Document:

Exhibit
4.1

 

COMMON STOCK PURCHASE AGREEMENT

 

THIS COMMON STOCK PURCHASE AGREEMENT (this “Agreement”) is dated as of November 23, 2010,
by and among Anacor Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and each purchaser identified on
the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

RECITALS

 

A.                                    The Company and
each Purchaser is executing and delivering this Agreement in reliance upon the
exemption from securities registration afforded by Section 4(2) of the
Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D (“Regulation D”)
as promulgated by the United States Securities and Exchange Commission (the “Commission”)
under the Securities Act.

 

B.                                    Each Purchaser,
severally and not jointly, wishes to purchase, and the Company wishes to sell,
upon the terms and conditions stated in this Agreement, that aggregate number
of shares of the common stock (the “Common
Stock”) of the Company set forth next of such Purchaser’s name
on Annex A hereto (which aggregate amount for all Purchasers together
shall be 2,000,000 shares of Common Stock and shall be collectively referred to
herein as the “Shares”).

 

C.                                    Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement, substantially in the
form attached hereto as Exhibit A
(the “Registration Rights Agreement”),
pursuant to which, among other things, the Company will agree to provide
certain registration rights with respect to the Shares under the Securities Act
and the rules and regulations promulgated thereunder and applicable state
securities laws.

 

NOW, THEREFORE, in consideration  of
the mutual covenants contained in this Agreement, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and the Purchasers hereby agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

1.1                               Definitions. In addition
to the terms defined elsewhere in this Agreement, for all purposes of this
Agreement, the following terms shall have the meanings indicated in this
Section 1.1:

 

“Agreement” shall
have the meaning ascribed to such term in the Preamble.

 

“Closing” means
the closing of the purchase by the Purchasers listed on Annex A  hereto and sale by the Company of the Shares to such
Purchasers pursuant to this Agreement on the Closing Date as provided in
Section 2 hereof, which shall be contingent on and concurrent with 

 

 

the
closing of the sale and issuance of shares of Common Stock by the Company
pursuant to the Underwriting Agreement.

 

“Closing
Date” shall be the Closing Date as described in the
Underwriting Agreement.

 

“Common Stock” has
the meaning set forth in the Recitals, and also includes any securities into
which the Common Stock may hereafter be reclassified or changed.

 

“Company Counsel”
means Cooley LLP.

 

“Company Deliverables”
has the meaning set forth in Section 2.2(a).

 

“Company’s Knowledge”
means the actual knowledge of the executive officers (as defined in Rule 405
under the Securities Act) of the Company, after due inquiry.

 

“IPO” means the proposed underwritten
initial public offering of shares of the Company’s Common Stock pursuant to the
Registration Statement.

 

“Lien” means any
lien, charge, claim, encumbrance, security interest, right of first refusal,
preemptive right or other restrictions of any kind.

 

“Material Adverse Effect”
means a material adverse effect on (a) the results of operations, assets,
liabilities, business, or financial condition of the Company, taken as a whole,
or (b) the ability of the Company to perform its obligations under the
Transaction Documents, except that any of the following, either alone or in
combination, shall not be deemed a Material Adverse Effect:   (i) effects caused by changes or
circumstances affecting general market conditions in the U.S. economy or which
are generally applicable to the industry in which the Company operates, or (ii) effects
caused by any event, occurrence or condition resulting from or relating to the
taking of any action in accordance with this Agreement.

 

“Material Contract”
means any contract of the Company that has been filed or was required to have
been filed as an exhibit to the Registration Statement pursuant to
Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.

 

“Person” means an
individual, corporation, partnership, limited liability company, trust,
business trust, association, joint stock company, joint venture, sole
proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.

 

“Purchase Price”
means the per share initial public offering price in the IPO (prior to any
underwriting discounts and commissions).

 

“Purchaser Deliverables”
has the meaning set forth in Section 2.2(b).

 

“Registration Rights Agreement”
has the meaning set forth in the Recitals.

 

“Registration Statement”
means the registration statement on Form S-1 (File No. 333-169322),
including a prospectus filed pursuant to Rule 424 under the Securities Act and
any free 

 

 

writing
prospectuses, relating to the underwritten public offering of shares of the
Company’s Common Stock.

 

“Securities Act”
means the Securities Act of 1933, as amended.

 

“Subscription Amount”
means with respect to each Purchaser, the aggregate amount to be paid for the
Shares purchased hereunder as indicated opposite such Purchaser’s name on Annex
A to this Agreement under the heading “Subscription Amount”.

 

“Transaction Documents”
means this Agreement, the schedules and exhibits attached hereto, the
Registration Rights Agreement and any other documents or agreements executed in
connection with the transactions contemplated hereunder.

 

“Underwriting Agreement” means that
certain Underwriting Agreement dated November 23, 2010 by and among the
Company and Citigroup Global Markets Inc. and Deutsche Bank Securities Inc., as
representatives of the several underwriters listed therein (together, the “Underwriters”), relating to the
Registration Statement.

 

ARTICLE 2

 

PURCHASE AND SALE

 

2.1                               Closing.

 

(a)                          Amount.  Subject to the terms and conditions set forth
in this Agreement, at the Closing, the Company shall issue and sell to each
Purchaser listed on Annex A hereto, and each Purchaser listed on Annex A hereto
shall, severally and not jointly, purchase from the Company, such number of
shares of Common Stock equal to the quotient resulting from dividing
(i) the Subscription Amount for such Purchaser by (ii) the Purchase
Price.

 

(b)                          Closing. The Closing
of the purchase and sale of the Shares shall be contingent on and shall take
place concurrently with the closing of the IPO at the offices of Company
Counsel, 3175 Hanover Street, Palo Alto, California on the Closing Date or at
such other locations or remotely by facsimile transmission or other electronic
means as the parties may mutually agree.

