Exclusive Distribution Agreement

Exhibit 10.06





INVO BioScience, Inc.

Exclusive Distribution Agreement






Terms and Conditions



THIS AGREEMENT is made this 17 day of January , 2009, between INVO BioScience Inc. (INVO), a Nevada Corporation having a place of business at 100 Cummings Center, Suite 421E, Beverly, MA 01915 USA, and Centro de Reproduccion Humana de Lima, having a place of business at Peru ("Distributor").



INVO is the global manufacturer of INVOcellae Medical Devices



Distributor desires to obtain from INVO and INVO desires to grant to Distributor, on the terms and conditions set forth below, the right to import, sell and distribute the Products (as hereinafter defined) in the Territory (as hereinafter defined).



INVO is entering into this Agreement based on assurances that Distributor will devote its best efforts to market and sell the Products in the Territory for its own account and will otherwise adhere to all the terms and conditions of this Agreement.



The parties agree as follows:



1. GRANT OF DISTRIBUTION RIGHTS



A. Subject to all of the terms and conditions of this Agreement (including the attached Exhibits), INVO hereby grants Distributor an Exclusive Master, non-transferable distributorship as set forth in Exhibit C Exclusive Distribution Milestones in the geographical territory described in Section 2 below (the "Territory") for its Products. The "Products" are those items which, as of the date of this Agreement, are attached as Exhibit A - Products, Pricing & Terms, and are outlined below.


Products:



a. INVO branded products only, including:




i. INVOcellae




ii. INVOcell Blockae




iii. Perforated Diaphragms


iv. Any other products that INVO, in its sole discretion, agrees to sell to DISTRIBUTOR during the term hereof, including any non-standard/custom products, as evidenced by an amendment to this Agreement signed by the parties;






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INVO BioScience, Inc.

Exclusive Distribution Agreement




v. Any improved or updated versions of the foregoing products or replacements of discontinued products that are added to this Agreement by an amendment to this Agreement signed by the parties




vi. Any other products actually purchased by distributor from INVO during the term hereof that might be added to this agreement on a case-by-case basis;




The preceding products will be referred to throughout this Agreement as the "Products."




B. The following are expressly excluded as Products under this Agreement:


(i) Products the international shipment of which is subject to prohibitions or penalties imposed by United States laws or regulations;

(ii) Products manufactured by INVO licensees in the Territory, if any;




(iii) Products which have been ordered by third parties but have not been delivered before the commencement of this Agreement;


(iv) Products for which exclusive rights in the Territory have been granted to others as of the date of this Agreement;


(v) Products for which territorial restrictions apply in a license, distribution or other agreement through which INVO has acquired or retains the right to distribute such products;


C. Without limiting INVO's other rights, INVO is expressly entitled (i) to sell or solicit sales to persons located outside the Territory (even if such persons request delivery into the Territory), (ii) to sell or solicit sales directly to customers as a result of a multi-facility sales agreement entered into directly by INVO and its customer, and (iii) to grant exclusive or non-exclusive manufacturing, distribution and/or trademark licenses or agreements covering the Products outside of the Territory and manufacturing licenses or agreements within the Territory.


2. TERRITORY



A. The "Territory" is the entire geographic territory of as defined in Exhibit B. Distributor is appointed Distributor only for the Territory and will not distribute or sell any Products to any parties located outside the Territory. Distributor will not distribute or sell Products in the Territory to any person or entity which Distributor knows or should know will distribute or sell Products outside the Territory. Distributor will promptly notify INVO of all sales requests received from potential customers outside the Territory for products, including the Products, which are to be sold outside the Territory. INVO reserves the right to distribute, whether directly or indirectly, any and all Products worldwide without restriction outside of the Distributors defined territory to any other entity, including without limitation to other distributors, dealers and original equipment manufacturers.



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INVO BioScience, Inc.

Exclusive Distribution Agreement






3. TERM OF AGREEMENT AND EARLY TERMINATION



A. This Agreement will begin on commencement date above and will continue for _five (5) years until January, 17, 2014. Within ninety (90) days of the anniversary of this Agreement, INVO and Distributor will review Distributor's sales and payment performance and other compliance with the terms of this Agreement during the prior Contract Year (as defined below). Both parties can decided to extended this agreement for an additional period of not greater than one year. For the purposes of this Agreement, "Contract Year" means a twelve-month period beginning on the anniversary date of this Agreement.



B. Early Termination . Notwithstanding any other provisions of this Agreement, this Agreement may be terminated before its normal expiration date under the following circumstances:



1. Either party has the right to terminate this Agreement at any time by a written notice to the other party given no less than ninety (90) days in advance of the intended date of termination.



