Quarterly Report (10-q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-10865

AMAG Pharmaceuticals, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		04-2742593
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

1100 Winter Street
Waltham, Massachusetts		02451
(Address of Principal Executive Offices)		(Zip Code)

(617) 498-3300

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer x
Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes o No x

As of July 22, 2015, there were 30,925,793 shares of the registrant’s common stock, par value $0.01 per share, outstanding.

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AMAG PHARMACEUTICALS, INC.

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2015

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PART I.	FINANCIAL INFORMATION (Unaudited)	3
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014	4
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014	5
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2015 and 2014	6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	47

PART II.	OTHER INFORMATION	47
Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 6.	Exhibits	54

SIGNATURES		55

CERTIFICATIONS

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

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AMAG PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(Unaudited)

	June 30, 2015			December 31, 2014
*ASSETS*
Current assets:
Cash and cash equivalents	$	89,884		$	119,296
Investments	308,524			24,890
Accounts receivable, net	57,954			38,172
Inventories	34,363			40,610
Receivable from collaboration	5,615			4,518
Deferred tax assets	53,135			32,094
Prepaid and other current assets	6,004			14,456
Total current assets	555,479			274,036
Property and equipment, net	1,917			1,519
Goodwill	204,414			205,824
Intangible assets, net	863,020			887,908
Restricted cash	2,397			2,397
Other long-term assets	12,056			17,249
Total assets	$	1,639,283		$	1,388,933
*LIABILITIES AND STOCKHOLDERS’ EQUITY*
Current liabilities:
Accounts payable	$	6,147		$	7,301
Accrued expenses	89,617			80,093
Current portion of long-term debt	132,680			34,000
Current portion of acquisition-related contingent consideration	95,526			718
Deferred revenues	—			44,376
Total current liabilities	323,970			166,488
Long-term liabilities:
Long-term debt, net	179,706			293,905
Convertible 2.5% senior notes, net	170,817			167,441
Acquisition-related contingent consideration	124,666			217,984
Deferred tax liabilities	122,303			77,619
Other long-term liabilities	4,840			5,543
Total liabilities	926,302			928,980
Commitments and contingencies
Stockholders’ equity:
Preferred stock, par value $0.01 per share, 2,000,000 shares authorized; none issued	—			—
Common stock, par value $0.01 per share, 117,500,000 shares authorized at June 30, 2015 and 58,750,000 authorized at December 31, 2014; 30,868,011 and 25,599,550 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively	309			256
Additional paid-in capital	1,000,901			793,757
Accumulated other comprehensive loss	(3,948		)	(3,617		)
Accumulated deficit	(284,281		)	(330,443		)
Total stockholders’ equity	712,981			459,953
Total liabilities and stockholders’ equity	$	1,639,283		$	1,388,933

The accompanying notes are an integral part of these condensed consolidated financial statements.

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AMAG PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Revenues:
U.S. product sales, net	$	84,652		$	22,484		$	162,067		$	40,007
License fee, collaboration and other revenues	39,232			2,318			51,322			5,630
Total revenues	123,884			24,802			213,389			45,637
Costs and expenses:
Cost of product sales	19,679			2,743			40,705			5,580
Research and development expenses	8,184			4,540			15,172			11,038
Selling, general and administrative expenses	31,801			16,284			63,913			33,775
Acquisition-related costs	2,653			—			2,653			—
Restructuring expenses	443			—			1,014			—
Total costs and expenses	62,760			23,567			123,457			50,393
Operating income (loss)	61,124			1,235			89,932			(4,756		)
Other income (expense):
Interest expense	(10,205		)	(3,051		)	(20,572		)	(4,527		)
Interest and dividend income, net	372			253			443			518
Other income	2			16			2			116
Total other income (expense)	(9,831		)	(2,782		)	(20,127		)	(3,893		)
Net income (loss) before income taxes	51,293			(1,547		)	69,805			(8,649		)
Income tax expense	18,035			—			23,643			—
Net income (loss)	$	33,258		$	(1,547	)	$	46,162		$	(8,649	)

Net income (loss) per share:
Basic	$	1.09		$	(0.07	)	$	1.60		$	(0.40	)
Diluted	$	0.82		$	(0.07	)	$	1.23		$	(0.40	)

Weighted average shares outstanding used to compute net income (loss) per share:
Basic	30,636			21,925			28,934			21,875
Diluted	43,181			21,925			40,791			21,875

The accompanying notes are an integral part of these condensed consolidated financial statements.

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AMAG PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(IN THOUSANDS)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014

Net income (loss)	$	33,258		$	(1,547	)	$	46,162		$	(8,649	)
Other comprehensive income (loss):
Unrealized (losses) gains on securities:
Holding (losses) gains arising during period, net of tax	(396		)	153			(327		)	230
Reclassification adjustment for (losses) gains included in net income (loss)	(3		)	2			(4		)	2
Net unrealized (losses) gains on securities	(399		)	155			(331		)	232
Total comprehensive income (loss)	$	32,859		$	(1,392	)	$	45,831		$	(8,417	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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AMAG PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(Unaudited)

	Six months Ended June 30,
	2015			2014
Cash flows from operating activities:
Net income (loss)	$	46,162		$	(8,649	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	34,375			380
Amortization of premium/discount on purchased securities	658			1,256
Write-down of inventory to net realizable value	280			868
Non-cash equity-based compensation expense	6,684			4,207
Amortization of debt discount and debt issuance costs	5,501			2,652
Other income	(2		)	(116		)
Change in fair value of contingent consideration	1,639			1,178
Deferred income taxes	23,643			—
Changes in operating assets and liabilities:
Accounts receivable, net	(17,849		)	(3,739		)
Inventories	(1,027		)	(2,567		)
Receivable from collaboration	(1,097		)	48
Prepaid and other current assets	3,331			(1,425		)
Other long-term assets	4,549			1,137
Accounts payable and accrued expenses	10,231			(515		)
Deferred revenues	(44,376		)	(5,178		)
Other long-term liabilities	(700		)	227
Repayment of Term Loan attributable to original issue discount	(314		)	—
Total adjustments	25,526			(1,587		)
Net cash provided by (used in) operating activities	71,688			(10,236		)
Cash flows from investing activities:
Acquisition of Lumara Health, net of acquired cash	562			—
Proceeds from sales or maturities of investments	6,464			48,706
Purchase of investments	(291,085		)	(47,329		)
Proceeds from sale of assets	—			102
Capital expenditures	(677		)	(135		)
Change in restricted cash	—			2,883
Net cash (used in) provided by investing activities	(284,736		)	4,227
Cash flows from financing activities:
Proceeds from the issuance of common stock, net of underwriting disount and other expenses	188,864			—
Long-term debt principal payment	(16,686		)	—
Proceeds from issuance of convertible 2.5% senior notes	—			200,000
Payment of debt issuance costs	—			(6,711		)
Proceeds from issuance of warrants	—			25,620
Purchase of convertible bond hedges	—			(39,760		)
Payment of contingent consideration	(190		)	(90		)
Proceeds from the exercise of stock options	11,648			2,021
Net cash provided by financing activities	183,636			181,080
Net (decrease) increase in cash and cash equivalents	(29,412		)	175,071
Cash and cash equivalents at beginning of the period	119,296			26,986
Cash and cash equivalents at end of the period	$	89,884		$	202,057
Supplemental data of cash flow information:
Interest paid on long-term debt	$	12,405		$	—
Interest paid on convertible 2.5% senior notes	$	2,500		$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

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AMAG PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2015

(Unaudited)

A. DESCRIPTION OF BUSINESS

AMAG Pharmaceuticals, Inc., a Delaware corporation, was founded in 1981. We are a specialty pharmaceutical company that markets Makena® (hydroxyprogesterone caproate injection), Feraheme® (ferumoxytol) Injection for Intravenous (“IV”) use and MuGard® Mucoadhesive Oral Wound Rinse.

On November 12, 2014, we acquired Lumara Health Inc. (“Lumara Health”), a privately held pharmaceutical company specializing in women’s health. In connection with the acquisition of Lumara Health, we acquired Makena, a progestin indicated to reduce the risk of preterm birth in women with a singleton pregnancy who have a history of singleton spontaneous preterm birth. Makena was approved by the U.S. Food and Drug Administration (“FDA”) in February 2011 and was granted orphan drug exclusivity through February 3, 2018. We sell Makena to specialty pharmacies and distributors, who, in turn, sell Makena to healthcare providers, hospitals, government agencies and integrated delivery systems. Additional details regarding the acquisition of Lumara Health can be found in Note C, “Business Combinations,” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

We also market and sell Feraheme, which was approved for marketing in the U.S. in June 2009 by the FDA for use as an IV iron replacement therapy for the treatment of iron deficiency anemia in adult patients with chronic kidney disease. We began selling Feraheme in the U.S. in July 2009 through our commercial organization, including a specialty sales force. We sell Feraheme to authorized wholesalers and specialty distributors, who, in turn, sell Feraheme to healthcare providers who administer Feraheme primarily within hospitals, hematology and oncology centers, and nephrology clinics.

In June 2013, we entered into a license agreement with Abeona Therapeutics, Inc. (“Abeona”) (formerly known as PlasmaTech Biopharmaceuticals, Inc. and Access Pharmaceuticals, Inc.) (the “MuGard License Agreement”), under which we acquired the U.S. commercial rights to MuGard for the management of oral mucositis (the “MuGard Rights”).

On June 29, 2015, we entered into a stock purchase agreement to acquire CBR Acquisition Holdings Corp. (“CBR Holdings”), which, through its wholly-owned subsidiary, Cbr Systems, Inc., operates Cord Blood Registry® (“CBR”), a privately held stem cell collection and storage company, for $700.0 million in cash consideration, subject to working capital, net debt and transaction expense adjustments. CBR stores preserved umbilical cord blood and tissue stem cell units. CBR also partners with leading academic institutions that conduct clinical trials focused on evaluating the use of stem cells for regenerative medicine applications in diseases and conditions that have no cure today, including autism, cerebral palsy and pediatric stroke. We expect this acquisition to close in the third quarter of 2015 and therefore, our condensed consolidated financial statements as of June 30, 2015 do not include the impact of the pending CBR acquisition. Additional details regarding the stock purchase agreement with CBR Holdings can be found in Note T, “Subsequent Events.”

On July 22, 2015, we entered into an option agreement with Velo Bio, LLC (“Velo”), a privately held life-sciences company, that grants us an option to acquire the rights to an orphan drug candidate, digoxin immune fab (“DIF”), a polyclonal antibody being developed for the treatment of severe preeclampsia in pregnant women. We will make an upfront payment of $10.0 million in the third quarter of 2015 from cash on hand to Velo for the option to acquire the global rights to the DIF program following the conclusion of the DIF Phase 2b/3a study. Additional details regarding the option agreement with Velo can be found in Note T, “Subsequent Events.”

Throughout this Quarterly Report on Form 10-Q, AMAG Pharmaceuticals, Inc. and our consolidated subsidiaries are collectively referred to as “the Company,” “AMAG,” “we,” “us,” or “our.” Unless the context suggests otherwise, references to “Feraheme” refer to both Feraheme (the trade name for ferumoxytol in the U.S.

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and Canada) and Rienso (the trade name for ferumoxytol in the European Union (“EU”) and Switzerland).

B. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments necessary for a fair statement of the financial position and results of operations of the Company for the interim periods presented. Such adjustments consisted only of normal recurring items. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”).

In accordance with GAAP for interim financial reports and the instructions for Form 10-Q and the rules of the Securities and Exchange Commission, certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. Our accounting policies are described in the Notes to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2014. Interim results are not necessarily indicative of the results of operations for the full year. These interim financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2014.

Use of Estimates and Assumptions

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. The most significant estimates and assumptions are used to determine amounts and values of, but are not limited to: revenue recognition related to product sales and collaboration agreements; product sales allowances and accruals; potential other-than-temporary impairment of investments; acquisition date fair value and subsequent fair value estimates used to assess impairment of long-lived assets, including goodwill, in-process research and development (“IPR&D”) and other intangible assets; contingent consideration; debt obligations; accrued expenses; income taxes and equity-based compensation expense. Actual results could differ materially from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist principally of cash held in commercial bank accounts, money market funds and U.S. Treasury securities having an original maturity of less than three months. We consider all highly liquid investments with a maturity of three months or less as of the acquisition date to be cash equivalents. At June 30, 2015 and December 31, 2014, substantially all of our cash and cash equivalents were held in either commercial bank accounts or money market funds.

Principles of Consolidation

The accompanying condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. Our results of operations for the six months ended June 30, 2015, include the results of Lumara Health, which we acquired on November 12, 2014 (the “Lumara Acquisition Date”).

Revenue Recognition

We recognize revenue from the sale of our products as well as license fee, collaboration and other revenues, including milestone payments, other product revenues, and royalties we receive from our licensees. Revenue is recognized when the following criteria are met: persuasive evidence of an arrangement exists; delivery of product has occurred or services have been rendered; the sales price charged is fixed or determinable; and collection is reasonably assured.

Our U.S. product sales, which primarily represented revenues from both Makena and Feraheme in the first half of 2015 and Feraheme in the first half of 2014, were offset by provisions for allowances and accruals as follows (in

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thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Gross U.S. product sales	$	136,589	$	40,493	$	262,106	$	72,154
Provision for U.S. product sales allowances and accruals:
Contractual adjustments	39,251		17,801		74,385		31,774
Governmental rebates	12,686		208		25,654		373
Total provision for U.S product sales allowances and accruals	51,937		18,009		100,039		32,147
U.S. product sales, net	$	84,652	$	22,484	$	162,067	$	40,007

We recognize U.S. product sales net of certain allowances and accruals in our condensed consolidated statement of operations at the time of sale. Our contractual adjustments include provisions for returns, pricing and prompt payment discounts, as well as wholesaler distribution fees, and volume-based and other commercial rebates. Governmental rebates relate to our reimbursement arrangements with state Medicaid programs.

The increases in contractual adjustments and governmental rebates primarily reflects the addition of Makena to our product portfolio in connection with the November 2014 acquisition of Lumara Health. During the three months ended June 30, 2015, we reduced our Makena related Medicaid and chargeback reserves, which were initially recorded at the time of the Lumara acquisition, by $4.0 million and $1.9 million, respectively. These adjustments were recorded to goodwill during the quarter ended June 30, 2015. We did not materially adjust our product sales allowances and accruals during the three or six months ended June 30, 2014. If we determine in future periods that our actual experience is not indicative of our expectations, if our actual experience changes, or if other factors affect our estimates, we may be required to adjust our allowances and accruals estimates, which would affect our net product sales in the period of the adjustment and could be significant.

IPR&D

IPR&D acquired in a business combination is capitalized on our condensed consolidated balance sheet at the acquisition-date fair value, net of any accumulated impairment losses. IPR&D is tested for impairment on an annual basis or more frequently if indicators of impairment are present, until completion or abandonment of the projects. If we determine that IPR&D becomes impaired or is abandoned, the carrying value of the IPR&D is written down to its fair value with the related impairment charge recognized in our condensed consolidated statement of operations in the period in which the impairment occurs. Upon successful completion of each project and launch of the product, we will make a separate determination of the estimated useful life of the IPR&D intangible asset and the related amortization will be recorded as an expense prospectively over its estimated useful life.

Concentrations and Significant Customer Information

Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents, investments, and accounts receivable. As of June 30, 2015, our cash, cash equivalents and investments amounted to approximately $398.4 million. We currently invest our excess cash primarily in corporate debt securities, commercial paper, certificates of deposit and municipal securities. As of June 30, 2015, approximately $1.8 million of our total $89.9 million cash and cash equivalents balance was invested in institutional money market funds, of which $1.0 million was invested in a single fund.

Our operations are located entirely within the U.S. We are focused principally on developing, manufacturing, and commercializing Makena and Feraheme and commercializing MuGard. We perform ongoing credit evaluations of our customers and generally do not require collateral. The following table sets forth customers or partners who represented 10% or more of our total revenues for the six months ended June 30, 2015 and 2014:

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	Six Months Ended June 30,
	2015		2014
AmerisourceBergen Drug Corporation	24	%	38	%
Takeda Pharmaceuticals Company Limited	24	%	10	%
McKesson Corporation	10	%	25	%
Cardinal Health, Inc.	<10	%	17	%

In addition, approximately 24% and 27% of our Feraheme end-user demand during the six months ended June 30, 2015 and 2014, respectively, was generated by members of a single group purchasing organization with which we have contracted. Revenues from outside of the U.S. amounted to approximately 24% and 12% of our total revenues for the six months ended June 30, 2015 and 2014, respectively, and were principally related to deferred Feraheme revenue recognized in connection with the termination of our license, development and commercialization agreement with Takeda Pharmaceutical Company Limited (“Takeda”), which is headquartered in Japan.

We are currently solely dependent on a single supplier for Feraheme drug substance (produced in two separate facilities) and finished drug product and a single supply chain for Makena finished drug product. We would be exposed to a significant loss of revenue from the sale of Makena and Feraheme if our suppliers and/or manufacturers cannot fulfill demand for any reason.

C. BUSINESS COMBINATIONS

As part of our strategy to expand our portfolio with additional commercial-stage products, in November 2014, we acquired Lumara Health through which we acquired its product Makena.

On November 12, 2014, we completed our acquisition of Lumara Health at which time Lumara Health became our wholly-owned subsidiary. By virtue of the acquisition of Lumara Health, we acquired Lumara Health’s existing commercial product, Makena. Under the terms of the acquisition agreement, we acquired 100% of the equity ownership of Lumara Health, excluding the assets and liabilities of the Women’s Health Division and certain other assets and liabilities, which were divested by Lumara Health prior to closing, for $600.0 million in cash (before taking into account certain adjustments related to Lumara Health’s financial position at the time of closing, including adjustments related to net working capital, net debt and transaction expenses) and issued approximately 3.2 million shares of our common stock, par value $0.01 per share, having a value of approximately $112.0 million at the time of closing, to the holders of common stock of Lumara Health.

We have agreed to pay additional merger consideration, up to a maximum of $350.0 million, based upon the achievement of certain net sales milestones of Makena for the period from December 1, 2014 through December 19, 2019. This contingent consideration is recorded as a liability and measured at fair value based upon significant unobservable inputs. See Note E, “Fair Value Measurements,” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and Note C, “Business Combinations,” to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2014 for additional information.

The following table summarizes the components of the estimated total purchase price at fair value, subject to adjustment upon finalization of Lumara Health’s net working capital, net debt and transaction expenses as of the Lumara Acquisition Date as adjusted for measurement period adjustments recorded during the three months ended June 30, 2015 (in thousands):

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	Total Acquisition Date Fair Value
Cash consideration	$	600,000
Fair value of 3.2 million shares of AMAG common stock	111,964
Fair value of contingent milestone payments	205,000
Estimated working capital and other adjustments	821
Purchase price paid at closing	917,785
Less:
Due from sellers	(562		)
Cash acquired from Lumara Health	(5,219		)
Total purchase price	$	912,004

We accounted for the acquisition of Lumara Health as a business combination using the acquisition method of accounting. Under the acquisition method of accounting, the total purchase price of an acquisition is allocated to the net tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition. During the three months ended June 30, 2015, we received $0.6 million from the former stockholders of Lumara Health as the final settlement adjustment of working capital. In addition, during the three months ended June 30, 2015, we adjusted the preliminary fair values assigned to the assets acquired and the liabilities assumed by us at the Lumara Acquisition Date, as discussed in Note H, “Goodwill, IPR&D and Other Intangible Assests, Net” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. These measurement period adjustments were not considered material to the original purchase accounting and have been reflected as a current period adjustment to these balances during the three months ended June 30, 2015. The following table summarizes the adjusted preliminary fair values as of June 30, 2015 (in thousands):

Accounts receivable	$	36,852
Inventories	30,300
Prepaid and other current assets	3,322
Deferred income tax assets	94,965
Property and equipment	60
Makena marketed product	797,100
IPR&D	79,100
Restricted cash	1,997
Other long-term assets	3,412
Accounts payable	(3,807		)
Accrued expenses	(37,499		)
Deferred income tax liabilities	(293,649		)
Other long-term liabilities	(4,563		)
Total estimated identifiable net assets	$	707,590
Goodwill	204,414
Total	$	912,004

The preliminary values assigned to accounts receivable, prepaid and other current assets, other long-term assets, accounts payable, accrued expenses, deferred income taxes, other long-term liabilities and goodwill presented in the table above are further subject to change as additional information becomes available concerning the fair value and tax basis of the assets acquired and liabilities assumed. Any adjustments to the preliminary fair value of these acquired assets and liabilities assumed will be made as soon as practicable but not later than one year from the

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Lumara Acquisition Date.

Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the fair values of the net assets acquired and liabilities assumed. The $204.4 million of goodwill resulting from the acquisition was primarily due to the net deferred tax liabilities recorded on the fair value adjustments to Lumara Health’s inventories and identifiable intangible assets. The goodwill is not deductible for income tax purposes.

D. INVESTMENTS

As of June 30, 2015 and December 31, 2014, our investments equaled $308.5 million and $24.9 million, respectively, and consisted of securities classified as available-for-sale.

The following is a summary of our investments as of June 30, 2015 and December 31, 2014 (in thousands):

	June 30, 2015
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Corporate debt securities
Due in one year or less	$	15,151	$	6	$	(4	)	$	15,153
Due in one to three years	140,738		11		(307		)	140,442
Commercial paper
Due in one year or less	48,215		8		—			48,223
Certificates of deposit
Due in one year or less	20,000		1		—			20,001
Municipal securities
Due in one year or less	8,753		—		(8		)	8,745
Due in one to three years	76,022		13		(75		)	75,960
Total investments	$	308,879	$	39	$	(394	)	$	308,524

	December 31, 2014
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Corporate debt securities
Due in one year or less	$	11,656	$	3	$	(4	)	$	11,655
Due in one to three years	13,258		10		(33		)	13,235
Total investments	$	24,914	$	13	$	(37	)	$	24,890

The $283.6 million increase in our total investments was primarily due to the sale of approximately 4.6 million shares of our common stock at a public offering price of $44.00 per share in March 2015, resulting in gross proceeds to us of approximately $201.2 million, prior to underwriting discounts of $12.1 million and $0.2 million in commissions and other offering expenses.

Impairments and Unrealized Gains and Losses on Investments

We did not recognize any other-than-temporary impairment losses in our condensed consolidated statements of operations related to our securities during any of the three or six month periods ended June 30, 2015 and 2014. We considered various factors, including the length of time that each security was in an unrealized loss position and our

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ability and intent to hold these securities until the recovery of their amortized cost basis occurs. As of June 30, 2015, none of our investments has been in an unrealized loss position for more than one year. Future events may occur, or additional information may become available, which may cause us to identify credit losses where we do not expect to receive cash flows sufficient to recover the entire amortized cost basis of a security and which may necessitate the recording of future realized losses on securities in our portfolio. Significant losses in the estimated fair values of our investments could have a material adverse effect on our earnings in future periods.

E. FAIR VALUE MEASUREMENTS

The following tables represent the fair value hierarchy as of June 30, 2015 and December 31, 2014 for those assets and liabilities that we measure at fair value on a recurring basis (in thousands):

	Fair Value Measurements at June 30, 2015 Using:
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Money market funds	$	1,844	$	1,844	$	—	$	—
Corporate debt securities	155,595		—		155,595		—
Commercial paper	48,223		—		48,223		—
Certificates of deposit	20,001		—		20,001		—
Municipal securities	84,705		—		84,705		—
Total Assets	$	310,368	$	1,844	$	308,524	$	—
Liabilities:
Contingent consideration - Lumara Health	$	211,631	$	—	$	—	$	211,631
Contingent consideration - MuGard	8,561		—		—		8,561
Total Liabilities	$	220,192	$	—	$	—	$	220,192

	Fair Value Measurements at December 31, 2014 Using:
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Money market funds	$	77,254	$	77,254	$	—	$	—
Corporate debt securities	24,890		—		24,890		—
Total Assets	$	102,144	$	77,254	$	24,890	$	—
Liabilities:
Contingent consideration - Lumara Health	$	206,600	$	—	$	—	$	206,600
Contingent consideration - MuGard	12,102		—		—		12,102
Total Liabilities	$	218,702	$	—	$	—	$	218,702

Investments

Our money market funds are classified as Level 1 assets under the fair value hierarchy as these assets have been valued using quoted market prices in active markets without any valuation adjustment. Our investments are classified as Level 2 assets under the fair value hierarchy as these assets were primarily determined from independent pricing services, which normally derive security prices from recently reported trades for identical or similar securities, making adjustments based upon other significant observable market transactions. At the end of each reporting period, we perform quantitative and qualitative analyses of prices received from third parties to determine whether prices are reasonable estimates of fair value. After completing our analyses, we did not adjust or override any fair value measurements provided by our pricing services as of June 30, 2015. In addition, there were

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no transfers or reclassifications of any securities between Level 1 and Level 2 during the six months ended June 30, 2015.

Contingent consideration

We accounted for the acquisitions of Lumara Health and the MuGard Rights as business combinations under the acquisition method of accounting. Additional details regarding the Lumara Health acquisition can be found in Note C, “Business Combinations” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. The fair value measurements of contingent consideration obligations and the related intangible assets arising from business combinations are determined using unobservable inputs (“Level 3”). These inputs include (a) the estimated amount and timing of projected cash flows; (b) the probability of the achievement of the factors on which the contingency is based; and (c) the risk-adjusted discount rate used to present value the probability-weighted cash flows. Significant increases or decreases in any of those inputs in isolation could result in a significantly lower or higher fair value measurement.

The following table presents a reconciliation of contingent consideration obligations related to the acquisition of Lumara Health and the MuGard Rights measured on a recurring basis using Level 3 inputs as of June 30, 2015 (in thousands):

Balance as of December 31, 2014	$	218,702
Payments made	(190		)
Adjustments to fair value of contingent consideration	1,639
Other adjustments	41
Balance as of June 30, 2015	$	220,192

The $1.6 million adjustments to the fair value of the contingent consideration liability was due primarily to a $5.0 million increase to the Makena contingent consideration related to the time value of money, partially offset by a $3.4 million reduction to the Makena contingent consideration due to revised estimated amounts and timing of cash flows related to the royalties we expect to pay to Abeona under the MuGard Agreement. These adjustments are included in selling, general and administrative expenses in our condensed consolidated statements of operations. We have classified $94.9 million of the Makena contingent consideration and $0.6 million of the MuGard contingent consideration as short-term liabilities in our condensed consolidated balance sheet as of June 30, 2015.

The fair value of the contingent milestone payments payable by us to the former stockholders of Lumara Health was determined based on our probability-adjusted discounted cash flows estimated to be realized from the net sales of Makena from December 1, 2014 through December 31, 2019. The cash flows were discounted at a rate of 5%, which we believe is reasonable given the level of certainty of the pay-out.

The fair value of the contingent royalty payments payable by us to Abeona was determined based on various market factors, including an analysis of estimated sales using a discount rate of approximately 12%. As of June 30, 2015, we estimate that the undiscounted royalty amounts we could pay under the MuGard License Agreement, based on current projections, may range from $10.0 million to $18.0 million over a ten year period beginning on June 6, 2013, the acquisition date, which is our best estimate of the period over which we expect the majority of the asset’s cash flows to be derived.

We believe the estimated fair values of Lumara Health and the MuGard Rights are based on reasonable assumptions, however, we cannot provide assurance that the underlying assumptions used to forecast the cash flows will materialize as we estimated and thus, our actual results may vary significantly from the estimated results.

Debt

In February 2014, we issued $200.0 million of 2.5% convertible senior notes due February 15, 2019 (the “Convertible Notes”). As of June 30, 2015, the fair value of our Convertible Notes was approximately $514.9

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million, which differs from their carrying values. The fair value of our Convertible Notes is influenced by interest rates, our stock price and stock price volatility and is determined by prices for the Convertible Notes observed in market trading, which are Level 2 inputs.

In November 2014, we borrowed $340.0 million under a term loan facility to fund a portion of the purchase price of Lumara Health (the “Term Loan Facility”). The fair value of our outstanding borrowings under the Term Loan Facility was approximately $332.8 million at June 30, 2015, which differs from their carrying values. The fair value of our Term Loan Facility is primarily influenced by interest rates, which are Level 2 inputs.

See Note Q, “Debt,” for additional information on our debt obligations.

F. ACCOUNTS RECEIVABLE, NET

Our net accounts receivable were $58.0 million and $38.2 million as of June 30, 2015 and December 31, 2014, respectively, and primarily represented amounts due from wholesalers, distributors and specialty pharmacies to whom we sell our products directly. Accounts receivable are recorded net of reserves for estimated chargeback obligations, prompt payment discounts and any allowance for doubtful accounts.

Customers which represented greater than 10% of our accounts receivable balances as of June 30, 2015 and December 31, 2014 were as follows:

	June 30, 2015		December 31, 2014
AmerisourceBergen Drug Corporation	43	%	45	%
McKesson Corporation	11	%	12	%

G. INVENTORIES

Our major classes of inventories were as follows as of June 30, 2015 and December 31, 2014 (in thousands):

	June 30, 2015		December 31, 2014
Raw materials	$	15,467	$	14,188
Work in process	4,304		5,965
Finished goods	14,592		20,457
Inventories included in current assets	34,363		40,610
Included in other long-term assets:
Raw materials	3,759		7,798
Total Inventories	$	38,122	$	48,408

In the fourth quarter of 2014, we recorded the acquired Makena inventory at a fair value of $30.3 million, which required a $26.1 million step-up adjustment to recognize the inventory at its expected net realizable value. We are amortizing and recognizing the step-up adjustment as cost of product sales in our condensed consolidated statements of operations as the related inventories are sold. During the six months ended June 30, 2015, we recognized $5.9 million of the fair value adjustment as cost of product sales. In connection with the fair value step-up adjustment of Makena inventory, we have recorded a portion of the associated raw material inventory and associated step-up adjustment in other long-term assets as we believe that the amount of inventory purchased in the acquisition exceeds our normal inventory cycle.

During the six months ended June 30, 2015, we reserved $3.6 million of Makena inventory, which may not be saleable. This amount included a fair value adjustment of $3.3 million.

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H. GOODWILL, IPR&D AND OTHER INTANGIBLE ASSETS, NET

Goodwill

In connection with our November 2014 acquisition of Lumara Health, we recognized $205.8 million of goodwill as of December 31, 2014. During the three months ended June 30, 2015, the goodwill balance decreased by $1.4 million, which is comprised of a $5.9 million reduction associated with adjustments to our Makena revenue reserves, partially offset by a $4.5 million increase associated with the final settlement of net working capital with the former stockholders of Lumara Health. These measurement period adjustments were not considered material to the original purchase accounting and have been reflected as a current period adjustment to these balances during the three months ended June 30, 2015. As of June 30, 2015, we had no accumulated impairment losses related to goodwill. See Note C, “Business Combinations” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.

Intangible Assets, Net

Our identifiable intangible assets consist of license agreements, product rights and other identifiable intangible assets, which result from product and business acquisitions. As of June 30, 2015 and December 31, 2014, our identifiable intangible assets consisted of the following (in thousands):

	June 30, 2015						December 31, 2014
	Cost		Accumulated Amortization		Net		Cost		Accumulated Amortization		Net
Amortizable intangible assets:
Makena Marketed Product	$	797,100	$	29,435	$	767,665	$	797,100	$	4,834	$	792,266
MuGard Rights	16,893		638		16,255		16,893		351		16,542
	813,993		30,073		783,920		813,993		5,185		808,808
Indefinite-lived intangible assets:
Makena IPR&D	79,100		—		79,100		79,100		—		79,100
Total intangible assets	$	893,093	$	30,073	$	863,020	$	893,093	$	5,185	$	887,908

The Makena intangible asset (the “Makena Marketed Product”) and IPR&D intangible assets were acquired in November 2014 in connection with our acquisition of Lumara Health. Amortization of the Makena Marketed Product asset is being recognized using an economic consumption model over twenty years, which we believe is an appropriate amortization period due to the estimated economic lives of the product rights and related intangibles.

The MuGard Rights were acquired from Abeona in June 2013. Amortization of the MuGard Rights is being recognized using an economic consumption model over ten years, which represents our best estimate of the period over which we expect the majority of the asset’s cash flows to be derived. We believe this is the best approximation of the period over which we will derive the majority of value of the MuGard Rights.

We recorded $24.9 million for the six months ended June 30, 2015 in amortization expense related to the Makena Marketed Product and the MuGard Rights and $0.1 million for the six months ended June 30, 2014 related to the MuGard Rights. Amortization expense is recorded in cost of product sales in our condensed consolidated statements of operations. We expect amortization expense related to our finite-lived intangible assets for the next five fiscal years to be as follows (in thousands):

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Period	Estimated Amortization Expense
Remainder of 2015	$	27,119
2016	64,857
2017	76,308
2018	83,917
2019	55,242
Total	$	307,443

I. ACCRUED EXPENSES

As of June 30, 2015 and December 31, 2014, our accrued expenses consisted of the following (in thousands):

	June 30, 2015		December 31, 2014
Commercial rebates, fees and returns	$	58,641	$	44,807
Professional, consulting and other outside services	21,741		23,157
Salaries, bonuses and other compensation	7,982		10,176
Restructuring expense	1,253		1,953
Total accrued expenses	$	89,617	$	80,093

J. INCOME TAXES

The following table summarizes our effective tax rate and income tax expense for the three and six months ended June 30, 2015 and 2014 (in thousands except for percentages):

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Effective tax rate	35		%	0		%	34		%	0		%
Income tax expense	$	18,035		$	—		$	23,643		$	—

For the three and six months ended June 30, 2015, we recognized income tax expense of $18.0 million and $23.6 million, respectively, representing an effective tax rate of 35% and 34%, respectively. The difference between the expected statutory federal tax rate of 35% and the 34% effective tax rate for the six months ended June 30, 2015 was attributable to the impact of a valuation allowance release related to certain deferred tax assets, partially offset by the impact of state income taxes. We did not recognize any income tax benefit or expense for the three or six months ended June 30, 2014 as we were subject to a full valuation allowance due to our net operating loss position at those times.

K. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The table below presents information about the effects of net income (loss) of significant amounts reclassified out of accumulated other comprehensive loss, net of tax, during the three and six months ended June 30, 2015 and 2014 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Beginning Balance	$	(3,549	)	$	(3,414	)	$	(3,617	)	$	(3,491	)
Other comprehensive income (loss) before reclassifications	(396		)	153			(327		)	230
Reclassification adjustment for (losses) gains included in net income (loss)	(3		)	2			(4		)	2
Ending Balance	$	(3,948	)	$	(3,259	)	$	(3,948	)	$	(3,259	)

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L. BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

We compute basic net income (loss) per share by dividing net income (loss) by the weighted average number of common shares outstanding during the relevant period. Diluted net income (loss) per common share has been computed by dividing net income (loss) by the diluted number of shares outstanding during the period. Except where the result would be antidilutive to net income (loss), diluted net income (loss) per common share would be computed assuming the impact of the conversion of Convertible Notes, the exercise of outstanding stock options, the vesting of restricted stock units (“RSUs”), and the exercise of warrants.

We have a choice to settle the conversion obligation under the Convertible Notes in cash, shares or any combination of the two. Pursuant to certain covenants in our Term Loan Facility, which we entered into to partially fund the acquisition of Lumara Health, we may be restricted from settling the conversion obligation in whole or in part with cash unless certain conditions in the Term Loan Facility are satisfied, including a first lien leverage ratio. During the three and six months ended June 30, 2015, we utilized the if-converted method to reflect the impact of the conversion of the Convertible Notes. This method assumes the conversion of the Convertible Notes into shares of our common stock and reflects the elimination of the interest expense related to the Convertible Notes. In connection with the issuance of the Convertible Notes, in February 2014, we entered into convertible bond hedges. The convertible bond hedges are not included for purposes of calculating the number of diluted shares outstanding, as their effect would be anti-dilutive. The convertible bond hedges are generally expected, but not guaranteed, to reduce the potential dilution and/or offset the cash payments we are required to make upon conversion of the Convertible Notes. See Note Q, “Debt,” for additional information.

The dilutive effect of the warrants, stock options and RSUs has been calculated using the treasury stock method.

The components of basic and diluted net income (loss) per share for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands, except per share data):

	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015		2014
Net income (loss), basic	$	33,258	$	(1,547	)	$	46,162	$	(8,649	)
Effect of dilutive securities:
Interest expense on convertible 2.5% senior notes	2,071		—			4,085		—
Net income (loss), diluted	$	35,329	$	(1,547	)	$	50,247	$	(8,649	)

Weighted average common shares outstanding	30,636		21,925			28,934		21,875
Effect of dilutive securities:
Stock options and restricted stock units	1,785		—			1,639		—
Convertible 2.5% senior notes	7,382		—			7,382		—
Warrants	3,378		—			2,836		—
Shares used in calculating dilutive net income (loss) per share	43,181		21,925			40,791		21,875

Net income (loss) per share:
Basic	$	1.09	$	(0.07	)	$	1.60	$	(0.40	)
Diluted	$	0.82	$	(0.07	)	$	1.23	$	(0.40	)

The following table sets forth the potential common shares issuable upon the exercise of outstanding options, the vesting of RSUs and the exercise of warrants (prior to consideration of the treasury stock method), which were excluded from our computation of diluted net income (loss) per share because their inclusion would have been anti-dilutive (in thousands):

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	Three Months Ended June 30,		Six Months Ended June 30,
	2015	2014	2015	2014
Options to purchase shares of common stock	601	3,210	709	3,210
Shares of common stock issuable upon the vesting of restricted stock units	68	517	341	517
Warrants	—	7,382	—	7,382
Total	669	11,109	1,050	11,109

During the three and six months ended June 30, 2014, the average common stock price was below the exercise price of the warrants.

