Exhibit
10.22


 


CERTAIN
IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT BOTH (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED.


 


TEXT
OMITTED FROM THIS EXHIBIT IS MARKED WITH [***]


 


ROYALTY
AGREEMENT


 


This
ROYALTY AGREEMENT (this “Agreement”) is entered into as of November 6, 2018 by and between Brooklyn Immunotherapeutics
LLC, a Delaware limited liability company with offices located at Brooklyn Army Terminal, 140 58th Street, Bldg. A, Loading Dock
9, Brooklyn, NY 11220 (“OpCo”), Brooklyn Immunotherapeutics Investors LP, a Delaware limited Partnership with
offices located at c/o Ara Partners, 109 North Post Oak Lane, Suite 530, Houston, TX 77024 (“LP”) and Brooklyn
Immunotherapeutics Investors GP LLC, a Delaware limited liability company with offices located at c/o Ara Partners, 109 North
Post Oak Lane, Suite 530, Houston, TX 77024 (“GP,” and together with LP, collectively, the “Investors”)
and OpCo and the Investors are jointly referred to herein as the “Parties” and each, individually, as a “Party.”


 


WHEREAS,
OpCo is an entity that is newly formed for the purpose of acquiring (the “Acquisition”) certain specified assets
and liabilities of IRX Therapeutics, Inc., a Delaware corporation;


 


WHEREAS,
the Investors are providing the financing to OpCo in order to consummate the Acquisition;


 


WHEREAS,
as additional consideration for such financing, OpCo has agreed to grant, and the Investors have agreed to accept, the royalty
payments described below on the terms and conditions set forth herein.


 


NOW
THEREFORE, in consideration of these premises and the covenants herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties mutually agree as follows:


 


1.
Royalty.


 


(a)
Royalty Payments. In consideration of the provision of the financing for the Transactions by the Investors, OpCo agrees
pay to the Investors during the Royalty Term compensatory royalties in an amount equal to [***] percent ([***]%) of the Net Revenues
received by OpCo during the applicable year, of which [***]% shall be paid to LP and [***]% shall be paid to GP (the “Royalty”).
OpCo shall pay the Royalty within thirty (30) days after the end of each calendar year of the Royalty Term. “Net Revenues”
shall mean [***].


 


(b)
Royalty Term. The term of the Royalty shall commence on the date hereof and will continue in perpetuity (the “Royalty
Term”). Notwithstanding the foregoing, the Royalty Term shall terminate early upon the occurrence of a Sale (as defined
in OpCo’s Limited Liability Company Agreement dated as of the date hereof, as amended) or liquidation of OpCo.


 




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(c)
Royalty Reports; Records. OpCo shall report to the Investors the Net Revenues on which Investors are entitled to Royalties
hereunder on a quarterly basis during the Term (each, a “Royalty Report”). During Royalty Term, OpCo shall
grant the Investors access to OpCo’s books and records for the purpose of Net Revenues.


 


(d)
Form of Payment. All Royalty payments shall be made in U.S. dollars. Any monies payable to the Investors shall be paid
by OpCo via check or wire transfer to an account designated in writing by each Investor to OpCo. In the event OpCo is unable to
pay the full amount of a quarterly Royalty payment when due, OpCo shall use good faith efforts to pay such amount promptly (as
soon as OpCo has available funds) and such unpaid amount shall accrue interest at the rate of [***] ([***]%) per year from the
date such amount of Royalties were due until paid in full.


 


(e)
Taxes. All payments under this Agreement are exclusive of all federal, state, local and foreign taxes, levies and assessments.
Each Investor agrees to bear and be responsible for the payment of all such taxes, levies and assessments imposed upon such Investor
arising out of its receipt of payments from OpCo under this Agreement. If OpCo reasonably determines in its sole discretion that
it is or could be obligated to withhold any tax in connection with the Royalty, OpCo may, in its reasonable discretion, withhold
the appropriate amount of tax in cash from the Royalty, provided that OpCo gives the applicable Investor notice of such determination
and an opportunity to comment on or object to such determination. If OpCo does not withhold an amount sufficient to satisfy the
withholding obligation of OpCo, the applicable Investor will, on demand, reimburse OpCo in cash for the amount which should have
been withheld.


 


2.
Confidential Information.


 


(a)
Protection and Use of Confidential Information. No Party shall disclose or use the Confidential Information of the other
Party, except as expressly authorized pursuant to this Agreement. The receiving Party shall limit disclosure of the disclosing
Party’s Confidential Information to the receiving Party’s employees or agents who have a need to know such Confidential
Information for purposes of this Agreement. Notwithstanding the foregoing, Confidential Information may be disclosed if required
by law, provided, however, that the receiving Party shall notify the disclosing Party of such requirement immediately in writing
and shall reasonably cooperate with the disclosing Party in obtaining a protective or similar order.


