Exhibit 10.5

 

STOCKHOLDER AGREEMENT

 

This Agreement (this “Agreement”) is entered into effective as of May 9, 2012 by
and between Adage Capital Management, L.P. (“Adage”) and AMAG
Pharmaceuticals, Inc., a Delaware corporation (the “Company”).  Capitalized
terms not defined herein will have the meaning given in the Rights Agreement
between the Company and American Stock Transfer & Trust Company, as Rights
Agent, dated as of September 4, 2009 (the “Rights Agreement”).

 

A.                                    As of the date of this Agreement, Adage
had Beneficial Ownership in the aggregate, of 4,135,330 shares of the Company’s
Common Stock, $0.01 par value per share (the “Common Stock”) or 19.36% of the
Company’s outstanding Common Stock.

 

B.                                    Adage has indicated to the Company that it
desires to purchase additional shares of the Common Stock that would cause
Adage’s Beneficial Ownership to exceed 20% of the issued and outstanding shares
of the Common Stock.

 

C.                                    Pursuant to Section 1(a) of the Rights
Agreement, a Person who becomes the Beneficial Owner of 20% or more of the
issued and outstanding Common Stock is an “Acquiring Person” for purposes of the
Rights Agreement.

 

D.                                    The Company has determined that purchases
of a limited number of additional shares of Common Stock by Adage pursuant to
the terms of this Agreement would not be inconsistent with the purpose and
intent of the Board of Directors in adopting the Rights Agreement.

 

Accordingly, in consideration of the foregoing premises and the mutual
covenants, representations and warranties contained in this Agreement, Adage and
the Company agree as follows:

 

1.                                      Representations and Warranties of
Adage.  Adage represents and warrants to, and agree with, the Company as
follows:

 

(a)                                 As of the date hereof, Adage is the
Beneficial Owner of an aggregate of 4,135,330 shares of the Common Stock
consisting of approximately 19.36% of the issued and outstanding shares of the
Common Stock (the “Original Shares”).

 

(b)                                 As of the date hereof, Adage’s Beneficial
Ownership of the Common Stock does not exceed 20% of the issued and outstanding
Common Stock.

 

(c)                                  Adage is familiar with the terms of the
Rights Agreement.

 

(d)                                 The Original Shares were originally acquired
(i) in the ordinary course of business solely for investment purposes, (ii) not
for the purpose of, and do not have the effect of, changing or influencing the
control of the Company and (iii) not in connection with or as a participant in
any transaction having such purposes or effect, and subsequent to such
acquisition, Adage filed a Schedule 13D indicating a possible change in its
status as a passive investor.

 

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(e)                                  No Person other than Adage is a Beneficial
Owner of any of the Original Shares.

 

(f)                                   Any additional shares of the Common Stock
purchased by Adage or their Affiliates after the date hereof (the “Additional
Shares,” and together with the Original Shares, the “Adage Shares”) will be
acquired (i) in the ordinary course of business solely for investment purposes,
(ii) not for the purpose of, or with the effect of, changing or influencing the
control of the Company and (iii) not in connection with or as a participant in
any transaction having such purpose or effect.

 

(g)                                  The Company has not induced, and is not
inducing, Adage or its Affiliates to purchase any additional shares of the
Common Stock and has not made and is not making any representation to Adage as
to the value of the Common Stock, the suitability of the Common Stock for
investment by Adage, or the past or future results of the Company’s business and
operations.

 

2.                                      Voting of Shares.

 

(a)                                 To the extent and for so long as Adage is or
becomes the Beneficial Owner of 20% or more of the issued and outstanding Common
Stock, Adage shall cause any shares in excess of 20% of the issued and
outstanding Common Stock (the “Excess Shares”) to be voted in the manner in
which the Board of Directors has recommended to the stockholders generally in
any proxy or consent solicitation to the stockholders of the Company.