M. EQUITY-BASED COMPENSATION

We currently maintain four equity compensation plans, including our Third Amended and Restated 2007 Equity Incentive Plan, as amended (the “2007 Plan”), our Amended and Restated 2000 Stock Plan (the “2000 Plan”) (under which we no longer grant awards), the Lumara Health Inc. Amended and Restated 2013 Incentive Compensation Plan (the “Lumara Health 2013 Plan”) and our 2015 Employee Stock Purchase Plan (“2015 ESPP”). All outstanding stock options granted under each of our equity compensation plans other than our 2015 ESPP (discussed below) have an exercise price equal to the closing price of a share of our common stock on the grant date.

In November 2007, the 2000 Plan was succeeded by our 2007 Plan and, accordingly, no further grants may be made under the 2000 Plan. Any shares that remained available for issuance under the 2000 Plan as of the date of adoption of the 2007 Plan are included in the number of shares that may be issued under the 2007 Plan. Any shares subject to outstanding awards granted under the 2000 Plan that expire or terminate for any reason prior to exercise will be added to the total number of shares available for issuance under the 2007 Plan. As of June 30, 2015, there were 4,108,218 shares remaining available for issuance under the 2007 Plan, including 1,700,000 shares which were added to the 2007 Plan upon approval by our stockholders of an amendment to our 2007 Plan at our Annual Meeting of Stockholders held on May 21, 2015 (the “Annual Meeting”). Such 4,108,218 amount does not include shares subject to outstanding awards under the 2000 Plan. Further, all outstanding options under the 2007 Plan have either a seven or ten-year term and all outstanding options under the 2000 Plan have a ten-year term.

In November 2014, we assumed the Lumara Health 2013 Plan in connection with the acquisition of Lumara Health. The total number of shares issuable pursuant to awards under this plan as of the effective date of the acquisition and after taking into account any adjustments as a result of the acquisition, was 200,000 shares. As of June 30, 2015, there were 1,275 shares remaining available for issuance under the Lumara Health 2013 Plan, which are available for grants to certain employees, officers, directors, consultants, and advisors of AMAG and our subsidiaries who are newly-hired or who previously performed services for Lumara Health. All outstanding options under the Lumara Health 2013 Plan have a ten-year term.

At our Annual Meeting, our stockholders approved our 2015 ESPP, which authorizes the issuance of up to 200,000 shares of our common stock to eligible employees. The terms of the 2015 ESPP permit eligible employees to purchase shares (subject to certain plan and tax limitations) in semi-annual offerings through payroll deductions of up to an annual maximum of 10% of the employee’s “compensation” as defined in the 2015 ESPP. Shares are purchased at a price equal to 85% of the fair market value of our common stock on either the first or last business day of the offering period, whichever is lower. As of June 30, 2015, no shares have been issued under our 2015 ESPP.

During the six months ended June 30, 2015, we also granted equity through inducement grants outside of the equity plans, as discussed below, to certain newly hired executive officers and employees.

Stock Options

The following table summarizes stock option activity in our equity plans for the six months ended June 30, 2015:

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	2007 Equity Plan		2000 Equity Plan		2013 Lumara Equity Plan	Total
Outstanding at December 31, 2014	2,051,017		35,266		44,000	2,130,283
Granted	468,875		—		75,250	544,125
Exercised	(525,367	)	(12,637	)	—	(538,004	)
Expired or terminated	(134,660	)	—		—	(134,660	)
Outstanding at June 30, 2015	1,859,865		22,629		119,250	2,001,744

Restricted Stock Units

The following table summarizes RSU activity in our equity plans for the six months ended June 30, 2015:

	2007 Equity Plan		2000 Equity Plan	2013 Lumara Equity Plan		Total
Outstanding at December 31, 2014	360,826		—	20,000		380,826
Granted	232,154		—	60,225		292,379
Vested	(53,607	)	—	—		(53,607	)
Expired or terminated	(35,568	)	—	(750	)	(36,318	)
Outstanding at June 30, 2015	503,805		—	79,475		583,280

Other Equity Compensation Grants

During the six months ended June 30, 2015, our Board or Compensation Committee granted options to purchase 83,500 shares of our common stock and 29,500 RSUs to certain new-hire employees to induce them to accept employment with us (collectively, “Inducement Awards”). The options were granted at an exercise price equal to the fair market value of a share of our common stock on the respective grant dates and will be exercisable in four equal annual installments beginning on the first anniversary of the respective grant dates. The RSU grants will vest in three equal annual installments beginning on the first anniversary of the respective grant dates. The foregoing grants were made pursuant to inducement grants outside of our stockholder approved equity plans as permitted under the NASDAQ Stock Market listing rules. We assessed the terms of these awards and determined there was no possibility that we would have to settle these awards in cash and therefore, equity accounting was applied. As of June 30, 2015, there were 806,100 options and 144,900 RSUs outstanding under the Inducement Awards.

Equity-based compensation expense

Equity-based compensation expense for the three and six months ended June 30, 2015 and 2014 consisted of the following (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2015			2014		2015			2014
Cost of product sales	$	54		$	29	$	95		$	57
Research and development	565			359		1,043			808
Selling, general and administrative	3,397			1,889		5,546			3,342
Total equity-based compensation expense	4,016			2,277		6,684			4,207
Income tax effect	(1,558		)	—		(2,593		)	—
After-tax effect of equity-based compensation expense	$	2,458		$	2,277	$	4,091		$	4,207

We reduce the compensation expense being recognized to account for estimated forfeitures, which we estimate based primarily on historical experience, adjusted for unusual events such as corporate restructurings, which may result in higher than expected turnover and forfeitures. Under current accounting guidance, forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

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As a result of our historical net losses incurred during the three and six months ended June 30, 2014, we did not provide an income tax effect for these periods.

N. STOCKHOLDERS’ EQUITY

2015 Annual Meeting

At our Annual Meeting, our stockholders approved proposals to (i) amend our Certificate of Incorporation, as amended and restated and then currently in effect, to increase the number of authorized shares of our common stock from 58,750,000 shares to 117,500,000 shares (which amendment was subsequently filed with the Secretary of State of the State of Delaware) and (ii) amend our 2007 Plan to, among other things, increase the number of shares of our common stock available for issuance thereunder by 1,700,000 shares.

March 2015 Public Offering of Common Stock

In March 2015, we sold approximately 4.6 million shares of our common stock at a public offering price of $44.00 per share, resulting in gross proceeds to us of approximately $201.2 million, prior to underwriting discounts of $12.1 million and $0.2 million in commissions and other offering expenses.

Change in Stockholders’ Equity

Total stockholders’ equity increased by $253.0 million during the six months ended June 30, 2015. This increase was primarily driven by $188.9 million in net proceeds related to the March 2015 public offering of common stock, as discussed above, $46.2 million from our net income, $11.6 million from the exercise of stock options and $6.7 million related to equity-based compensation expense.

O. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

We accrue a liability for legal contingencies when we believe that it is both probable that a liability has been incurred and that we can reasonably estimate the amount of the loss. We review these accruals and adjust them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information is obtained and our views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in our accrued liabilities would be recorded in the period in which such determination is made. For the matters referenced below, the liability is not probable or the amount cannot be reasonably estimated and, therefore, accruals have not been made. In addition, in accordance with the relevant authoritative guidance, for any matters in which the likelihood of material loss is at least reasonably possible, we will provide disclosure of the possible loss or range of loss. If a reasonable estimate cannot be made, however, we will provide disclosure to that effect.

Makena Securities Litigation

During October and November 2011, three complaints were filed in the United States District Court for the Eastern District of Missouri (the “Court”) against K-V Pharmaceutical Company (“KV”) (since renamed as Lumara Health) and certain individual defendants, alleging violations of the anti-fraud provisions of the federal securities laws on behalf of all purchasers of the publicly traded securities of KV between February 14, 2011 and April 4, 2011: Julianello v. K-V Pharmaceutical Co., et al. (filed October 19, 2011); Mukku v. K-V Pharmaceutical Co., et al. (filed October 31, 2011), and Cheong v. K-V Pharmaceutical Co., et al. (filed November 2, 2011). On March 8, 2012, the three cases were consolidated and the consolidated action is now styled In Re K-V Pharmaceutical Company Securities Litigation, Case No. 4:11-CV-1816-AGF. On May 4, 2012, the Court appointed Lori Anderson as the Lead Plaintiff in the matter, and an amended complaint was filed on July 24, 2012. The amended complaint alleges class members were damaged by purchasing KV stock at artificially inflated prices due to defendants’ purportedly misleading statements regarding KV’s exclusivity over Makena. On April 22, 2013, the individual defendants moved to dismiss the complaint and oral argument was held before the Court on

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November 26, 2013. KV joined in the motion to dismiss on February 10, 2014. On March 27, 2014, the Court entered an order granting defendants’ motion to dismiss the class action complaint without prejudice to the plaintiff’s ability to file a second amended complaint with respect to a limited issue of whether defendants’ statements about Lumara Health’s financial assistance program for Makena were materially false or misleading. On April 16, 2014, plaintiff filed a motion to reconsider asking the Court to reconsider its order restricting the scope of plaintiff’s ability to amend its complaint. The Court denied plaintiff’s motion to reconsider and entered a judgment granting defendants’ motion to dismiss on June 6, 2014. On July 1, 2014, plaintiff filed a Notice of Appeal with the United States Court of Appeals for the Eighth Circuit (the “Court of Appeals”). The Court of Appeals heard oral argument on March 12, 2015 and on July 2, 2015, affirmed the Court’s decision to dismiss the case. Although the plaintiff has an opportunity to appeal, even if such an appeal were to be pursued, in accordance the Sixth Amended Joint Chapter 11 Plan of Reorganization for K-V Discovery Solutions and Its Affiliated Debtors, which became effective on September 16, 2013, the recovery in this matter, if any, is limited to the extent of any insurance and/or any proceeds therefrom (excluding any self-insured retention obligation or deductible) that may provide coverage for any liability of Lumara Health for the claims asserted in this litigation.

European Patent Organization Appeal

In July 2010, Sandoz GmbH (“Sandoz”) filed with the European Patent Office (the “EPO”) an opposition to a previously issued patent which covers ferumoxytol in EU jurisdictions. In October 2012, at an oral hearing, the Opposition Division of the EPO revoked this patent. We recorded a notice of appeal at the EPO in December 2012, which suspended the revocation of our patent. The oral proceedings for the appeal occurred on June 16, 2015, where the decision revoking the patent was set aside and remitted back to the Opposition Division for further consideration. In the event that we do not experience a successful outcome at the Opposition Division, under EU regulations, ferumoxytol would still be entitled to eight years of data protection and ten years of market exclusivity from the date of approval, which we believe would create barriers to entry for any generic version of ferumoxytol into the EU market until sometime between 2020 and 2022. This decision had no impact on our revenues for the six months ended June 30, 2015. However, any future unfavorable outcome in this matter could negatively affect the magnitude and timing of future revenues, if we were to resume commercialization efforts in the EU. We do not expect to incur any related liability regardless of the outcome of the appeal and therefore have not recorded any liability as of June 30, 2015. We continue to believe the patent is valid and intend to vigorously prosecute the patent before the Opposition Division.

Other

On July 20, 2015, the Federal Trade Commission (the “FTC”) notified us that it is conducting an investigation with respect to Makena or any hydroxyprogesterone caproate product. The FTC noted that the existence of the investigation does not indicate that the FTC has concluded that Lumara Health or its predecessor has violated the law. We intend to cooperate with the FTC investigation and at this time we cannot assess potential outcomes of this investigation.

We may periodically become subject to other legal proceedings and claims arising in connection with ongoing business activities, including claims or disputes related to patents that have been issued or that are pending in the field of research on which we are focused. Other than the above actions, we are not aware of any material claims against us at June 30, 2015. We expense legal costs as they are incurred.

P. COLLABORATIVE AGREEMENTS

Our commercial strategy includes the formation of collaborations with other pharmaceutical companies to expand our portfolio through the in-license or acquisition of additional pharmaceutical products or companies, including revenue-generating commercial products and late-stage development assets.

In December 2014, we entered into an agreement (the “Takeda Termination Agreement”), which terminated our License, Development and Commercialization Agreement with Takeda (as amended, the “Takeda Agreement”). Under the terms of the Takeda Agreement, Takeda had exclusive rights to develop and commercialize Feraheme as a therapeutic agent in certain agreed-upon territories outside of the U.S. Pursuant to the Takeda Termination Agreement, the termination of the Takeda Agreement was effective on a rolling basis, whereby the termination was effective for a particular geographic territory (i.e., countries under the regulatory jurisdictions of Health Canada, the European Medicines Agency and SwissMedic) upon the earlier of effectiveness of the transfer to us or a withdrawal of the marketing authorization for such territory, with the final effective termination date to be on the third such effective date. On April 13, 2015, the marketing authorization for Rienso was withdrawn in the EU and Switzerland. On June 25, 2015, the transfer from Takeda to us of the Feraheme marketing authorization in Canada became effective and marked the final termination date of the Takeda Agreement.

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In connection with the final termination of the Takeda Agreement, we recognized into revenues the remaining balances of deferred revenue related to the upfront and milestone payments we received from Takeda during the life of the agreement as well as amounts associated with the terms of the Takeda Termination Agreement. During the three and six months ended June 30, 2015, we recognized $33.6 million and $44.4 million, respectively, in revenues associated with the amortization of the remaining deferred revenue balance and have recorded it in license fee, collaboration and other revenues in our condensed consolidated statement of operations. In addition, we recognized $5.2 million of additional revenues in the three months ended June 30, 2015 related to payments made by Takeda upon the final termination date as required under the terms of the Takeda Termination Agreement.

Q. DEBT

2.5% Convertible Notes

On February 14, 2014, we issued $200.0 million aggregate principal amount of Convertible Notes. We received net proceeds of $193.3 million from the sale of the Convertible Notes, after deducting fees and expenses of $6.7 million. We used $14.1 million of the net proceeds from the sale of the Convertible Notes to pay the cost of the convertible bond hedges, as described below (after such cost was partially offset by the proceeds to us from the sale of warrants in the warrant transactions described below).

The Convertible Notes are governed by the terms of an indenture between us, as issuer, and Wilmington Trust, National Association, as the Trustee. The Convertible Notes are senior unsecured obligations and bear interest at a rate of 2.5% per year, payable semi-annually in arrears on February 15 and August 15 of each year. The Convertible Notes will mature on February 15, 2019, unless earlier repurchased or converted. Upon conversion of the Convertible Notes at a holder’s election, such Convertible Notes will be convertible into cash, shares of our common stock, or a combination thereof, at our election (subject to certain limitations in the Term Loan Facility), at a conversion rate of approximately 36.9079 shares of common stock per $1,000 principal amount of the Convertible Notes, which corresponds to an initial conversion price of approximately $27.09 per share of our common stock.

The conversion rate is subject to adjustment from time to time upon the occurrence of certain events, including, but not limited to, the issuance of stock dividends and payment of cash dividends. At any time prior to the close of business on the business day immediately preceding May 15, 2018, holders may convert their Convertible Notes at their option only under the following circumstances:

(1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

(2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; or

(3) upon the occurrence of specified corporate events.

On or after May 15, 2018 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Convertible Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. Based on the last reported sale price of our common stock during the last 30 trading days of the calendar quarter ended June 30, 2015, the Convertible Notes are convertible for the calendar quarter ended June 30, 2015 pursuant to clause (1) above.

In accordance with accounting guidance for debt with conversion and other options, we separately account for the liability and equity components of the Convertible Notes by allocating the proceeds between the liability component and the embedded conversion option (“equity component”) due to our ability to settle the Convertible Notes in cash, common stock or a combination of cash and common stock, at our option (subject to certain

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limitations in the Term Loan Facility). The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The allocation was performed in a manner that reflected our non-convertible debt borrowing rate for similar debt. The equity component of the Convertible Notes was recognized as a debt discount and represents the difference between the proceeds from the issuance of the Convertible Notes and the fair value of the liability of the Convertible Notes on their respective dates of issuance. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) is amortized to interest expense using the effective interest method over five years (the “life of the Convertible Notes”). The equity component is not remeasured as long as it continues to meet the conditions for equity classification.

Our outstanding Convertible Note balances as June 30, 2015 consisted of the following (in thousands):

	June 30, 2015
Liability component:
Principal	$	200,000
Less: debt discount, net	(29,183		)
Net carrying amount	$	170,817

Equity component	$	38,188

In connection with the issuance of the Convertible Notes, we incurred approximately $6.7 million of debt issuance costs, which primarily consisted of underwriting, legal and other professional fees, and allocated these costs to the liability and equity components based on the allocation of the proceeds. Of the total $6.7 million of debt issuance costs, $1.3 million were allocated to the equity component and recorded as a reduction to additional paid-in capital and $5.4 million were allocated to the liability component and recorded as assets on the balance sheet. The portion allocated to the liability component is amortized to interest expense over the expected life of the Convertible Notes using the effective interest method.

We determined the expected life of the debt was equal to the five year term on the Convertible Notes. As of June 30, 2015, the carrying value of the Convertible Notes was $170.8 million and the fair value of the Convertible Notes was $514.9 million. The effective interest rate on the liability component was 7.23% for the period from the date of issuance through June 30, 2015. The following table sets forth total interest expense recognized related to the Convertible Notes during the three and six months ended June 30, 2015 (in thousands):

	Three Months Ended June 30, 2015		Six Months Ended June 30, 2015
Contractual interest expense	$	1,250	$	2,500
Amortization of debt issuance costs	246		480
Amortization of debt discount	1,727		3,376
Total interest expense	$	3,223	$	6,356

Convertible Bond Hedge and Warrant Transactions

In connection with the pricing of the Convertible Notes and in order to reduce the potential dilution to our common stock and/or offset cash payments due upon conversion of the Convertible Notes, on February 11, 2014 and February 13, 2014, we entered into convertible bond hedge transactions covering approximately 7.4 million shares of our common stock underlying the $200.0 million aggregate principal amount of the Convertible Notes, with the Call Spread Counterparties. The convertible bond hedges have an exercise price of approximately $27.09 per share, subject to adjustment upon certain events, and are exercisable when and if the Convertible Notes are converted. If upon conversion of the Convertible Notes, the price of our common stock is above the exercise price of the convertible bond hedges, the Call Spread Counterparties will deliver shares of our common stock and/or cash with an aggregate value approximately equal to the difference between the price of our common stock at the

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conversion date and the exercise price, multiplied by the number of shares of our common stock related to the convertible bond hedges being exercised. The convertible bond hedges are separate transactions entered into by us and are not part of the terms of the Convertible Notes or the warrants, discussed below. Holders of the Convertible Notes will not have any rights with respect to the convertible bond hedges. We paid $39.8 million for these convertible bond hedges and recorded this amount as a reduction to additional paid-in capital, net of tax, in the first quarter of 2014.

In February 2014, we also entered into separate warrant transactions with each of the Call Spread Counterparties relating to, in the aggregate, approximately 7.4 million shares of our common stock underlying the $200.0 million aggregate principal amount of the Convertible Notes. The initial exercise price of the warrants is $34.12 per share, subject to adjustment upon certain events, which is 70% above the last reported sale price of our common stock of $20.07 on February 11, 2014. The warrants would separately have a dilutive effect to the extent that the market value per share of our common stock, as measured under the terms of the warrants, exceeds the applicable exercise price of the warrants. The warrants were issued to the Call Spread Counterparties pursuant to the exemption from registration set forth in Section 4(a)(2) of the Securities Act of 1933, as amended. We received $25.7 million for these warrants and recorded this amount to additional paid-in capital in the first quarter of 2014.

Aside from the initial payment of $39.8 million to the Call Spread Counterparties for the convertible bond hedges, which is partially offset by the receipt of $25.7 million for the warrants, we are not required to make any cash payments to the Call Spread Counterparties under the convertible bond hedges and will not receive any proceeds if the warrants are exercised.

Term Loan Facility

On November 12, 2014 (the “Closing Date”), we borrowed $340.0 million under the Term Loan Facility to fund a portion of the purchase price of Lumara Health. At June 30, 2015, the carrying value of the outstanding borrowings, net of unamortized original issue costs and other lender fees and expenses, was $312.4 million.

We must repay the Term Loan Facility in installments of (a) $8.5 million per quarter due on the last day of each quarter beginning with the quarter ending March 31, 2015 through the quarter ending December 31, 2015, and (b) $12.75 million per quarter due on the last day of each quarter beginning with the quarter ending March 31, 2016 through the quarter ending September 30, 2020, with the balance due in a final installment on November 12, 2020. The Term Loan Facility matures on November 12, 2020, except that the maturity date of Term Loan Facility will accelerate to September 30, 2018 if:

(a) more than $25.0 million in aggregate principal amount of our Convertible Notes remains outstanding and not converted to common stock or refinanced and replaced with debt that matures following, and has no amortization prior to, the date that is six and one half years following the Closing Date; and

(b) the aggregate principal amount of all loans borrowed under the Term Loan Facility (including all undrawn incremental commitments) is greater than $50.0 million on and as of such date (the “Maturity Date”).

The Term Loan Facility includes an annual mandatory prepayment of the debt in an amount equal to 75% of our excess cash flow (as defined in the Term Loan Facility) as measured on an annual basis, beginning with the year ending December 31, 2015. On or after December 31, 2017, the applicable excess cash flow percentage shall be reduced based on the total net leverage ratio as of the last day of the period. Excess cash flow is generally defined as our adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) as well as other adjustments specified in the credit agreement. Our estimated excess cash flow, as calculated at June 30, 2015, for the period ending December 31, 2015, was $90.2 million, which was reclassified from long-term to current as of June 30, 2015 as it would be paid in April 2016.

The Term Loan Facility has a lien on substantially all of our assets, including a pledge of 100% of the equity interests in our domestic subsidiaries and an obligation to pledge 65% of the equity interests in our direct foreign subsidiaries.

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The Term Loan Facility contains customary affirmative covenants for transactions of this type and other affirmative covenants agreed to by the parties, including, among others, the provision of annual and quarterly financial statements and compliance certificates, maintenance of property, insurance, compliance with laws and environmental matters. The Term Loan Facility contains customary negative covenants for transactions of this type and other negative covenants agreed to by the parties, including, among others, restrictions on the incurrence of indebtedness, granting of liens, making investments and acquisitions, paying dividends, repurchases of equity interests in the Company, entering into affiliate transactions and asset sales. The Term Loan Facility also provides for a number of customary events of default, including, among others, payment, bankruptcy, covenant, representation and warranty, change of control and judgment defaults. In addition, the Term Loan Facility contains certain restrictions regarding the use of our funds to pay certain debts.

The Term Loan Facility requires that we comply with a Total Net Leverage Ratio. Under the terms of the Term Loan Facility, we must maintain a Total Net Leverage Ratio that is less than or equal to 4.25 to 1.00 for the fiscal quarter ended June 30, 2015 and declining over time to a range of 1.00 to 1.00 for the fiscal quarter ending September 30, 2017 and each fiscal quarter thereafter through the Maturity Date. For purposes of testing our Total Net Leverage Ratio, we are permitted to net from our outstanding total indebtedness up to $25.0 million of our domestic unrestricted cash and cash equivalents. As of June 30, 2015, we were in compliance with these covenants.

All obligations under the Term Loan Facility are unconditionally guaranteed by substantially all of our direct and indirect domestic subsidiaries. These guarantees are secured by substantially all of the present and future property and assets of such subsidiaries. In connection with the CBR acquisition, we intend to refinance this debt. Additional details regarding our intended financing plans can be found in Note T, “Subsequent Events.”

R. RESTRUCTURING

In connection with the Lumara Health acquisition, we initiated a restructuring program in the fourth quarter of 2014, which included severance benefits primarily related to certain former Lumara Health employees. As a result of the restructuring, we recorded charges of approximately $1.0 million in the six months ended June 30, 2015. We expect to pay substantially all of these restructuring costs during 2015.

The following table outlines the components of our restructuring expenses which were included in current liabilities for the three and six months ended June 30, 2015 and 2014 (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2015			2014		2015			2014
Accrued restructuring, beginning of period	$	2,118		$	—	$	1,953		$	—
Employee severance, benefits and other related costs	284			—		855			—
Payments	(1,149		)	—		(1,555		)	—
Accrued restructuring, end of period	$	1,253		$	—	$	1,253		$	—

S. RECENTLY ISSUED AND PROPOSED ACCOUNTING PRONOUNCEMENTS

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

In May 2015, the FASB issued Accounting Standards Update (“ASU”) 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). Under this standard, investments measured at net asset value (‘‘NAV’’), as a practical expedient for fair value, will be excluded from the fair value hierarchy. The only criterion for categorizing investments in the fair value hierarchy will be the observability of the inputs. The standard is effective for us for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including

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for financial statement periods that have not yet been issued. We do not expect the adoption of ASU 2015-07 to have a material impact on our disclosures.

In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for annual and interim periods beginning on or after December 15, 2015. As of June 30, 2015, we have $5.3 million in debt issuance costs associated with our Convertible Notes and Term Loan Facility that would be reclassified from a long-term asset to a reduction in the carrying amount of our debt.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures, if required. ASU 2014-15 will be effective for annual reporting periods ending after December 15, 2016, which will be our fiscal year ending December 31, 2016, and to annual and interim periods thereafter. We are in the process of evaluating the impact of adoption of ASU 2014-15 on our condensed consolidated financial statements and related disclosures and do not expect it to have a material impact our results of operations, cash flows or financial position.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, as a new Topic, Accounting Standards Codification Topic 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB finalized a one year delay in the effective date of this standard, which will now be effective for us on January 1, 2018, however early adoption is permitted any time after the original effective date, which for us is January 1, 2017. We have not yet selected a transition method and are currently evaluating the impact of ASU 2014-09 on our condensed consolidated financial statements.

T. SUBSEQUENT EVENTS

CBR Agreement

On June 29, 2015, we entered into a stock purchase agreement (the “CBR Agreement”) to acquire CBR Holdings and its CBR business. CBR is a privately held provider of services for the collection, processing, and long-term cryopreservation of umbilical cord blood and cord tissue stem cells for family use. The CBR Agreement provides that, upon the terms and subject to the conditions set forth in the CBR Agreement, we will purchase all of the outstanding equity securities of CBR Holdings for an aggregate of $700.0 million in cash consideration, subject to working capital, net debt and transaction expense adjustments as set forth in the CBR Agreement. We expect this acquisition to close in the third quarter of 2015.

The CBR Agreement contains customary representations, warranties and covenants of the parties as well as customary conditions to closing, including, among other things, the representations and warranties of CBR Holdings and its sole owner being true and correct at the closing, subject to the terms of the CBR Agreement and the absence of any material adverse changes affecting CBR Holdings. In addition, the CBR Agreement provides for limited termination rights, including, among others, by the mutual consent of us and the sole owner of CBR; upon certain breaches of representations, warranties, covenants or agreements; and in the event the acquisition has not been consummated before October 28, 2015.

Commitment Letter

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Agreement does provide that we shall have a 15 business day marketing period after receipt of certain financial information from CBR (with customary exclusions for holidays) to obtain financing to fund a portion of the consideration, and CBR has agreed to use its reasonable best efforts to cooperate with us in our efforts to obtain such financing, including the preparation and delivery of certain audited financial information and assistance in preparing certain pro forma financial information.

Concurrently with the execution and delivery of the CBR Agreement, Jefferies Finance LLC and Barclays Bank PLC (collectively, the “Joint Lead Arrangers”) entered into a commitment letter with us (the “Commitment Letter”) pursuant to which the Joint Lead Arrangers and additional lenders (together, the “Lenders”) will provide (a) a senior secured term loan facility of up to $350.0 million (the “CBR Term Loan Facility”) and (b) senior unsecured increasing rate loans (the “Bridge Loans”) in an aggregate principal amount of up to $450.0 million under a senior unsecured bridge loan facility (the “Bridge Loan Facility” and together with the CBR Term Loan Facility, the “Debt Financing”), in each case, subject to customary conditions set forth in the Commitment Letter. We expect to use the proceeds of the CBR Term Loan Facility and the Bridge Loan Facility to (a) pay a portion of the CBR acquisition consideration, (b) pay various fees and expenses incurred in connection with the CBR acquisition and the Debt Financing, and (c) repay certain of our and CBR’s indebtedness ((a) through (c) collectively referred to as the “Financial Obligations”). We may also fund a portion of the Financial Obligations using cash on hand and other available sources of funding, including through the issuance and sale of senior unsecured notes (the “Notes”) and the issuance and sale of equity or equity-linked securities, which would reduce the amount of the CBR Term Loan Facility and/or Bridge Loan Facility.

The obligations of the Lenders to provide the financing under the Commitment Letter for the Debt Financing are subject to a number of conditions for acquisition financings, including conditions that do not relate directly to the CBR Agreement, such as a 15 business day marketing period (with customary exclusions for holidays) for the Lead Arrangers to syndicate the CBR Term Loan Facility. The Commitment Letter expires on the earliest of (a) the date that is five business days after the valid termination of the CBR Agreement, (b) the closing of the CBR acquisition (unless the Lenders have failed to fund in breach of their obligations under the Commitment Letter) and (c) October 26, 2015. The CBR Term Loan Facility amortizes in quarterly installments over the term of the CBR Term Loan Facility, is secured by substantially all of our assets and the assets of our subsidiaries and is guaranteed by certain of our subsidiaries.

The Bridge Loan Facility is unsecured, is guaranteed by certain of our subsidiaries and matures one year from the initial date of funding (the “Bridge Loan Maturity Date”). If the Bridge Loans have not been repaid prior to the Bridge Loan Maturity Date, they shall automatically be converted into senior unsecured term loans (“Extended Term Loans”) with a maturity date on the seventh anniversary of the Bridge Loan Maturity Date.

Pursuant to the Commitment Letter and in accordance with the terms of a fee letter entered into among the Joint Lead Arrangers and us, the Joint Lead Arrangers expect to receive certain customary fees, some of which are based on their pro rata participation under the Commitment Letter, from us, including certain fees payable depending on various circumstances and contingencies. In addition, the fee letter gives the Joint Lead Arrangers the right to make certain limited and customary changes to the terms of the facilities to facilitate syndication.

Velo Agreement

On July 22, 2015, we entered into an option agreement with Velo, a privately held life-sciences company, that grants us an option to acquire the rights to an orphan drug candidate, DIF, a polyclonal antibody being developed for the treatment of severe preeclampsia in pregnant women. We will make an upfront payment of $10.0 million to Velo in the third quarter of 2015 for the option to acquire the global rights to the DIF program (the “DIF Rights”) and will fund the consideration with cash on hand. DIF has been granted both orphan drug and fast-track review designations by the FDA for the use in treating severe preeclampsia. Under the option agreement, Velo will complete a dose ranging study and a Phase 2b/3a clinical study. Following the conclusion of the DIF Phase 2b/3a study, we may terminate, or, for additional consideration, exercise or extend, our option to acquire the DIF Rights. If we exercise the option to acquire the DIF Rights, we would be responsible for additional costs in pursuing FDA approval, and would be subject to certain milestone payments and single-digit royalties based on regulatory approval and commercial performance of the product. If we exercise the option, we will be responsible for

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payments totaling up to $75.0 million (including the upfront payment, payment of the option exercise price and the regulatory milestone payments) and up to an additional $250.0 million in sales milestone payments based on the achievement of annual sales milestones at targets ranging from $100.0 million to $900.0 million. We anticipate that results from the pivotal Phase 2b/3a study could be available as early as 2018.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with the unaudited financial information and the notes thereto included in this Quarterly Report on Form 10-Q and the audited financial information and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014 (our “Annual Report”).

Unless the context suggests otherwise, references to “Feraheme” refer to both Feraheme (the trade name for ferumoxytol in the U.S. and Canada) and Rienso (the trade name for ferumoxytol in the EU and Switzerland).

Except for the historical information contained herein, the matters discussed in this Quarterly Report on Form 10-Q may be deemed to be forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. In this Quarterly Report on Form 10-Q, words such as “may” “will,” “expect,” “intend,” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements.

Examples of forward-looking statements contained in this report include, without limitation, statements regarding the following: plans to bring to market therapies that provide clear benefits and improve patients’ lives; the expected timing of our acquisition of CBR; plans to diversify and grow our product portfolio, including our intent to continue to expand and diversify our portfolio through the in license or purchase of additional pharmaceutical products or companies; expectations that results from the Velo pivotal Phase 2b/3a study could be available as early as 2018; beliefs that AMAG is a high-growth specialty pharmaceutical company; our plans to continue to expand the impact of our product portfolio by delivering on our aggressive growth strategy; expectations and plans as to regulatory and commercial developments and activities, including the pursuit, if any, of a broader indication for Feraheme, commercialization efforts, if any, for Feraheme outside of the U.S., requirements and initiatives for clinical trials and studies, post-approval commitments for our products and the lifecycle management program for Makena; expectations regarding our response to the FDA on the complete response letter for approval of the single-dose preservative-free vial of Makena and our expectations of the timing of the related commercial launch; expectations as to what impact recent regulatory developments will have on our business and competition, including recent changes to the Feraheme product information and label; the market opportunities for each of our products; plans regarding our sales and marketing initiatives, including our contracting and discounting strategy and efforts to increase patient compliance and access; our expectation of costs to be incurred in connection with and revenue sources to fund our future operations; our expectations regarding the contribution of Makena and Feraheme sales and, once consummated, CBR revenues, to the funding of our on-going operations; the potential significance of costs in integrating CBR into our current business; expectations regarding the manufacture of all drug substance and drug products at our third-party manufacturers; our expectations regarding customer returns and other revenue-related reserves and accruals; estimates regarding our net operating loss carryforwards, effective tax rate and other tax attributes; the impact of accounting pronouncements; the effect of product price increases; expected increases in research and development expenses; expectations regarding our financial results, including revenues, cost of product sales, selling, general and administrative expenses, restructuring costs, amortization and other income (expense); our investing activities; expectations regarding our cash, cash equivalents and investments balances and capital needs; estimates and beliefs related to our debt, including our Convertible Notes and the Term Loan Facility; the impact of volume-based and other rebates and incentives; the valuation of certain intangible assets, goodwill, contingent consideration, debt and other assets and liabilities, including our methodology and assumptions regarding fair value measurements; our expectations regarding competitive pressures and the impact on growth on our product sales; our plans regarding manufacturing; the timing of our planned research and development projects; the manner in which we intend or are required to settle the conversion of our Convertible Notes; and our expectations for our cash, revenue, cash equivalents and investments balances and information with respect to any other plans and strategies for our business. Our actual results and the timing of certain events may differ materially from the results discussed, projected, anticipated or indicated in any forward-looking statements. Any forward-looking statement should be considered in light of the factors discussed in Part II, Item 1A below under “Risk Factors” in this Quarterly Report on Form 10-Q and in Part I, Item 1A in our Annual Report. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. We disclaim any obligation, except as specifically required by law and the rules of the U.S. Securities and Exchange

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Commission to publicly update or revise any such statements to reflect any change in company expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

Overview

Product Portfolio Overview

Current Offerings

AMAG Pharmaceuticals, Inc., a Delaware corporation, was founded in 1981. We are a high-growth specialty pharmaceutical company that uses our business and clinical expertise to bring medical therapies and other innovations to market that provide clear benefits and improve people’s lives. We have a diverse portfolio of products with a focus on maternal health, anemia management and cancer supportive care, including Makena® (hydroxyprogesterone caproate injection), Feraheme® (ferumoxytol) Injection for Intravenous (“IV”) use and MuGard® Mucoadhesive Oral Wound Rinse. We intend to continue to expand the impact of these and future products for patients by delivering on our aggressive growth strategy, which includes organic growth, as well as the pursuit of products and companies that align with our existing therapeutic areas or those that could benefit from our proven core competencies. Currently, our two primary sources of revenue are from sales of Makena and Feraheme.

On November 12, 2014, we completed our acquisition of Lumara Health at which time Lumara Health became our wholly-owned subsidiary. Under the terms of the acquisition agreement (the “Lumara Agreement”), we purchased 100% of the equity ownership of Lumara Health, excluding the assets and liabilities of the Women’s Health Division and certain other assets and liabilities, which were divested by Lumara Health prior to closing, for $600.0 million in cash (before taking into account certain adjustments related to Lumara Health’s financial position at the time of closing, including adjustments related to net working capital, net debt and transaction expenses) and issued approximately 3.2 million shares of our common stock, par value $0.01 per share, having a value of approximately $112.0 million at the time of closing, to the holders of common stock of Lumara Health. The Lumara Agreement provides for future contingent payments of up to $350.0 million in cash (or upon mutual agreement between us and the former Lumara Health security holders, future contingent payments may also be made in common stock or some combination thereof) payable by us to the former Lumara Health security holders based upon the achievement of certain sales milestones through calendar year 2019. By virtue of the acquisition of Lumara Health, we acquired an existing commercial product, Makena, a progestin indicated to reduce the risk of preterm birth in women with a singleton pregnancy who have a history of singleton spontaneous preterm birth. Makena was approved by the U.S. Food and Drug Administration (“FDA”) in February 2011 and was granted orphan drug exclusivity through February 3, 2018. We sell Makena to specialty pharmacies and distributors, who, in turn, sell Makena to healthcare providers, hospitals, government agencies and integrated delivery systems. Additional details regarding the Lumara Agreement can be found in Note C, “Business Combinations,” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Feraheme was approved for marketing in the U.S. in June 2009 by the FDA for use as an IV iron replacement therapy for the treatment of iron deficiency anemia (“IDA”) in adult patients with chronic kidney disease (“CKD”). We began selling Feraheme in the U.S. in July 2009 through our commercial organization, including a specialty sales force. We sell Feraheme to authorized wholesalers and specialty distributors, who, in turn, sell Feraheme to healthcare providers who administer Feraheme primarily within hospitals, hematology and oncology centers, and nephrology clinics.

