Document:

EXHIBIT
10.80

 

INTERMUNE, INC.

 

REGISTRATION
RIGHTS AGREEMENT

 

REGISTRATION RIGHTS
AGREEMENT, dated as of October 29, 2004, among the investors listed on Schedule
I hereto (the “Investors”) and InterMune, Inc., a Delaware corporation
(the “Company”).

 

R E  C
I  T  A  L  S

 

WHEREAS, the Investors
and certain of their affiliates and the Company entered into a Standstill
Agreement, dated April 28, 2004, between the Company and the Investors (the “Original
Standstill Agreement”), relating to the potential acquisitions by the
Investors of shares of common stock, par value $0.001 per share, of the Company
(the “Common Stock”);

 

WHEREAS, the Investors
and certain of their affiliates and the Company entered into an Amended and
Restated Standstill Agreement, dated October 29, 2004, between the Company and
the Investors (the “Amended and Restated Standstill Agreement”), which
amends and restates the Original Standstill Agreement in its entirety;

 

WHEREAS, pursuant to the
Amended and Restated Standstill Agreement, the Company has agreed to grant the
Investors certain registration rights; and

 

WHEREAS, the Company and
the Investors desire to define the registration rights of the Investors on the
terms and subject to the conditions herein set forth.

 

NOW, THEREFORE, in
consideration of the foregoing premises and for other good and valuable
consideration, the parties hereby agree as follows:

 

SECTION 1.  DEFINITIONS

 

As used in this
Agreement, the following terms have the respective meanings set forth below:

 

Agreement:  shall mean this Registration Rights Agreement
among the Investors and the Company;

 

Commission:  shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act;

 

Exchange Act:  shall mean the Securities Exchange Act of
1934, as amended;

 

 

Holder:  shall mean Warburg, Pincus Equity Partners,
L.P., a Delaware limited partnership, Warburg, Pincus Netherlands Equity
Partners I, C.V., a Netherlands limited partnership, Warburg, Pincus
Netherlands Equity Partners II, C.V., a Netherlands limited partnership,
Warburg, Pincus Netherlands Equity Partners III, C.V., a Netherlands limited
partnership, Warburg Pincus & Co., a New York general partnership and
Warburg Pincus LLC, a New York limited liability company;

 

Initiating Holder:  shall mean any Holder or Holders who in the
aggregate are Holders of more than 50% of the then outstanding Registrable
Securities;

 

Person:  shall mean an individual, partnership,
joint-stock company, corporation, trust or unincorporated organization, and a
government or agency or political subdivision thereof;

 

register, registered
and registration:  shall mean a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement;

 

Registrable Securities:  shall mean (A) any shares of Common Stock now
owned or hereinafter acquired by the Investors and (B) any stock of the Company
issued as a dividend or other distribution with respect to, or in exchange for
or in replacement of, the shares of Common Stock referred to in clause (A) or
(B);

 

Registration Expenses:  shall mean all expenses incurred by the Company
in compliance with Section 2(a) and (b) hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, fees and expenses of one counsel for all the Holders
in an amount not to exceed $15,000, blue sky fees and expenses and the expense
of any special audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company, which shall be
paid in any event by the Company);

 

security, securities:  shall have the meaning set forth in Section
2(1) of the Securities Act;

 

Securities Act:  shall mean the Securities Act of 1933, as
amended; and

 

Selling Expenses:  shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and all
fees and disbursements of counsel for each of the Holders other than fees and
expenses of one counsel for all the Holders in an amount not to exceed $15,000.

 

2

 

SECTION 2.  REGISTRATION RIGHTS

 

(a)           Requested
Registration.

