Exhibit 10.27

CONSENT AND THIRD AMENDMENT

TO

LOAN AND SECURITY AGREEMENT

This Consent and Third Amendment to Loan and Security Agreement (this
“Amendment”) is entered into this 18th day of December, 2014, by and among
(i) TETRAPHASE PHARMACEUTICALS, INC., a Delaware corporation with offices
located at 480 Arsenal Street, Suite 110, Watertown, Massachusetts 02472
(“Borrower”), (ii) SILICON VALLEY BANK, a California corporation with an office
located at 275 Grove Street, Suite 2-200, Newton, MA 02466 (“SVB”), (iii) OXFORD
FINANCE LLC, a Delaware limited liability company with an office located at 133
North Fairfax Street, Alexandria, Virginia 22314 (“Oxford”), (iv) each of the
other Lenders, listed on Schedule 1.1 hereof or otherwise a party thereto from
time to time, including SVB and Oxford in their capacities as Lenders, (each a
“Lender” and collectively, the “Lenders”), and (v) SVB, as agent (in such
capacity, the “Agent”) for the Lenders.

RECITALS

A. Lenders and Borrower have entered into that certain Loan and Security
Agreement dated as of May 16, 2011, as amended by that certain First Amendment
to Loan and Security Agreement dated as of December 20, 2012, as amended by that
certain Consent and Second Amendment to Loan and Security Agreement dated as of
December 1, 2014 (as the same may from time to time be further amended,
modified, supplemented or restated, the “Loan Agreement”).

B. Each Lender extended credit to Borrower for the purposes permitted in the
Loan Agreement.

C. Borrower has requested that Lenders amend the Loan Agreement to make certain
revisions to the Loan Agreement as more fully set forth herein.

D. Each Lender has agreed to so amend certain provisions of the Loan Agreement,
but only to the extent, in accordance with the terms, subject to the conditions
and in reliance upon the representations and warranties set forth below.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:

1. Definitions. Capitalized terms used but not defined in this Amendment shall
have the meanings given to them in the Loan Agreement.

2. Amendments to Loan Agreement.

2.1 Section 5.2(b) (Collateral). The Loan Agreement shall be amended by
inserting the words “or in support of a new drug application” immediately after
the words “pre-clinical and clinical trials” in Section 5.2(b) thereof.

2.2 Section 5.3 (Litigation). Section 5.3 is amended by deleting “One Hundred
Thousand Dollars ($100,000)” and replacing it with “Two Hundred Fifty Thousand
Dollars ($250,000)”.

2.3 Section 5.4 (No Material Deterioration in Financial Condition; Financial
Statements). Section 5.4 is amended in its entirety and replaced with the
following:

“5.4 No Material Deterioration in Financial Condition; Financial Statements. All
consolidated financial statements for Borrower and its Subsidiaries delivered to
Agent fairly

 

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present, in all material respects the consolidated financial condition of
Borrower and its Subsidiaries and the consolidated results of operations of
Borrower and its Subsidiaries. There has not been any material deterioration in
Borrower’s consolidated financial condition since the date of the most recent
financial statements submitted to Lenders.”

2.4 Section 6.2(a)(i) (Financial Statements, Reports, Certificates).
Section 6.2(a)(i) is amended in its entirety and replaced with the following:

“(i) no later than forty-five (45) days after the last day of each quarter, a
company prepared consolidated balance sheet, income statement and cash flow
statement covering the consolidated operations of Borrower and its Subsidiaries
for such quarter certified by a Responsible Officer and in a form reasonably
acceptable to Agent;”

2.5 Section 6.2(v) (Financial Statements, Reports, Certificates). Section 6.2 is
amended by adding the following to the end of such section:

“(d) Borrower shall not be required to deliver or furnish any document or
materials under this Agreement to the extent such document or materials are
available on the SEC’s Electronic Data Gathering, Analysis and Retrieval System
(EDGAR) or on Borrower’s website on the Internet at Borrower’s website address.”

