of this Agreement), other
special experts, retained by the Company, shall be borne by the Company. The
Company shall, in any event, pay the expenses of any annual audit or quarterly
review, the expenses of any liability insurance, the expenses and fees for
listing the Registrable Securities to be registered on the applicable securities
exchange. All fees and disbursements of counsel to any Holder(s), the expenses
of any liability insurance obtained by any Holder(s) and transfer taxes incurred
in connection with the offering of any Registrable Securities shall be borne by
the Participating Holder(s). Any other provisions of this Agreement
notwithstanding, if a registration request is withdrawn at the request of the
Holder(s), then the Holder(s) responsible for such request shall pay all
Registration Expenses incurred in connection with such registration unless the
withdrawal of such request is the result of any act or omission by the Company
that occurs after the date on which such request was made, and which, based on
the reasonable determination of the managing underwriter(s), would have a
material adverse effect on the offering of the Registrable Securities.

 

Section 2.4.     Registration Procedures. In the case of each Registration
effected by the Company subject to this Article 2, the Company will keep the
Holders advised in writing as to the initiation of each Registration and, to the
best of knowledge thereof, as to the completion thereof. At its expense, the
Company will:

 

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(a)     as promptly as practicable, prepare and file with the Commission such
pre- and post-effective amendments to such Registration Statement, supplements
to the Prospectus and such amendments or supplements to any Issuer Free Writing
Prospectus as may be (i) reasonably requested by the Participating Holder(s) (if
any), (ii) reasonably requested by any other Participating Holder (to the extent
such request relates to information relating to such Participating Holder), or
(iii) necessary to keep such Registration effective for the period of time
required by this Agreement, and comply with provisions of the applicable
securities laws with respect to the sale or other disposition of all securities
covered by such Registration Statement during such period in accordance with the
intended method or methods of disposition by the sellers thereof set forth in
such Registration Statement;

 

(b)     notify the Participating Holders and the managing underwriter or
underwriters, if any, and (if requested) confirm such advice in writing and
provide copies of the relevant documents, as promptly as practicable after
notice thereof is received by the Company (i) when the applicable Registration
Statement or any amendment thereto has been filed or becomes effective, and when
the applicable Prospectus or Issuer Free Writing Prospectus or any amendment or
supplement thereto has been filed, (ii) to the extent any of the following
relates to the Participating Holders or information supplied by the
Participating Holders, of any written comments by the Commission or any request
by the Commission or any other federal or state governmental authority for
amendments or supplements to such Registration Statement, Prospectus or Issuer
Free Writing Prospectus or for additional information, (iii) of the issuance by
the Commission of any stop order suspending the effectiveness of such
Registration Statement or any order by the Commission or any other regulatory
authority preventing or suspending the use of any Prospectus or any Issuer Free
Writing Prospectus or the initiation or threatening of any proceedings for such
purposes and (iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of the
Registrable Securities for offering or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;

 

(c)     promptly notify the Participating Holders and the managing underwriter
or underwriters, if any, when the Company becomes aware of the happening of any
event as a result of which the applicable Registration Statement, the Prospectus
included in such Registration Statement (as then in effect) or any Issuer Free
Writing Prospectus contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in order to
make the statements therein (in the case of such Prospectus or any Issuer Free
Writing Prospectus, in light of the circumstances under which they were made)
not misleading, and when any Issuer Free Writing Prospectus includes information
that may conflict with the information contained in the Registration Statement,
or, if for any other reason the Company shall have determined in good faith it
necessary during such time period to amend or supplement such Registration
Statement, Prospectus or Issuer Free Writing Prospectus in order to comply with
the Securities Act and, in either case as promptly as reasonably practicable
thereafter, prepare and file with the Commission, and furnish without charge to
the Participating Holders and the managing underwriter or underwriters, if any,
an amendment or supplement to such Registration Statement, Prospectus or Issuer
Free Writing Prospectus which shall correct such misstatement or omission or
effect such compliance;