 

(b)                                 To secure Adage’s obligations to vote the
Excess Shares in accordance with Section 2(a) above during the term of this
Agreement, Adage hereby irrevocably (to the fullest extent permitted by law)
appoints the Chairman of the Board of Directors and the Chief Executive Officer
of the Company, or either of them from time to time, or their designees, as
Adage’s true and lawful proxy and attorney, with the power to act alone and with
full power of substitution, to vote all of such Excess Shares in accordance with
Section 2(a) above and to execute all appropriate instruments consistent with
Section 2(a) above on behalf of Adage if, and only if, Adage fails to vote all
of the Excess Shares in accordance with Section 2(a) above.  The proxy and power
granted by Adage pursuant to this Section are coupled with an interest and are
given to secure the performance of its duties under this Agreement.  Each such
proxy and power will be irrevocable until the termination of this Agreement. 
The proxy and power, so long as any party hereto is an individual, will survive
the death, incompetency and disability of such party, and, so long as any party
hereto is an entity, will survive the merger or reorganization of such party or
any other entity holding any Excess Shares.  The proxy and power shall be
binding upon the successors and assigns of Adage (including any transferee of
any of the Excess Shares, so long as they remain Excess Shares pursuant to the
terms of this Agreement).  Adage shall, at its own expense, perform such further
acts and execute such further proxies and other documents and instruments as may
reasonably be required to vest in the Company the power to carry out and give
effect to the provisions of this Section 2.

 

3.                                      Sale of Shares.  In the event that Adage
proposes to sell in a bona fide transaction any Excess Shares of the Common
Stock (other than a sale in a “broker’s transaction” or in a transaction
directly with a “market maker,” in either case as defined in and in a manner of
sale consistent with paragraphs (f) and (g) of Rule 144 promulgated under the
Securities Act of 1933,

 

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as amended), then Adage shall provide to the Company not less than ten (10) days
prior written notice of such proposed transaction, specifying the number of
shares of the Common Stock proposed to be sold, the price at which such shares
are to be sold and the proposed purchaser of such shares, and shall only
complete such sale with the prior written consent of the Company (the
“Consent”), such Consent to be provided or withheld at the Company’s sole
discretion and without regard to the economic consequences of providing or
withholding such Consent.  Notwithstanding the foregoing, and for the avoidance
of doubt, sales effected through a broker-dealer where Adage does not know the
purchaser of the shares or has not negotiated with the purchaser or any
representative of the purchaser shall not be restricted by this Section 3.

 

4.                                      Standstill.  Adage agrees that it shall
not and it shall cause its Affiliates not to, directly or indirectly:

 

(a)                                 make, effect, initiate, cause or participate
in (i) any acquisition of Beneficial Ownership of the Common Stock resulting in
an increase in its aggregate Beneficial Ownership of the Common Stock to a
number of shares representing 25% or more of the outstanding shares of the
Common Stock at any time without the prior written consent of the Company,
(ii) any acquisition of any assets of the Company or any assets of any
subsidiary or other Affiliate of the Company, (iii) any tender offer, exchange
offer, merger, business combination, recapitalization, restructuring,
liquidation, dissolution or extraordinary transaction involving the Company or
any subsidiary or other Affiliate of the Company, or involving any securities or
assets of the Company or any securities or assets of any subsidiary or other
Affiliate of the Company, other than (x) any tender of shares of the Common
Stock in an issuer tender offer under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) or a third party tender offer under the Exchange
Act that is recommended by a majority of the current directors of the Company
(the “Current Directors”), directors appointed or elected upon the
recommendation of the current directors (“Subsequent Directors”) and directors
appointed or elected upon the recommendation of the Current Directors and
Subsequent Directors (collectively, the “Incumbent Board”) or (y) any merger,
business combination, recapitalization, restructuring, liquidation, dissolution
or extraordinary transaction not proposed or initiated, directly or indirectly,
by Adage that is recommended by a majority of the Incumbent Board, or (iv) any
“solicitation” of “proxies” or stockholder consents (as such terms are defined
under Regulation 14A of the Exchange Act) with respect to any securities of the
Company or any of its subsidiaries;

 

(b)                                 form, join or in any way participate in a
“group” (within the meaning of Section 13(d)(3) of the Exchange Act) with
respect to any securities of the Company or any of its subsidiaries;

 

(c)                                  whether alone or together with third
parties, seek or vote to remove any Board members, unless such actions have been
recommended in writing by the Incumbent Board;

 

(d)                                 initiate or propose one or more
stockholders’ proposals, as described in Rule 14a-8 under the Exchange Act, with
respect to the Company;

 

(e)                              take any action that might require the Company
to make a public announcement regarding any of the types of matters set forth in
clause “(a)”, “(c)” or “(d)” of this sentence;

 

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(f)                                   agree or offer to take, or encourage or
propose (publicly or otherwise) the taking of, any action referred to in clause
“(a)”, “(b)”, “(c)” “(d)” or “(e)” of this sentence;

 

(g)                                  assist, induce or encourage any other
Person to take any action of the type referred to in clause “(a)”, “(b)”, “(c)”
“(d)”, “(e)”, or “(f)” of this sentence; or

 

(h)                                 enter into any discussions, negotiations,
arrangement or agreement with any other Person relating to any of the foregoing.