 

(i)            Request for Registration.  If the Company shall receive from an
Initiating Holder, at any time, a written request that the Company effect any
registration with respect to all or a part of the Registrable Securities, the
Company will:

 

(1)           promptly give written notice of the
proposed registration, qualification or compliance to all other Holders; and

 

(2)           as soon as practicable, effect such
registration (including, without limitation, the execution of an undertaking to
file post-effective amendments, appropriate qualification under applicable blue
sky or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as may be so requested and as
would permit or facilitate the sale and distribution of all or such portion of
such Registrable Securities as are specified in such request, together with all
or such portion of the Registrable Securities of any Holder or Holders joining
in such request as are specified in a written request received by the Company
within ten (10) business days after written notice from the Company is given
under Section 2(a)(i)(1) above; provided that the Company shall not be
obligated to effect, or take any action to effect, any such registration
pursuant to this Section 2(a):

 

(A)          In any particular jurisdiction in
which the Company would be required to execute a general consent to service of
process in effecting such registration, qualification or compliance, unless the
Company is already subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or regulations thereunder;

 

(B)           After the Company has effected two
(2) such registrations pursuant to this Section 2(a) and such registrations
have been declared or ordered effective and the sales of such Registrable
Securities shall have closed;

 

(C)           If the Registrable Securities
requested by all Holders to be registered pursuant to such request do not have
an anticipated aggregate public offering price (before deduction of Selling
Expenses) of not less than $25,000,000;

 

(D)          Within one hundred eighty (180) days
of the effective date of the most recent registration pursuant to this Section
2(a) in which the Registrable Securities held by the Initiating Holder could
have been included for sale or distribution;

 

3

 

(E)           During any period of time (not to
exceed 60 days in the aggregate in any period of 12 consecutive months) after
the Company has determined to proceed with a registration (other than a
registration of securities in a Rule 145 transaction under the Securities Act
or with respect to an employee benefit plan) and is diligently proceeding to
complete such registration; or

 

(F)           During any period of time (not to
exceed 60 days in the aggregate in any period of 12 consecutive months) in
which the Board of Directors of the Company determines that it would be
materially detrimental to the Company or its stockholders for a registration
statement to be filed.

 

The
registration statement filed pursuant to the request of the Initiating Holders
may, subject to the provisions of Section 2(a)(ii) below, include other
securities of the Company which are held by Persons who, by virtue of
agreements with the Company, are entitled to include their securities in any
such registration (“Other Stockholders”).

 

(ii)           Underwriting.  As set forth in the Amended and Restated
Standstill Agreement, any requests made by the Holders to effect any registration
with respect to the Registrable Securities shall involve sales of such
Registrable Securities only by means of a registered, underwritten public
offering.

 

If
Other Stockholders request inclusion of their securities in the underwriting,
the Holders shall offer to include the securities of such Other Stockholders in
the underwriting and may condition such offer on their acceptance of the
further applicable provisions of this Section 2.  The Holders whose shares are to be included
in such registration and the Company shall (together with all Other
Stockholders proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter of the underwriter or underwriters selected for such underwriting
by the Company and reasonably acceptable to the Initiating Holders; provided,
however, that such underwriting agreement shall not provide for
indemnification or contribution obligations on the part of the Holders
materially greater than the obligations of the Holders under Section
(e)(ii).  Notwithstanding any other
provision of this Section 2(a), if the underwriter advises the Holders in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the securities of the Company held by Other Stockholders shall
be excluded from such registration to the extent so required by such
limitation.  If, after the exclusion of
such shares, further reductions are still required, the number of shares
included in the registration by each Holder shall be reduced on a pro rata
basis (based on the number of shares held by such Holder), by such minimum
number of shares as is necessary to comply with such request.  No Registrable Securities or any other
securities excluded from the underwriting by reason of the underwriter’s
marketing limitation shall be included in such registration.  If any Other Stockholder who has requested
inclusion in such registration as provided above disapproves of the terms of
the underwriting, such Person may elect to withdraw therefrom by written notice
to the Company, the underwriter and the Initiating Holders.  The securities so withdrawn shall also be

 

4

 

withdrawn
from registration.  If the underwriter
has not limited the number of Registrable Securities or other securities to be
underwritten, the Company may include securities in such registration if the
underwriter so agrees and if the number of Registrable Securities and other
securities which would otherwise have been included in such registration and
underwriting will not thereby be limited.