2.6 Section 6.2(b) (Financial Statements, Reports, Certificates). Section 6.2(b)
is amended in its entirety and replaced with the following:

“Concurrently with the delivery of the financial statements specified in
Section 6.2(a)(i) above but no later than forty-five (45) days after the last
day of each quarter, deliver to Agent, a duly completed Compliance Certificate
signed by a Responsible Officer.”

2.7 Section 6.5 (Insurance). Section 6.5 is amended in its entirety and replaced
with the following:

“6.5 Insurance. Borrower shall keep its business and the Collateral insured for
risks and in amounts standard for companies in Borrower’s industry and location
and as Agent may reasonably request. Borrower’s insurance policies shall be in a
form, with companies, and in amounts that are reasonably satisfactory to Agent
and Lenders. All property policies of Borrower shall have a lender’s loss
payable endorsement showing Agent as lender loss payee and waive subrogation
against Agent, and all domestic liability policies shall show, or have
endorsements showing, Agent, as an additional insured. All domestic policies of
Borrower (or the loss payable and additional insured endorsements) shall provide
that the insurer shall endeavor to give Agent at least twenty (20) days’ notice
before canceling, amending, or declining to renew its policy. At Agent’s
request, Borrower shall deliver certified copies of Borrower’s policies and
evidence of all premium payments. Proceeds payable under any policy of Borrower
shall, at Agent’s option, be payable to Agent on behalf of the Lenders on
account of the Obligations. Notwithstanding the foregoing, (a) so long as no
Event of Default has occurred and is continuing, Borrower shall have the option
of applying the proceeds of any casualty policy of Borrower up to $100,000 with
respect to any loss, but not exceeding $250,000, in the aggregate for all losses
under all casualty policies of Borrower in any one year, toward the replacement
or repair of destroyed or damaged property; provided that any such replaced or
repaired property (i) shall be of equal or like value as the replaced or
repaired Collateral and (ii) shall be deemed Collateral in which Agent has been
granted a first priority security interest, and (b) after the occurrence and
during the continuance of an Event of Default, all proceeds payable under such
casualty policy of Borrower shall, at the option of Agent, be payable to Agent,
for the ratable benefit of the Lenders, on account of the Obligations. If
Borrower fails to obtain insurance as required under this Section 6.5 or to pay
any amount or furnish any required proof of payment to third persons and Agent,
Agent and/or any Lender may make, at Borrower’s expense, all or part of such
payment or obtain such insurance policies required in this Section 6.5, and take
any action under the policies Agent or such Lender deems prudent.”

 

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2.8 Section 6.6(a) (Operating Accounts). Section 6.6(a) is amended in its
entirety and replaced with the following:

“Maintain all of Borrower’s and all of its Subsidiaries’ operating and other
deposit accounts and securities accounts with Silicon Valley Bank or its
Affiliates; provided, further, that Borrower shall have, at all times, on
deposit in Collateral Accounts, operating, and investment accounts maintained
with Silicon Valley Bank or its Affiliates that are subject to Control
Agreements in favor of each Lender, cash and/or Cash Equivalents in an amount
not less than one hundred five percent (105%) of the then-outstanding
Obligations of Borrower to Lenders. Notwithstanding the foregoing, Bermuda
Subsidiary and Securities Subsidiary may maintain accounts with banks and/or
financial institutions other than Silicon Valley Bank or its Affiliates (the
“Permitted Accounts”).”

2.9 Section 6.9 (Notices of Litigation and Defaults). Section 6.9 is amended by
(i) deleting “One Hundred Thousand Dollars ($100,000)” and replacing it with
“Two Hundred Fifty Thousand Dollars ($250,000)” and (ii) deleting “three
(3) Business Days” and replacing it with “four (4) Business Days”.

2.10 Section 6.10 (Creation/Acquisition of Subsidiaries). The Loan Agreement
shall be amended by inserting the words “(other than Bermuda Subsidiary and
Securities Subsidiary”) immediately after the words “creates or acquires any
Subsidiary” in Section 6.10 thereof.

2.11 Section 6.12 (Investments in Foreign Subsidiaries). Section 6.12 is amended
in its entirety and replaced with the following:

“6.12 [Reserved.]”

