Exhibit 10.1


 


EXECUTION
VERSION


 


THIRD
AMENDMENT dated as of May 21, 2009 (this “Amendment”), to the
CREDIT AGREEMENT dated as of August  15, 2008, as heretofore amended
(as so amended, the “Credit Agreement”), among CEPHALON, INC., a
Delaware corporation, the LENDERS party thereto and JPMORGAN CHASE BANK, N.A.,
as Administrative Agent.


 


WITNESSETH:


 


WHEREAS, the
Lenders have agreed to extend credit to the Borrower under the Credit Agreement
on the terms and subject to the conditions set forth therein; and


 


WHEREAS, the
Borrower has requested that the Lenders amend certain provisions of the Credit
Agreement, and the Lenders whose signatures appear below, constituting at least
the Required Lenders, are willing to amend the Credit Agreement on the terms
and subject to the conditions set forth herein;


 


NOW,
THEREFORE, in consideration of the mutual agreements herein contained and other
good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto hereby agree as follows:


 


SECTION 1.  Defined
Terms.  Capitalized terms used but
not otherwise defined herein (including in the recitals hereto) have the
meanings assigned to them in the Credit Agreement.


 


SECTION 2.  Amendments
to the Credit Agreement.  (a) Section 1.01
of the Credit Agreement is hereby amended as follows:


 


(i)            The definition of “Hedging Agreement” is hereby amended
and restated in its entirety as follows:


 


““Hedging
Agreement” means any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by
reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value, any similar
transaction or any combination of the foregoing transactions; provided
that, for the avoidance of doubt, “Hedging Agreement” shall not include (i) any
phantom stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
the Borrower or any Subsidiary, (ii) any Warrant or (iii) any
Qualifying Subordinated Indebtedness Securities Transaction.”


 


(ii)           The definition of “Qualifying
Subordinated Indebtedness” is hereby amended and restated in its entirety as
follows:


 

















 


““Qualifying
Subordinated Indebtedness” means, as of any date, the aggregate principal
amount outstanding on such date of (a) the 2010 Subordinated Notes, the
2014 Subordinated Notes and the 2015 Subordinated Notes and (b) any other
Indebtedness (including related Guarantees) for borrowed money of the Borrower
that is expressly subordinated to the Loan Documents Obligations on terms not
less favorable to the Lenders than those applicable to the 2015 Subordinated
Notes; provided that in the case of such Indebtedness referred to in the
preceding clause (b), (i) the maturity of such Indebtedness shall not be
earlier than the date 91 days after the Maturity Date; (ii) such
Indebtedness shall not be required to be repaid, prepaid, redeemed, repurchased
or defeased (except to the extent on terms not less favorable to the Lenders
than those applicable to the 2014 Subordinated Notes), whether on one or more
fixed dates, upon the occurrence of one or more events or at the option of any
holder thereof, prior to the date 91 days after the Maturity Date; (iii) such
Indebtedness shall not constitute an obligation of any Subsidiary that shall
not be a Subsidiary Loan Party; (iv) such Indebtedness shall not be
secured by any Lien on any asset of the Borrower or any Subsidiary; and (v) such
Indebtedness shall not contain any covenants that, taken as a whole, are
materially more restrictive than those set forth in this Agreement.”


 


(iii)          The definition of “Warrants” is hereby amended and restated
in its entirety as follows:


 


““Warrants”
means (a) the Seven Year Warrant dated June 6, 2003, between the
Borrower and Credit Suisse First Boston International, as amended by the
Amendment to Seven Year Warrant dated December 13, 2006, between the
Borrower and Credit Suisse International (f/k/a Credit Suisse First Boston
International), (b) the Warrant Confirmation dated June 2, 2005,
between the Borrower and Deutsche Bank AG, as amended, (c) the
Confirmation dated May 21, 2009, between the Borrower and Deutsche Bank
AG, London Branch, as amended and restated to provide for the exercise of an
overallotment option, with respect to the warrant transaction described
therein, substantially on the terms set forth in the draft heretofore made
available to the Lenders, and (d) any similar instrument issued in
connection with Qualifying Subordinated Indebtedness.”


 


(iv)          The definition of “2015 Subordinated Notes” is hereby
amended and restated in its entirety as follows:


 


““2015
Subordinated Notes” means the Borrower’s 2.00% Convertible Senior
Subordinated Notes due June 1, 2015, issued under the 2015 Subordinated
Notes Indenture.”