 

(b)           Company
Registration.

 

(i)            If the Company proposes to register
any of its Common Stock either for its own account or for the account of Other
Stockholders for the purposes of an underwritten public offering of such Common
Stock, other than a registration relating solely to employee benefit plans, or
a registration relating solely to a Rule 145 transaction under the Securities
Act, or a registration on any registration form which does not permit secondary
sales or does not include substantially the same information as would be
required to be included in a registration statement covering the sale of
Registrable Securities, the Company will:

 

(1)           promptly give to each of the Holders
a written notice thereof (which shall include a list of the jurisdictions in
which the Company intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws); and

 

(2)           include in such registration (and any
related qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made by the Holders within fifteen (15) days after
receipt of the written notice from the Company described in clause (1) above,
except as set forth in Section 2(b)(ii) below. 
Such written request may specify all or a part of the Holders’
Registrable Securities.

 

(ii)           Underwriting.  The right of each of the Holders to
registration pursuant to this Section 2(b) shall be conditioned upon such
Holders’ participation in such underwriting and the inclusion of such Holders’
Registrable Securities in the underwriting to the extent provided herein.  The Holders whose shares are to be included
in such registration shall (together with the Company and the Other
Stockholders distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for underwriting by the Company; provided, however,
that such underwriting agreement shall not provide for indemnification or
contribution obligations on the part of the Holders materially greater than the
obligations of the Holders under Section (e)(ii).  Notwithstanding any other provision of this
Section 2(b), if the underwriter determines that marketing factors require a
limitation on the number of shares to be underwritten, the Company shall so
advise all holders of securities requesting registration, and the number of
shares of securities that are entitled to be included in the registration and

 

5

 

underwriting shall be allocated in the following
manner:  the securities of the Company
held by officers, directors and Other Stockholders of the Company (other than
Registrable Securities and other than securities held by holders who by
contractual right demanded such registration (“Demanding Holders”))
shall be excluded from such registration and underwriting to the extent
required by such limitation, and, if a limitation on the number of shares is
still required, the number of shares that may be included in the registration
and underwriting by each of the Holders and Demanding Holders shall be reduced,
on a pro rata basis (based on the number of shares held by such holder), by
such minimum number of shares as is necessary to comply with such
limitation.  If any of the Holders or any
officer, director or Other Stockholder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter.  Any
Registrable Securities or other securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.

 

(c)           Expenses
of Registration.  All Registration
Expenses incurred in connection with any registration, qualification or
compliance pursuant to this Section 2 shall be borne by the Company, and all
Selling Expenses shall be borne by the Holders of the securities so registered
pro rata on the basis of the number of their shares so registered.

 

(d)           Registration
Procedures.  In the case of each
registration effected by the Company pursuant to this Section 2, the Company
will keep the Holders, as applicable, advised in writing as to the initiation
of each registration and as to the completion thereof.  At its expense, the Company will:

 

(i)            furnish such number of prospectuses
and other documents incident thereto as each of the Holders, as applicable,
from time to time may reasonably request;

 

(ii)           notify each Holder of Registrable
Securities covered by such registration at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the happening
of any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing; and

 

(iii)          furnish, on the date that such
Registrable Securities are delivered to the underwriters for sale (1) an
opinion, dated as of such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering and reasonably satisfactory to
a majority in interest of the Holders participating in such registration,
addressed to the underwriters and to the Holders participating in such
registration and (2) a letter, dated as of such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters
in an underwritten public offering and reasonably satisfactory to a majority in
interest of the Holders participating in such registration, addressed to the
underwriters and, if permitted by applicable accounting standards, to the
Holders participating in such registration.

 

6

 

(e)           Indemnification.

 

(i)            The Company will indemnify each of
the Holders, as applicable, each of its officers, directors and each Person
controlling each of the Holders, with respect to each registration which has
been effected pursuant to this Section 2, and each underwriter and each person
who controls any underwriter, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any registration statement or prospectus (including any preliminary prospectus)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and will reimburse
each of the Holders, each of its officers, directors and each Person
controlling each of the Holders, each such underwriter and each Person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission based upon
written information furnished to the Company by the Holders or underwriter and
stated to be specifically for use therein.

