Exhibit 10.5

Joint Development Agreement

 

Effective Date

October _31st____, 2018

 

Parties:

Erchonia Corporation, LLC

650 Atlantis Road

Melbourne Fl 32904

(“Erchonia”)

 

 

InnerScope Hearing Technologies, Inc.

A Nevada Corporation

2151 Professional Drive, 2nd Flr.

Roseville CA 95611

(“INND”)

 

 

For good and valuable consideration, the parties agree to the term set forth in
this Joint Development Agreement (“Agreement”).

1.Background:

a.ERCHONIA is a world leader in the manufacture and development of Low Level
Laser Therapy technology (“3LT”) and medical laser equipment using 3LT
technology.

b.INND is in the business of marketing and distributing hearing aid devices and
related hearing products and services.

c.INND has worldwide B2B hearing health care professionals and B2C eCommerce
direct-to-consumer sales channels.

d.The Parties wish to jointly conduct FDA Clinical Research and Trials for the
purpose of obtaining a 510k FDA-Clearance for devices, technologies, methods and
techniques used in the treatment of hearing related conditions and disorders,
including, tinnitus, sensorineural hearing loss, central auditory processing
disorders, dizziness, vertigo, balance disorders, and Meniere’s disease
(“Hearing Disorders”).

e.The Parties desire to jointly work to design and develop a new ERCHONIA 3LT
laser(s) and related technologies and methods to be used to treat Hearing
Disorders (the “Hearing Products and Methods”).

f.Upon the successful development of new Hearing Products, INND desires to
obtain an exclusive license to commercially distribute such Hearing Products and
Methods worldwide.

g.ERCHONIA and INND have entered into an “Exclusive Distributor Agreement” for
ERCHONIA to grant an Exclusive License for worldwide distribution of the Hearing
Product and Methods, as set forth in the Exclusive Distribution Agreement
attached hereto as Attachment “A”.

h.INND wishes to undertake certain research concerning the use of ERCHONIA’s
current developed products for various applications on Hearing Disorders for
determining treatment efficacy and protocols using ERCHONIA Products.

i.The Parties wish to share the cost, risk, and benefit of such FDA Clinical
Research and Trials on the terms set forth herein in this Agreement.

j.The Parties agree that this Background will be considered terms of this
Agreement.

2.INND Investment:

a.INND is a publicly traded Company on the OTCQB OTC trading under the symbol
INND. INND is committed to this project and desires a long-term relationship
with ERCHONIA. As consideration for the promises and undertakings contained in
this agreement, upon the Effective Date the agreement, INND will transfer One
Million (1,000,000) common shares of INND from INND to Kirkwall investments.

b.The transfer of the One Million (1,000,000) common shares to Kirkwall
investments is considered “controlled securities” and thus “Restricted” shares
under the regulations of U.S. Securities and Exchange Commission (“SEC”) Rule
144. Since INND is a fully reporting public Company under the U.S. Securities
and Exchange Act of 1934, the “Restricted” common shares will have a mandatory
“Holding Period” of six (6) months from the issuing date before the shares can
be sold on the open market by ERCHONIA.

3.INND Obligations: INND’s will be responsible for the following requirements:

a.INND will provide the staffing and facilities for a clinical trial to research
the use and effectiveness of using the Hearing Products and Methods under
development for medical or therapeutic treatment of Hearing Disorders and
performing medical research related to such clinical trial (the “Clinical
Research”). The Clinical Research shall be conducted in a professional manner,
in accordance with clinical treatment protocols developed and overseen by
qualified licensed medical and health care professionals. In coordination with
Erchonia, INND shall be responsible for selecting the qualified professionals to
perform such Clinical Research and for ensuring such professionals oversee the
Clinical Research during the full term of such clinical trials and related
research.

b.INND will provide Doctors of Audiology as the Principal Investigators for all
Clinical Research.

c.The Clinical Research (including the clinical trials) shall be developed and
organized to include up to 100 patients in the study. The patients shall be
divided among at least two clinical test sites.

d.The Clinical Research shall be conducted in accordance with all applicable
medical and industry standards, and in accordance with all applicable laws,
rules and regulations, and applicable health care regulations.

e.INND will only use the ERCHONIA Products in such Clinical Research, except
upon the consent of ERCHONIA or where required to study the safety and efficacy
of the ERCHONIA Products compared to other Products as part of the Clinical
Research.

