(b) any amount owed to the Company or any of its affiliates in connection with a Change of Control transaction with Astellas or any of its affiliates. As further consideration for the rights granted to Astellas under the Option Agreement, the Company and Astellas also entered into the Securities Purchase Agreement (as defined below).
The foregoing description of the Option Agreement does not purport to be complete and is qualified in its entirety by reference to such agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
Securities Purchase Agreement
On October 21, 2022, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with Astellas, pursuant to which the Company agreed to issue and sell to Astellas in a private placement (the “Private Placement”) an aggregate of 7,266,342 shares (the “Shares”) of common stock, par value $0.00001 per share (the “Common Stock”), of the Company, for aggregate gross proceeds of approximately $30.0 million. The Securities Purchase Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties and termination provisions.
The Private Placement closed on October 24, 2022 (the “Closing Date”). The Company expects the net proceeds from the Private Placement to be used to fund the ongoing clinical, regulatory and manufacturing development of TSHA-102 and TSHA-120, pre-commercialization activities for TSHA-120 and for working capital and other general corporate purposes.
The shares of Common Stock issued by the Company pursuant to the Securities Purchase Agreement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent effective registration or an applicable exemption from registration requirements. The Company is relying on the private placement exemption from registration provided by Section 4(a)(2) of the Securities Act and by Rule 506 of Regulation D, promulgated thereunder and on similar exemptions under applicable state laws.
Pursuant to the Securities Purchase Agreement, in connection with the Private Placement, Astellas has the right to designate one individual to attend all meetings of the board of directors in a non-voting observer capacity.
The foregoing description of the Securities Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to such agreement, a copy of which is filed as Exhibit 10.2 hereto and incorporated by reference herein.
Registration Rights Agreement
Also, on October 21, 2022, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with Astellas, pursuant to which the Company agreed to register the resale of the Shares. Under the Registration Rights Agreement, the Company has agreed to file a registration statement covering the resale of the Shares no later than April 24, 2023 (the “Filing Deadline”). The Company has agreed to use reasonable best efforts to cause such registration statement to become effective as promptly as practicable after the filing thereof but in any event on or prior to the Effectiveness Deadline (as defined in the Registration Rights Agreement), and to keep such registration statement continuously effective until the earlier of (i) the date the Shares covered by such registration statement have been sold or may be resold pursuant to Rule 144 without restriction, or (ii) the date that is three (3) years following the Closing Date. The Company has also agreed, among other things, to pay all reasonable fees and expenses (excluding any underwriters’ discounts and commissions and all fees and expenses of legal counsel, accountants and other advisors for Astellas except as specifically provided in the Registration Rights Agreement) incident to the performance of or compliance with the Registration Rights Agreement by the Company.
In the event the registration statement has not been filed within 180 days following the Closing Date, subject to certain limited exceptions, then the Company has agreed to make pro rata payments to Astellas as liquidated damages in an amount equal to 1.0% of the aggregate amount invested by Astellas per 30-day period or pro rata for any portion thereof for each such 30-day period during which such event continues, subject to certain caps set forth in the Registration Rights Agreement.
The Company has granted Astellas customary indemnification rights in connection with the registration statement. Astellas has also granted the Company customary indemnification rights in connection with the registration statement.