 

(ii)           Each of the Holders will, if
Registrable Securities held by it are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers and each underwriter of the Company’s
securities covered by such a registration statement, each person who controls
the Company or such underwriter, each Other Stockholder and each of their
officers, directors and each person controlling such Other Stockholder against
all claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement)
of a material fact contained in any such registration statement or prospectus
(including any preliminary prospectus), or any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and will reimburse the Company and such Other
Stockholders, directors, officers, partners, persons, underwriters or control
persons for any legal or any other expenses reasonably incurred in connection
with investigating and defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is made
in such registration statement or prospectus in reliance upon and in conformity
with written information furnished to the Company by such Holder and stated to
be specifically for use therein; provided, however, that the obligations of
each of the Holders hereunder shall be limited to an amount equal to the net
proceeds to such Holder of securities sold.

 

(iii)          Each party entitled to indemnification
under this Section 2(e) (the “Indemnified Party”) shall give notice to
the party required to provide indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom;

 

7

 

provided that counsel for the Indemnifying Party, who
shall conduct the defense of such claim or any litigation resulting therefrom,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at such party’s expense (unless the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which case the
fees and expenses of counsel shall be at the expense of the Indemnifying
Party), and provided further that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 2(e) unless the Indemnifying Party is materially
prejudiced thereby.  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.  Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.

 

(iv)          If the indemnification provided for in
this Section 2(e) 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 herein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the amount
paid or 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 which
resulted in such loss, liability, claim, damage or expense, as well as any
other relevant equitable considerations. 
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 (or
alleged 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.

 

(v)           Notwithstanding the foregoing, to the
extent that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with any underwritten public
offering contemplated by this Agreement are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall be controlling.

 

(vi)          The foregoing indemnity agreement of
the Company and Holders is subject to the condition that, insofar as they
relate to any loss, claim, liability or damage arising out of a statement made
in or omitted from a preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the Commission at the time the registration
statement in question becomes effective or the amended prospectus

 

8

 

filed with the Commission pursuant to Rule 424(b)
under the Securities Act (the “Final Prospectus”), such indemnity or
contribution agreement shall not inure to the benefit of any underwriter or
Holder if a copy of the Final Prospectus was furnished to the underwriter and
was not furnished to the Person asserting the loss, liability, claim or damage
at or prior to the time such action is required by the Securities Act.

 

(f)            Information
by the Holders.

 

Each of the Holders holding securities included in any
registration shall use its reasonable best efforts to timely furnish to the
Company such information regarding such Holder and the distribution proposed by
such Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Section 2.

 

(g)           Termination.  The registration rights set forth in this
Section 2 shall be available to any Holder until such time as (i) all of the
Registrable Securities held by such Holder have been sold in a registration
pursuant to the Securities Act or (ii) the restrictions contained in Section 6
of the Amended and Restated Standstill Agreement are terminated pursuant to Section
6(d) thereof.

 

SECTION 3.  MISCELLANEOUS

 

(a)           Directly
or Indirectly.  Where any provision
in this Agreement refers to action to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be applicable whether
such action is taken directly or indirectly by such Person.

 

(b)           Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.

 

(c)           Section
Headings.  The headings of the
sections and subsections of this Agreement are inserted for convenience only
and shall not be deemed to constitute a part thereof.

 

(d)           Notices.

 

(i)            All communications under this
Agreement shall be in writing and shall be delivered by hand or facsimile or
mailed by overnight courier or by registered or certified mail, postage
prepaid:

 

(1)           if to the Company, to 3280 Bayshore
Boulevard, Brisbane, CA  94005,
Attention: General Counsel (facsimile: (415) 508-0006) or at such other address
as it may have furnished in writing to the Holders, with a copy to 1301 Avenue
of the Americas, New York, NY  10019
(facsimile:  (212) 259-6333), Attention:  Frederick W. Kanner, Esq.