 

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(d)     use its reasonable best efforts to prevent, or obtain the withdrawal of,
any stop order or other order suspending the use of any Prospectus or any Issuer
Free Writing Prospectus;

 

(e)     deliver to each Participating Holder and each underwriter, if any,
without charge, as many copies of the applicable Prospectus (including each
preliminary Prospectus), any Issuer Free Writing Prospectus and any amendment or
supplement thereto as such Participating Holder or underwriter may reasonably
request (it being understood that the Company consents to the use of such
Prospectus, any Issuer Free Writing Prospectus and any amendment or supplement
thereto by such Holder and the underwriters, if any, in connection with the
offering and sale of the Registrable Securities thereby) and such other
documents as such Participating Holder or underwriter may reasonably request in
order to facilitate the disposition of the Registrable Securities by such
Participating Holder or underwriter;

 

(f)     on or prior to the date on which the applicable Registration Statement
is declared effective, use its reasonable best efforts to register or qualify
the offer or sale of the Registrable Securities covered by such Registration
Statement under such other securities or blue sky laws of such jurisdictions in
the United States as any Participating Holder reasonably (in light of such
Participating Holder’s intended plan of distribution) requests and do any and
all other acts and things that may be reasonably necessary or advisable to
enable such Participating Holder to consummate the disposition of the
Registrable Securities owned by such Participating Holder pursuant to such
Registration Statement;

 

(g)     make such representations and warranties to the Participating Holders
and the underwriters or agents, if any, in form, substance and scope as are
customarily made by issuers in underwritten public offerings;

 

(h)     in connection with an underwritten offering, enter into such customary
agreements (including underwriting and indemnification agreements) and take such
other customary and appropriate actions as the Participating Holder(s) or the
managing underwriter, if any, reasonably requests in order to expedite or
facilitate the Registration and disposition of such Registrable Securities;

 

(i)     use its commercially reasonable efforts to obtain for delivery to the
managing underwriter, if any, an opinion or opinions from counsel for the
Company dated the effective date of the Registration Statement or, in the event
of an underwritten offering, the date of the closing under the underwriting
agreement, in form and substance as is customarily given to underwriters in an
underwritten secondary public offering;

 

(j)     in the case of an underwritten offering, use commercially reasonable
efforts to obtain for delivery to the Company and the managing underwriter, if
any, a “comfort” letter from the Company’s independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants in an underwritten secondary public offering as may
be reasonably requested;

 

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(k)     cooperate with each Participating Holder and the underwriters, if any,
of such Registrable Securities and their respective counsel in connection with
any filings required to be made with FINRA;

 

(l)     use its commercially reasonable efforts to cause all Registrable
Securities covered by the applicable Registration Statement to be listed or
quoted on a national securities exchange or trading system and each securities
exchange and trading system (if any) on which similar securities issued by the
Company are then listed if the listing of such securities is then permitted
under the rules of such exchange and trading system;

 

(m)     cooperate with the Participating Holders and the underwriters, if any,
to facilitate the timely preparation and delivery of certificates (or
non-physical certificates, such as through the use of The Depositary Trust
Company’s Direct Registration System), with requisite CUSIP numbers,
representing Registrable Securities to be sold and not bearing any restrictive
legends;

 

(n)     in the case of an underwritten offering, make reasonably available the
appropriate officers of the Company to participate in the customary “road show”
presentations that may be reasonably requested by the managing underwriter in
any such underwritten offering and otherwise to facilitate, cooperate with, and
participate in each proposed offering contemplated herein and customary selling
efforts related thereto;

 

(o)     use its commercially reasonable efforts to procure the cooperation of
the Company’s transfer agent in settling any offering or sale of Registrable
Securities, including with respect to the transfer of physical security
instruments into book-entry form in accordance with any procedures reasonably
requested by the Holders or any managing underwriter(s);

 

