Document:

Exhibit 10.2

 

SEVENTH AMENDMENT TO AMENDED AND RESTATED  

LOAN AND SECURITY AGREEMENT

 

THIS
SEVENTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (the “Amendment”)
is made effective as of the 8th day of February, 2008, by and among FARM & HOME OIL COMPANY LLC, a Pennsylvania limited liability company, successor by
merger to FARM & HOME OIL COMPANY (“F&H”), UNIVEST NATIONAL BANK AND TRUST CO., as Agent (“Agent”) and UNIVEST NATIONAL BANK AND TRUST CO., as Lender, WACHOVIA BANK, NATIONAL
ASSOCIATION, as Lender, FULTON BANK, as Lender and CITIZENS BANK OF PENNSYLVANIA, as a Lender
(collectively, the “Lenders” and
each a “Lender”).

 

BACKGROUND

 

A.            Farm & Home Oil Company, predecessor
to Farm & Home Oil Company LLC (“Farm
and Home”), Agent and the Lenders named therein are parties to that
certain Amended and Restated Loan and Security Agreement dated as of December 16,
2004 (as amended by that certain First Amendment to Amended and Restated Loan
and Security Agreement dated January 10, 2005, that certain Second
Amendment to Amended and Restated Loan and Security Agreement dated July 13,
2005, that certain Third Amendment to Amended and Restated Loan and Security
Agreement dated August 19, 2005, that certain Fourth Amendment to Amended
and Restated Loan and Security Agreement dated December 7, 2005, that
certain Fifth Amendment to Amended and Restated Loan and Security Agreement
dated December 22, 2006, that certain Sixth Amendment to Amended and
Restated Loan and Security Agreement dated November 20, 2007 and as the
same may be further amended, modified, supplemented or restated from time to
time, the “Loan Agreement”).

 

B.            F&H, Agent and Lenders desire to further
amend the Loan Agreement as set forth herein.

 

C.            Capitalized terms used herein and not otherwise
defined shall have the meanings provided for such terms in the Loan Agreement.

 

NOW,
THEREFORE, intending
to be legally bound hereby, the parties hereto agree as follows:

 

1.             Merger; Sale of Interests;
Consent.

 

(a)           Pursuant to that certain (i) Agreement of Merger dated February 6, 2008 among F&H and Farm and
Home  (the “Merger Agreement”) and (ii) Certificate
of Merger filed with the Secretary of State of the Commonwealth of Pennsylvania
on February 7, 2008 (the “Articles of Merger”),
Farm and Home (formerly the Borrower under the Loan Agreement) merged with and
into F&H, with F&H being the surviving entity (the “Merger”).

 

(b)           On or about the date hereof, Buckeye Energy Holdings LLC, a Delaware
limited liability company (“Buckeye”)
purchased all of the membership interests in F&H (the “Acquisition”), pursuant to that certain
Purchase Agreement dated December 21, 2007 (the “Purchase Agreement”) among Buckeye, Farm and Home, Richard A.
Longacre and the other Sellers referred to therein.

 

 

(c)           The Merger Agreement, Articles of Merger and Purchase Agreement are
referred to herein, collectively, as the “Transaction
Documents”.  The copies of the
Transaction Documents attached hereto as Exhibit “A”
are true and complete copies of such documents, none of which have been
modified or amended.

 

(d)           Subject to the terms and conditions of this Amendment, Agent and each
Lender hereby consent to the Merger and the Acquisition on the terms and
conditions set forth in the Transaction Documents.  Solely for the purpose of avoiding the
occurrence of a Default or Event of Default which would be caused by the Merger
and the Acquisition, Agent and each Lender hereby waive compliance with those
provisions of the Loan Agreement and the other Loan Documents which would prohibit
the Merger and the Acquisition.

 

2.             F&H Post-Merger and
Acquisition.  F&H represents and warrants to Agent and
each Lender that:

 

(a)           The transactions contemplated by the Transaction Documents have been
consummated in accordance with the terms and conditions set forth in the
Transaction Documents.

