Exhibit 10.1


 


	
   

  	
  Deutsche Bank 

  
	
   

  	
   

  
	
   

  	
  Deutsche Bank AG, London Branch

  
	
   

  	
  Winchester house

  
	
   

  	
  1 Great Winchester St,

  
	
   

  	
  London EC2N 2DB

  
	
   

  	
  Telephone: 44 20 7545 8000

  
	
   

  	
   

  
	
   

  	
  c/o Deutsche Bank Securities Inc.

  
	
   

  	
  60 Wall Street

  
	
   

  	
  New York, NY 10005

  
	
   

  	
  Telephone: 212-250-2500

  



 


	
  DATE:

  	
  May 21,
  2009

  
	
   

  	
   

  
	
  TO:

  	
  Cephalon, Inc.

  
	
  ATTENTION:

  	
  Gerald J. Pappert

  
	
  FACSIMILE:

  	
  (610) 738-6258

  
	
   

  	
   

  
	
  FROM:

  	
  Deutsche Bank AG, London Branch

  
	
  TELEPHONE:

  	
  44
  20 7545 0556

  
	
  FACSIMILE:

  	
  44
  11 3336 2009

  
	
   

  	
   

  
	
  SUBJECT:

  	
  Equity
  Derivatives Confirmation

  
	
   

  	
   

  
	
  REFERENCE NUMBER(S):

  	
  331714
  and 332054

  



 


The purpose of this
facsimile agreement (this “Confirmation”) is to confirm the amended and restated
terms and conditions of the transaction entered into between Deutsche Bank AG, London Branch (“Deutsche”) and Cephalon, Inc. (“Counterparty”) on the Trade Date specified below (the “Transaction”).  This amended and
restated Confirmation constitutes a “Confirmation” as referred to in the ISDA
Master Agreement specified below and amends and restates in its entirety the equity
derivatives confirmation regarding options on note hedging units, dated May 21,
2009, and subject to the Agreement (the “Original Confirmation”). 
All references to the Original Confirmation in the Agreement or in other
documentation between the parties shall be to this amended and restated
Confirmation.  This amended and restated
Confirmation constitutes the entire agreement and understanding of the parties
with respect to the subject matter and terms of the Transaction and supersedes
all prior or contemporaneous written and oral communications with respect
thereto.


 


DEUTSCHE BANK AG IS NOT REGISTERED AS A BROKER OR DEALER UNDER THE U.S.
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 
DEUTSCHE BANK SECURITIES INC. (“AGENT”) HAS ACTED SOLELY AS AGENT IN CONNECTION
WITH THE TRANSACTION AND HAS NO OBLIGATION, BY WAY OF ISSUANCE, ENDORSEMENT,
GUARANTEE OR OTHERWISE WITH RESPECT TO THE PERFORMANCE OF EITHER PARTY UNDER
THE TRANSACTION.  DEUTSCHE BANK AG,
LONDON BRANCH IS NOT A MEMBER OF THE SECURITIES INVESTOR PROTECTION CORPORATION
(SIPC).


 


	
  Chairman of the Supervisory Board: Clemens Börsig Board
  of Managing Directors: Hermann-Josef Lamberti, Josef Ackermann, Dr. Hugo
  Banziger, Anthony DiIorio

  	
   

  	
  Deutsche
  Bank AG is regulated by the FSA for the conduct of designated investment
  business in the UK, is a member of the London Stock Exchange and is a limited
  liability company incorporated in the Federal Republic of Germany HRB No. 30
  000 District Court of Frankfurt am Main; Branch Registration No. in England
  and Wales BR000005, Registered address: Winchester House, 1 Great Winchester
  Street, London EC2N 2DB.

  



 

















 


The definitions contained in the 2002 ISDA Equity Derivatives
Definitions (the “Equity Definitions”),
as published by the International Swaps and Derivatives Association, Inc.,
are incorporated into this Confirmation. 
In the event of any inconsistency between the Equity Definitions and the
terms of this Confirmation, the terms of this Confirmation shall govern.  For the purposes of the Equity Definitions,
each reference herein to a Note Hedging Unit shall be deemed to be a reference
to a Call or an Option, as context requires.


 


This Confirmation evidences a complete and binding agreement between
Deutsche and Counterparty as to the terms of the Transaction to which this
Confirmation relates.  This Confirmation
shall supplement, form a part of, and be subject to an agreement (the “Agreement”) in the form of the ISDA 2002
Master Agreement as if Deutsche and Counterparty had executed an agreement in
such form (without any Schedule but with the elections set forth in this
Confirmation).  For the avoidance of
doubt, the Transaction shall be the only transaction under the Agreement.


 


The
Transaction shall be considered a Share Option Transaction for purposes of the
Equity Definitions, and shall have the following terms:


 


	
  General:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Trade
  Date:

  	
   

  	
  May 21,
  2009.

  
	
   

  	
   

  	
   

  
	
  Effective
  Date:

  	
   

  	
  The
  closing date for the initial issuance of the Convertible Notes.

  
	
   

  	
   

  	
   

  
	
  Transaction
  Style:

  	
   

  	
  Modified
  American, as described below under “Procedure for Exercise”.

  
	
   

  	
   

  	
   

  
	
  Transaction
  Type:

  	
   

  	
  Note
  Hedging Units.

  
	
   

  	
   

  	
   

  
	
  Seller:

  	
   

  	
  Deutsche.

  
	
   

  	
   

  	
   

  
	
  Buyer:

  	
   

  	
  Counterparty.

  
	
   

  	
   

  	
   

  
	
  Shares:

  	
   

  	
  The
  common stock, par value USD 0.01 per share, of Counterparty.

  
	
   

  	
   

  	
   

  
	
  Convertible
  Notes:

  	
   

  	
  USD
  500,000,000 principal amount of 2.5% Convertible Senior Subordinated Notes of
  Counterparty due May 1, 2014, including the Convertible Notes issued
  pursuant to the underwriters’ exercise of their option to purchase additional
  Convertible Notes pursuant to the Underwriting Agreement (as defined below),
  offered pursuant to a Prospectus Supplement dated May 21, 2009 to the
  Prospectus dated May 25, 2006 (the “Prospectus
  Supplement”) and issued pursuant to the indenture to be dated as
  of the closing date of the initial issuance of the Convertible Notes, by and
  between Counterparty and U.S. Bank National Association, as trustee (as may
  be amended, modified or supplemented from time to time, but only if such
  amendment, modification or supplement does not constitute an Amendment Event
  (as defined below) or is consented to by Deutsche in writing, the “Indenture”). Certain defined terms used herein have the
  meanings assigned to them in the Indenture as described in the Prospectus
  Supplement. In the event of any inconsistency between the terms defined in
  the Indenture or defined in the Prospectus Supplement and this Confirmation,
  this Confirmation shall govern. For the avoidance of doubt, references herein
  to provisions of the Indenture are based on the 

  



 


2

















 


	
   

  	
   

  	
  description
  of the Convertible Notes set forth in the Prospectus Supplement. If the
  relevant provisions of the Indenture differ in any material respect from
  those described in the Prospectus Supplement, the parties will, if
  appropriate, amend this Confirmation in good faith to preserve the economic
  intent of the parties.

  
	
   

  	
   

  	
   

  
	
  Number
  of Note Hedging Units:

  	
   

  	
  500,000
  (being the sum of the Number of Initial Note Hedging Units and the Number of
  Additional Note Hedging Units)

  
	
   

  	
   

  	
   

  
	
  Number
  of Initial Note Hedging Units:

  	
   

  	
  435,000

  
	
   

  	
   

  	
   

  
	
  Number
  of Additional Note Hedging Units:

  	
   

  	
  65,000

  
	
   

  	
   

  	
   

  
	
  Note
  Hedging Unit Entitlement:

  	
   

  	
  The
  lesser of (a) USD 1,000 divided by
  the Strike Price and (b) the “Conversion Rate” (as such term is defined
  in the Indenture as described in the Prospectus Supplement under “Description
  of the Notes — Conversion of Notes — General”) at such time.

