Exhibit 10.22

 

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Double asterisks denote omissions.

 

 

 

 

Fourth Amendment to License Agreement

This Fourth Amendment to License Agreement (this “Fourth Amendment”) is entered
into as of this 5th day of December, 2017 (the “Fourth Amendment Effective
Date”), by and between Tetraphase Pharmaceuticals, Inc., a Delaware corporation,
with its principal place of business at 480 Arsenal Street, Suite 110,
Watertown, MA 02472 (“Licensee”) and President and Fellows of Harvard College,
Richard A. and Susan F. Smith Campus Center, Suite 727, 1350 Massachusetts
Avenue, Cambridge, MA 02138 (“Harvard”).

WHEREAS, the parties entered into a License Agreement as of August 3, 2006 (as
previously amended, the “License Agreement”), pursuant to which Harvard granted
to Licensee an exclusive license under Harvard Patent Rights and Harvard’s
interest in Joint Patent Rights (as such terms are defined in the License
Agreement);

WHEREAS, on January 31, 2007, the parties amended the License Agreement (the
“First Amendment”) to include a new patent application [**] under Harvard Patent
Rights;

WHEREAS, on April 6, 2010, the parties amended the License Agreement (the
“Second Amendment”) to include the Additional Patent Application (as defined in
the Second Amendment) under Harvard Patent Rights;

WHEREAS, the parties agreed in a letter dated June 2, 2010 to include [**] for
all purposes of the License Agreement as Additional Patent Rights (as defined in
the Second Amendment);

WHEREAS, on February 18, 2011, the parties amended the License Agreement (the
“Third Amendment”) to include [**] under Additional Patent Rights; and

WHEREAS, the parties wish to amend Licensee’s payment obligations under the
License Agreement to assist Licensee in its efforts to enter into one or more
partnerships for the development and/or commercialization of products based on
the Harvard Patent Rights;

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:

 

1.

Capitalized terms used in this Fourth Amendment that are not defined herein
shall have the meanings set forth in the License Agreement.

 

 

2.

Section 1.3 of the License Agreement is replaced in its entirety with the
following:

1.3.  “Combination Product” shall mean a pharmaceutical preparation that
includes one or more Non-Covered Components in addition to one or more Covered
Components.  All references to Licensed Product or Royalty Product, as
applicable, in this Agreement shall be deemed to include Combination Product.

 

 

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3.

Section 1.4 of the License Agreement is replaced in its entirety with the
following:

1.4.  “Covered Component” shall mean any compound (or part thereof) the
production, making, use, sale or importation of which (a) falls within the scope
of a Valid Claim or (b) would infringe any claim (other than any claim that has
at any time been rejected by any patent examiner) made at any time in any patent
or patent application within the Licensed Patent Rights as if such claim were as
of such time a Valid Claim.

 

4.

Section 1.13 of the License Agreement is hereby replaced in its entirety with
the following:

1.13.  “Infringed Patent” shall mean an issued and unexpired patent (a) that has
not been abandoned, held invalid, revoked, held or rendered unenforceable or
lost through interference and (b) the claims of which would be infringed by
Licensee’s practice of the Harvard Patent Rights and/or Joint Patent Rights in
the making, using, offering for sale, selling or importation of Licensed
Products or Royalty Products, as applicable.

 

5.

Section 1.22 of the License Agreement is replaced in its entirety with the
following:

1.22.  “Net Sales” shall mean the gross amount billed or invoiced by or on
behalf of