 

(b)           As a result of the Merger, F&H succeeded to all assets, properties,
rights and remedies of Farm and Home, including, without limitation, all assets
of Farm and Home previously granted, pledged or assigned by Farm and Home to
Agent as Collateral, and F&H is the sole legal and beneficial owner of such
assets, properties, rights and remedies, subject only to the liens and
encumbrances therein permitted pursuant to the terms of the Loan Agreement and
the other Loan Documents.

 

(c)           As a result of the Merger, F&H succeeded to and is directly
responsible for the payment and performance of all indebtedness, liabilities,
obligations and covenants of Farm and Home, including, without limitation, all
sums advanced and outstanding, or to be advanced thereafter, under the Loan
Agreement or any of the other Loan Documents and all other obligations and
covenants of Farm and Home to Agent and Lenders under the Loan Agreement or any
of the other Loan Documents.

 

3.             F&H as Borrower.

 

(a)           Effective as of the date hereof, F&H shall be for all purposes the “Borrower”
under the Loan Agreement.  By its
execution hereof, F&H hereby becomes a party to and agrees to be bound by
the Loan Agreement and each of the other Loan Documents.

 

(b)           F&H ratifies, confirms and assumes direct liability for all
indebtedness, liabilities and covenants of Borrower under the Loan Agreement
and each of the other Loan Documents. 
F&H covenants and agrees to perform all covenants and agreements of
Borrower under the Loan Agreement and each of the other Loan Documents all in
accordance with the terms thereof. 
F&H hereby recites all representations and warranties set forth in
the Loan Agreement (as modified by the updated schedules attached hereto) and
each of the other Loan Documents as of the date hereof, as if F&H were the
original Borrower thereunder and agrees to be bound by all of the terms,
conditions, covenants, restrictions, waivers and consents set forth in the Loan
Agreement and each of the other Loan Documents.

 

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(c)           F&H hereby grants to Agent for the benefit of Agent and each Lender
all of the rights, remedies and authorities of Agent and each Lender with
respect to F&H and F&H’s assets set forth in the Loan Agreement and
each of the other Loan Documents including without limitation, the right to
exercise all powers of attorney with respect to F&H set forth therein and
the right to exercise the remedies set forth in Sections 7.2, 7.3, 7.4 and 7.5 of the Loan Agreement.

 

(d)           F&H agrees that all notices to which it may be entitled under the
Loan Agreement, the other Loan Documents or otherwise, may be sent to them at
the address set forth in Section 10.3(b) of
the Loan Agreement.

 

4.             Security Interest in
Collateral.  To secure the prompt payment and performance
to Agent and each Lender of the Obligations, F&H hereby assigns, pledges
and grants to Agent for its benefit and for the ratable benefit of each Lender
a continuing security interest in and to all of the following, whether now
owned or existing or hereafter acquired or arising and wheresoever located:

 

(a)           All now owned and hereafter acquired right, title and interest of
F&H in, to and in respect of all: accounts (including health care insurance
receivables), interest in goods represented by accounts, returned, reclaimed or
repossessed goods with respect thereto and rights as an unpaid vendor; contract
rights; chattel paper; general intangibles (including, but not limited to
payment intangibles, tax and duty refunds, registered and unregistered patents,
trademarks, service marks, copyrights, trade names, applications for the
foregoing, trade secrets, goodwill, processes, drawings, blueprints, customer
lists, licenses, whether as licensor or licensee, choses in action and other
claims, existing and future leasehold interests in equipment and fixtures and
goodwill); stock and other ownership interests in subsidiaries and other
entities; documents (including bills of lading, warehouse receipts and other
documents of title); instruments; investment property and financial assets of
every kind; insurance policies (including, without limitation, the cash
surrender value of all life insurance policies); letters of credit, bankers’
acceptances, guaranties and letter of credit rights, and all supporting
obligations and rights to receive payment thereunder; cash monies, deposits,
securities, bank accounts, deposit accounts, reserves and credits; all property
now or hereafter held in any capacity by Agent or Lenders, any of their
affiliates or any entity which, at any time, participates in Agent’s or any
Lender’s financing of F&H or at any other depository or other institution;
agreements or property securing or relating to any of the items referred to
above; all commercial tort claims of F&H based on or arising in connection
with any of the matters described on Schedule
4.3(a), and all judgments, orders and awards issued in
connection therewith;