In June 2013, we entered into a license agreement with Abeona Therapeutics, Inc. (“Abeona”) (formerly known as PlasmaTech Biopharmaceuticals, Inc. and Access Pharmaceuticals, Inc.), under which we acquired the U.S. commercial rights to MuGard for the management of oral mucositis (the “MuGard Rights”).

Pending Additions

On June 29, 2015, we entered into a stock purchase agreement (the “CBR Agreement”) with CBR Acquisition Holdings Corp. (“CBR Holdings”), which through its wholly-owned subsidiary, Cbr Systems, Inc., operates Cord Blood Registry® (“CBR”). CBR is

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a privately held provider of services for the collection, processing, and long-term cryopreservation of umbilical cord blood and cord tissue stem cells for family use. As of June 30, 2015, CBR stores more than 600,000 preserved umbilical cord blood and tissue stem cell units, which represents more than half of all privately stored cord units in the U.S. CBR also partners with leading academic institutions that conduct clinical trials focused on evaluating the use of stem cells for regenerative medicine applications in diseases and conditions that have no cure today, including autism, cerebral palsy and pediatric stroke. The CBR Agreement provides that, upon the terms and subject to the conditions set forth in the CBR Agreement, we will purchase all of the outstanding equity securities of CBR Holdings for an aggregate of $700.0 million in cash consideration, subject to working capital, net debt and transaction expense adjustments as set forth in the CBR Agreement. We expect this acquisition to close in the third quarter of 2015.

We expect the pending acquisition of CBR, once completed, to have a significant impact on our business and results of operations, including revenues, cost of product sales, research and development expenses, selling, general and administrative expenses, and net income (loss), which we are in the process of assessing. Our expectations of income and expenses discussed throughout this Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations do not include the impact of the pending CBR acquisition and the resulting CBR revenue.

Makena Regulatory Developments Overview

In October 2014, we filed a prior approval supplement to the original Makena New Drug Application (“NDA”) with the FDA, seeking approval of a single-dose (1 mL) preservative-free vial of Makena. In May 2015, we received a complete response letter from the FDA for the prior approval supplement requesting additional information related to manufacturing procedures for the single-dose vial at our third-party manufacturer, Coldstream Laboratories, Inc. (“Coldstream”). We are currently working with Coldstream to develop the required information requested by the FDA in the complete response letter. We remain committed to commercializing a single-dose vial of Makena and plan to work with the FDA on a timely response. In addition, on July 20, 2015, we filed a prior approval supplement to the original Makena NDA with the FDA, seeking approval of Hospira, Inc., our current manufacturer of the multi-dose vial, to manufacture the single-dose (1 mL) preservative-free vial of Makena. Based on current expectations, we are planning for a commercial launch of the single-dose vial in the fourth quarter of 2015.

Feraheme Regulatory Developments Overview

In March 2015, following discussions with the FDA, we updated our current U.S. Feraheme label to include (a) the addition of a boxed warning related to the risks of serious hypersensitivity reactions or anaphylaxis, which risks were previously described only in the Warnings and Precautions section; (b) revisions to the Dosing and Administration section to indicate that Feraheme should only be administered by IV infusion; and (c) modifications to the Warnings and Precautions section to include a statement that patients with a history of multiple drug allergies may have a greater risk of anaphylaxis with parenteral iron products. In addition to updating the Feraheme product label, we have communicated these changes to healthcare providers through a Dear Healthcare Provider Letter.

In December 2014, we entered into an agreement (the “Takeda Termination Agreement”), which terminated our License, Development and Commercialization Agreement with Takeda (as amended, the “Takeda Agreement”). Under the terms of the Takeda Agreement, Takeda had exclusive rights to develop and commercialize Feraheme as a therapeutic agent in certain agreed-upon territories outside of the U.S. Pursuant to the Takeda Termination Agreement, the termination of the Takeda Agreement was effective on a rolling basis, whereby the termination was effective for a particular geographic territory (i.e., countries under the regulatory jurisdictions of Health Canada, the European Medicines Agency and SwissMedic) upon the earlier of effectiveness of the transfer to us or a withdrawal of the marketing authorization for such territory, with the final effective termination date to be on the third such effective date. The marketing authorization for Rienso was withdrawn in the EU and Switzerland in April 2015 and on June 25, 2015, the transfer from Takeda to us of the Feraheme marketing authorization in Canada became effective and marked the final termination date of the Takeda Agreement. As a result, we have recognized all remaining deferred revenues related to Takeda into revenues during the quarter ended June 30, 2015. We continue to assess the commercial opportunity for Feraheme, including partnering opportunities, in Canada.

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In December 2012, we submitted a supplemental new drug application (“sNDA”) to the FDA seeking approval for Feraheme for the treatment of IDA in adult patients who had failed or could not use oral iron. In January 2014, we received a complete response letter from the FDA for the sNDA informing us that our sNDA could not be approved in its present form and stating that we have not provided sufficient information to permit labeling of Feraheme for safe and effective use for the proposed broader indication. The FDA indicated that its decision was based on the cumulative ferumoxytol data, including the global Phase 3 IDA program and global post-marketing safety reports for the currently indicated CKD patient population. The FDA suggested, among other things, that we submit additional clinical trial data in the proposed broad IDA patient population with a primary composite safety endpoint of serious hypersensitivity/anaphylaxis, cardiovascular events and death, events that are included in the labels of Feraheme and other IV irons and that have been reported in the post-marketing environment for Feraheme. In June 2014, we met with the FDA to discuss our proposed approach to resolving the points that were raised in the complete response letter. Based on the FDA’s feedback, we submitted a revised proposal that includes the design of a potential clinical trial and a safety endpoint for such trial of Feraheme. We expect to receive feedback from the FDA during 2015 and expect thereafter to be able to assess and determine the path forward, if any, for Feraheme in the broad IDA patient population in the U.S., including the related timing and cost of any clinical trials.

Our Acquisition of CBR

CBR Agreement

On June 29, 2015, we entered into the CBR Agreement, which provides that, upon the terms and subject to the conditions set forth in the CBR Agreement, we will purchase all of the outstanding equity securities of CBR for $700.0 million in cash consideration, subject to working capital, net debt and transaction expense adjustments. CBR is a privately held provider of services for the collection, processing, and long-term cryopreservation of umbilical cord blood and cord tissue stem cells for family use.

The CBR Agreement contains customary representations, warranties and covenants of the parties as well as customary conditions to closing, including, among other things, the representations and warranties of CBR being true and correct at the closing, subject to the terms of the CBR Agreement and the absence of any material adverse changes affecting CBR. In addition, the CBR Agreement provides for limited termination rights, including, among others, by the mutual consent of us and CBR; upon certain breaches of representations, warranties, covenants or agreements; and in the event the acquisition has not been consummated before October 28, 2015.

Commitment Letter

Pursuant to the CBR Agreement, we are obligated to obtain financing to fund a portion of the consideration. Receipt of financing by us is not a condition to our obligation under the CBR Agreement; however, the CBR Agreement does provide that we shall have a 15 business day marketing period after receipt of certain financial information from CBR (with customary exclusions for holidays) to obtain financing to fund a portion of the consideration, and CBR has agreed to use its reasonable best efforts to cooperate with us in our efforts to obtain such financing, including the preparation and delivery of certain audited financial information and assistance in preparing certain pro forma financial information.

Concurrently with the execution and delivery of the CBR Agreement, Jefferies Finance LLC and Barclays Bank PLC (collectively, the “Joint Lead Arrangers”) entered into a commitment letter with us (the “Commitment Letter”) pursuant to which the Joint Lead Arrangers and additional lenders (together, the “Lenders”) will provide (a) a senior secured term loan facility of up to $350.0 million (the “CBR Term Loan Facility”) and (b) senior unsecured increasing rate loans (the “Bridge Loans”) in an aggregate principal amount of up to $450.0 million under a senior unsecured bridge loan facility (the “Bridge Loan Facility” and together with the CBR Term Loan Facility, the “Debt Financing”), in each case, subject to customary conditions set forth in the Commitment Letter. We expect to use the proceeds of the CBR Term Loan Facility and the Bridge Loan Facility to (a) pay a portion of the CBR acquisition consideration, (b) pay various fees and expenses incurred in connection with the CBR acquisition and the Debt Financing, and (c) repay certain or our and CBR’s indebtedness ((a) through (c) collectively referred to as the “Financial Obligations”). We may also fund a portion of the Financial Obligations using cash on hand and other

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available sources of funding, including through the issuance and sale of senior unsecured notes (the “Notes”) and the issuance and sale of equity or equity-linked securities, which would reduce the amount of the CBR Term Loan Facility and/or Bridge Loan Facility.

Velo Agreement

On July 22, 2015, we entered into an agreement with Velo Bio, LLC (“Velo”), a privately held life-sciences company, that grants us an option to acquire the rights to an orphan drug candidate, digoxin immune fab (“DIF”), a polyclonal antibody being developed for the treatment of severe preeclampsia in pregnant women. We will make an upfront payment of $10.0 million to Velo in the third quarter of 2015 for the option to acquire the global rights to the DIF program (the “DIF Rights”) and will fund the consideration with cash on hand. DIF has been granted both orphan drug and fast-track review designations by the FDA for the use in treating severe preeclampsia. Under the option agreement, Velo will complete a dose ranging study and a Phase 2b/3a clinical study. Following the conclusion of the DIF Phase 2b/3a study, we may terminate, or, for additional consideration, exercise or extend, our option to acquire the DIF Rights. If we exercise the option to acquire the DIF Rights, we would be responsible for additional costs in pursuing FDA approval, and would be subject to certain milestone payments and single-digit royalties based on regulatory approval and commercial performance of the product. If we exercise the option, we will be responsible for payments totaling up to $75.0 million (including the upfront payment, payment of the option exercise price and the regulatory milestone payments) and up to an additional $250.0 million in sales milestone payments based on the achievement of annual sales milestones at targets ranging from $100.0 million to $900.0 million. We anticipate that results from the pivotal Phase 2b/3a study could be available as early as 2018.

Results of Operations — Three Months Ended June 30, 2015 and 2014

Revenues

Total revenues for the three months ended June 30, 2015 and 2014 consisted of the following (in thousands):

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	Three Months Ended June 30,
	2015		2014		$ Change			% Change
U.S. product sales, net
Makena	$	63,574	$	—	$	63,574		N/A
Feraheme	20,550		22,225		(1,675		)	-8	%
MuGard	528		259		269			>100	%
Total	84,652		22,484		62,168			>100	%
License fee, collaboration and other revenues	39,232		2,318		36,914			>100	%
Total Revenues	$	123,884	$	24,802	$	99,082		>100	%

Net U.S. product sales increased by $62.2 million during the three months ended June 30, 2015 as compared to the same period in 2014 primarily due to the addition of Makena to our product portfolio as a result of the November 2014 acquisition of Lumara Health, partially offset by a $1.7 million decrease in Feraheme net product sales. The decline in Feraheme sales was partially a result of recent changes to the product’s label that included adding a boxed warning and changing the administration from rapid injection to IV infusion. We anticipate that sales of Feraheme will return to growth in the second half of the year due to the expected continued growth in the IV iron market and forecasted future price appreciation. In addition, we anticipate that sales of Makena will increase in the second half of 2015 as compared to the first half of 2015 as we continue to gain market share from compounded product through broader reimbursement of Makena, improved patient compliance and continued educational programs for patients and physicians regarding treatment with Makena.

Total gross U.S. product sales were offset by product sales allowances and accruals for the three months ended June 30, 2015 and 2014 as follows (in thousands):

	Three Months Ended June 30,
	2015		2014
Gross U.S. product sales	$	136,589	$	40,493
Provision for U.S. product sales allowances and accruals:
Contractual adjustments	39,251		17,801
Governmental rebates	12,686		208
Total provision for U.S product sales allowances and accruals	51,937		18,009
U.S. product sales, net	$	84,652	$	22,484

The $96.1 million increase in gross U.S. product sales was due primarily to the addition of Makena to our product portfolio, which resulted in $96.5 million gross sales in the second quarter of 2015, partially offset by a $0.5 million decrease in our U.S. Feraheme sales in the three months ended June 30, 2015 as compared to the same period in 2014. Of the $0.5 million decrease in U.S. Feraheme sales, $6.5 million was due to decreased units sold, partially offset by $6.0 million due to price increases.

During the three months ended June 30, 2015, we reduced our Makena related Medicaid and chargeback reserves, which were initially recorded at the time of the Lumara acquisition, by $4.0 million and $1.9 million, respectively. These adjustments were recorded to goodwill during the quarter ended June 30, 2015. We did not materially adjust our product sales allowances and accruals during the three months ended June 30, 2014. We may revise our estimated revenue reserves related to Makena as we continue to obtain additional experience. If we determine in future periods that our actual experience is not indicative of our expectations, if our actual experience changes, or if other factors affect our estimates, we may be required to adjust our allowances and accruals estimates, which would affect our net product sales in the period of the adjustment and could be significant.

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For further details related to our revenue recognition and related sales allowances policy, please refer to our critical accounting policies included in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on our Annual Report for the year ended December 31, 2014 and Note B to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Healthcare Reform Legislation

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “Healthcare Reform Act”) was enacted in the U.S. in March 2010 and includes certain cost containment measures including an increase to the minimum rebates for products covered by Medicaid programs and the extension of such rebates to drugs dispensed to Medicaid beneficiaries enrolled in Medicaid managed care organizations as well as the expansion of the 340B Drug Discount Program under the Public Health Service Act. This legislation contains provisions that can affect the operational results of companies in the pharmaceutical industry and healthcare related industries, including us, by imposing additional costs on such companies. The impact of this healthcare reform legislation has not had a material impact on our financial statements or results of operations.

Presently, we have not identified any provisions of the recent healthcare reform legislation that could materially impact our business in 2015 and beyond, but we continue to monitor ongoing legislative developments and we are assessing what impact such healthcare reform legislation will have on our business going forward, including following the consummation of our acquisition of CBR.

License Fee, Collaboration and Other Revenues

License fee, collaboration and other revenues include deferred license fee revenues from Takeda, Feraheme product sales to Takeda and royalties from Takeda. The $36.9 million increase in license fee, collaboration and other revenues in the three months ended June 30, 2015 as compared to the same period in 2014 was primarily due to $33.6 million of deferred license fee revenues recognized in the second quarter of 2015 as the result of the effective termination of the Takeda Agreement on June 25, 2015, which resulted in the recognition of all remaining Takeda related deferred revenues. In addition, we recognized $5.2 million of additional revenues in the three months ended June 30, 2015 related to payments made by Takeda upon the final termination date as required under the terms of the Takeda Termination Agreement.

We expect our quarterly license fee, collaboration and other revenues will be immaterial for the remainder of 2015 due to the effective termination of the Takeda Agreement and the full recognition of the remaining deferred revenue balance, as discussed above.

Costs and Expenses

Cost of Product Sales

Cost of product sales for the three months ended June 30, 2015 and 2014 were as follows (in thousands):

	Three Months Ended June 30,
	2015			2014			$ Change		% Change
Cost of Product Sales	$	19,679		$	2,743		$	16,936	>100	%
Percentage of U.S. Net Product Sales	23		%	12		%

Our cost of product sales are primarily comprised of manufacturing costs, costs of managing our contract manufacturers, and costs for quality assurance and quality control associated with our U.S. product sales and the amortization of product related intangible assets and inventory step-up related to the November 2014 acquisition of Lumara Health. The $16.9 million increase in our cost of product sales for the three months ended June 30, 2015 as compared to the same period in 2014 was primarily attributable to $13.2 million of amortization expense recognized during the second quarter of 2015 related to the Makena intangible asset. In addition, the increase reflects $3.0 million recognized during the second quarter of 2015 for the step-up adjustment to the Makena inventory we

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acquired in November 2014.

We expect our cost of product sales as a percentage of net product sales, excluding any impact from the amortization of the Makena and MuGard Rights intangible assets and the amortization of inventory step-up of Makena inventory, to remain relatively consistent for the remaining quarters of 2015 as compared to the first half of 2015.

Research and Development Expenses

Research and development expenses for the three months ended June 30, 2015 and 2014 consisted of the following (in thousands):

	Three Months Ended June 30,
	2015		2014		$ Change			% Change
External Research and Development Expenses
Feraheme-related costs	$	1,604	$	1,788	$	(184	)	-10	%
Makena-related costs	3,244		—		3,244			N/A
Other external costs	160		345		(185		)	-54	%
Total	5,008		2,133		2,875			>100	%
Internal Research and Development Expenses	3,176		2,407		769			32	%
Total Research and Development Expenses	$	8,184	$	4,540	$	3,644		80	%

Total research and development expenses incurred in the three months ended June 30, 2015 increased by $3.6 million, or 80%, as compared to the same period in 2014. The increase was primarily due to new costs related to Makena clinical trials and related development costs in the second quarter of 2015.

We expect research and development expenses to increase slightly for the second half of 2015 due to the timing of expenses for our current clinical trials related to Makena’s lifecycle management program and post approval commitments and expenses related to our clinical trial to determine the safety and efficacy of repeat doses of Feraheme for the treatment of IDA in patients with hemodialysis dependent CKD. In addition, research and development expenses could increase further depending on the outcome of discussions with the FDA on the regulatory path forward for Feraheme in the broad IDA indication and any resulting clinical trials or development efforts that we may undertake.

Research and Development Activities

We track our external costs on a major project basis, in most cases through the later of the completion of the last trial in the project or the last submission of a regulatory filing to the FDA or applicable foreign regulatory body. We do not track our internal costs by project since our research and development personnel work on a number of projects concurrently and much of our fixed costs benefit multiple projects or our operations in general. The following major research and development projects were ongoing as of June 30, 2015:

· Feraheme to treat IDA in CKD patients: This project currently includes the following (a) a completed clinical study evaluating Feraheme treatment as compared to treatment to another IV iron to support the 2010 marketing authorization application (“MAA”) submission; (b) a pediatric study that is being conducted as part of our post-approval Pediatric Research Equity Act requirement to support pediatric CKD labeling of Feraheme; and (c) an ongoing multi-center clinical trial to determine the safety and efficacy of repeat doses of Feraheme for the treatment of IDA in patients with hemodialysis dependent CKD, including a treatment arm with iron sucrose using a magnetic resonance imaging sub-analysis to evaluate the potential for iron to accumulate in the body following repeated IV iron administration.

· Makena: This project currently includes studies conducted as part of the post-approval commitments under the provisions of the FDA’s “Subpart H” Accelerated Approval regulations, including (a) an ongoing

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efficacy and safety clinical study of Makena; (b) an ongoing follow-up study of the children born to mothers from the efficacy and safety clinical study; and (c) a completed pharmacokinetic trial of women taking Makena.

Through June 30, 2015, we have incurred aggregate external research and development expenses of approximately $39.3 million related to our current program for the development of Feraheme to treat IDA in CKD patients, described above. We currently estimate that the total remaining external costs associated with this development project will be in the range of approximately $5.0 million to $10.0 million over the next several years, not including any potential costs related to any clinical trials or development efforts that we may undertake as an outcome of discussions with the FDA on the regulatory path forward for Feraheme in the broad indication. This represents a decrease in the range from our expected range at March 31, 2015 due to the reduction of estimated costs associated with our pediatric studies for Feraheme to treat IDA in CKD patients. In recent years, we have been unable to enroll sufficient patients in these studies. We are working with the FDA to determine whether these studies can be modified or canceled in light of the difficulty enrolling pediatric patients. We will continue to assess the potential future costs of these study and modify our expected ranges as needed.

From November 12, 2014 (the date of the Lumara Health acquisition) through June 30, 2015, we have incurred aggregate external research and development expenses of approximately $3.3 million related to our current program for Makena, described above. We currently estimate that the total remaining external costs associated with this development project will be in the range of approximately $19.0 million to $29.0 million over the next several years.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended June 30, 2015 and 2014 consisted of the following (in thousands):

	Three Months Ended June 30,
	2015			2014		$ Change			% Change
Compensation, payroll taxes and benefits	$	13,736		$	6,921	$	6,815		98	%
Professional, consulting and other outside services	15,628			7,086		8,617			122	%
Fair value of contingent consideration liability	(960		)	388		(1,348		)	<(100	)%
Equity-based compensation expense	3,397			1,889		1,508			80	%
Total	$	31,801		$	16,284	$	15,592		96	%

Total selling, general and administrative expenses incurred in the three months ended June 30, 2015 increased by $15.6 million, or 96%, as compared to the same period in 2014 primarily as the result of the November 2014 Lumara Health acquisition, including additional employee-related expenses primarily related to the addition of the Makena sales force, an adjustment to the Makena contingent consideration expense, and higher sales and marketing costs to support the Makena product, as well as severance related costs incurred in the second quarter of 2015 related to the departure of two executive officers, partially offset by an adjustment in the fair value of MuGard contingent consideration expense resulting from a revision to the estimated amounts and timing of cash flows related to the royalties we expect to pay to Abeona.

We expect that total selling, general and administrative expenses will increase slightly for the second half of 2015 as compared to the three months ended June 30, 2015 as a result of the increased headcount following the November 2014 acquisition of Lumara Health and costs associated with Makena related commercial activities.

Acquisition-related Costs

Acquisition-related costs incurred in the three months ended June 30, 2015 included costs for consulting, business development and legal expenses primarily related to pre-acquisition activities in connection with our planned

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acquisition of CBR.

Restructuring Expense

In connection with the November 2014 Lumara Health acquisition, we initiated a restructuring program, which included severance benefits related to former Lumara Health employees. As a result of the restructuring, we recorded charges of approximately $0.4 million in the three months ended June 30, 2015. We expect to pay substantially all of the restructuring costs during 2015.

Other Income (Expense)

Other income (expense) for the three months ended June 30, 2015 decreased by $7.0 million as compared to the same period in 2014 primarily as the result of the recognition of an additional $7.2 million in interest expense in the second quarter of 2015, which was comprised of the amortization of debt discount, contractual interest expense and amortization of debt issuance costs in connection with the February 2014 issuance of the $200.0 million of 2.5% convertible senior notes due February 15, 2019 (the “Convertible Notes”) and a $340.0 million term loan we entered into in November 2014 to partially finance the Lumara Health acquisition (the “Term Loan Facility”).

We expect our net other (income) expense to remain relatively consistent for the remaining quarters of 2015 as compared to the three months ended June 30, 2015.

Income Tax Expense

The following table summarizes our effective tax rate and income tax expense for the three months ended June 30, 2015 and 2014 (in thousands except for percentages):

	Three Months Ended June 30,
	2015			2014
Effective tax rate	35		%	0		%
Income tax expense	$	18,035		$	—

For the three months ended June 30, 2015, we recognized income tax expense of $18.0 million, representing an effective tax rate of 35%. The effective tax rate remained relatively the same as the statutory federal tax rate, however, included the impact of state income taxes offset by the impact of a valuation allowance release related to certain deferred tax assets. We did not recognize any income tax benefit or expense for the three months ended June 30, 2014, as we were subject to a full valuation allowance due to our net operating loss position at the time.

We expect our full year 2015 effective tax rate to be 36%. This rate does not consider the impact of a potential renewal of the federal research and development tax credit.

Net Income (Loss)

For the reasons stated above, we have earned net income of $33.3 million, or $1.09 per basic share and $0.82 per diluted share, for the three months ended June 30, 2015 as compared to a net loss of $1.5 million, or $0.07 per basic and diluted share for the three months ended June 30, 2014.

Results of Operations - Six Months Ended June 30, 2015 and 2014

Revenues

Total revenues for the six months ended June 30, 2015 and 2014 consisted of the following (in thousands):

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	Six Months Ended June 30,
	2015		2014		$ Change		% Change
U.S. product sales, net
Makena	$	119,103	$	—	$	119,103	N/A
Feraheme	42,008		39,600		2,408		6	%
MuGard	956		407		549		>100	%
Total	162,067		40,007		122,060		>100	%
License fee, collaboration and other revenues	51,322		5,630		45,692		>100	%
Total Revenues	$	213,389	$	45,637	$	167,752	>100	%

Net U.S. product sales increased by $122.1 million during the six months ended June 30, 2015 as compared to the same period in 2014 primarily due to the addition of Makena to our product portfolio as a result of the November 2014 acquisition of Lumara Health as well as a $2.4 million increase in Feraheme net product sales.

Total gross U.S. product sales were offset by product sales allowances and accruals for the six months ended June 30, 2015 and 2014 as follows (in thousands):

	Six Months Ended June 30,
	2015		2014
Gross U.S. product sales	$	262,106	$	72,154
Provision for U.S. product sales allowances and accruals:
Contractual adjustments	74,385		31,774
Governmental rebates	25,654		373
Total provision for U.S product sales allowances and accruals	100,039		32,147
U.S. product sales, net	$	162,067	$	40,007

The $190.0 million increase in gross U.S. product sales was due primarily to the addition of Makena to our product portfolio, which resulted in $182.5 million gross sales in the first half of 2015, and a $7.0 million increase in our gross U.S. Feraheme sales in the six months ended June 30, 2015 as compared to the same period in 2014. Of the $7.0 million increase in gross U.S. Feraheme sales, $10.5 million was due to price increases, partially offset by $3.5 million due to decreased units sold.

During the six months ended June 30, 2015, we reduced our Makena related Medicaid and chargeback reserves, which were initially recorded at the time of the Lumara Health acquisition, by $4.0 million and $1.9 million, respectively. These adjustments were recorded to goodwill during the quarter ended June 30, 2015. We did not materially adjust our product sales allowances and accruals during the six months ended June 30, 2014.

License Fee, Collaboration and Other Revenues

The $45.7 million increase in license fee, collaboration and other revenues in the six months ended June 30, 2015 as compared to the same period in 2014 was primarily due to $44.4 million of additional deferred license fee revenues recognized in the first half of 2015 as a result of the effective termination of the Takeda Agreement. In addition, we recognized $5.2 million of additional revenues in the three months ended June 30, 2015 related to payments made by Takeda upon the final termination date as required under the terms of the Takeda Termination Agreement.

Costs and Expenses

Cost of Product Sales

Cost of product sales for the six months ended June 30, 2015 and 2014 were as follows (in thousands):

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	Six Months Ended June 30,
	2015			2014			$ Change		% Change
Cost of Product Sales	$	40,705		$	5,580		$	35,125	>100	%
Percentage of U.S. Net Product Sales	25		%	14		%

The $35.1 million increase in our cost of product sales for the six months ended June 30, 2015 as compared to the same period in 2014 was primarily attributable to $24.6 million of amortization expense recognized during the first half of 2015 related to the Makena intangible asset. In addition, the increase reflects $9.2 million recognized during the first half of 2015 for the step-up adjustment to the Makena inventory we acquired in November 2014, including $5.9 million related to product sales and $3.3 million related to inventory reserves.

Research and Development Expenses

Research and development expenses for the six months ended June 30, 2015 and 2014 consisted of the following (in thousands):

	Six Months Ended June 30,
	2015		2014		$ Change			% Change
External Research and Development Expenses
Feraheme-related costs	$	3,656	$	5,192	$	(1,536	)	-30	%
Makena-related costs	4,762		—		4,762			N/A
Other external costs	508		533		(25		)	-5	%
Total	8,926		5,725		3,201			56	%
Internal Research and Development Expenses	6,246		5,313		933			18	%
Total Research and Development Expenses	$	15,172	$	11,038	$	4,134		37	%

Total research and development expenses incurred in the six months ended June 30, 2015 increased by $4.1 million, or 37%, as compared to the same period in 2014. The increase was primarily due to new costs related to Makena clinical trials and related development costs in the first half of 2015, partially offset by a decrease in Feraheme clinical trial costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the six months ended June 30, 2015 and 2014 consisted of the following (in thousands):

	Six Months Ended June 30,
	2015		2014		$ Change		% Change
Compensation, payroll taxes and benefits	$	26,953	$	13,663	$	13,290	97	%
Professional, consulting and other outside services	29,775		15,592		14,258		91	%
Fair value of contingent consideration liability	1,639		1,178		461		39	%
Equity-based compensation expense	5,546		3,342		2,204		66	%
Total	$	63,913	$	33,775	$	30,213	89	%

Total selling, general and administrative expenses incurred in the six months ended June 30, 2015 increased by $30.2 million, or 89%, as compared to the same period in 2014 primarily as the result of the November 2014 Lumara Health acquisition, including additional employee-related expenses primarily related to the addition of the Makena sales force, an adjustment to the Makena contingent consideration expense, and higher sales and marketing costs to support the Makena product, as well as severance related costs incurred in the second quarter of 2015 related to the departure of two executive officers, partially offset by an adjustment in the fair value of MuGard

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contingent consideration expense resulting from a revision to the estimated amounts and timing of cash flows related to the royalties we expect to pay to Abeona.

Acquisition-related Costs

Acquisition-related costs incurred in the six months ended June 30, 2015 included costs for consulting, business development and legal expenses primarily related to pre-acquisition activities in connection with our planned acquisition of CBR.

Restructuring Expense

Other Income (Expense)

Other income (expense) for the six months ended June 30, 2015 decreased by $16.2 million as compared to the same period in 2014 primarily as the result of the recognition of an additional $16.0 million in interest expense in the first half of 2015, which was comprised of the amortization of debt discount, contractual interest expense and amortization of debt issuance costs in connection with the February 2014 issuance of the $200.0 million Convertible Notes and the Term Loan Facility.

Income Tax Expense

The following table summarizes our effective tax rate and income tax expense for the six months ended June 30, 2015 and 2014 (in thousands except for percentages):

	Six Months Ended June 30,
	2015			2014
Effective tax rate	34		%	0		%
Income tax expense	$	23,643		$	—

For the six months ended June 30, 2015, we recognized income tax expense of $23.6 million, representing an effective tax rate of 34%. The difference between the expected statutory federal tax rate of 35% and the 34% effective tax rate was attributable to the impact of state income taxes offset by the impact of a valuation allowance release related to certain deferred tax assets. We did not recognize any income tax benefit or expense for the six months ended June 30, 2014 as we were subject to a full valuation allowance due to our net operating loss position at the time.

Net Income (Loss)

For the reasons stated above, we have earned net income of $46.2 million, or $1.60 per basic share and $1.23 per diluted share, for the six months ended June 30, 2015 as compared to a net loss of $8.6 million, or $0.40 per basic and diluted share for the six months ended June 30, 2014.

Liquidity and Capital Resources

General

We currently finance our operations primarily from the sale of our products and cash generated from our investing and financing activities. We expect revenues from CBR will contribute to the financing of our operations following the consummation of our acquisition of CBR. We expect to continue to incur significant expenses as we continue to market, sell and contract for the manufacture of Makena and Feraheme and as we market and sell MuGard, as we pursue a lifecycle management program for Makena and as and if we further develop and seek

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regulatory approval for Feraheme for the treatment of IDA in a broad range of patients in the U.S. We also expect to incur significant expenses as we integrate and operate the CBR business following the closing of the transaction.

Cash, cash equivalents, investments and certain financial obligations as of June 30, 2015 and December 31, 2014 consisted of the following (in thousands):

	June 30, 2015		December 31, 2014		$ Change			% Change
Cash and cash equivalents	$	89,884	$	119,296	$	(29,412	)	-25	%
Investments	308,524		24,890		283,634			>100	%
Total	$	398,408	$	144,186	$	254,222		>100	%

Outstanding principal on Convertible Notes	$	200,000	$	200,000	$	—		0	%
Outstanding principal on Term Loan Facility	323,000		340,000		(17,000		)	-5	%
	$	523,000	$	540,000	$	(17,000	)	-3	%

The $254.2 million increase in cash, cash equivalents and investments as of June 30, 2015, as compared to December 31, 2014, was primarily due to net proceeds of $188.9 million received in the first quarter of 2015 following the sale of approximately 4.6 million shares of our common stock in an underwritten public offering and cash flow from product sales, partially offset by expenditures to fund our operations.

Business Developments

In November 2014, we completed our acquisition of Lumara Health for approximately $600.0 million in upfront cash consideration (before taking into account certain adjustments related to Lumara Health’s financial position at the time of closing, including adjustments related to net working capital, net debt and transaction expenses as set forth in the Lumara Agreement) and issued approximately 3.2 million shares of our common stock having a fair value of approximately $112.0 million at the time of closing. The Lumara Agreement includes future contingent payments of up to $350.0 million in cash (or upon mutual agreement between us and the former Lumara Health security holders, future contingent payments may also be made in common stock or some combination thereof) payable by us to the former Lumara Health security holders based upon the achievement of certain sales milestones through calendar year 2019. See Note C, “Business Combinations,” to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31 2014 for additional information.

As discussed above, under the caption “Our Acquisition of CBR,” on June 29, 2015, we entered into the CBR Agreement under which we will purchase all of the outstanding equity securities of CBR Holdings for an aggregate of $700.0 million in cash consideration, subject to working capital, net debt and transaction expense adjustments as set forth in the CBR Agreement. We expect this acquisition to close in the third quarter of 2015. Concurrently with the execution and delivery of the CBR Agreement, the Joint Lead Arrangers entered into the Commitment Letter pursuant to which the Lenders will provide (a) the CBR Term Loan Facility, which provides for up to $350.0 million in a secured term loan and (b) up to $450.0 million in the Bridge Loans, in each case, subject to customary conditions set forth in the Commitment Letter. We expect to use the proceeds of the CBR Term Loan Facility and the Bridge Loan Facility to (a) pay a portion of the CBR acquisition consideration, (b) pay various fees and expenses incurred in connection with the CBR acquisition and the Debt Financing, and (c) repay certain of our and CBR’s indebtedness. We may also fund a portion of the Financial Obligations using cash on hand and other available sources of funding, including through the issuance and sale of the Notes and the issuance and sale of equity or equity-linked securities, which would reduce the amount of the CBR Term Loan Facility and/or Bridge Loan Facility. We have paid and will continue to pay substantial costs and expenses associated with the transaction and many of these costs and expenses will be payable whether or not the transaction is consummated.

Borrowings and Other Liabilities

In November 2014, we financed the $600.0 million cash portion of the Lumara Health acquisition through $327.5 million of net proceeds from borrowings under the $340.0 million Term Loan Facility, as discussed in more

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detail in Note Q, “Debt,” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and $272.5 million of existing cash on hand. The Term Loan Facility imposes restrictive covenants on us, including a requirement that we reduce our leverage over time, and obligates us to make certain payments of principal and interest over time. In addition, the Term Loan Facility includes an annual mandatory prepayment of the debt in an amount equal to 75% of our excess cash flow (as defined in the Term Loan Facility) as measured on an annual basis, beginning with the fiscal year ending December 31, 2015. Our estimated excess cash flow, as calculated at June 30, 2015, for the period ending December 31, 2015, was $90.2 million, which was reclassified from long-term to current as of June 30, 2015 as it would be paid in April 2016.

In addition, on February 14, 2014, we issued $200.0 million aggregate principal amount of Convertible Notes, as discussed in more detail in Note Q, “Debt,” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. The Convertible Notes are senior unsecured obligations and bear interest at a rate of 2.5% per year, payable semi-annually in arrears on February 15 and August 15 of each year. The Convertible Notes will mature on February 15, 2019, unless repurchased or converted earlier. The Convertible Notes will be convertible into cash, shares of our common stock, or a combination thereof, at our election (subject to certain limitations in the Term Loan Facility), at a conversion rate of approximately 36.9079 shares of common stock per $1,000 principal amount of the Convertible Notes, which corresponds to a conversion price of approximately $27.09 per share of our common stock. The conversion rate is subject to adjustment from time to time. Based on the last reported sale price of our common stock during the last 30 trading days of the calendar quarter ended June 30, 2015, the Convertible Notes are convertible for the calendar quarter ending June 30, 2015.

We expect that our cash, cash equivalents and investments balances, in the aggregate, may decrease due to the payment of the CBR purchase price and transaction-related expenses, partially offset by increased net product sales during 2015 and proceeds from any debt or equity offerings. Our expectation assumes our continued investment in the development and commercialization of our products. We believe that our cash, cash equivalents and investments as of June 30, 2015, and the cash we currently expect to receive from sales of our products (and following the consummation of the acquisition of CBR, CBR revenue), earnings on our investments, will be sufficient to service our debt and satisfy our cash flow needs for the foreseeable future.

Cash flows from operating activities

Net cash provided by operating activities for the six months ended June 30, 2015 was $71.7 million as compared to net cash used in operating activities of $10.2 million for the same period in 2014. The increase in cash provided by (used in) operating activities is primarily due to increased product sales from the addition of Makena to our product portfolio. We expect to generate cash from operations as we continue to grow our business, partially offset by increased expenditures to support our growth.

Cash flows from investing activities

Net cash used in investing activities in the six months ended June 30, 2015 was $284.7 million as compared to net cash provided by investing activities in the six months ended June 30, 2014 of $4.2 million. Cash used in investing activities increased during the six months ended June 30, 2015 primarily due to a $291.1 million increase in cash used to purchase investments and a $6.5 million decrease in net proceeds from sales or maturities of investments.

Cash flows from financing activities

In March 2015, we closed an underwritten public offering of our approximately 4.6 million shares of our common stock at the public offering price of $44.00 per share. We received total gross proceeds in the offering of approximately $201.2 million, before deducting underwriting discounts, commissions and estimated expenses.