Licensee, its Affiliates and Sublicensees (in each case, the “Invoicing Entity”)
on sales, leases or other transfers of Licensed Products or Royalty Products, as
applicable, less the following to the extent applicable on such sales, leases or
other transfers of Licensed Products or Royalty Products, as applicable, and not
previously deducted from the gross invoice price: (a) customary trade, quantity,
and cash discounts to the extent actually allowed and taken; (b) amounts
actually repaid or credited by reason of rejection or return of any previously
sold, leased or otherwise transferred Licensed Products or Royalty Products, as
applicable, and uncollectible portions of billed or invoiced amounts with
respect to any previously sold, leased or otherwise transferred Licensed
Products or Royalty Products, as applicable; (c) rebates, chargebacks,
retroactive price reductions, allowances and fees actually paid or credited to
customers, wholesalers, distributors, third party payors, governmental agencies,
administrators and contractees with respect to Licensed Products or Royalty
Products, as applicable, sold, leased or otherwise transferred; (d)
transportation, freight and insurance charges that are paid by or on behalf of
the Invoicing Entity; and (e) to the extent separately stated on purchase
orders, invoices, or other documents of sale, any sales, value added or similar
taxes, custom duties or other similar governmental charges levied directly on
the production, sale, transportation, delivery, or use of a Licensed Product or
Royalty Product, as applicable, that are paid by or on behalf of the Invoicing
Entity, but not including any tax levied with respect to income; provided that:

 

(i)  in any transfers of Licensed Products or Royalty Products, as applicable,
among an Invoicing Entity, Affiliates of such Invoicing Entity and Sublicensees,
not for the purpose of resale by any such Affiliate or Sublicensee, Net Sales
shall be equal to the fair market value of the Licensed Products or Royalty
Products, as applicable, so transferred, assuming an arm’s length transaction
made in the ordinary course of business; and

 

 

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(ii)  in the event that an Invoicing Party receives non-monetary consideration
for any Licensed Products or Royalty Products, as applicable, or in the case of
transactions not at arm’s length with a non-Affiliate of such Invoicing Entity
that is not a Sublicensee, Net Sales shall be calculated based on the fair
market value of such consideration or transaction, assuming an arm’s length
transaction made in the ordinary course of business.

 

Sales of Licensed Products or Royalty Products, as applicable, by an Invoicing
Party to an Affiliate of such Invoicing Party or to a Sublicensee for resale by
such Affiliate or Sublicensee shall not be deemed Net Sales and Net Sales shall
be determined based on the gross amount invoiced or billed by such Affiliate or
Sublicensee on resale to an independent third party purchaser.

 

In the event that a Licensed Product or Royalty Product, as applicable, is sold
in any country in the form of a Combination Product, Net Sales of such
Combination Product will be adjusted by multiplying actual Net Sales of such
Combination Product (i.e., Net Sales as determined above without regard to this
paragraph) in such country by the fraction A/(A+B), where A is the average
invoice price in such country, of a Licensed Product or Royalty Product, as
applicable, containing the same strength of Covered Component(s) that is
included in such Combination Product sold without the Non-Covered Components, if
sold separately in such country, and B is the average invoice price of the
Non-Covered Component(s) that is included in such Combination Product in such
country, if sold separately in such country. If, in a specific country, either
the Covered Component(s) or the Non-Covered Component(s) is not sold separately,
the relative value of the Covered Component(s) and the Non-Covered Component(s)
in the Combination Product shall be negotiated in and agreed upon in good faith
by the parties in order to determine the appropriate ratio for calculating Net
Sales with respect to such Combination Product in such country.

 

 

6.

Section 1.30 of the License Agreement is replaced in its entirety with the
following:

 

1.30.  “Sublicense” shall mean: (a) any right granted, license given, or
agreement entered into by Licensee to or with any other person or entity (or by
a Sublicensee to or with a further Sublicensee permitted by Section 4.2.2.4)
under or with respect to or permitting any use of any of the Licensed Patent
Rights, or otherwise permitting the development, manufacture, marketing,
distribution, use and/or sale of Licensed Products or Royalty Products; (b) any
option or other right granted by Licensee to any other person or entity (or by a
Sublicensee to a further Sublicensee permitted by Section 4.2.2.4) to negotiate
for or receive any of the rights described under clause (a); or (c) any
standstill or similar obligation undertaken by Licensee toward any other person
or entity (or by a Sublicensee toward a further Sublicensee permitted by Section
4.2.2.4) not to grant any of the rights described in clause (a) or (b) to any
third party; in each case regardless of whether such grant of rights, license
given or agreement entered into is referred to or is described as a sublicense.
For clarity, “Sublicense” does not include any implied license that may be
deemed to be granted as part of a sale of a Licensed Product.

 

 

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7.