  
	
   

  	
   

  	
   

  
	
  Strike
  Price:

  	
   

  	
  USD
  69.00.

  
	
   

  	
   

  	
   

  
	
  Number
  of Shares:

  	
   

  	
  The
  product of the Number of Note Hedging Units and the Note Hedging Unit
  Entitlement.

  
	
   

  	
   

  	
   

  
	
  Premium:

  	
   

  	
  As
  provided in Annex A to this Confirmation.

  
	
   

  	
   

  	
   

  
	
  Additional
  Premium:

  	
   

  	
  As
  provided in Annex A to this Confirmation. The Additional Premium shall be
  paid by Counterparty to Deutsche on the Premium Payment Date.

  
	
   

  	
   

  	
   

  
	
  Premium
  Payment Date:

  	
   

  	
  The
  Effective Date.

  
	
   

  	
   

  	
   

  
	
  Exchange:

  	
   

  	
  The
  NASDAQ Global Select Market.

  
	
   

  	
   

  	
   

  
	
  Related
  Exchanges:

  	
   

  	
  All
  Exchanges.

  
	
   

  	
   

  	
   

  
	
  Calculation
  Agent:

  	
   

  	
  Deutsche.

  
	
   

  	
   

  	
   

  
	
  Procedure for Exercise:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Potential
  Exercise Dates:

  	
   

  	
  Each
  Conversion Date.

  
	
   

  	
   

  	
   

  
	
  Conversion
  Date:

  	
   

  	
  Each
  “Conversion Date” as defined in the Indenture as described in the Prospectus
  Supplement under “Description of the Notes — Conversion of Notes — General”.

  
	
   

  	
   

  	
   

  
	
  Required
  Exercise on Conversion Dates:

  	
   

  	
  On
  each Conversion Date, a number of Note Hedging Units equal to the number of
  Convertible Notes in denominations of USD 1,000 principal amount submitted
  for conversion in respect of such Conversion Date in accordance with the
  terms of the Indenture shall be exercised automatically, subject to “Notice
  of Exercise” below; provided
  that, if 

  



 


3

















 


	
   

  	
   

  	
  Counterparty
  has elected the “Exchange in Lieu of Conversion” option (as described in the
  Prospectus Supplement under “Description of the Notes — Conversion of Notes —
  Exchange in Lieu of Conversion”), the related number of Note Hedging Units
  shall not be exercised.

  
	
   

  	
   

  	
   

  
	
  Expiration
  Date:

  	
   

  	
  May 1,
  2014

  
	
   

  	
   

  	
   

  
	
  Multiple
  Exercise:

  	
   

  	
  Applicable,
  as provided under “Required Exercise on Conversion Dates”.

  
	
   

  	
   

  	
   

  
	
  Automatic
  Exercise:

  	
   

  	
  As
  provided under “Required Exercise on Conversion Dates”.

  
	
   

  	
   

  	
   

  
	
  Notice
  of Exercise:

  	
   

  	
  Notwithstanding
  anything to the contrary in the Equity Definitions, in order to exercise any
  Note Hedging Units, Counterparty must notify Deutsche in writing (and use
  reasonable efforts to confirm receipt by telephone to Deutsche’s Origination
  Convertible Desk (telephone: 212-250-5600)) prior to 5:00 PM, New York City
  time, on the day that is one Scheduled Trading Day prior to the first day of
  the “Conversion Period” (as defined in the Indenture as described in the
  Prospectus Supplement under “Description of the Notes — Conversion of Notes —
  Settlement upon Conversion”) relating to the Convertible Notes converted on
  the Conversion Date relating to the relevant Exercise Date (the “Notice Deadline”) of (i) the number
  of Note Hedging Units being exercised on such Exercise Date and (ii) the
  scheduled commencement date of the “Conversion Period” and the scheduled
  settlement date under the Indenture for the Convertible Notes converted on the
  Conversion Date corresponding to such Exercise Date; provided that, notwithstanding the
  foregoing, such notice shall be effective if given after the Notice Deadline
  referred to above, but prior to 5:00 PM New York City time, on the fifth
  Scheduled Trading Day of such “Conversion Period”, in which event the
  Calculation Agent shall have the right to adjust the Settlement Amount as
  appropriate to reflect the additional costs (including, but not limited to,
  hedging mismatches and market losses) and expenses actually incurred by
  Deutsche in connection with its hedging activities (including the unwinding
  of any hedge position) as a result of Deutsche not having received such
  notice prior to the Notice Deadline; provided
  further that in respect of Convertible Notes with a Conversion
  Date during the period beginning on, and including the 30th scheduled “Trading
  Day” (as defined in the Indenture as described in the Prospectus Supplement
  under “Description of the Notes — Conversion of Notes — Conversion upon
  Satisfaction of Market Price Condition”) prior to the “Maturity Date” (as
  defined in the Indenture as described in the Prospectus Supplement under
  “Description of the Notes — General”) and ending on the close of business on
  the second scheduled “Trading Day” immediately preceding the “Maturity Date”,
  the Notice Deadline in respect of the information set forth in clauses
  (i) and (ii) above shall be 5:00 PM, New York City time, on the
  scheduled “Trading Day” immediately preceding the “Maturity Date”.

  



 


4

















 


	
  Settlement Terms:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Net
  Share Settlement:

  	
   

  	
  In
  lieu of the obligations set forth in Sections 8.1 and 9.1 of the Equity
  Definitions, and subject to “Notice of Exercise” above, in respect of any
  Exercise Date occurring on a Conversion Date, Deutsche shall deliver to
  Counterparty, on the related Settlement Date, the Settlement Amount.For the
  avoidance of doubt, to the extent Deutsche is obligated to deliver Shares
  hereunder, the provisions of Sections 9.8, 9.9, 9.10, 9.11 and 9.12 of the
  Equity Definitions shall be applicable to any such delivery of Shares, except
  that all references in such provisions to “Physical Settlement” and
  “Physically-settled” shall be read as references to “Net Share Settlement”
  and “Net Share Settled”; and provided
  that the Representation and Agreement contained in Section 9.11 of the
  Equity Definitions shall be modified by excluding any representations therein
  relating to restrictions, obligations, limitations or requirements under
  applicable securities laws as a result of the fact that Counterparty is the
  issuer of the Shares.

  
	
   

  	
   

  	
   

  
	
  Settlement
  Amount:

  	
   

  	
  A
  number of Shares (and cash in lieu of fractional Shares, if any, as provided
  below) equal to the aggregate number of Shares that Counterparty is obligated
  to deliver to the holder(s) of the Convertible Notes converted on such
  Conversion Date pursuant to the section of the Indenture as described in the
  Prospectus Supplement under “Description of the Notes — Conversion of Notes —
  Settlement upon Conversion” (the “Deliverable
  Shares”) (except that such number of Deliverable Shares shall be
  determined without taking into consideration any rounding pursuant to the
  section of the Indenture described in the Prospectus Supplement under
  “Description of the Notes — Conversion of Notes — Settlement upon Conversion”
  and shall be rounded down to the nearest whole number) and cash in lieu of
  fractional Shares, if any, resulting from such rounding (with the value of
  any such fractional Shares determined pursuant to the section of the
  Indenture as described in the Prospectus Supplement under “Description of the
  Notes — Conversion of Notes — Settlement upon Conversion”) (collectively, the
  “Convertible Obligation”); provided that such obligation shall be
  determined excluding any Shares or cash that Counterparty is obligated to
  deliver to holder(s) of the Convertible Notes as a result of any
  adjustments to the “Conversion Rate” for the issuance of additional Shares or
  cash as set forth in the section of the Indenture as described in the
  Prospectus Supplement under “Description of the Notes — Adjustment to Shares
  Delivered upon Conversion upon a Make Whole Adjustment Event” (a “Fundamental Change Adjustment”) or any
  voluntary adjustment pursuant to the section of the Indenture as described in
  the Prospectus Supplement under the seventh to last paragraph of “Description
  of the Notes — Conversion of Notes — Conversion Price Adjustments” (i.e. the
  paragraph commencing with “We are permitted to reduce the conversion price...”)
  (a “Discretionary Adjustment”); provided further that, if such exercise
  relates to the conversion of Convertible Notes in connection with which
  holders thereof are entitled to receive additional Shares or cash pursuant to
  a 