2.12 Section 7.1(d) (Dispositions). Section 7.1(d) is amended in its entirety
and replaced with the following:

“(d) of non-exclusive licenses for the use of the Intellectual Property of
Borrower or its Subsidiaries in the ordinary course of business in connection
with joint ventures and collaborations and licenses that do not result in a
legal transfer of title of the licensed property but that may be exclusive in
respects other than territory and that may be exclusive as to territory only as
to discrete geographical areas outside of the United States; or (e) dispositions
contemplated under the Cost Sharing Agreement and the Rights Transfer
Agreement.”

2.13 Section 7.2(b) (Changes in Business, Management, Ownership or Business
Locations). The Loan Agreement shall be amended by inserting the words “(except
for Tetraphase Securities)” immediately after the words “liquidate or dissolve”
in Section 7.2(b) thereof.

2.14 Section 7.2 (Changes in Business, Management, Ownership, or Business
Locations). Section 7.2(c)(i) is amended in its entirety and replaced with the
following:

“(c) (i) fail to provide notice to Agent and Lenders of any Key Person departing
from or ceasing to be employed by Borrower within five (5) Business Days after
such Key Person’s departure from Borrower;”

 

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2.15 Section 7.7(a) (Distributions; Investments). Section 7.7(a) of the Loan
Agreement in its entirety and replaced with the following

“(a) Except for distributions by any Subsidiary to Borrower, pay any dividends
(other than dividends payable solely in capital stock) or make any distribution
or payment on account of or redeem, retire or purchase any capital stock (other
than repurchases pursuant to the terms of employee stock purchase plans,
employee restricted stock agreements, stockholder rights plans, director or
consultant stock option plans, or similar plans, provided such repurchases do
not exceed One Hundred Thousand Dollars ($100,000) in the aggregate per fiscal
year), or”

2.16 Section 7.8 (Transactions with Affiliates). Section 7.8 is amended in its
entirety and replaced with the following:

“7.8 Transactions with Affiliates. Directly or indirectly enter into or permit
to exist any material transaction with any Affiliate of Borrower, except for
(i) Permitted Investments, (ii) in connection with the Rights Transfer Agreement
and the Cost Sharing Agreement, and (iii) transactions that are in the ordinary
course of Borrower’s business, upon fair and reasonable terms that are no less
favorable to Borrower than would be obtained in an arm’s length transaction with
a non-affiliated Person.”

2.17 Section 7.12 (Securities Corporation). The Loan Agreement shall be amended
by inserting the following new provision to appear as Section 7.12 thereof.

“7.12 Securities Corporation. Permit Securities Subsidiary or Tetraphase
Securities to hold or maintain any assets (including, without limitation, any
intellectual property), other than cash and Cash Equivalents.”

2.18 Section 9.1(c) (Rights and Remedies). The Loan Agreement shall be amended
by inserting the words “and Lenders” immediately before the words “shall have
the right, without notice or demand” in Section 9.1(c) thereof.

2.19 Section 9.1(c)(iv) (Rights and Remedies). The Loan Agreement shall be
amended by inserting the words “of Borrower” immediately after the words “place
a “hold on any account” in Section 9.1(c)(iv) thereof.

2.20 Section 13.1 (Definitions). The Loan Agreement shall be amended by
(i) deleting “and” at the end of subsection (f); (ii) changing “.” to “; and” at
the end of subsection (g); and (iii) inserting the following new subsection
(h) to appear in the definition of “Permitted Indebtedness” set forth in
Section 13.1 thereof:

“(h) unsecured Indebtedness pursuant to the Cost Sharing Agreement and the
Rights Transfer Agreement.”

2.21 Section 13.1 (Definitions). Subsection (l) appearing in the definition of
“Permitted Investments” set forth in Section 13.1 is amended in its entirety and
replaced with the following:

“(l) (i) Investments by Borrower in Bermuda Subsidiary (including pursuant to
the Cost Sharing Agreement), and (ii) provided Borrower has complied with the
provisions of Section 7.12, cash Investments by Borrower in Securities
Subsidiary; and provided further that in each case of (i) and (ii) no Event of
Default exists or would result from such Investment.”