A new Section 1.34 is hereby added to the License Agreement as follows:

1.34.  “Licensee Valid Claim” shall mean: (a) a claim of an issued and unexpired
patent owned by Licensee, excluding any Joint Patent Rights, that has not been
(i) held permanently revoked, unenforceable, unpatentable or invalid by a
decision of a court or governmental body of competent jurisdiction, unappealable
or unappealed within the time allowed for appeal, (ii) rendered unenforceable
through disclaimer or otherwise, (iii) abandoned, or (iv) lost through an
interference proceeding; or (b) a pending claim of a pending patent application
owned by Licensee (in a particular country), excluding any Joint Patent Rights,
that (i) has been asserted and continues to be prosecuted in good faith, (ii)
has not been abandoned or finally rejected without the possibility of appeal or
refiling and (iii) has not remained un-issued for a period of five or more years
from the date of issuance of the first substantive patent office action
considering the patentability of such claim by the applicable patent office in
such country.

 

8.

A new Section 1.35 is hereby added to the License Agreement as follows:

1.35.  “Royalty Product” shall mean any product that contains, as an active
pharmaceutical ingredient, (a) eravacycline, TP-271 or TP-6076 or (b) any
compound, other than eravacycline, TP-271 or TP-6076, the composition or
synthesis of which would infringe any claim (other than any claim that has at
any time been rejected by any patent examiner) made at any time in any patent or
patent application within the Licensed Patent Rights as if such claim were as of
such time a Valid Claim.  For the avoidance of doubt, each Royalty Product shall
also be deemed a Licensed Product for so long as (and only for so long as) the
manufacture, use, offer for sale, sale or importation of such Royalty Product
would infringe a Valid Claim.

 

9.

A new Section 1.36 is hereby added to the License Agreement as follows:

1.36.  “First Commercial Sale” shall mean the first sale for end use or
consumption of a product in a country after the granting of all approvals from
the relevant Regulatory Authority(ies) necessary to market and sell such product
in such country.

 

10.

Section 6.4.1 of the License Agreement is replaced in its entirety with the
following:

6.4.1.Royalties.  

6.4.1.1.  As partial consideration for the license granted hereunder, Licensee
shall pay Harvard an amount equal to the following percentages of any Net Sales
of Licensed Products, and Royalty Products that are not Licensed Products, in
the United States and its districts, territories and possessions (the “US
Territory”), made by Licensee and/or its Affiliates or Sublicensees:

(a)[**] percent ([**]%) of Net Sales made on Licensed Products; and

(b)[**] percent ([**]%) of Net Sales made on Royalty Products that are not
Licensed Products.

 

 

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6.4.1.2.  As partial consideration for the license granted hereunder, Licensee
shall pay Harvard an amount equal to the following percentages of (y) Net Sales
of Licensed Products in each country outside of the US Territory (the “Ex-US
Territory”) made by Licensee and/or its Affiliates (but not Sublicensees):

(a)[**] percent ([**]%) of that portion of calendar year annual Net Sales of
Licensed Products up to [**] U.S. Dollars ($[**]);

(b)[**] percent ([**]%) of that portion of calendar year annual Net Sales of
Licensed Products in excess of [**] U.S. Dollars ($[**]) up to [**] U.S. Dollars
($[**]);

(c)[**] percent ([**]%) of that portion of calendar year annual Net Sales of
Licensed Products in excess of [**] U.S. Dollars ($[**]) up to [**] U.S. Dollars
($[**]); and

(d)[**] percent ([**]%) of that portion of calendar year annual Net Sales of
Licensed Products in excess of [**] U.S. Dollars ($[**]).

6.4.1.3.  As partial consideration for the license granted hereunder, Licensee
shall pay Harvard an amount equal to the following percentages of (y) Net Sales
of Royalty Products that are not Licensed Products in each country in the Ex-US
Territory made by Licensee and/or its Affiliates (but not Sublicensees):    

(a)[**] percent ([**]%) of that portion of calendar year annual Net Sales of
Royalty Products that are not Licensed Products up to [**] U.S. Dollars ($[**]);

(b)[**] percent ([**]%) of that portion of calendar year annual Net Sales of
Royalty Products that are not Licensed Products in excess of [**] U.S. Dollars
($[**]) up to [**] U.S. Dollars ($[**]);

(c)[**] percent ([**]%) of that portion of calendar year annual Net Sales of
Royalty Products that are not Licensed Products in excess of [**] U.S. Dollars
($[**]) up to [**] U.S. Dollars ($[**]); and

(d)[**] percent ([**]%) of that portion of calendar year annual Net Sales of
Royalty Products that are not Licensed Products in excess of [**] U.S. Dollars
($[**]).