 

(b)           All now owned and hereafter acquired right, title and interest of
F&H in, to and in respect of all goods of F&H including, without
limitation, all (i) inventory, wherever located, whether now owned or
hereafter acquired, of whatever kind, nature or description, including, without
limitation, all raw materials, work-in-process, finished goods, and materials
to be used or consumed in F&H’s business; all returned or repossessed goods
and all names or marks affixed to or to be affixed thereto for purposes of
selling same by the seller, manufacturer, lessor or licensor thereof and (ii) equipment
and fixtures wherever located, whether now owned or hereafter acquired,
including, without limitation, all machinery, motor vehicles, and furniture and
any and all additions, substitutions, replacements (including spare parts) and
accessions thereof and thereto;

 

(c)           Without in any way limiting the generality of any of the foregoing, all
now owned or hereafter acquired right, title and interest of F&H in, to and
in respect of all (i) margin deposits and accounts maintained by F&H with
any party (including, without limitation, all

 

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Approved Margin Deposits); (ii) Derivatives
Contracts; (iii) delivery contracts with F&H’s customers; and (iv) F&H’s
customer list;

 

(d)           All now owned and hereafter acquired right, title and interests of
F&H in, to and in respect of any personal property in or upon which Agent
or any Lender has or may hereafter have a security interest, lien or right of
setoff;

 

(e)           All present and future books and records relating to any of the above
including, without limitation, all computer programs, printed output and
computer readable data in the possession or control of F&H, any computer
service bureau or other third party; and

 

(f)            All products and proceeds of the foregoing in
whatever form and wherever located, including, without limitation, all
insurance proceeds and all claims against third parties for loss or destruction
of or damage to any of the foregoing.

 

Without in any way limiting
the generality of the foregoing, (a) in no event will any existing or
future Hedging Agreements with Agent or any Lender, any affiliate of Agent or
any Lender or any participant with Agent or any Lender in respect of this
Agreement be deemed Collateral; and (b) notwithstanding the foregoing
grant of a security interest, (i) no account, instrument, chattel paper or
other obligation or property of any kind due from, owed by, or belonging to, a
Sanctioned Person or (ii) any lease in which the lessee is a Sanctioned
Person shall be Collateral.

 

Lender may reject or refuse
to accept any Collateral for credit toward payment of the Obligations that is
an account, instrument, chattel paper, lease, or other obligation or property
of any kind due from, owed by, or belonging to, a Sanctioned Person.

 

5.             CONFESSION OF JUDGMENT.  F&H HEREBY AUTHORIZES AND EMPOWERS ANY
ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF
PENNSYLVANIA, OR IN ANY OTHER JURISDICTION WHICH PERMITS THE ENTRY OF JUDGMENT
BY CONFESSION, TO APPEAR FOR F&H AT ANY TIME AFTER THE OCCURRENCE OF AN
EVENT OF DEFAULT UNDER THE LOAN AGREEMENT IN ANY ACTION BROUGHT AGAINST F&H
ON THE NOTES OR THE LOAN DOCUMENTS AT THE SUIT OF AGENT OR ANY LENDER, WITH OR
WITHOUT COMPLAINT OR DECLARATION FILED, WITHOUT STAY OF EXECUTION, AS OF ANY
TERM OR TIME, AND THEREIN TO CONFESS OR ENTER JUDGMENT AGAINST F&H FOR THE
ENTIRE UNPAID OUTSTANDING PRINCIPAL AMOUNT OF THE NOTES AND ALL OTHER SUMS TO
BE PAID BY F&H TO OR ON BEHALF OF AGENT AND/OR ANY LENDER PURSUANT TO THE TERMS
OF THE NOTES OR OF THE LOAN DOCUMENTS AND ALL ARREARAGES OF INTEREST THEREON,
TOGETHER WITH ALL COSTS AND OTHER EXPENSES AND AN ATTORNEY’S COLLECTION
COMMISSION OF TEN PERCENT (10%) OF THE AGGREGATE AMOUNT OF THE FOREGOING SUMS,
BUT IN NO EVENT LESS THAN $5,000.00; AND FOR SO DOING THIS AMENDMENT OR A COPY
HEREOF VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT.

