Item 1.01 Entry into a Material Definitive Agreement.
On October 10, 2021, Adamas
Pharmaceuticals, Inc., a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger
Agreement”), by and among the Company, Supernus Pharmaceuticals, Inc., a Delaware corporation (“Parent”),
and Supernus Reef, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Purchaser”).
Pursuant to the Merger Agreement,
and upon the terms and subject to the conditions thereof, Parent has agreed to cause Purchaser to commence a tender offer (the “Offer”)
to purchase all of the outstanding shares of common stock of the Company, par value $0.001 per share (the “Shares”
and each, a “Share”), at an offer price of (i) $8.10 per Share, in cash, less any applicable withholding taxes
and without interest (the “Cash Amount”), plus (ii) two contingent value rights per Share (each, a “CVR”),
which represents the right to receive $0.50 per CVR, which CVRs are governed by the terms of the CVR Agreement (as defined herein), in
cash, less any applicable withholding taxes and without interest (the Cash Amount plus two CVRs, collectively, or any higher amount per
Share paid pursuant to the Offer, the “Offer Price”). Following the consummation of the Offer and subject to the terms
and conditions of the Merger Agreement, Purchaser will be merged with and into the Company (the “Merger” and, together
with the Offer, the “Transactions”) pursuant to Section 251(h) of the General Corporation Law of the State of
Delaware (the “DGCL”), with the Company continuing as the surviving corporation in the Merger and a wholly owned subsidiary
of Parent. At the effective time of the Merger, each Share that was not tendered in the Offer, other than Excluded Shares and Dissenting
Shares (each as defined in the Merger Agreement), will be converted into the right to receive the Offer Price, less any applicable withholding
taxes and without interest (the “Merger Consideration”).
At or prior to the time at
which Purchaser accepts the Shares tendered in the Offer for purchase, Parent and a rights agent mutually agreeable to Parent and the
Company shall enter into a contingent value right agreement (the “CVR Agreement”) to allow for the payment of the milestones
pursuant to each CVR. One CVR issued in respect of a Share shall become payable upon the first occurrence of achievement of aggregate
worldwide Net Sales of the Product (each as defined in the CVR Agreement) in excess of $150,000,000 during any consecutive 12-month
period ending on or before December 31, 2024. The second CVR issued in respect of each Share shall become payable upon the first
occurrence of aggregate worldwide Net Sales of the Product in excess of $225,000,000 during any consecutive 12-month period ending
on or before December 31, 2025. Each milestone with respect to a CVR may only be achieved one time. The maximum amount payable with
respect to the CVRs issued in respect to each Share is $1.00.
The Offer will initially remain
open for 20 business days following commencement of the Offer. If, at the scheduled expiration time of the Offer, any of the conditions
to the Offer have not been satisfied (unless such condition is waivable by Parent or Purchaser and has been waived), Purchaser may extend
the Offer for subsequent periods of up to 10 business days each. Additionally, Purchaser must extend the Offer (i) for any period
required by applicable law (including any applicable interpretations or positions of the U.S. Securities and Exchange Commission (the
“SEC”), the SEC staff and the Nasdaq Global Market), (ii) for periods of up to 10 business days each until the
expiration or termination of the waiting period (or any extension thereof) applicable to the Transactions under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the “HSR Act”) and (iii) at the request of the Company, for two
periods of 10 business days each, if all the other conditions to the Offer have been satisfied or waived, in order to permit the satisfaction
of the Minimum Condition (as defined herein).
The obligation of
Purchaser to accept for payment, and pay for, Shares validly tendered (and not properly withdrawn) pursuant to the Offer is subject
to satisfaction or waiver, to the extent permitted under applicable legal requirements, of customary conditions, including
(i) there being validly tendered and not properly withdrawn Shares that, considered together with all other Shares (if any)
beneficially owned by Purchaser and its affiliates, represent one more Share than 50% of the total number of the then-issued and
outstanding Shares at the expiration of the Offer (the “Minimum Condition”), (ii) the accuracy of the
Company’s representations and warranties (subject to customary materiality and “material adverse effect”
thresholds), (iii) the Company’s compliance or performance in all material respects of the obligations, covenants and
agreements it is required to comply with or perform at or prior to the expiration of the Offer, (iv) the absence, since the
date of the Merger Agreement, of a Material Adverse Effect (as defined in the Merger Agreement) that is continuing as of the time
the Purchaser accepts Shares for purchase pursuant to the Offer, (v) the expiration or termination of the waiting period (or
any extension thereof) applicable to the Transactions under the HSR Act, (vi) the absence of any law or order prohibiting the
consummation of the Offer or the Merger, and (vii) the Merger Agreement not having been terminated in accordance with its
terms. If the conditions to the Offer are satisfied or waived (other than conditions that by their nature are to be satisfied or
waived at the expiration of the Offer), then Purchaser must (i) irrevocably accept for payment all of the Shares tendered
pursuant to the Offer and (ii) pay the Offer Price in respect of each such Share.
The Merger Agreement includes
certain representations, warranties and covenants of the Company, Parent and Purchaser, including certain restrictions with respect to
the Company’s business between the date of the Merger Agreement and the consummation of the Merger. Parent and the Company also
agreed to use their respective reasonable best efforts to take all actions, to file all documents and to do all things necessary, proper
or advisable under applicable antitrust laws to consummate and make effective the Offer and the Merger as soon as reasonably practicable.
However, Parent is not required to make divestitures, commit to any licenses or hold separate requirements or litigate or defend the Transactions
in connection with any applicable antitrust laws. Parent and Purchaser may not take any action would reasonably be expected to prevent
or materially delay consummation of the Offer and the Merger, including enter into any competing transactions that would potentially delay
the Transactions.