6.4.1.4.  With respect to each Royalty Product (other than Licensed Products)
containing eravacycline, royalties will be payable under Sections 6.4.1.1(b) and
6.4.1.3, as applicable, until the date fifteen (15) years after the First
Commercial Sale of the first Royalty Product in the first country, after which
no royalties shall be due on Net Sales of Royalty Products containing
eravacycline.  With respect to each Royalty Product (other than Licensed
Products) containing any compound other than eravacycline (and not containing
eravacycline), royalties will be payable under Sections 6.4.1.1(b) and 6.4.1.3,
as applicable, on a country-by-country basis until the fifth anniversary of the
expiration of the last Licensee Valid Claim that covers the composition of the
first Royalty Product containing such compound in such country, after which no
royalties shall be due on Net Sales of such Royalty Product in such
country.  With respect to each Licensed Product,

 

 

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including each Royalty Product that is also a Licensed Product, royalties will
be payable under Sections 6.4.1.1(a) and 6.4.1.2 on a country-by-country basis
for so long as the making, using or selling of such Licensed Product is covered
by a Valid Claim in the country in which such Licensed Product is made, used or
sold, after which no royalties shall be due on such Licensed Product (except, if
such Licensed Product is also a Royalty Product, to the extent set forth in the
first two sentences of this Section 6.4.1.4).  For clarity, no milestones will
be due under Section 6.3 with respect to any Royalty Product that is not a
Licensed Product.

6.4.1.5.  The parties acknowledge that the consideration terms and structure set
forth in this Section 6.4.1 (a) were agreed upon for convenience purposes with
the intent of compensating Harvard for the rights granted under this Agreement,
including with respect to the Licensed Patent Rights and other valuable
intellectual property licensed and/or transferred to Licensee, and the key role
such rights and intellectual property will have in the activities of Licensee
and its ability to enter into strategic relationships and (b) represent the fair
market value of such rights as determined and agreed upon by the parties.  For
clarity, the terms of this Section 6.4.1 with respect to any Royalty Product
shall survive the termination of this Agreement if such termination occurs prior
to the end of the applicable royalty period for such Royalty Product.

 

11.

Section 6.4.2 of the License Agreement is hereby deleted in its entirety.

 

 

12.

Section 6.5 of the License Agreement is replaced in its entirety with the
following:

6.5.Sublicense Income.  

6.5.1As partial consideration for the license granted hereunder, Licensee shall
pay Harvard (a) [**] percent ([**]%) of all Non-Royalty Sublicense Income, in
connection with any Sublicense granted with rights to make and/or sell Licensed
Products and/or Royalty Products solely in the Ex-US Territory, and (b) [**]
percent ([**]%) of payments or other consideration that Licensee or any of its
Affiliates receives in connection with a Sublicense that are royalties based on
sales, leases or other transfers of Licensed Products or Royalty Products by or
on behalf of Sublicensees in the Ex-US Territory (“Ex-US Sublicensee
Royalties”).

6.5.2As partial consideration for the license granted hereunder, Licensee shall
pay Harvard an amount equal to the following percentages of Non-Royalty
Sublicense Income received in connection with any Sublicense granted that
includes rights to make and/or sell Licensed Products and/or Royalty Products in
the US Territory, whether or not rights are granted in any ex-US Territory:

(a)if Licensee grants such Sublicense prior to the filing of an IND with respect
to any Licensed Product or Royalty Product that is the subject of such
Sublicense, Licensee shall pay Harvard an amount equal to [**] percent ([**]%)
of all Non-Royalty Sublicense Income received in connection with such
Sublicense;

 

 

