13D Filing: OrbiMed Advisors and Verona Pharma PLC (VRNA)

The foregoing description of the Lock-Up Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Lock-Up Agreement, a copy of which is included in this Statement as Exhibit 2 and incorporated herein by reference.

Registration Rights

In connection with the July Placement, the Issuer entered into a registration rights agreement, dated July 29, 2016 (the “Registration Rights Agreement”), with certain of its existing shareholders, including OPI VI.  Pursuant to the Registration Rights Agreement and subject to the terms and conditions therein, the parties agreed that:

Demand Registration Rights

At any time after the Commencement Date (as defined below), the holders of at least a majority of the registrable securities have the right to demand that the Issuer effect an underwritten public offering of the registrable securities pursuant to an effective registration statement under the Securities Act.  These registration rights are subject to specified conditions and limitations including the right of the underwriters, if any, to limit the number of shares included in any such registration under specified circumstances.  Upon such a request, the Issuer is required to use commercially reasonable efforts to cause such registration statement to become effective.

Shelf Registration Rights

The Registration Rights Agreement further provides that at any time beginning not later than the later of (i) 180 days following the date of the commencement of the IPO or (ii) five business days after the expiration of the IPO Lock-Up Period, which shall not be later than 235 days after the commencement of the IPO (the “Commencement Date”), the Issuer is required to file a shelf registration covering the resale of all of the registrable securities under the Registration Rights Agreement pursuant to Rule 415 under the Securities Act (or any successor or similar rule), to use commercially reasonable efforts to have the registration statement declared effective as promptly as practicable and to maintain an effective shelf registration until all of the registrable securities pursuant to the Registration Rights Agreement have been sold under such shelf registration or cease to be registrable securities.

Expenses of Registration

Subject to limited exceptions, the Issuer will pay all registration expenses of the holders of the shares registered under the Registration Rights Agreement.

Indemnification

The Registration Rights Agreement contains customary cross-indemnification provisions, pursuant to which the Issuer is obligated to indemnify the selling stockholders in the event of material misstatements or omissions in the registration statement attributable to the Issuer, and the selling stockholders are obligated to indemnify the Issuer for material misstatements or omissions attributable to them.

Termination of Registration Rights

OPI VI’s rights under the Registration Rights Agreement generally will terminate upon the earlier of: (i) the date five years following the closing of the IPO; and (ii) the date on which there are registrable securities remaining pursuant to the Registration Rights Agreement.