 


(v)           The following new defined terms are hereby inserted in the
appropriate alphabetical order:


 


““Qualifying
Subordinated Indebtedness Securities Transaction” means (a) the
transactions provided for in (i) (x) the Confirmation dated June 2,
2005 between Deutsche Bank AG and the Borrower, as amended, with respect to the
share option transaction described therein and (y) the Confirmation dated June 28,
2005 between 


 


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Deutsche Bank AG and the
Borrower, with respect to the share option transaction described therein and (ii) the
Confirmation dated May 21, 2009 between Deutsche Bank AG, London Branch
and the Borrower, as amended and restated to provide for the exercise of an
overallotment option, with respect to the share option transaction described
therein, substantially on the terms set forth in the draft heretofore made
available to the Lenders, and (b) any similar transaction entered into in
connection with Qualifying Subordinated Indebtedness.


 


“2014
Subordinated Notes” means the Borrower’s 2.50% Convertible Senior
Subordinated Notes due May 1, 2014, issued under the 2014 Subordinated
Notes Indenture.


 


“2014
Subordinated Notes Indenture” means the Indenture dated May 27, 2009,
between the Borrower and U.S. Bank National Association, as Trustee, under
which the 2014 Subordinated Notes are outstanding.”


 


(b)  Section 6.08(b)(iii) of the Credit
Agreement is hereby amended and restated in its entirety as follows:


 


“(iii)(A) payments made
with respect to the 2010 Subordinated Notes upon the exercise (x) by the
Borrower of any redemption rights with respect thereto, (y) by holders
thereof of conversion rights with respect thereto or (z) by holders
thereof of their right to require the repurchase of such Notes in accordance
with the provisions of the 2010 Subordinated Notes Indenture, (B) payments
required to be made with respect to the 2014 Subordinated Notes upon the
exercise (x) by holders thereof of conversion rights with respect thereto
or (y) by holders thereof of their right to require the repurchase of such
Notes in accordance with the provisions of the 2014 Subordinated Notes
Indenture, (C) payments required to be made with respect to the 2015
Subordinated Notes upon the exercise (x) by holders thereof of conversion
rights with respect thereto or (y) by holders thereof of their right to
require the repurchase of such Notes in accordance with the provisions of the
2015 Subordinated Notes Indenture and (D) any other similar payments
required to be made in connection with any other Qualifying Subordinated
Indebtedness (x) upon the exercise by holders thereof of conversion rights
with respect thereto and (y) by holders thereof of their right to require
the repurchase of such notes in accordance with the provisions of the indenture
applicable thereto; and”


 


(c)  Section 6.08(b)(iv) of the Credit
Agreement is hereby amended and restated in its entirety as follows:


 


“(iv) payments made
pursuant to consensual exchange agreements between the Borrower and any
noteholder (A) in cash or Equity Interests of the Borrower with respect to
the 2010 Subordinated Notes and (B) in Equity Interests of the Borrower
with respect to the 2014 Subordinated Notes, the 2015 Subordinated Notes or any
other Qualifying Subordinated Indebtedness.”


 


SECTION 3.  Representations
and Warranties.  The Borrower hereby
represents and warrants to the Administrative Agent and to each of the Lenders,
as of the Amendment Effective Date (as defined below), that:


 


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(a)  The execution, delivery and performance by the
Borrower of this Amendment have been duly authorized by all necessary corporate
or other organizational and, if required, stockholder or other equityholder
action.  This Amendment has been duly
executed and delivered by the Borrower and this Amendment and the Credit
Agreement, as amended by this Amendment, constitutes legal, valid and binding
obligations of the Borrower, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and other laws affecting creditors’ rights generally and to general principles
of equity, regardless of whether considered in a proceeding in equity or at
law.


 


(b)  The representations and warranties of the
Borrower and the Subsidiary Loan Parties set forth in the Credit Agreement and
the other Loan Documents are true and correct in all material respects on and
as of the Amendment Effective Date, except in the case of any such
representation or warranty that expressly relates to an earlier date, in which
case such representation or warranty is true and correct in all material
respects on and as of such earlier date.


 


(c)  On and as of the Amendment Effective Date,
after giving effect to this Amendment, no Default has occurred and is
continuing.


 


SECTION 4.  Effectiveness.  This Amendment shall become effective, as of
the date first above written, on the date (the “Amendment Effective Date”)
on which the Administrative Agent shall have received duly executed
counterparts hereof that, when taken together, bear the authorized signatures
of the Borrower and Lenders constituting at least the Required Lenders, provided
that the Administrative Agent shall have received all fees and other amounts
due and payable to it or any of its Affiliates on or prior to the Amendment
Effective Date, including reimbursement of all reasonable and documented
out-of-pocket expenses (including fees, charges and disbursements of counsel)
required to be reimbursed by the Borrower under the Credit Agreement.