 

(2)           if to the Holders, at the address or
facsimile number listed on Schedule I hereto, or at such other address or
facsimile number as may have been furnished the

 

9

 

Company in writing, with a copy to Willkie Farr &
Gallagher LLP, 787 Seventh Avenue, New York, NY 10019 (facsimile: (212)
728-9222), Attention: Steven J. Gartner, Esq.

 

(ii)           Any notice so addressed shall be
deemed to be given: if delivered by hand or facsimile, on the date of such
delivery; if mailed by overnight courier, on the first business day following
the date of such mailing; and if mailed by registered or certified mail, on the
third business day after the date of such mailing.

 

(e)           Reproduction
of Documents.  This Agreement and all
documents relating thereto, including, without limitation, any consents,
waivers and modifications which may hereafter be executed may be reproduced by
the Holders by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and the Holders may destroy any original
document so reproduced.  The parties
hereto agree and stipulate that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such reproduction
was made by the Holders in the regular course of business) and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.

 

(f)            Successors
and Assigns.  This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties.

 

(g)           Entire
Agreement; Amendment and Waiver. 
This Agreement and the Amended and Restated Standstill Agreement
constitute the entire understanding of the parties hereto relating to the
subject matter hereof and supersedes all prior understandings among such
parties.  This Agreement may be amended,
and the observance of any term of this Agreement may be waived, with (and only
with) the written consent of the Company and the Holders holding a majority of
the then outstanding Registrable Securities.

 

(h)           Severability.  In the event that any part or parts of this
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not affect the
remaining provisions of this Agreement which shall remain in full force and
effect.

 

(i)            Counterparts.  This Agreement may be executed in two or more
counterparts (including by facsimile), each of which shall be deemed an original
and all of which together shall be considered one and the same agreement.

 

[Remainder
of Page Intentionally Left Blank]

 

10

 

IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date first set forth above.

 

	
   

  	
  INTERMUNE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel Welch

  	
   

  
	
   

  	
   

  	
  Name: Daniel G. Welch

  
	
   

  	
   

  	
  Title: President and Chief Executive Officer

  
					

 

	
  WARBURG, PINCUS EQUITY PARTNERS, L.P.

  	
   

  
	
   

  	
   

  
	
  By: Warburg Pincus & Co., its General Partner

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jonathan Leff

  	
   

  	
   

  
	
   

  	
  Name:  Jonathan Leff

  	
   

  
	
   

  	
  Title:  Partner

  	
   

  
	
   

  	
   

  
	
  WARBURG,
  PINCUS NETHERLANDS

  EQUITY PARTNERS I, C.V.

  	
   

  
	
   

  	
   

  
	
  By: Warburg Pincus & Co., its General Partner

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jonathan Leff

  	
   

  	
   

  
	
   

  	
  Name:  Jonathan Leff

  	
   

  
	
   

  	
  Title:  Partner

  	
   

  
	
   

  	
   

  
	
  WARBURG,
  PINCUS NETHERLANDS

  EQUITY PARTNERS II, C.V.

  	
   

  
	
  By: Warburg Pincus & Co., its General Partner

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jonathan Leff

  	
   

  	
   

  
	
   

  	
  Name:  Jonathan Leff

  	
   

  
	
   

  	
  Title:  Partner

  	
   

  
	
   

  	
   

  
	
  WARBURG,
  PINCUS NETHERLANDS

  EQUITY PARTNERS III, C.V.

  	
   

  
	
   

  	
   

  
	
  By: Warburg Pincus & Co., its General Partner

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jonathan Leff

  	
   

  	
   

  
	
   

  	
  Name:  Jonathan Leff

  	
   

  
	
   

  	
  Title:  Partner

  	
   

  
	
   

  	
   

  
	
  WARBURG PINCUS & CO.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jonathan Leff

  	
   

  	
   

  
	
   

  	
  Name:  Jonathan Leff

  	
   

  
	
   

  	
  Title:  Partner

  	
   

  
					

 

 

Schedule
I

 

Investors

 

	
  Investor Name and Address

  
	
   

  
	
  Warburg, Pincus Equity
  Partners, L.P.