 

THE
AUTHORITY GRANTED HEREIN TO CONFESS JUDGMENT SHALL NOT BE EXHAUSTED BY ANY
EXERCISE THEREOF BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL
PAYMENT IN FULL OF ALL THE AMOUNTS DUE UNDER THE NOTES AND UNDER THE LOAN
DOCUMENTS.  F&H

 

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ACKNOWLEDGES
THAT IT HAS BEEN REPRESENTED BY COUNSEL IN CONNECTION WITH THE EXECUTION AND
DELIVERY OF THE NOTES AND THE LOAN DOCUMENTS AND THAT IT KNOWINGLY WAIVES ITS
RIGHT TO BE HEARD PRIOR TO THE ENTRY OF SUCH JUDGMENT AND UNDERSTANDS THAT,
UPON SUCH ENTRY, SUCH JUDGMENT SHALL BECOME A LIEN ON ALL REAL PROPERTY OF
F&H IN THE COUNTY WHERE SUCH JUDGMENT IS ENTERED.

 

6.             CONFESSION OF JUDGMENT IN
EJECTMENT.  F&H HEREBY IRREVOCABLY
AUTHORIZES AND EMPOWERS THE PROTHONOTARY, CLERK OR ANY ATTORNEY OF ANY COURT OF
RECORD OF THE COMMONWEALTH OF PENNSYLVANIA OR ELSEWHERE, UPON THE OCCURRENCE OF
AN EVENT OF DEFAULT, TO APPEAR FOR AND CONFESS JUDGMENT AGAINST F&H, AS
WELL AS AGAINST ALL PERSONS CLAIMING UNDER, BY OR THROUGH F&H, AND IN FAVOR
OF AGENT, ITS SUCCESSORS OR ASSIGNS, AS OF ANY TERM, PAST, PRESENT OR FUTURE,
WITH OR WITHOUT DECLARATION, FOR POSSESSION, CONTROL OR BOTH OF THE PREMISES
(AS DEFINED IN THE MORTGAGES), IMPROVEMENTS (AS DEFINED IN THE MORTGAGES) AND
BUILDING EQUIPMENT (AS DEFINED IN THE MORTGAGES), WITHOUT THE NECESSITY OF
FILING ANY BOND AND WITHOUT ANY STAY OF EXECUTION OR APPEAL.  THIS INSTRUMENT, OR A COPY HEREOF VERIFIED BY
AFFIDAVIT, SHALL BE SUFFICIENT WARRANT THEREFOR; WHEREUPON, APPROPRIATE PROCESS
TO OBTAIN POSSESSION, CONTROL OR BOTH OF THE PREMISES, IMPROVEMENTS AND
BUILDING EQUIPMENT, INCLUDING LEVY AND EXECUTION, MAY BE ISSUED FORTHWITH,
WITHOUT ANY PRIOR WRIT OR PROCEEDING WHATSOEVER.  F&H HEREBY RELEASES AND AGREES TO RELEASE
AGENT AND SAID ATTORNEYS FROM ALL PROCEDURAL ERRORS AND DEFECTS WHATSOEVER IN
ENTERING SUCH JUDGMENT OR JUDGMENTS OR IN CAUSING SUCH WRITS OR PROCESS TO BE
ISSUED OR IN ANY PROCEEDING THEREON OR CONCERNING THE SAME, PROVIDED THAT AGENT
SHALL HAVE FILED IN SUCH ACTION OR ACTIONS AN AFFIDAVIT OR AFFIDAVITS MADE BY
SOMEONE ON AGENT’S BEHALF SETTING FORTH THE FACTS NECESSARY TO AUTHORIZE THE
ENTRY OF SUCH JUDGMENT OR JUDGMENTS ACCORDING TO THE TERMS OF THIS INSTRUMENT,
OF WHICH FACTS SUCH AFFIDAVIT OR AFFIDAVITS SHALL BE PRIMA FACIE EVIDENCE.  IT IS HEREBY EXPRESSLY AGREED THAT IF FOR ANY
REASON AFTER ANY SUCH ACTION OR ACTIONS HAVE BEEN COMMENCED THE SAME SHALL BE
DISCONTINUED, MARKED SATISFIED OF RECORD OR BE TERMINATED, OR POSSESSION OF THE
PREMISES, IMPROVEMENTS OR BUILDING EQUIPMENT REMAINS IN OR IS RESTORED TO
F&H OR ANYONE CLAIMING UNDER, BY OR THROUGH F&H, AGENT MAY, WHENEVER
AND AS OFTEN AS AGENT SHALL HAVE THE RIGHT TO AGAIN TAKE POSSESSION OF THE
PREMISES, IMPROVEMENTS AND BUILDING EQUIPMENT, BRING ONE OR MORE FURTHER
CONFESSIONS IN THE MANNER SET FORTH HEREIN TO RECOVER POSSESSION OF THE
PREMISES, IMPROVEMENTS AND BUILDING EQUIPMENT. 
THE AUTHORITY AND POWER ABOVE GIVEN SHALL CONTINUE FROM TIME TO TIME AND
AT ALL TIMES UNTIL FINAL PAYMENT IN FULL OF ALL SECURED INDEBTEDNESS (AS
DEFINED IN THE MORTGAGES).