2.22 Section 13.1 (Definitions). The following definitions set forth in
Section 13.1 are amended in their entirety and replaced with the following:

“Cash Equivalents” are (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or any agency or any State
thereof having maturities of not more than one (1) year from the date of
acquisition; (b) commercial paper maturing no more than one (1) year after its
creation and having the highest rating from either Standard & Poor’s Ratings
Group or Moody’s Investors Service, Inc., (c) certificates of deposit maturing
no more than one (1) year

 

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after issue provided that the account (other than accounts of Securities
Subsidiary) in which any such certificate of deposit is maintained is subject to
a Control Agreement in favor of Agent, and (d) money market accounts at least
ninety-five percent (95%) of the assets of which constitute Cash Equivalents of
the kinds described in clauses (a) through (c) of this definition. For the
avoidance of doubt, the direct purchase by Borrower, any co-borrower, any
guarantor, or any subsidiary of Borrower of any Auction Rate Securities, or
purchasing participations in, or entering into any type of swap or other
derivative transaction, or otherwise holding or engaging in any ownership
interest in any type of Auction Rate Security by Borrower, any co-borrower, any
guarantor or any subsidiary of Borrower shall be conclusively determined by the
Lenders as an ineligible Cash Equivalent, and any such transaction shall
expressly violate each other provision of this agreement governing Permitted
Investments. Notwithstanding the foregoing, Cash Equivalents does not include
and Borrower and its Subsidiaries are prohibited from purchasing, purchasing
participations in, entering into any type of swap or other equivalent derivative
transaction, or otherwise holding or engaging in any ownership interest in any
type of debt instrument, including, without limitation, any corporate or
municipal bonds with a long-term nominal maturity, in each case, for which the
interest rate is reset through a dutch auction and more commonly referred to as
an auction rate security.

“Collateral Account” is any Deposit Account, Securities Account, or Commodity
Account of Borrower.

“Loan Documents” are, collectively, this Agreement, the Warrants, the Perfection
Certificate, each Compliance Certificate, the Pledge Agreement, any
subordination agreements, any note, or notes or guaranties executed by Borrower,
and any other present or future agreement between Borrower for the benefit of
Lenders and Agent in connection with this Agreement, all as amended, restated,
or otherwise modified.

2.23 Section 13.1 (Definitions). The Loan Agreement is amended by inserting the
following new definitions to appear alphabetically in Section 13.1 thereof:

“Cost Sharing Agreement” means that certain Agreement For Sharing Intangible
Development Costs between Borrower and Bermuda Subsidiary dated as of
December 1, 2014 and effective as of November 25, 2014.

“Pledge Agreement” means that certain Pledge Agreement executed by Borrower in
favor of Agent, for the ratable benefit of the Lenders, dated as of December 18,
2014, as may be amended, modified, supplemented or restated from time to time.

“Rights Transfer Agreement” means that certain Rights Transfer Agreement between
Borrower and Bermuda Subsidiary dated as of December 1, 2014.

“Securities Subsidiary” means Tetraphase Pharma Securities, Inc., a corporation
organized under the laws of Massachusetts and a Subsidiary of Borrower.

“Tetraphase Securities” means Tetraphase Securities Corporation, a corporation
organized under the laws of Massachusetts and a Subsidiary of Borrower.

2.24 Exhibit C (Compliance Certificate). The Compliance Certificate is amended
in its entirety and replaced with the Compliance Certificate in the form of
Schedule 1 attached hereto.