Net cash provided by financing activities in the six months ended June 30, 2015 and 2014 was $183.6 million and $181.1 million, respectively. Cash provided by financing activities during the six months ended June 30, 2015 as compared to the same period in 2014 was primarily attributable to the $188.9 million in net proceeds from the issuance of common stock from our March 2015 public offering and $11.6 million in proceeds from the exercise of

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stock options, partially offset by principal payments on our long-term debt in the first half of 2015. Cash provided by financing activities during the six months ended June 30, 2014 was primarily attributable to $179.1 million in net proceeds received from the issuance of the Convertible Notes in February 2014. See the discussion above under the heading “Business Developments” for financing activities we expect to undertake in the second half of 2015.

Contingent Consideration

In connection with certain of our acquisitions, we agreed to make contingent cash payments to the former shareholders of the acquired companies. In accordance with accounting for business combinations guidance, these contingent cash payments are recorded as contingent consideration liabilities on our condensed consolidated balance sheets at fair value. The aggregate, undiscounted amount of contingent consideration potentially payable for all contingent consideration arrangements ranges from zero to approximately $368.0 million.

As of June 30, 2015, the contingent consideration related to the Lumara Health acquisition and the MuGard Rights are our only financial liabilities measured and recorded using Level 3 inputs in accordance with accounting guidance for fair value measurements, and represent 100% of the total liabilities measured at fair value. See Note E., “Fair Value Measurements,” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.

Off-Balance Sheet Arrangements

As of June 30, 2015, we did not have any off-balance sheet arrangements as defined in Regulation S-K, Item 303(a)(4)(ii).

Commitments

During the six months ended June 30, 2015, we entered into an amendment of our lease agreement with BP Bay Colony LLC for additional space for use as our principal executive offices in Waltham, Massachusetts and to extend the term of our original lease from November 30, 2018 to November 30, 2019, with one five-year extension term at our option. The incremental impact of the amended lease is approximately $0.2 million per year.

On June 29, 2015, we entered the CBR Agreement to purchase all of the outstanding equity securities of CBR Holdings for an aggregate of $700.0 million in cash consideration, subject to working capital, net debt and transaction expense adjustments as set forth in the CBR Agreement. We expect this acquisition to close in the third quarter of 2015. Additional details regarding the stock purchase agreement with CBR Holdings can be found in Note T, “Subsequent Events” included in this Quarterly Report on Form 10-Q.

Concurrently with the execution and delivery of the CBR Agreement, the Joint Lead Arrangers entered into a the Commitment Letter pursuant to which the Lenders will provide (a) a senior secured term loan facility of up to $350.0 million and (b) senior unsecured increasing rate loans in an aggregate principal amount of up to $450.0 million under a senior unsecured bridge loan facility, in each case, subject to customary conditions set forth in the Commitment Letter. Additional details regarding the Commitment Letter can be found in Note T, “Subsequent Events” included in this Quarterly Report on Form 10-Q.

On July 22, 2015, we entered into an option agreement with Velo, a privately held life-sciences company, that grants us an option to acquire the rights to an orphan drug candidate, DIF, a polyclonal antibody being developed for the treatment of severe preeclampsia in pregnant women. We will make an upfront payment of $10.0 million in the third quarter of 2015 to Velo for the option to acquire the global rights to the DIF program (the “DIF Rights”) and will fund the consideration with cash on hand. If we exercise the option to acquire the DIF Rights, we would be responsible for payments totaling up to $75.0 million (including the upfront payment, payment of the option exercise price and the regulatory milestone payments) and up to an additional $250.0 million in sales milestone payments based on the achievement of annual sales milestones at targets ranging from $100.0 million to $900.0 million. We anticipate that results from the pivotal Phase 2b/3a study could be available as early as 2018. Additional details regarding the option agreement with Velo can be found in Note T, “Subsequent Events” included in this Quarterly Report on Form 10-Q.

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There have been no other material changes to our contractual obligations and commitments outside the ordinary course of business from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014.

Impact of Recently Issued and Proposed Accounting Pronouncements

See Note S, “Recently Issued and Proposed Accounting Pronouncements,” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for information regarding new accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes with respect to the information appearing in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the year ended December 31, 2014.

Item 4. Controls and Procedures.

Managements’ Evaluation of our Disclosure Controls and Procedures

Our principal executive officer and principal financial officer, after evaluating the effectiveness of our “disclosure controls and procedures” (as defined in the Exchange Act Rule 13a-15(e), or Rule 15d-15(e)), with the participation of our management, have each concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective and were designed to ensure that information we are required to disclose in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure, and is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms. It should be noted that any system of controls is designed to provide reasonable, but not absolute, assurances that the system will achieve its stated goals under all reasonably foreseeable circumstances. Our principal executive officer and principal financial officer have each concluded that our disclosure controls and procedures as of the end of the period covered by this report are effective at a level that provides such reasonable assurances.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the three months ended June 30, 2015 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See Note N, “Commitments and Contingencies,” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for information regarding our legal proceedings, including how we accrue liabilities for legal contingencies.

Item 1A. Risk Factors

With the exception of the risk factors below, there have been no material changes from the Risk Factors disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

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We have undertaken efforts to expand our product portfolio with our pending acquisition of CBR. If we do not realize the expected benefits, including synergies, from the pending CBR acquisition, if consummated, our business and results of operations will suffer.

On June 29, 2015, we entered into a stock purchase agreement with CBR Holdco, LLC (“CBR Seller”) and CBR Acquisition Holdings Corp. (“CBR”), which, through its wholly-owned subsidiary CBR Systems, Inc., operates Cord Blood Registry, a provider of services for the collection, processing, and long-term cryopreservation of umbilical cord blood and cord tissue stem cell units for family use (the “CBR Services”), to purchase CBR for an aggregate of $700.0 million in cash consideration, subject to working capital, net debt and transaction expense adjustments as set forth in the stock purchase agreement (the “CBR Agreement”).

Upon consummation of our acquisition of CBR, our business will be significantly larger and more complex than we are today. If the acquisition is consummated, our future success will significantly depend upon our ability to manage our expanded enterprise, including multiple locations, which will pose substantial challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity. In order to support this expanded enterprise, we will need to achieve revenues from the CBR business and synergies consistent with our business expectations, which may prove more difficult than currently expected. For example, with the announcement of the acquisition of CBR, we indicated that we believe we could achieve annual synergies of approximately $15.0 million. Any failure to achieve this level of synergies could affect our profitability, our ability to service the debt that we are taking on to partially fund this acquisition, and our ability to meet the financial covenants under the credit agreement with the lenders.

Further, we have no experience with providing the CBR Services and will be dependent upon the contributions of the CBR commercial organization and sales force and CBR’s relationships to drive CBR revenues, and we may be unable to retain and motivate the commercial sales force or successfully maintain CBR’s current relationships following the closing of the transaction.

The consummation of the CBR acquisition is subject to a number of closing conditions, some of which are out of our control. Further, if the acquisition is consummated, our post-closing recourse is limited.

Completion of the CBR acquisition is subject to certain conditions contained in the CBR Agreement, some of which are beyond our control, and we can make no assurances that the transaction will close in a timely manner or at all. Such conditions include, among other things, the representations and warranties of CBR and the CBR Seller being true and correct at the closing subject to the terms of the CBR Agreement and the absence of any material adverse changes affecting CBR or the CBR Seller. In the event that the acquisition is not consummated, we will have spent considerable time and resources and incurred substantial costs, such as legal, accounting and advisory fees, which must be paid even if the acquisition is not completed. If the acquisition is not consummated, our reputation in our industry and in the investment community could be damaged and, as a result, the market price of our common stock could decline.

The CBR Seller’s obligation to indemnify us is limited to breaches of specified representations and warranties and covenants included in the CBR Agreement, certain pre-closing tax liabilities, and certain claims related to the reimbursements of engagement and retainer fees, and we have agreed to indemnify the CBR Seller for certain matters, including breaches of specified representations and warranties and covenants included in the CBR Agreement. The maximum liability of each of the CBR Seller and us for indemnification claims is capped at $20.0 million. If any issues arise post-closing, we may not be entitled to sufficient, or any, indemnification or recourse from the CBR Seller, which could have a materially adverse impact on our business and results of operations.

We do not have a sufficient amount of cash on hand to consummate the acquisition of CBR and if the transaction is consummated, we will incur a substantial amount of debt to finance the consideration and certain other amounts to be paid in connection with the acquisition, which could adversely affect our business.

A portion of the consideration to be paid to the CBR Seller will be provided by debt financing, for which we have received a binding commitment (the “Commitment Letter”) from Jefferies Finance LLC and Barclays Bank PLC (the “Joint Lead Arrangers”) pursuant to which the Joint Lead Arrangers and additional lenders will provide (i) a senior secured term loan facility (the “CBR Term Loan Facility”) of up to $350.0 million and (ii) senior unsecured increasing rate loans in an aggregate principal amount of up to $450.0 million under a senior unsecured bridge loan facility.

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We have certain obligations under the Commitment Letter to assist the Joint Lead Arrangers in syndicating the CBR Term Loan Facility to other institutions and lenders, and the commitment of the Joint Lead Arrangers is also subject to a number of closing conditions. Also, the terms of the Commitment Letter provide for certain flexibility to change the terms under which the Joint Lead Arrangers will provide the debt financing based on the market conditions encountered during the period for marketing the debt to other lenders. The need to utilize some or all of the flexibility could result in less favorable financing terms for us and increase the cost of the capital required to fund the acquisition of CBR resulting in an adverse impact on our financial condition, our results of operations and our ability to service the debt in the future if our projections for CBR are not achieved. Further, we may also fund a portion of the consideration using cash on hand and other available sources of funding, including through the issuance and sale of senior unsecured notes and the issuance and sale of equity or equity-linked securities, which would have a dilutive impact on our stockholders.

The substantial amount of debt we will incur if and when the transaction is consummated could adversely affect our business, including by restricting our ability to engage in additional transactions or incur additional indebtedness or resulting in a downgrade or other adverse action with respect to our credit rating. Although our management believes that we will have access to cash sufficient to meet our business objectives and capital needs, the lessened availability of cash and cash equivalents for a period of time following the consummation of the acquisition could constrain our ability to grow our business. Our more leveraged financial position following the acquisition could also make us vulnerable to general economic downturns and industry conditions, and place us at a competitive disadvantage relative to our competitors who have more cash at their disposal. In the event that we do not have adequate capital to maintain or develop our business, additional capital may not be available to us on a timely basis, on favorable terms, or at all, which could have a material and negative impact on our business and results of operations.

CBR is subject to data security and privacy obligations. If the acquisition of CBR is consummated, our existing data security and privacy obligations may expand and the failure to comply with these obligations could adversely affect our financial condition and operating results.

CBR is subject to data security and privacy obligations. Through April 29, 2033, CBR is required to comply with a Federal Trade Commission (“FTC”) Order (the “FTC Order”). The FTC Order requires CBR, among other things, to implement and maintain a comprehensive information security program and conduct a biennial assessment of its information security program. CBR is also required not to make any misrepresentations regarding its information security program. The costs of compliance with, and other burdens imposed by, these obligations are substantial and, if our acquisition of CBR is completed, may impede the performance and our ability to develop the CBR Services, or lead to significant fines, penalties or liabilities for noncompliance. Any of our plans to integrate CBR into our operations may also be limited by the FTC Order. Full integration of CBR’s information technology systems into our systems, for example, may result in a requirement that we also comply with the FTC Order. These limitations on our efforts to integrate CBR may impede our ability to operate and deploy our systems in the most efficient and cost effective manner.

The CBR Services involve the collection, processing, storage and disposal of health-related and other personal information. CBR may be subject to a number of federal, state and foreign laws and regulations regarding the privacy and protection of such information, some of which may already apply in our existing business, including state data breach notification laws, state data security laws, state health information privacy laws and federal and state consumer protection laws. Expansion of operations into jurisdictions outside the United States may also subject such operations to a number of additional laws in those jurisdictions, including the EU Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data and EU member state implementing legislation. Though, like our existing business, CBR may not be directly subject to the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, or HIPAA, CBR and our existing business could potentially be subject to criminal penalties if we knowingly obtain or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA. The costs of compliance with, and other burdens imposed by, these laws may become substantial and may limit the use and adoption of CBR Services, impede the performance and development of future CBR Services, or lead to significant fines, penalties or liabilities for noncompliance with such laws or regulations. In addition, a security breach affecting this information could result in significant legal and financial exposure and reputational damages that could potentially have an adverse effect on our business. Because the techniques used to obtain unauthorized access change frequently and often are not recognized until launched against a target, we and CBR may be unable to anticipate these techniques or otherwise may fail to implement adequate preventative measures.

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The acquisition of CBR, if consummated, will create numerous risks and uncertainties which could adversely affect our financial condition and operating results.

Strategic and transformative transactions like our potential acquisition of CBR create numerous uncertainties and risks. Upon consummation of the acquisition, CBR will become a wholly-owned subsidiary of AMAG and will significantly broaden our operations. This addition to our business will entail many changes, including the integration of CBR and its personnel, changes in systems and employee benefit plans and management of multiple geographic locations across the U.S. These transition activities are complex and we may encounter unexpected difficulties, incur unexpected costs or experience business disruptions, including as a result of:

· increased commitments for the management team, including the need to divert management’s attention to integration matters, particularly if we are unable to recruit and hire key personnel;

· difficulties realizing the revenue projections, financial benefits, synergies and other strategic opportunities anticipated in connection with the transaction;

· our inexperience with maintaining multiple geographic locations spread out across the U.S.;

· challenges in leveraging our commercial expertise, which could result in unforeseen expenses and disrupt our business operations; and

· difficulties in the assimilation and retention of employees, including key personnel responsible for the success of the CBR Services.

If any of these factors limits our ability to integrate CBR into our operations successfully or on a timely basis, the expectations of future results of operations, including certain synergies expected to result from the acquisition, might not be met. As a result, we may not be able to realize the expected benefits that we seek to achieve from the acquisition, which could also affect our ability to service our debt obligations. In addition, we may be required to spend additional time or money on integration that otherwise would be spent on the development and expansion of our business, including efforts to further expand our product portfolio.

Further, the market price of our stock may decline following the consummation of the merger, including if our integration of CBR is unsuccessful, takes longer than expected or fails to achieve financial benefits to the extent anticipated by us, financial analysts or investors, causes us to miss a financial covenant in connection with our debt arrangements, or the effect of the acquisition on our post-closing financial results is otherwise not consistent with the expectations of us, financial analysts or investors.

The success of the CBR Services following, and assuming, consummation of the CBR acquisition will face considerable risks and uncertainties, any of which could have a materially adverse impact on our revenues and results of operations.

Following consummation of the acquisition, our success with the CBR Services will be faced with certain risks and uncertainties, including:

· demand for the CBR Services and our ability to gain widespread market acceptance of cryo-storage of cord blood and tissue, despite efforts to educate and increase awareness among potential customers and medical practitioners, which will require significant marketing and promotional expenditures;

· the potential for stem cell science and its recognition, adoption and utility among the medical community and the continued viability of and actionable use of stem cells in the treatment of disease, especially given (i) this is a relatively new technology and is subject to potentially revolutionary technological, medical, therapeutic and regulatory changes and (ii) future technological and medical developments could render the use of stem cells obsolete;

· controversy surrounding private versus public cord blood banks, and any erosion of market share for private banking of cord blood and tissue;

· our inexperience with CBR’s service based business model and our ability to meet or exceed customers’ service level expectations and CBR’s contractual obligations with respect to the CBR Services;

· the need for strategic pricing skills to optimize the forward looking CBR Services business;

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· the ethical, legal, regulatory, and social implications of stem cell research, and the possibility that negative public opinion about stem cell therapy may damage public perception of our overall business;

· complaints or perception that the benefits of private cord blood banking have been overstated, or legal challenges to the marketing and promotion of cord blood and tissue banking;

· reliance upon third party contractors to assist in providing the CBR Services, including reliance upon current suppliers for proprietary materials, which could lead to operational delays and lost revenue and the need to reconfigure machinery and/or systems if current suppliers need to be changed or are disrupted;

· legal, regulatory, and compliance risks we may face as a result of CBR’s pre-acquisition business practices, including if CBR were alleged to have (a) participated in collusive or other anticompetitive conduct or utilized marketing and sales tactics with referring physicians that are in violation of state anti-kickback or self-referral provisions, (b) violated any privacy, data security, or other healthcare compliance laws, or (c) failed to comply with all applicable FDA laws and requirements;

· the impact of any material disruption in our ability to maintain continued, uninterrupted and fully operating storage systems in the event of any damage or interruption from fire, earthquake, flood, break-ins, tornadoes and similar events;

· our ability to maintain compliance with all applicable FDA regulations, including those regarding cord blood and cord tissue banking services, as well as tissue procurement services;

· any new regulatory restrictions on cord blood and tissue banking;

· the application and implications to CBR’s operations of certain healthcare laws, regulations and industry guidelines relating to pharmaceutical companies;

· increased competition in the cord blood and cord tissue banking and stem cell processing and storage business;

· many of CBR’s customers prepay for CBR Services which we will provide far (and sometimes indefinitely) into the future, and any unexpected increases in expenses will be difficult to pass on to such customers;

· CBR has offered, and we expect to offer, each customer a large payment ($50,000) in the event such customer’s stored cord blood is used in a hematopoietic reconstitution and fails to engraft, and such offerings could significantly increase costs in the event such failures begin to occur; and

· long-term commitments to pay fixed commissions to certain of CBR’s marketing vendors could be financially burdensome if the CBR Services’ profit margins fall.

If the success of the CBR Services is negatively impacted by any of the foregoing risks and uncertainties, our business and stock price could suffer as a result of a materially adverse impact on our revenues or results of operations. In addition, following the consummation of the CBR acquisition, as we undertake integration activities and pursue the CBR Services, we may identify additional risks and uncertainties not yet known to us, which we will identify in our subsequent SEC filings.

Should the FDA determine, following, and assuming, consummation of the CBR acquisition, that CBR does not meet the regulatory requirements for a private cord blood and cord tissue bank that screens, processes, stores, labels and distributes human cells, tissues and cellular and tissue-based products without pre-marketing approval, we may be subject to FDA enforcement action and may be forced to change or halt CBR Service operations in a manner that materially harms our business.

Human tissues intended for transplantation, including umbilical cord blood and umbilical cord tissue, are subject to comprehensive regulations that address activities associated with human cells, tissues and cellular and tissue-based products (“HCT/Ps”). One set of requirements are that companies that engage in the recovery, processing, storage, labeling, packaging, or distribution of any HCT/Ps, or the screening or testing of a cell or tissue donor, register with the FDA. This set of regulations also includes the criteria that must be met in order for the HCT/P to be eligible for distribution solely under Section 361 of the Public Health Service Act (the “PHSA”), and the regulations in 21 CFR Part 1271, rather than under the drug or device provisions of the Federal Food, Drug, and

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Cosmetic Act or the biological product licensing provisions of the PHSA. Another set of regulations provides criteria that must be met for donors to be eligible to donate HCT/Ps and is referred to as the “Donor Eligibility” rule. A third set of provisions governs the processing and distribution of the tissues and is often referred to as the “Current Good Tissue Practices” rule. The Current Good Tissue Practices rule covers all stages of HCT/P processing, from procurement to distribution of final allografts. Together these regulations are designed to ensure that sound, high quality practices are followed to reduce the risk of tissue contamination and of communicable disease transmission to recipients.

CBR is registered with the FDA as an HCT/P establishment that screens, processes, stores, labels and distributes umbilical cord blood and umbilical cord tissue by virtue of the services it provides to expectant parents as a private cord blood and tissue bank. The FDA periodically inspects such registered establishments to determine compliance with HCT/P requirements. Violations of applicable regulations noted by the FDA during facility inspections could adversely affect the continued marketing of the CBR Services. If the FDA determines that we have failed to comply with applicable regulatory requirements, it can impose or initiate a variety of enforcement actions, including but not limited to, public warning or untitled letters, written recall or destruction orders, written cease manufacturing orders, court-ordered seizures, injunctions, consent decrees, civil penalties, or criminal prosecutions. If any of these events were to occur following the consummation of the CBR acquisition, it could materially adversely affect us.

In addition, the FDA could disagree that CBR cord blood and tissue meet the criteria for distribution solely under Section 361 of the PHSA, and therefore, with the conclusion that CBR’s banked HCT/Ps do not require approval or clearance of a marketing application. If the FDA were to draw this conclusion, it could require the submission and approval or clearance of a marketing application in order for us to continue to process and distribute the product. Following the consummation of the CBR acquisition, such an action by the FDA could cause negative publicity, decreased or discontinued sales of CBR cord blood and tissue banking services, and significant expense in obtaining required marketing approval or clearance, or in conforming our marketing approach to the FDA’s expectations.

Following, and assuming, consummation of the CBR acquisition, if third parties who provide cord blood and tissue to CBR fail to comply with ongoing FDA requirements for HCT/P recovery and testing, CBR cord blood and tissue could be subject to restrictions that will cause a materially adverse effect on our business.

Healthcare providers and other entities who collect and test the cord blood and tissue that CBR processes and stores are responsible for performing donor recovery and donor testing in compliance with the FDA regulations that govern those functions. CBR is dependent upon the actions of these third parties with whom CBR contracts. If these third parties fail to comply with applicable requirements, the cord blood and tissue that CBR processes and stores will be negatively affected and at risk of FDA enforcement action, and our business could be negatively affected following, and assuming, consummation of the CBR acquisition.

It is likely that the FDA’s regulation of HCT/Ps will continue to evolve in the future. Complying with any such new regulatory requirements may entail significant time delays and expense following, and assuming, consummation of the CBR acquisition, which could have a material adverse effect on our business.

In the future, the FDA may promulgate new regulatory requirements and standards for HCT/Ps. Following, and assuming, consummation of the CBR acquisition, we may not be able to comply with any such future regulatory requirements or product standards. Failure to comply with future applicable regulatory requirements and standards may result in, among other things, public warning or untitled letters, written recall or destruction orders, court-ordered seizures, injunctions, consent decrees, civil penalties, or criminal prosecutions. Moreover, the cost of compliance with future government regulations may adversely affect revenue and profitability.

State and other requirements and standards may impact our ability to conduct a profitable collection, processing and storage business for cord blood and tissue following, and assuming, consummation of the CBR acquisition.

Some states impose additional regulation and oversight of cord blood and tissue banks and of clinical laboratories operating within their borders and impose regulatory compliance obligations on out-of-state

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laboratories providing services to their residents. Many of the states in which CBR and, following, and assuming, consummation of the CBR acquisition, we and our business partners operate, have licensing requirements that must be complied with. If current state law regulations change, there can be no assurance that, following, and assuming, consummation of the CBR acquisition, we, our business partners, or members of our collection center network will be able to obtain or maintain any necessary licenses required to conduct business in any states or that the cost of compliance will not materially and adversely affect our ability to market or perform our services or our ability to do so profitably.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides certain information with respect to our purchases of shares of our stock during the three months ended June 30, 2015:

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2)

April 1, 2015 through April 30, 2015	—	$	—	—	—

May 1, 2015 through May 31, 2015	—	—		—	—

June 1, 2015 through June 30, 2015	17,900	68.39		—	—

Total	17,900	$	68.39	—	—

(1) Represents shares of our common stock withheld by us to satisfy the minimum tax withholding obligations in connection with the vesting of restricted stock units held by our employees.

(2) We do not currently have any publicly announced purchase programs or plans.

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Item 6. Exhibits

(a) List of Exhibits

2.1		Stock Purchase Agreement, dated as of June 29, 2015, by and among CBR Holdco, LLC, CBR Acquisition Holdings Corp. and AMAG Pharmaceuticals, Inc. (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed June 29, 2015, File No. 001-10865)

3.1		Certificate of Amendment to Restated Certificate of Incorporation of AMAG Pharmaceuticals, Inc. as filed on May 21, 2015 with the Delaware Secretary of State (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed May 28, 2015, File No. 001-10865)

3.2		Restated Certificate of Incorporation of AMAG Pharmaceuticals, Inc. (Restated as of April 12, 2010) (incorporated herein by reference to Exhibit 3.1 and 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, File No. 0-14732)

3.3		Amendment No. 1 to the Amended and Restated By-Laws of AMAG Pharmaceuticals, Inc. (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed April 2, 2015, File No. 001-10865)

3.4		Amended and Restated By-Laws of AMAG Pharmaceuticals, Inc. (Amended and Restated as of November 25, 2008) (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 28, 2008, File No. 0-14732)

10.1	+	Commitment Letter, dated June 29, 2015, by and between AMAG Pharmaceuticals, Inc., Jefferies Finance LLC and Barclays Bank PLC (Certain confidential information contained in this exhibit was omitted by means of redacting a portion of the text and replacing it with [***]. This exhibit has been filed separately with the SEC without any redactions pursuant to a Confidential Treatment Request under Rule 24b-2 of the Securities and Exchange Act of 1934, as amended)

10.2	+	Amendment No. 2 to Commercial Supply Agreement, dated April 28, 2015, by and between the Company and Sigma-Aldrich, Inc. (Certain confidential information contained in this exhibit was omitted by means of redacting a portion of the text and replacing it with [***]. This exhibit has been filed separately with the SEC without any redactions pursuant to a Confidential Treatment Request under Rule 24b-2 of the Securities and Exchange Act of 1934, as amended)

10.3	+	Notice of Termination between the Company and Edward Jordan dated May 4, 2015

10.4	+	Notice of Termination between the Company and Scott Townsend dated May 5, 2015

10.5		First Amendment to the AMAG Pharmaceuticals, Inc. Third Amended and Restated 2007 Equity Incentive Plan (incorporated herein by reference to Appendix B to the Company’s Definitive Proxy Statement for its 2015 Annual Meeting of Stockholders, filed April 16, 2015, File No. 001-10865)

10.6		AMAG Pharmaceuticals, Inc. 2015 Employee Stock Purchase Plan (incorporated herein by reference to Appendix C to the Company’s Definitive Proxy Statement for its 2015 Annual Meeting of Stockholders, filed April 16, 2015, File No. 001-10865)

31.1	+	Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	+	Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	++	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	++	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS	+	XBRL Instance Document

101.SCH	+	XBRL Taxonomy Extension Schema Document

101.CAL	+	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	+	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	+	XBRL Taxonomy Extension Label Linkbase Document

101.PRE	+	XBRL Taxonomy Extension Presentation Linkbase Document

+ Exhibits marked with a plus sign (“+”) are filed herewith.

++ Exhibits marked with a double plus sign (“++”) are furnished herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	AMAG PHARMACEUTICALS, INC.

	By:	/s/ William K. Heiden
		William K. Heiden
		Chief Executive Officer (Authorized Officer)

	Date: July 27, 2015

	AMAG PHARMACEUTICALS, INC.

	By:	/s/ Frank E. Thomas
		Frank E. Thomas
		President and Chief Operating Officer (Principal Financial Officer)


	Date: July 27, 2015

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EXHIBIT INDEX

Exhibit Number		Description

2.1		Stock Purchase Agreement, dated as of June 29, 2015, by and among CBR Holdco, LLC, CBR Acquisition Holdings Corp. and AMAG Pharmaceuticals, Inc. (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed June 29, 2015, File No. 001-10865)

3.1		Certificate of Amendment to Restated Certificate of Incorporation of AMAG Pharmaceuticals, Inc. as filed on May 21, 2015 with the Delaware Secretary of State (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed May 28, 2015, File No. 001-10865)

3.2		Restated Certificate of Incorporation of AMAG Pharmaceuticals, Inc. (Restated as of April 12, 2010) (incorporated herein by reference to Exhibit 3.1 and 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, File No. 0-14732)

3.3		Amendment No. 1 to the Amended and Restated By-Laws of AMAG Pharmaceuticals, Inc. (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed April 2, 2015, File No. 001-10865)

3.4		Amended and Restated By-Laws of AMAG Pharmaceuticals, Inc. (Amended and Restated as of November 25, 2008) (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 28, 2008, File No. 0-14732)

10.1	+	Commitment Letter, dated June 29, 2015, by and between AMAG Pharmaceuticals, Inc., Jefferies Finance LLC and Barclays Bank PLC (Certain confidential information contained in this exhibit was omitted by means of redacting a portion of the text and replacing it with [***]. This exhibit has been filed separately with the SEC without any redactions pursuant to a Confidential Treatment Request under Rule 24b-2 of the Securities and Exchange Act of 1934, as amended)

10.2	+	Amendment No. 2 to Commercial Supply Agreement, dated April 28, 2015, by and between the Company and Sigma-Aldrich, Inc. (Certain confidential information contained in this exhibit was omitted by means of redacting a portion of the text and replacing it with [***]. This exhibit has been filed separately with the SEC without any redactions pursuant to a Confidential Treatment Request under Rule 24b-2 of the Securities and Exchange Act of 1934, as amended)

10.3	+	Notice of Termination between the Company and Edward Jordan dated May 4, 2015

10.4	+	Notice of Termination between the Company and Scott Townsend dated May 5, 2015

10.5		First Amendment to the AMAG Pharmaceuticals, Inc. Third Amended and Restated 2007 Equity Incentive Plan (incorporated herein by reference to Appendix B to the Company’s Definitive Proxy Statement for its 2015 Annual Meeting of Stockholders, filed April 16, 2015, File No. 001-10865)

10.6		AMAG Pharmaceuticals, Inc. 2015 Employee Stock Purchase Plan (incorporated herein by reference to Appendix C to the Company’s Definitive Proxy Statement for its 2015 Annual Meeting of Stockholders, filed April 16, 2015, File No. 001-10865)

31.1	+	Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	+	Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	++	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	++	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS	+	XBRL Instance Document

101.SCH	+	XBRL Taxonomy Extension Schema Document

101.CAL	+	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	+	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	+	XBRL Taxonomy Extension Label Linkbase Document

101.PRE	+	XBRL Taxonomy Extension Presentation Linkbase Document

+ Exhibits marked with a plus sign (“+”) are filed herewith.

++ Exhibits marked with a double plus sign (“++”) are furnished herewith.

Exhibit 10.1

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

Execution Version

JEFFERIES FINANCE LLC	BARCLAYS
520 Madison Avenue	745 Seventh Avenue
New York, New York 10022	New York, New York 10019

June 29, 2015

CONFIDENTIAL

COMMITMENT LETTER

AMAG Pharmaceuticals, Inc.
1100 Winter Street
Waltham, MA 02451

Attention: Frank E. Thomas, President and Chief Operating Officer

Re: Acquisition of CBR Acquisition Holdings Corp.

Ladies and Gentlemen:

You have advised Jefferies Finance LLC (“Jefferies Finance”) and Barclays Bank PLC (“Barclays”; Jefferies Finance and Barclays are referred to herein as the “Joint Lead Arrangers”, and are referred to, together with the Initial Lenders (as defined below), as “we” or “us”) that AMAG Pharmaceuticals, Inc., a Delaware corporation (the “Acquiror” or “you”), intends to acquire (the “Acquisition”) all of the issued and outstanding capital stock of CBR Acquisition Holdings Corp., a Delaware corporation (the “Target” and, together with its subsidiaries, the “Acquired Business”), from CBR Holdco, LLC, a Delaware limited liability company (the “Seller”), and to refinance (together with any applicable prepayment premium or fee, with the commitments thereunder being terminated, and all guarantees and security in respect thereof being terminated and released following repayment) substantially all of the existing indebtedness (the “Refinanced Debt”) of you and the Acquired Business (the “Refinancing”), other than indebtedness permitted to be outstanding under the Definitive Debt Documents (as defined herein), which shall include, among other things, (i) the Acquiror’s 2.50% Convertible Senior Notes due 2019 in the original principal amount of $200.0 million (the “2019 Notes”) and (ii) indebtedness of the Acquired Business permitted to be incurred and remain outstanding under the Acquisition Agreement, which shall, in each case, remain outstanding immediately following the Closing Date (collectively, the “Surviving Debt”). Capitalized terms used but not defined herein and defined in any exhibit hereto have the meanings assigned to them in such exhibit. As used herein, the term “Closing Date” means the date of the consummation of the acquisition and the first extension of credit under the Facilities (as defined herein).

You have advised us that the total purchase price due on the Closing Date for the Acquisition (the “Purchase Price”), the Refinancing, and fees, commissions and expenses related to the Acquisition and

the Refinancing, in each case payable by you or your affiliates on the Closing Date, is anticipated to be financed from the following sources:

(i) a $350.0 million senior secured first lien term loan facility, having the terms set forth in Exhibit A hereto (the “Term Loan Facility”; the Term Loan Facility, together with any Incremental Facilities (as defined herein), are collectively referred to as the “Senior Credit Facilities”);

(ii) the issuance and sale (the “Notes Offering”) of senior unsecured notes (the “Notes”) yielding gross proceeds of $450.0 million (or, if the offering of the Notes is not consummated prior to, or concurrently with, the Acquisition, the drawdown of senior unsecured increasing rate loans in an aggregate principal amount equal to (A) $450.0 million less (B) the gross cash proceeds received in respect of the issuance of the Notes (whether in escrow or otherwise) (the “Bridge Loans”) under a senior unsecured bridge loan facility having the terms set forth in Exhibits B and C hereto (the “Bridge Loan Facility” and, together with the Term Loan Facility, the “Facilities”) yielding gross proceeds of $450.0 million); and

(iii) cash on hand of the Acquiror and its subsidiaries, including the amount of the net cash proceeds (“New Equity Proceeds”) of the issuance of common equity or equity-linked securities of the Acquiror received by the Acquiror after the date hereof (the amounts described in this clause (iii), the “Balance Sheet Cash Contribution”) so long as the cash on hand of the Acquiror and its subsidiaries on the Closing Date after giving pro forma effect to the Transactions is not less than $75.0 million.

The transactions described in clauses (i) and (ii) above are referred to as the “Debt Financing”; the Debt Financing, together with the Acquisition and the Refinancing and the payment of all related fees, commissions and expenses payable on the Closing Date by you or your affiliates, are collectively referred to as the “Transactions.” You and your subsidiaries (including the Target and its subsidiaries) are referred to herein as the “Company.” As used in this Commitment Letter and the other Debt Financing Letters (as defined below), the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”

1. The Commitments.

In connection with the foregoing, (i) Jefferies Finance (either directly or through one of its affiliates) hereby severally and not jointly commits to provide 65.0% of each of the Facilities and (ii) Barclays hereby severally and not jointly commits to provide 35.0% of each of the Facilities (each of Jefferies Finance and Barclays, in such capacity, an “Initial Lender”), provided that the commitments of the Initial Lenders shall be several and not joint.

The commitments described in this Section 1 are collectively referred to herein as the “Commitments.” The several obligations of each Initial Lender to the Borrower to fund the Facilities on the Closing Date are, in each case, on the terms and subject only to the conditions set forth in (i) this letter (including the exhibits, schedules and annexes hereto, collectively, this “Commitment Letter”) and (ii) the fee letter, dated as of the date hereof (the “Fee Letter” and, together with the Commitment Letter, the “Debt Financing Letters”), among you, Jefferies Finance and Barclays. Notwithstanding anything to the contrary in any Debt Financing Letter, but subject to the Documentation Principles (as defined in Exhibit A hereto), the terms of this Commitment Letter are intended as an outline of the material provisions and

terms of the Facilities, but do not include all of the terms that will be contained in the definitive documents relating to the Debt Financing, which shall be prepared by our counsel (collectively, the “Definitive Debt Documents”); provided that there shall be no closing condition contained in the Definitive Debt Documents that is not specifically set forth in Section 3 hereof, on Exhibit A or B to this Commitment Letter under the headings “Conditions Precedent to Initial Borrowing” and “Conditions”, respectively, or on Exhibit D to this Commitment Letter. No party hereto has been authorized by us to make any oral or written statements or representations that are inconsistent with the Debt Financing Letters.

2. Titles and Roles. As consideration for the Commitments, you hereby appoint (a) Jefferies Finance and Barclays, and Jefferies Finance and Barclays hereby agree to act, as joint bookrunners and as joint lead arrangers for the Facilities (each of Jefferies and Barclays Capital, in such capacity, a “Joint Lead Arranger”) and (b) Jefferies Finance to act, and Jefferies Finance hereby agrees to act, as sole administrative agent and sole collateral agent for the Term Loan Facility and as sole administrative agent for the Bridge Loan Facility. It is understood and agreed that no other titles shall be awarded and no compensation (other than that expressly contemplated by the Debt Financing Letters) shall be paid in connection with the Facilities, unless mutually agreed. You further agree that Jefferies Finance shall have “left” placement in any and all marketing materials or other documentation used in connection with each of the Facilities and shall hold the leading role and responsibilities customarily associated with such “left” placement.

In addition, pursuant to an engagement letter satisfactory to the Joint Lead Arrangers (the “Engagement Letter”) between you and one or more banking or investment banking institutions of national prominence acceptable to us (collectively, the “Financial Institutions”) entered into on or prior to the date hereof, you have engaged the Financial Institutions to act as joint underwriters, joint initial purchasers and/or joint placement agents in connection with any public offering or private placement of any Notes, equity securities or equity-linked securities.

3. Conditions Precedent. The closing of the Facilities and the making of the initial loans under the Facilities on the Closing Date are conditioned upon (and solely upon) the satisfaction or waiver by us of each of the following conditions: (i) since the date hereof, no Company Material Adverse Effect (as defined below) shall have occurred, and no event shall have occurred that, individually or in the aggregate, with or without notice or the lapse of time, would reasonably be expected to result in a Company Material Adverse Effect; (ii) the other conditions expressly set forth in Exhibit A and Exhibit B under the heading “Conditions Precedent to Initial Borrowing”; and (iii) the other conditions expressly set forth in Exhibit D to this Commitment Letter.

