Document:

EX-4.2.3

 

Exhibit 4.2.3

AMENDMENT 2

TO

AMENDED AND RESTATED

EMPLOYEE STOCKHOLDERS AGREEMENT

     AMENDMENT 2 TO THE AMENDED AND RESTATED EMPLOYEE STOCKHOLDERS AGREEMENT (the “Amendment”), by
and among Endo Pharmaceuticals Holdings Inc., a Delaware corporation (the “Company”), Kelso
Investment Associates V, L.P., a Delaware limited partnership (together with Kelso Equity Partners
V, L.P., a Delaware limited partnership, “Kelso”), Endo Pharma LLC, a Delaware limited liability
company (“Endo LLC”), and stockholders of the Company set forth in Exhibit A hereto (each such
stockholder who executes this Amendment, an “Amending Stockholder,” and collectively, the “Amending
Stockholders”).

     WHEREAS, the Company, Kelso, Endo LLC and the Employee Stockholders (as defined below) are
parties to that certain Amended and Restated Employee Stockholders Agreement, dated as of July 14,
2000, as amended and restated on June 5, 2003, and as amended on June 28, 2004 (the “Employee
Stockholders Agreement”);

     WHEREAS, the Company, Kelso, Endo LLC and the Amending Stockholders desire to amend the
Employee Stockholders Agreement, to eliminate certain rights granted thereunder in connection with
Endo LLC’s sales of the Company’s shares of common stock;

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

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

     NOW, THEREFORE, in consideration of the mutual promises and obligations set forth in this
Amendment, the parties hereto agree that the Employee Stockholders Agreement is hereby amended as
follows:

     (i) Section 5.6(a) is hereby deleted in its entirety and the following shall be inserted in
its place:

     “The Company shall not be obligated to register any shares of Common Stock owned by the
Employee Stockholders, including shares of Common Stock underlying stock options, under the Act,
whether in connection with a registration by the Company

 

 

of any of its securities or otherwise, nor shall the Company be obligated to make any shares
available for sale by Employee Stockholders in any Take-Down Transaction. For purposes of this
section a “Take-Down Transaction” shall mean sales under any shelf registration statement through
one or more (including any combination thereof) (i) block trades, (ii) underwritten offerings,
(iii) derivative transactions with third parties, or (iv) other types of hedging transactions.”

     (ii) Sections 5.6(b) and (d) are hereby deleted in their entirety.

     (iii) Section 5.7 is hereby deleted in its entirety.

     (iv) Section 5.8 is hereby deleted in its entirety.

     (v) Section 5.9 is hereby deleted in its entirety.

     (vi) Schedule 1 is hereby deleted in its entirety.

2. NATURE OF AMENDMENT. Except as expressly set forth herein, this Amendment shall not by
implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and
remedies of any party under, the Employee Stockholders Agreement, nor alter, modify, amend or in
any way affect any of the terms, conditions, obligations, covenants or agreements contained in the
Employee Stockholders Agreement, all of which are ratified and affirmed in all respects and shall
continue in full force and effect. This Amendment shall apply and be effective only with respect
to the provisions of the Employee Stockholders Agreement specifically referred to in this
Amendment. All future references to the Employee Stockholders Agreement or any document that
references or incorporates the Employee Stockholders Agreement shall be deemed to refer to the
Employee Stockholders Agreement as amended by this Amendment.

2

 

     IN WITNESS WHEREOF, the undersigned have duly executed this Amendment this 20th day of
September, 2005.

	 	 	 	 	 
	 	ENDO PHARMACEUTICALS HOLDINGS INC.

 	 
	 	By:  	/s/ Jeffrey R. Black
 	 
	 	Name:  Jeffrey R. Black 	 	 
	 	Title:  Chief Financial Officer	 	 
	 
	 	KELSO INVESTMENT ASSOCIATES V, L.P.

By: Kelso Partners V, L.P., General Partner

 	 
	 	By: 	/s/ David I. Wahrhaftig
 	 
	 	 	 	 
	 	 	 	 
	 
	 	ENDO PHARMA LLC

 	 
	 	By:  	/s/ Jeffrey R. Black
 	 
	 	Name:  Jeffrey R. Black 	 	 
	 	Title:  Chief Financial Officer 	 	 
	 
	 	AMENDING STOCKHOLDER

 	 
	 	By:  	/s/ [Amending Stockholder]
 	 
	 	Name:  [Amending Stockholder]	 
	 	 	 	 

3EX-4.3

 

Exhibit 4.3

August 10, 2005

Dear employee/former employee,

     We refer to the Amended and Restated Employee Stockholders Agreement by and among Endo
Pharmaceuticals Holdings Inc. (the “Company”), Kelso Investment Associates V, L.P. (together with
Kelso Equity Partners V, L.P., “Kelso”), Endo Pharma LLC (“Endo LLC”) and the stockholders of the
Company party thereto (the “Employee Stockholders”), dated as of July 14, 2000, as amended and
restated on June 5, 2003, and as amended on June 28, 2004 (the “Employee Stockholders Agreement”).
All capitalized terms used herein, and not otherwise defined, shall have the meanings assigned to
them in the Employee Stockholders Agreement.

     Pursuant to Section 7.5 of the Employee Stockholders Agreement, the Employee Stockholders
Agreement may be amended by Employee Stockholders owning a majority of the outstanding shares of
Common Stock then owned by all Employee Stockholders. By executing this letter agreement, you
hereby agree to Amendment 2 to the Employee Stockholders Agreement, in the form set forth as Annex
A hereto.