The Company has agreed to
customary “no-shop” restrictions on its ability to solicit alternative transaction proposals from third parties and engage
in discussions or negotiations with third parties regarding transaction proposals. Notwithstanding these restrictions, the Company may
under certain circumstances provide information to and engage in or otherwise participate in discussions or negotiations with third parties
with respect to a bona fide written alternative acquisition proposal that the board of directors of the Company (the “Board”)
has determined in good faith, after consultation with its financial advisor and outside legal counsel, constitutes or could reasonably
be expected to result in a Superior Offer (as defined in the Merger Agreement) and that failure to take such action would reasonably be
expected to constitute a breach of the Board’s fiduciary duties under applicable legal requirements. Pursuant to the Merger Agreement,
the Company has agreed that the Board will (x) recommend that the stockholders of the Company accept the Offer and tender their Shares
to Purchaser pursuant to the Offer (the “Board Recommendation”) and (y) include the Board Recommendation in the
Company’s Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”)
when filed with the SEC and when disseminated to the Company’s stockholders. The Board will also not (i) withdraw (or modify
in a manner adverse to Parent or Purchaser), or publicly propose to withdraw (or modify in a manner adverse to Parent or Purchaser), the
Board Recommendation, (ii) approve, recommend or declare advisable, or publicly propose to approve, recommend or declare advisable,
any alternative acquisition proposal or (iii) approve, recommend or declare advisable, or propose to approve, recommend or declare
advisable, or allow the Company to execute or enter into any contract with respect to any acquisition proposal, requiring, or which would
reasonably expect to cause the Company to abandon, terminate or fail to consummate the Transactions (other than a customary confidentiality
agreement). Notwithstanding these restrictions, the Board is permitted, subject to the terms and conditions set forth in the Merger Agreement,
to change the Board Recommendation in certain instances, subject to matching rights in favor of Parent.
The Merger Agreement
contains certain termination rights for both the Company and Parent, including, (i) if the consummation of the Transactions has
not occurred on or before February 10, 2022 (the “End Date”), (ii) if consummation of the Offer or the
Merger is legally prohibited or permanently enjoined, (iii) if the Offer has been withdrawn or terminated in accordance with
the terms of the Merger Agreement without the acceptance for payment of Shares pursuant to the Offer, provided that the terminating
party’s material breach of any provision of the Merger Agreement is not the cause of the events specified in the foregoing
clauses (i) through (iii) occurring. The Merger Agreement may also be terminated by Parent if (i) the Board has failed to
include the Board Recommendation in the Schedule 14D-9 when mailed or has effected a Company Adverse Change Recommendation
(as defined in the Merger Agreement), (ii) the Company has entered into an agreement with respect to a Superior Offer,
(iii) the Board fails to publicly reaffirm the Board Recommendation upon request by Parent (subject to certain limitations),
(iv) in the case of a tender offer or exchange offer, the Board fails to recommend in a Solicitation/Recommendation Statement
on Schedule 14D-9 the rejection by its stockholders of such tender offer or exchange offer, or (v) the Company has
breached any representation, warranty or covenant that cannot be cured by the End Date or, if capable of being cured, has not been
cured within 30 days following written notice, if such breach would cause certain of the conditions to closing to not be able to be
satisfied. The Merger Agreement may also be terminated by the Company (i) subject to the terms and conditions set forth in the
Merger Agreement, to accept a Superior Offer, (ii) if Parent or Purchaser has breached any representation, warranty or covenant
that cannot be cured by the End Date or, if capable of being cured, has not been cured within 30 days following written notice, if
such breach would reasonably be expected to prevent Parent or Purchaser from consummating the transactions, or (iii) in the
event that Purchaser fails to commence the Offer within the specified period set forth in the Merger Agreement or fails to purchase
all Shares validly tendered (and not validly withdrawn) when required to do so under the Merger Agreement. Upon termination of the
Merger Agreement (i) by the Company to accept a Superior Offer or (ii) by Parent following a Company Adverse Change
Recommendation, the Company will be required to pay Parent a termination fee of $16,000,000 (the “Termination
Fee”). Under certain additional circumstances described in the Merger Agreement, the Company must also pay Parent the
Termination Fee if the Merger Agreement is terminated and, within 12 months following such termination, the Company recommends or
enters into certain alternative acquisition arrangements and such acquisition is subsequently consummated.
The foregoing description
of the Merger Agreement and the Transactions does not purport to be complete and is qualified in its entirety by reference to the Merger
Agreement, which is filed as Exhibit 2.1 hereto and which is incorporated herein by reference. The Merger Agreement has been filed
to provide information to investors regarding its terms. It is not intended to provide any other factual information about the Company,
Parent or Purchaser, their respective businesses, or the actual conduct of their respective businesses during the period prior to the
consummation of the Transactions. The Merger Agreement and this summary should not be relied upon as disclosure about the Company or Parent.
None of the Company’s stockholders or any other third parties should rely on the representations, warranties and covenants or any
descriptions thereof as characterizations of the actual state of facts or conditions of the Company, Parent, Purchaser or any of their
respective subsidiaries or affiliates. The Merger Agreement contains representations and warranties that are the product of negotiations
among the parties thereto and that the parties made to, and solely for the benefit of, each other as of specified dates. The assertions
embodied in those representations and warranties are subject to qualifications and limitations agreed to by the respective parties and
are also qualified in important part by confidential disclosure schedules delivered in connection with the Merger Agreement. The representations
and warranties may have been made for the purpose of allocating contractual risk between the parties to the agreements instead of establishing
these matters as facts and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable
to investors.