For purposes hereof, “Company Material Adverse Effect” means any change, effect, event, occurrence, state of facts or development that, individually or in the aggregate, is, or would reasonably be expected to have or result in, a material adverse effect on the business, assets, results of operations or financial condition of the Acquired Business taken as a whole; provided, however, that any such change, effect, event, occurrence, state of facts or development, to the extent resulting from or arising in connection with the following, shall not be deemed in themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been or will be, a Company Material Adverse Effect: any change, effect, event, occurrence, state of facts or development attributable to (i) the announcement or pendency of the transactions contemplated by the Acquisition Agreement; (ii) conditions affecting the industry in which the Acquired Business participates,

the economy as a whole or the capital markets in general (including currency fluctuations) or the markets in which the Acquired Business operates; (iii) the taking of any action required by the Acquisition Agreement; (iv) any change in, or proposed or potential change in, applicable laws or the interpretation thereof; (v) any change in GAAP or other accounting requirements or principles or the interpretation thereof; (vi) the failure of the Acquired Business to meet or achieve the results set forth in any projection or forecast (provided, that this clause (vi) shall not prevent a determination that any change or effect underlying such failure to meet projections or forecasts has resulted in a Company Material Adverse Effect (to the extent such change or effect is not otherwise excluded from this definition of Company Material Adverse Effect)); (vii) the commencement, continuation or escalation of a war, material armed hostilities or other material international or national calamity or act of terrorism; or (viii) earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events in the U.S. or any other country or region in the world; provided that, in the case of clauses (ii), (iv), (vii) and (viii) above, if such change, effect, event, occurrence, state of facts or development disproportionately affects the Acquired Business as compared to other persons or businesses that operate in the industry in which the Acquired Business operates, then the disproportionate aspect of such change, effect, event, occurrence, state of facts or development may be taken into account in determining whether a Company Material Adverse Effect has or will occur.

Notwithstanding anything in the Debt Financing Letters, the Definitive Debt Documents or any other letter agreement or other undertaking concerning the financing of the Transactions to the contrary, (i) the only representations and warranties the accuracy of which shall be a condition to the availability of the Facilities and the making of the initial loans on the Closing Date shall be (A) such of the representations and warranties with respect to the Acquired Business in the Acquisition Agreement as are material to the interests of the Lenders or the Joint Lead Arrangers, but only to the extent that you have (or your applicable affiliate has) the right to terminate your (or its) obligations under the Acquisition Agreement or decline to consummate the Acquisition as a result of a breach of such representations and warranties (as determined without giving effect to any waiver, amendment, consent or other modification thereto) (collectively, the “Specified Acquisition Agreement Representations”) and (B) the Specified Representations (as defined below) and (ii) the terms of the Definitive Debt Documents and closing deliverables shall be in a form such that they do not impair availability of the Facilities and the making of the initial loans on the Closing Date if the conditions expressly set forth in the first paragraph of this Section 3 are satisfied or waived by us (it being understood that, to the extent any lien or security interest on or in any Collateral (other than to the extent that a lien on such Collateral may be perfected (x) by the filing of a financing statement under the Uniform Commercial Code or (y) by the delivery of stock certificates of the Borrower and its subsidiaries (which stock certificates shall be delivered on the Closing Date, provided that if after using commercially reasonable efforts such stock certificates cannot be delivered on the Closing Date, then such stock certificates must be delivered within five (5) Business Days after the Closing Date, as such period may be extended by the Administrative Agent in its sole discretion) which are required to be delivered under Exhibit A to this Commitment Letter) or is not or cannot be perfected on the Closing Date after your use of commercially reasonable efforts to do so, neither the perfection of such Collateral nor, in the case of real estate Collateral, the delivery of any related title policies, surveys, title insurance documents, endorsements or similar documentation shall constitute a condition precedent to the availability of the Facilities and the making of the initial loans on the Closing Date, but shall be required to be perfected within 90 days after the Closing Date (subject to extensions by the Administrative Agent, in its sole discretion). For purposes hereof, “Specified Representations” means the representations and warranties of the Loan Parties set forth in the Definitive Debt Documents relating to corporate or other organizational existence of the Borrower and Guarantors,

organizational power and authority (as to execution, delivery and performance of the applicable Definitive Debt Documents) of the Borrower and Guarantors, the due authorization, execution, delivery and enforceability of the applicable Definitive Debt Documents, solvency of the Borrower and its subsidiaries (which representation shall be consistent with the representation contained in Exhibit E hereto), no conflicts resulting from the entering into and performance of the Definitive Debt Documents with charter documents of the Borrower and Guarantors, Federal Reserve margin regulations, the Patriot Act, FCPA, OFAC, the Investment Company Act and, subject to permitted liens and the limitations set forth in the prior sentence, the creation, validity, perfection and priority of security interests in the Collateral (subject, in each case, to certain customary exceptions to be set forth in the Definitive Debt Documents and consistent with the Documentation Principles). This paragraph shall be referred to herein as the “Certain Funds Provision”.

4. Syndication.

(a) Each Joint Lead Arranger reserves the right, at any time after the date hereof and prior to or after execution of the Definitive Debt Documents, to syndicate all or part of its (or its affiliated Initial Lender’s) Commitments to a syndicate of banks, financial institutions and other entities identified by the Joint Lead Arrangers in consultation with you and subject to your consent (which shall not be unreasonably withheld or delayed) (collectively with the Initial Lenders, the “Lenders”); provided that the Joint Lead Arrangers will not syndicate to (i) certain banks, financial institutions and other lenders or competitors of the Borrower or the Target that have been specified to us by you or in writing prior to the date hereof and (ii) any of the affiliates of such persons listed in clause (i) that are either (x) identified in writing by you prior to the Closing Date or (y) clearly identifiable on the basis of such affiliates’ names (the parties described in clauses (i) and (ii) above, collectively, “Disqualified Persons”); provided that the Borrower, upon reasonable notice to the Joint Lead Arrangers after the date hereof, shall be permitted to supplement in writing by name the list of persons that are Disqualified Persons to the extent such supplemented person becomes (x) a competitor of, or is or becomes an affiliate of, a competitor of the Borrower or the Target or their respective subsidiaries or (y) an affiliate of a Disqualified Person, which supplement shall be in the form of a list provided to the Administrative Agent, the Joint Lead Arrangers and the Lenders and become effective two business days after delivery to the Administrative Agent, the Joint Lead Arrangers and the Lenders, but which shall not apply retroactively to disqualify any parties that have previously acquired an assignment or participation interest in the either of the Facilities; provided further that any bona fide debt fund or investment vehicle (other than a bona fide debt fund or investment vehicle that is separately identified under clause (i) above) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit and securities in the ordinary course of business shall not be considered to be a competitor or an affiliate of a competitor; provided further that notwithstanding our right to syndicate the Commitments, (i) no Initial Lender shall be relieved, released or novated from its several obligation to fund a portion of the Facilities on the Closing Date in connection with any syndication, assignment or participation of either of the Facilities, including our respective Commitments in respect thereof, until after the Closing Date has occurred, (ii) no assignment or novation by us shall become effective as between us and you with respect to all or any portion of our respective Commitments until the initial funding of the Facilities and (iii) we shall retain exclusive control over the rights and obligations with respect to our respective Commitments in respect of the Facilities, including all rights with respect to consents, modifications, supplements and amendments, until the Closing Date has occurred, in each case, unless you and we agree in writing. The Joint Lead Arrangers will exclusively manage all aspects of any such syndication in consultation with you, including decisions as to the selection of prospective Lenders to be approached, when they will be

approached, when their commitments will be accepted, which prospective Lenders will participate, the allocation of the commitments among the Lenders, and the amount and distribution of fees. Notwithstanding anything to the contrary contained in this Section 4, this Commitment Letter or the other Debt Financing Letters or any other letter agreement or undertaking concerning the financing of the Transactions to the contrary, unless otherwise expressly set forth on Exhibit D hereto, your obligations to assist in syndication efforts as provided herein (including the obtaining of the ratings referenced herein) shall not constitute a condition to the Commitments hereunder or the funding of the Facilities on the Closing Date, and the Commitments hereunder are not conditioned upon the syndication of or receipt of commitments in respect of the Facilities and in no event shall the commencement or successful completion of syndication of the Facilities constitute a condition to the availability of the Facilities and the making of the initial loans on the Closing Date.

(b) We intend to commence our syndication efforts promptly upon your execution of this Commitment Letter and you agree to use commercially reasonable efforts to assist us until the date that is the earlier of (i) 60 days after the Closing Date and (ii) the date on which a Successful Syndication (as defined in the Fee Letter) is achieved but in no event shall such date be earlier than the Closing Date (such earlier date referred to in clause (i) and (ii), the “Syndication Date”). Such assistance shall include:

(i) your using commercially reasonable efforts to ensure that our syndication efforts benefit from your existing lending and investment banking relationships and, to the extent reasonably requested by you, existing lending and investment banking relationships of the Acquired Business to the extent reasonably practical and appropriate,

(ii) your providing direct contact between appropriate members of your senior management, representatives and non-legal advisors, on the one hand, and the proposed Lenders, on the other hand (and (x) prior to the consummation of the Acquisition, your using commercially reasonable efforts (subject to the limitations on your rights set forth in the Acquisition Agreement, but including exercising your rights thereunder) to cause, and (y) thereafter, your causing, direct contact between appropriate members of senior management of the Acquired Business, on the one hand, and the proposed Lenders, on the other hand),

(iii) your assistance (and (x) prior to the consummation of the Acquisition, your using commercially reasonable efforts to cause, and (y) thereafter, your causing, the Acquired Business to assist) in the preparation of one or more customary confidential information memoranda (each, a “Confidential Information Memorandum”) and other customary marketing materials to be used in connection with the syndication of our Commitments (together with all Confidential Information Memoranda, the “Materials”), by providing such information and other customary materials as we may reasonably request in connection with the preparation of such Confidential Information Memoranda, including, in the case of information concerning the Acquired Business, by requiring the furnishing of information required to be furnished under the Acquisition Agreement, but subject to the limitations on your rights thereunder,

(iv) your using commercially reasonable efforts to obtain prior to the launch of primary syndication of the Facilities a monitored public corporate rating and a monitored public corporate family rating for the Borrower (after giving pro forma effect to the Transactions) from each of Standard & Poor’s Ratings Services, a division of the McGraw-Hill Companies, Inc. (“S&P”) and Moody’s Investors Service, Inc. (“Moody’s”), respectively, and monitored public facility ratings from

each of S&P and Moody’s for each of the Term Loan Facility, the Notes and, if reasonably requested by the Joint Lead Arrangers, the Bridge Loan Facility (but, for the avoidance of doubt, not any specific rating in either such case), and

(v) your hosting, with us, of meetings with prospective Lenders at such times and in such places as mutually agreed (including one general “bank meeting” and a reasonable number of “one on one” meetings), in each case to the extent reasonably requested by us and at such times and places as you and we, acting reasonably, may agree and, to the extent we request that senior management or appropriate representatives of the Acquired Business attend such meetings, you shall use your commercially reasonably efforts to cause them so to attend (without violation of the Acquisition Agreement, but including by exercising your rights thereunder).

(c) You agree, at our request, to assist in the preparation of a version of any Materials consisting exclusively of information and documentation that is either (i) publicly available or (ii) not material with respect to you, the Target, or any of your or their respective subsidiaries for purposes of United States federal and state securities laws (such information and Materials, “Public Information”). In addition, you agree that, unless specifically labeled “Private — Contains Non-Public Information,” no Materials disseminated to potential Lenders in connection with the syndication of the Facilities, whether through an Internet website, electronically, in presentations, at meetings or otherwise, will contain any Material Non-Public Information (as defined below). Any information and documentation that is not Public Information is referred to herein as “Material Non-Public Information.” It is understood that in connection with your assistance described above, authorization letters will be included in any information package and presentation whereby you authorize the distribution of such information to prospective Lenders, it being understood that (x) the authorization letter for Public Information shall contain a representation by you to the Lenders that the Public Information does not include any such Material Non-Public Information and each letter shall contain a customary “10b-5” representation and (y) each such information package and presentation shall exculpate you, the Target, your and their respective affiliates and us and our respective affiliates with respect to any liability related to the use of the contents of such information package and presentation or any related marketing material by the recipients thereof. You acknowledge and agree that the following documents contain and shall contain solely Public Information (unless you notify us promptly that any such document contains Material Non-Public Information): (i) draft and final Definitive Debt Documents with respect to the Facilities, (ii) customary administrative materials prepared by us for prospective Lenders (including a lender meeting invitation, Lender allocations, if any, and funding and closing memoranda), and (iii) term sheets and notification of changes in the terms of the Facilities. You agreed to identify Public Information by clearly and conspicuously marking the same as “PUBLIC”.

(d) You agree that all Materials and Information (as defined below) (including draft and execution versions of the Definitive Debt Documents and draft or final offering materials relating to contemporaneous securities issuances by the Company) may be disseminated for syndication purposes in accordance with our standard syndication practices (including through hard copy and via one or more internet sites (including an IntraLinks, SyndTrak or similar workspace), e-mail or other electronic transmissions). Without limiting the foregoing, you authorize, and will use commercially reasonable efforts to maintain the contractual undertakings from the Acquired Business to authorize, the use of your and (subject to the limitations thereon set forth in the Acquisition Agreement) its logos in connection with any such dissemination. You further agree that, at our expense, we may place advertisements in financial and other newspapers and periodicals or on a home page or similar place for dissemination of information

on the Internet or worldwide web as we may choose, and circulate similar promotional materials, after the closing of the Transactions in the form of a “tombstone” or otherwise, containing information customarily included in such advertisements and materials, including (i) the names of the Acquiror, the Target and your and its respective affiliates (or any of them), (ii) our and our respective affiliates’ titles and roles in connection with the Transactions, and (iii) the amount, type and closing date of such Transactions, but subject to the limitations on disclosure of confidential information set forth in Section 9 hereof.

Notwithstanding anything to the contrary contained in this Commitment Letter or the Fee Letter, (i) none of the foregoing requirements of this Section 4 shall constitute a condition to the commitments hereunder or the funding of the Facilities on the Closing Date and (ii) neither the commencement nor the completion of the syndication of the Facilities shall constitute a condition precedent to the Closing Date or delay or interfere in any way with the negotiation of the Facilities and/or the funding thereof.

5. Information. You represent and warrant with respect to the Acquiror, the Target and your and its respective subsidiaries (provided that, with respect to information relating to the Target and its subsidiaries, such representation and warranty is to your knowledge) that:

(a) all written information (excluding, for this purpose, all immaterial information) and data other than the Projections (as defined below), forward-looking information and information of a general economic or industry-specific nature (the “Information”) that has been or will be made available to us by or on behalf of you or any of your representatives with respect to the Acquiror, the Target or your or its respective subsidiaries in connection with the Transactions does not and will not, when taken as a whole, when furnished or on the Closing Date, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not materially misleading, taken as a whole, in light of the circumstances under which such statements are made, and

(b) all projections, forecasts and other forward-looking information that have been or will be made available to us by you or on your behalf with respect to you, the Acquired Business or any of your or its respective subsidiaries (collectively, the “Projections”) have been or will be prepared in good faith based upon assumptions that are believed by you to be reasonable at the time made (it being understood that any such Projections are not to be viewed as facts, are not a guarantee of financial performance and are subject to uncertainties and contingencies, many of which are beyond your control, that no assurance can be given that any particular Projections will be realized, that actual results may differ and that such differences may be material).

You agree that, if at any time prior to the later of the Closing Date and the Syndication Date, you become aware that any of the representations and warranties in the preceding sentence would be incorrect in any material respect if the Information or Projections were then being furnished and such representations and warranties were then being made, you shall, at such time, supplement promptly such Information and/or Projections, as the case may be, in order that such representations and warranties (and with respect to the Target and its subsidiaries prior to the Closing Date, to your knowledge) will be correct in all material respects under those circumstances (and any such supplementation shall cure any breach of such representation and warranty).

You shall be solely responsible for Information, including the contents of all Materials. We (i) will be relying on Information and data provided by or on behalf of you and the Acquired Business or any of your or its representatives or otherwise available from generally recognized public sources,

without having independently verified the accuracy or completeness of the same, (ii) do not assume responsibility for the accuracy or completeness of any such Information and data and (iii) will not make an appraisal of your assets or liabilities or the assets or liabilities of the Acquired Business.

6. Clear Market. You agree that, from the date hereof until the Syndication Date, you and your subsidiaries will not, and you will use commercially reasonable efforts not to permit the Acquired Business to, directly or indirectly, (i) syndicate, place, sell or issue, (ii) attempt or offer to syndicate, place, sell or issue, (iii) announce or authorize the announcement of the syndication, placement, sale or issuance of, or (iv) engage in discussions concerning the syndication, placement, offering, sale or issuance of, any debt facility, debt security or convertible or equity-linked security or obligation (but excluding common equity and preferred stock not redeemable at the option of the holder thereof) of you, the Target or any of your or its respective subsidiaries (other than (x) the Debt Financing contemplated hereby and the financings contemplated by the Engagement Letter, (y) letters of credit, capital leases, purchase money indebtedness, equipment financings and, in the case of the Acquired Business, drawings under its revolving credit facility, in each case in the ordinary course of business, and (z) in the case of the Target and its subsidiaries, indebtedness permitted to be incurred prior to the Closing Date under the Acquisition Agreement), including any renewals or refinancings of any existing debt facility, without our prior written consent.

7. Fees and Expenses. As consideration for the Commitment and our other undertakings hereunder, you hereby agree to pay or cause to be paid to us and Jefferies for our respective accounts the fees, expenses and other amounts set forth in the Debt Financing Letters on the terms and conditions set forth therein.

8. Indemnification and Waivers. You agree to indemnify and hold harmless the Joint Lead Arrangers, the Lenders and our and their respective affiliates (including, in the case of Jefferies Finance, Jefferies LLC) and subsidiaries and each director, officer, trustee, shareholders employee, advisor, agent, affiliate, successor, assign, attorney in fact, partner, representative and controlling person of each of the foregoing (each an “Indemnified Person”) from and against any and all actions, suits, investigation, inquiry, claims, actual losses, damages, liabilities or proceedings of any kind or nature whatsoever which may be incurred by or asserted against or involve any such Indemnified Person as a result of or arising out of or in any way related to or resulting from the Debt Financing Letters, the Debt Financing, the Facilities, the use of proceeds thereof, the Transactions or the other transactions contemplated hereby or thereby (regardless of whether any such Indemnified Person is a party thereto and regardless of whether such matter is initiated by a third party or otherwise) (any of the foregoing, a “Proceeding”), and you agree to reimburse each Indemnified Person within 30 days after written demand therefor (which request shall include reasonably detailed backup documentation) for any reasonable and documented legal or other out-of-pocket expenses incurred in connection with investigating, defending, preparing to defend or participating in any such Proceeding (limited, in the case of legal fees and expenses, to one firm of primary counsel to such Indemnified Persons taken as a whole (and one or more firms of additional counsel as a result of any actual or reasonably perceived conflicts of interest for each class of similarly situated Indemnified Persons) and any reasonably necessary local counsel in each applicable jurisdiction); provided, however, that no Indemnified Person will be indemnified for any such cost, expense or liability (a) to the extent determined by a final non-appealable judgment of a court of competent jurisdiction to have resulted from (i) the gross negligence, bad faith or willful misconduct of such Indemnified Person or its affiliates or (ii) a material breach of such Indemnified Person’s or its affiliate’s obligations under the Debt Financing Letters or (b) to the extent arising out of any dispute among Indemnified Persons (other

than a dispute involving claims against any Indemnified Person in its capacity as administrative agent or arranger or any other agent or co-agent (if any) designated with respect to either Facility) that a court of competent jurisdiction has determined in a final non-appealable decision did not result from actions or omissions of the Acquiror, the Target or their respective direct or indirect parents, controlling persons or subsidiaries. In the case of any Proceeding to which the indemnity in this paragraph applies, such indemnity and reimbursement obligations shall be effective, whether or not such Proceeding is brought by you, the Target, any of your or their respective affiliates, securityholders or creditors, an Indemnified Person or any other person, or an Indemnified Person is otherwise a party thereto and whether or not any aspect of the Debt Financing Letters, the Debt Financing or any of the Transactions is consummated.

Notwithstanding any other provision of this Commitment Letter, (i) no Indemnified Person shall be liable for any damages arising from the use by others of information or other materials obtained through internet, electronic, telecommunications or other information transmission systems, except to the extent that such damages have resulted from the willful misconduct, bad faith or gross negligence of such Indemnified Person or any of such Indemnified Person’s affiliates or any of its or their respective officers, directors, employees, agents, advisors or other representatives, in each case who are involved in or aware of the Transactions as determined by a final, non-appealable judgment of a court of competent jurisdiction and (ii) without in any way limiting the indemnification obligations set forth above, none of us, you, the Target or any Indemnified Person shall be liable for any indirect, special, punitive or consequential damages (including, without limitation, any loss of profits, business or anticipated savings) in connection with this Commitment Letter, the Fee Letter, the Transactions (including the Facilities and the use of proceeds thereunder), or with respect to any activities related to the Facilities, including the preparation of the Debt Financing Letters and the Definitive Debt Documents; provided, that nothing contained in the preceding clause (ii) shall limit your indemnification obligations set forth herein to the extent that such indirect, special, punitive or consequential damages are included in any third party claim in connection with which such Indemnified Person is entitled to indemnification hereunder.

You shall not be liable for any settlement of any Proceeding effected without your written consent (which consent shall not be unreasonably withheld or delayed), but if settled with your written consent or if there is a judgment by a court of competent jurisdiction in any such Proceeding, you agree to indemnify and hold harmless each Indemnified Person from and against any and all losses, claims, damages, liabilities and expenses by reason of such settlement or judgment in accordance with the other provisions of this Section 8.

You shall not, without the prior written consent of the affected Indemnified Person (which consent shall not be unreasonably withheld or delayed, it being understood that an Indemnified Person may withhold consent to a settlement that does not satisfy the criteria in clauses (i) and (ii) below), effect any settlement of any pending or threatened proceedings in respect of which indemnity could have been sought hereunder by such Indemnified Person unless such settlement (i) includes an unconditional release of such Indemnified Person in form and substance reasonably satisfactory to such Indemnified Person from all liability or claims that are the subject matter of such proceedings and (ii) does not include any statement as to or any admission of fault, culpability, wrong doing or a failure to act by or on behalf of any Indemnified Person. Notwithstanding the foregoing, each Indemnified Person shall be obligated to refund and/or return promptly any and all amounts paid by you or on your behalf under this paragraph to such Indemnified Person for any such losses, claims, damages, liabilities and expenses to the extent such Indemnified Person is not entitled to payment of such amounts in accordance with the terms hereof.

9. Confidentiality. This Commitment Letter and the Fee Letter are each delivered to you on the understanding that neither this Commitment Letter, any other Debt Financing Letter nor any of their terms or substance will be disclosed, directly or indirectly, to any other person or entity except (a) this Commitment Letter (but not the Fee Letter) may be disclosed as required by the rules and regulations of the Securities and Exchange Commission (the “SEC”) in connection with any filings with the SEC in connection with the Transactions (in which case you agree to inform us promptly thereof), (b) pursuant to the order of any court or administrative agency in any pending legal or administrative proceeding, or as otherwise required by applicable law or compulsory legal process (and in either such case you agree to inform us promptly thereof and to cooperate with us in securing a protective order in respect thereof to the extent lawfully permitted to do so), (c) to you and your officers, directors, employees, stockholders, affiliates, agents, attorneys, accountants and advisors on a confidential and need to know basis and only in connection with the Transactions, (d) the Term Sheets may be disclosed to rating agencies in connection with their review of the Facilities and the Notes Offering or the Borrower, (e) the information contained in this Commitment Letter (but not that contained in the Fee Letter) may be disclosed in any Confidential Information Memorandum and any offering materials for the Notes Offering or in connection with the syndication of the Facilities, (f) this Commitment Letter (but not the Fee Letter) may be disclosed to the Target, the Seller, their direct and indirect equity holders and their respective officers, directors, employees, attorneys, accountants, agents and advisors, in each case on a confidential basis and only in connection with the Transactions, (g) to the extent portions thereof have been redacted in a manner reasonably agreed by us, you may disclose the Fee Letter and the contents thereof to the Target, the Seller and their respective officers, directors, employees, attorneys, accountants and advisors, in each case on a confidential basis and only in connection with the Transactions, and (h) after the Closing Date, you may disclose to the Acquired Business’s auditors the Fee Letter and the contents thereof for customary accounting purposes, including accounting for deferred financing costs. You may also disclose, on a confidential basis, the aggregate amount of fees (including original issue discount) payable under the Fee Letter as part of a generic disclosure regarding sources and uses (but without disclosing any specific fees or “flex” or other economic terms set forth therein) in connection with the syndication of the Facilities.

We and our respective affiliates shall use all non-public information received by us and them from you, the Target or your or its respective subsidiaries and representatives in connection with the Transactions solely for the purposes of providing the services contemplated by the Debt Financing Letters and shall treat confidentially all such non-public information; provided, however, that nothing herein shall prevent us from disclosing any such information (a) on a customary basis, to Moody’s and S&P in connection with obtaining ratings in connection with the Transactions (including ratings in connection with the Notes), (b) to any Lenders or participants or prospective Lenders or participants (other than persons who have, on the date of disclosure, effectively been designated as Disqualified Persons) and to any direct or indirect contractual counterparty to any credit default swap or similar derivative product (other than Disqualified Persons), (c) in any legal, judicial, administrative proceeding or other compulsory process or otherwise as required by applicable law, rule or regulations (in which case we will promptly notify you, in advance, to the extent practicable and permitted by law, rule or regulation, except in connection with any request as part of any regulatory audit or examinations conducted by accountants or any governmental regulatory authority exercising examination or regulatory authority), (d) upon the request or demand of any governmental or regulatory authority (including any self-regulatory authority) having jurisdiction over us or upon the good faith determination by counsel that such information should be disclosed in light of ongoing oversight or review by any governmental or regulatory authority (including any self-regulatory authority) having jurisdiction over us (in which case we shall, to the extent practicable and permitted by law, rule or regulation, except with respect to any audit or examination

conducted by accountants or any governmental regulatory authority exercising examination or regulatory authority, promptly notify you, in advance, to the extent lawfully permitted to do so), (e) to our respective officers, directors, employees, legal counsel, independent auditors, professionals and other experts or agents working on the Transactions (collectively, “Representatives”) and who are informed of the confidential nature of such information and are or have been advised of their obligation to keep information of this type confidential, (f) to any of our respective affiliates or Representatives of our respective affiliates (provided that any such affiliate or Representative is advised of its obligation to retain such information as confidential) solely in connection with the Transactions, (g) to the extent any such information is or becomes publicly available other than by reason of improper disclosure by us, our respective affiliates or our respective Representatives in breach of this Commitment Letter, (h) to the extent that any such information is independently developed by us, any of our respective affiliates or any of our respective Representatives, (i) to the extent that such information is received by us or our affiliates from a third party that is not to our or our respective affiliates’ knowledge subject to confidentiality obligations to you and (j) to establish a “due diligence” defense, if applicable; provided that the disclosure of any such information to any Lenders or prospective Lenders or participants or prospective participants referred to above shall be made subject to the acknowledgment and acceptance by such Lenders or prospective Lenders or participant or prospective participant that such information is being disseminated on a confidential basis (on substantially the terms set forth in this paragraph or as is otherwise reasonably acceptable to you and us, including, without limitation, as agreed in any confidential information memorandum or other marketing materials) in accordance with our standard syndication processes or customary market standards for dissemination of such type of information. Our obligations under this paragraph shall terminate two years from the date hereof.

Notwithstanding anything herein to the contrary, you and we (and any of your and our respective employees, respective representatives or other agents) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by the Debt Financing Letters and all materials of any kind (including opinions or other tax analyses) that are provided to you or us relating to such tax treatment and tax structure, except that (i) tax treatment and tax structure shall not include the identity of any existing or future party (or any affiliate of such party) to any Debt Financing Letter, and (ii) neither you nor we shall disclose any information relating to such tax treatment and tax structure to the extent nondisclosure is reasonably necessary in order to comply with applicable securities laws. For this purpose, the tax treatment of the transactions contemplated by the Debt Financing Letters is the purported or claimed U.S. federal income tax treatment of such transactions and the tax structure of such transactions is any fact that may be relevant to understanding the purported or claimed U.S. federal income tax treatment of such transactions.

10. Conflicts of Interest; Absence of Fiduciary Relationship. You acknowledge and agree that:

(a) each of us and/or our respective affiliates and subsidiaries, including, in the case of Jefferies Finance, Jefferies Group LLC and its affiliates (each, a “Commitment Party Group”), in our and their capacities as principal or agent, are involved in a wide range of commercial banking and investment banking activities globally (including investment advisory, asset management, research, securities issuance, trading, and brokerage) from which conflicting interests or duties may arise and, therefore, conflicts may arise between (i) our interests and duties hereunder and (ii) the duties or interests or other duties or interests of another member of our respective Commitment Party Group,

(b) we and any other member of a Commitment Party Group may, at any time, (i) provide services to any other person, (ii) engage in any transaction (on our or its own account or otherwise) with respect to you or any member of the same group as you or (iii) act in relation to any matter for any other person whose interests may be adverse to you or any member of your group (a “Third Party”), and may retain for our or its own benefit any related remuneration or profit, notwithstanding that a conflict of interest exists or may arise and/or any member of a Commitment Party Group is in possession or has come or comes into possession (whether before, during or after the consummation of the transactions contemplated hereunder) of information confidential to you; provided that such confidential information shall not be used by us or any other member of a Commitment Party Group in performing services or providing advice to any Third Party. You accept that permanent or ad hoc arrangements/information barriers may be used between and within our divisions or divisions of other members of a Commitment Party Group for this purpose and that locating directors, officers or employees in separate workplaces is not necessary for such purpose,

(c) information that is held elsewhere within us or a member of any Commitment Party Group, but of which none of the individual directors, officers or employees having primary responsibility for the consummation of the transactions contemplated by this Commitment Letter actually has knowledge (or can properly obtain knowledge without breach of internal procedures), shall not for any purpose be taken into account in determining our responsibilities to you hereunder,

(d) neither we nor any other member of a Commitment Party Group shall have any duty to disclose to you, or utilize for your benefit, any non-public information acquired in the course of providing services to any other person, engaging in any transaction (on our or its own account or otherwise) or otherwise carrying on our or its business,

(e) (i) neither we nor any of our respective affiliates have assumed any advisory responsibility or any other obligation in favor of the Acquiror, the Target or any of its or their affiliates except the obligations expressly provided for under the Debt Financing Letters, except for the advisory services of Jefferies LLC, (ii) we and our respective affiliates, on the one hand, and the Acquiror and its affiliates, on the other hand, have an arm’s-length business relationship that does not directly or indirectly give rise to, nor does the Acquiror or any of its affiliates rely on, any fiduciary duty on the part of us or any of our respective affiliates and (iii) we are (and are affiliated with) full service financial firms and as such may effect from time to time transactions for our own account or the account of customers, and hold long or short positions in debt, equity-linked or equity securities or loans of companies that may be the subject of the transactions contemplated by this Commitment Letter (and, in particular, we and any other member of a Commitment Party Group may at any time hold debt or equity securities for our or its own account in the Company). With respect to any securities and/or financial instruments so held by us, any of our respective affiliates or any of our respective customers, all rights in respect of such securities and financial instruments, including any voting rights, will be exercised by the holder of such rights, in its sole discretion. You hereby waive and release, to the fullest extent permitted by law, any claims you have, or may have, with respect to (i) any breach or alleged breach of fiduciary duty (and agree that we shall have no liability (whether direct or indirect) to you in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of you, including your stockholders, employees or creditors) and (ii) any conflict of interest arising from such transactions, activities, investments or holdings, or arising from our failure or the failure of any of our respective affiliates to bring such transactions, activities, investments or holdings to your attention, and

(f) neither we nor any of our respective affiliates are advising you as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. You shall consult with your own advisors concerning such matters and shall be responsible for making your own independent investigation and appraisal of the transactions contemplated by the Debt Financing Letters, and neither we nor our respective affiliates shall have responsibility or liability to you with respect thereto. Any review by us, or on our behalf, of the Company, the Transactions, the other transactions contemplated by the Debt Financing Letters or other matters relating to such transactions will be performed solely for our benefit and shall not be on behalf of you or any of your affiliates.

11. Choice of Law; Jurisdiction; Waivers. The Debt Financing Letters, and any claim, controversy or dispute arising under or related to the Debt Financing Letters (whether in contract or tort), shall be governed by, and construed in accordance with, the laws of the State of New York; provided, however, that the interpretation of any provisions of the Acquisition Agreement referred to in this Commitment Letter, including the determination of the accuracy of the Specified Acquisition Agreement Representations and the definition of “Company Material Adverse Effect” shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. To the fullest extent permitted by applicable law, each of the parties hereto hereby irrevocably submits to the exclusive jurisdiction of any New York State court or federal court sitting in the County of New York and the Borough of Manhattan in respect of any claim, suit, action or proceeding arising out of or relating to the provisions of any Debt Financing Letter and irrevocably agrees that all claims in respect of any such claim, suit, action or proceeding may be heard and determined in any such court (provided that suit for the recognition or enforcement of any judgment obtained in any such New York State or Federal court may be brought in any other court of competent jurisdiction) and that service of process therein may be made by certified mail, postage prepaid, to its address set forth above and further agree that a final judgment in any such suit, action or proceeding shall be conclusive and many be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. You and we hereby waive, to the fullest extent permitted by applicable law, any objection that you or we may now or hereafter have to the laying of venue of any such claim, suit, action or proceeding brought in any such court, and any claim that any such claim, suit, action or proceeding brought in any such court has been brought in an inconvenient forum. You and we hereby waive, to the fullest extent permitted by applicable law, any right to trial by jury with respect to any claim, suit, action or proceeding (whether based upon contract, tort or otherwise) arising out of or relating to the Debt Financing Letters, any of the Transactions or any of the other transactions contemplated hereby or thereby. The provisions of this Section 11 are intended to be effective upon the execution of this Commitment Letter without any further action by you or us, and the introduction of a true copy of this Commitment Letter into evidence shall be conclusive and final evidence as to such matters.

12. Miscellaneous.

(a) This Commitment Letter may be executed in one or more counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument. Delivery of an executed signature page of this Commitment Letter by facsimile, PDF or other electronic transmission will be effective as delivery of a manually executed counterpart hereof.

(b) You may not assign any of your rights, or be relieved of any of your obligations, under this Commitment Letter without our prior written consent, which may be given or withheld in our

reasonable discretion (and any purported assignment without such consent, at our sole option, shall be null and void) except that you may assign your rights hereunder without our prior written consent (x) to any of your subsidiaries that is a domestic “shell” company controlled by you that consummates or intends to consummate the Acquisition, so long as (i) you remain liable for all of your obligations under each of the Debt Financing Letters, (ii) each other Debt Financing Letter is contemporaneously assigned to the applicable assignee and (iii) such assignee agrees to be obligated on each Debt Financing Letter pursuant to documentation reasonably satisfactory to us and (y) in connection with any other assignment that occurs as a matter of law pursuant to, or otherwise substantially simultaneously with, the Acquisition at the closing of the Acquisition in accordance with the Acquisition Agreement. We may at any time and from time to time assign all or any portion of our Commitments hereunder to one or more of our respective affiliates (provided that, unless you otherwise consent in writing to such assignment, we will remain liable for our obligations hereunder until the funding of the Facilities) or, subject to Sections 2 and 4 hereof, to one or more Lenders. Any and all obligations of, and services to be provided by, us hereunder (including our respective Commitments) may be performed, and any and all of our rights hereunder may be exercised, by or through any of our respective affiliates or branches and we reserve the right to allocate, in whole or in part, to our respective affiliates or branches certain fees payable to us in such manner as we and our respective affiliates may agree in our and their sole discretion. You further acknowledge that we may share with any of our respective affiliates, and such affiliates may share with us, any information relating to the Transactions, you or the Acquired Business (and your and their respective affiliates), or any of the matters contemplated in the Debt Financing Letters.

(c) This Commitment Letter has been and is made solely for the benefit of you, us and the Indemnified Persons and your, our and their respective successors and assigns, and nothing in this Commitment Letter, expressed or implied, is intended to confer or does confer on any other person or entity any rights or remedies under or by reason of this Commitment Letter or your and our agreements contained herein.

(d) The Debt Financing Letters set forth the entire understanding of the parties hereto as to the scope of the Commitments and our obligations hereunder and thereunder. The Debt Financing Letters supersede all prior understandings and proposals, whether written or oral, between us and you relating to any financing or the transactions contemplated hereby and thereby.

(e) You agree that we or any of our respective affiliates may disclose information about the Transactions to market data collectors and similar service providers to the financing community.

(f) We hereby notify you that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “PATRIOT Act”), each of us and each of the Lenders may be required to obtain, verify and record information that identifies the Borrower and the Guarantors, which information may include their names, addresses, tax identification numbers and other information that will allow each of us and the Lenders to identify the Borrower and the Guarantors in accordance with the PATRIOT Act. This notice is given in accordance with the requirements of the PATRIOT Act and is effective for each of us and the Lenders.

13. Amendment; Waiver. This Commitment Letter may not be modified or amended except in a writing duly executed by the parties hereto. No waiver by any party of any breach of, or any provision of, this Commitment Letter shall be deemed a waiver of any similar or any other breach or

provision of this Commitment Letter at the same or any prior or subsequent time. To be effective, a waiver must be set forth in writing signed by the waiving party.