     Pursuant to Section 7.5 of the Employee Stockholders Agreement, Endo LLC may, at any time in
its sole discretion, release all or a portion of any Employee Stockholder’s shares of Common Stock
from the Employee Stockholders Agreement, and upon such release, such Employee Stockholder will no
longer be entitled to the benefits under the Employee Stockholders Agreement with respect to such
shares of Common Stock. Subject to and upon the effectiveness of this letter agreement and subject
to your execution of this letter agreement and Amendment 2 to the Employee Stockholders Agreement,
in the form set forth as Annex A hereto, Endo LLC hereby releases you from the Employee
Stockholders Agreement.

     Effective upon your release from the Employee Stockholders Agreement, you hereby acknowledge
that you will no longer be entitled to any benefits under the Employee Stockholders Agreement with
respect to shares of Common Stock owned by you now or in the future, including shares of Common
Stock (i) to be received to you upon exercise of stock options under the Amended and Restated 1997
Employee Stock Option Plan and the Amended and Restated 2000 Supplemental Employee Stock Option
Plan (collectively, the “Option Plans”), and (ii) acquired by you pursuant to the 1997 Employee
Stock Purchase Plan.

 

 

     Effective on October 24, 2005, upon your release from the Employee Stockholders Agreement, and
payment of all applicable taxes, you will no longer be bound by the restrictions on transfer of
shares of Common Stock set forth in Article I of the Employee Stockholders Agreement. To provide
for an orderly sale of shares of Common Stock, you hereby agree that, beginning on October 24, 2005
(or such earlier date as the Company may inform you) until January 1, 2006, you will not sell more
than 10% of your shares of Common Stock on any single day and you will not sell more than an
aggregate of 25% of your shares in any calendar week. The references to “your shares” in the
preceding sentence mean the number of shares of Common Stock set forth on the signature page
hereto. After January 1, 2006, you will no longer be bound by the above volume restrictions.
Shares of Common Stock issuable upon exercise of stock options under the Endo Pharmaceuticals
Holdings Inc. 2004 Stock Incentive Plan and the Endo Pharmaceuticals Holdings Inc. 2000 Stock
Incentive Plan will not be subject to the restrictions on sale set forth in this paragraph. You
hereby acknowledge that all sales of shares of Common Stock by you will be made in compliance with
the Company’s insider trading policy (if applicable), which is available on the Company’s intranet
site, and all applicable federal and state securities laws.

     In connection with your release from the Employee Stockholders Agreement, you hereby waive any
and all rights you may have now or in the future under Section 5.6(d) of the Employee Stockholders
Agreement and Schedule 1 thereto with respect to the registration of shares of Common Stock on the
Registration Statement on Form S-3, as amended, filed by the Company with the Securities and
Exchange Commission on April 30, 2004 relating to the sale of up to 30,000,000 shares of Common
Stock by Endo LLC and the other selling shareholders for whom shares were reserved therein (the
“Shelf Registration Statement”). To the extent you elected to participate as a selling shareholder
in the Shelf Registration Statement, you hereby (i) consent to (a) be removed as a selling
shareholder; (b) have the shares reserved for sale by you reallocated to any of the other selling
shareholders named therein; and (c) to have any increase pursuant to Rule 462(b) of the Act in the
number of shares registered under the Shelf Registration Statement allocated to any of the other
selling shareholders named therein; and (ii) agree to take such actions as may be requested by the
Company to terminate the custody arrangements made in June 2004 in connection with the Shelf
Registration Statement, and to withdraw your shares from any such arrangements, including executing
the termination of custody agreement and power of attorney, in the form set forth as Annex B
hereto. In addition, you hereby waive any and all rights you may have now or in the future with
respect to the registration of shares of Common Stock under the Securities Act of 1933, including
any rights you may have pursuant to Article V of the Employee Stockholders Agreement, and any
rights you may have pursuant to the Registration Rights Agreement by and between the Company and
Endo LLC, dated as of July 17, 2000, as amended as of June 30, 2003 or the Shelf Registration
Agreement by and between the Company and Endo LLC, dated as of April 30, 2004, as amended as of
June 10, 2004.

2

 

     This letter agreement will become effective for all Employee Stockholders who have executed
it, upon its execution by the Company, Endo LLC, Kelso and Employee Stockholders owning a majority
of the outstanding shares of Common Stock then owned by all Employee Stockholders. We will inform
you when this letter agreement is effective by a further communication.

     Please acknowledge your agreement with the foregoing by signing and dating below.

	 	 	 	 	 
	 	Yours truly,

ENDO PHARMACEUTICALS HOLDINGS INC.

 	 
	 	By:  	/s/ Jeffrey R. Black
 	 
	 	Name:  Jeffrey R. Black 	 
	 	Title:   Chief Financial Officer 	 
	 
	 	ENDO PHARMA LLC

 	 
	 	By:  	/s/ Jeffrey R. Black
 	 
	 	Name:  Jeffrey R. Black 	 
	 	Title:   Chief Financial Officer 	 

	 	 	 	 	 
	 	KELSO INVESTMENT ASSOCIATES V, L.P.

By: Kelso Partners V, L.P., General Partner

 	 
	 	By:  	/s/ David I. Wahrhaftig
 	 
	 	Name:  	 
	 	Title:  	 
	 

AGREED TO AND ACKNOWLEDGED BY:

	 
	/s/ [Employee Stockholder]

Total number of shares of Common Stock: __________________

3

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