2. If either party defaults in the performance of any of its obligations under this Agreement, the other party may give written notice to the defaulting party specifying the nature and the extent of the default and demanding a cure to the default, and the defaulting party will then have thirty (30) days to cure each default. If the default is not cured within thirty (30) days of the date of notice, then the aggrieved party may by written notice terminate this Agreement effective immediately upon the defaulting party's receipt of the notice.



3. If either party becomes bankrupt or insolvent, or makes an assignment for the benefit of its creditors, or has a receiver appointed for it or for any of its properties, the other party will have the right to terminate this Agreement effective immediately upon the date of written notice to the other party.



4. INVO will have the right to terminate this Agreement immediately in the event of a merger, consolidation, or change of control, directly or indirectly, of Distributor or a transfer by, or agreement to transfer by, Distributor of substantially all of its business or assets.



5. INVO will have the right to terminate this Agreement immediately if INVO believes in good faith that Distributor has defaulted in the performance of any of its obligations under Article 6, 10 or 11 of this Agreement. Nevertheless, INVO may give written notice to the distributor specifying the default and demanding a cure to the default, and the defaulting party will then have thirty (30) days to cure each default. If the default is not cured within thirty (30) days of the date of notice, then the aggrieved party may by written notice terminate this Agreement effective immediately upon the defaulting party's receipt of the notice.



6. INVO will have the right to terminate this Agreement immediately upon written notice to Distributor in the event that any other agreement existing between INVO (or its affiliates) and Distributor (or its affiliates) terminates for cause during the term of this Agreement.



7. If the government or Peruvian authority by any reason forbids the commercialization of the product.







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INVO BioScience, Inc.

Exclusive Distribution Agreement






C. Obligations Upon Termination



1. In the event of the termination of this Agreement by INVO pursuant to Sections 3.B.2. or 3.B.5., INVO will have the right to withhold payment of any amounts owed by INVO under the Agreement as a set-off against any damages, including fines and attorneys' fees, which INVO incurs as a result of Distributor's default.



2. Immediately upon the termination or expiration of this Agreement, Distributor's appointment will terminate and all of Distributor's rights under the Agreement will terminate, including the right to any additional payments, severance or termination fees, or other termination claims, except that Distributor will have the non-exclusive right to sell its remaining inventory of the Products, subject to the terms and conditions of this Agreement. Following any expiration or termination of this Agreement, if requested in writing by INVO at its sole option, Distributor will within 30 days of request return all unsold quantities of Products in its inventory. INVO will refund Distributor within 30 days of receipt of such returned inventory the purchase price paid for such Products which exceeds all amounts due INVO under this Agreement or otherwise, provided that such Products are in salable condition.



3. The termination or expiration of this Agreement will operate as a cancellation, as of the date of the termination, of all orders which have not been shipped by INVO to Distributor and, thereafter, INVO will not be obligated to fill such orders. Distributor will be unconditionally obligated to take and pay for all Products ordered and shipped prior to delivery of notice of termination. Within thirty (30) days after the date of termination or expiration of the Agreement, Distributor will pay all outstanding invoices and deliver to INVO any and all other sums due INVO from Distributor under the Agreement and will return to INVO all trade secret and confidential information belonging to INVO, along with any and all sales aids which INVO may have supplied to Distributor under this Agreement.



4. Upon the expiration or effective date of termination of this Agreement, Distributor will immediately remove from its premises and elsewhere all signs and advertising relating to INVO and the Products and will stop all use of the INVO Trademarks and all other trademarks and trade names identified with the Products. Distributor will also ensure that all such use by any assistant or subsidiary distributors or others claiming rights from Distributor will also immediately cease and will no longer use, without INVO written consent, any name, title, or expression in connection with any business in which Distributor is engaged which, in the judgment of INVO, so nearly resembles any trademark or trade name, or part thereof, owned by INVO, including the INVO Trademarks, as to be likely to lead to confusion or uncertainty on the part of the public.



Nevertheless, the DISTRIBUTOR would have the right to sell all the products already bought after the termination of this agreement.



