Summary of INTERMUNE INC - Yahoo! Finance

Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligati

Item 1.01 Entry Into a Material Definitive Agreement.

Completion of Concurrent Public Offerings of Common Stock and Convertible Senior Notes

On January 22, 2013, InterMune, Inc. (the "Company") completed its registered underwritten public offering of 15,525,000 shares (the "Shares") of the Company's common stock, par value $0.001 per share ("Common Stock"), pursuant to an underwriting agreement (the "Equity Underwriting Agreement") with Goldman, Sachs & Co. ("Goldman Sachs") and J.P. Morgan Securities LLC ("J.P. Morgan"), as representatives of the several underwriters named therein (the "Common Stock Offering"), and the concurrent registered underwritten public offering of $120.75 million aggregate principal amount of the Company's 2.50% convertible senior notes due 2017 (the "Notes") pursuant to an underwriting agreement (the "Debt Underwriting Agreement" and together with the Equity Underwriting Agreement, the "Underwriting Agreements") with Goldman Sachs and J.P. Morgan as underwriters (the "Convertible Note Offering").

The Shares sold in the Common Stock Offering include 2,025,000 shares of Common Stock sold to the Equity Underwriters (as defined below) pursuant to their 30-day option to purchase additional shares of Common Stock, which was exercised in full on January 16, 2013. The Notes sold in the Convertible Note Offering include $15.75 million aggregate principal amount of the Company's 2.50% convertible senior notes due 2017 sold to the Note Underwriters (as defined below) pursuant to their 30-day option to purchase additional convertible senior notes to cover over-allotments, which was exercised in full on January 16, 2013.

The Shares and the Notes (and the shares of Common Stock issuable upon conversion of the Notes) have been registered pursuant to the Registration Statement on Form S-3 (Registration Statement No. 333-185508) (the "Registration Statement") filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"), including the prospectus supplements filed by the Company with the Commission pursuant to Rule 424(b)(5) under the Act, in each case, dated January 15, 2013 (each, a "Prospectus Supplement" and together, the "Prospectus Supplements") to the prospectus contained in the Registration Statement dated December 28, 2012.

The resulting aggregate net proceeds to the Company from the Common Stock Offering were approximately $145.7 million, after deducting underwriting discounts and estimated expenses. The resulting aggregate net proceeds to the Company from the Convertible Note Offering were approximately $116.7 million, after deducting underwriting discounts and estimated expenses.

The Company intends to use the net proceeds from the Convertible Note Offering and, if necessary, a portion of the net proceeds from the Common Stock Offering to repay at maturity or earlier repurchase up to all of the Company's outstanding 5.00% convertible senior notes due 2015 (the "2015 Notes"). The Company intends to use the net proceeds from the Common Stock Offering and any remaining proceeds from the Convertible Note Offering to fund the commercialization of Esbriet, to fund the Company's ASCEND trial and for general corporate purposes, which may include funding research and development and increasing working capital. The Company may also use net proceeds for capital expenditures or for acquisitions or investments in complementary businesses, products or technologies. Although the Company currently has no material agreements or commitments with respect to acquisitions, the Company evaluates acquisition opportunities and engages in related discussions from time to time.

The 2015 Notes were issued in June 2008, mature on March 1, 2015 and bear interest at 5.00%, which is payable semi-annually. As of December 31, 2012, there were $85.0 million aggregate principal outstanding of the 2015 Notes. On January 22, 2013, the Company repurchased and cancelled from certain holders of the outstanding 2015 Notes approximately $18.8 million of the 2015 Notes. The Company intends to repurchase and cancel an additional approximately $47.8 million aggregate principal amount of the 2015 Notes on January 23, 2013. Accordingly, following the repurchases completed on January 22, 2013 and the expected repurchases on January 23, 2013, approximately $18.4 million of the 2015 Notes will remain outstanding.

Base Indenture and Supplemental Indenture

The Company issued the Notes under an indenture dated as of September 19, 2011 (the "Base Indenture") between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), as supplemented by the second supplemental indenture dated as of January 22, 2013, between the Company and the Trustee (the "Supplemental Indenture" and, together with the Base Indenture, the "Indenture").