 

Nothing in Section 4(a), shall restrict Adage from tendering or, subject to
Section 2, voting its shares of Common Stock as a passive participant in any
such transaction.

 

5.                                      Amendment to Rights Agreement.  Subject
to the terms and conditions of this Agreement and in reliance upon the
representations and warranties of Adage contained in this Agreement, the Company
agrees to amend the definition of “Acquiring Person” in the Rights Agreement to
provide that the percentage Beneficial Ownership of the outstanding Common Stock
used to determine whether a Person constitutes an “Acquiring Person” will be 25%
or more in the case of Adage.  As soon as reasonably practicable following the
effective date of this Agreement, appropriate officers of the Company will
execute an amendment to the Rights Agreement in substantially the form attached
hereto as Exhibit A (the “Amendment”), instruct the Rights Agent to execute the
Amendment and notify Adage when the Amendment has been fully executed.

 

6.                                      Certain Statutory Matters.  Adage
understands and agrees that the provisions of Section 203 of the Delaware
General Corporation Law, as amended, will continue to apply to Adage and that
execution and delivery of this Agreement and the Amendment on behalf of the
Company do not constitute approval of any acquisition of shares of the Common
Stock by Adage, or any other transaction, for the purposes of such Section 203
and do not result in Adage not being, collectively or individually, an
“interested stockholder” or “associate” as defined therein.

 

7.                                      Entire Agreement and Amendment.  This
Agreement contains the entire agreement among the parties with respect to the
subject matter of this Agreement.  All prior and contemporaneous agreements,
discussions or understandings, whether oral or written, are expressly superseded
by this Agreement and are null and void.  This Agreement may not be modified,
waived, discharged or amended, in whole or in part, except in writing signed by
the parties.

 

8.                                      Termination and Effect Thereof.

 

(a)                                 This Agreement will terminate automatically
on the earlier of (1) the date on which, after Adage has become the Beneficial
Owner of 20% or more of the Company’s outstanding shares of Common Stock, Adage
becomes the Beneficially Owner of less than 20% of the outstanding shares of the
Common Stock on any day as of the close of trading on the principal stock
exchange on which the Common Stock is then listed and (2) one hundred twenty
(120) days following the date of this Agreement provided that Adage has not and
did not become the Beneficial Owner of 20% or more of the Company’s outstanding
shares of Common Stock at any time since the date of this Agreement.

 

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(b)                                 If Adage breaches its covenants,
representations or agreements in this Agreement, the Company will have the right
to terminate this Agreement; provided, however, that Section 4 hereof shall
survive any such termination for as long as Adage beneficially owns 20% or more
of the outstanding shares of the Common Stock and that any such termination will
not prejudice any claim that the Company may have with respect to any breach of
any representation, warranty or covenant hereunder occurring prior to such
termination.

 

9.                                      No Third Party Beneficiaries.  This
Agreement is solely for the benefit of the parties hereto and is not intended to
confer upon any other person any rights or remedies hereunder.

 

10.                               Governing Law and Venue.  This Agreement and
the legal relations among the parties hereto will be governed by, construed and
enforced according to the internal laws of the State of Delaware (without regard
to the laws of conflict of any jurisdiction) as to all matters, including,
without limitation, matters of validity, interpretation, construction, effect,
performance and remedies.  The parties to this Agreement hereby consent to the
personal jurisdiction of the state and federal courts located in the State of
Delaware in connection with any controversy related to this Agreement.

 

11.                               Injunctive Relief.  Adage acknowledges that
its failure to abide by the terms of this Agreement would cause the Company
irreparable harm and that any material breach or threatened material breach of
this Agreement by Adage will entitle the Company to seek injunctive relief and
reasonable attorneys’ fees, in addition to any other legal remedies available to
it, in any court of competent jurisdiction without the obligation to prove
damages or post any bond.

 

12.                               Counterparts; Facsimile.  This Agreement may
be executed in one or more counterparts, and each such counterpart will be
deemed an original, but all such counterparts together will constitute one and
the same instrument.  Facsimile signatures shall be treated the same as
originals.

 

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The parties have caused this Agreement to be duly executed as of the day and
year first above written.

 

 

ADAGE CAPITAL MANAGEMENT, L.P.