 

7.             Amendments to Loan Agreement.   

 

(a)           Definitions.

 

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(i)            Section 10.1(d) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:

 

“(d)   “Borrowing Base Amount” shall mean the
remainder of (i) the sum of (A) up to seventy-five percent (75%) of
the book value of Eligible Receivables, plus (B) up to seventy-five
percent (75%) of the Value of Eligible Inventory, minus (ii) the Reserve.”

 

(ii)           Section 10.1 of the Loan Agreement is hereby amended by
adding the following definition thereto:

 

‘“Reserve” shall mean an amount equal to Two Million
Six Hundred Thousand Dollars ($2,600,000.00).”

 

(b)           Pro Rate Line Percentage;
Pro Rata Line Share.  Schedule
A to the Loan Agreement is hereby deleted in its entirety and
replaced with Schedule A
attached hereto.

 

(c)           Other Schedules.  The
other Schedules to the Loan Agreement are hereby replaced with the Schedules
attached hereto.

 

8.             Third-Party Locations;
Through-Put Locations.

 

(a)           Third Party Locations. 
F&H represents and warrants to Agent and Lenders that the portions
of the Collateral which are tangible property and F&H’s books and records
(both pertaining to the Collateral and otherwise) are located at the addresses
set forth on Schedule 8(a) attached
hereto, which addresses included, without limitation, all “through-put” or
similar locations.

 

(b)           Through-Put Contracts. 
F&H represents and warrants to Agent and Lenders that Schedule 8(a) attached hereto sets
forth (i) a complete list of all of F&H’s agreements in connection
with any “through-put” or similar arrangements and (ii) the current
contact information for each through-put operator.

 

(c)           Notification of Lien.  At
Agent’s option from time to time, Agent may notify each party to F&H’s
agreements in connection with any “through-put” or similar arrangements of
Agent’s security interest in the Collateral. 
F&H shall provide such information and take such actions as Agent
may reasonably request in connection with the giving of such notice.