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(b)if Licensee grants such Sublicense after filing of an IND but prior to the
Initiation of a Phase II Clinical Trial with respect to any Licensed Product or
Royalty Product that is the subject of such Sublicense, Licensee shall pay
Harvard an amount equal to [**] percent ([**]%) of all Non-Royalty Sublicense
Income received in connection with such Sublicense; and

(c)if Licensee grants a Sublicense after the Initiation of a Phase II Clinical
Trial with respect to any Licensed Product or Royalty Product that is the
subject of such Sublicense, Licensee shall pay Harvard an amount equal to [**]
percent ([**]%) of all Non-Royalty Sublicense Income received in connection with
such Sublicense.

6.5.3Notwithstanding anything to the contrary in this Agreement, if Licensee or
any of its Affiliates receives a payment constituting Non-Royalty Sublicense
Income that is directly attributable to the occurrence of a milestone event
described in Section 6.3 or a circumstance substantially equivalent to such
milestone event and Licensee has paid or is obligated to pay to Harvard its due
share of such Non-Royalty Sublicense Income under this Section 6.5, any amounts
paid under Section 6.3 with respect to such milestone may be deducted from
Non-Royalty Sublicense Income on which Licensee must pay fees to Harvard under
this Section 6.5.

6.5.4Licensee’s obligations under this Section 6.5 with respect to any
Sublicense that includes rights to make and/or sell any Royalty Product shall
expire on the expiration of Licensee’s royalty payment obligations under Section
6.4.1 with respect to such Royalty Product.  Licensee’s obligations under this
Section 6.5 with respect to any Sublicense that includes rights to make and/or
sell any Licensed Product that is not a Royalty Product shall expire on
expiration of Licensee’s royalty payment obligations under Section 6.4.1 with
respect to such Licensed Product.

 

13.

Section 7.1 of the License Agreement is replaced in its entirety with the
following:

 

7.1.Reports and Payments.

 

7.1.1.Reports.  Within [**] days after the conclusion of each Calendar Quarter
commencing with the first Calendar Quarter in which Net Sales are generated or
Non-Royalty Sublicense Income or Ex-US Sublicensee Royalties received, Licensee
shall deliver to Harvard a report containing the following information (in each
instance, with a Licensed Product-by-Licensed Product or Royalty
Product-by-Royalty Product, as applicable, breakdown):

 

(a)the number of units of Licensed Products or Royalty Products, as applicable,
sold by Licensee and its Affiliates in the US Territory and Ex-US Territory, and
by Sublicensees in the US Territory, for the applicable Calendar Quarter;

 

(b)the gross amount billed for Licensed Products or Royalty Products, as
applicable, sold by Licensee and its Affiliates in the US Territory and Ex-US
Territory, and by Sublicensees in the US Territory, during the applicable
Calendar Quarter;

 

 

 

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(c)a calculation of Net Sales by Licensee and its Affiliates in the US Territory
and Ex-US Territory, and by Sublicensees in the US Territory, for the applicable
Calendar Quarter, including an itemized listing of applicable deductions; and

 

(d)the total amount payable to Harvard in U.S. Dollars on Net Sales by Licensee
and its Affiliates in the US Territory and Ex-US Territory, and by Sublicensees
in the US Territory, for the applicable Calendar Quarter, together with the
exchange rates used for conversion.

 

In addition, Licensee shall include in each such report a statement of all
Non-Royalty Sublicense Income and Ex-US Sublicensee Royalties and the amounts
payable to Harvard in respect thereto for the applicable Calendar Quarter.  Each
such report shall be certified on behalf of Licensee as true, correct and
complete in all material respects by Licensee’s Chief Financial Officer or an
executive level officer with comparable authority.  If no amounts are due to
Harvard for any Calendar Quarter, the report shall so state.

7.1.2.Payment for Net Sales.  Within [**] days after the end of each Calendar
Quarter, Licensee shall pay Harvard all amounts due with respect to Net Sales,
Non-Royalty Sublicense Income and Ex-US Sublicensee Royalties for the applicable
Calendar Quarter.

 

14.