  



 


5

















 


	
   

  	
   

  	
  Fundamental
  Change Adjustment, then, notwithstanding the foregoing, the Settlement Amount
  shall include such additional Shares or cash, except that the Settlement
  Amount shall be capped so that the value of the Settlement Amount per Note
  Hedging Unit (with the value of the Shares included in the Settlement Amount
  determined by the Calculation Agent using the volume-weighted average price
  per share on the last day of the relevant “Conversion Period”) does not
  exceed the amount as determined by the Calculation Agent that would be
  payable by Seller pursuant to Section 6 of the Agreement if such
  Conversion Date were an Early Termination Date resulting from an Additional
  Termination Event with respect to which the Transaction (except that, for
  purposes of determining such amount (x) the Number of Note Hedging Units
  shall be deemed to be equal to the number of Note Hedging Units exercised on
  such Exercise Date and (y) such amount payable will be determined as if
  the section of the Indenture regarding a Fundamental Change Adjustment were
  deleted) was the sole Affected Transaction and Counterparty was the sole
  Affected Party (determined without regard to provisions under “Alternative Calculations and Deutsche Payment on
  Early Termination and on Certain Extraordinary Events” in this
  Confirmation). If Counterparty is permitted or required to exercise
  discretion under the terms of the Indenture with respect to any
  determination, calculation or adjustment relevant to conversion of the
  Convertible Notes including, but not limited to, the volume-weighted average
  price of the Shares, Counterparty shall consult with Deutsche with respect
  thereto and the Calculation Agent shall make such determination, calculation
  or adjustment for purposes of the Transaction. For the avoidance of doubt, if
  the “Daily Conversion Value” (as defined in the Indenture as described in the
  Prospectus Supplement under “Description of the Notes — Conversion of Notes —
  Settlement upon Conversion”) for each of the “Trading Days” in the relevant
  “Conversion Period” is less than or equal to USD 40, Deutsche will have no
  delivery obligation hereunder.

  
	
   

  	
   

  	
   

  
	
  Notice
  of Delivery Obligation:

  	
   

  	
  No
  later than the Scheduled Trading Day immediately following the last day of
  the relevant “Conversion Period”, Counterparty shall give Deutsche notice of
  the final number of Shares (and cash in lieu of fractional Shares, if any)
  comprising the Convertible Obligation (it being understood, for the avoidance
  of doubt, that the requirement of Counterparty to deliver such notice shall
  not limit Counterparty’s obligations with respect to Notice of Exercise, as
  set forth above, in any way).

  
	
   

  	
   

  	
   

  
	
  Settlement
  Date:

  	
   

  	
  In
  respect of an Exercise Date occurring on a Conversion Date, the settlement
  date for the Shares to be delivered under the Convertible Notes under the
  terms of the Indenture; provided
  that the Settlement Date will not be prior to the Exchange Business Day
  immediately following the date on which Counterparty gives notice to Deutsche
  of such Settlement Date prior to 5:00 PM, New York City time.

  
	
   

  	
   

  	
   

  
	
  Settlement
  Currency:

  	
   

  	
  USD.

  



 


6

















 


	
  Restricted
  Certificated Shares:

  	
   

  	
  Notwithstanding
  anything to the contrary in the Equity Definitions, Deutsche may, in whole or
  in part, deliver Shares in certificated form representing the Share portion
  of the Settlement Amount to Counterparty in lieu of delivery through the
  Clearance System.

  
	
   

  	
   

  	
   

  
	
  Share Adjustments:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Potential
  Adjustment Events:

  	
   

  	
  Notwithstanding
  Section 11.2(e) of the Equity Definitions, a “Potential Adjustment
  Event” means any occurrence of any event or condition, as set forth in the
  section of the Indenture as described in the Prospectus Supplement under
  “Description of the Notes — Conversion of Notes — Conversion Price
  Adjustments”, that would result in an adjustment to the Conversion Rate of
  the Convertible Notes; provided that
  in no event shall there be any adjustment hereunder as a result of an
  adjustment to the Conversion Rate pursuant to a Fundamental Change Adjustment
  or a Discretionary Adjustment.

  
	
   

  	
   

  	
   

  
	
  Method
  of Adjustment:

  	
   

  	
  Calculation
  Agent Adjustment, which means that, notwithstanding
  Section 11.2(c) of the Equity Definitions, upon any adjustment to
  the Conversion Rate of the Convertible Notes pursuant to the Indenture (other
  than a Fundamental Change Adjustment or a Discretionary Adjustment), the
  Calculation Agent shall make a corresponding adjustment to any one or more of
  the Strike Price, Number of Note Hedging Units, the Note Hedging Unit Entitlement
  and any other variable relevant to the exercise, settlement, payment or other
  terms of the Transaction.

  
	
   

  	
   

  	
   

  
	
  Extraordinary Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Merger
  Events:

  	
   

  	
  Notwithstanding
  Section 12.1(b) of the Equity Definitions, a “Merger Event” means
  the occurrence of any event or condition set forth in the section of the
  Indenture as described in the Prospectus Supplement under the ninth to last
  paragraph of “Description of the Notes — Conversion of Notes — Conversion
  Price Adjustments” (i.e. the paragraph commencing with “In the event of: any
  reclassification...”).

  
	
   

  	
   

  	
   

  
	
  Notice
  of Merger Consideration:

  	
   

  	
  Upon
  the occurrence of a Merger Event that causes the Shares to be converted into
  or exchanged for more than a single type of consideration (determined based
  in part upon the form of election of the holders of Shares), Counterparty
  shall promptly (but in any event prior to the effective date of the Merger
  Event) notify the Calculation Agent of the weighted average of the kind and
  amounts of consideration to be received by the holders of Shares in any
  Merger Event who affirmatively make such an election.

  
	
   

  	
   

  	
   

  
	
  Consequences
  of Merger Events:

  	
   

  	
  Notwithstanding
  Section 12.2 of the Equity Definitions, upon the occurrence of a Merger
  Event, the Calculation Agent shall make the corresponding adjustment in
  respect of any adjustment under the Indenture to any one or more of the
  nature of the Shares, the Strike 

  



 


7

















 


	
   

  	
   

  	
  Price,
  the Number of Note Hedging Units, the Note Hedging Unit Entitlement and any
  other variable relevant to the exercise, settlement, payment or other terms
  of the Transaction, to the extent an analogous adjustment is made under the
  Indenture; provided that such
  adjustment shall be made without regard to any adjustment to the Conversion
  Rate for the issuance of additional shares or cash pursuant to a Fundamental
  Change Adjustment or a Discretionary Adjustment.

  
	
   

  	
   

  	
   

  
	
  Nationalization,
  Insolvency and Delisting:

  	
   

  	
  Cancellation
  and Payment (Calculation Agent Determination); provided that in addition to the provisions of
  Section 12.6(a)(iii) of the Equity Definitions, it shall also
  constitute a Delisting if the Exchange is located in the United States and
  the Shares are not immediately re-listed, re-traded or re-quoted on any of
  the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ
  Global Market (or their respective successors); if the Shares are immediately
  re-listed, re-traded or re-quoted on any such exchange or quotation system,
  such exchange or quotation system shall be deemed to be the Exchange. For the
  avoidance of doubt, the occurrence of any event that is a Merger Event and
  would otherwise have been a Delisting will have the consequence specified for
  the relevant Merger Event.