(p)     use its commercially reasonable efforts to take such actions as are
under its control to become or remain a well-known seasoned issuer (as such term
in defined in Rule 405 under the Securities Act) and not become an ineligible
issuer (as such term is defined in Rule 405 under the Securities Act) during the
period when such Registration Statement remains in effect; and

 

(q)     make available for inspection by a representative of Participating
Holders that are selling at least twenty percent (20%) of the Registrable
Securities included in such Registration (and who is named in the applicable
prospectus supplement as a Person who may be deemed to be an underwriter with
respect to an offering and sale of Registrable Securities), the managing
underwriter(s), if any, and any attorneys or accountants retained by such
Holders or the managing underwriters(s), at the offices where normally kept,
during reasonable business hours, financial and other records and pertinent
corporate documents of the Company, and cause the officers, directors and
employees of the Company to supply all information in each case reasonably
requested by any such representative, managing underwriter, attorney or
accountant in connection with such Registration Statement, in each case as shall
be advisable to conduct a reasonable investigation within the meaning of the
Securities Act; provided, that if any such information is identified by the
Company as being confidential or proprietary, each Person receiving such
information shall take such actions as are reasonably necessary to protect the

 

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confidentiality of such information and shall sign customary confidentiality
agreements reasonably requested by the Company prior to the receipt of such
information.

 

Section 2.5.     Indemnification.

 

(a)     Indemnification by the Company. With respect to each Registration which
has been effected pursuant to this Article 2, the Company agrees to indemnify
and hold harmless, to the fullest extent permitted by law, (i) each of the
Participating Holders and each of its officers, directors, limited or general
partners and members thereof, (ii) each member, limited or general partner of
each such member, limited or general partner, (iii) each of their respective
Affiliates, officers, directors, shareholders, employees, advisors, and agents
and each Person who controls (within the meaning of the Securities Act or the
Exchange Act) such Persons and each underwriter, if any, and each person who
controls (within the meaning of the Securities Act or the Exchange Act) any
underwriter, against any and all claims, losses, damages, penalties, judgments,
suits, costs, liabilities, reasonable attorney’s fees and reasonable documented
out of pocket expenses of investigating and defending a claim (or actions in
respect thereof) (collectively, the “Losses”) arising out of or based on (A) any
untrue statement (or alleged untrue statement) of a material fact contained in
any Registration Statement (including any Prospectus or Issuer Free Writing
Prospectus) or any other document incident to any such Registration,
qualification or compliance, (B) any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading (in the case of any Prospectus or Issuer Free
Writing Prospectus, in light of the circumstances under which they were made not
misleading), or (C) any violation by the Company of the Securities Act, the
Exchange Act or blue sky laws applicable to the Company and relating to action
or inaction required of the Company in connection with any such Registration,
qualification or compliance, and will reimburse each of the Persons listed
above, for any reasonable and documented legal and any other expenses reasonably
incurred in connection with investigating and defending any such Losses,
provided, that the Company will not be liable in any such case to the extent
that any such Losses arise out of or are based on any untrue statement or
omission of material fact based upon written information furnished to the
Company by the Participating Holders or underwriter and stated to be
specifically for use therein. The liability imposed by this Section 2.5(a) will
be in addition to any liability which the Company may otherwise have.

 

(b)     Indemnification by the Participating Holders. Each of the Participating
Holders agrees (severally and not jointly) to indemnify and hold harmless, to
the fullest extent permitted by law, the Company, each of its directors and
officers and each underwriter, if any, of the Company’s securities covered by
such a Registration Statement, each Person who controls the Company (within the
meaning of the Securities Act or the Exchange Act) or such underwriter, each
other Participating Holder and each of their respective officers, directors,
partners and members, and each Person controlling such Participating Holder
(within the meaning of the Securities Act or the Exchange Act) against any and
all Losses arising out of or based on (i) any untrue statement (or alleged
untrue statement) of a material fact contained in any Registration Statement
(including any Prospectus or Issuer Free Writing Prospectus) or any other
document incident to any such Registration, qualification or compliance
(including any notification or the like) made by such Participating Holder in
writing or (ii) any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements by such
Participating Holder therein not misleading (in the case of any