 

(c)                          Form of
Payment.  On the Closing Date, each
Purchaser listed on Annex A hereto shall wire its Subscription Amount, in
United States dollars and in immediately available funds, in the amount set
forth as the “Subscription Amount” indicated opposite such Purchaser’s name on
Annex A hereto by wire transfer to the Company’s account, as set forth in
instructions previously provided to the Purchasers.

 

2.2                               Closing
Deliveries.

 

(a)                          On or prior to
the Closing with respect to the Purchasers listed on Annex A hereto the Company
shall issue, deliver or cause to be delivered to each such Purchaser the
following (the “Company
Deliverables”):

 

 

(i)                                    this Agreement,
duly executed by the Company;

 

(ii)                                the Shares
registered in the name of such Purchaser;

 

(iii)                            the
Registration Rights Agreement, duly executed by the Company; and

 

(iv)                               a customary
legal opinion from Company Counsel, reasonably acceptable to the Purchasers.

 

(b)                          On or prior to
the Closing with respect to the Purchasers listed on Annex A hereto, each such
Purchaser shall deliver or cause to be delivered to the Company the following
(the “Purchaser Deliverables”):

 

(i)                                    this Agreement,
duly executed by such Purchaser;

 

(ii)                                its Subscription
Amount, in United States dollars and in immediately available funds, in the
amount set forth as the “Subscription Amount” indicated below such Purchaser’s
name on the applicable signature page hereto by wire transfer to the Company’s
account as previously provided to the Purchasers; and

 

(iii)                            the
Registration Rights Agreement, duly executed by such Purchaser.

 

ARTICLE 3

 

REPRESENTATIONS AND
WARRANTIES

 

3.1                               Representations
and Warranties of the Company. The Company hereby
represents and warrants as of the date hereof and the Closing Date (except for
the representations and warranties that speak as of a specific date, which
shall be made as of such date), to each of the Purchasers that, except as set
forth in the Schedules delivered herewith or disclosed in the Registration
Statement:

 

(a)                          Organization
and Qualification. The Company is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of
the jurisdiction of its respective incorporation, with the requisite corporate
power and authority to own or lease and use its properties and assets and to
carry on its business as currently conducted. The Company is not in violation
of any of the provisions of its Certificate of Incorporation or Bylaws. The
Company is duly qualified to conduct business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not have a Material Adverse Effect.

 

(b)                          Authorization;
Enforcement; Validity. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions contemplated
by each of the Transaction Documents to which it is a party and otherwise to
carry out its obligations hereunder and thereunder. The execution and delivery
of each of the Transaction Documents to 

 

 

which the Company is a party and the consummation by
it of the transactions contemplated hereby and thereby (including, but not
limited to, the sale and delivery of the Shares) have been duly authorized by
all necessary corporate action on the part of the Company, and no further
corporate action is required by the Company, its Board of Directors or its
stockholders in connection therewith. 
Each of the Transaction Documents to which it is a party has been (or
upon delivery will have been) duly executed by the Company and is, or when
delivered in accordance with the terms hereof, will constitute the legal, valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general
application.  Except as disclosed in the
Registration Statement, there are no stockholder agreements, voting agreements,
or other similar arrangements with respect to the Company’s capital stock to
which the Company is a party or, to the Company’s Knowledge, between or among
any of the Company’s stockholders.

 

(c)                          No
Conflicts.  The
execution, delivery and performance by the Company of the Transaction Documents
to which it is a party and the consummation by the Company of the transactions
contemplated hereby or thereby (including, without limitation, the issuance of
the Shares) do not and will not (i) conflict with or violate any
provisions of the Company’s Certificate of Incorporation or Bylaws or otherwise
result in a violation of the organizational documents of the Company, (ii)
conflict with, or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, result in the creation of any
Lien upon any of the properties or assets of the Company or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any Material Contract, or (iii) result
in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company is subject, or by which any property or asset of the Company is bound
or affected, except in the case of clause (iii) such as would not,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect.

 

(d)                          Issuance
of the Securities. The Shares have been duly authorized and, when
issued and paid for in accordance with the terms of the Transaction Documents,
will be duly and validly issued, fully paid and nonassessable and free and
clear of all Liens, other than restrictions on transfer provided for in the
Transaction Documents or imposed by applicable securities laws, and shall not
be subject to preemptive or similar rights. 
Assuming the accuracy of the representations and warranties of the
Purchasers in this Agreement, the Shares will be issued in compliance with all
applicable federal and state securities laws.

 

(e)                          Registration
Statement. The Registration Statement, as of its filing date
and including each of its subsequent amendments, complies in all material
respects with the requirements of the Securities Act and the rules and
regulations of the Commission promulgated thereunder, and the Registration
Statement and any prospectus contained therein does not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.

 

 

(f)                            Private
Placement. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2 of this Agreement,
no registration under the Securities Act is required for the offer and sale of
the Shares by the Company to the Purchasers under the Transaction Documents.

 

(g)                         Brokers
and Finders.  No Person
will have, as a result of the transactions contemplated by this Agreement, any
valid right, interest or claim against or upon the Company or any Purchaser for
any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding entered into by or on behalf of the Company.