  
	
   

  	
   

  	
   

  
	
  Additional Disruption Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Change
  in Law:

  	
   

  	
  Applicable; provided that
  Section 12.9(a)(ii) of the Equity Definitions is hereby amended
  (i) by the replacement of the word “Shares” with “Hedge Positions”;
  (ii) by adding the phrase “or public announcement” immediately after the
  phrase “due to the promulgation” in the third line thereof and adding the
  phrase “formal or informal” before the word “interpretation” in the same
  line; and (iii) immediately following the word “Transaction” in clause
  (X) thereof, adding the phrase “in the manner contemplated by the
  Hedging Party on the Trade Date, unless the illegality is due to an act or
  omission of the party seeking to elect termination of the Transaction”.

  
	
   

  	
   

  	
   

  
	
  Failure
  to Deliver:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Insolvency
  Filing:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Increased
  Cost of Hedging:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Hedging
  Party:

  	
   

  	
  Deutsche
  for all applicable Additional Disruption Events

  
	
   

  	
   

  	
   

  
	
  Determining
  Party:

  	
   

  	
  Deutsche
  for all applicable Additional Disruption Events

  
	
   

  	
   

  	
   

  
	
  Acknowledgements:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Non-Reliance:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Agreements
  and Acknowledgements

  	
   

  	
   

  
	
  Regarding
  Hedging Activities:

  	
   

  	
  Applicable

  



 


8

















 


	
  Additional
  Acknowledgements:

  	
   

  	
  Applicable

  



 


Mutual Representations: Each
of Deutsche and Counterparty represents and warrants to, and agrees with, the
other party that:


 


	
   

  	
  (i)

  	
  Tax Disclosure.  Notwithstanding anything to the
  contrary herein, in the Equity Definitions or in the Agreement, and
  notwithstanding any express or implied claims of exclusivity or proprietary
  rights, the parties (and each of their employees, representatives or other
  agents) are authorized to disclose to any and all persons, beginning
  immediately upon commencement of their discussions and without limitation of
  any kind, the tax treatment and tax structure of the Transaction, and all
  materials of any kind (including opinions or other tax analyses) that are
  provided by either party to the other relating to such tax treatment and tax
  structure.

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  Commodity Exchange Act.  It is an
  “eligible contract participant” within the meaning of Section 1a(12) of
  the U.S. Commodity Exchange Act, as amended (the “CEA”).  The Transaction has been subject to
  individual negotiation by the parties. 
  The Transaction has not been executed or traded on a “trading facility”
  as defined in Section 1a(33) of the CEA. 
  It has entered into the Transaction with the expectation and intent that the
  Transaction shall be performed to its termination date.

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  Securities Act.  It is a
  “qualified institutional buyer” as defined in Rule 144A under the U.S.
  Securities Act of 1933, as amended (the “Securities Act”),
  or an “accredited investor” as defined under the Securities Act.

  
	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
  ERISA.  The assets
  used in the Transaction (1) are not assets of any “plan” (as such term
  is defined in Section 4975 of the U.S. Internal Revenue Code (the “Code”)) subject to Section 4975 of the Code or any
  “employee benefit plan” (as such term is defined in Section 3(3) of
  the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) subject to Title I of ERISA, and (2) do not
  constitute “plan assets” within the meaning of Department of Labor Regulation
  2510.3-101, 29 CFR Section 2510-3-101.

  
	
   

  	
   

  	
   

  
	
  Counterparty
  Representations: In addition
  to the representations and warranties in the Agreement and those contained
  elsewhere herein, Counterparty represents, warrants, acknowledges and
  covenants that:

  
	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Counterparty is not as of the Trade Date,
  and shall not be after giving effect to the transactions contemplated hereby,
  “insolvent” (as such term is defined in Section 101(32) of the U.S.
  Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would
  be able to purchase a number of Shares equal to the Number of Shares in
  compliance with the laws of the jurisdiction of Counterparty’s incorporation
  or organization.

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  Counterparty
  shall provide written notice to Deutsche as soon as reasonably practicable
  upon obtaining knowledge of the occurrence of any event that would constitute
  an Event of Default, a Potential Event of Default, a Potential Adjustment
  Event, a Merger Event or any other Extraordinary Event; provided,
  however, that should Counterparty be in possession of material
  non-public information regarding Counterparty, Counterparty shall not
  communicate such information to Deutsche in connection with this Transaction.

  



 


9
















 


	
   

  	
  (iii)

  	
  Counterparty has (and shall at all times during the
  Transaction have) the capacity and authority to repurchase the Shares
  underlying the Transaction and has not entered into the Transaction with the
  intent to avoid any regulatory filings.

  
	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
  Counterparty’s
  financial condition is such that it has no need for liquidity with respect to
  its investment in the Transaction and no need to dispose of any portion
  thereof to satisfy any existing or contemplated undertaking or indebtedness.

  
	
   

  	
   

  	
   

  
	
   

  	
  (v)

  	
  Counterparty’s
  investments in and liabilities in respect of the Transaction, which it
  understands are not readily marketable, are not disproportionate to its net
  worth, and Counterparty is able to bear any loss in connection with the
  Transaction, including the loss of its entire investment in the Transaction.

  
	
   

  	
   

  	
   

  
	
   

  	
  (vi)

  	
  The
  representations and warranties of Counterparty set forth in Section 3 of
  the Agreement and Section 1 of the Underwriting Agreement dated
  May 21, 2009 between Counterparty and Deutsche Bank Securities Inc. as
  representative of the underwriters party thereto (the “Underwriting Agreement”) are true and
  correct and are hereby deemed to be repeated to Deutsche as if set forth
  herein.

  
	
   

  	
   

  	
   

  
	
   

  	
  (vii)

  	
  Counterparty
  understands, agrees and acknowledges that Deutsche has no obligation or
  intention to register the Transaction under the Securities Act, any state
  securities law or other applicable federal securities law.

  
	
   

  	
   

  	
   

  
	
   

  	
  (viii)

  	
  Counterparty is not,
  and after giving effect to the transactions contemplated hereby will not be,
  an “investment company” as such term is defined in the U.S. Investment
  Company Act of 1940, as amended.

  
	
   

  	
   

  	
   

  
	
   

  	
  (ix)

  	
  Counterparty
  understands, agrees and acknowledges that no obligations of Deutsche to it
  hereunder shall be entitled to the benefit of deposit insurance and that such
  obligations shall not be guaranteed by any affiliate of Deutsche or any
  governmental agency.

  
	
   

  	
   

  	
   

  
	
   

  	
  (x)

  	
  (A) Counterparty is
  acting for its own account, and it has made its own independent decisions to
  enter into the Transaction and as to whether the Transaction is appropriate
  or proper for it based upon its own judgment and upon advice from such
  advisers as it has deemed necessary, (B) Counterparty is not relying on
  any communication (written or oral) of Deutsche or any of its affiliates as
  investment advice or as a recommendation to enter into the Transaction (it
  being understood that information and explanations related to the terms and
  conditions of the Transaction shall not be considered investment advice or a
  recommendation to enter into the Transaction) and (C) no communication
  (written or oral) received from Deutsche or any of its affiliates shall be
  deemed to be an assurance or guarantee as to the expected results of the
  Transaction.

  
	
   

  	
   

  	
   

  
	
   

  	
  (xi)

  	
  Without limiting the
  generality of Section 13.1 of the Equity Definitions, Counterparty
  acknowledges that Deutsche is not making any representations or warranties
  with respect to the treatment of the Transaction under FASB Statements 128,
  133, 149 or 150 (or under any successor statement), EITF Issue
  No. 00-19, 01-6, 03-6 or 07-5 (or any successor issue statements), under
  FASB’s Liabilities & Equity Project, or under any other accounting
  guidance.

  
	
   

  	
   

  	
   

  
	
   

  	
  (xii)

  	
  Counterparty
  is not entering into the Transaction for the purpose of (i) creating
  actual or apparent trading activity in the Shares (or any security
  convertible into or exchangeable for the Shares) or (ii) raising or
  depressing or otherwise manipulating the price of the Shares (or any security
  convertible into or exchangeable for the Shares), in either case in violation
  of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”).