 

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Prospectus or Issuer Free Writing Prospectus, in light of the circumstances
under which they were made not misleading) and will reimburse the Persons listed
above for any reasonable and documented legal or any other expenses reasonably
incurred in connection with investigating or defending any such Losses, in each
case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in reliance
upon and in conformity with written information furnished to the Company by such
Participating Holder and stated to be specifically for use therein; provided,
however, that the obligations of each of the Participating Holders hereunder
shall be limited to an amount equal to the net proceeds (after giving effect to
any underwriters discounts and commissions) such Participating Holder receives
in such Registration. The liability imposed by this Section 2.5(b) will be in
addition to any liability which the Participating Holders may otherwise have.

 

(c)     Conduct of the Indemnification Proceedings. Each party entitled to
indemnification under this Section 2.5 (the “Indemnified Party”) shall give
notice to the party required to provide indemnification (the “Indemnifying
Party”) promptly after such Indemnified Party has actual knowledge of any claim
as to which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom;
provided, that counsel for the Indemnifying Party, who shall conduct the defense
of such claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld) and the
Indemnified Party may participate in such defense at such party’s expense
(unless the Indemnified Party shall have reasonably concluded that there may be
a conflict of interest between the Indemnifying Party and the Indemnified Party
in such action, in which case the fees and expenses of counsel shall be at the
expense of the Indemnifying Party), and provided, further, that the failure of
any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2.5 unless the
Indemnifying Party is prejudiced thereby. It is understood and agreed that the
Indemnifying Party shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate legal counsel for all Indemnified Parties; provided, however,
that where the failure to be provided separate legal counsel could potentially
result in a conflict of interest on the part of such legal counsel for all
Indemnified Parties, separate counsel shall be appointed for Indemnified Parties
to the extent needed to alleviate such potential conflict of interest. No
Indemnifying Party, in the defense of any such claim or litigation shall, except
with the prior written consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.

 

(d)     If the indemnification provided for in this Section 2.5 is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any Losses, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and of the Indemnified Party on the other in connection with the statements
or omissions (or alleged statements or omissions) which resulted in such Losses,
as well as any other relevant

 

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equitable considerations, including any relative benefits obtained. The relative
benefit received by the Company shall be deemed to be equal to the total value
received or proposed to be received (after deducting expenses) by the Company
pursuant to the sale of securities in any offering, if any. The relative benefit
received by the Holders shall be deemed to be equal to the total value received
or proposed to be received (after deducting expenses) by the Holders of
securities in an offering, if any. The relative fault of the Indemnifying Party
and of the Indemnified Party shall be determined by reference to, among other
things, whether the untrue (or alleged untrue) statement of a material fact or
the omission (or alleged omission) to state a material fact relates to
information supplied by the Indemnifying Party or by the Indemnified Party and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission; provided, however, that the
obligations of each of the Participating Holders hereunder shall be several and
not joint and shall be limited to an amount equal to the net proceeds (after
giving effect to any underwriters discounts and commissions) such Participating
Holder receives in such Registration and, provided, further, that no Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section
2.5(d), each Person, if any, who controls an underwriter or agent within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as such underwriter or agent and each director of the Company, each
officer of the Company who signed a Registration Statement, and each Person, if
any, who controls the Company or a selling Holder within the meaning of Section
15 of the Securities Act shall have the same rights to contribution as the
Company or such selling Holder, as the case may be.

 

(e)     Subject to the limitations on the Holders’ liability set forth in
Section 2.5(b) and Section 2.5(d), the remedies provided for in this Section 2.5
are not exclusive and shall not limit any rights or remedies which may otherwise
be available to any Indemnified Party at law or equity. The remedies shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Holder or any Indemnified Party and survive the transfer of such
securities by such Holder.