14. Surviving Provisions. Notwithstanding anything to the contrary in this Commitment Letter, except as set forth in the immediately succeeding sentence: (i) Sections 6 to and including 15 hereof shall survive the expiration or termination of this Commitment Letter, regardless of whether the Definitive Debt Documents have been executed and delivered or the Transactions consummated, and (ii) Sections 2, 4 and 6 to and including 13 hereof shall survive execution and delivery of the Definitive Debt Documents and the consummation of the Transactions. Upon execution and delivery of the Definitive Debt Documents, except as otherwise provided in the immediately preceding sentence, the provisions of this Commitment Letter shall be superseded in their entirety by those set forth in the Definitive Debt Documents.

15. Acceptance, Expiration and Termination; Reduction. Please indicate your acceptance of the terms of the Debt Financing Letters by returning to us executed counterparts of the Debt Financing Letters not later than 5:00 p.m., New York City time, on June 29, 2015 (the “Deadline”). The Debt Financing Letters are conditioned upon your contemporaneous execution and delivery to us, and the contemporaneous receipt by us, of executed counterparts of each Debt Financing Letter on or prior to the Deadline. This Commitment Letter will expire at such time in the event that you have not returned such executed counterparts to us by such time. Thereafter, except with respect to any provision that expressly survives pursuant to Section 14, this Commitment Letter (but not the Fee Letter) will terminate automatically on the earliest of (i) the date that is five business days after the valid termination of the Acquisition Agreement prior to the closing of the Acquisition, (ii) the closing of the Acquisition (unless the Initial Lenders have failed to fund in breach of their obligations hereunder), and (iii) 5:00 p.m., New York City time, on the earlier of (x) the Outside Date, as defined in the Acquisition Agreement and (y) October 26, 2015. You may terminate this Commitment Letter and the Initial Purchasers’ Commitments hereunder in full, or reduce such Commitments on a pro rata basis between the Initial Lenders, at any time, subject to the terms of this Section 14 and the Fee Letter; provided, however, that no such reduction of Commitments hereunder prior to the Closing Date may reduce the aggregate Commitments (pro rata between the Initial Lenders) to less than $600,000,000, so long as (I) the aggregate Commitments under the Term Loan Facility equal an amount that is either at least $250,000,000 or zero and (II) the aggregate Commitments under the Bridge Loan Facility equal an amount that is either at least $300,000,000 or zero. In addition, (x) our Commitments hereunder to provide Bridge Loans shall automatically be reduced, on a dollar-for-dollar basis, by the aggregate gross proceeds from the issuance or sale of the Notes upon the closing thereof (whether in escrow or otherwise) and (y) receipt of New Equity Proceeds on or prior to the Closing Date will reduce the Commitments (pro rata between the Initial Lenders) on a dollar-for-dollar basis until the aggregate Commitments are equal to $600,000,000, allocated at your discretion, but subject to clauses (I) and (II) of the proviso to the preceding sentence.

Each of the parties hereto agrees that this Commitment Letter is a binding and enforceable agreement with respect to the subject matter contained herein, including an agreement to negotiate in good faith the Loan Documents by the parties hereto in a manner consistent with this Commitment Letter, it being acknowledged and agreed that the commitments provided hereunder by the Commitment Parties are subject only to the conditions precedent set forth in Section 3 hereof, including the execution and delivery of the Loan Documents (which shall be negotiated in good faith as required by the Documentation Principles).

[Signature Pages Follow.]

We are pleased to have the opportunity to work with you in connection with this important financing.

Very truly yours,

JEFFERIES FINANCE LLC


By:	/s/ Brian Buoye
	Name:	Brian Buoye
	Title:	Managing Director

[Signature Page to Commitment Letter]

BARCLAYS BANK PLC

By:	/s/ Jeremy Hazan
	Name:	Jeremy Hazan
	Title:	Managing Director

[Signature Page to Commitment Letter]

Accepted and agreed to as of the
date first above written:

AMAG PHARMACEUTICALS, INC.


By:	/s/ Frank E. Thomas
	Name:	Frank E. Thomas
	Title:	Chief Operating Officer

[Signature Page to Commitment Letter]

EXHIBIT A TO COMMITMENT LETTER

SUMMARY OF TERMS OF SENIOR CREDIT FACILITIES

Set forth below is a summary of the principal terms of the Senior Credit Facilities and the documentation related thereto. Capitalized terms used and not otherwise defined in this Exhibit A have the meanings set forth elsewhere in this Commitment Letter.

I. Parties

Borrower	AMAG Pharmaceuticals, Inc. (the “*Borrower*”).

Guarantors	Each of the direct and indirect wholly-owned subsidiaries of the Borrower (other than (i) any foreign subsidiary (defined to include any subsidiary that is a “controlled foreign corporation” within the meaning of section 957 of the United States Tax Code of 1986, as amended (a “*CFC*”)), (ii) any direct or indirect U.S. subsidiary of a direct or indirect foreign subsidiary of the Borrower, (iii) any U.S. subsidiary if it has no material assets other than equity interests of one or more foreign subsidiaries, (iv) immaterial subsidiaries (to be defined in a mutually acceptable manner as to individual and aggregate revenues or assets excluded), (v) captive insurance companies, (vi) not-for profit subsidiaries, (vii) special purpose entities reasonably satisfactory to the Administrative Agent, (viii) in the case of any hedging obligations, any subsidiary that is not an “Eligible Contract Participant” as defined in the Commodity Exchange Act, (ix) other subsidiaries to the extent a guarantee by any such subsidiary is not permitted by law, regulation or contract existing on the Closing Date or on the date any such subsidiary is acquired or organized (as long as, in the case of an acquisition of a subsidiary, such prohibition in respect of such contract did not arise as part of or in contemplation of such acquisition), in each case to the extent, and so long as, such law, regulation or contract prohibits such subsidiary from becoming a guarantor, (x) any subsidiary acquired pursuant to a permitted acquisition or investment that is subject to indebtedness permitted to be assumed pursuant to the Loan Documents and any subsidiary thereof that guarantees such indebtedness, in each case to the extent, and so long as, such indebtedness prohibits such subsidiary from becoming a guarantor, (xi) any subsidiary where the Administrative Agent and the Borrower agree that the cost or burden of obtaining a

Exhibit A-1

	guarantee by such subsidiary would be excessive in light of the practical benefit to the Lenders afforded thereby, (xii) unrestricted subsidiaries, (xiii) any Massachusetts securities corporation, if the granting of a guarantee by such corporation would result in adverse tax or other consequences to the Borrower or such subsidiary and (xiv) other exceptions to be mutually agreed upon, in each case so long as such person does not guarantee any indebtedness of the Borrower or any other Loan Party) (collectively, the “*Guarantors;” the Borrower and the Guarantors, collectively, the “Credit Parties*”).

Joint Lead Arrangers and Bookrunners	Jefferies Finance LLC (“*Jefferies Finance”) and Barclays Bank PLC (“Barclays”; Jefferies Finance and Barclays, in such capacity, the “*Joint Lead Arrangers**”). The Joint Lead Arrangers will perform the duties customarily associated with such role

Administrative Agent	Jefferies Finance and/or one or more of its designees (in such capacity, the “*Administrative Agent*”). The Administrative Agent will perform the duties customarily associated with such role. Any such designee that is not an affiliate of Jefferies Finance will be subject to the approval of the Borrower, which approval may not be unreasonably withheld, delayed or conditioned.

Collateral Agent	Jefferies Finance and/or one or more of its designees (in such capacity, the “*Collateral Agent*”). The Collateral Agent will perform the duties customarily associated with such role. Any such designee that is not an affiliate of Jefferies Finance will be subject to the approval of the Borrower, which approval may not be unreasonably withheld, delayed or conditioned.

Lenders	A syndicate of banks, financial institutions and other institutions (including the Initial Lenders) other than Disqualified Persons (collectively, the “*Lenders*”) identified by the Joint Lead Arrangers and reasonably acceptable to the Borrower.

Closing Date	The date, on or before the date on which the Commitments are terminated in accordance with Section 15 of the Commitment Letter, on which the Acquisition is consummated and the initial funding of the Loans occurs (the “*Closing Date*”).

Exhibit A-2

Loan Documents	The definitive documentation governing or evidencing the Senior Credit Facilities (collectively, the “*Loan Documents”) (a) shall be consistent with the Commitment Letter and the Fee Letter, will contain only those conditions to borrowing, mandatory prepayments, representations, warranties, covenants and events of default referred to in this Commitment Letter (subject to modification in accordance with the “market flex” provisions of the Fee Letter) and consistent with loan documentation terms customary and usual for facilities and transactions of this type (but in no event including any conditions to borrowing not set forth in the Commitment Letter (including this Summary of Terms and Exhibits B and D hereto)), and (b) shall be negotiated in good faith by the Borrower and the Joint Lead Arrangers giving due regard to (i) the terms set forth in certain precedent loan documents to be mutually agreed by the Borrower and the Joint Lead Arrangers, (ii) the differences in the business of the borrower under such precedent documentation on one hand, and the Borrower and its subsidiaries, on the other hand, (iii) the operational and strategic requirements of the Borrower and its subsidiaries in light of their size, industries, businesses and business practices, operations, financial accounting, matters disclosed in the Acquisition Agreement and the Projections delivered to the Joint Lead Arrangers prior to the date of the Commitment Letter, (iv) certain baskets, thresholds and exceptions will be adjusted in light of the EBITDA and total assets of the Borrower and its restricted subsidiaries, and (v) the prevailing market conditions at the time of syndication of the Facilities. This paragraph and the provisions herein are referred to as the “Documentation Principles*”.

II. Senior Credit Facilities

Term Loan Facility	A 6-year senior secured first lien term loan facility in an aggregate principal amount equal to $350.0 million (the “*Term Loan Facility”; the loans thereunder, the “Term Loans” or the “Loans*”). The full amount of the Term Loan Facility (other than any Incremental Term Loans) shall be drawn in a single drawing on the Closing Date. Amounts borrowed under the Term Loan Facility that are repaid or prepaid may not be reborrowed.

Exhibit A-3

Final Maturity and Amortization of Term Loan Facility

The Term Loan Facility will mature on the date that is six years after the Closing Date and will amortize at an annual rate of [***]% in equal quarterly installments of [***]% of the original principal amount of the Term Loan Facility, with the balance payable on the sixth anniversary of the Closing Date. The first installment shall be due and payable on the last day of the first full fiscal quarter following the Closing Date.

Notwithstanding any of the foregoing, the Loan Documents shall provide the right for individual Lenders under the Term Loan Facility to agree to extend the maturity date of the outstanding Term Loans (which may include, among other things, an increase in the interest rate payable with respect to such extended Term Loans, with such extension not subject to any financial test or “most favored nation” pricing provision) upon the request of the Borrower and without the consent of any other Lender pursuant to customary procedures to be agreed; it being understood that each Lender under the applicable tranche or tranches that are being extended shall have the opportunity to participate in such extension on the same terms and conditions as each other Lender in such tranche or tranches; provided, further that it is understood that no existing Lender will have any obligation to commit to any such extension. The terms of the extended Term Loans shall be substantially similar to the Term Loans except for interest rates, fees, amortization (so long as, prior to the final stated maturity of the Term Loans, the amortization of such extended Term Loans does not exceed equal quarterly installments in an aggregate annual amount equal to [***]% of the original principal amount of the extended Term Loans), final maturity date, provisions requiring optional and mandatory prepayments to be directed first to the non-extended Term Loans prior to being applied to extended Term Loans and certain other provisions to be agreed, provided that the extended Term Loans shall not benefit from Guarantees or Collateral that do not also benefit the existing Term Loans, and further provided that other terms of the extended Term Loans may differ from the Term Loans to the extent such differences do not apply until after the final stated maturity of the Term Loans.

The Administrative Agent and Borrower shall be permitted to effect such amendments to the Loan Documents as may be necessary or appropriate to give

Exhibit A-4

	effect to the foregoing, including conforming amendments (which may be in the form of an amendment and restatement), without the consent of any Lender, other than the Lenders agreeing to extend such extended Term Loans.

Incremental Credit Facilities	The Borrower shall have the right to increase the size of or incur additional loans under the Term Loan Facility and/or establish revolving credit commitments under a revolving credit facility (a “*Revolving Credit Facility”) (including, at the Borrower’s election and with the Administrative Agent’s approval, subfacilities for swing line loans and letters of credit) (such new commitments, (x) with respect to the Term Loan Facility, “Incremental Term Loan Commitments” and such new loans, “Incremental Term Loans” and (y) with respect to any such Revolving Credit Facility, “Incremental Revolving Commitments” and such new loans, “Incremental Revolving Credit Loans”; each of the Incremental Term Loans and Incremental Revolving Commitments may hereinafter be referred to as the “Incremental Facility”), at any time after the Closing Date, from willing existing Lenders and/or Additional Lenders (as defined below); in an aggregate principal amount not to exceed the sum of (A) $225.0 million, less the aggregate principal amount of all Incremental Equivalent Debt (as defined below) issued and/or incurred in reliance on this clause (A) plus (B) the aggregate amount of all voluntary prepayments and voluntary commitment reductions of the Senior Credit Facilities (with respect to any Revolving Credit Facility, to the extent accompanied by a permanent reduction of the revolving commitments) (other than to the extent such voluntary prepayment is funded with proceeds of indebtedness) plus (C) an unlimited additional amount at any time so long as the First Lien Net Leverage Ratio (as defined below), on a pro forma basis after giving effect to such Incremental Facility and any acquisition consummated in connection therewith, and all other appropriate pro forma adjustments under the Loan Documents ((1) assuming all Incremental Revolving Commitments incurred on such date were fully drawn and (2) without netting the cash proceeds of any borrowing under the Incremental Facility being incurred), does not exceed the First Lien Net Leverage Ratio on the Closing Date (the amount under clauses (A), (B) and (C), the “Available Incremental Amount*”);

Exhibit A-5

	provided, that,

	(i) no event of default shall have occurred and be continuing, or would immediately result after giving effect to, such Incremental Term Loan Commitments, Incremental Revolving Commitments and the proposed Incremental Term Loans and Incremental Revolving Credit Loans, as applicable (subject to customary “SunGard” limitations to the extent the proceeds of any Incremental Facility are being used to finance a permitted acquisition),

	(ii) any Incremental Facility shall have a maturity date no earlier than the original maturity date of the Term Loan Facility, any Revolving Credit Facility or Incremental Revolving Commitments will not have any mandatory commitment reductions prior to the original maturity date of the Term Loan Facility, and any Incremental Term Loans and shall have a weighted average life to maturity no shorter than the weighted average life to maturity of the Term Loan Facility,

	(iii) in connection with any Incremental Term Loans incurred within 18 months following the Closing Date, the initial yield (to be defined to include all applicable margin, LIBOR floor, upfront fees, original issue discount or similar yield-related discounts (equating upfront fees and original issue discount or similar yield-related discounts to interest based upon an assumed four year average life to maturity, or, if shorter, the average life to maturity of the related Incremental Term Loans), but excluding any customary underwriting, arrangement or similar fees in connection therewith that are not paid to all of the Lenders providing the Incremental Term Loans) of the Incremental Term Loans shall be no greater than [**]% per annum* higher than the yield applicable to the existing Term Loan Facility (or, if such initial yield on the Incremental Term Loans exceeds the yield on the existing Term Loan Facility, then the interest rate margin for the existing Term Loan Facility shall automatically be increased to equal such initial yield on the Incremental Term Loans, less [***]%), it being agreed that any increase in yield to the existing Term Loan Facility required due to the application of an Adjusted LIBOR or Base Rate floor on any Incremental Term Loan shall be effected solely through an increase in (or implementation of, as applicable) any Adjusted LIBOR or Base Rate floor

Exhibit A-6

	applicable to the existing Term Loan Facility),

	(iv) the representations and warranties of the Credit Parties set forth in the Loan Documents shall be true and correct in all material respects (without duplication of any materiality qualifiers set forth therein) immediately prior to, and immediately after giving effect to, the establishment of such Incremental Facility (although any representations and warranties which expressly relate to a given date or period shall be required to be true and correct in all material respects (without duplication of any materiality qualifiers set forth therein) as of the respective date or for the respective period, as the case may be) (subject to customary “SunGard” limitations to the extent the proceeds of any Incremental Facility are being used to finance a permitted acquisition),

	(v) any Incremental Revolving Commitment will be documented solely as an establishment of the Revolving Credit Facility or increase to the commitments with respect to the Revolving Credit Facility, without any change in terms except as set forth above and except for provisions reasonably satisfactory to the Administrative Agent and customary for revolving credit facilities, including, without limitation (x) customary provisions relating to borrowing procedures and requirements, which must be satisfactory to the Borrower, the Administrative Agent and each Lender or Additional Lender providing such Incremental Revolving Credit Facility, (y) customary differences with respect to assignments and (z) customary voting and approval rights of any letter of credit issuer or swing line lender,

	(vi) the Incremental Facilities will have the same guarantees as, and be secured on a pari passu basis by the same collateral securing, the Term Loan Facility; and

	(vii) except as otherwise required in clauses (i) through (vi), all other terms of such Incremental Facility, if not consistent with the terms of the existing Term Loan Facility or Revolving Facility, as applicable, will be as agreed between the Borrower and the lenders providing such Incremental Facility; provided that such Incremental Facility shall have covenants and defaults no more restrictive (excluding pricing, optional prepayment or redemption terms, call protections and premiums) than those under the Term Loan Facility (except for covenants

Exhibit A-7

	or other provisions applicable only to periods after the latest final maturity date of the Term Facilities existing at the time of such incurrence of Incremental Facilities), unless otherwise mutually agreed by the Borrower and the Administrative Agent.

	The Borrower may seek Incremental Term Loan Commitments and Incremental Revolving Commitments from existing Lenders (each of which shall be entitled to agree or decline to participate in its sole discretion) and additional banks, financial institutions and other institutional lenders or investors who will become Lenders in connection therewith (“*Additional Lenders”); provided* that the Administrative Agent shall have consent rights (not to be unreasonably withheld or delayed) with respect to such Additional Lender, if such consent would be required under the heading “Assignments and Participations” for an assignment of loans or commitments, as applicable, to such Additional Lender. For purposes of this Summary of Terms, unless the context otherwise requires, Incremental Term Loans (and extended Term Loans, as referred to above) shall constitute “Term Loans”. Incremental Term Loans will participate pro rata (or on a basis less than pro rata) in mandatory prepayments of the Term Loans, but Incremental Revolving Facilities will not be required to be prepaid in connection with any mandatory prepayment prior to the repayment or prepayment in full of the Term Facility and all Incremental Term Facilities. “*First Lien Net Leverage Ratio*” shall be calculated in the same manner as the Total Net Leverage Ratio, as described below under “Incremental Equivalent Debt”, excluding from the numerator of such ratio any consolidated funded indebtedness of the Borrower that is (a) unsecured or (b) secured by a lien ranking junior to the liens of the Loan Documents.

Incremental Equivalent Debt:	In addition, the Borrower may, in lieu of adding Incremental Term Facilities, utilize any part of the Available Incremental Amount at any time by issuing or incurring Incremental Equivalent Debt (as defined below); provided that (i) the final maturity date of any such Incremental Equivalent Debt shall not be earlier than the ninety-first day following the latest maturity date

Exhibit A-8

	of the then outstanding Term Loan Facility and any outstanding Incremental Term Facility, (ii) the terms of such Incremental Equivalent Debt shall not provide for any scheduled repayment, mandatory redemption, sinking fund obligations or other payments of principal prior to the latest maturity date of the then outstanding Term Loan Facility and any outstanding Incremental Term Facility, other than customary offers to purchase upon a change of control, asset sale or casualty or condemnation event and customary acceleration rights upon an event of default, (iii) there shall be no borrowers or guarantors in respect of such Incremental Equivalent Debt that are not the Borrower or a Guarantor, (iv) any secured Incremental Equivalent Debt shall (x) be subject to an intercreditor agreement on terms reasonably acceptable to the Administrative Agent and (y) not be secured by any property or assets of, the Borrower or any restricted subsidiary other than Collateral, and (v) the terms and conditions of such Incremental Equivalent Debt (excluding pricing, interest rate margins, fees, discounts, rate floors and optional prepayment or redemption terms) shall not (taken as a whole) be materially more favorable (as determined in good faith by the board of directors of the Borrower) to the lenders or noteholders providing such Incremental Equivalent Debt, than those applicable to the Senior Credit Facilities (except for covenants or other provisions applicable only to periods after the latest final maturity date of the Senior Credit Facilities existing at the time of such incurrence of Incremental Equivalent Debt).

	“*Incremental Equivalent Debt” means indebtedness, in an amount not to exceed the then Available Incremental Amount, incurred by the Borrower consisting of the issuance of first lien, junior lien or unsecured notes or junior lien or unsecured loans, in each case in respect of the issuance of notes, issued in a public offering, Rule 144A or other private placement or bridge financing in lieu of the foregoing, in each case subject to the provisions hereof applicable to Incremental Facilities and customary conditions to be agreed (except, to the extent such Incremental Equivalent Debt will be used to finance a permitted acquisition or other acquisition permitted under the Loan Documents, the condition that there be no event of default may be limited solely to payment and bankruptcy events of default); provided* that (i) in determining amounts available under clause (C) of the

Exhibit A-9

	Available Incremental Amount, the reference to the First Lien Net Leverage Ratio test therein shall be supplanted, in the case of Incremental Equivalent Debt (A) that is secured by a lien on Collateral ranking lower than pari passu with to the lien on Collateral securing the Senior Credit Facilities, by a test that the pro forma Total Secured Net Leverage Ratio shall not be greater than the Total Secured Net Leverage Ratio on the Closing Date and, (B) that is unsecured, by a test that the pro forma Total Net Leverage Ratio shall not be greater than the Total Net Leverage Ratio on the Closing Date and (ii) Incremental Equivalent Debt shall not be subject to the requirement set forth in clause (iii) of proviso in the first paragraph under “Incremental Credit Facilities”, above.

	“*Total Net Leverage Ratio” means as of any date of determination, the ratio of (a) consolidated funded indebtedness of the Borrower and its restricted subsidiaries as of such date (net of up to $50.0 million of domestic unrestricted cash and cash equivalents and domestic cash and cash equivalents restricted in favor of the Collateral Agent), to (b) Consolidated Adjusted EBITDA of the Borrower and its restricted subsidiaries for the most recently ended four-fiscal quarter period for which financial statements have been delivered, calculated on a pro forma basis. “Consolidated funded indebtedness” will include obligations for borrowed money, obligations evidenced by bonds, notes and similar instruments and capital lease and purchase money debt, and guarantees in respect of any of the foregoing, but will exclude (i) undrawn letters of credit, (ii) obligations that may be paid entirely in qualified stock at the option of the payor and (iii) the earnout obligations in respect of the 2014 Lumara Health acquisition (the “Lumara Earnout*”) permitted acquisitions and investments, so long as such Lumara Earnout or earnout obligations, as the case may be, are not due and owing but unpaid.

	“*Consolidated Adjusted EBITDA*” will be defined in accordance with the Documentation Principles and will include add backs to net income to be agreed upon (with certain customary limitations to be agreed upon), including add backs for taxes, interest expense (including hedging), commitment and similar fees, depreciation and amortization, non-cash charges, deductions, losses and expenses, extraordinary, unusual or nonrecurring losses

Exhibit A-10

and expenses (determined in accordance with GAAP), proceeds of business interruption insurance, transaction fees and expenses, fees and expenses incurred in connection with license arrangements, acquisitions and other investments, whether or not consummated and without a dollar or percentage cap, restricted payments, dispositions not in the ordinary course of business and issuances of or amendments to debt or equity, in each case whether or not consummated, non-recurring or unusual costs and expenses (including integration costs, facility closure expenses, and severance costs), without a dollar or percentage cap, all gains and losses on sales of assets outside the ordinary course of business, restructuring and similar charges, severance, relocation costs, integration and new product development costs, board of directors fees and expenses, expenses, charges and losses due to the effects of purchase accounting, unrealized currency translation gains or losses, and (x) pro forma “run rate” cost savings, operating expense reductions and synergies related to the Transactions that are reasonably identifiable, factually supportable and projected by the Borrower in good faith to be reasonably expected to be realized within 18 months after the Closing Date (not to exceed 20% of Consolidated Adjusted EBITDA (before giving effect to this clause (x) or clause (y) below) when aggregated to amounts added back or adjusted pursuant to clause (y)) and (y) pro forma “run rate” cost savings, operating expense reductions and synergies related to acquisitions, dispositions and other specified transactions (including, for the avoidance of doubt, acquisitions occurring prior to the Closing Date), restructurings, cost savings initiatives and other restructuring initiatives that are reasonably identifiable and projected by the Borrower in good faith to be reasonably expected to be realized within 18 months after such acquisition, disposition or other specified transaction, restructuring, cost savings initiative or other initiative (not to exceed 20% of Consolidated EBITDA (before giving effect to this clause (y) and the foregoing clause (x)) when aggregated to amounts added back or adjusted pursuant to clause (x), and other add backs to be agreed upon. Notwithstanding the foregoing, Consolidated Adjusted EBITDA for periods prior to the Closing Date will be fixed at amounts to be agreed (subject to pro forma adjustment for subsequent transactions).

Exhibit A-11

		“*Total Secured Net Leverage Ratio*” shall be calculated in the same manner as the Total Net Leverage Ratio, excluding from the numerator of such ratio any consolidated funded indebtedness that is not secured by a lien.

Use of Proceeds		The proceeds of the Term Loans borrowed on the Closing Date, will be used to finance, in part, the Acquisition, the Refinancing of the Refinanced Debt of the Acquiror and the Acquired Business and to pay fees and expenses in connection with the foregoing.

		The proceeds of any Incremental Facility will be used by the Borrower for general corporate purposes and other legal purposes of the Borrower and its restricted subsidiaries (including, without limitation, acquisitions permitted under the Loan Documents, other permitted investments, capital expenditures, refinancing of indebtedness and permitted restricted payments and distributions).

III. Certain Payment Provisions

Fees and Interest Rates		As set forth on Annex A-I hereto.

Optional Prepayments		Optional prepayments of borrowings under the Term Loan Facility will be permitted at any time, in minimum principal amounts to be agreed upon, without premium or penalty (subject (i) to reimbursement of the Lenders’ redeployment costs in the case of a prepayment of Adjusted LIBOR Loans other than on the last day of the relevant interest period and (ii) to payments of an amount provided below under the caption “Soft Call on Term Loans”). Voluntary prepayments of the Term Loans shall be applied to remaining scheduled amortization payments as directed by the Borrower (or, in absence of such direction, in direct order of maturity).

Mandatory Prepayments and Commitment Reductions		The following amounts will be applied to prepay the Term Loans:
Mandatory Prepayments and Commitment Reductions
		· 100% of the net cash proceeds of any incurrence of indebtedness after the Closing Date (other than indebtedness permitted under the Loan Documents) by the Borrower or any of its restricted subsidiaries (with additional exceptions to be agreed upon);

Exhibit A-12

		· within five business days after the receipt thereof, 100% of the net cash proceeds in excess of a threshold per fiscal year to be mutually and reasonably agreed of any non-ordinary course sale or other disposition of assets by the Borrower or any of its restricted subsidiaries (including (i) as a result of casualty or condemnation and (ii) any sale of the equity interests in any subsidiary of the Borrower (other than a sale by an unrestricted subsidiary), but with exceptions for sales of inventory and other ordinary course dispositions, obsolete, surplus or worn-out property, property no longer useful in the business, and the repayment of any indebtedness secured by a permitted lien on the asset subject to the prepayment event) subject to exceptions to be agreed and subject to the right to reinvest 100% of such proceeds, if such proceeds are reinvested in assets used or useful in the business (other than working capital, except for short term capital assets), permitted acquisitions or other investments, or to pay consideration under license arrangements, or committed to be reinvested within 12 months and, if so committed to be reinvested, so long as such reinvestment is actually completed within 180 days thereafter; and

		· 50% of “excess cash flow” (to be defined in a manner consistent with the Documentation Principles) for each fiscal year of the Borrower (commencing with the first full fiscal year ending after the Closing Date), with step-downs to 25% and 0% if the First Lien Net Leverage Ratio as of the last day of such fiscal year does not exceed levels to be agreed, less, in each case, the aggregate amount of voluntary prepayments (including assignments of Term Loans to the Borrower, in an amount equal to the purchase price thereof paid by the Borrower) made during the relevant fiscal year or, at the option of the Borrower (and without counting such amounts against the subsequent fiscal year’s excess cash flow prepayment), after year-end and prior to the time such excess cash flow prepayment is due, of (i) the Term Loan Facility and (ii) any Revolving Credit Facility to the extent, in the case of this clause (ii), that such prepayments are accompanied by a corresponding reduction in the commitments under the Revolving Credit Facility and, in the case of both

Exhibit A-13

		clauses (i) and (ii) above, other than prepayments funded with the proceeds of long-term indebtedness (which, in the case of loans prepaid at a discount to par, will be limited to the actual amount of cash paid to lenders in connection with such prepayment (as opposed to the face amount of the loans so prepaid)) and (ii) excess cash flow shall be reduced for, among other things, cash used for capital expenditures and licensing, permitted acquisitions and investments, earn-outs to the extent earned and/or paid during such fiscal year (without counting such amounts against a subsequent fiscal year), consideration paid under licensing arrangements, and restricted payments (in each case, to the extent financed with internally generated cash (to be defined in a manner consistent with the Documentation Principles)).

		Prepayments from foreign restricted subsidiaries’ excess cash flow and asset sale proceeds (to the extent otherwise required) will be limited under the Loan Documents to the extent (x) the repatriation of funds to fund such prepayments is prohibited, restricted or delayed by applicable laws or (y) repatriation of funds to fund such prepayment would result in material adverse tax consequences.

		All mandatory prepayments are subject to permissibility under (a) local law (e.g., financial assistance, corporate benefit, restrictions on upstreaming of cash intra-group and the fiduciary and statutory duties of the directors of the relevant restricted subsidiaries) and (b) organizational document restrictions (including as a result of minority ownership). The non-application of any such mandatory prepayment amounts as a result of the foregoing provisions will not constitute a default or an event of default and such amounts shall be available for working capital purposes of the Borrower and its restricted subsidiaries. The Borrower will undertake to use commercially reasonable efforts to overcome or eliminate any such restriction and/or minimize any such costs of prepayment and/or use the other cash resources of the Borrower and its restricted subsidiaries (subject to the considerations above) to make the relevant payment. Notwithstanding the foregoing, any prepayments made after application of the above provision shall be net of any costs, expenses or taxes incurred by the Borrower and its restricted subsidiaries or any of its affiliates or

Exhibit A-14

		equity partners and arising as a result of compliance with the preceding sentence.

		All such mandatory prepayments shall be applied without premium or penalty (except for breakage costs, if any, and premiums, if any described below) and shall be applied to unpaid installments of principal of the Term Loan Facility in direct order of maturity.

		Any Lender may elect to decline all or a portion of any such mandatory prepayment of the Term Loans held by such Lender, in which case such prepayment (or portion thereof) shall be retained by the Borrower (such amount, the “*Declined Amount*”).

Soft Call on Term Loans		The Borrower shall pay a prepayment premium in connection with any Repricing Event (as defined below) with respect to all or any portion of the Term Loans that occurs on or before the date that is [*] after the Closing Date, in an amount not to exceed []% of the principal amount of the Term Loans subject to such Repricing Event (the “Prepayment Premium”). The term “Repricing Event” shall mean (i) any prepayment or repayment of Term Loans with the proceeds of, or any conversion of Term Loans into, any new or replacement tranche of term loans bearing interest at an “effective” interest rate less than the “effective” interest rate applicable to the Term Loans (as such comparative rates are determined by the Administrative Agent) and (ii) any amendment to the Term Loan Facility the primary purpose of which is to reduce the “effective” interest rate applicable to the Term Loans (in each case, with original issue discount and upfront fees, which shall be deemed to constitute like amounts of original issue discount, being equated to interest margins in a manner consistent with generally accepted financial practice based on an assumed four-year life to maturity), including any mandatory assignment in connection therewith with respect to each Lender that refuses to consent to such amendment; provided* that such Prepayment Premium shall not apply if such prepayment, repayment or amendment is in connection with a “change of control” transaction or any transformative acquisition. If such prepayment is made after the date that is six months after the Closing Date, there shall be no Prepayment Premium.

Exhibit A-15

IV. Collateral and Guarantees

Collateral		Subject to the limitations set forth below in this section and limitations on “excluded hedging obligations” to be agreed, and subject to the Certain Funds Provision, the obligations of each Credit Party in respect of the Senior Credit Facilities and any interest rate hedging obligations of the Borrower owed to a Lender, the Administrative Agent, a Joint Lead Arranger or their respective affiliates or to an entity that was a Lender, the Administrative Agent, a Joint Lead Arranger or one of their respective affiliates at the time of such transaction (“*Secured Hedging Obligations”) will be secured by the following: a perfected first priority security interest (subject to permitted priority liens and other mutually agreed exceptions consistent with the Documentation Principles) in substantially all of its tangible and intangible assets, including intellectual property, real property, licenses, permits, intercompany indebtedness, all of the capital stock of each Credit Party (other than the Borrower) and 65% of the voting stock (and 100% of the non-voting stock) of each first-tier foreign subsidiary of a Credit Party (other than immaterial foreign subsidiaries) (the items described above, but excluding the Excluded Assets (as defined below), collectively, the “Collateral*”), except that the Credit Parties shall not be obligated to provide a security interest or perfect the Collateral Agent’s security interests in those assets as to which the Collateral Agent reasonably determines the costs of obtaining a security interest are excessive in relation to the value of the security afforded thereby.

		Notwithstanding anything to the contrary, the Collateral shall exclude the following: (i) any fee-owned real property with a value of less than $2.0 million (as reasonably determined by the Borrower) and any leasehold interests (it being understood that there shall be no requirement to obtain landlord waivers, estoppels, collateral access letters or similar third-party agreements or consents); (ii) motor vehicles, aircraft and other assets subject to certificates of title; (iii) any lease, license or other similar agreement or any property subject to a purchase money security interest or similar arrangement to the extent that a grant of a security interest therein would violate or invalidate such lease, license or similar agreement or purchase money arrangement or applicable laws or create a right of termination in favor of any other party thereto (other than the Borrower or a Guarantor) after giving effect to the applicable anti-assignment

Exhibit A-16

		provisions of the Uniform Commercial Code and other applicable laws, other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the Uniform Commercial Code and other applicable laws notwithstanding such prohibition; (iv) any intent to use trademark applications; (v) letter of credit rights and commercial tort claims with a value below an amount to be agreed; (vi) any governmental licenses or state or local franchises, charters and authorizations, to the extent security interests in such licenses, franchises, charters or authorizations are prohibited or restricted thereby, (vii) any controlled substances or prescription drugs to the extent the grant of a security interest therein would violate applicable laws, (viii) (A) margin stock, and (B) equity interests in any non-wholly owned subsidiaries, but only to the extent that (x) the organizational documents or other agreements with other equity holders of such non-wholly owned subsidiaries do not permit or restrict the pledge of such equity interests, or (y) the pledge of such equity interests (including any exercise of remedies) would result in a change of control, repurchase obligation or other adverse consequence to the Borrower or a subsidiary and (ix) assets in circumstances where the cost of obtaining a security interest in such assets, including, without limitation, the cost of title insurance, surveys or flood insurance (if necessary) would be excessive in light of the practical benefit to the Lenders afforded thereby as reasonably determined by the Borrower and the Administrative Agent (the foregoing described in clauses (i) through (ix) are collectively, the “*Excluded Assets*”).

		All the above-described pledges, security interests and mortgages shall be created on terms to be set forth in the Loan Documents. Notwithstanding the foregoing, no actions in any non-U.S. jurisdiction or required by the laws of any non-U.S. jurisdiction shall be required in order to create any security interests in assets located or titled outside of the U.S. or to perfect such security interests, including any intellectual property registered in any non-U.S. jurisdiction (it being understood that there shall be no security agreements or pledge agreements governed under the laws of any non-U.S. jurisdiction).

Guarantees		The Guarantors will unconditionally, and jointly and severally, guarantee the obligations of each Credit Party in respect of the Senior Credit Facilities and the Secured

Exhibit A-17

		Hedging Obligations (the “*Guarantees*”). Such Guarantees will be in form consistent with the Documentation Principles. All Guarantees shall be guarantees of payment and performance, and not of collection.

V. Other Provisions

Representations and Warranties		Consistent with the Documentation Principles and limited to the following (to be applicable to the Borrower and its restricted subsidiaries): organizational existence, status and powers; due authorization, execution, delivery and enforceability of Loan Documents; no conflicts with law, organizational documents or material agreements; financial statements and projections; no material adverse effect after the Closing Date (and no Company Material Adverse Effect on the Closing Date); ownership of properties; intellectual property; equity interests and subsidiaries; litigation and compliance with laws and governmental approvals; healthcare matters; federal reserve regulations; the Patriot Act; OFAC; FCPA; the Investment Company Act of 1940, as amended, and other laws restricting incurrence of debt; use of proceeds; taxes; accuracy of disclosure; solvency of the Borrower and its subsidiaries at closing (such representation and warranty to contain a definition of solvency consistent with the solvency certificate in the form attached as Exhibit E); labor matters; employee benefit plans and ERISA; environmental matters; insurance; security documents and creation, validity, perfection and priority of security interests in the Collateral (subject to permitted liens); status of the Senior Credit Facilities as senior debt; and anti-terrorism laws, money laundering activities and dealing with embargoed persons; subject in the case of each of the foregoing representations and warranties, to customary exceptions, qualifications and baskets, including for materiality to be agreed consistent with the Documentation Principles.