 


(b)
Exceptions. Confidential Information will not include information that: (i) is in or enters the public domain through no
act or fault of the receiving Party; (ii) is known to and has been reduced to tangible form by the receiving Party at the time
of disclosure; (iii) is independently developed by the receiving Party without use of or reference to the disclosing Party’s
Confidential Information; or (iv) is disclosed to the receiving Party by a third party, at any time, whether prior to or after
the time of its disclosure under this Agreement, on a non-confidential basis, provided that such third party is not, to the receiving
Party’s knowledge, bound by any obligation of confidentiality to the disclosing Party with respect to such Confidential
Information.


 


(c)
Return of Confidential Information. Upon the disclosing Party’s written request, the receiving Party shall return
or destroy all copies of the disclosing Party’s Confidential Information and certify promptly in writing that it has done
so.


 




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(d)
Definition. As used herein, “Confidential Information” shall mean a Party’s non-public technical
or business information, including without limitation, the Royalty Report, trade secrets, know-how, inventions, technical data
or specifications, testing methods, business or financial information, research and development activities, product and marketing
plans, and customer and supplier information. Furthermore, the terms and conditions of this Agreement shall be considered the
Confidential Information of all Parties.


 


3.
Miscellaneous.


 


(a)
Headings, Integration, Revisions. All headings are for reference purposes only and will not affect the meaning or interpretation
of this Agreement. This Agreement of even date herewith merges all prior representations and collateral understandings, memorandums
and agreements in connection with its subject matter, and constitutes the entire understanding between the Investors and OpCo
concerning the subject matter of this Agreement. No Party shall be bound by any revision of this Agreement unless in writing and
signed by an authorized officer of said Party.


 


(b)
Applicable Law and Interpretation. All questions concerning the validity, operation, interpretation, and construction of
the Agreement will be governed by and determined in accordance with the substantive laws of the State of New York without regard
to its conflicts of law provisions. Any action brought pursuant to or in connection with this Agreement shall be brought only
in the state or federal courts within New York County, New York. In any such action, all Parties consent to the exercise of personal
jurisdiction of such courts and waive any objections to venue in any such forum. THE PARTIES HERETO EXPRESSLY WAIVE ANY RIGHT
THEY MAY HAVE TO A TRIAL BY JURY.


 


(c)
Assignment. No Party may assign this Agreement without the prior written consent of the other Parties.


 


(d)
Notices. Notices pertaining to this Agreement shall be in writing and shall be deemed received by the addressee when delivered,
if delivered in person or by receipted courier, five (5) business days after being deposited in the United States mail, postage
prepaid, certified or registered mail or when delivered via electronic mail, provided that a copy is sent via United State mail
or express mail. Notices shall be addressed to the other Party at its respective address set forth in the preamble hereof or to
such address as is communicated to each Party in writing.


 


(e)
Severability. If any provision of this Agreement is unenforceable, such provision will be changed and interpreted to accomplish
the objectives of such provision to the greatest extent possible under applicable law and the remaining provisions will continue
in full force and effect.


 


(f)
Independent Contractors, No Joint Venture. The Investors and OpCo acknowledge and agree that each is an independent contractor
and neither shall be considered an employee, agent, partner or co-venturer of the other. It is understood that neither the Investors
nor OpCo shall have the right or authority to make any commitments or incur any costs on behalf of the other. This Agreement does
not constitute, and shall not be construed as constituting, a partnership or joint venture between OpCo and the Investors. Nothing
herein contained shall give or is intended to give any rights of any kind to any third party.


 


(g)
Waiver. No delay on the part of a Party in exercising any of its rights, remedies, powers and privileges hereunder or partial
or single exercise thereof, shall constitute a waiver thereof. The waiver by any Party of any default or breach, or of any claimed
default or claimed breach, of this Agreement shall not constitute a waiver of any other or subsequent default or breach. No notice
to or demand on any Party hereto in any case shall entitle such Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any of the rights of the other Party hereto to any other or further action in any circumstances
without notice or demand.


 


(h)
Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all
of which taken together shall constitute one and the same instrument. The delivery of signed counterparts by facsimile or e-mail
transmission that includes a copy of the sending Party’s signature is as effective as signing and delivering the counterpart
in person.


 


[REMAINDER
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IN
WITNESS WHEREOF the Parties have executed this Agreement as of the Effective Date.


 


	 	Brooklyn
    Immunotherapeutics, LLC
	 	 	 
	 	By:	/s/
    Charles R. Cherington
	 	Name:	Charles
    R. Cherington
	 	Title:	Manager
	 	 	 
	 	Brooklyn
    Immunotherapeutics, LLC
	 	 	 
	 	By:	Brooklyn
    Immunotherapeutics Inevstors 
	 	 	GP,
    LLC, its general partner
	 	 	 
	 	By:	/s/
    Charles R. Cherington 
	 	Name:	Charles
    R. Cherington 
	 	Title:	Manager
	 	 	 
	 	Brooklyn
    Immunotherapeutics Investors GP
	 	LLC
	 	 	 
	 	By:	/s/
    Charles R. Cherington 
	 	Name:	Charles
    R. Cherington
	 	Title:	Manager


 


{Signature
page to Royalty Agreement}