 

3.2                               Representations
and Warranties of the Purchasers. Each Purchaser hereby, for
itself and for no other Purchaser, represents and warrants as of the date
hereof and as of the Closing Date in the case of the Purchasers listed on Annex
A hereto to the Company as follows:

 

(a)                          Organization;
Authority. Such Purchaser is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with the requisite corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the Transaction
Documents to which it is a party and otherwise to carry out its obligations
hereunder and thereunder.  The execution,
delivery and performance by such Purchaser of the transactions contemplated by
this Agreement have been duly authorized by all necessary corporate or, if such
Purchaser is not a corporation, such partnership, limited liability company or
other applicable like action, on the part of such Purchaser.  Each of this Agreement and the Registration
Rights Agreement has been (or upon delivery will have been) duly executed by
such Purchaser, and when delivered by such Purchaser in accordance with the
terms hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

 

(b)                          No
Conflicts. The execution, delivery and performance by such
Purchaser of this Agreement and the Registration Rights Agreement and the consummation
by such Purchaser of the transactions contemplated hereby and thereby will not
(i) result in a violation of the organizational documents of such
Purchaser, (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which such Purchaser is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment
or decree (including federal and state securities laws) applicable to such
Purchaser, except in the case of clauses (ii) and (iii) above, for
such conflicts, defaults, rights or violations which would not, individually or
in the aggregate, reasonably be expected to have a material adverse effect on
the ability of such Purchaser to perform its obligations hereunder.

 

(c)                          Restricted
Securities. Such Purchaser understands that the Shares are
being issued in a transaction that was not, and will not be, registered under
the Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of the Purchaser’s
representations as expressed herein. Such Purchaser understands that the Shares

 

 

are “restricted securities” under applicable U.S.
federal and state securities laws and that, pursuant to these laws, such
Purchaser must hold the Shares indefinitely unless they are registered with the
Commission and qualified by state authorities, or an exemption from such
registration and qualification requirements is available. Subject to the
Registration Rights Agreement, such Purchaser acknowledges that the Company has
no obligation to register or qualify the Shares for resale. Such Purchaser
further acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares, and
on requirements relating to the Company which are outside of the Purchaser’s
control, and which the Company is under no obligation and may not be able to
satisfy.

 

(d)                          Accredited
Investor.  Such
Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act. Such Purchaser’s principal executive
offices are in the jurisdiction set forth immediately below such Purchaser’s
name on the applicable signature page attached hereto.

 

(e)                          Experience
of Such Purchaser. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Shares, and has so evaluated the merits and
risks of such investment. Such Purchaser is able to bear the economic risk of
an investment in the Shares and is able to afford a complete loss of such investment.

 

(f)                            Access
to Information.  Such
Purchaser acknowledges that it has received all the information it considers
necessary or appropriate for deciding whether to purchase the Shares and has
been afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the Shares and the
merits and risks of investing in the Shares; (ii) access to information
about the Company and its respective financial condition, results of
operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment. Neither such inquiries nor any other
investigation conducted by or on behalf of such Purchaser or its
representatives or counsel shall modify, amend or affect such Purchaser’s right
to rely on the truth, accuracy and completeness of the Registration Statement
and the Company’s representations and warranties contained in the Transaction
Documents.

 

(g)                         Brokers
and Finders. No Person will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company or any Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Purchaser.

 

(h)                         Reliance
on Exemptions. Such Purchaser understands that the Shares being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and such Purchaser’s
compliance with, the representations, warranties, 

 

 

agreements, acknowledgements and understandings of
such Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of such Purchaser to acquire the Shares.

 

(i)                            Legends. Such Purchaser
understands that the Shares may bear one or all of the following legends:

 

(i)                                    “THE SHARES
REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION THAT WAS NOT
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
FORM REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933.”

 

(ii)                                Any legend
required by the Blue Sky laws of any state to the extent such laws are
applicable to the Shares represented by the certificate so legended.

 

After
a registration statement on Form S-3 filed pursuant to the Registration Rights
Agreement has been declared effective by the Commission, the legends set forth
in this Section 3.2(i) shall be removed and the Company shall issue a
certificate without such legend to the holder of the Shares upon which it is
stamped or issue the Shares without such a legend to such holder by electronic
delivery at the applicable balance account at DTC.  Any fees (with respect to the transfer agent,
Company Counsel or otherwise) associated with the removal of such legend shall
be borne by the Company.

 

ARTICLE 4

 

CONDITIONS PRECEDENT TO
CLOSING

 

4.1                               Conditions
Precedent to the Obligations of the Purchasers to Purchase Shares at the
Closing. The obligation of each Purchaser listed on Annex A hereto to acquire
Shares at the Closing is subject to the fulfillment to such Purchaser’s
satisfaction, on or prior to the Closing Date, of each of the following
conditions, any of which may be waived by such Purchaser (as to itself only):

 

(a)                          Representations
and Warranties. The representations and warranties of the Company
contained herein shall be true and correct in all material respects (except for
those representations and warranties which are qualified as to materiality, in
which case such representations and warranties shall be true and correct in all
respects) as of the date of this Agreement and as of the Closing Date, as
though made on and as of the Closing Date, except for such representations and
warranties that speak as of a specific date.

 

(b)                          IPO
Shares. The Underwriters shall have purchased, concurrent with the purchase of
the Shares by the Purchasers hereunder, the Underwritten Shares (as defined in
the Underwriting Agreement) at the same purchase price (less any underwriting
discounts or commissions) per share payable by the Purchasers hereunder.

 

 

(c)                          No
Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents.

 

(d)                          Company
Deliverables. The Company shall have delivered the Company
Deliverables in accordance with Section 2.2(a).

 

4.2                               Conditions
Precedent to the Obligations of the Company to sell Shares at the Closing. The Company’s
obligation to sell and issue the Shares to each Purchaser listed on Annex A
hereto at the Closing is subject to the fulfillment to the satisfaction of the
Company on or prior to the Closing Date of the following conditions, any of
which may be waived by the Company:

 

(a)                          Representations
and Warranties. The representations and warranties made by such
Purchaser in Section 3.2 hereof shall be true and correct in all material
respects as of the date of this Agreement, and as of the Closing Date as though
made on and as of the Closing Date, except for representations and warranties
that speak as of a specific date.

 

(b)                          IPO
Shares. The Underwriters shall have purchased, concurrent with the purchase of
the Shares by the Purchasers hereunder, the Underwritten Shares (as defined in
the Underwriting Agreement) at the same purchase price (less any underwriting
discounts or commissions) per share payable by the Purchasers hereunder.