		The representations and warranties will be required to be made in connection with each extension of credit under the Loan Documents (including the extension of credit on the Closing Date, subject to the Certain Funds Provision), but subject to clause (iv) under “Incremental Credit Facilities”, above, in respect of Incremental Facilities.

Exhibit A-18

Conditions Precedent to Initial Borrowing		Subject to the Certain Funds Provision, the initial borrowings on the Closing Date will be subject only to the conditions precedent set forth in Section 3 of the Commitment Letter and Exhibit D to the Commitment Letter.

Conditions Precedent to all Borrowings (except on the Closing Date)		Except with respect to borrowings and other credit extensions on the Closing Date and except as otherwise provided above under “Incremental Credit Facilities”, each borrowing and each other extension of credit under the Loan Documents shall be subject only to the following conditions precedent: (i) delivery of notice of borrowing or request for issuance of letter of credit; (ii) accuracy of representations and warranties in all material respects (provided, that any representation and warranty that is qualified as to “materiality,” “material adverse effect” or similar language shall be true and correct in all respects (after giving effect to any such qualification therein) and any representations and warranties which expressly relate to a given date or period shall be required to be true and correct in all material respects (without duplication of any materiality qualifiers set forth therein) as of the respective date or for the respective period, as the case may be)); and (iii) the absence of defaults or events of default at the time of, or immediately after giving effect to the making of, such extension of credit.

Affirmative Covenants		Consistent with the Documentation Principles and limited to the following (to be applicable to the Borrower and its restricted subsidiaries): delivery of annual and, for the first three quarters of each fiscal year, quarterly financial statements (and in connection with the annual financial statements, an annual audit opinion from a nationally recognized auditor that is not subject to any qualification as to “going concern” other than with respect to any upcoming maturity date under the Senior Credit Facilities or other permitted indebtedness, or any qualification as to the scope of the audit), annual and quarterly MD&A, final accountants’ letters, annual projections within 60 days after year end, quarterly compliance certificates and other information reasonably requested by the Administrative Agent; notices of default, litigation and other events that, in each case, would result in a material adverse effect; existence; maintenance of business and properties; maintenance of insurance; payment and performance of obligations and taxes; employee benefits and ERISA; maintaining books and records; access to

Exhibit A-19

		properties; use of proceeds; compliance with laws; healthcare and regulatory matters; additional collateral and additional guarantors; inspection rights; further assurances; information regarding Collateral, including as to security; at the request of the Administrative Agent, holding quarterly lender conference calls (including Q&A); and using commercially reasonable efforts (including, in all events, applying to maintain each credit rating and paying all usual and customary fees and expenses to each of S&P and Moody’s with respect to each credit rating) to maintain ratings (subject to an exclusion to be mutually agreed for non-performance by Moody’s or S&P, as the case may be), in each case, without regard to the level of such ratings; subject, in the case of each of the foregoing covenants, to customary exceptions, qualifications and baskets to be agreed consistent with the Documentation Principles.

		If such financial statements of the Borrower described in the paragraph above are filed with the Securities and Exchange Commission on EDGAR or in such other manner as make them publicly available, the obligation to deliver such information shall be satisfied by such public filings and notice thereof to the Administrative Agent.

		Notwithstanding anything to the contrary, there will be no minimum hedging requirement for interest rate or foreign exchange hedging.

Negative Covenants		Consistent with the Documentation Principles and limited to the following (to be applicable to the Borrower and its restricted subsidiaries): indebtedness (including mandatorily redeemable equity interests, guarantees and other contingent obligations), but permitting (i) unlimited pari passu indebtedness, junior secured indebtedness and unsecured indebtedness, so long as the First Lien Net Leverage Ratio, Senior Secured Net Leverage Ratio, or Total Net Leverage Ratio, respectively, does not exceed the respective ratio on the Closing Date after giving effect to the Transactions, subject, in each case, to certain other conditions to be mutually agreed (“*Ratio Debt*”) and (ii) a general debt basket in an amount to be agreed, subject to certain other conditions to be mutually agreed; liens (subject to permitted liens to be agreed, but permitting liens that secure permitted secured Ratio Debt); sale and leaseback transactions; investments (including acquisitions, loans, advances, etc.), with

Exhibit A-20

		exceptions to include (x) reorganizations and other activities related to tax planning and reorganization, so long as, after giving effect thereto, the guarantees of the Senior Credit Facilities and security interest of the Lenders in the Collateral, taken as a whole, are not impaired in any material respect; investments funded with proceeds of qualified equity or contributions paid in qualified equity that are not otherwise applied and (y) a general investment basket in an amount to be agreed; asset sales; mergers, acquisitions, consolidations, liquidations and dissolutions; dividends and other payments in respect of equity interests and other restricted payments; transactions with affiliates; prepayments, redemptions and repurchases of other indebtedness; adverse modifications of organizational documents, documents related to the Acquisition and debt instruments; limitations on certain restrictions on subsidiaries; limitations on issuance of disqualified capital stock; limitations on business activities; fundamental changes; limitations on accounting changes; changes in fiscal year; use of proceeds; further negative pledges; and anti-terrorism laws, money-laundering activities and dealing with embargoed persons. The foregoing covenants will contain additional limitations on transactions between Credit Parties and non-Credit Parties, in accordance with the Documentation Principles.

		The negative covenants will be subject, in the case of each of the foregoing covenants to customary exceptions, qualifications and “baskets” consistent with the Documentation Principles, including, without limitation an available amount basket (the “*Available Amount Basket”) that will consist of, without duplication, (a) a “starter” amount to be agreed (the “Starter Basket*”) plus (b) retained excess cash flow (excluding excess cash flow retained by reason of a reduction in prepayment amounts because of voluntary prepayments of debt or because of limitations on prepayments of excess cash flow of foreign restricted subsidiaries), plus (c) Declined Amounts, plus, (d) the net cash proceeds of equity issuances and capital contributions (other than disqualified capital stock and contributions in respect thereof), plus (e) the net cash proceeds of sales of investments made with the Available Amount Basket, plus (f) returns, profits, distributions and similar amounts received in cash or cash equivalents on investments made with the Available Amount Basket up to a maximum of the amount of such original investment

Exhibit A-21

		plus (g) debt and disqualified stock issued after the Closing Date which have been exchanged for or converted into qualified equity of the Borrower. Subject to terms and conditions to be agreed consistent with Documentation Principles, the Available Amount Basket may be used for investments (including permitted acquisitions of entities that do not become guarantors and assets that are not then owned by Loan Parties) or dividends, payments in respect of equity and other restricted payments, including payments on unsecured second lien or junior debt; provided, that no event of default under the Loan Documents shall exist or immediately result therefrom and, solely in the case of dividends, payments on equity and other restricted payments, including payments on junior debt, in each case, to the extent not made with the Starter Basket or with the net cash proceeds of equity issuances and capital contributions of or with respect to qualified capital stock (which do not increase the Available Amount Basket), the Total Net Leverage Ratio, determined on a pro forma basis after giving effect to such restricted payment, and the incurrence of any indebtedness incurred to finance the same, is less than or equal to the Total Net Leverage Ratio on the Closing Date after giving effect to the Transactions.

		The Borrower or any restricted subsidiary will be permitted to dispose or sell any of its assets on an unlimited basis for fair market value so long as (a) no Event of Default shall have occurred and be continuing at the time of, or result from, such disposition or sale, (b) at least 75% of the consideration therefor consists of cash (subject to customary exceptions to the cash consideration requirement to be set forth in the Loan Documents, including a basket in an amount to be agreed for non-cash consideration that may be designated as cash consideration) and (c) the net proceeds of such asset sale shall be subject to the terms set forth in the section entitled “Mandatory Prepayments and Commitment Reductions” hereof (subject to the reinvestment rights set forth therein).

		The Loan Documents will permit acquisitions by the Borrower and its Restricted Subsidiaries subject only to the following terms:

		(i) no event of default shall have occurred

Exhibit A-22

		and be continuing on the date that the agreement for such acquisition is executed, and no payment or bankruptcy event of default shall have occurred and be continuing on the date such acquisition is consummated;

		(ii) compliance with the line of business covenant;

		(iii) the acquired entity and its subsidiaries shall become restricted subsidiaries and Guarantors, and the assets acquired shall become subject to the liens of the Loan Documents, to the extent required in accordance with the limitations set forth under “Guarantors” and “Collateral”, above, subject to a cap to be agreed (plus, without duplication, the Available Amount Basket and the net cash proceeds of equity issuances and capital contributions (other than disqualified capital stock and contributions in respect thereof)), for entities that do not become Guarantors and assets that are not owned by Loan Parties;

		(iv) such acquisition shall not be “hostile” and, unless approved in a court-ordered sale, shall have been recommended by the board of directors (or similar body) of the target; and

		(v) unless financed with the net cash proceeds of equity issuances and capital contributions (and/or purchased using the capital stock of the Borrower) (in each case other than disqualified capital stock and contributions in respect thereof) and not involving any incurrence of debt other than ordinary course debt permitted under an unlimited basket or a basket subject to a dollar cap, after giving effect to such acquisition on a pro forma basis, the Total Net Leverage Ratio shall be no greater than the Total Net Leverage Ratio on the Closing Date after giving effect to the Transactions.

Refinancing Facilities		The Loan Documents will permit the Borrower to refinance in whole or in part on a dollar-for-dollar basis the Loans under the Term Loan Facility (including loans under any Incremental Term Facility) and/or Loans and commitments under any Revolving Credit Facility (and any loans or commitments under any Incremental

Exhibit A-23

Revolving Facility) with new term credit facilities (each a Refinancing Term Facility”) or with new revolving facilities (each, a “Refinancing Revolving Facility” and, together with each Refinancing Term Facility, the “Refinancing Facilities”) under the Loan Documents with the consent of the Borrower and the Administrative Agent; provided that (a) none of the Refinancing Facilities (i) matures prior to the final maturity date of the loans being refinanced (or, in the case of a Refinancing Facility that is secured on a junior basis, or that is unsecured, prior to the date which is 91 days after the longest then-applicable maturity date of then outstanding loans and revolving credit commitments), and (ii) with respect to Refinancing Facilities consisting of term loans only, has a shorter weighted average life to maturity of the loans being refinanced, (b) with respect to Refinancing Facilities consisting of revolving loans and commitments, (i) has no mandatory commitment reductions prior to the maturity date of any earlier maturing Revolving Credit Facility and (ii) all borrowings, prepayments and commitment reductions (other than at final maturity) shall be ratable among the Revolving Credit Facility and all other revolving tranches, (c) any secured Refinancing Facility: (i) shall be subject an intercreditor agreement (a “Pari Passu Intercreditor Agreement”) (the primary terms of which will either be attached as an exhibit to the Loan Documents or that is reasonably acceptable to the Administrative Agent) governing the relationship between such secured Refinancing Facility and the facilities under the Loan Documents, (ii) shall not be secured by any assets that do not also constitute Collateral under the Loan Documents and (iii) may not be secured pursuant to security documentation that is more restrictive to the Borrower than the Loan Documents; (d) there are no direct or indirect obligors or guarantors in respect of the Refinancing Facilities that are not a Credit Party, (e) the principal amount of the Refinancing Facility does not exceed the principal amount of the debt being refinanced (together with accrued and unpaid interest thereon, any prepayment premiums applicable thereto and reasonable fees and expenses incurred in connection therewith), (f) there shall be no more than a number of revolving facilities to be mutually agreed outstanding at any one time; provided that drawings, repayments, repayments and commitment reductions thereunder shall be made on a pro rata basis as between

Exhibit A-24

		such revolving facilities, (g) the proceeds of any Refinancing Facility shall be applied, substantially concurrently with the incurrence thereof, to the pro rata repayment of the outstanding loans under the facility (and to the permanent reduction in commitments of any Revolving Credit Facility) being so refinanced, and (h) the other terms and conditions of the Refinancing Facility (excluding pricing and optional prepayment or redemption terms) are substantially identical to, or less favorable to, investors providing the Refinancing Facility than those applicable to the Loan and/or commitments being refinanced (except for covenants or other terms applicable only to periods after the latest final maturity date of the Loans or commitments (or, in the case of a Refinancing Facility that is secured on a junior basis, or that is unsecured, prior to the date which is 91 days after the longest then applicable maturity date) existing at the time of such refinancing), in each case as certified by the chief financial officer of the Borrower in good faith prior to such incurrence or issuance.

Financial Covenant		None.

Events of Default		Consistent with the Documentation Principles and limited to the following (to be applicable to the Borrower and its restricted subsidiaries): nonpayment of principal when due; nonpayment of interest, fees or other amounts after a three business days grace period; inaccuracy of representations and warranties in any material respect; failure to perform negative covenants or customary specified affirmative covenants, and failure to perform other covenants subject to a 30-day cure period after notice from the Administrative Agent; cross-default and cross-acceleration to other material indebtedness; bankruptcy and insolvency events; material final judgments (after giving effect to insurance and indemnification by non-affiliates); ERISA events (subject to a material adverse effect limitation); actual or asserted invalidity or impairment of guarantees, security documents, or any other Loan Documents (including the failure of any lien on any portion of the Collateral to remain perfected with the priority required under the Loan Documents); and a “Change of Control” (to be defined in a manner consistent with the Documentation Principles); subject to customary threshold, notice and grace period provisions, and other exceptions to be mutually and reasonably agreed consistent with the

Exhibit A-25

		Documentation Principles.

Voting		Amendments and waivers with respect to the Loan Documents will require the approval of Lenders (that are not defaulting Lenders) holding not less than a majority of the aggregate principal amount of the Loans (including, to the extent applicable, participations by Lenders in Letters of Credit and Swing Line Loans and unused commitments) under the Loan Documents (the “*Required Lenders*”), except that (i) the consent of each Lender directly and adversely affected thereby shall be required with respect to (a) reductions in the amount or extensions of the final maturity of the Loans of such Lender, (b) reductions in the rate of interest (other than a waiver of default interest) or any fee or other amount payable or extensions of any due date thereof with respect to the Loans of such Lender, or (c) increases in the amount or extensions of the expiration date of such Lender’s commitment, and (ii) the consent of 100% of the Lenders shall be required with respect to (a) reductions of any of the voting percentages or pro rata provisions (other than as contemplated herein in connection with Incremental Facilities and Refinancing Facilities), (b) releases of all or substantially all of the value of the guarantees of the Guarantors or of all or substantially all of the Collateral (other than in connection with permitted asset sales or other disposition) or (c) assignments by any Credit Party of its rights or obligations under the Senior Credit Facilities.

		In addition, if the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a technical nature in the Loan Documents, then the Administrative Agent and the Borrower shall be permitted to amend such provision without any further action or consent of any other party.

Unrestricted Subsidiaries		The Loan Documents will contain provisions pursuant to which, subject to limitations to be agreed (including on investments, loans, advances to, and other guarantees and other investments in, unrestricted subsidiaries and transactions with affiliates), the Borrower will be permitted to designate any existing or subsequently acquired or organized subsidiary as an “unrestricted subsidiary” and subsequently re-designate any such unrestricted subsidiary as a restricted subsidiary; provided, that (a) no event of default shall have occurred

Exhibit A-26

		and be continuing or would result from any such designation or re-designation, (b) the designation of any unrestricted subsidiary as a restricted subsidiary shall constitute the incurrence at the time of designation of any indebtedness or liens of such subsidiary existing at such time, (c) the fair market value of such subsidiary at the time it is designated as an “unrestricted subsidiary” shall be treated as an investment by the Borrower at such time, (d) the Total Net Leverage Ratio, after giving effect to any such designation or re-designation, shall be no greater than the pro forma Total Net Leverage Ratio as of the Closing Date and (e) no restricted subsidiary shall be designated as an unrestricted subsidiary if it is a restricted subsidiary under the Notes or the Bridge Loan Facility (and any unrestricted subsidiary under the Notes or the Bridge Loan Facility that is subsequently designated as a restricted subsidiary shall be designated as a restricted subsidiary under the Senior Credit Facilities); provided, further, that no restricted subsidiary may be re-designated as an unrestricted subsidiary if such subsidiary had previously been designated as an unrestricted subsidiary. With limited exceptions to be agreed, unrestricted subsidiaries will not be subject to the representations and warranties, affirmative or negative covenants or event of default provisions of the Loan Documents and results of operations and indebtedness of unrestricted subsidiaries will not be taken into account for purposes of determining any financial ratio or covenant contained in the Loan Documents.

Assignments and Participations		The Lenders shall be permitted to assign and sell participations in their loans and commitments (in each case, other than to Disqualified Persons), subject, in the case of assignments, to the consent of (x) the Administrative Agent (not to be unreasonably withheld, delayed or conditioned) and (y) other than assignments to another Lender, an affiliate of a Lender or an “approved fund” (to be defined in the Loan Documents) and so long as no payment or bankruptcy event of default has occurred and is then continuing, the Borrower (which consent shall not be unreasonably withheld, delayed or conditioned; provided that (A) the Borrower shall be deemed to have consented to such assignment if the Borrower has not otherwise rejected in writing such assignment within ten (10) business days of the date on which consent to such assignment is requested of the Borrower in writing, (B) participations in the Senior

Exhibit A-27

		Credit Facilities shall not be granted, and interests in the Senior Credit Facilities shall not be assigned, to the Borrower or any of its subsidiaries (except as set forth below) or any natural person, and (C) the consent of the Borrower will always be required for assignments or participations to Disqualified Persons. In the case of partial assignments (other than to another Lender, an affiliate of a Lender or an approved fund), the minimum assignment amount shall be $1.0 million. Assignments will be made by novation and will not be required to be pro rata among different facilities. The Administrative Agent shall receive an administrative fee of $3,500 in connection with each assignment unless otherwise agreed by the Administrative Agent.

		Participants shall have no greater benefit than the related Lender with respect to tax gross ups, yield protection and increased cost provisions, except to the extent incurred as a result of a change in the law occurring after the date of the participation, and will be subject to customary limitations on voting rights (as mutually agreed).

		Pledges of Loans in accordance with applicable law shall be permitted on customary terms. Promissory notes shall be issued under the Senior Credit Facilities only upon request.

		The Loan Documents shall contain customary provisions for replacing non-consenting Lenders in connection with amendments and waivers requiring the consent of all Lenders or of all Lenders directly affected thereby so long as Lenders holding at least a majority of the aggregate principal amount of the Loans and commitments shall have consented thereto. The Loan Documents shall contain customary provisions for replacing defaulting lenders and lenders requesting indemnities, gross ups or increased costs.

		In addition, the Loan Documents shall provide that the Term Loans may be purchased by the Borrower and its restricted subsidiaries on a non-pro rata basis through Dutch auctions open to all Lenders on a pro rata basis in accordance with customary procedures; provided that (i) any such Term Loans acquired by the Borrower shall be retired and cancelled immediately upon acquisition thereof, (ii) the Term Loans may not be purchased with the proceeds of revolving loans under the Loan

Exhibit A-28

		Documents, (iii) no event of default shall exist or result therefrom, and (iv) any such Term Loans acquired by the Borrower shall not be deemed to increase EBITDA.

Defaulting Lenders		The Loan Documents shall contain customary provisions relating to “defaulting” Lenders consistent with the Documentation Principles, including provisions relating to the suspension of voting rights and of rights to receive certain fees, and termination or assignment of commitments or Loans of such Lenders.

Cost and Yield Protection		Each holder of Loans will receive cost and interest rate protection customary for facilities and transactions of this type, including compensation in respect of prepayments of LIBOR loans, taxes (including gross-up provisions for withholding taxes imposed by any governmental authority and taxes associated with all gross-up payments, but subject to customary exclusions), changes in capital requirements, guidelines or policies or their interpretation or application after the Closing Date (including, for the avoidance of doubt (and regardless of the date adopted or enacted), with respect to (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations with respect thereto and (y) all requests, rules, guidelines and directions promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any similar or successor agency, or the United States or foreign regulatory authorities, in each case, pursuant to Basel III)), illegality, change in circumstances, reserves and other provisions reasonably deemed necessary by the Administrative Agent to provide customary protection for U.S. and non-U.S. financial institutions and other lenders, subject to, in the case of each of the foregoing, the right to replace lenders claiming such cost and interest rate protection, customary notice and tolling provisions, mitigation requirements, certification requirements and other exceptions to be mutually and reasonably agreed upon.

Expenses		If the Transactions are consummated and the Closing Date occurs, the Borrower shall pay (i) all reasonable and documented out-of-pocket expenses of the Administrative Agent, the Collateral Agent and the Joint Lead Arrangers associated with the syndication of the Term Loan Facility and the preparation, negotiation, execution, delivery, filing and administration of the Loan

Exhibit A-29

		Documents and, with respect to the Administrative Agent and the Collateral Agent, any amendment or waiver with respect thereto (including the reasonable and documented fees, disbursements and other charges of external counsel and the charges of IntraLinks, SyndTrak or a similar service and (ii) all reasonable and documented out-of-pocket expenses of the Administrative Agent, the Collateral Agent, any other agent appointed in respect of the Senior Credit Facilities and the Lenders (including the reasonable and documented fees, disbursements and other charges of external counsel) in connection with the enforcement of, or protection and preservation of rights under, the Loan Documents; provided, that, in each case, the charges of counsel for the Administrative Agent, the Collateral Agent, any other agent appointed in respect of the Senior Credit Facilities and the Lenders shall be limited to one primary transactional counsel, one local counsel in each relevant jurisdiction, and one or more additional counsel if one or more actual or potential conflicts of interest arise for each class of similarly situated persons. For avoidance of doubt, prior to the Closing Date, the Borrower’s expense reimbursement obligations shall be governed by the Fee Letter and not by this paragraph. All expenses due under this paragraph shall be paid (a) on the Closing Date, to the extent required under Exhibit D hereto, or, (b) otherwise, within 30 days of a written demand therefor, together with reasonably detailed backup documentation supporting such reimbursement request.

Indemnification		The Loan Documents will contain customary indemnities (as reasonably determined by the Joint Lead Arrangers) for (i) the Joint Lead Arrangers, the Collateral Agent, the Administrative Agent and the Lenders, (ii) each affiliate of any of the foregoing persons and (iii) each of the respective officers, directors, partners, trustees, employees, affiliates, shareholders, advisors, successors, assigns, agents, attorneys-in-fact and controlling persons of each of the foregoing persons referred to in clauses (i) and (ii) above (the persons identified in clauses (i), (ii) and (iii) above, collectively, the “*Indemnified Persons*”) (other than (a) as a result of such Indemnified Person’s or its affiliate’s bad faith, gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final and non-appealable ruling, (b) a material breach of such Indemnified Person’s or its affiliate’s obligations under the Loan Documents as

Exhibit A-30

		determined by a court of competent jurisdiction in a final and non-appealable ruling or (c) as a result of a claim that does not result from an act or omission by the Borrower or any of its subsidiaries or affiliates and that is brought by an Indemnified Person against any other Indemnified Person (other than claims against Jefferies Finance, Barclays or any of their respective affiliates in their capacity as or in fulfilling their role as Administrative Agent, Collateral Agent, Joint Lead Arranger or any similar role under the Senior Credit Facilities), provided that the obligations of the Credit Parties to reimburse the Indemnified Persons for legal fees and expenses shall be limited to one firm of primary counsel to such Indemnified Persons taken as a whole (and one or more firm of additional counsel as a result of any actual or potential conflicts of interest and any firm of special counsel and local counsel in each applicable jurisdiction); provided further that the Borrower shall have no obligation to reimburse any Indemnified Person for fees and expenses unless such Indemnified Person provides an undertaking in which such Indemnified Person agrees to refund and return any and all amounts paid by the Borrower to such Indemnified Person to the extent any of the foregoing items described in clauses (a) through (c) occurs. Each Indemnified Person shall be obligated to refund and return promptly any and all amounts paid by the Borrower or any of its affiliates under this paragraph to such Indemnified Person for any such fees, expenses or damages to the extent such Indemnified Person is not entitled to payment of such amounts in accordance with the terms hereof.

Governing Law and Forum		State of New York.

Counsel to the Joint Lead Arrangers, the Collateral Agent and the Administrative Agent		Jones Day

* * *

Exhibit A-31

ANNEX A TO EXHIBIT A
TO COMMITMENT LETTER

Interest and Certain Fees

Interest Rate Options		The Borrower may elect that the Loans comprising each borrowing bear interest at a rate per annum equal to:

		(i) the Base Rate plus the Applicable Margin; or

		(ii) Adjusted LIBOR plus the Applicable Margin.

		The Borrower may elect interest periods of 1, 3 or 6 months for Adjusted LIBOR Loans (as defined below).

		As used herein:

		“*Applicable Margin” means (i) []%, in the case of Base Rate Loans, and (ii) [*]%, in the case of Adjusted LIBOR Loans.

		“*Base Rate” means the highest of (i) the “U.S. Prime Lending Rate” as published in The Wall Street Journal* (the “*Prime Rate”), (ii) the federal funds effective rate from time to time, plus []% and (iii) the Adjusted LIBOR Rate for a one-month interest period plus [*]%.

		“*Adjusted LIBOR” means the higher of (i) the rate per annum* (adjusted for statutory reserve requirements for Eurocurrency liabilities) at which Eurodollar deposits are offered in the interbank Eurodollar market for the applicable interest period, as quoted on Reuters Screen LIBOR01 Page (or any successor page or service) and (ii) [***]%.

Interest Payment Dates		With respect to Loans bearing interest based upon the Base Rate (“*Base Rate Loans*”), quarterly in arrears on the last day of each calendar quarter and on the applicable maturity date.

		With respect to Loans bearing interest based upon the Adjusted LIBOR Rate (“*Adjusted LIBOR Loans*”), on the last day of each relevant interest period and, in the case of any interest period longer than three months, on each successive date three months after the first day of such interest period and on the applicable maturity date.

Annex A-1

Upfront Fees; Original Issue Discount		The Term Loans will be issued on the Closing Date at a price of [***]% of their principal amount. For purposes of the Debt Financing Letters, all calculations of interest and fees, however, will be calculated on the basis of their full stated principal amount. Notwithstanding the foregoing, at the sole discretion of the Joint Lead Arrangers, in lieu of original issue discount on the Term Loans, the Borrower shall pay an equivalent amount of upfront fees on the Closing Date.

Default Rate		Upon the occurrence and during the continuance of a payment or bankruptcy event of default, all overdue principal, overdue interest, overdue fees and other overdue amounts outstanding under the Term Loan Facility shall bear interest at [***]% above the otherwise applicable rate and shall be payable on demand.

Rate and Fee Basis		All per annum rates shall be calculated on the basis of a year of 360 days (or 365/366 days, in the case of Base Rate Loans, the interest rate payable on which is then based on the Prime Rate) for the actual number of days elapsed (including the first day but excluding the last day).

		* * *

Annex A-2

EXHIBIT B TO COMMITMENT LETTER

SUMMARY OF TERMS OF THE BRIDGE LOAN FACILITY

Set forth below is a summary of certain of the terms of the Bridge Loan Facility and the documentation related thereto. Capitalized terms used and not otherwise defined in this Exhibit B have the meanings set forth elsewhere in this Commitment Letter.

I. Parties

Borrower		The Borrower (as defined in Exhibit A) under the Senior Credit Facilities (the “*Borrower*”).

Guarantors		Each of the Guarantors (as defined in Exhibit A) under the Senior Credit Facilities (collectively, the “*Guarantors;” the Borrower and the Guarantors, collectively, the “Credit Parties*”).

Joint Lead Arrangers and Bookrunners		Jefferies Finance LLC (“*Jefferies Finance”) and Barclays Bank PLC (“Barclays”; Jefferies Finance and Barclays, in such capacity, the “Joint Lead Arrangers*”). The Joint Lead Arrangers will perform the duties customarily associated with such role.

Administrative Agent		Jefferies Finance and/or one or more of its designees (in such capacity, the “*Administrative Agent*”). The Administrative Agent will perform the duties customarily associated with such role. Any such designee that is not an affiliate of Jefferies Finance will be subject to the approval of the Borrower, which approval may not be unreasonably withheld, delayed or conditioned.

Lenders		A syndicate of banks, financial institutions and other entities, other than Disqualified Persons (collectively, the “*Lenders*”) identified by the Joint Lead Arrangers and reasonably acceptable to the Borrower.

Closing Date		The date, on or before the date on which the Commitments are terminated in accordance with Section 15 of this Commitment Letter, on which the Acquisition is consummated (the “*Closing Date*”).

Bridge Loan Documents		The definitive documentation governing or evidencing the Bridge Loans, the Extended Term Loans and the Exchange Notes (collectively, the “*Bridge Loan Documents*”).

Exhibit B-1

II. Bridge Loan Facility

Bridge Loans		An aggregate principal amount of $450.0 million of senior unsecured increasing rate bridge loans (the “*Bridge Loans*”) less the gross cash proceeds available on the Closing Date from the issuance of the Notes and subject to reduction in accordance with Section 15 of the Commitment Letter.

Use of Proceeds		To finance, in part, the Acquisition and the Refinancing of the Refinanced Debt and to pay fees and expenses in connection with the foregoing.

Maturity		One year from the initial funding date of the Bridge Loans (the “*Bridge Loan Maturity Date*”).

Rollover		If the Bridge Loans are not repaid in full on or prior to the Bridge Loan Maturity Date and the Borrower has paid the Rollover Fee (as defined in the Fee Letter), and provided that no Conversion Default (as defined below) has occurred and is continuing, the Bridge Loans shall be automatically converted on the Bridge Loan Maturity Date into senior unsecured term loans due on the seventh anniversary of the Bridge Loan Maturity Date (or such earlier date as may be specified in Exhibit C hereto) (the “*Extended Term Loans*”) in an aggregate principal amount equal to the aggregate principal amount of Bridge Loans so converted. The Extended Term Loans will have the terms set forth in Exhibit C to this Commitment Letter.

		Under certain circumstances to be determined by the Joint Lead Arrangers, Extended Term Loans may be exchanged by the holders thereof for exchange notes (“*Exchange Notes”), which will have the terms set forth in Exhibit C to this Commitment Letter. The Exchange Notes will be issued under an indenture that will have the terms set forth in Exhibit C to this Commitment Letter. In connection with each such exchange, if requested by any Lender that is a Lender as of the Closing Date (each, an “Senior Secured Initial Bridge Lender*”), the Borrower shall (i) deliver to the Lender that is receiving Exchange Notes, and to such other Lenders as such Senior Secured Initial Bridge Lender requests, an offering memorandum of the type customarily utilized in a Rule 144A offering of high yield securities covering the resale of such Exchange Notes by such Lenders, in such form and substance as reasonably acceptable to the Borrower and such Senior Secured Initial Bridge Lender, and keep such offering memorandum updated in a manner as would be required

Exhibit B-2

		pursuant to a customary Rule 144A securities purchase agreement, (ii) execute an exchange agreement containing provisions customary in Rule 144A securities purchase agreements (including indemnification provisions) and a registration rights agreement customary in Rule 144A offerings, in each case, if requested by such Senior Secured Initial Bridge Lender, (iii) deliver or cause to be delivered such opinions and accountants’ comfort letters addressed to the Senior Secured Initial Bridge Lender and such certificates as the Senior Secured Initial Bridge Lender may reasonably request in form and substance satisfactory to the Senior Secured Initial Bridge Lender and (iv) take such other actions, and cause its advisors, auditors and counsel to take such actions, as reasonably requested by the Senior Secured Initial Bridge Lender in connection with issuances or resales of Exchange Notes, including providing such information regarding the business and operations of the Borrower and its subsidiaries as is reasonably requested by any prospective holder of Exchange Notes and customarily provided in due diligence investigations in connection with purchases or resales of securities.

		“*Conversion Default*” shall mean a bankruptcy event of default with respect to the Borrower under the Bridge Loan Facility.

		The Extended Term Loans will be governed by the provisions of the Bridge Loan Documents and will have the same terms as the Bridge Loans except as expressly set forth in Exhibit C to this Commitment Letter.

III. Certain Payment Provisions

Interest		The Bridge Loans will bear interest at a rate per annum equal to the higher of (i) three month LIBOR, adjusted quarterly, and (ii) [*]%, in either case, plus a spread of []% (the “Rate”). The Rate will increase by (i) [] basis points upon the [] of the Closing Date, plus (ii) an additional [] basis points upon each subsequent [] following the initial [**] of the Closing Date. Notwithstanding the foregoing, interest on the Bridge Loans (excluding default interest, if any) shall not exceed the Total Cap (as defined in the Fee Letter). Interest will be payable quarterly in arrears, on the Bridge Loan Maturity Date and on the date of any prepayment of the Bridge Loans. For amounts outstanding after the Bridge Loan Maturity Date, interest will be payable on demand at the default rate.

Exhibit B-3

Default Rate		Overdue principal, interest, fees and other amounts under the Bridge Loan Facilities shall bear interest at the applicable interest rate plus [**]% per annum*.

Optional Repayment		The Bridge Loans may be repaid, in whole or in part, on a pro rata basis, at the option of the Borrower at any time (other than any time at which a Demand Failure Event (as defined in the Fee Letter) shall have occurred and be continuing) upon five business days’ prior written notice, at a price equal to 100% of the principal amount thereof, plus all accrued and unpaid interest and fees to the date of repayment.

Mandatory Repayment		The Borrower will repay the Bridge Loans with the net cash proceeds from:

		(i) any direct or indirect public offering or private placement of Notes or any other issuance or sale of (x) debt securities or equity securities of the Borrower or (y) debt securities of any of its subsidiaries,

		(ii) the incurrence of any other indebtedness for borrowed money (other than Loans under the Term Loan Facility as in effect on the Closing Date and certain other limited exceptions to be mutually agreed upon) by the Borrower or any of its restricted subsidiaries, and

		(iii) any non-ordinary course sale or other non-ordinary course disposition of assets by the Borrower or any of its restricted subsidiaries (including (x) as a result of casualty or condemnation and (y) any sale of the equity interests in any subsidiary of the Borrower), subject to the required prior prepayment of any Loans outstanding under the Senior Credit Facilities, in each case, at 100% of the principal amount of the Bridge Loans repaid, plus all accrued and unpaid interest and fees on the principal amount repaid to the date of the repayment, in the case of any such prepayments pursuant to the foregoing clauses (i), (ii) or (iii) above, with exceptions and baskets usual and customary for financings of this type and in any event not less favorable to the Borrower than those applicable to the Senior Credit Facilities.

Change of Control		Each holder of the Bridge Loans will be entitled to require the Borrower, and the Borrower shall offer, to repay the Bridge Loans held by such holder, at a price of 100% of the principal amount thereof, plus all accrued and unpaid interest on the

Exhibit B-4

		principal amount repaid to the date of repayment, upon the occurrence of a “change of control” (to be defined in the Bridge Loan Documents in a manner satisfactory to the Joint Lead Arrangers, subject to the Documentation Principles).

IV. Collateral and Guarantees

Collateral		None.

Guarantees		The Guarantors will unconditionally, and jointly and severally, guarantee the obligations of the Borrower in respect of the Bridge Loans (the “*Guarantees*”). Such Guarantees will be in form and substance satisfactory to the Administrative Agent and the Joint Lead Arrangers. All Guarantees shall be guarantees of payment and performance, and not of collection. The Guarantees will automatically be released on terms and conditions customary for public high-yield financings.

V. Other Provisions

Conditions Precedent		Subject to the Certain Funds Provision, the incurrence of the Bridge Loans under the Bridge Loan Facility on the Closing Date will be subject only to the applicable conditions precedent set forth in Section 3 of the Commitment Letter and Exhibit D to the Commitment Letter.

Representations and Warranties		Customary for facilities and transactions of this type (as reasonably determined by the Joint Lead Arrangers) (including those specified under the caption “Representations and Warranties” in Exhibit A to this Commitment Letter), with such changes and additions as are mutually agreed to be appropriate in connection with the Bridge Loans.

Covenants		The Bridge Loan Facility will contain such affirmative and negative covenants applicable to the Borrower and its restricted subsidiaries usual and customary for publicly traded high yield securities with such changes and additions as are mutually agreed to be appropriate in connection with the Bridge Loans (it being understood that (x) there shall be no financial maintenance covenants under the Bridge Loan Documents and (y) such covenants will under no circumstances be more restrictive than the analogous covenants included in the Senior Credit Facilities).

Events of Default; Remedies		Customary for facilities and transactions of this type (as reasonably determined by the Joint Lead Arrangers) (in certain cases, subject to customary and appropriate grace and cure periods and materiality thresholds to be mutually agreed upon)

Exhibit B-5

		(including those specified under the caption “Events of Default” in Exhibit A to this Commitment Letter), with such changes and additions as are appropriate in connection with the Bridge Loans; provided that the cross-default to the Senior Credit Facilities shall only be to (i) payment, bankruptcy and other specified events of default to be mutually agreed upon and (ii) other events of default under the Senior Credit Facilities that have not been cured within 90 days; provided that failure to comply with any obligation under Section 3 in the Fee Letter shall not be an Event of Default (but failure to pay any amount that becomes due as a result of such failure (such as increased interest amounts, conversion fees, etc.) shall constitute a payment Event of Default).