 

(f)     The obligations of the Company and of the Participating Holders
hereunder to indemnify any underwriter or agent who participates in an offering
(or any Person, if any, controlling such underwriter or agent within the meaning
of Section 15 of the Securities Act) shall be conditioned upon the underwriting
or agency agreement with such underwriter or agent containing an agreement by
such underwriter or agent to indemnify and hold harmless the Company, each of
its directors and officers, each other Participating Holder, and each Person who
controls the Company (within the meaning of the Securities Act or the Exchange
Act) or such Participating Holder against all Losses, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto), or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such underwriter or agent expressly for use in such filings described
in this sentence.

 

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Section 2.6.     Participating Holders.

 

(a)     Each of the Participating Holders shall furnish to the Company such
information regarding such Participating Holder and its partners and members,
and the distribution proposed by such Participating Holder as the Company may
reasonably request in writing and as shall be reasonably requested in connection
with any Registration, qualification or compliance referred to in this Article
2.

 

(b)     In the event that, either immediately prior to or subsequent to the
effectiveness of any Registration Statement, any Participating Holder shall
distribute Registrable Securities to its partners or members, such Participating
Holder shall so advise the Company promptly and provide such information as
shall be necessary to permit an amendment to such Registration Statement to
provide information with respect to such partners or members, as selling
security holders. As soon as is reasonably practicable following receipt of such
information, the Company shall file an appropriate amendment to such
Registration Statement reflecting the information so provided. Any incremental
expense to the Company resulting from such amendment shall be borne by such
Participating Holder.

 

(c)     Each Holder agrees that at the time that such Holder is a Participating
Holder, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 2.4(c), such Holder shall forthwith
discontinue disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until such Holder’s receipt of
the copies of a supplemented or amended Prospectus or Issuer Free Writing
Prospectus or until such Holder is advised in writing by the Company that the
use of the Prospectus or Issuer Free Writing Prospectus, as the case may be, may
be resumed, and, if so directed by the Company, such Holder shall deliver to the
Company all copies, other than any permanent file copies then in such Holder’s
possession, of the most recent Prospectus or any Issuer Free Writing Prospectus
covering such Registrable Securities at the time of receipt of such notice. If
the Company shall give notice, the Company shall extend the period during which
such Registration Statement shall be maintained effective by the number of days
during the period from and including the date of the giving of notice pursuant
to Section 2.4(c) to the date when the Company shall make available to such
Holder a copy of the supplement or amended Prospectus or Issuer Free Writing
Prospectus or is advised in writing that the use of the Prospectus or Issuer
Free Writing Prospectus may be required.

 

Section 2.7.     Rule 144. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of
restricted securities to the public without registration, the Company agrees to
use its commercially reasonable efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act at any time during which it is subject to
such reporting requirements (or, if the Company is not required to file such
reports, it will, upon the reasonable request of the Holders holding a majority
of the then outstanding Registrable Securities, make publicly available such
necessary information for so long as necessary to permit sales pursuant to Rules
144 under the Securities Act).

 

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Section 2.8.     Termination. The Registration Rights set forth in this Article
2 shall terminate and cease to be available as to any securities held by a
Holder at such time as such Holder (after owning) first ceases to own any
Registrable Securities.

 

Section 2.9.     Notwithstanding any provision of this Agreement to the
contrary, in order for a Registration to be included as a Registration for
purposes of this Article 2, the Registration Statement in connection therewith
shall have been continually effective in compliance with the Securities Act and
usable for resale for the full period established with respect to such
Registration (except in the case of any suspension of sales pursuant to Section
2.4(c) hereof, in which case such period shall be extended to the extent of such
suspension).