  
	
  Warburg, Pincus
  Netherlands Equity Partners I, C.V.

  
	
  Warburg, Pincus
  Netherlands Equity Partners II, C.V.

  
	
  Warburg, Pincus
  Netherlands Equity Partners III, C.V.

  
	
  Warburg Pincus &
  Co.

  
	
  466 Lexington Avenue

  
	
  New York, NY 10017

  
	
  Facsimile: (212)
  878-9361

  
	
  Attention: Jonathan
  LeffEXHIBIT
10.81

 

AMENDMENT
TO RIGHTS AGREEMENT

BETWEEN
INTERMUNE, INC. AND

MELLON
INVESTOR SERVICES LLC

 

THIS
AMENDMENT TO RIGHTS AGREEMENT (the “Amendment”) is
made this 29th day of October 2004, by and between INTERMUNE, INC., a Delaware corporation (the “Company”),
and MELLON INVESTOR SERVICES LLC (the
“Rights Agent”).

 

R  E  C  I  T  A
L  S

 

WHEREAS,
Warburg, Pincus Equity Partners, L.P., a Delaware limited partnership (“WPEP”),
Warburg, Pincus Netherlands Equity Partners I, C.V., a Netherlands limited
partnership (“WPEP I”), Warburg, Pincus Netherlands Equity Partners II,
C.V., a Netherlands limited partnership (“WPEP II”), Warburg, Pincus
Netherlands Equity Partners III, C.V., a Netherlands limited partnership (“WPEP
III” and, together with WPEP, WPEP I and WPEP II, the “Purchasers”),
Warburg Pincus & Co., a New York general partnership and the sole general
partner of each of the Purchasers (“WP”), and Warburg Pincus LLC, a New
York limited liability company and the sole manager of each of the Purchasers (“WP
LLC” and, collectively, WP LLC, WP and the Purchasers are referred to
herein as, the “Purchaser Group”) and the Company entered into a
Standstill Agreement, dated April 28, 2004, (the “Original Standstill Agreement”),
relating to the potential acquisitions by the Purchaser Group of shares of
common stock, par value $0.001 per share, of the Company (the “Common Stock”);

 

WHEREAS,
the Purchaser Group and the Company entered into an Amended
and Restated Standstill Agreement, dated October 29, 2004 (the “Amended and
Restated Standstill Agreement”), which amends and restates the Original
Standstill Agreement in its entirety;

 

WHEREAS,
the Company and the Rights Agent are parties to that certain Rights Agreement,
dated as of July 17, 2001 (the “Rights Agreement”);

 

WHEREAS,
the Company desires to amend the Rights Agreement to facilitate the Purchaser
Group’s acquisition of additional shares of the Common Stock in accordance with
the terms of the Amended and Restated Standstill Agreement; and

 

WHEREAS,
the Board of Directors of the Company has approved this Amendment and
authorized its appropriate officers to execute and deliver the same to the
Rights Agent.

 

NOW,
THEREFORE, in accordance with the procedures for amendment of
the Rights Agreement set forth in Section 27 thereof, and in consideration of
the foregoing and the mutual agreements herein set forth, the parties hereby
agree as follows:

 

1.    Capitalized terms that are not otherwise
defined herein shall have the meanings ascribed to them in the Rights
Agreement.