 

(d)           Confirmation of Certain
Through-Put Provisions.  In connection with the “through-put” and
similar arrangements identified on Schedule
8(a) hereto (i) F&H shall not be required to
obtain waiver and access agreements from the other parties to such
arrangements, (ii) the Reserve has been instituted and (iii) the
inventory of F&H at the locations listed on 

Schedule 8(a) hereto
shall constitute Eligible Inventory to the extent that all of the requirements
for Eligible Inventory set forth in the definition thereof (except for the
provisions of subsection (viii) of
such definition) continue to be satisfied.  F&H acknowledges and agrees that the
Reserve is in effect with respect to the “through-put” and similar arrangements
in effect on the date hereof and identified on Schedule 8(a) hereto. 
F&H further acknowledges and agrees that, with respect to any “through-put”
or similar arrangements F&H enters into after the date hereof, (A) F&H
shall comply with the provisions of  Section 6.39
of the Loan Agreement and (B) Agent reserves the right to exclude from
Eligible Inventory any inventory of F&H in connection with any such “through-put”
or similar

 

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arrangements which fails to
satisfy the requirements of subsection (viii) of
the definition of Eligible Inventory.

 

9.             Additional Documents.  On
or before the date hereof, and in addition to all other requirements set forth
in this Amendment, F&H shall execute and deliver, or cause to be executed
and delivered, as applicable, to Agent at F&H’s sole cost and expense,

 

(a)           updated schedules to the Loan Agreement, after giving effect to the
Merger and the Acquisition;

 

(b)           an amendment, ratification and confirmation of (i) the Amended and
Restated Security Agreement and Assignment of Hedging Account among Borrower,
Agent and Citigroup (successor to Solomon Smith Barney Inc.) and (ii) the
Amended and Restated Security Agreement and Assignment of Hedging Account among
Borrower, Agent and Newedge Financial, Inc. (successor to Calyon Financial, Inc.,
successor to Carr Futures Inc.);

 

(c)           an amendment, ratification and confirmation of that certain Amended and
Restated Intellectual Property Security Agreement dated December 16, 2004
between Borrower and Agent;

 

(d)           a copy of all of F&H’s agreements in connection with any “though-put”
or similar arrangements (the “Through-Put
Contracts”) along with all documents as Agent may reasonably require
in connection with F&H’s inventory subject to such agreements;

 

(e)           an opinion of counsel for F&H, addressed to the Agent and dated the
date hereof;

 

(f)            evidence of insurance of F&H evidencing liability
and casualty insurance meeting the requirements set forth in the Loan
Documents; and

 

(g)           search reports on F&H showing no liens, judgments, suits,
encumbrances, bankruptcies or restrictions of any nature with respect to
F&H;

 

(h)           true and complete copies of the Transaction Documents and each of the
documents executed pursuant thereto or in connection therewith, none of which
shall have been amended or modified;

 

(i)            evidence that each party to a Derivatives
Contract has consented to the Merger;

 

(j)            an officer’s certificate of F&H
certifying as true and correct (i) F&H’s formation documents, (ii) the
Articles of Merger and evidence of filing with the Pennsylvania Secretary of
State, (iii) F&H’s governing documents, (iv) incumbency of
F&H’s officer’s and directors and (v)  the resolutions of the members,
managers with respect to the transactions contemplated hereby;

 

(k)           copies of certificates of good standing, subsistence or its equivalent
with respect to F&H of the state or other jurisdiction of formation and
each other jurisdiction in which F&H is qualified to do business; and

 

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(l)            such additional documents, agreements,
assignments, amendments, certificates and other items as Lenders may reasonably
request to evidence or effect the terms hereof or of any documents executed in
connection herewith, or to further evidence, effect, enforce or protect any of
the terms hereof or the rights or remedies granted or intended to be granted to
Agent and/or Lenders herein or therein.