  



 


10

















 


	
   

  	
  (xiii)

  	
  Counterparty’s
  filings under the Exchange Act and other applicable securities laws that are
  required to be filed have been filed and, as of the respective dates thereof,
  there was no misstatement of material fact contained therein or omission of a
  material fact required to be stated therein or necessary to make the
  statements made therein, in the light of the circumstances under which they
  were made, not misleading.

  
	
   

  	
   

  	
   

  
	
   

  	
  (xiv)

  	
  Counterparty
  has not violated, and shall not take any action that violates (including,
  without limitation, any violation by Counterparty involving Deutsche), any
  applicable law (including, without limitation, the Securities Act and the
  Exchange Act) in connection with the Transaction.

  
	
   

  	
   

  	
   

  
	
   

  	
  (xv)

  	
  The
  Transaction, and any repurchase of the Shares by Counterparty in connection
  with the Transaction, is pursuant to a publicly announced Share repurchase
  program that has been approved by Counterparty’s board of directors
  (including engaging in derivative transactions) and any such repurchase has
  been, or shall when and to the extent so required be, publicly disclosed in
  its periodic filings under the Exchange Act, including any financial
  statements and notes therein.

  
	
   

  	
   

  	
   

  
	
   

  	
  (xvi)

  	
  Counterparty
  shall deliver to Deutsche an opinion of counsel, dated as of the Trade Date
  and reasonably acceptable to Deutsche in form and substance, with respect to
  the matters set forth in Section 3(a) of the Agreement and such
  other matters as Deutsche may reasonably request.

  
	
   

  	
   

  	
   

  
	
  Miscellaneous:

  
	
   

  	
   

  	
   

  
	
   

  	
  Netting
  and Set-Off. The parties hereto agree that the Transaction shall
  not be subject to netting or set off with any other transaction.

  
	
   

  	
   

  	
   

  
	
   

  	
  Qualified Financial Contracts. It
  is the intention of the parties that, in respect of Counterparty,
  (a) the Transaction shall constitute a “qualified financial contract”
  within the meaning of 12 U.S.C. Section 1821(e)(8)(D)(i) and
  (b) a Non-defaulting Party’s rights under Sections 5 and 6 of the
  Agreement constitute rights of the kind referred to in 12 U.S.C.
  Section 1821(e)(8)(A).

  
	
   

  	
   

  	
   

  
	
   

  	
  Method of Delivery. Whenever delivery of funds or other assets is
  required hereunder by or to Counterparty, such delivery shall be effected
  through Agent. In addition, all notices, demands and communications of any
  kind relating to the Transaction between Deutsche and Counterparty shall be
  transmitted exclusively through Agent.

  
	
   

  	
   

  	
   

  
	
   

  	
  Staggered Settlement. If upon advice of counsel
  with respect to applicable legal and regulatory requirements or related
  policies and procedures applicable to Deutsche, Deutsche reasonably
  determines that it would not be advisable to deliver, or to acquire Shares to
  deliver, any or all of the Shares to be delivered by Deutsche on a Settlement
  Date for this Transaction, Deutsche may, by notice to Counterparty prior to
  any Settlement Date (a “Nominal
  Settlement Date”), elect to deliver the Shares deliverable on
  such Nominal Settlement Date on two or more dates (each, a “Staggered Settlement Date”) or at two or more times
  on the Nominal Settlement Date as follows: (i) in such notice, Deutsche
  will specify to Counterparty the related Staggered Settlement Dates (each of
  which will be on or prior to such Nominal Settlement Date, but not prior to
  the beginning of the related “Conversion Period”) or delivery times and how
  it will allocate the Shares it is required to deliver under “Net Share
  Settlement” above among the Staggered Settlement Dates or delivery times; and
  (ii) the aggregate number of Shares that Deutsche will deliver to
  Counterparty hereunder on all such Staggered Settlement Dates and delivery
  times will equal the number of Shares that Deutsche would otherwise be
  required to deliver on such Nominal Settlement Date.

  
	
   

  	
   

  	
   

  
	
   

  	
  Additional Termination Events. The occurrence of
  (i) an “Event of Default” with respect to Counterparty under the terms
  of the Convertible Notes as set forth in the section of the Indenture as
  described in the Prospectus Supplement under “Description of the Notes —
  Events of Default”, (ii) an Amendment Event or (iii) a Repayment
  Event shall be an Additional Termination Event, in each case with the
  Transaction as the sole Affected Transaction and Counterparty as the sole
  Affected Party and Deutsche as the party entitled to designate an Early 

  



 


11

















 


	
   

  	
  Termination Date
  pursuant to Section 6(a) of the Agreement; provided that in the case of a Repayment
  Event the Transaction shall be subject to termination only in respect of the
  portion of the Transaction corresponding to the number of Convertible Notes
  subject to such Repayment Event.

  
	
   

  	
   

  	
   

  
	
   

  	
  “Amendment Event” means that Counterparty amends, modifies,
  supplements or obtains a waiver with respect to any term of the Indenture or
  the Convertible Notes if such amendment, modification, supplement or waiver
  has a material adverse effect on this Transaction or Deutsche’s ability to
  hedge all or a portion of this Transaction, with such materiality
  determination to be made in the sole discretion of the Calculation Agent. For
  the avoidance of doubt, Counterparty electing to increase the Conversion Rate
  pursuant to a Discretionary Adjustment shall not constitute an Amendment
  Event.

  
	
   

  	
   

  	
   

  
	
   

  	
  “Repayment Event” means that (A) any
  Convertible Notes are repurchased (whether in connection with or as a result
  of a change of control, howsoever defined, or for any other reason) by
  Counterparty or any of its subsidiaries, (B) any Convertible Notes are
  delivered to Counterparty or any of its subsidiaries in exchange for delivery
  of any property or assets of Counterparty or any of its subsidiaries
  (howsoever described), (C) any principal of any of the Convertible Notes
  is repaid prior to the final maturity date of the Convertible Notes (whether
  following acceleration of the Convertible Notes or otherwise), or
  (D) any Convertible Notes are exchanged by or for the benefit of the
  holders thereof for any other securities of Counterparty or any of its
  affiliates (or any other property, or any combination thereof) pursuant to
  any exchange offer or similar transaction; provided
  that, in the case of clause (B) and clause (D), conversions of the
  Convertible Notes pursuant to the terms of the Indenture as in effect on the
  date hereof shall not be Repayment Events.

  
	
   

  	
   

  	
   

  
	
   

