Item 1.01 Entry into a Material Definitive Agreement
On April 22, 2020, Tetraphase Pharmaceuticals, Inc. (the Company) entered into a promissory note evidencing an unsecured $2,285,830
loan (the PPP Loan) under the Paycheck Protection Program (the PPP), which was established as part of the Coronavirus Aid, Relief, and Economic Security Act.
The PPP Loan is evidenced by a promissory note, dated as of April 22, 2020 (the Note), between the Company, as borrower, and Silicon
Valley Bank, N.A., as lender (the Lender). The interest rate on the Note is 1.0% per annum, with interest accruing on the unpaid principal balance computed on the basis of the actual number of days elapsed in a year of 360 days.
No payments of principal or interest are due during the six-month period beginning on the date of the Note (the Deferral Period).
Beginning one month following expiration of the Deferral Period, and continuing monthly until 24 months from the date of the Note (the Maturity
Date), the Company is obligated to make monthly payments of principal and interest to the Lender with respect to any unforgiven portion of the Note, in such equal amounts required to fully amortize the principal amount outstanding on the
Note as of the last day of the Deferral Period by the Maturity Date. The Company is permitted to prepay the Note at any time without payment of any premium.
The principal and accrued interest under the Note evidencing the PPP Loan are forgivable after eight weeks as long the Company has used the loan proceeds for
eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the Company terminates employees or reduces salaries during the eight-week period. The Company
will be obligated to repay any portion of the principal amount of the Note that is not forgiven, together with interest accrued and accruing thereon at the rate set forth above, until such unforgiven portion is paid in full.
Upon a default under the Note, including the non-payment of principal or interest, the obligations of the Company
under the Note may be accelerated and the Lender may pursue its rights under the Uniform Commercial Code and any other applicable law or in equity.
The
foregoing description of the Note does not purport to be complete and is qualified in its entirety by reference to the full text of the Note attached to this Current Report on Form 8-K as Exhibit 10.1 and
incorporated herein by reference.