 


SECTION 5.  Effect
of Amendment.  (a)  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 the Lenders or the Administrative Agent under the Credit
Agreement or any other Loan Document, and shall not alter, modify, amend or in
any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement or any other Loan Document, all of
which are ratified and affirmed in all respects and shall continue in full
force and effect.  Nothing herein shall
be deemed to entitle any Loan Party to a consent to, or a waiver, amendment,
modification or other change of, any of the terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement or any other Loan
Document in similar or different circumstances.


 


(b)           On and after the
Amendment Effective Date, each reference in the Credit Agreement to “this
Agreement”, “hereunder”, “hereof”, “herein”, or words of like import, and each
reference to the Credit Agreement in any other Loan Document shall be deemed to
be a reference to the Credit Agreement as amended 


 


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hereby. 
This Amendment shall constitute a “Loan Document” for all purposes of
the Credit Agreement and the other Loan Documents.


 


SECTION 6.  Applicable Law.  THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.


 


SECTION 7.  Counterparts.  This Amendment may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which, when taken together,
shall constitute a single contract. 
Delivery of an executed counterpart of a signature page of this
Amendment by facsimile or other electronic imaging shall be as effective as
delivery of a manually executed counterpart of this Amendment.


 


SECTION 8.  Severability.  Any provision of this Amendment held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.


 


SECTION 9.  Headings.  The Section headings used herein are for
convenience of reference only, are not part of this Amendment and shall not
affect the construction of, or be taken into consideration in interpreting,
this Amendment.


 


SECTION 10.  Fees
and Expenses.  Without limiting the
Borrower’s obligations under Section 9.03 of the Credit Agreement, the
Borrower agrees to reimburse the Administrative Agent for its reasonable and
documented out-of-pocket expenses in connection with this Amendment, including
the reasonable fees, charges and disbursements of Cravath, Swaine &
Moore LLP, counsel for the Administrative Agent.  All fees shall be payable in immediately
available funds and shall not be refundable.


 


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IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be duly executed by
their respective authorized officers as of the date first above written.


 


 


	
   

  	
  CEPHALON, INC.

  
	
   

  	
   

  
	
   

  	
    by

  
	
   

  	
   

  	
  /s/ Wilhemus Groenhuysen

  
	
   

  	
   

  	
   Name: 

  	
  Wilhemus Groenhuysen

  
	
   

  	
   

  	
   Title:

  	
  Senior Vice President,

  
	
   

  	
   

  	
   

  	
  Worldwide Finance

  



 


 


	
   

  	
  JPMORGAN CHASE BANK, N.A., individually

  and as Administrative Agent,

  
	
   

  	
   

  
	
   

  	
    by

  
	
   

  	
   

  	
  /s/ James A. Knight

  
	
   

  	
   

  	
   Name: 

  	
  James A. Knight

  
	
   

  	
   

  	
   Title:

  	
  Vice President

  



 

















 


	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
    by

  
	
   

  	
   

  	
  /s/ Kevin R. Wagley

  
	
   

  	
   

  	
   Name: 

  	
  Kevin R. Wagley

  
	
   

  	
   

  	
   Title:

  	
  Senior Vice President

  



 

















 


	
   

  	
  BARCLAYS BANK PLC

  
	
   

  	
   

  
	
   

  	
    by

  
	
   

  	
   

  	
  /s/ Alicia Borys

  
	
   

  	
   

  	
   Name: 

  	
  Alicia Borys

  
	
   

  	
   

  	
   Title:

  	
  Assistant Vice President

  



 

















 


	
   

  	
  CITIZENS BANK OF PENNSYLVANIA

  
	
   

  	
   

  
	
   

  	
    by

  
	
   

  	
   

  	
  /s/ Jonathan H. Sprogell

  
	
   

  	
   

  	
   Name: 

  	
  Jonathan H. Sprogell

  
	
   

  	
   

  	
   Title:

  	
  Senior Vice President

  



 

















 


	
   

  	
  DEUTSCHE BANK AG NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
    by

  
	
   

  	
   

  	
  /s/ Douglas Weir

  
	
   

  	
   

  	
   Name: 

  	
  Douglas Weir

  
	
   

  	
   

  	
   Title:

  	
  Director

  



 


 


	
   

  	
    by

  
	
   

  	
   

  	
  /s/ Ming K. Chu

  
	
   

  	
   

  	
   Name: 

  	
  Ming K. Chu

  
	
   

  	
   

  	
   Title:

  	
  Vice President

  



 

















 


	
   

  	
  U.S. BANK, N.A.

  
	
   

  	
   

  
	
   

  	
    by

  
	
   

  	
   

  	
  /s/ Christopher T. Kordes

  
	
   

  	
   

  	
   Name: 

  	
  Christopher T. Kordes

  
	
   

  	
   

  	
   Title:

  	
  Senior Vice President