  	
  Disposition of Hedge Shares. Counterparty hereby agrees
  that if, in the good faith reasonable judgment of Deutsche, the Shares (the “Hedge Shares”) acquired by Deutsche
  for the purpose of hedging its obligations pursuant to the Transaction cannot
  be sold in the public market by Deutsche without registration under the
  Securities Act, Counterparty shall, at its election: (i) in order to
  allow Deutsche to sell the Hedge Shares in a registered offering, make
  available to Deutsche an effective registration statement under the
  Securities Act to cover the resale of such Hedge Shares and (A) enter
  into an agreement, in form and substance reasonably satisfactory to Deutsche,
  substantially in the form of an underwriting agreement for underwritten
  offerings of equity securities of companies of comparable size and lines of
  business, (B) provide accountant’s “comfort” letters in customary form
  for registered offerings of equity securities, (C) provide disclosure
  opinions of nationally recognized outside counsel to Counterparty reasonably
  acceptable to Deutsche, (D) provide other customary opinions,
  certificates and closing documents customary in form for registered offerings
  of equity securities and (E) afford Deutsche a reasonable opportunity to
  conduct a “due diligence” investigation with respect to Counterparty
  customary in scope for underwritten offerings of equity securities; provided, however, that if Deutsche, in its sole reasonable
  discretion, is not satisfied with access to due diligence materials, the
  results of its due diligence investigation, or the procedures and
  documentation for the registered offering referred to above, then clause
  (ii) or clause (iii) of this paragraph shall apply at the election
  of Counterparty; (ii) in order to allow Deutsche to sell the Hedge
  Shares in a private placement, enter into a private placement agreement
  substantially similar to private placement purchase agreements customary for
  private placements of equity securities, in form and substance satisfactory
  to Deutsche, including customary representations, covenants, blue sky and
  other governmental filings and/or registrations, indemnities to Deutsche, due
  diligence rights (for Deutsche or any designated buyer of the Hedge Shares
  from Deutsche), opinions and certificates and such other documentation as is
  customary for private placements agreements, all reasonably acceptable to
  Deutsche (in which case, the Calculation Agent shall make any adjustments to
  the terms of the Transaction that are necessary, in its reasonable judgment,
  to compensate Deutsche for any discount from the public market price of the
  Shares incurred on the sale of Hedge Shares in a private placement); or (iii) purchase
  the Hedge Shares from Deutsche at the VWAP Price on such Exchange Business
  Days, and in the amounts, requested by Deutsche. “VWAP Price” means, on any Exchange
  Business Day, the per Share volume-weighted average price as displayed under
  the heading “Bloomberg VWAP” on Bloomberg page CEPH <equity> AQR (or any
  successor thereto) in respect of the period from 9:30 a.m. to
  4:00 p.m. (New York City time) on such Exchange Business Day (or if such
  volume-weighted average price is unavailable, the market value of one Share
  on such Exchange Business Day, as determined by the Calculation Agent using a
  volume-weighted method). This paragraph shall survive the termination,
  expiration or early unwind of the Transaction.

  



 


12

















 


	
   

  	
  Status of Claims in Bankruptcy. Deutsche acknowledges and agrees
  that this Confirmation is not intended to convey to Deutsche rights with
  respect to the Transaction that are senior to the claims of common
  stockholders in any U.S. bankruptcy proceedings of Counterparty; provided that nothing herein shall limit
  or shall be deemed to limit Deutsche’s right to pursue remedies in the event
  of a breach by Counterparty of its obligations and agreements with respect to
  the Transaction; provided, further, that
  nothing herein shall limit or shall be deemed to limit Deutsche’s rights in
  respect of any transactions other than the Transaction.

  
	
   

  	
   

  	
   

  
	
   

  	
  No
  Collateral. Notwithstanding any provision of this
  Confirmation, the Agreement, Equity Definitions, or any other agreement
  between the parties to the contrary, the obligations of Counterparty under
  the Transaction are not secured by any collateral.

  
	
   

  	
   

  	
   

  
	
   

  	
  Securities Contract; Swap Agreement. The parties
  hereto agree and acknowledge that Deutsche is a “financial institution,”
  “swap participant” and “financial participant” within the meaning of Sections
  101(22), 101(53C) and 101(22A) of the Bankruptcy Code. The parties hereto
  further agree and acknowledge (A) that this Confirmation is (i) a
  “securities contract,” as such term is defined in Section 741(7) of
  the Bankruptcy Code, with respect to which each payment and delivery
  hereunder or in connection herewith is a “termination value,” “payment
  amount” or “other transfer obligation” within the meaning of Section 362
  of the Bankruptcy Code and a “settlement payment” or a “transfer” within the
  meaning of Section 546 of the Bankruptcy Code, and (ii) a “swap
  agreement,” as such term is defined in Section 101(53B) of the
  Bankruptcy Code, with respect to which each payment and delivery hereunder or
  in connection herewith is a “termination value,” a “payment amount” or “other
  transfer obligation” within the meaning of Section 362 of the Bankruptcy
  Code and a “transfer” within the meaning of Section 546 of the
  Bankruptcy Code, and (B) that Deutsche is entitled to the protections
  afforded by, among other sections, Section 362(b)(6), 362(b)(17),
  362(b)(27), 362(o), 546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of
  the Bankruptcy Code.

  
	
   

  	
   

  	
   

  
	
   

  	
  Repurchase
  Notices. Counterparty shall, on any day on which
  Counterparty effects any repurchase of Shares, give Deutsche a written notice
  of such repurchase (a “Repurchase Notice”)
  on such day if, following such repurchase, the Unit Equity Percentage as
  determined on such day is greater by 1.0% or more than the Unit Equity
  Percentage included in the immediately preceding Repurchase Notice (or, in
  the case of the first such Repurchase Notice, greater by 1.0% or more than
  the Unit Equity Percentage as of the date hereof). The “Unit Equity
  Percentage” as of any day is the fraction, expressed as a
  percentage, (i) the numerator of which is the product of the number of
  Note Hedging Units and the Note
  Hedging Unit Entitlement, and (ii) the denominator of which is the
  number of Shares outstanding on such day. Counterparty agrees to indemnify
  and hold harmless Deutsche and its affiliates and their respective officers,
  directors, employees, advisors, agents and controlling persons (each, a “Section 16  Indemnified
  Person”) from and against any and all losses (including losses
  relating to Deutsche’s hedging activities as a consequence of becoming, or of
  the risk of becoming, a Section 16 “insider”, including without
  limitation, any forbearance from hedging activities or cessation of hedging
  activities and any losses in connection therewith with respect to the
  Transaction), claims, damages, judgments, liabilities and expenses (including
  reasonable attorney’s fees), joint or several, to which a Section 16
  Indemnified Person may become subject, as a result of Counterparty’s failure
  to provide Deutsche with a Repurchase Notice on the day and in the manner
  specified in this paragraph, and to reimburse, upon written request, each of
  such Section 16 Indemnified Persons for any reasonable legal or other
  expenses incurred in connection with investigating, preparing for, providing
  testimony or other evidence in connection with or defending any of the
  foregoing. Counterparty shall not be liable for any settlement of any
  proceeding effected without its written consent, but if settled with such
  consent or if there be a final judgment for the plaintiff, Counterparty
  agrees to indemnify any Section 16 Indemnified Person from and against
  any loss or liability by reason of such settlement or judgment. Counterparty
  shall not, without the prior written consent of the Section 16
  Indemnified Person, effect any settlement of any pending or threatened
  proceeding in respect of which any Section 16 Indemnified Person is or
  could have been a party and indemnity could have been sought hereunder by
  such Section 16 Indemnified Person, unless such settlement includes an
  unconditional release of such Section 16 Indemnified Person from all
  liability on claims that are the subject matter of such proceeding on terms
  reasonably satisfactory to such Section 16 Indemnified Person. If the
  indemnification provided for in this paragraph is unavailable to a
  Section 16 Indemnified Person or insufficient in respect of any losses,
  claims, damages or liabilities referred to therein, then 

  



 


13

















 


	
   

  	
  Counterparty,
  in lieu of indemnifying such Section 16 Indemnified Person thereunder,
  shall contribute to the amount paid or payable by such Section 16
  Indemnified Person as a result of such losses, claims, damages or
  liabilities. The remedies provided for in this paragraph are not exclusive
  and shall not limit any rights or remedies that may otherwise be available to
  any Section 16 Indemnified Person at law or in equity. The indemnity and
  contribution agreements contained in this paragraph shall remain operative
  and in full force and effect regardless of the termination of the
  Transaction.