 

All such documents,
agreements, assignments, amendments, certificates, consents and other items
shall be in form and content reasonably acceptable to Agent.  F&H hereby authorizes Agent to file any
and all financing statements, amendments and continuations thereto in any
jurisdictions and with any filing offices as Agent may determine, in its sole
discretion, as necessary or advisable to evidence, perfect or continue all
security interests granted to Agent, for its benefit and the benefit of Lenders
including, without limitation its security interest in all assets of
F&H.  Such financing statements may
describe the collateral in the same manner as described in the Loan Agreement,
as amended, or any security agreement or pledge agreement entered into in
connection therewith or may contain an indication or description of collateral
that describes such property in any other manner as Agent may determine, in its
sole discretion, is necessary, advisable or prudent to ensure the continuing perfection
of the security interest in the Collateral including, without limitation, Agent’s
security interest in all assets of F&H and such description may describe
such property as “All present and future assets of Debtor and all products and
proceeds thereof, wherever located.” 
F&H hereby authorizes Agent to file such other items as Agent may
reasonably require to evidence or perfect Agent’s continuing security interests
and liens in and against the Collateral, including, without limitation, all
assets of F&H.  F&H agrees to
join with Agent in notifying any third party with possession of any Collateral
of Agent’s security interest therein and in obtaining an acknowledgment from
the third party that it is holding the Collateral for the benefit of Agent, as
agent for the Lenders.  F&H will
cooperate with Agent in obtaining control with respect to Collateral consisting
of deposit accounts, investment property, letter-of-credit rights and
electronic chattel paper.

 

10.           References.  From
and after the date hereof:

 

(a)           All references in the Loan Agreement and each of the other Loan
Documents to “Borrower” shall mean
F&H; and

 

(b)           All references in the Loan Agreement and the other Loan Documents to
the “Loan Agreement” shall mean
the Loan Agreement, as amended hereby.

 

11.           Term Loan.  On
the date hereof, F&H shall pay in full the outstanding principal balance of
the Term Loan, together with all accrued and unpaid interest thereon.  No portion of the Term Loan may be
reborrowed.

 

12.           Further Agreements and
Representations.  F&H does hereby:

 

(a)           ratify, confirm and acknowledge that the Loan Agreement, as amended,
and the other Loan Documents continue to be and are valid, binding and in full
force and effect;

 

(b)           covenant and agree to perform all obligations of F&H contained
herein, under the Loan Agreement, as amended, and the other Loan Documents;

 

8

 

(c)           acknowledge and agree that as of the date hereof F&H has no
defense, set-off, counterclaim or challenge against the payment of any sums
owing under Loan Documents, the enforcement of any of the terms of the Loan
Agreement, as amended, or the other Loan Documents;

 

(d)           acknowledge and agree that all representations and warranties of
F&H (as amended by the updated schedules attached hereto) contained in the
Loan Agreement and/or the other Loan Documents, as amended, are true, accurate
and correct on and as of the date hereof as if made on and as of the date
hereof;

 

(e)           represent and warrant that no Default or Event of Default exists and
all information described in the foregoing Background and in Section 1 above is true, accurate
and complete;

 

(f)            acknowledge and agree that nothing contained
herein and no actions taken pursuant to the terms hereof is intended to constitute
a novation of the Loan Agreement or any of the other Loan Documents, and do not
constitute a release, termination or waiver of any of the rights or remedies
granted to Agent or any Lender therein, which rights and remedies are hereby
ratified, confirmed, extended and continued as security for the Obligations;
and

 

(g)           acknowledge and agree that F&H’s failure to comply with or perform
any of its covenants, agreements or obligations contained in this Amendment
shall constitute an Event of Default under the Loan Agreement and each of the
Loan Documents, subject to any applicable cure periods contained therein.

