EXHIBIT 2
Endo Pharmaceuticals Holdings Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
November 26, 1999
▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
c/o Algos Pharmaceutical Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Gentlemen:
This letter agreement (the "Letter Agreement") will confirm the
----------------
understanding and agreement among ▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(collectively, the "Executives") and Endo Pharmaceuticals Holdings Inc., a
----------
Delaware corporation ("Endo"), in connection with the possible purchase by Endo
----
or an Affiliate of Endo from each of the Executives of the number of shares of
common stock of Algos Pharmaceutical Corporation, a Delaware corporation (the
"Company"), owned by them and set forth on Annex I hereto (the "Algos Shares").
-------- ------------
Capitalized terms used in this Letter Agreement but not otherwise defined herein
shall have the meanings ascribed to them in that certain Agreement and Plan of
Merger, dated as of November 26, 1999, by and among Endo, the Company and Endo
Inc., a Delaware corporation and wholly owned subsidiary of Endo (the "Merger
------
Agreement").
---------
The parties hereto agree that the Executives may sell the Algos Shares
on the open market after December 20, 1999 in the event either (a) the Proxy
Statement has been filed with the SEC and made publicly available on or prior to
December 20, 1999 or (b) a press release relating to the Merger and the Merger
Agreement has been released to the general public on or prior to December 20,
1999 such that Endo and the Executives, each after consultation with outside
counsel, reasonably believe that such sales may be made in accordance with the
federal securities laws. If neither of the actions contemplated by the prior
sentence occur on or prior to December 20, 1999, then Endo shall or shall cause
an Affiliate of Endo to purchase the Algos Shares from the Executives on or
before December 31, 1999 at a price equal to the average closing price of the
Algos Common Stock as reported on NASDAQ for the five-trading-day period
immediately preceding such purchase (ending on the day immediately prior to such
purchase); provided, however that if the purchase price for the Algos Shares
-------- -------
exceeds $5.5 million in the aggregate, then Endo or an Affiliate of Endo shall
pay any such excess in the form of a promissory note which will become payable
on January 31, 2000. The closing and settlement of any such sale to Endo or an
Affiliate thereof shall occur on or before December 31, 1999 and payment for the
Algos Shares shall be made by wire transfer of immediately available funds.
Please confirm that the foregoing is in accordance with your
understanding by signing and returning to the Company the enclosed copy of this
Letter Agreement, whereupon this Letter Agreement will become a binding
agreement among us.
Very truly yours,
ENDO PHARMACEUTICALS HOLDINGS INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
By:___________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President & Chief Executive Officer
Confirmed as of the date above:
/s/ ▇▇▇▇ ▇. ▇▇▇▇
____________________________
▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
2
Annex I
_______
Holders Number of Algos Shares owned
------- ----------------------------
▇▇▇▇ ▇. ▇▇▇▇ 224,100
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 66,400