 

2.    Section 1 of the Rights
Agreement is restated in its entirety as follows:

 

 

SECTION
1.         CERTAIN DEFINITIONS.  For purposes of this Agreement, the following
terms have the meanings indicated:

 

(a)           “Acquiring Person”
shall mean any Person (as such term is hereinafter defined) who or which,
together with all Affiliates and Associates (as such terms are hereinafter
defined) of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 20% or more of the Common Shares then outstanding.  Notwithstanding the foregoing, (A) the term
Acquiring Person shall not include (i) the Company, (ii) any Subsidiary (as
such term is hereinafter defined) of the Company, (iii) any employee benefit or
compensation plan of the Company or any Subsidiary of the Company, (iv) any
entity holding Common Shares for or pursuant to the terms of any such employee
benefit or compensation plan of the Company or any Subsidiary of the Company or
(v) an Excluded Stockholder (as such term is hereinafter defined) and (B) no
Person shall become an “Acquiring Person” either (x) as the result of an
acquisition of Common Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 20% or more (25% or more with respect to an Excluded
Stockholder) of the Common Shares then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of 20%
or more (25% or more with respect to an Excluded Stockholder) of the Common
Shares then outstanding by reason of share purchases by the Company and shall,
following written notice from, or public disclosure by the Company of such
share purchases by the Company, become the Beneficial Owner of any additional
Common Shares without the prior consent of the Company and shall then
Beneficially Own more than 20% (25% with respect to an Excluded Stockholder) of
the Common Shares then outstanding, then such Person shall be deemed to be an “Acquiring
Person,” or (y) if the Board of Directors determines in good faith that a
Person who would otherwise be an “Acquiring Person,” as defined pursuant to the
foregoing provisions of this paragraph (a), has become such inadvertently, and
such Person divests, as promptly as practicable (as determined in good faith by
the Board of Directors), following receipt of written notice from the Company
of such event, of Beneficial Ownership of a sufficient number of Common Shares
so that such Person would no longer be an Acquiring Person, as defined pursuant
to the foregoing provisions of this paragraph (a), then such Person shall not
be deemed to be an “Acquiring Person” for any purposes of this Agreement; provided, however, that if such Person shall again become
the Beneficial Owner of 20% or more (25% or more with respect to an Excluded
Stockholder) of the Common Shares then outstanding, such Person shall be deemed
an “Acquiring Person,” subject to the exceptions set forth in this
Section 1(a).

 

(b)           “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), as in effect
on the date of this Agreement; provided, however,
that the limited partners of a limited partnership shall not be deemed to be
Associates of such limited partnership solely by virtue of their limited
partnership interests.

 

(c)           A Person shall be
deemed the “Beneficial Owner” of and shall be
deemed to “beneficially own” any securities:

 

2

 

(i)           which such Person
or any of such Person’s Affiliates or Associates is deemed to beneficially own,
within the meaning of Rule 13d-3 of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Rights Agreement;

 

(ii)          which such Person or
any of such Person’s Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other than these Rights),
warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to beneficially
own, securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person’s Affiliates or Associates until
such tendered securities are accepted for purchase or exchange; or (B) the
right to vote pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act and (2) is
not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or

 

(iii)         which are
beneficially owned, directly or indirectly, by any other Person with which such
Person or any of such Person’s Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring, holding, voting (except
to the extent contemplated by the proviso to Section 1(c)(ii)(B) hereof)
or disposing of any securities of the Company.

 

Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase, “then outstanding,” when used
with reference to a Person’s Beneficial Ownership of securities of the Company,
shall mean the number of such securities then issued and outstanding together
with the number of such securities not then actually issued and outstanding
which such Person would be deemed to own beneficially hereunder.

 

(d)           “Business Day”
shall mean any day other than a Saturday, a Sunday, or a day on which banking
institutions in the States of California or New Jersey are authorized or
obligated by law or executive order to close.

 

(e)           “Close of Business”
on any given date shall mean 5:00 p.m., Pacific Time, on such date; provided, however, that if such date is not a Business Day it
shall mean 5:00 p.m., Pacific Time, on the next succeeding Business Day.

 

3

 

(f)           “Common Shares”
shall mean the shares of common stock, par value $.001 per share, of the
Company; provided, however, that, “Common Shares,”
when used in this Agreement in connection with a specific reference to any
Person other than the Company, shall mean the capital stock (or equity
interest) with the greatest voting power of such other Person or, if such other
Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.

 

(g)          “Distribution Date”
shall have the meaning set forth in Section 3 hereof.