The Notes bear interest at a rate of 2.50% per year, payable semi-annually in arrears, on June 15 and December 15 of each year, commencing on June 15, 2013. The Notes are general unsecured senior obligations of the Company and (i) rank equal in right of payment with the Company's other senior unsecured indebtedness, (ii) rank senior in right of payment to any indebtedness that is contractually subordinated to the Notes, (iii) are effectively subordinated to all of the Company's future secured indebtedness to the extent of the value of the collateral securing such indebtedness and (iv) are structurally subordinated in right of payment to the claims of the Company's subsidiaries creditors (including trade creditors).

The Notes will mature on December 15, 2017 (the "Maturity Date"), unless earlier redeemed or repurchased by the Company or converted. Holders may convert their Notes at their option prior to the close of business on the business day immediately preceding September 15, 2017 but only under the following circumstances: (1) during any fiscal quarter commencing after June 30, 2013, if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the applicable conversion price on each applicable trading day; (2) during the five consecutive business day period after any five consecutive trading day period (the "measurement period") in which the trading price (as defined herein) per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Common Stock and the applicable conversion rate on each such trading day; (3) if the Company calls the Notes for redemption, at any time prior to the close of business on the second scheduled . . .

Item 8.01 Other Events.

On January 15, 2013, the Company entered into the Equity Underwriting Agreement with Goldman Sachs and J.P. Morgan as representatives of the several underwriters named therein (collectively, the "Equity Underwriters"). Subject to the terms and conditions of the Equity Underwriting Agreement, the Company agreed to sell to the Equity Underwriters, and the Equity Underwriters agreed to purchase from the Company, an aggregate of 15,525,000 shares of Common Stock, at a public offering price of $9.90 per share. The Company also granted the Equity Underwriters a 30-day option to purchase up to an additional 2,025,000 shares of Common Stock, which option was exercised in full on January 16, 2013. The parties have agreed to indemnify each other against certain liabilities, including liabilities under the Act.

On January 15, 2013, the Company also entered into the Debt Underwriting Agreement with Goldman Sachs and J.P. Morgan as underwriters (collectively, the "Note Underwriters" and together with the Equity Underwriters, the "Underwriters"). Subject to the terms and conditions of the Debt Underwriting Agreement, the Company agreed to sell to the Note Underwriters, and the Note Underwriters agreed to purchase from the Company, $120.75 million aggregate principal amount of the Company's 2.50% convertible senior notes due 2017. The Company also granted the Note Underwriters a 30-day option to purchase up to an additional $15.75 million aggregate principal amount of the convertible senior notes solely to cover over-allotments, which option was exercised in full on January 16, 2013. Pursuant to the terms of the Debt Underwriting Agreement, the parties have agreed to indemnify each other against certain liabilities, including liabilities under the Act.

A copy of the Equity Underwriting Agreement is filed as Exhibit 1.1 to this Current Report and is incorporated herein by reference, and the description of the terms of the Equity Underwriting Agreement is qualified in its entirety by reference to such exhibit. A copy of the Debt Underwriting Agreement is filed as Exhibit 1.2 to this Current Report and is incorporated herein by reference, and the description of

the terms of the Debt Underwriting Agreement is qualified in its entirety by reference to such exhibit. The Underwriting Agreements are also filed with reference to, and are hereby incorporated by reference into, the Registration Statement.

Pursuant to the terms of the Underwriting Agreements, the Company and all of the Company's directors and executive officers also agreed not to sell or transfer any Common Stock held by them for 90 days after January 15, 2013 without first obtaining the written consent of Goldman Sachs and J.P. Morgan on behalf of underwriters, subject to certain exceptions as described in the Prospectus Supplements.

Attached as Exhibit 5.1 and Exhibit 5.2 to this Current Report and incorporated herein by reference are copies of the opinions of Latham & Watkins LLP relating to the validity of the Shares sold in the Common Stock Offering and the validity of the Notes sold in the Convertible Note Offering, respectively (the "Legal Opinions"). The Legal Opinions are also filed with reference to, and are hereby incorporated by reference into, the Registration Statement.