 

Section 2.10.     Notwithstanding any provision of this Agreement to the
contrary, if the Company is required to file a post-effective amendment to a
Registration Statement to incorporate the Company’s quarterly and annual reports
and related financial statements on Form 10-Q and Form 10-K, the Company shall
use its reasonable best efforts to promptly file such post-effective amendment
and may postpone or suspend effectiveness of such Registration Statement to the
extent the Company determines necessary to comply with applicable securities
laws; provided, that the period by which the Company postpones or suspends the
effectiveness of a shelf Registration Statement pursuant to this Section 2.10
plus any suspension, deferral or delay pursuant to Section 2.4(c) shall not
exceed 60 days in the aggregate in any twelve-month period.

 

Section 2.11.     Each Holder agrees that, following receipt of any Piggyback
Registration Notice or Underwritten Offering Piggyback Notice, such Holder will
keep confidential and will not disclose, divulge, or use for any purpose (other
than to exercise its rights pursuant to this Agreement) the fact that such
Piggyback Registration Notice or Underwritten Offering Piggyback Notice exists
or was received by such Holder or the contents of any such Piggyback
Registration Notice or Underwritten Offering Piggyback Notice, unless and until
the earlier of (a) the date that is 30 days following receipt of such notice or
(b) such time as the registration or underwritten offering that is the subject
of such notice is known or becomes known to the public in general (other than as
a result of a breach of this Section 2.11).

 

ARTICLE 3
MISCELLANEOUS

 

Section 3.1.     Governing Law; Jurisdiction. This Agreement and any claim,
controversy or dispute arising under this Agreement and/or the interpretation
and enforcement of the rights and duties of the parties shall be governed by and
construed in accordance with the laws of the State of Nevada without reference
to the conflict of laws principles thereof. Each of the Holders and the Company
(a) irrevocably and unconditionally submits to the sole and exclusive
jurisdiction of the state or federal courts located in the State of Nevada for
purposes of all legal proceedings arising out of this Agreement, (b) agrees that
it shall not attempt to deny or defeat such personal jurisdiction and venue by
motion or other request for leave from any such court, (c) agrees that it shall
not bring any action arising under this Agreement or otherwise in any court
other than the state or federal courts located in the State of Nevada.

 

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Section 3.2.     Section Headings. The headings of the sections and subsections
of this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.

 

Section 3.3.     Notices. All notices, consents, requests, instructions,
approvals and other communications provided for herein and all legal process in
regard hereto shall be in writing and shall be deemed validly given, made or
served, (a) if given by email, when sent to the email address set forth below,
as applicable, and the appropriate confirmation is received or (b) if given by
any other means, when actually received during normal business hours at the
address specified in this section:

 

(i)     If to the Company:

 

INVO Bioscience, Inc.
5582 Broadcast Court

Sarasota, Florida 34240
Attention: Steve Shum
E-mail: steveshum@invobioscience.com

 

 

With a copy to (which shall not constitute notice):

 

Dentons US LLP
601 S. Figueroa Street
Suite 2500
Los Angeles, California 90017
Attention: Greg Carney, Esq.

Email: greg.carney@dentons.com

 

 

(ii)     If to the Holders:

 

To the one or more addresses and e-mail addresses indicated on the signature
pages hereto.

 

Section 3.4.     Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed, may be reproduced by the Holders
by any photographic, photostatic, microfilm, microcard, miniature photographic
or other similar process and the Holders may destroy any original document so
reproduced. The parties hereto agree and stipulate that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Holders in the regular course
of business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.

 

Section 3.5.     Successors and Assigns. Neither this Agreement nor any right or
obligation hereunder may be assigned in whole or in part by any party without
the prior written consent of the other parties hereto and any purported
assignment in violation of this provision

 

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shall be void; provided, however, that the rights and obligations hereunder of
any Holder may be assigned, in whole or in part, to any Person who acquires such
Registrable Securities that is an Affiliate of any Holder (each such Affiliate a
“Permitted Assignee”). Any assignment pursuant to this Section 3.5 shall be
effective and any Person shall become a Permitted Assignee only upon receipt by
the Company of (a) a written notice from the transferring Holder stating the
name and address of the transferee and identifying the number of shares of
Registrable Securities with respect to which the rights under this Agreement are
being transferred and, if fewer than all of the rights attributable to a Holder
hereunder are to be so transferred, the nature of the rights so transferred and
(b) a written instrument by which the transferee agrees to be bound by all of
the terms and conditions applicable to a Holder of such Registrable Securities.
Subject to the foregoing, this Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties.