 

(c)                          No
Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents.

 

(d)                          Purchasers
Deliverables. Such Purchaser shall have delivered its Purchaser
Deliverables in accordance with Section 2.2(b).

 

(e)                          Lock-Up
Agreement. Such Purchaser shall have executed and delivered to
the Underwriters a lock-up agreement in substantially the form delivered to the
Underwriters pursuant to the Underwriting Agreement, and such Lock-Up Agreement
shall be in full force and effect.

 

ARTICLE 5

 

MISCELLANEOUS

 

5.1                               Termination. This
Agreement shall automatically terminate upon the earliest to occur of
(i) the written consent of each of the Company and the Purchaser,
(ii) the withdrawal by the Company of the Registration Statement, or
(iii) following the execution of the Underwriting Agreement, the
termination of such Underwriting Agreement in accordance with its terms.

 

5.2                               Fees
and Expenses.  The Company
shall pay the reasonable fees and expenses incurred by the Purchasers,
including reasonable fees and expenses of experts, consultants, 

 

 

counsel and the like, and other fees and expenses
incurred in connection with the negotiation, preparation, execution, delivery
and performance of this Agreement, in an amount not to exceed an aggregate of
$10,000.

 

5.3                               Entire
Agreement. The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements,
understandings, discussions and representations, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules. At or after the Closing, and without further
consideration, the Company and the Purchasers will execute and deliver to the
other such further documents as may be reasonably requested in order to give
practical effect to the intention of the parties under the Transaction
Documents.

 

5.4                               Notices. All notices
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if mailed or transmitted and confirmed by any standard
form of telecommunication. The address for such notices and communications
shall be as follows:

 

	
  If to the Company:

  	
  Anacor
  Pharmaceuticals, Inc.

  
	
   

  	
  1020 East Meadow Circle

  
	
   

  	
  Palo Alto, CA 94303

  
	
   

  	
  Telephone No.: 
  (650) 543-7500

  
	
   

  	
  Attention: 
  Chief Financial Officer

  
	
   

  	
   

  
	
  With a copy to:

  	
  Cooley
  LLP

  
	
   

  	
  3175 Hanover Street

  
	
   

  	
  Palo Alto, California
  94304

  
	
   

  	
  Telephone No.:   (650) 843-5180

  
	
   

  	
  Facsimile No.:   (650) 849-7400

  
	
   

  	
  Attention:   Mark B. Weeks

  
	
   

  	
   

  
	
  If to a Purchaser:

  	
  To
  the address set forth under such Purchaser’s name on the signature page
  hereof;

  
	
   

  	
   

  
	
   

  	
  or
  such other address as may be designated in writing hereafter, in the same
  manner, by such Person.

  

 

5.5                               Amendments;
Waivers; No Additional Consideration. No amendment or waiver of
any provision of this Agreement, nor any consent or approval to any departure
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the parties hereto.

 

5.6                               Construction. The headings
herein are included for convenience of reference only and are not intended to
be part of, or to affect the meaning or interpretation of, this Agreement.

 

 

5.7                               Successors
and Assigns. The provisions of this Agreement shall inure to
the benefit of and be binding upon the parties and their successors and
permitted assigns. This Agreement is intended for the benefit of the parties
hereto and their respective successors and permitted assigns and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.

 

5.8                               Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of California, without regard to the principles of
conflicts of law thereof.

 

5.9                               Survival. The
representations and warranties contained herein shall survive the Closing and
the delivery of the Shares for a period of one (1) year from the Closing
Date. The agreements and covenants contained herein shall survive for the
applicable statute of limitations.

 

5.10                        Execution. This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.

 

5.11                        Severability. If any
provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

 

5.12                        Remedies. In addition
to being entitled to exercise all rights provided herein or granted by law,
including recovery of damages, each of the Purchasers and the Company will be
entitled to specific performance under the Transaction Documents. The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agree to waive in any action for specific performance of
any such obligation (other than in connection with any action for a temporary
restraining order) the defense that a remedy at law would be adequate.

 

 

IN WITNESS WHEREOF, the parties hereto have
caused this Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated above.

 

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  ANACOR
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James R. Marconi

  
	
   

  	
  Name:

  	
  James
  R. Marconi

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

 

IN WITNESS WHEREOF, the parties hereto have
caused this Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated above.

 

	
  PURCHASERS:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  VENROCK HEALTHCARE CAPITAL
  PARTNERS, L.P.

  	
   

  
	
  By:

  	
  VHCP
  Management, LLC

  	
   

  
	
  Its:

  	
  General
  Partner

  	
   

  
	
   

  	
   

  	
   

  
	
  VHCP CO-INVESTMENT HOLDINGS,
  LLC

  	
   

  
	
  By:

  	
  VHCP
  Management, LLC

  	
   

  
	
  Its:

  	
  Manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Anders Hove

  	
   

  
	
  Anders Hove

  	
   

  
	
  Member

  	
   

  

 

 

EXHIBIT A

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

1

 

ANNEX A

 

SCHEDULE OF PURCHASERS

 

	
  Purchaser

  	
   

  	
  Number of Shares

  	
   

  	
  Subscription Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Venrock Healthcare Capital Partners, L.P.

  	
   

  	
  1,690,722

  	
   

  	
  $

  	
  8,453,610.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VHCP Co-Investment Holdings, LLC

  	
   

  	
  309,278

  	
   

  	
  $

  	
  1,546,390.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  2,000,000

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  

 

2Exhibit
4.2

 

ANACOR PHARMACEUTICALS, INC.

