FORM OF AMENDMENT TO AMENDED & RESTATED AGMNT



 



Exhibit 10.3



FORM OF



AMENDMENT



TO



STOCKHOLDERS AGREEMENT



          AMENDMENT TO REGISTRATION RIGHTS AGREEMENT, dated as of July     , 2003
(the “Amendment”), by and among Endo Pharmaceuticals Holdings Inc., a Delaware
corporation (the “Company”) and Endo Pharma LLC, a Delaware limited liability
company (“Endo LLC,” and, together with the Company, the “Parties”).



          WHEREAS, the Parties have entered into that certain Registration Rights
Agreement, dated July 17, 2000 (the “Registration Rights Agreement”);



          WHEREAS, the Company has filed a registration statement under the
Securities Act of 1933, as amended, in connection with a public offering of its
common stock in which certain of the Amending Stockholders may elect to
participate as selling stockholders;



          WHEREAS, the Parties desire to amend the Registration Rights Agreement
pursuant to Section 9.5 thereof, to clarify the scope of certain rights granted
thereunder in connection with Endo Pharma LLC’s sales of the Company’s common
stock; and



          WHEREAS, the Amending Stockholders beneficially own, in the aggregate, a
majority of the shares of the Company’s common stock owned by all “Management
Stockholders,” as such term is defined in the Stockholders Agreement, as of the
date hereof; and



          WHEREAS, all capitalized terms used in this Amendment, and not otherwise
defined herein, shall have the meanings assigned to them in the Stockholders
Agreement.



          NOW THEREFORE, in consideration of the mutual promises and obligations of
the Parties, the Parties, by this Amendment, hereby amend the Stockholders
Agreement as follows:



          1. Section 5.4 of the Stockholders Agreement shall hereafter read in full
as follows:



”     5.4     Tag-Along and Drag-Along Rights.


          (a)     Tag Along Rights. Endo LLC shall not, in any one transaction
or any series of similar transactions not
effected through a broker or over a national securities exchange, Transfer more
than 25% of the shares of Common Stock it owns as



 






 





of the date of the Merger, except pursuant to Section 5.4(b) hereof, or except
in connection with an underwritten public offering of the Company’s securities
or any other capital markets transaction, to any third party or parties
unaffiliated with Endo LLC (a “Third Party”), unless the Management
Stockholders (collectively, the “Offerees”), are offered the right, at the
option of each Offeree, to include in such Transfer to the Third Party such
number of shares of Common Stock then owned by each such Offeree, as determined
in accordance with this Section 5.4(a). If Endo LLC receives from a Third
Party a bona fide offer or offers to Transfer which it intends to accept, or
proposes to Transfer to a Third Party, shares of its Common Stock, Endo LLC
shall provide written notice (the “Tag-Along Notice”) to each of the Offerees,
setting forth the consideration per share to be paid by such Third Party and
the other material terms and conditions of such transaction. The Tag-Along
Notice shall offer the Offerees the opportunity to participate in the proposed
Transfer of shares to the Third Party according to the terms and conditions of
this Section 5.4(a) and for the same type of consideration and for an amount of
consideration per share not less than that offered to Endo LLC by the Third
Party. At any time within 20 days after its receipt of the Tag-Along Notice,
each of the Offerees may irrevocably accept the offer included in the Tag-Along
Notice for up to such number of shares of Common Stock as is determined in
accordance with the provisions of this Section 5.4(a) by furnishing written
notice of such acceptance to Endo LLC. Promptly following such acceptance by
an Offeree, each such Offeree shall deliver to Endo LLC the certificate or
certificates representing the shares of Common Stock to be Transferred pursuant
to such offer by such Offeree, together with a limited power-of-attorney
authorizing Endo LLC to sell or otherwise dispose of such shares of Common
Stock pursuant to the proposed Transfer to the Third Party.


     Each Offeree shall have the right to participate in the proposed Transfer
to the Third Party by Transferring in connection therewith shares of Common
Stock equal to the product of (x) the total number of shares to be acquired by
the Third Party, times (y) a fraction, the numerator of which shall be the
total number of shares of Common Stock then owned by such Offeree, and the
denominator of which shall be the number of shares of Common Stock then owned
by Endo LLC plus the total number of shares of Common Stock then owned by the
Offerees. The maximum number of shares of Common Stock that may be Transferred
by each Offeree to the Third Party in accordance with this Section 5.4(a) shall
be the total number of shares of Common Stock then owned by such Offeree.