  
	
   

  	
   

  	
   

  
	
   

  	
  Alternative
  Calculations and Deutsche Payment on Early Termination and on Certain
  Extraordinary Events. If Deutsche owes Counterparty any amount
  in connection with the Transaction pursuant to Sections 12.2, 12.3 (and
  “Consequences of Merger Events” above), 12.6, 12.7 or 12.9 of the Equity
  Definitions (except in the case of an Extraordinary Event in which the
  consideration or proceeds to be paid to holders of Shares as a result of such
  event consists solely of cash) or pursuant to Section 6(d)(ii) of
  the Agreement (except in the case of an Event of Default in which
  Counterparty is the Defaulting Party or a Termination Event in which
  Counterparty is the Affected Party, other than (x) an Event of Default
  of the type described in Section 5(a)(iii), (v), (vi) or
  (vii) of the Agreement or (y) a Termination Event of the type
  described in Section 5(b)(i), (ii), (iii), (iv), (v) or (vi) of
  the Agreement that in the case of either (x) or (y) resulted from
  an event or events outside Counterparty’s control) (a “Deutsche
  Payment Obligation”), Counterparty shall have the right, in its
  sole discretion, to require Deutsche to satisfy any such Deutsche Payment
  Obligation by delivery of Termination Delivery Units (as defined below) by
  giving irrevocable telephonic notice to Deutsche, confirmed in writing within
  one Scheduled Trading Day, between the hours of 9:00 a.m. and
  4:00 p.m. New York time on the Early Termination Date or other date the
  transaction is terminated, as applicable (“Notice of
  Deutsche Termination Delivery”). Within a commercially reasonable
  period of time following receipt of a Notice of Deutsche Termination
  Delivery, Deutsche shall deliver to Counterparty a number of Termination
  Delivery Units having a cash value equal to the amount of such Deutsche
  Payment Obligation (such number of Termination Delivery Units to be delivered
  to be determined by the Calculation Agent as the number of whole Termination
  Delivery Units that could be purchased over a commercially reasonable period
  of time with the cash equivalent of such payment obligation). If the
  provisions set forth in this paragraph are applicable, the provisions of
  Sections 9.8, 9.9, 9.10, 9.11 (modified as described above) and 9.12 of the
  Equity Definitions shall be applicable, except that all references to
  “Shares” shall be read as references to “Termination Delivery Units”.

  
	
   

  	
   

  	
   

  
	
   

  	
  “Termination Delivery Unit” means (a) in the case of a
  Termination Event, an Event of Default or an Extraordinary Event (other than
  an Insolvency, Nationalization or Merger Event), one Share or (b) in the
  case of an Insolvency, Nationalization or Merger Event, a unit consisting of
  the number or amount of each type of property received by a holder of one
  Share (without consideration of any requirement to pay cash or other
  consideration in lieu of fractional amounts of any securities) in such
  Insolvency, Nationalization or Merger Event. If a Termination Delivery Unit
  consists of property other than cash or New Shares and Counterparty provides
  irrevocable written notice to the Calculation Agent on or prior to the
  Closing Date that it elects to receive cash, New Shares or a combination
  thereof (in such proportion as Counterparty designates) in lieu of such other
  property, the Calculation Agent shall replace such property with cash, New
  Shares or a combination thereof as components of a Termination Delivery Unit
  in such amounts, as determined by the Calculation Agent in its discretion by
  commercially reasonable means, as shall have a value equal to the value of
  the property so replaced. If such Insolvency, Nationalization or Merger Event
  involves a choice of consideration to be received by holders, such holder shall
  be deemed to have elected to receive the maximum possible amount of cash.

  
	
   

  	
   

  	
   

  
	
   

  	
  No Material Non-Public
  Information.  On each day during the period beginning
  on the date on which the offering of the Convertible Notes was first
  announced and ending on the earlier of (a) the day on which Deutsche has
  informed Counterparty in writing that Deutsche has completed all purchases of
  Shares or other transactions to hedge initially its exposure with respect to
  the Transaction and (b) the Effective Date, Counterparty represents and
  warrants to Deutsche that it is not aware of any material nonpublic
  information concerning itself or the Shares.

  
	
   

  	
   

  	
   

  
	
   

  	
  Right to Extend. Deutsche may
  postpone any potential Exercise Date or postpone or extend any other date of
  valuation or delivery with respect to some or all of the relevant Note
  Hedging Units (in which event the Calculation Agent shall make appropriate
  adjustments to the Settlement Amount for such Note Hedging Units), if 

  



 


14

















 


	
   

  	
  Deutsche determines, in its reasonable discretion, that (a) a
  Regulatory Disruption has occurred or (b) such extension is reasonably
  necessary or appropriate to (i) preserve Deutsche’s hedging or hedge
  unwind activity hereunder in light of existing liquidity conditions or
  (ii) enable Deutsche to effect purchases of Shares in connection with
  its hedging, hedge unwind or settlement activity hereunder in a manner that
  would, if Deutsche were the Issuer or an affiliated purchaser of the Issuer,
  be in compliance with applicable legal, regulatory or self-regulatory
  requirements, or with related policies and procedures applicable to Deutsche;
  provided that, in the case of a
  postponement or extension as a result of clause (b)(i), such postponement or
  extension shall be limited to 25 scheduled “Trading Days”. “Regulatory Disruption” shall mean
  any event that Deutsche, in its commercially reasonable discretion upon the
  advice of outside counsel, determines makes it appropriate with regard to any
  legal, regulatory or self-regulatory requirements or related policies and
  procedures (whether or not such requirements, policies or procedures are
  imposed by law or have been voluntarily adopted by Deutsche, and including
  without limitation Rule 10b-18, Rule 10b-5, Regulation 13D-G and
  Regulation 14E under the Exchange Act and Regulation M and/or analyzing
  Deutsche as if Deutsche were the Issuer or an affiliated purchaser of the
  Issuer), for Deutsche to refrain from or decrease any market activity in
  connection with the Transaction.

  
	
   

  	
   

  	
   

  
	
   

  	
  Transfer
  or Assignment. Counterparty may not transfer any of its rights
  or obligations under the Transaction without the prior written consent of
  Deutsche. Deutsche may transfer or assign all or a portion of its Note
  Hedging Units hereunder at any time to any nationally recognized dealer in
  over-the-counter equity derivatives transactions with a rating (or whose
  guarantor has a rating) for its long term, unsecured and unsubordinated
  indebtedness of A+ or better by Standard & Poor’s Ratings Services
  or its successor (“S&P”), or
  A1 or better by Moody’s Investors Service, Inc. or its successor (“Moody’s”) or, if either S&P or Moody’s ceases to rate
  such debt, at least an equivalent rating or better by a substitute agency
  rating mutually agreed by Counterparty and Deutsche, without the consent of
  Counterparty.

  
	
   

  	
   

  
	
   

  	
  If,
  as determined in Deutsche’s sole discretion, (a) at any time
  (1) the Equity Percentage exceeds 8% or (2) Deutsche, Deutsche
  Group (as defined below) or any person whose ownership position would be
  aggregated with that of Deutsche or Deutsche Group (Deutsche, Deutsche Group
  or any such person, a “Deutsche Person”)
  under Section 203 of the Delaware General Corporation Law (the “DGCL Takeover Statute”) or other federal,
  state or local laws, regulations or regulatory orders applicable to ownership
  of Shares (excluding Section 13 of the Exchange Act and the
  rules promulgated thereunder, “Applicable Laws”),
  owns, beneficially owns, constructively owns, controls, holds the power to
  vote or otherwise meets a relevant definition of ownership, or could be
  reasonably viewed as meeting any of the foregoing, in excess of a number of
  Shares equal to (x) the number of Shares that would give rise to
  reporting, registration, filing or notification obligations or other
  requirements (including obtaining prior approval by a state or federal
  regulator) of a Deutsche Person under Applicable Laws (including, without
  limitation, “interested shareholder” or “acquiring Person” status under the
  DGCL Takeover Statute) and with respect to which such requirements have not
  been met or the relevant approval has not been received minus
  (y) 1% of the number of Shares outstanding on the date of determination
  (either such condition described in clause (1) or (2), an “Excess Ownership Position”), and (b) Deutsche is
  unable, after commercially reasonable efforts, to effect a transfer or
  assignment on pricing and terms and within a time period reasonably
  acceptable to it of all or a portion of this Transaction pursuant to the preceding
  paragraph such that an Excess Ownership Position no longer exists, Deutsche
  may designate any Scheduled Trading Day as an Early Termination Date with
  respect to a portion (the “Terminated Portion”)
  of this Transaction, such that an Excess Ownership Position no longer exists
  following such partial termination. In the event that Deutsche so designates
  an Early Termination Date with respect to a portion of this Transaction, a
  payment shall be made pursuant to Section 6 of the Agreement as if (i) an
  Early Termination Date had been designated in respect of a Transaction having
  terms identical to this Transaction and a Number of Note Hedging Units equal
  to the Terminated Portion, (ii) Counterparty shall be the sole Affected
  Party with respect to such partial termination and (iii) such
  Transaction shall be the only Terminated Transaction (and, for the avoidance
  of doubt, the provisions set forth under the caption “Alternative Calculations and Deutsche Payment on
  Early Termination and on Certain Extraordinary Events” shall apply
  to any amount that is payable by Deutsche to Counterparty pursuant to this
  sentence). The “Equity Percentage”
  as of any day is the fraction, expressed as a percentage, (A) the
  numerator of which is the number of Shares that Deutsche and any of its
  affiliates subject to aggregation with Deutsche for purposes of the
  “beneficial ownership” test under Section 13 of the Exchange Act and all
  persons who may form a “group” (within the meaning of
  Rule 13d-5(b)(1) under the Exchange Act) with Deutsche
  (collectively, 