 

(h)          “Excluded Stockholder” shall mean the
Purchaser Group (including its Affiliates and Associates); provided, however,
that the Purchaser Group (including its Affiliates and Associates) shall not be
an Excluded Stockholder if the Purchaser Group (including its Affiliates and
Associates) becomes the Beneficial Owner of more than 25% of the Common Shares
then outstanding.

 

(i)           “Final Expiration Date”
shall have the meaning set forth in Section 7 hereof.

 

(j)           “Interested Stockholder”
shall mean any Acquiring Person or any Affiliate or Associate of an Acquiring
Person or any other Person in which any such Acquiring Person, Affiliate or
Associate has an interest, or any other Person acting directly or indirectly on
behalf of or in concert with any such Acquiring Person, Affiliate or Associate.

 

(k)          “Person” shall mean
any individual, firm, corporation, limited liability company or other entity,
and shall include any successor (by merger or otherwise) of such entity.

 

(l)           “Preferred Shares”
shall mean shares of Series A Junior Participating Preferred Stock, par value
$0.001 per share, of the Company having the designations and the powers,
preferences and rights, and the qualifications, limitations and restrictions
set forth in the Form of Certificate of Designation attached to this Agreement
as Exhibit A.

 

(m)         “Purchase Price”
shall have the meaning set forth in Section 7(b) hereof.

 

(n)          “Redemption Date”
shall have the meaning set forth in Section 7 hereof.

 

(o)           “Shares Acquisition Date”
shall mean the first date of public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such provided, however that, if such
Person is determined not to have become an Acquiring Person pursuant to clause
(y) of Subsection 1(a)(B) hereof, then no Shares Acquisition Date shall be
deemed to have occurred.

 

(p)           “Subsidiary” of any
Person shall mean any corporation or other entity of which a majority of the
voting power of the voting equity securities or equity interest is owned,
directly or indirectly, by such Person.

 

4

 

(q)           “Transaction” shall
mean any merger, consolidation or sale of assets described in
Section 13(a) hereof or any acquisition of Common Shares which would
result in a Person becoming an Acquiring Person or a Principal Party (as such
term is hereinafter defined).

 

(r)           “Transaction Person”
with respect to a Transaction shall mean (i) any Person who (x) is or will
become an Acquiring Person or a Principal Party (as such term is hereinafter
defined) if the Transaction were to be consummated and (y) directly or indirectly
proposed or nominated a director of the Company which director is in office at
the time of consideration of the Transaction, or (ii) an Affiliate or Associate
of such a Person.

 

3.    The Rights Agreement, as amended by this
Amendment, shall remain in full force and effect in accordance with its terms.

 

4.    All the covenants and provisions of this
Amendment by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

 

5.    If any term, provision, covenant or
restriction of this Amendment is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Amendment shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

 

6.    This Amendment shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes
shall be governed by, and construed in accordance with, the laws of such State
applicable to contracts to be made and performed entirely within such State;
provided, however, that all provisions regarding the rights, duties and
obligations of the Rights Agent shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.

 

7.    This Amendment may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

 

8.    The Company hereby certifies to the Rights
Agent that this Amendment is in compliance with Section 27 of the Rights
Agreement.

 

5

 

IN
WITNESS WHEREOF, the parties herein have caused this
Amendment to be duly executed and attested, all as of the date and year first
above written.

 

	
  ATTEST:

  	
  INTERMUNE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Robin Steele

  	
   

  	
  /s/ Daniel Welch

  	
   

  
	
  Robin Steele

  	
  Daniel G. Welch

  
	
  Senior Vice President, General Counsel and

  Corporate Secretary

  	
  Chief Executive Officer and President

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
  MELLON INVESTOR SERVICES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Asa P. Drew

  	
   

  	
  By:

  	
  /s/ Joseph Thatcher

  	
   

  
	
   

  	
  Asa P. Drew

  	
   

  	
   

  	
  Joseph W. Thatcher

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
								

 

6

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