A DELAWARE CORPORATION

 

 

REGISTRATION RIGHTS AGREEMENT

 

 

November 23, 2010

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions; Registration Rights

  	
  1

  
	
   

  	
  1.1

  	
  Definitions

  	
  1

  
	
   

  	
  1.2

  	
  Form S-3 Registration

  	
  2

  
	
   

  	
  1.3

  	
  Obligations of the Company

  	
  3

  
	
   

  	
  1.4

  	
  Furnish Information

  	
  4

  
	
   

  	
  1.5

  	
  Expenses of Registration

  	
  4

  
	
   

  	
  1.6

  	
  Delay of Registration

  	
  5

  
	
   

  	
  1.7

  	
  Indemnification

  	
  5

  
	
   

  	
  1.8

  	
  Reports Under Securities Exchange Act of 1934

  	
  7

  
	
   

  	
  1.9

  	
  Termination of Registration Rights

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Miscellaneous

  	
  8

  
	
   

  	
  2.1

  	
  Entire Agreement

  	
  8

  
	
   

  	
  2.2

  	
  Successors and Assigns

  	
  8

  
	
   

  	
  2.3

  	
  Amendments and Waivers

  	
  8

  
	
   

  	
  2.4

  	
  Notices

  	
  8

  
	
   

  	
  2.5

  	
  Severability

  	
  8

  
	
   

  	
  2.6

  	
  Delays or Omissions; Remedies Cumulative

  	
  9

  
	
   

  	
  2.7

  	
  Attorneys’ Fees

  	
  9

  
	
   

  	
  2.8

  	
  Governing Law

  	
  9

  
	
   

  	
  2.9

  	
  Counterparts

  	
  9

  
	
   

  	
  2.10

  	
  Titles and Subtitles

  	
  9

  
	
   

  	
  2.11

  	
  Aggregation of Stock

  	
  9

  

 

i

 

ANACOR PHARMACEUTICALS, INC.

A DELAWARE CORPORATION

 

REGISTRATION RIGHTS AGREEMENT

 

This
Registration Rights Agreement (this “Agreement”) is made as of November
23, 2010, by and among Anacor Pharmaceuticals, Inc., a Delaware corporation
(the “Company”) and the investors listed on Exhibit A hereto
(each, an “Investor”).

 

R E C I T A L S

 

The
Company and certain of the Investors have entered into a Common Stock Purchase
Agreement (the “Purchase Agreement”) of even date herewith pursuant to
which the Company is selling to certain of the Investors and such Investors are
purchasing from the Company shares of the Company’s Common Stock.  A condition to the parties’ obligations under
the Purchase Agreement is that the Company and the Investors enter into this
Agreement in order to provide the Investors with certain rights to register
shares of the Company’s Common Stock. 
The Company desires  to induce the
Investors to purchase shares of Common Stock pursuant to the Purchase Agreement
by agreeing to the terms and conditions set forth herein.

 

A G R E E M E N T

 

The
parties hereto agree as follows:

 

1.               Definitions;
Registration Rights.

 

1.1                                 Definitions.

 

For
purposes of this Agreement:

 

(a)                                  “Board”
means the Board of Directors of the Company, as the same shall be constituted
from time to time.

 

(b)                                 “Common
Stock” means the common stock, par value $0.001 per share, of the Company.

 

(c)                                  “Exempt
Registration” means a registration statement relating to the sale of
securities by the Company pursuant to a stock option, stock purchase or similar
benefit plan or an SEC Rule 145 transaction.

 

(d)                                 “Form S-3”
means such form under the Securities Act as in effect on the date hereof or any
successor form under the Securities Act that is intended to be used as a short
form for the registration of distribution of secondary shares.

 

(e)                                  “Person”
means any individual, corporation, partnership, limited liability company,
trust, business, association or government or political subdivision thereof,
governmental agency or other entity.

 

 

(f)                                    “Preferred
Stock” means the Series C Preferred Stock, the Series D Preferred Stock and
the Series E Preferred Stock of the Company.

 

(g)                                 The terms “register,”
“registered,” and “registration” refer to a registration effected
by preparing and filing a registration statement or similar document in
compliance with the Securities Act and the declaration or ordering of
effectiveness of such registration statement or document.

 

(h)                                 The term “Registrable
Securities” means (i) the shares of Common Stock issuable or issued
upon conversion of the Preferred Stock, (ii) the shares of Common Stock of
the Company issued pursuant to the Purchase Agreement, and (iii) the shares of
Common Stock issued pursuant to an Underwriting Agreement to be entered into by
and among the Company, Citigroup Global Markets Inc. and Deutsche Bank
Securities Inc., as representatives of the several Underwriters (the “Underwriters”)
named therein, in connection with the Company’s initial public offering
pursuant to the Registration Statement on Form S-1 (File
No. 333-169322).  Subject to the
foregoing, securities shall only be treated as Registrable Securities if and so
long as they have not been (A) sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction, or
(B) sold in a transaction exempt from the registration and prospectus
delivery requirements of the Securities Act under Section 4(1) thereof so
that all transfer restrictions, and restrictive legends with respect thereto,
if any, are removed upon the consummation of such sale.

 

(i)                                     The number of
shares of “Registrable Securities then outstanding” shall equal the
number of shares of Common Stock outstanding which are, and the number of
shares of Common Stock issuable pursuant to then exercisable or convertible
securities which are, Registrable Securities.

 

(j)                                     “SEC”
means the Securities and Exchange Commission or any other federal agency at the
time administering the Securities Act.

 

(k)                                  “Securities
Act” means the Securities Act of 1933, as amended.

 

1.2                                 Form
S-3 Registration.

 

(a)                                  Initiation.  After the Company becomes eligible to use
Form S-3 and within 30 days of receiving a written request from the Investor,
the Company will use its best efforts to effect the registration of such
Investor’s Registrable Securities as are specified in such written request.