 

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3. Release of TetraPhase Securities Corporation. Upon the occurrence the
Condition to Effectiveness (as defined in Section 10 of this Amendment:

3.1 TETRAPHASE SECURITIES CORPORATION (“Released Borrower”) will automatically,
and without the need for any further action on the part of Agent, Lenders or any
other Person, be fully and forever released as a Borrower under the Loan
Agreement and each other Loan Document;

3.2 the Liens, security interests and other rights of Agent and each Lender in
and to any and all of the assets of Released Borrower will automatically, and
without the need for any further action on the part of Agent, Lenders, or any
other Person, be fully and forever released and terminated;

3.3 Released Borrower, or any of Released Borrower’s designees as notified to
Agent in writing (which may be submitted by facsimile or electronic mail
transmission), and their respective attorneys, agents and representatives, is
authorized to file UCC-3 termination statements with respect to Released
Borrower in all applicable jurisdictions to evidence the release and termination
referred to above; and

3.4 Agent shall at Borrower’s sole cost and expense, (i) promptly execute and
deliver to Released Borrower all documents and instruments reasonably requested
by Released Borrower to further evidence the release and termination of the
Liens, security interests and other rights in favor of Agent, for the ratable
benefit of the Lenders, in and to the assets of Released Borrower under the Loan
Documents, and (ii) promptly deliver to Released Borrower, or their respective
designees as notified to Bank in writing (which may be submitted by facsimile or
electronic mail transmission), all instruments and other property of Released
Borrower that are in the possession of Agent, for the ratable benefit of the
Lenders.

3.5 The other Borrower hereby consents to Agent’s release of Released Borrower
and acknowledges and confirms that it remains fully liable under the Loan
Agreement and the other Loan Documents. Notwithstanding the foregoing, nothing
herein shall be deemed a release or discharge by Agent or Lenders of any
security interest, lien, or pledge of any other Collateral other than as
expressly set forth herein.

4. Consent to Formation of Subsidiary. Borrower has notified Agent and Lenders
that Borrower intends to create the Securities Subsidiary (the “Subsidiary
Formation”). Borrower has requested that Agent and Lenders consent to the
Subsidiary Formation. Agent and Lenders hereby consent to the Subsidiary
Formation and agree that the Subsidiary Formation shall not, in and of itself,
constitute an “Event of Default” under Section 6.10 (relative to creation and
acquisition of subsidiaries), Section 7.3 (relative to mergers or acquisitions),
or Section 7.7 (relative to distributions and investments) of the Loan
Agreement. The Securities Subsidiary shall continue to be subject to all of the
terms and conditions of the Loan Agreement (other than Section 6.10 of the Loan
Agreement).

5. Limitation of Amendments.

5.1 The amendments set forth in Section 2, above, are effective for the purposes
set forth herein and shall be limited precisely as written and shall not be
deemed to (a) be a consent to any amendment, waiver or modification of any other
term or condition of any Loan Document, or (b) otherwise prejudice any right or
remedy which Bank may now have or may have in the future under or in connection
with any Loan Document.

5.2 This Amendment shall be construed in connection with and as part of the Loan
Documents and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Loan Documents, except as herein amended, are hereby
ratified and confirmed and shall remain in full force and effect.

6. Representations and Warranties. To induce Bank to enter into this Amendment,
Borrower hereby represents and warrants to Bank as follows:

6.1 Immediately after giving effect to this Amendment (a) the representations
and warranties contained in the Loan Documents are true, accurate and complete
in all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case they are
true and correct as of such date), and (b) no Event of Default has occurred and
is continuing;

6.2 Borrower has the power and authority to execute and deliver this Amendment
and to perform its obligations under the Loan Agreement, as amended by this
Amendment;

 

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6.3 The organizational documents of Borrower delivered to Bank on the Effective
Date remain true, accurate and complete and have not been amended, supplemented
or restated and are and continue to be in full force and effect;

6.4 The execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, have been duly authorized;

6.5 The execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, do not and will not contravene (a) any material law or regulation
binding on or affecting Borrower, (b) any material contract with a Person
binding on Borrower, (c) any order, judgment or decree of any court or other
governmental or public body or authority, or subdivision thereof, binding on
Borrower, or (d) the organizational documents of Borrower;

6.6 The execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, do not require any order, consent, approval, license, authorization
or validation of, or filing, recording or registration with, or exemption by any
governmental or public body or authority, or subdivision thereof, binding on
either Borrower, except as already has been obtained or made; and

6.7 This Amendment has been duly executed and delivered by Borrower and is the
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium or other similar laws of
general application and equitable principles relating to or affecting creditors’
rights.