5. It is understood by the parties hereto that in the event of the termination of this Agreement or its expiration, INVO shall have no obligation whatsoever to reimburse or otherwise compensate Distributor, in whole or in part, for the capital or labor investment undertaken in connection with the storage or distribution of the Products, including without limitation its investment in personal or real property or any improvements thereto, any personnel employed by Distributor engaged in the handling, storage or distribution of the Products, for advertising, promotion or marketing efforts undertaken in connection with the Products, or to compensate or indemnify Distributor in any other way whatsoever, including without limitation on account of the loss of prospective profits on anticipated sales or commitments in connection with the business or goodwill of Distributor. Distributor acknowledges that (i) Distributor has no expectation and has received no assurances that its business relationship with INVO will continue beyond the stated term of this Agreement or its termination in accordance with the terms of this Agreement, or that any investment by Distributor in the promotion of Products will be recovered or recouped by virtue of this Agreement; and (ii) Distributor will not have or acquire any vested, proprietary or other right in the promotion of Products or in any goodwill created by its efforts under this Agreement. THE PARTIES ACKNOWLEDGE THAT THIS SECTION HAS BEEN INCLUDED AS A MATERIAL INDUCEMENT FOR INVO TO ENTER INTO THIS AGREEMENT AND THAT INVO WOULD NOT HAVE ENTERED INTO THIS AGREEMENT BUT FOR THE LIMITATIONS OF LIABILITY OUTLINED IN THIS ARTICLE.



6. The expiration or termination of this Agreement will not affect any then existing obligation of either party with respect to moneys already owed or to Confidential Information (as defined below).




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INVO BioScience, Inc.

Exclusive Distribution Agreement






4. TERMS AND CONDITIONS OF SALE TO DISTRIBUTOR



A. Purchase Orders . Distributor will order Products from INVO and INVO will sell Products to Distributor pursuant to the terms and conditions in this agreement. In the event of a conflict between the terms of Distributor's purchase order and the terms of this Agreement, the terms of this Agreement will control. Each confirmed purchase order will be an agreement between Distributor and INVO for the delivery of Products in accordance with this Agreement. INVO may amend its terms and conditions of sale on notice to Distributor, and such amended terms and conditions will apply to all future orders placed by Distributor.



B. Price . The price payable by Distributor for Products purchased from INVO will be the Distributor Price outlined in Exhibit A. The Distributor Price may be increased or decreased by INVO. The effective date of such price change will be upon ninety (90) days notice from INVO.. The Distributor Price does not include export packing charges, handling, shipping and insurance charges, inspection fees, consular fees, import or export duties, taxes, and levies (including but not limited to, value added, property, sales, use, or similar taxes), whether imposed by the United States or any other foreign, state or local government. The payment of the full amount of all such fees, charges or taxes will be the responsibility of the Distributor. If INVO is required to collect or pay any such fees, charges or taxes, the amounts so paid or collected will be reimbursed by Distributor. Distributor will provide INVO with appropriate resale certificate numbers and other documentation satisfactory to the applicable taxing authorities to substantiate any claim of exemption from any such fees, charges or taxes.



C. Payment . An open terms credit limit may be established by INVO based on financial documentation submitted by the Distributor. Terms of payment will be outlined in Exhibit A. Payment for all purchase orders above the established credit limit will be paid by confirmed, irrevocable letter of credit unless otherwise agreed by the parties. All payments will be made in United States dollars. Failure to make any payment when due will be deemed a material breach of this Agreement, and will entitle INVO to interest of overdue payments at the rate of 1.5% (one and one half percent) per month.



D. INVO Remedies . In addition to any other legal or equitable remedies INVO may have, INVO reserves the right to refuse to accept or to cancel any purchase orders placed by Distributor and accepted by INVO, or to refuse or delay shipment, if Distributor (i) fails to make any payment as provided for in this Agreement or a INVO invoice, (ii) fails to meet reasonable credit or financial requirements established by INVO, including any limitations on allowable credit, or (iii) otherwise fails to comply with the terms and conditions of this Agreement.



E. Risk of Loss and Title to Products . Risk of loss or damage to the Products will pass to Distributor at INVO loading facility and INVO will have no further responsibility for any damages or losses to the Products. Distributor must obtain insurance from an insurance company satisfactory to INVO covering the Products in the amount equal to the purchase order price. Title to the Products will pass to Distributor when Products are loaded at INVO facility, unless otherwise designated by INVO.



F. Discontinued Distribution . INVO reserves the right to discontinue the distribution of any Products at any time, and to cancel any orders for discontinued Products without liability of any kind to the Distributor or to any other person by a written notice to the other party given no less than ninety (90) days in advance of the intended date of discontinue. No cancellation, refusal or delay will be considered to be a termination or breach of this Agreement by INVO.



G. Changes to Products . It is understood that the basic specifications of any Product may be modified. INVO will notify immediately Distributor of significant changes in specifications that will alter the use or handling of the Product.




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INVO BioScience, Inc.

Exclusive Distribution Agreement






5. GENERAL COMMERCIAL CONDITIONS



A. Sales Promotion, ...