 

(b)                                 Limitations.  Notwithstanding Section 1.2(a) above, the
Company shall not be obligated to effect any such registration pursuant to this
Section 1.2 (i) if Form S-3 is not available for such offering
by the Investors; (ii)  if the Company shall furnish to the Investors a
certificate signed by the Chief Executive Officer of the Company stating that
in the good faith judgment of the Board, it would be seriously detrimental to
the Company and its stockholders for such Form S-3 registration to be
effected at such time, in which event the Company shall have the right to defer
the filing of the Form S-3 for a period of not more than 30 days after
receipt of the request of the Investor or Investors under this
Section 1.2; provided, however,
that the Company shall not utilize this right more than once in any 12-month
period; (iii) if the Company 

 

2

 

has, within the 12-month period preceding the date
of such request, already effected two registrations on Form S-3 for the
Investors pursuant to this Section 1.2; or (iv) during the period
ending 120 days after the effective date of a registration statement subject to
Section 1.2 of the Company’s Amended and Restated Investors’ Rights Agreement,
as amended.  Except as otherwise set
forth in this Section 1.2, the Investors shall be entitled to request an
unlimited number of registrations on Form S-3.

 

1.3                                 Obligations
of the Company.  Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:

 

(a)                                  Prepare and
file with the SEC a registration statement with respect to such Registrable
Securities and use its reasonable best efforts to cause such registration
statement to become effective and shall its reasonable best efforts to keep
such registration statement effective for up to two (2) years.

 

(b)                                 Prepare and
file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of the Securities
Act.

 

(c)                                  Furnish to the
Investors such numbers of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as they may reasonably request in order to facilitate the
disposition of such Registrable Securities.

 

(d)                                 Use its
reasonable best efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Investors, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.

 

(e)                                  In the event of
any underwritten public offering, enter into and perform its obligations under
an underwriting agreement with the managing underwriter of such offering in
usual and customary form and consistent with the other provisions of this
Agreement.  Each Investor participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.

 

(f)                                    Notify each Investor who holds Registrable Securities covered by the
registration statement at any time when the Company becomes aware of the
happening of any event as a result of which the registration statement or the
prospectus included in such registration statement or any supplement to the
prospectus (as then in effect) contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein (in
the case of the prospectus, in light of the circumstances under which they were
made) not misleading or, if for any other reason it shall be necessary during
such time period to amend or supplement the registration statement or the
prospectus in order to comply with the Securities Act, whereupon, in either
case, each Investor shall immediately cease to use such registration statement
or prospectus for any purpose and, as
promptly as practicable thereafter, the Company shall promptly prepare and file
with the SEC, and furnish without charge to the appropriate 

 

3

 

Investors a supplement or
amendment to such registration statement or prospectus which will correct such
statement or omission or effect such compliance and such copies thereof as the
Investors may reasonably request.  In any
such event, the number of days for which such registration statement is
required to be effective hereunder shall be extended accordingly.
Notwithstanding the foregoing, in no event shall trading be suspended for more than
twenty (20) consecutive days, and for not more than an aggregate of forty-five
(45) days in any twelve (12) month period.

 

(g)                                 Cause all such
Registrable Securities registered pursuant hereunder to be listed on each
securities exchange or over-the-counter market on which similar securities
issued by the Company are then listed, if applicable.

 

(h)                                 Provide a
transfer agent and registrar for such Registrable Securities and a CUSIP number
for all such Registrable Securities, in each case not later than the effective
date of such registration.

 

(i)                                     Notify each
Investor who holds Registrable Securities covered by the registration statement
of (i) the expected effective date of the registration statement and
(ii) the effectiveness on the actual effective date thereof.

 

1.4                                 Furnish
Information.  It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Section 1 with respect to the Registrable Securities of any selling
Investor that such Investor shall furnish to the Company such information
regarding itself, the Registrable Securities held by it, and the intended
method of disposition of such securities as shall be required to effect the
registration of such Investor’s Registrable Securities.  The Company shall have no obligation with
respect to any registration requested pursuant to Section 1.2 of this
Agreement if, as a result of the application of the preceding sentence, the
number of shares or the anticipated aggregate offering price of the Registrable
Securities to be included in the registration does not equal or exceed the
number of shares or the anticipated aggregate offering price required to
originally trigger the Company’s obligation to initiate such registration as
specified in subsection 1.2(b).

 

1.5                                 Expenses
of Registration.

 

All
expenses other than underwriting discounts and commissions incurred in
connection with registrations initiated pursuant to Section 1.2, including
all registration, filing and qualification fees, printers’ and accounting fees,
fees and disbursements of counsel for the Company, and the reasonable fees and
disbursements  of one counsel for the selling
Investors up to a maximum of $30,000 shall be borne by the Company; provided, however, that
the Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 1.2 if the registration request is
subsequently withdrawn at the request of the Investors; provided,
however, that if at the time of such
withdrawal, the Investors have learned of a material adverse change in the
condition, business, or prospects of the Company from that known to the
Investors at the time of their request and have withdrawn the request with
reasonable promptness following disclosure by the Company of such material
adverse change, then the Investors shall not be required to pay any of such
expenses.

 

4

 

1.6                                 Delay
of Registration.  No Investor shall have any
right to obtain or seek an injunction restraining or otherwise delaying any
such registration as the result of any controversy that might arise with
respect to the interpretation or implementation of this Section 1.