7. Updated Perfection Certificate. Borrower has delivered an updated Perfection
Certificate in connection with this Amendment (the “Updated Perfection
Certificate”) dated as of December 18, 2014, which Updated Perfection
Certificate shall supersede in all respects that certain Perfection Certificate
dated as of December 20, 2012. Borrower agrees that all references in the Loan
Agreement to “Perfection Certificate” shall hereinafter be deemed to be a
reference to the Updated Perfection Certificate.

8. Integration. This Amendment and the Loan Documents represent the entire
agreement about this subject matter and supersede prior negotiations or
agreements. All prior agreements, understandings, representations, warranties,
and negotiations between the parties about the subject matter of this Amendment
and the Loan Documents merge into this Amendment and the Loan Documents.

9. Counterparts. This Amendment may be executed in any number of counterparts
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.

10. Effectiveness. This Amendment shall be (i) conditioned upon receipt of each
of the closing deliverables set forth on the Document Agenda attached as
Schedule 2 hereto, and (ii) deemed effective upon (a) the due execution and
delivery to Agent of (a) this Amendment by each party hereto, and (b) Borrower’s
payment of Lenders’ Expenses (collectively, the “Condition to Effectiveness”).

[Signature page follows.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first written above.

 

BORROWER: TETRAPHASE PHARMACEUTICALS, INC. By:

/s/ David Lubner

Name:

David Lubner, CFO

AGENT AND LENDERS: SILICON VALLEY BANK, as Agent and a Lender By:

/s/ Kate Walsh

Name:    

Kate Walsh

Title:

Vice President

OXFORD FINANCE LLC, as a Lender By:

/s/ Mark Davis

Name:

Mark Davis

Title:

Vice President – Finance, Secretary & Treasurer

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Schedule 1

EXHIBIT C -COMPLIANCE CERTIFICATE

 

TO: Silicon Valley Bank, as Agent FROM: TETRAPHASE PHARMACEUTICALS, INC.

The undersigned authorized officer of TETRAPHASE PHARMACEUTICALS, INC.
(“Borrower”) hereby certifies in such capacity that in accordance with the terms
and conditions of the Loan and Security Agreement among Borrower, Agent, and the
Lenders (the “Agreement”),

(i) Borrower is in complete compliance for the period ending
                     with all required covenants except as noted below;

(ii) There are no Events of Default, except as noted below;

(iii) Except as noted below, all representations and warranties of Borrower
stated in the Loan Documents are true and correct in all material respects on
this date except as noted below; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects
as of such date.

(iv) Borrower, and each of its Subsidiaries, has timely filed all required tax
returns and reports, and Borrower has timely paid all foreign, federal, state,
and local taxes, assessments, deposits and contributions owed by Borrower except
as otherwise permitted pursuant to the terms of Section 5.8 of the Agreement;

(v) No Liens have been levied or claims made against Borrower or any of its
Subsidiaries relating to unpaid employee payroll or benefits of which Borrower
has not previously provided written notification to Agent

Attached are the required documents, if any, supporting our certification(s).
The Officer on behalf of Borrower further certifies that the attached financial
statements are prepared in accordance with Generally Accepted Accounting
Principles (GAAP) and are consistently applied from one period to the next
except as explained in an accompanying letter or footnotes and except, in the
case of unaudited financial statements, for the absence of footnotes and subject
to year-end audit adjustments as to the interim financial statements.
Capitalized terms used but not otherwise defined herein shall have the meanings
given them in the Agreement.

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Please indicate compliance status since the last Compliance Certificate by
circling Yes, No, or N/A under “Complies” column.

 

   

Reporting Covenant

  

Requirement

       

Complies

1)   Financial statements    Quarterly within 45 days       Yes    No    N/A 2)
  Annual (CPA Audited) statements    Within 150 days after Fiscal Year End   
Yes    No    N/A 3)   Annual Financial Projections/Budget (prepared on a monthly
basis)    Annually (w/n 45 days of FYE). and when revised       Yes    No    N/A
4)   8-K, 10-K and 10-Q Filings    If applicable       Yes    No    N/A 5)  
Intellectual Property    Material Changes to composition of IP       Yes    No
   N/A 6)   Intellectual Property    New Registrations       Yes    No    N/A 7)
  Total amount of Borrower’s cash and cash equivalents at the last day of the
measurement period       $                      8)      Month    QTD    YTD   
   9)         $                        Deposit and Securities Accounts   
(Please list all accounts; attach separate sheet if additional space needed)

 

   

Bank

  

Account Number

  

New Account?