 

Section 3.6.     Several Nature of Commitments. The obligations of each Holder
hereunder are several and not joint, and relate only to the Registrable
Securities held by such Holder from time to time. No Holder shall bear
responsibility to the Company for breach of this Agreement or any information
provided by any other Holder.

 

Section 3.7.     Entire Agreement; Amendment and Waiver. This Agreement
constitutes the entire understanding of the parties hereto relating to the
subject matter hereof and supersedes all prior understandings among such
parties; provided that nothing contained herein shall limit the rights and
obligations of the Company and Iroquois pursuant to the Cooperation Agreement.
This Agreement may be amended with (and only with) the written consent of the
Company and the Holders holding a majority of the then outstanding Registrable
Securities and any such amendment shall apply to all Holders and all of their
Registrable Securities; provided, however, that, notwithstanding the foregoing,
no amendment to this Agreement may adversely affect the rights of a Holder
hereunder without the prior written consent of such Holder; provided, further,
that, notwithstanding the foregoing, additional Holders may become party hereto
upon an assignment of rights and obligations hereunder pursuant to Section 3.5;
provided further, however, that other than as set forth in Section 3.5, the
Company may not add additional parties hereto without the consent of Holders
holding a majority of the then outstanding Registrable Securities. The
observance of any term of this Agreement may be waived by the party or parties
waiving any rights hereunder; provided, that any such waiver shall apply to all
Holders and all of their Registrable Securities only if made by Holders holding
a majority of then-outstanding Registrable Securities.

 

Section 3.8.     Injunctive Relief. It is hereby agreed and acknowledged that it
will be impossible to measure in money the damage that would be suffered if the
parties fail to comply with any of the obligations herein imposed on them and
that in the event of any such failure, an aggrieved Person will be irreparably
damaged and will not have an adequate remedy at law. Any such Person shall,
therefore, be entitled (in addition to any other remedy to which it may be
entitled in law or in equity) to injunctive relief, including specific
performance, to enforce such obligations, and if any action should be brought in
equity to enforce any of the provisions of this Agreement, none of the parties
hereto shall raise the defense that there is an adequate remedy at law.

 

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Section 3.9.     WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT
ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY ACTIONS, SUITS, DEMAND LETTERS, JUDICIAL, ADMINISTRATIVE OR REGULATORY
PROCEEDINGS, OR HEARINGS, NOTICES OF VIOLATION OR INVESTIGATIONS ARISING OUT OF
OR RELATING TO THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND
ACKNOWLEDGES THAT (A) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER
AND (B) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY.

 

Section 3.10.     Other Registration Rights. The Company acknowledges that it
currently does not have an existing registration rights agreement with any other
party. After the date of this Agreement, the Company shall not enter into any
registration rights agreement that is inconsistent with or violates the rights
granted to the Holders by this Agreement.

 

Section 3.11.     Severability. In the event that any part or parts of this
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not affect the
remaining provisions of this Agreement which shall remain in full force and
effect.

 

Section 3.12.     Counterparts. This Agreement may be executed in two or more
counterparts (including by email or facsimile signature), each of which shall be
deemed an original and all of which together shall be considered one and the
same agreement.

 

Section 3.13.     Interpretation of this Agreement. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first set forth above.

 

 

INVO BIOSCIENCE INC.

     

By:

     

Name:

Steve Shum

   

Title:

Chief Executive Officer

 

 

 

[SUBSCRIBER]

     

By:

     

Name:

     

Title:

 

 

 

 

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