4.Erchonia Responsibilities:

a.ERCHONIA will be the sponsor and be responsible for assisting INND with
administrative and procedural requirements of the Clinical Research to be
conducted by INND. Erchonia assistance will include: (i) providing a Clinical
Research monitor, such as Elvira Walls from Regulatory Insight Inc.; and (ii)
assist in locating an Institutional Review Board, such as Independent Review
Consulting, Inc. to review and approve the research protocols.

b.ERCHONIA will assist INND in overseeing the procedural and the administrative
FDA regulatory compliance aspects of the Clinical Research.

c.ERCHONIA will provide units of its Products as required to perform the
Clinical Research up to a maximum of 3 units.

d.ERCHONIA will be responsible for filing for utility or design patent
applications that may be applicable to any devices and methods developed and
used during the clinical research process.

e.To the extent any new products, methods, or technology is developed as a
result of the Clinical Research into Hearing Disorders, such new products,
methods, or technology will be licensed to INND under the terms of the Exclusive
Distribution Agreement attached as Exhibit A to this agreement.

5.Development Costs:

a.The Parties agree to share equally the costs (including attorney’s fees) of
filing any and all patent applications and obtaining the issuance of any
patents, or the cost of protecting or registering any other intellectual
property rights in the Clinical Research or derived from the results of the
Clinical Research as described in 4(d) herein above.

b.INND agrees to share equally in all costs associated with the FDA
administrative and procedural requirements of the Clinical Research, as
described in 4(a) herein above.

c.INND is responsible for all costs associated for providing the site locations
as describe in 3(a)(b)(c) herein above.

d.ERCHONIA shall bear all costs associated with the development of its products,
or jointly develop products and make available to INND those products for the
Clinical Research and under Attachment “A”, Exclusive Distribution Agreement
attached hereof made part of the Agreement as describe in 3(e) and 4(e) herein
above.

e.To the extent one party incurs costs under this paragraph, which costs are to
be shared, it will promptly invoice the other party for its share of such costs
and such invoices will be paid promptly upon receipt.

 

6.Ownership of Intellectual Property Rights: All intellectual property rights,
including any patent rights, in the Hearing Products and Methods developed under
this agreement will be owned as follows:

 

a.All utility patent rights in the Hearing Products and Methods will be owned
solely by Erchonia to the extent such patent rights are granted for any device
or apparatus.

b.All utility patent rights in the Hearing Products and Methods will be jointly
owned by the parties to the extent such patent rights apply to any method or
technique related to the Hearing Products and Methods. The parties agree that
such rights will be exclusively licensed to Erchonia for the duration of such
patents to the extent such rights relate to the use of any products which are
the subject of any utility patent rights owned by Erchonia under the terms of
this agreement.

 

c.All design patent rights in the Hearing Products and Methods will be jointly
owned by the parties to the extent such design patent rights apply the Hearing
Products and Methods. During the term of this agreement, the parties agree that
such rights will be exclusively licensed to Erchonia to the extent such rights
relate to the design of any products which are the subject of any utility patent
rights owned by Erchonia under the terms of this agreement.

 

d.To the extent any intellectual property rights are associated with the
Clinical Research data developed under the terms of this agreement, all rights
in such data will be owned by Erchonia. All such Clinical Research data will be
considered Confidential Information under the terms of this agreement unless and
until such data is published. The parties agree they will cooperate in the 510K
process to obtain FDA clearance for the Hearing Products and Methods, and will
not publish any information related to the products until such time as
publication is appropriate in accordance with FDA regulations and similar
industry regulations. At the appropriate time the parties will cooperate in
publication of data related to the Clinical Research and it is anticipated that
such publication will list the parties or their appropriate personnel as is
standard practice in the industry for such publications, including listing
Erchonia as the manufacturer of the products. The parties will cooperate in good
faith in preparing such publications.

 

e.During the term of this agreement, the parties agree that the treatment
applications based upon the Clinical research will be exclusively licensed to
INND.

7.Term of Agreement: The initial term of this agreement will be three (3) years
from the Effective date first set forth above. Upon the expiration of the
initial term, this agreement will automatically renew for successive one (1)
year renewal terms unless either party gives the other party not less than
ninety (90) days written notice of its intent not to renew this agreement.

 

 

8.Termination:

a.Either party may terminate this agreement upon a material breach of the other
party which breach is not cured within thirty (30) days after written notice of
breach is given to the breaching party.

b.Upon expiration of the initial term of this agreement, either party may
terminate this agreement at any time upon ninety (90) days written notice to the
other party. Notwithstanding the foregoing, the Exclusive License Agreement will
only be terminated in accordance with its terms.

c.Upon completion of the Clinical Research, either party may terminate this
agreement upon ninety (90) days written notice to the other party, if, in such
party’s reasonable good faith determination, the results of the Clinical
Research show that: (i) the products and methods being evaluated are not
reasonable viable or effective for the treatment of the Hearing Disorders; (ii)
the cost, time and effort involved in further development of the products and
methods being evaluated show that the project is not scientifically or
economically viable or that further efforts in this regard are not economically,
medically or otherwise justifiable.