Voting		Amendments and waivers with respect to the Bridge Loan Documents will require the approval of Lenders holding not less than a majority of the aggregate principal amount of the Bridge Loans, Extended Term Loans or Exchange Notes, as the case may be (the “*Required Lenders*”), except that (i) the consent of each Lender directly affected thereby shall be required with respect to (a) reductions in the amount or extensions of the final maturity of any Bridge Loan, Extended Term Loan or Exchange Note, as the case may be, or the reduction of the non-call period for any Exchange Note, as applicable, (b) reductions in the rate of interest (other than a waiver of default interest) or any fee (including any prepayment fee) or other amount payable or extensions of any due date thereof, (c) increases in the amount or extensions of the expiration date of any Lender’s commitment or (d) modifications to the assignment provisions of the Bridge Loan Documents that further restrict assignments thereunder and (ii) the consent of 100% of the Lenders shall be required with respect to (a) reductions of any of the voting percentages or the pro rata provisions, (b) releases of all or substantially all of the value of the guarantees of the Guarantors or (c) alterations of (or additions to) the restrictions on the ability of Lenders to exchange Extended Term Loans for Exchange Notes, (d) modification of the rights to exchange Extended Term Loans into Exchange Notes or (e) assignments by any Credit Party of its rights or obligations under the Bridge Loan Facility.

Transferability		Each holder of Bridge Loans will be free to (x) sell or transfer all or any part of its Bridge Loans to any third party with the consent of the Administrative Agent (not to be unreasonably withheld) in compliance with applicable law (provided that such holder shall give prompt written notice to the Administrative Agent and the Borrower of any such sale or

Exhibit B-6

		transfer), (y) sell participations in all or a portion of the Bridge Loans (subject to customary voting restrictions), and (z) pledge any or all of the Bridge Loans in accordance with applicable law.

Cost and Yield Protection		Substantially similar to those contained in the Loan Documents.

Expenses		Substantially similar to those contained in the Loan Documents.

Indemnification		Substantially similar to those contained in the Loan Documents.

Governing Law and Forum		State of New York.

Counsel to the Joint Lead Arrangers and the Administrative Agent		Jones Day

Exhibit B-7

EXHIBIT C TO COMMITMENT LETTER

SUMMARY OF TERMS OF EXTENDED TERM LOANS
AND EXCHANGE NOTES

Set forth below is a summary of certain of the terms of the Extended Term Loans and the Exchange Notes and the documentation related thereto. Capitalized terms used and not otherwise defined in this Exhibit C have the meanings set forth elsewhere in this Commitment Letter.

Term Loans

On the Bridge Loan Maturity Date, so long as no Conversion Default has occurred and is continuing, the outstanding Bridge Loans will be converted automatically into Extended Term Loans. The Extended Term Loans will be governed by the provisions of the Bridge Loan Documents and, except as expressly set forth below, will have the same terms as the Bridge Loans.

Maturity	The Extended Term Loans will mature on the seventh anniversary of the Bridge Loan Maturity Date.

Interest Rate	The Extended Term Loans will bear interest at a rate per annum (the “*Interest Rate*”) equal to the Total Cap.

	Overdue principal, interest, fees and other amounts shall bear interest at the applicable interest rate plus [**]% per annum*.

Exhibit C-1

Exchange Notes

At any time on or after the Bridge Loan Maturity Date, upon five or more business days’ prior notice, the Extended Term Loans may, at the option of any Lender, be exchanged for a principal amount of Exchange Notes equal to 100% of the aggregate principal amount of the Extended Term Loans so exchanged (plus any accrued interest thereon not required to be paid in cash), provided that the Borrower may defer the first issuance of Exchange Notes until such time as the Borrower shall have received requests to issue an aggregate of at least $100.0 million in aggregate principal amount of Exchange Notes. The Borrower will issue Exchange Notes under an indenture (the “Indenture”) that complies with the Trust Indenture Act of 1939, as amended. The Borrower will appoint a trustee acceptable to the Lenders.

Maturity Date	The Exchange Notes will mature on the seventh anniversary of the Bridge Loan Maturity Date.

Interest Rate	Each Exchange Note will bear interest at a rate per annum equal to the Total Cap.

	Interest will be payable semi-annually in arrears. Default interest will be payable on demand.

	Overdue principal, interest, fees and other amounts shall bear interest at the applicable interest rate plus [**]% per annum*.

Transferability	If the Extended Term Loans are converted to Exchange Notes, the Borrower, upon request by any holder of such Exchange Notes or the Administrative Agent, shall be required to use its commercially reasonable efforts to make such Exchange Notes DTC-eligible.

Optional Redemption	Exchange Notes will be non-callable until the second anniversary of the Bridge Loan Maturity Date (subject to (x) a 35% “equity clawback” provision customary for publicly traded high yield debt securities and (y) redemption at a make-whole price based on U.S. Treasury notes with maturity closest to such second anniversary plus [*] basis points). Thereafter, each Exchange Note will be callable at par plus accrued interest plus a premium equal to [] of the coupon on such Exchange Note, which premium shall decline to []% and [*]% on each subsequent anniversary of the Bridge Loan Maturity Date and to zero on the date that is the fifth anniversary of the Bridge Loan Maturity Date.

Defeasance Provisions	Customary for publicly traded high yield debt securities.

Modification	Customary for publicly traded high yield debt securities.

Change of Control	The Borrower will be required to offer to repurchase the Exchange Notes following the occurrence of a “change of

Exhibit C-2

	control” (to be defined in a manner customary for publicly traded high yield debt securities and not to include any “continuing director” component) at [***]% of the outstanding principal amount thereof.

Registration Rights	None.

Covenants	Customary for publicly traded high yield debt securities.

Events of Default	Customary for publicly traded high yield debt securities.

Exhibit C-3

EXHIBIT D TO COMMITMENT LETTER

CLOSING CONDITIONS

Capitalized terms used but not defined in this Exhibit D have the meanings assigned to them elsewhere in this Commitment Letter. The closing of the Facilities and the making of the initial loans thereunder are conditioned upon satisfaction of the conditions precedent contained in Section 3 of this Commitment Letter, the other conditions expressly set forth in this Commitment Letter, in Exhibits A and B under “Conditions Precedent to Initial Borrowing” and “Conditions Precedent”, respectively, and those identified below. For purposes of this Exhibit D, references to “we”, “us” or “our” means the Joint Lead Arrangers and their respective affiliates.

GENERAL CONDITIONS

1. Concurrent Transactions. The Borrower and the Guarantors shall have executed and delivered to the Administrative Agent the Definitive Debt Documents related to (x) the Term Loan Facility and (y) the Bridge Loan Facility (or substantially contemporaneously with the Transactions, the Borrower shall have received not less than $450.0 million in gross cash proceeds from the issuance of the Notes or New Equity Proceeds (excluding New Equity Proceeds included in the Balance Sheet Cash Contribution)), in each case, which shall be prepared by our counsel and consistent with the Debt Financing Letters and the Documentation Principles; provided that this condition is subject to the Certain Funds Provision. The Borrower shall have received additional New Equity Proceeds not constituting part of the Balance Sheet Cash Contribution in an amount not less than the aggregate reduction of the Facilities pursuant to Section 15 of the Commitment Letter. With respect to the Senior Credit Facilities, the Collateral Agent, for the benefit of the Lenders under the Senior Credit Facilities and the other secured parties thereunder, shall have been granted perfected first priority security interests in all assets of the Credit Parties to the extent described in Exhibit A to this Commitment Letter under the caption “Collateral”, pursuant to security documents in form and substance consistent with the Documentation Principles; provided that this condition is subject to the Certain Funds Provision.

2. Acquisition. The Transactions (including the Acquisition) shall have been consummated in accordance with the Acquisition Agreement or will be consummated concurrently with or immediately following the borrowing of the Term Loans and the Bridge Loans (or the issuance of the Notes or equity or equity-linked securities in lieu of the Bridge Loans) (including, without limitation, the payment by the Borrower of all amounts due on the Closing Date in connection with the Transactions with the proceeds of the Term Loans, the Bridge Loans (or Notes or equity or equity-linked securities, as applicable) and the Balance Sheet Cash Contribution), and the Target and each of its subsidiaries shall have become, or will contemporaneously on the Closing Date become, wholly-owned subsidiaries of Borrower. The executed Stock Purchase Agreement, dated as of the date hereof (as may be amended, modified, supplemented, waived or the subject of any consent in accordance with the terms of this Commitment Letter and together with the annexes, schedules, exhibits and attachments thereto, the “Acquisition Agreement”), among you, the Target and the Seller shall not have been amended, modified, supplemented, waived or been the subject of any consent in any manner materially adverse to the Lenders or the Joint Lead Arrangers (in each case in their capacities as such) without the consent of the Joint Lead Arrangers, not to be unreasonably withheld, delayed or conditioned (it being understood and agreed that (1) any decrease in the amount of consideration required to consummate the Acquisition shall not be deemed to be adverse to the interests of the Lenders and the Joint Lead Arrangers so long as (a) any such decrease is utilized to

Exhibit D-1

reduce each of the Facilities and the Balance Sheet Cash Contribution on a pro rata basis, (2) any change to the definition of “Company Material Adverse Effect” in a manner favorable to the Target shall be deemed to be adverse to the interests of the Lenders and the Joint Lead Arrangers, (3) any modifications to any of the provisions relating to the Administrative Agent’s, the Collateral Agent’s, the Joint Lead Arrangers’ or any Lender’s liability, jurisdiction or status as a third party beneficiary under the Acquisition Agreement shall be deemed to be adverse to the interests of the Lenders and the Joint Lead Arrangers).

3. Refinancing of Existing Debt. Concurrently with or immediately following the consummation of the Acquisition, the Refinancing shall have been (or shall be) consummated, all commitments relating to refinanced debt shall have been terminated, and all liens or security interests related thereto shall have been (or immediately following the initial funding of the Facilities will be) terminated or released or arrangements for such termination or release shall have been made. Immediately after giving effect to the Transactions, the Company shall have outstanding no outstanding indebtedness for borrowed money or preferred stock (or direct or indirect guarantee or other credit support in respect thereof) other than the Facilities (or Notes issued in lieu of the Bridge Loan Facility) and the Surviving Debt.

4. Financial Information. The Joint Lead Arrangers shall have received (A) audited consolidated balance sheets of the Acquiror as of December 31, 2012, 2013 and 2014 and related audited consolidated statements of operations and cash flows of the Acquiror for the fiscal years ended December 31, 2012, 2013 and 2014 (it being understood that the Joint Lead Arrangers acknowledge receipt of such audited financial statements) and audited consolidated balance sheets of the Target as of December 31, 2013 and 2014 and related audited consolidated statements of operations and cash flows of Target for the fiscal years ended December 31, 2013 and 2014 (it being understood that the Joint Lead Arrangers acknowledge receipt of such audited financial statements), (B) unaudited consolidated balance sheets and related statements of operations and cash flows of the Acquiror and the Target for each interim quarterly period subsequent to December 31, 2014 (but only if such period is one of the first three fiscal quarters of a fiscal year) ended at least 45 days prior to the Closing Date (it being understood that the Joint Lead Arrangers acknowledge receipt of such unaudited financial statements of the Acquiror and the Target for the fiscal quarter ended March 31, 2015) and (C) a pro forma consolidated balance sheet and related pro forma consolidated statement of operations (but not a pro forma statement of cash flows) of the Borrower (after giving effect to the Acquisition and the other Transactions) as of and for the four fiscal quarter period ending on the last day of the most recently completed four fiscal quarter period ended at least 120 days prior to the Closing Date (if such period is a fiscal year) or at least 45 days prior to the Closing Date (if such period is one of the first three fiscal quarters of a fiscal year), prepared after giving effect to the Acquisition and other Transactions as if the Transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of the statement of operations).

5. Information; Cooperation; Marketing Period. The Joint Lead Arrangers shall have been afforded a period prior to the Closing Date (the “Marketing Period”) of at least 15 consecutive Business Days (as defined in the Acquisition Agreement) (ending on the business day no later than the business day immediately prior to the Closing Date) following the earlier of (x) delivery of a Confidential Information Memorandum with respect to the Senior Credit Facilities and (y) delivery of the information required to be delivered under Section 4 of the Commitment Letter necessary for inclusion in a Confidential Information Memorandum with respect to the Senior Credit Facilities (the “Required Bank Information”), provided, that (i) Friday, July 3, 2015 shall not be considered a Business Day for purposes

Exhibit D-2

of calculating such Marketing Period and (ii) if such 15 consecutive Business Day period shall not have ended prior to August 22, 2015, then such period shall not commence prior to September 8, 2015. If the Borrower shall in good faith reasonably believe that it has delivered the Required Bank Information, it may deliver to the Joint Lead Arrangers written notice to that effect (stating when it believes it completed the applicable delivery), in which case the Required Bank Information shall be deemed to have been delivered on the date of the applicable notice, unless the Joint Lead Arrangers in good faith reasonably believe that the Borrower has not completed delivery of the Required Bank Information, and, within 3 business days after their receipt of such notice from the Borrower, the Joint Lead Arrangers deliver a written notice to the Borrower to that effect (stating with reasonable specificity the Required Bank Information that has not been delivered).

6. Prior Marketing of Permanent Instruments. With respect to the Bridge Loan Facility, we shall be satisfied that the Company has used its commercially reasonable efforts to cause the Notes to be issued and sold prior to the Closing Date, which efforts shall include (a) delivery to the Financial Institutions as soon as reasonably practicable and in any event prior to the Required Marketing Period, a complete (as reasonably determined by us) preliminary offering memorandum (the “Preliminary Offering Memorandum”) usable in a customary high-yield road show relating to a Rule 144A offering of the Notes, containing all financial statements and other financial data (including selected financial data) to be included therein (including all audited financial statements, all unaudited financial statements (each of which shall have undergone a SAS 100 review) and all appropriate pro forma financial statements) prepared in accordance with, or reconciled to, generally accepted accounting principles in the United States, in each case, of the type and form customarily included in preliminary offering memoranda for transactions of this type (other than for the avoidance of doubt (i) financial statements and data required by Rules 3-09, 3-10 or 3-16 of Regulation S-X, (ii) segment financial data, although customary qualitative disclosure with respect to clauses (i) and (ii), to the extent applicable, will be provided or (iii) information regarding compensation discussion and analysis as required by Item 402 of Regulation S-K) (collectively, the “Required Information”); provided the condition described in clause (a) will also be deemed satisfied if the Notes are offered on a registered basis and the Company has delivered a preliminary prospectus with respect to an offering of the Notes (the “Preliminary Prospectus”) containing the information that is customarily included in a preliminary prospectus for transactions of this type and required in a registered offering of Notes on a Form S-1 registration statement (including all audited financial statements, all unaudited financial statements (each of which shall have undergone a SAS 100 review) and all appropriate pro forma financial statements), but excluding information that would not customarily be included in a preliminary prospectus of a first-time issuer of Notes and (b) the participation of senior management and representatives of the Company and the Target in the road show. The Financial Institutions shall have been offered a period of not less than 15 consecutive business days after delivery of such complete printed Preliminary Offering Memorandum to seek to place the Notes (ending on the business day no later than the Business Day immediately prior to the Closing Date) (such period, the “Required Marketing Period”), provided that (i) Friday, July 3, 2015 shall not be considered a Business Day for purposes of calculating such Required Marketing Period and (ii) if such 15 consecutive Business Day period shall not have ended prior to August 22, 2015, then such period shall not commence prior to September 8, 2015.

Notwithstanding the foregoing, the Required Marketing Period shall be deemed not to have commenced, if prior to the completion of such period, (A) the Company auditor shall have withdrawn its audit opinion with respect to any year end audited financial statements set forth in the Preliminary Offering Memorandum, (B) the financial statements included in the Preliminary Offering Memorandum

Exhibit D-3

would be required to be updated under Rule 3-12 of Regulation S-X in order to be sufficiently current on any day during such period to permit a registration statement using such financial statements to be declared effective by SEC on the last day of such period, in which case the Required Marketing Period shall not be deemed to commence until the receipt of updated financial information that would be required under Rule 3-12 of Regulation S-X to permit a registration statement using such financial statements to be declared effective by the SEC on the last day of such new period, or (C) the Company shall have publicly announced any intention to restate any material financial information included in the Preliminary Offering Memorandum or that any such restatement is under consideration, in which case the Required Marketing Period shall be deemed not to commence unless and until such restatement has been completed or the Company has determined that no restatement shall be required.

7. Comfort Letter. With respect to the Bridge Loan Facility, the independent accountants that have audited the financial statements contained in the Preliminary Offering Memorandum relating to the issuance of the Notes shall make available and have delivered to the Financial Institutions, (i) no later than the delivery to the Financial Institutions of the Preliminary Offering Memorandum in accordance with preceding paragraph, in a form they are prepared to execute, a draft in customary form for Rule 144A offerings of securities like the Notes (including, without limitation, the items included in the “circle-up” and the degree of comfort provided with respect thereto), of a comfort letter prepared in accordance with the requirements of SAS 72 covering the financial statements and other data included and incorporated by reference in the Preliminary Offering Memorandum (the “Comfort Letter”), (ii) no later than reasonably promptly after the pricing of the Notes Offering (but in any event not later than the calendar day immediately following the pricing of the Notes Offering), an executed copy of the Comfort Letter dated the date of the pricing of the Notes Offering and (iii) on the date of consummation of the issuance of the Notes Offering, a “bring down” comfort letter in customary form for Rule 144A offerings of securities like the Notes; provided that the foregoing condition will also be deemed satisfied if (x) the Notes are offered on a registered basis and (y) such accountants have delivered draft, executed and bring down comfort letters in respect of the Preliminary Prospectus in customary form for registered offerings of securities like the Notes within the timeframes described in clauses (i), (ii) and (iii) respectively.

8. Payments; Obligations. All costs, fees, expenses (including reasonable and documented legal fees and out-of-pocket expenses and recording taxes and fees) and other compensation and amounts payable on the Closing Date to us, the Lenders or any of our or their respective affiliates pursuant to the Commitment Letter or the Fee Letter, shall have been (or concurrently with the initial funding of the Facilities will be) paid to the extent due and payable in accordance with the terms, respectively, thereof and invoiced at least 2 business days (unless otherwise reasonably agreed by the Borrower) prior to the Closing Date. The Debt Financing Letters shall be in full force and effect.

9. Customary Closing Documents. Delivery of the following customary documents, consistent with the Documentation Principles: customary lien, litigation and tax searches with respect to the Borrower and the Guarantors, customary legal opinions, corporate records and documents from public officials and customary officers’ certificates and payoff letters with respect to the Refinanced Debt shall have been delivered. In addition, you shall have delivered (a) at least three business days prior to the Closing Date, all documentation and other information about the Borrower and the Guarantors required by U.S. regulatory authorities under applicable “know- your-customer” and anti-money laundering rules and regulations, including the Patriot Act as has been reasonably been requested in writing at least ten days prior to the Closing Date by the Joint Lead Arrangers and (b) a certificate from the chief financial officer of the Borrower in the form attached as Exhibit E.

Exhibit D-4

AMENDED.

10. Accuracy of Representations and Warranties. The Specified Representations shall be true and correct in all material respects (provided, that any representation and warranty that is qualified as to “materiality,” “material adverse effect” or similar language shall be true and correct in all respects (after giving effect to any such qualification therein)) and the Specified Acquisition Agreement Representations shall be true and correct except for any and all breaches of such Specified Acquisition Agreement Representations that do not give rise, individually or in the aggregate, to the right to terminate your (or any of your applicable affiliates’) obligations under the Acquisition Agreement or decline to consummate the Acquisition as a result of any such breaches of the Specified Acquisition Agreement Representations (as determined without giving effect to any waiver, amendment or other modification thereto).

Exhibit D-5

EXHIBIT E TO COMMITMENT LETTER

SOLVENCY CERTIFICATE

[BORROWER]

[ ], 20[ ]

Pursuant to Section [_] of the Credit Agreement, dated as of the date hereof (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among [ ], the undersigned [chief accounting officer][other officer with equivalent duties] of the Borrower hereby certifies as of the date hereof, solely on behalf of the Borrower and not in his or her individual capacity and without assuming any personal liability whatsoever, that:

I am familiar with the finances, properties, businesses and assets of the Borrower and its Subsidiaries and the Target and its Subsidiaries.(1) I have reviewed the Loan Documents and such other documentation and information and have made such investigation and inquiries as I have deemed necessary and prudent therefor. I have also reviewed the consolidated financial statements of the Borrower and its Subsidiaries and the Target and its Subsidiaries, including projected financial statements and forecasts relating to statements of operations and cash flow statements of the Borrower and its Subsidiaries and the Target and its Subsidiaries, respectively.

On the Closing Date, after giving effect to the Transactions, the Borrower and its Subsidiaries (on a consolidated basis) (a) have property with fair value greater than the total amount of their debts and liabilities, contingent (it being understood that the amount of contingent liabilities at any time shall be computed as the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability), subordinated or otherwise, (b) have assets with present fair salable value not less than the amount that will be required to pay their liability on their debts as they become absolute and matured, (c) will be able to pay their debts and liabilities, subordinated, contingent or otherwise, as they become absolute and matured and (d) are not engaged in business or a transaction, and are not about to engage in business or a transaction, for which their property would constitute an unreasonably small capital.

All capitalized terms used but not defined in this certificate shall have the meanings set forth in the Credit Agreement.

IN WITNESS WHEREOF, I have executed this Certificate as of the date first written above.

	AMAG PHARMACEUTICALS, INC.

	By:
	Name:	Frank E. Thomas
	Title:	President and Chief Operating Officer

(1) Subsidiaries” to be defined in a manner consistent with the Documentation Principles.

Exhibit E-1

Exhibit D-2

Exhibit 10.2

AMENDMENT NO. 2

This Amendment No. 2 (“Amendment”), effective as of March 31, 2015 (the “Effective Date”), entered into by and between (i) AMAG Pharmaceuticals, Inc. (“AMAG” or the “Company”) and (ii) Sigma-Aldrich, Inc. (“SAFC”), amends that certain Commercial Supply Agreement between AMAG and SAFC dated August 29, 2012 (the “Commercial Supply Agreement”), as amended October 3, 2013 (“Amendment No. 1”), and collectively with the Commercial Supply Agreement, the “Agreement”). Capitalized terms used but not defined in this Amendment will have the meanings given them in the Agreement.

BACKGROUND

SAFC and AMAG desire to amend the Agreement as set forth in this Amendment.

Now, therefore, in consideration of the premises and the mutual covenants and agreements contained herein, the Parties hereby agree as follows:

AMENDMENTS

1. As set forth in Section 5.2 of the Commercial Supply Agreement, the sales prices for Product Manufactured under the Agreement shall be the sales prices in Appendix 3 to the Commercial Supply Agreement (subject to price adjustment based on PPI in accordance with Section 5.5 of the Commercial Supply Agreement); provided, however, and notwithstanding anything to the contrary in this Agreement, that SAFC agrees to hold the sales prices firm, without any PPI increases, as in effect on the date of this Amendment, through the end of [***].

2. The Parties further agree that the first sentence of Section 2.8(c) until and including the table below will be deleted and restated as follows:

(c) As set forth in Section 5.2 of the Agreement, the sales prices for Product Manufactured under this Agreement shall be the sales prices in Appendix 3; provided, however, beginning on [***] SAFC will use commercially reasonable efforts to provide AMAG with the following Product Pricing:

Amount Produced per Calendar Year (kg)		Price per kg Fe shipped from SAFC (USD)
0-180		[***]
181-360		[***]
361-540		[***]
541 or more		[***]

3. The Parties further agree that in Section 2.8(d)(ii)(b) of the Commercial Supply Agreement, which was added pursuant to Amendment No. 1, “If after [***]” shall be deleted and restated as: “If after [***].”

CONFIDENTIAL

SIGNATURE PAGE TO AMENDMENT NO. 2

In Witness Whereof, the Parties by their authorized representatives have executed this Amendment as of the Effective Date.

AMAG PHARMACEUTICALS, INC.		Sigma-Aldrich, Inc.


By:	/s/ Frank E. Thomas	By:	/s/ Gilles Cottier

Name:	Frank E. Thomas	Name:	Gilles Cottier
Title:	Chief Operating Officer	Title:	Vice President

CONFIDENTIAL

Exhibit 10.3

May 4, 2015

BY HAND

Edward P. Jordan

Re: Notice of Termination

Dear Ed:

This letter confirms the ending of your employment with AMAG Pharmaceuticals, Inc. (the “Company”).

You and the Company entered into the Employment Agreement dated February 24, 2014 (“Employment Agreement”). To the extent that a term is not defined herein, the capitalized terms shall have the same meaning as in the Employment Agreement. Pursuant to Section 4(d) of the Employment Agreement the Company may elect to terminate your employment other than for Cause (as that term is defined in the Employment Agreement) upon thirty (30) days prior written notice to you. This letter serves as that written notice. Accordingly, you are hereby notified that your employment is being terminated effective June 3, 2015 (the “Date of Termination”).

The time period between today’s date and the Date of Termination shall be considered the “Notice Period”. During the Notice Period, unless otherwise directed by the Company, you will perform services for the Company as requested by the Company. It is expected that you will perform these services from your home office unless otherwise directed. To the extent that you wish to use a portion of your accrued but unused vacation time during the Notice Period, please let me know.

Pursuant to Section 5(b) of the Employment Agreement you are entitled to certain severance pay and benefits (“Severance Benefits”) in connection with the termination of your employment other than for Cause, provided you (i) comply fully with all of your obligations under all agreements between the Company and you, and (ii) execute and deliver to the Company within 60 days of the Date of Termination, and do not revoke, a general release, releasing and waiving any and all claims that you have or may have against the Company, its directors, officers, employees, agents, successors and assigns with respect to your employment (other than any obligation of the Company set forth in the Employment Agreement which specifically survives the termination of your employment) (the “Release”). The Release is being provided to you along with this notice. Accordingly, if you enter into the Release and comply with the continuing obligations, including without limitation, the Nonsolicitation Covenant, Non-Competition, and Injunctive Relief provisions set forth in Section 6 of the Employment Agreement and the Non-Disclosure, Non-Competition, Non-Solicitation, and Invention Assignment Agreement you and the Company entered into effective as of February 24, 2014 (collectively the “Restrictive Covenants”), all of which continue to be in full force and effect, the Company will provide you with the following Severance Benefits: (i) twelve (12) months of severance pay based on your current Base Salary; and (ii) vesting of all time-based stock options and other time-based equity awards you hold in which you would have vested if you had been

employed for an additional twelve (12) months following the Date of Termination, which shall become exercisable or no forfeitable on the later of (i) June 4, 2015 or (ii) the date that the Release may no longer be revoked. The foregoing severance pay shall be paid in equal installments over the twelve (12) month severance period in accordance with the Company’s usual payroll schedule, commencing on the date that the Release may no longer be revoked.

For the avoidance of doubt, consistent with Section 5(a) of the Employment Agreement, regardless of whether you sign the Release and/or receive Severance Benefits, the Company shall pay you for the following items that were earned and accrued but unpaid as of the Date of Termination: (i) your Base Salary; (ii) a cash payment for all accrued, unused vacation calculated at your current Base Salary rate; and (iii) reimbursement for any unpaid business expenses. For the avoidance of doubt, you are not entitled to any bonus compensation or to any additional Moving Expenses or other relocation assistance under Section 3(g) of the Employment Agreement or otherwise. The Company shall provide you with the right to continue group medical and dental insurance coverage after the Date of Termination under the law known as “COBRA”. (The terms for that opportunity will be set forth in a separate written notice.)

Although not contemplated in the Employment Agreement, as an additional benefit, if you satisfy each of the Severance Conditions (as defined in the Release), the Company will pay a portion of your COBRA premiums in an amount equal to what it would have paid towards health insurance premiums for an active employee with similar coverage until the earlier of: (i) twelve months following the Date of Termination, and (ii) the date you become reemployed and eligible for alternative health insurance. Your eligibility to participate in any other employee benefit plans and programs of the Company will cease on the Date of Termination in accordance with the applicable benefit plan or program terms and practices. The Company will also pay for your participation in the Challenger Executive Advisor Program (“Outplacement Services”). Information about the Outplacement Services will be provided to you under separate cover. Finally, and also contingent on your satisfaction of each of the Severance Conditions, the Company will provide you with a one time lump of payment of $35,000, less witholdings, in leiu of any payments, reimbursements, or benefits of any kind or nature in connection with your location or relocation of your personal residence in connection with your employment at the Company.

Also regardless of whether you enter to the Release and/or receive Severance Benefits, you are obligated to comply with the continuing obligations set forth in the Employment Agreement, including the Restrictive Covenants.

We look forward to working with you in a cooperative and productive manner during the time of transition. Please let me know if you have any questions.

Sincerely,

/s/ Elizabeth S. Bolgiano
Elizabeth S. Bolgiano
Senior Vice President, Human Resources

Acknowledged and Agreed:

/s/ Edward P. Jordan
Edward P. Jordan

Exhibit 10.4

May 5, 2015

BY HAND

Scott B. Townsend

Re: Notice of Termination and Transition Service Agreement

Dear Scott:

This letter confirms the ending of your employment with AMAG Pharmaceuticals, Inc. (the “Company”) and sets forth the terms of a mutually agreeable transition plan.

As you know, you and the Company entered into the Amended and Restated Employment Agreement dated February 7, 2014 (“Employment Agreement”). To the extent that a term is not defined herein, the capitalized terms shall have the same meaning as in the Employment Agreement.

Pursuant to Section 4(d) of the Employment Agreement, the Company may elect to terminate your employment other than for Cause after a thirty (30) day notice period. This letter serves as the written notice contemplated by the Employment Agreement. Provided, and notwithstanding the foregoing, in the event you enter into this Notice of Termination and Transition Service Agreement (the “Transition Service Agreement”) and the Release Agreement (the “Release”) appended hereto (collectively with the Follow on Release defined below, the “Termination Agreements”), you and the Company have agreed that the thirty (30) day notice period will be extended until January 16, 2016 on the terms set forth herein unless, prior to that date, (i) you resign, (ii) your employment ends due to your death or Disability, or (iii) the Company terminates your employment with Cause. For purposes of the Termination Agreements, the actual last date of your employment, whether it is January 16, 2016 or an earlier date, shall be referred to as the “Date of Termination” and the Term shall end on the Date of Termination.

The time period between May 5, 2015 and the Date of Termination shall be considered the “Transition Period”. During the Transition Period the following terms shall apply to your employment in lieu of any terms under the Employment Agreement or otherwise:

(a) Phase I of the Transition Period: During the period between May 5, 2015 and May 30, 2015, you will continue to hold the full-time position of Senior Vice President of Legal Affairs and General Counsel of the Company and the Secretary of the Company and shall perform the duties and responsibilities associated with that position as well as assisting with transitional matters to the extent requested by the Company’s Chief Executive Officer, President and other members of the Company’s executive management team.

(b) Phase Two of the Transition Period. During the period between May 31, 2015 and the Date of Termination, you will no longer hold the position of Senior Vice President of Legal Affairs and General Counsel or Secretary of the Company but, instead, you will serve in a part-time Senior Advisor role. As Senior Advisor, you will perform duties,

responsibilities and projects as requested by the Company’s Chief Executive Officer, President and other members of the Company’s executive management team. You shall provide services on a reduced schedule equal to a percentage of that of a full time exempt employee (the “Level of Services”). The Level of Services shall commence at 50% and may be reduced by the Company in its discretion upon advance written notice to you effective upon first day of the next full calendar month, provided the Level of Services shall not be reduced to a percentage lower than 20%.

(c) Salary and Benefits During Transition Period. During (i) Phase One of the Transition Period, you shall continue to be paid at the rate of 100% of your Base Salary, $355,600 per year, (“Full Base Salary”); and (ii) Phase Two of the Transition Period, you shall be paid a percentage of your Base Salary that corresponds to the Level of Services. You will continue to participate in the Company’s employee benefits to the extent that you remain eligible under the Company’s plans based on your Level of Services, provided it is understood and agreed that you will continue to accrue vacation during the Transition Period but the regular accrual rate of four (4) weeks per year will be prorated on based on the Level of Services. Further, to the extent you are unable to perform the hours required based on the applicable Level of Services due to illness or injury, you shall be permitted to use your previously accrued vacation and sick time. The Company reserves the right to request medical documentation associated with use of such paid time off consistent with the Company’s policies and practices.

(d) Indemnification; Insurance. During the Transition Period, the Indemnification Agreement by and between the Company and you shall remain in effect and you shall be entitled to indemnification and to the extent applicable pursuant to the Charter and Bylaws of the Company, the Company’s employed lawyer insurance policies and the Company’s employment practices liability insurance.

(e) Equity. In lieu of the accelerated vesting following the Date of Termination contemplated by your Employment Agreement, and notwithstanding anything in the Employment Agreement or any equity award agreement to the contrary, you and the Company agree that all unvested time-based stock options and/or restricted stock units and any other unvested time-based equity awards that you hold in which you would have vested if you had been employed for an additional twelve (12) months following May 30, 2015 shall become vested on the later of (i) June 1, 2015 or (ii) the Effective Release Date, as defined in the Release (the “Accelerated Vesting”) and all other outstanding unvested time-based equity awards not vested by the Accelerated Vesting shall be forfeited on the Effective Release Date. You will continue to have a Business Relationship through the Date of Termination for purposes of vesting with respect to your performance-based equity grants, and any such performance-based equity grants that remain unvested as of the Date of Termination shall be forfeited at such time.

(f) Expenses. During the Transition Period you will remain eligible for reasonable and documented business expenses in accordance with the Company’s expense reimbursement policy. You shall not continue to be reimbursed for bar dues or

continuing legal education and Section 3(f) (1) —(4) shall not longer be in effect after May 31, 2015.

Pursuant to Section 5(b) of the Employment Agreement you are entitled to certain severance pay and benefits (“Severance Benefits”) after the termination of your employment other than for Cause, provided you (i) comply fully with all of your obligations under all agreements between the Company and you, and (ii) execute and deliver (A) the Release, and (B) an affirmation of the general release of claims in the Release with respect to the period between the date you signed the Release and the Date of Termination (the “Follow on Release”). Accordingly, if (i) you enter into and comply with the continuing obligations under the Termination Agreements, including without limitation the Nonsolicitation Covenant, Non-Competition, and Injunctive Relief provisions set forth in Section 6 of the Employment Agreement and the Non-Disclosure, Non-Competition, Non-Solicitation, and Invention Assignment Agreement you and the Company entered into effective as of February 27, 2014 (collectively the “Restrictive Covenants”), all of which continue to be in full force and effect, (ii) you are not terminated for Cause; and (iii) the Date of Termination occurs on January 16, 2016 or on an earlier date due to your resignation or your employment ends due to your death or Disability, the Company will provide you with Severance Benefits in the form of twelve (12) months of severance pay based on your Full Base Salary. The foregoing severance pay shall be paid in equal installments over the twelve (12) month severance period in accordance with the Company’s usual payroll schedule, commencing on the Company’s next regular payroll date following the later of: (i) the Date of Termination; and (ii) the Effective Release Date.

Although not contemplated in the Employment Agreement, as an additional Severance Benefit, if you satisfy each of the Severance Conditions (as defined in the Release), the Company will pay a portion of your COBRA premiums in an amount equal to what it would have paid towards health insurance premiums for an active employee with similar coverage commencing of the earlier of: (i) the Date of Termination, or (ii) the date you become eligible for COBRA based on the Level of Services (in either case the “COBRA Commencement Date”) and continuing until the earlier of (A) twelve (12) months from COBRA Commencement Date; and (B) the date you become reemployed and eligible for alternative health insurance. The Company shall provide you with the right to continue group medical and dental insurance coverage after the COBRA Commencement Date under the law known as “COBRA”. (The terms for that opportunity will be set forth in a separate written notice.) Your eligibility to participate in any other employee benefit plans and programs of the Company will cease in accordance with the applicable benefit plan or program terms and practices.

For the avoidance of doubt, consistent with Section 5(a) of the Employment Agreement, regardless of whether you sign the Termination Agreements and/or receive Severance Benefits, the Company shall pay you for the following items that were earned and accrued but unpaid as of the Date of Termination: (i) your Base Salary (based on the Level of Services); (ii) a cash payment for all accrued, unused vacation calculated at your Full Base Salary rate; and (iii) reimbursement for any unpaid business expenses. For the avoidance of doubt, you are not entitled to any bonus compensation for 2015 or any other periods.

Also regardless of whether you enter to the Termination Agreements and/or receive Severance Benefits, you are obligated to comply with the continuing obligations set forth in the Employment Agreement, including the Restrictive Covenants.

You acknowledge and agree that (i) this Transition Service Agreement modifies the Employment Agreement (ii) Sections 1-5 of the Employment Agreement are fully supereceded by this Transition Service Agreement, provided the definitions therein shall remain in effect; (ii) the changes described herein do not trigger Good Reason rights under the Employment Agreement or otherwise.

Please let me know if you have any questions.

Sincerely,

/s/ Elizabeth S. Bolgiano

Elizabeth S. Bolgiano
Senior Vice President, Human Resources

Acknowledged and Agreed:

/s/ Scott B. Townsend
Scott B. Townsend

Exhibit 31.1

CERTIFICATIONS

I, William K. Heiden, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of AMAG Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 27, 2015

	/s/ William K. Heiden
	William K. Heiden
	Chief Executive Officer (Principal Executive Officer)

Exhibit 31.2

CERTIFICATIONS

I, Frank E. Thomas, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of AMAG Pharmaceuticals, Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 27, 2015
	/s/ Frank E. Thomas
	Frank E. Thomas
	President and Chief Operating Officer
	(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AMAG Pharmaceuticals, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William K. Heiden, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ William K. Heiden
	William K. Heiden
	Chief Executive Officer
	(Principal Executive Officer)


July 27, 2015

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AMAG Pharmaceuticals, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Frank E. Thomas, President, Chief Operating Officer and Principal Financial Officer, of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Frank E. Thomas
	Frank E. Thomas
	President and Chief Operating Officer
	(Principal Financial Officer)


July 27, 2015

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