  

Acct Control
Agmt in place?

1)         Yes    No    Yes    No   Silicon Valley Bank                2)     
   Yes    No    Yes    No   Silicon Valley Bank                3)         Yes   
No    Yes    No   Silicon Valley Bank                5)         Yes    No    Yes
   No 6)         Yes    No    Yes    No    

Minimum Cash and Cash Equivalents

at SVB

  

Requirement

  

Actual

  

Compliance

       Minimum Cash and Cash Equivalents at SVB    Not less than 105% of the
outstanding Obligations    $            Yes    No       

Other Matters

                           Have there been any changes in Key Person since the
last Compliance Certificate?    Yes    No      Have there been any
transfers/sales/disposals/retirement of Collateral or IP prohibited by the
Agreement?    Yes    No      Have there been any new or pending claims or causes
of action against Borrower that involve more than $250,000?    Yes    No   

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Exceptions Please explain any exceptions with respect to the certification
above: (If no exceptions exist, state “No exceptions.” Attach separate sheet if
additional space needed.)

 

    

    

    

 

 

LENDERS USE ONLY TETRAPHASE PHARMACEUTICALS, INC. DATE By:

 

Received by:

 

Verified by:

 

Name:

 

Title:

    

Date:

    

Date:

 

Compliance Status Yes No

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Schedule 2

 

 

SILICON VALLEY BANK

OXFORD FINANCE LLC

TERM LOAN FACILITY

WITH

TETRAPHASE PHARMACEUTICALS, INC.

DECEMBER 2014

 

 

 

                

Responsible
Party1

I.  

AUTHORITY DOCUMENTS

      

1.

  Certificate of Incorporation, as amended    BC    

2.

  By-Laws, as amended    BC    

3.

  Certificate of Good Standing (Long Form) – Delaware    BC    

4.

 

Certificates of Foreign Qualification

 

(a) Massachusetts

 

(b) California

   BC    

5.

  Secretary’s Corporate Borrowing Certificate (attaching Board Consent)    AC  
 

6.

  Shareholder Consent, as necessary (please provide drafts for R&B’s review
prior to execution)    BC II.   LOAN DOCUMENTS       

7.

  Consent and Third Amendment to Loan and Security Agreement    AC    

8.

  UCC Termination Statement – TetraPhase Securities Corporation    AC

 

1  AC = Agent’s Counsel - Riemer & Braunstein LLP

  BC = Borrower’s Counsel – Wilmer, Cutler, Pickering Hale & Dorr LLP

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Responsible
Party1

    9.   Stock Pledge Agreement    AC     10.   Updated Perfection Certificate
(to be completed by Borrower and delivered to Lenders prior to closing)    AC/BC
    11.   Landlord’s Consents, as necessary (pending review of Updated
Perfection Certificate)    AC     12.   Bailee’s Waivers, as necessary (pending
review of Updated Perfection Certificate)    AC     13.   Deposit/Securities
Account Control Agreements, as necessary    On File with Lenders     14.  
Post-Closing Letter    AC

III.

  MISCELLANEOUS       

15.

  UCC and other Lien Searches for each Borrower    On File with Lenders    

16.

  Intellectual Property Search Results    On File with Lenders    

17.

  Stock Certificates and Stock Powers - Tetraphase Pharmaceuticals (Bermuda)
Ltd.    BC    

18.

  Stock Certificates and Stock Powers - Tetraphase Pharma Securities, Inc.   
Post-Closing within 10
days    

19.

  Evidence of Insurance (On Acord 28 Form, and Acord 25S Form), together with
Endorsements    On File with Lenders    

20.

  Payment of Fees – Lenders’ Fees    Borrower