 

1.7                                 Indemnification.  In the event any Registrable
Securities are included in a registration statement under this Section 1:

 

(a)                                  Indemnification
by the Company.  To the
extent permitted by law, the Company will indemnify and hold harmless each
Investor, any or each agent, officer, director, stockholder or partner of each
Investor, any or each grantor or beneficiary of a Investor that is a trust, any
underwriter (as defined in the Securities Act) for such Investor and each
person, if any, who controls such Investor or underwriter within the meaning of
Section 15 of the Securities Act or the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a “Violation”): 
(i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the
statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law; and the Company will pay to each
such Investor, underwriter or controlling person, as incurred, any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however, that
the indemnity agreement contained in this subsection 1.7(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable to any Investor, underwriter or controlling person for any such loss,
claim, damage, liability, or action (1) to the extent that it arises out
of or is based upon a Violation that occurs in reliance upon and in conformity
with written information furnished expressly for use in connection with such registration
by any such Investor, underwriter or controlling person or (2) in the case of a
sale directly by a Investor of Registrable Securities (including a sale of such
Registrable Securities through any underwriter retained by such Investor
engaging in a distribution solely on behalf of such Investor), such Violation
arises out of a material misstatement or omission contained in a preliminary
prospectus and corrected in a final or amended prospectus, and such Investor
failed to deliver a copy of the final or amended prospectus at or prior to the
confirmation of the sale of the Registrable Securities to the person asserting
any such loss, claim, damage or liability in any case in which such delivery is
required by the Securities Act.

 

(b)                                 Indemnification
by the Investors.  To the
extent permitted by law, each Investor joining in registration will indemnify
and hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, any
underwriter and any controlling person of any such underwriter, against any
losses, claims, damages, or 

 

5

 

liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Securities Act, the Exchange
Act or other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
(including, without limitation, written negative responses to inquiries)
furnished by such Investor expressly for use in connection with such
registration; and each such Investor will pay, as incurred, any legal or other
expenses reasonably incurred by any person intended to be indemnified pursuant
to this Section 1.7(b), in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement
contained in this Section 1.7(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such settlement
is effected without the consent of the Investor, which consent shall not be
unreasonably withheld; provided, further, that in no event shall any indemnity under this
Section 1.7(b) exceed the net proceeds from the offering received by such
Investor, except in the case of willful fraud by such Investor; provided, further, that
the indemnity under this Section 1.7(b) shall not be deemed to relieve any
underwriter of any of its due diligence obligations.

 

(c)                                  Procedures.  Promptly after receipt by an indemnified
party under this Section 1.7 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this
Section 1.7, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the reasonable fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by
such counsel in such proceeding.  The
failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action, to the extent prejudicial to its
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 1.7, but the
omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this Section 1.7.  No
indemnifying party, in the defense of any such claim or litigation, shall,
except with the consent of each indemnified party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.  The indemnity agreements
contained in this Section 1.7 shall not apply to amounts paid in settlement of
any loss, claim, damage, liability or action if such settlement is effected
without the consent of the indemnifying party, which consent shall not be
unreasonably withheld.

 

(d)                                 Contribution.  If the indemnification provided for in this
Section 1.7 is held by a court of competent jurisdiction to be unavailable
to an indemnified party with respect to any loss, liability, claim, damage or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or 

 

6

 

payable by such indemnified party as a result of
such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim, damage or
expense as well as any other relevant equitable considerations; provided, that in no event shall any contribution by a
Investor under this Section 1.9(d) exceed the net proceeds from the offering
received by such Investor, except in the case of willful fraud by such Investor.  The relative fault of the indemnifying party
and of the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative
intent, knowledge, access to information, and opportunity to correct or prevent
such statement or omission.

 

(e)                                  Reimbursement.  The contribution required by this
Section 1.7 shall be made by periodic payment during the course of the
investigation or defense, as and when bills are submitted to the indemnifying
party.

 

(f)                                    Survival.  The obligations of the Company and Investors
under this Section 1.7 shall survive the completion of any offering of
Registrable Securities in a registration statement under this Section 1,
and otherwise.  No indemnifying party, in
defense of any such claim or litigation, shall, except with the consent of each
indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.

 

1.8                                 Reports
Under Securities Exchange Act of 1934.  With a view to making available to the
Investors the benefits of Rule 144 promulgated under the Securities Act
and any other rule or regulation of the SEC that may at any time permit a
Investor to sell securities of the Company to the public without registration
or pursuant to a registration on Form S-3, the Company agrees to:

 

(a)                                  make and keep
public information available, as those terms are understood and defined in SEC
Rule 144, at all times after the effective date of the first registration
statement filed by the Company for the offering of its securities to the
general public so long as the Company remains subject to the periodic reporting
requirements under Sections 13 or 15(d) of the Exchange Act;

 

(b)                                 take such
action, including the voluntary registration of its Common Stock under
Section 12 of the Exchange Act, as is necessary to enable the Investors to
use Form S-3 for the sale of their Registrable Securities, such action to
be taken as soon as practicable after the end of the fiscal year in which the
first registration statement filed by the Company for the offering of its
equity securities to the general public is declared effective;

 

(c)                                  file with the
SEC in a timely manner all reports and other documents as may be required of
the Company under the Securities Act and the Exchange Act; and

 

(d)                                 furnish to any
Investor, so long as the Investor owns any Registrable Securities, forthwith
upon request (i) a written statement by the Company that it has complied 

 

7

 

with the reporting requirements of SEC
Rule 144, the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3 (at any
time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed
by the Company, and (iii) such other information as may be reasonably
requested in availing any Investor of any rule or regulation of the SEC which
permits the selling of any such securities without registration or pursuant to
such form.

 

1.9                                 Termination
of Registration Rights.  No Investor shall be entitled to exercise any
registration right provided for in this Section 1 after five years
following the consummation of the initial public offering described in Section
1.1(h) above.

 

2.               Miscellaneous.

 

2.1                                 Entire
Agreement.  This Agreement
constitutes the entire agreement among the parties hereto pertaining to the
subject matter hereof, and any and all other written or oral agreements
relating to the subject matter hereof existing among any of the parties hereto
are expressly canceled.

 

2.2                                 Successors
and Assigns.  Except as
otherwise provided in this Agreement, and subject to the restriction on
transfer set forth in the Purchase Agreement, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties.  Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

 

2.3                                 Amendments
and Waivers.  This Agreement may be amended or waived only
with the written consent of the Company and the Investors who hold at least a
majority of the Registrable Securities then outstanding.  The Investors and their successors and
assigns acknowledge that by operation of this Section 2.3, the Investors who
hold at least a majority of the then outstanding Registrable Securities, when
acting together with the Company, will have the right and power to diminish or
eliminate any rights or increase any or all obligations under this Agreement.