Section 7.3 of the License Agreement is replaced in its entirety with the
following:

7.3.Records.  Licensee shall maintain, and shall cause its Affiliates and, with
respect to the US Territory, Sublicensees to maintain, complete and accurate
records of Licensed Products and Royalty Products that are made, used or sold
under this Agreement, any amounts payable to Harvard in relation to such
Licensed Products and Royalty Products and all Non-Royalty Sublicense Income and
Ex-US Sublicensee Royalties received by Licensee and its Affiliates, which
records shall contain sufficient information to permit Harvard to confirm the
accuracy of any reports or notifications delivered to Harvard under Section
7.1.  Licensee, its Affiliates and/or its Sublicensees, as applicable, shall
retain such records relating to a given Calendar Quarter for at least [**] years
after the conclusion of that Calendar Quarter, during which time Harvard shall
have the right, at its expense, to cause an independent, certified public
accountant to inspect such records during normal business hours for the sole
purpose of verifying any reports and payments delivered under this
Agreement.  Such accountant shall enter into a confidentiality agreement
reasonably satisfactory to Licensee and shall not disclose to Harvard any
information other than information relating to the accuracy of reports and
payments delivered under this Agreement.  The parties shall reconcile any
underpayment or overpayment within [**] days after the accountant delivers the
results of the audit.  In the event that any audit performed under this Section
7.3 reveals an underpayment in excess of five percent (5%) in any calendar year,
the audited entity shall bear the full cost of such audit.  Harvard may exercise
its rights under this Section 7.3 [**] per audited entity and only with
reasonable prior notice to the audited entity.

 

15.

Section 11.1 of the License Agreement is replaced in its entirety with the
following:

 

 

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11.1.Term.  The term of this Agreement shall commence on the Effective Date and,
unless earlier terminated as provided in this Article 11, shall continue in full
force and effect (a) on a Licensed Product-by-Licensed Product and
country-by-country basis until expiration of the last to expire Valid Claim of
the Harvard Patent Rights and Joint Patent Rights and (b) on a Royalty
Product-by-Royalty Product and country-by-country basis until expiration of
Licensee’s royalty payment obligations with respect to such Royalty Product in
such country under this Agreement; provided, however, that, once the making,
using or selling of any Licensed Product or Royalty Product in any country is
not covered by a Valid Claim within the Licensed Patent Rights or a Licensee
Valid Claim, as the case may be, the license granted by Harvard to Licensee
under Section 4.1 with respect to such Licensed Product or Royalty Product, as
applicable, in such country will be perpetual, irrevocable, freely sublicensable
and freely transferrable.

 

16.

Section 11.4 of the License Agreement is replaced in its entirety with the
following:  

 

11.4.Survival.  The parties’ respective rights, obligations and duties under
Articles 7 and 10 and under this Article 11, as well as any rights, obligations
and duties which by their nature extend beyond the expiration or termination of
this Agreement, shall survive any expiration or termination of this
Agreement.  In addition, Licensee’s obligations under Section 6.5 with respect
to any Sublicense granted prior to termination of the Agreement that includes
rights to make and/or sell any Royalty Product shall survive termination of this
Agreement and shall continue in full force and effect until the expiration of
Licensee’s royalty payment obligations under Section 6.4.1 with respect to such
Royalty Product.  Harvard’s obligations under Section 12.15 shall survive
expiration or termination of this Agreement.  The terms of Section 6.4.1 shall
survive termination of this Agreement.

 

 

17.

All other terms and conditions of the License Agreement shall remain unchanged
and in full force and effect.

IN WITNESS WHEREOF, the parties have caused this Fourth Amendment to be executed
by their duly authorized representatives as of the date first written above.

 

President and Fellows of Harvard College

 

Tetraphase Pharmaceuticals, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Isaac T. Kohlberg

 

By:

 

/s/ Guy Macdonald

 

 

 

 

 

 

 

 

 

Name:

 

Isaac T. Kohlberg

 

Name:

 

Guy Macdonald

 

 

 

 

 

 

 

 

 

Title:

 

Sr. Associate Provost,

 

Title:

 

CEO

 

Chief Technology Development Officer,

 

 

 

Office of Technology Development

 

 

 

Harvard University

 

 

 

 

 

 

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