     If within 20 days after the receipt of the Tag-Along Notice, any Offeree
has not accepted the offer contained in the Tag-Along Notice, such Offeree will
be deemed to have waived any and all rights with respect to, or to participate
in, the Transfer of Common Stock described in the Tag-Along Notice and Endo LLC
shall have 45 days in which to Transfer not more than the amount of Common
Stock described in the Tag-Along Notice, for an amount and type of
consideration per share not materially more favorable to Endo LLC than was set
forth in the Tag-Along Notice. If, at the end of 65 days following the receipt
of the Tag-Along Notice, Endo LLC has not completed the Transfer of Common
Stock of Endo LLC and Common Stock of any Offeree, Endo LLC shall return to
such Offeree all certificates representing shares of Common Stock which such
Offeree delivered for Transfer pursuant to this Section 6.4(a), and all the
restrictions


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on sale or other disposition contained in this Agreement with respect to Common
Stock then or thereafter owned by the Offeree shall again be in effect.


     As promptly as practicable (but in no event later than 5 days) after the
consummation of the Transfer of Common Stock of Endo LLC and Common Stock of
the Offerees to the Third Party in accordance with this Section 5.4(a), Endo
LLC shall notify the Offerees thereof, shall remit to each of the Offerees the
total consideration in respect of the shares of Common Stock of such Offeree
which were so Transferred, and shall furnish such other evidence of the
completion and time of completion of such Transfer and the terms thereof as may
be reasonably requested by the Offerees.


          (b)     Drag-Along Rights. If Endo LLC shall propose to Transfer at
least 60% of all shares of Common Stock then owned by Endo LLC to a Third
Party, then (in addition to the rights of the Management Stockholders to
participate in such Transfer pursuant to Section 5.4(a) hereof) Endo LLC may,
at its option, require the Management Stockholders (collectively, the
“Remaining Holders”), include in such Transfer to the Third Party such number
of shares of Common Stock then owned by such Remaining Holder, as determined in
accordance with this Section 5.4(b).



          Endo LLC shall send written notice (the “Drag-Along Notice”) of the
exercise of its rights pursuant to this Section 5.4(b) to each of the Remaining
Holders, setting forth the consideration per share to be paid by the Third
Party and the other material terms and conditions of such transaction. The
Drag-Along Notice shall state that the Remaining Holders shall be required to
participate in the proposed Transfer of shares of Common Stock to the Third
Party according to the terms and conditions of this Section 5.4(b) and for the
same type of consideration and for an amount of consideration per share not
less than that offered to Endo LLC by the Third Party. Within 15 days
following the receipt of the Drag-Along Notice, each of the Remaining Holders
shall deliver to a representative of Endo LLC designated in the Drag-Along
Notice certificates representing all shares of Common Stock held by such
Remaining Holder, duly endorsed, together with all other documents required to
be executed in connection with such transaction. In the event that any
Remaining Holder should fail to deliver such certificates to Endo LLC, the
Company shall cause the books and records of the Company to show that such
shares are bound by the provisions of this Section 5.4(b) and that such shares
may be Transferred only to the Third Party.



          Each Remaining Holder shall be required to participate in the proposed
Transfer to the Third Party by Transferring in connection therewith shares of
Common Stock equal to the product of (x) the total number of shares to be
acquired by the Third Party, times (y) a fraction, the numerator of which shall
be the total number of shares of Common Stock then owned by such Remaining
Holder, and the denominator of which shall be the total number of shares of
Common Stock then owned by Endo LLC plus the total number of shares of Common
Stock then owned by the Remaining Holders. The maximum number of shares of
Common Stock that may be Transferred by each Remaining Holder to the Third
Party in accordance with this Section 5.4(b) shall be the total number of
shares of Common Stock then owned by such Remaining Holder.



     If, within 120 days after Endo LLC gave the Drag-Along Notice, it shall
not have completed the Transfer of all the shares of Common Stock of the
Remaining


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Holders in accordance with this Section 5.4(b), Endo LLC shall return to each
of the Remaining Holders all certificates representing shares of Common Stock
that such Remaining Holder delivered for Transfer pursuant hereto and that were
not purchased pursuant to this Section 5.4(b).


          Promptly (but in no event later than 5 days) after the consummation of the
Transfer of Common Stock of Endo LLC and Remaining Holders pursuant to this
Section 5.4(b), Endo LLC shall give notice thereof to the Remaining Holders,
shall remit to each of the Remaining Holders the total consideration in respect
of the shares of Common Stock of such Remaining Holder which were so
transferred, and shall furnish such other evidence of the completion and time
of completion of such Transfer and the terms thereof as may be reasonably
requested by such Remaining Holders.