 

2.4                                 Notices.  Unless otherwise provided, any notice
required or permitted by this Agreement shall be in writing and shall be deemed
sufficient upon delivery, when delivered personally or by nationally recognized
overnight courier or sent by electronic mail, or if mailed to a domestic
address, on the third business day after being deposited in the U.S. mail, as
certified or registered mail, return receipt requested, with postage prepaid,
and addressed to the party to be notified at such party’s address or electronic
mail address as set forth below or on Exhibit A hereto or as subsequently
modified by written notice and if to the Company, (a) addressed to Anacor
Pharmaceuticals, Inc., 1020 East Meadow Circle, Palo Alto, CA 94303-4230, Attn:
David Perry, E-mail: dperry@anacor.com, (b) with a copy to Mark B. Weeks,
Cooley LLP, 3175 Hanover Street, Palo Alto, CA 94304, E-mail: mweeks@cooley.com.

 

2.5                                 Severability.  If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. 

 

8

 

In
the event that the parties cannot reach a mutually agreeable and enforceable
replacement for such provision, then (a) such provision shall be excluded
from this Agreement, (b) the balance of the Agreement shall be interpreted
as if such provision were so excluded and (c) the balance of the Agreement
shall be enforceable in accordance with its terms.

 

2.6                                 Delays
or Omissions; Remedies Cumulative. 
No delay or omission to exercise any right, power or remedy accruing to
any party under this Agreement, upon any breach or default of any other party
under this Agreement, shall impair any such right, power or remedy of such
non-breaching or non-defaulting party nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring.  Any
waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in
such writing.  All remedies, either under
this Agreement or by law or otherwise afforded to any party, shall be
cumulative and not alternative.

 

2.7                                 Attorneys’
Fees.  If any action at law or in
equity (including arbitration) is necessary to enforce or interpret the terms
of any this Agreement, the prevailing party shall be entitled to reasonable
attorneys’ fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.

 

2.8                                 Governing
Law.  This Agreement and all acts and transactions
pursuant hereto shall be governed, construed and interpreted in accordance with
the laws of the State of California, without giving effect to principles of
conflicts of laws.

 

2.9                                 Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

2.10                           Titles
and Subtitles.  The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

 

2.11                           Aggregation
of Stock.  All shares of
Company stock held or acquired by affiliated Persons (including former and
current partners, former and current members and former and current
stockholders) shall be aggregated together for the purpose of determining the
availability of any rights under this Agreement.

 

[Signature Pages Follow]

 

9

 

The
parties hereto have executed this Registration Rights Agreement as of the date
first above written.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  ANACOR
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  James R. Marconi

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:
  

  	
  James
  R. Marconi

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:
  

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:
  

  	
  1020
  East Meadow Circle

  
	
   

  	
   

  	
  Palo
  Alto, California  94303

  

 

 

SIGNATURE
PAGE TO THE REGISTRATION RIGHTS AGREEMENT

 

 

INVESTORS:

 

 

	
  VENROCK
  PARTNERS, L.P.

  	
   

  	
  VENROCK
  ASSOCIATES IV, L.P.

  
	
  by
  its General Partner, Venrock

  	
   

  	
  by
  its General Partner, Venrock

  
	
  Partners
  Management, LLC

  	
   

  	
  Management
  IV, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Anders D. Hove

  	
   

  	
  By:

  	
  /s/
  Anders D. Hove

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Anders
  D. Hove

  	
   

  	
  Name:

  	
  Anders
  D. Hove

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Member

  	
   

  	
  Title:

  	
  Member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
  530
  Fifth Avenue, 22nd floor

  	
   

  	
  Address:

  	
  530
  Fifth Avenue, 22nd floor

  
	
   

  	
  New
  York, NY 10036

  	
   

  	
   

  	
  New
  York, NY 10036

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  VENROCK
  ENTREPRENEURS

  	
   

  	
  VENROCK
  HEALTHCARE CAPITAL 

  
	
  FUND
  IV, L.P.

  	
   

  	
  PARTNERS,
  L.P.

  
	
  by
  its General Partner, VEF

  	
   

  	
  By:
  VHCP Management, LLC

  
	
  Management
  IV, LLC

  	
   

  	
  Its:
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VHCP
  CO-INVESTMENT HOLDINGS, 

  
	
  By:
  

  	
  /s/
  Anders D. Hove

  	
   

  	
  LLC

  
	
   

  	
   

  	
   

  	
  By:
  VHCP Management, LLC

  
	
  Name:
  

  	
  Anders
  D. Hove

  	
   

  	
  Its:
  Manager

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:
  

  	
  Member

  	
   

  	
  /s/
  Anders D. Hove

  
	
   

  	
   

  	
   

  	
  Anders
  Hove

  
	
  Address:

  	
  530
  Fifth Avenue, 22nd floor

  	
   

  	
  Member

  
	
   

  	
  New
  York, NY 10036

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  530
  Fifth Avenue, 22nd floor

  
	
   

  	
   

  	
   

  	
  New
  York, NY 10036

  
							

 

 

SIGNATURE
PAGE TO THE REGISTRATION RIGHTS AGREEMENT

 

 

EXHIBIT A

 

Schedule of Investors

 

VENROCK
PARTNERS L.P.

VENROCK
ASSOCIATES IV, L.P.

VENROCK
ENTREPRENEURS’ FUND IV, L.P.

Venrock
Healthcare Capital Partners, L.P.

VHCP
Co-Investment Holdings, LLC

 

530
Fifth Avenue, 22nd floor

New
York, NY 10036

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