9.Confidentiality:

a.In connection with this Agreement, each party may disclose to the other party,
or permit the other party to have access to, information that is confidential
and proprietary to the disclosing party (the “Confidential Information”).
Confidential Information includes but is not limited to the Hearing Products and
Methods, designs for the Hearing Products and Methods, know-how, business or
marketing strategies, plans for the Hearing Products and Methods, plans for
research and development, development tools, financial information, production
costs and information, and supplier and customer lists and information and
medical research conducted during the performance of this agreement; Clinical
Research, and patient information learned during Clinical Research. Confidential
Information further includes any information identified or marked as
“Confidential,” “Proprietary,” or similarly marked. The terms of this agreement
will also be considered Confidential Information.

b.Neither party will not copy, reproduce, disclose, disseminate or provide any
Confidential Information to any third party, without the prior written consent
of the disclosing party. In addition, the parties agree that they will use the
Confidential Information only for the purpose of carrying out their obligations
under this agreement. Upon termination of this agreement for any reason, any
recipient will return all Confidential Information and any copies of it to the
Disclosing Party and will remove and delete any such Confidential Information
for any computers, computer systems or other electronic, magnetic or optical
media in its possession or control.

c.Nothing in this agreement will prevent any party from dealing with its own
Confidential Information in any manner it deems appropriate.

d.Notwithstanding the above, the following materials will not be deemed
confidential:

i.Information which was in the public domain at the time of disclosure

ii.Information which was published or otherwise became part of the public domain
after disclosure to the Distributor through no fault of the Distributor; and

iii.Information which was received from a third party who did not acquire it,
directly or indirectly, from Erchonia under an obligation of confidence except
where required by law.

 

10.Independent Contractors: It is understood that both Parties are independent
contractors and engage in the operation of their own respective businesses.
Neither Party will be considered the agent of the other Party for any purpose
whatsoever nor does any Party have any authority to enter into any contract or
assume any obligation for the other Party or to make any warranty or
representation on behalf of the other Party. Each Party is fully responsible for
its own employees, servants and agents, and the employees, servants and agents
of one Party will not be deemed to be employees, servants and agents of the
other Party for any purpose.

 

11.Public Announcements: No party will make any public disclosure or public
announcement of any information related to this agreement without the prior
consent of the other party.

12.Assignment: No party may assign this agreement or any rights or obligations
under this agreement without the prior consent of the other party.

13.Arbitration. The parties intend to negotiate in good faith and resolve any
dispute arising under this Agreement. In the event the parties are unable to
resolve any such dispute to binding arbitration for settlement in accordance
with the rules of the American Arbitration Association. Notwithstanding the
foregoing, any party may seek and obtain emergency or preliminary equitable or
injunctive relief from any court of competent jurisdiction in order to prevent
irreparable injury or to preserve the status quo pending any ruling in
arbitration. In any action seeking equitable or injunctive relief pursuant to
this paragraph (and notwithstanding any arbitration rule to the contrary), the
Court (rather than the arbitrator) will have the power to determine any
questions of its jurisdiction or authority to issue such a ruling.

14.General Provisions:

a.Modification: This agreement may only be modified by an agreement in writing
signed by both parties.

b.Counterparts: This agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument

c.Notices. All notices and communications required under this Agreement will be
in writing and will be delivered in person, or mailed, postage prepaid, by
overnight express carrier, to the address of the parties listed at the beginning
of this Agreement, or to any other address as such party designates in a written
notice to the other party. All notices sent pursuant to the terms of this
section will be deemed received on the date of delivery if personally delivered,
or if sent by overnight express carrier, on the next business day immediately
following the day sent

d.Severability. The provisions of this Agreement will be deemed severable and
the invalidity or unenforceability of any provision will not affect the validity
or enforceability of any other provisions hereof.

e.Governing Law. This Agreement shall be governed in all respects by the laws of
the United States and the State of Florida, except for conflict of laws
provisions. The parties agree that for any dispute, controversy or claim arising
out of or in connection with this Agreement, venue and personal jurisdiction
shall be in the federal or state court with competent jurisdiction located in
Brevard Country, Florida.

f.Entire Agreement. This Agreement constitutes and expresses the entire
agreement and understanding between the parties hereto with respect to the
subject matter, all revisions discussions, promises, representation, and
understanding relative thereto, if any, being herein merged.

 

 

Erchonia Corporation, LLC

 

 

By ______________________________

 

 

Title______________________________

InnerScope Hearing Technologies, Inc.

 

 

By ______________________________

 

 

Title ______________________________

 

 

Exhibits

Exhibit A – Exclusive License Agreement