          2. Section 6.1 of the Stockholders Agreement shall hereafter read in full
as follows:



”               6.1     Incidental Registration. If Endo LLC, pursuant to that
certain registration rights agreement, dated as of
July 17, 2000, by and between the Company and Endo LLC (the “Endo LLC
Registration Rights Agreement”), demands that the Company register any of its
shares of Common Stock or any other of its common equity securities
(collectively, “Other Securities”) under the Act for
sale for cash to the public under the Act, then Endo LLC will at
such time give prompt written notice to each Management Stockholder or any of
their respective Permitted Transferees (each, a “Holder”) of its intention to
do so and of the rights of such Holder under this Section 6.1, at least 20 days
prior to the Company’s anticipated filing date of the registration statement
relating to such demand registration. Such notice shall offer each such Holder
the opportunity to include in such registration statement such number of shares
of Common Stock as such Holder may request, in accordance with this Section
6.1. Upon the written request of a Holder made within 10 days after the receipt
of Endo LLC’s notice (which request shall specify the number of shares of
Common Stock intended to be disposed of and the intended method of disposition
thereof), Endo LLC will use its best efforts to cause the Company to effect, in
connection with the registration of the Other Securities, the registration
under the Act of all shares of Common Stock which the Company has been so
requested to register, to the extent required to permit the disposition (in
accordance with such intended methods of disposition) of such shares of Common
Stock so requested to be registered, provided that:


               (a)     if, at any time after Endo LLC has given such written notice of the
Company’s intention to register any Other Securities pursuant to a demand by
Endo LLC and prior to the effective date of the registration statement filed in
connection with such demand registration, Endo LLC shall determine for any
reason not to demand such registration, Endo LLC shall give written notice of
such determination to the Holders, and thereupon the Company shall be relieved
of its obligation to register the shares of Common Stock requested to be
registered in connection with the demand registration of such Other Securities;



               (b)     if the registration referred to in the first sentence of Section
6.1(a) hereof is to be an underwritten registration on behalf of the Company,
and the managing underwriter(s) advises the Company in writing that, in such
firm’s opinion,



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such offering would be materially and adversely affected by the inclusion
therein of any of the Common Stock requested to be included therein, the
Company shall include in such registration: (i) first, all securities for which
Endo LLC has demanded registration (“Endo LLC Securities”), (ii) second, up to
the full number of shares of Common Stock requested to be included in such
registration by the Management Stockholders and the “Employee Stockholders” (as
such term is defined in that certain Amended and Restated Employee Stockholders
Agreement, dated as of July 14, 2000, by and among the Company, Kelso, Endo LLC
and the Employee Stockholders), which, in the good faith opinion of such firm,
can be sold without so materially and adversely affecting such offering (and,
if less than the full number of such shares of Common Stock, allocated pro rata
among the Management Stockholders and the Employee Stockholders on the basis of
the total number of shares of Common Stock requested to be included therein by
the Management Stockholders and the Employee Stockholders); provided, however,
that with respect to the Management Stockholders, if the underwriter in
connection with such registration determines that such offering would be
materially and adversely affected by the inclusion of Common Stock owned by the
Management Stockholders for reasons including, but not limited to, the status
of the owners of such securities as Management Stockholders such underwriter
may in its sole discretion exclude all or, in such manner as either in its sole
discretion deems appropriate, the Common Stock owned by Management Stockholders
from such offering, and (iii) third, an amount of other securities, if any,
requested to be included therein in excess of the number or dollar amount of
Company Securities and Common Stock of the Holders which, in the opinion of
such firm, can be so sold without materially and adversely affecting such
offering (allocated among the holders of such other securities in such
proportions as such holders and the Company may agree); and


               (c)     no registration of Common Stock effected under this Section 6.1 shall
relieve the Company of its obligation to effect a registration of shares of
Common Stock pursuant to the Endo LLC Registration Rights Agreement.”



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FOLLOWS]



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          IN WITNESS WHEREOF, the undersigned have duly executed this Amendment as
of the date first written above.




	 	 	 	 	 
	 	 	ENDO PHARMACEUTICALS HOLDINGS INC.
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	

	 	 	Name:

Title:
	 	 	 	 	 
	 	 	KELSO INVESTMENT ASSOCIATES V, L.P.
	 	 	 	 	 
	 	 	By: Kelso Partners V, L.P., General Partner
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	

	 	 	Name:

Title:
	 	 	 	 	 
	 	 	ENDO PHARMA LLC
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	

	 	 	Name:

Title:
	 	 	 	 	 
	 	 	AMENDING STOCKHOLDER
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	

	 	 	Name:

Title:









 






Exhibit A



Amending Stockholders



Carol A. Ammon

Jeffrey R. Black

Mariann T. McDonald

David A.H. Lee

Caroline B. Manogue

Peter A. Lankau



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