  



 


15

















 


	
   

  	
  “Deutsche Group”) “beneficially own” (within the meaning of
  Section 13 of the Exchange Act) without duplication on such day and
  (B) the denominator of which is the number of Shares outstanding on such
  day.

  
	
   

  	
   

  	
   

  
	
   

  	
  Notwithstanding
  any other provision in this Confirmation to the contrary requiring or
  allowing Deutsche to purchase, sell, receive or deliver any shares or other
  securities to or from Counterparty, Deutsche may designate any of its
  affiliates to purchase, sell, receive or deliver such shares or other
  securities and otherwise to perform Deutsche’s obligations in respect of the
  Transaction and any such designee may assume such obligations. Deutsche shall
  be discharged of its obligations to Counterparty to the extent of any such
  performance.

  
	
   

  	
   

  	
   

  
	
   

  	
  Severability;
  Illegality. If compliance by either party with any provision
  of the Transaction would be unenforceable or illegal, (a) the parties
  shall negotiate in good faith to resolve such unenforceability or illegality
  in a manner that preserves the economic benefits of the transactions
  contemplated hereby and (b) the other provisions of the Transaction
  shall not be invalidated, but shall remain in full force and effect.

  
	
   

  	
   

  	
   

  
	
   

  	
  Waiver
  of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT
  PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
  RESPECT OF ANY SUIT, ACTION OR PROCEEDING RELATING TO THE TRANSACTION. EACH
  PARTY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE
  OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
  WOULD NOT, IN THE EVENT OF SUCH A SUIT, ACTION OR PROCEEDING, SEEK TO ENFORCE
  THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTY
  HAVE BEEN INDUCED TO ENTER INTO THE TRANSACTION, AS APPLICABLE, BY, AMONG
  OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS PROVIDED HEREIN.

  
	
   

  	
   

  	
   

  
	
   

  	
  Early Unwind. In the event the
  sale of Convertible Notes is not consummated with the underwriters thereof
  for any reason by the close of business in New York on May 27, 2009 (or
  such later date as agreed upon by the parties) (May 27, 2009 or such
  later date as agreed upon being the “Early Unwind Date”),
  the Transaction shall automatically terminate (the “Early
  Unwind”) on the Early Unwind Date and (a) the Transaction and
  all of the respective rights and obligations of Deutsche and Counterparty
  under the Transaction shall be cancelled and terminated, (b) each party
  shall be released and discharged by the other party from and agrees not to
  make any claim against the other party with respect to any obligations or
  liabilities of the other party arising out of and to be performed in
  connection with the Transaction either prior to or after the Early Unwind
  Date and (c) Deutsche shall return to Counterparty any Premium paid by
  Counterparty to Deutsche in respect of this Transaction (net of any amounts
  payable by Counterparty to Deutsche pursuant to the following proviso); provided that Counterparty shall purchase from Deutsche on
  the Early Unwind Date all Shares purchased by Deutsche or one or more of its
  affiliates, and assume, or reimburse the cost of, derivatives and other
  hedging activities entered into by Deutsche or one or more of its affiliates,
  in each case, in connection with hedging of the Transaction and the unwind of
  such hedging activities. The amount payable by Counterparty shall be
  Deutsche’s (or its affiliates) actual cost of such Shares and unwind cost of
  such derivatives and other hedging activities as Deutsche informs
  Counterparty and shall be paid in immediately available funds on the Early
  Unwind Date. Deutsche and Counterparty represent and acknowledge to the other
  that, subject to the proviso included in the preceding sentence, upon an
  Early Unwind, all obligations with respect to the Transaction shall be deemed
  fully and finally discharged.

  
	
   

  	
   

  	
   

  
	
   

  	
  Governing
  law:  The law of the State of New York.

  



 


Contact information.
For purposes of the Agreement (unless otherwise specified in the Agreement),
the addresses for notice to the parties shall be:


 


(a) Counterparty


 


	
  Cephalon, Inc.

  	
   

  
	
  41 Moores Road

  	
   

  
	
  Frazer, PA 19355

  	
   

  
	
  Attention:

  	
  Gerald J. Pappert

  
	
  Fax:

  	
  (610) 738-6258

  



 


16

















 


(b) Deutsche


 


	
  Deutsche Bank AG,
  London Branch

  
	
  c/o Deutsche Bank
  Securities Inc.

  
	
  60 Wall Street

  
	
  New York, NY 10005

  
	
  Attention:

  	
  Andrew Yaeger

  
	
   

  	
   

  
	
  Telephone:

  	
  (212) 250-2717

  
	
  Email:

  	
  Andrew.Yaeger@db.com

  
	
   

  
	
  with a copy to:

  	
   

  
	
   

  	
   

  
	
  Deutsche Bank AG,
  London Branch

  	
   

  
	
  c/o Deutsche Bank
  Securities Inc.

  	
   

  
	
  60 Wall Street

  	
   

  
	
  New York, New York
  10005

  
	
  Attention:

  	
  Lars Kestner

  
	
   

  	
   

  
	
  Telephone:

  	
  (212)
  250-6043

  
	
  Email:

  	
  Lars.Kestner@db.com

  
			



 


17

















 


This Confirmation may be
executed in several counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.


 


Counterparty hereby
agrees to check this Confirmation and to confirm that the foregoing correctly
sets forth the terms of the Transaction by signing in the space provided below
and returning to Deutsche a facsimile of the fully-executed Confirmation to
Deutsche at 44 113 336 2009.  Originals
shall be provided for your execution upon your request.


 


We are very pleased to
have executed the Transaction with you and we look forward to completing other
transactions with you in the near future.


 


Very truly yours,


 


DEUTSCHE BANK AG, LONDON BRANCH


 


 


	
  By: 

  	
  /s/ Lars Kestner

  	
   

  
	
   

  	
  Name: 

  	
  Lars Kestner

  	
   

  
	
   

  	
  Title: 

  	
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John Arnone

  	
   

  
	
   

  	
  Name: 

  	
  John Arnone

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  DEUTSCHE BANK SECURITIES INC.,

  
	
  acting solely as Agent
  in connection with this Transaction

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Lars Kestner

  	
   

  
	
   

  	
  Name: 

  	
  Lars Kestner

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John Arnone

  	
   

  
	
   

  	
  Name: 

  	
  John Arnone

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  



 


 


Counterparty hereby
agrees to, accepts and confirms the terms of the foregoing as of the Trade
Date.


 


CEPHALON, INC.


 


	
  By:

  	
  /s/ J. Kevin Buchi

  	
   

  
	
   

  	
  Name: 

  	
  J. Kevin Buch

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice
  President and Chief Financial Officer

  	
   

  



 


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