 

AMAG PHARMACEUTICALS, INC.

 

 

 

 

 

 

/s/:

Dan Lehan

 

/s/:

Frank Thomas

 

 

 

 

 

Name:

Dan Lehan

 

Name:

Frank Thomas

 

 

 

Its:  Chief Operating Officer

 

Its:  Interim Chief Executive Officer, Chief Operating Officer

 

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EXHIBIT A

 

AMENDMENT TO RIGHTS AGREEMENT

 

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AMENDMENT TO RIGHTS AGREEMENT

 

This Amendment dated as of May     , 2012 (this “Amendment”) to the Rights
Agreement, dated as of September 4, 2009 (the “Rights Agreement”), is entered
into between AMAG PHARMACEUTICALS, INC., a Delaware corporation (the “Company”),
and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, as Rights Agent (the “Rights
Agent”).  Capitalized terms used herein and not defined shall have the meanings
specified in the Rights Agreement.

 

WHEREAS, the Company and the Rights Agent are parties to the Rights Agreement;

 

WHEREAS, the Company is entering into a Stockholder Agreement, dated as of
May 9, 2012, with Adage Capital Management, L.P. (“Adage”), pursuant to which,
among other things, the shares of the Company’s Common Stock, $0.01 par value
per share (the “Common Stock”) held by Adage shall be subject to certain
restrictions;

 

WHEREAS, Adage has indicated to the Company that it desires to purchase
additional shares of Common Stock on behalf of its clients and itself that would
cause Adage’s Beneficial Ownership to exceed 20% of the issued and outstanding
shares of the Common Stock;

 

WHEREAS, Section 27 of the Rights Agreement permits the Company to amend the
Rights Agreement on the terms set forth in this Amendment;

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that
one or more purchases of additional shares of Common Stock by Adage as provided
herein would not be inconsistent with the purpose and intent of the Board in
adopting the Rights Agreement;

 

WHEREAS, the Board has determined that it is in the best interests of the
Company and its stockholders to modify the terms of the Rights Agreement as set
forth herein, and in connection therewith the Company is entering into this
Amendment and directing the Rights Agent to enter into this Amendment.

 

NOW, THEREFORE, in consideration of the promises and mutual agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the Company and the Rights Agent hereby agree as follows:

 

1.                                      Amendment to the Rights Agreement.

 

(a)                                 Section 1(a) of the Rights Agreement is
hereby amended by inserting the following new paragraph immediately after the
existing paragraph in such Section 1(a):

 

“Notwithstanding the foregoing, Adage Capital Management, L.P. (“Adage”), shall
not be deemed to be an Acquiring Person for purposes of this Agreement unless
and until Adage, together with all Affiliates and Associates thereof, is the
Beneficial Owner of 25% or more of the Common Shares then outstanding; provided,
however, that Adage

 

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shall also not become an Acquiring Person 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
Adage to 25% or more of the Common Shares then outstanding; and provided
further, that if Adage shall become the Beneficial Owner of 25% or more 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 25% of the Common Shares then outstanding, then Adage
shall be deemed to be an Acquiring Person.  The provisions of this paragraph
shall terminate and be of no further force and effect upon the earlier of
(a) the termination of the Stockholder Agreement dated May 9, 2012 by and among
Adage and the Company and (b) Adage reducing its Beneficial Ownership below 20%
of the Common Shares then outstanding after it increases its Beneficial
Ownership to 20% or more of the Common Shares then outstanding.”

 

2.                                      Miscellaneous.

 

(a)                                 Except as expressly set forth herein, the
Rights Agreement shall not by implication or otherwise be supplemented or
amended by virtue of this Amendment, but shall remain in full force and effect,
as amended hereby.  This Amendment shall be construed in accordance with and as
a part of the Rights Agreement, and all terms, conditions, representations,
warranties, covenants and agreements set forth in the Rights Agreement and each
other instrument or agreement referred to therein, except as herein amended, are
hereby ratified and confirmed.  To the extent that there is a conflict between
the terms and provisions of the Rights Agreement and this Amendment, the terms
and provisions of this Amendment shall govern for purposes of the subject matter
of this Amendment only.

 

(b)                                 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.

 

(c)                                  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.

 

(d)                                 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.

 

(e)                                  This Amendment shall be deemed effective as
of the date first written above, as if executed on such date.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first written above.

 

 

AMAG PHARMACEUTICALS, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, AS RIGHTS AGENT

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

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