 

13.           Additional Documents;
Further Assurances.  F&H covenants and agrees to execute and
deliver to Agent, or to cause to be executed and delivered to Agent
contemporaneously herewith, at the sole cost and expense of F&H, this
Amendment and any and all other documents, agreements, statements, resolutions,
certificates, consents and information as Agent or any Lender may reasonably
require in connection with the matters or actions described herein.  F&H further covenants and agrees to
execute and deliver to Agent or to cause to be executed and delivered at the
sole cost and expense of F&H, from time to time, any and all other
documents, agreements, statements, certificates and information as Agent or any
Lender shall reasonably request to evidence or effect the terms hereof, the
Loan Agreement, as amended, or any of the other Loan Documents, or to enforce
or to protect Agent’s and each Lender’s interest in the  Collateral.  All such documents, agreements, statements,
etc., shall be in form and content acceptable to Agent in its reasonable sole
discretion.

 

14.           Fees, Cost, Expenses and
Expenditures.  F&H will pay all of Agent’s and each
Lender’s expenses in connection with the review, preparation, negotiation,
documentation and closing of this Amendment and the consummation of the
transactions contemplated hereunder, including without limitation, fees,
reasonable attorney’s fees, disbursements, expenses and disbursements of
counsel retained by Agent and all fees related to title insurance, filings,
recording of documents and searches, whether or not the transactions
contemplated hereunder are consummated.

 

15.           Inconsistencies.  To the extent of any inconsistency
between the terms, conditions and provisions of this Amendment and the terms,
conditions and provisions of the Loan Agreement or the other Loan Documents,
the terms, conditions and provisions of this Amendment shall prevail.  All terms, conditions and provisions of the
Loan Agreement and the other Loan Documents not

 

9

 

inconsistent herewith shall
remain in full force and effect and are hereby ratified and confirmed by
F&H.

 

16.           Construction.  All references to the Loan
Agreement therein or in any other Loan Documents shall be deemed to be a
reference to the Loan Agreement as amended hereby.

 

17.           No Waiver.  Nothing contained in this Amendment and no actions taken pursuant
to the terms hereof are intended to nor shall they constitute a waiver by Agent
or any Lender of any rights or remedies available to Agent or any Lender at law
or in equity or as provided in the Loan Agreement or the other Loan Documents.

 

18.           Binding Effect.  This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

 

19.           Severability.  The
provisions of this Amendment and all other Loan Documents are deemed to be
severable, and the invalidity or unenforceability of any provision shall not
affect or impair the remaining provisions which shall continue in full force
and effect.

 

20.           Modifications.  No
modification of this Amendment or any of the Loan Documents shall be binding or
enforceable unless in writing and signed by or on behalf of the party against
whom enforcement is sought.

 

21.           Governing Law.  This Amendment shall be governed
by and construed in accordance with the laws of the Commonwealth of
Pennsylvania without regard to conflict of law principles.

 

22.           Headings.  The
headings of the sections of this Amendment are inserted for convenience only
and shall not be deemed to constitute a part of this Amendment.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

10

 

IN WITNESS
WHEREOF, the parties
hereto have executed this Amendment effective as of the date first above
written.

 

	
   

  	
  FARM &
  HOME OIL COMPANY LLC,
  a 

  Pennsylvania limited liability company 

  (successor by merger to Farm & Home Oil 

  Company, a Pennsylvania corporation)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  _/s/ James M. Boyd

  	
   

  
	
   

  	
  Name/Title:

  	
  James Boyd, CFO &
  VP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNIVEST
  NATIONAL BANK AND 

  TRUST CO., as Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip C. Jackson

  	
   

  
	
   

  	
  Name/Title:

  	
  Philip C. Jackson,
  Executive

  Vice President and Market President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WACHOVIA
  BANK, NATIONAL 

  ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harry E. Ellis

  	
   

  
	
   

  	
  Name/Title:

  	
  Harry E.
  Ellis, Senior Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FULTON
  BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher M. Markley

  	
   

  
	
   

  	
  Name/Title:

  	
  Christopher M. Markley,
  SVP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CITIZENS
  BANK OF PENNSYLVANIA, 

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel J. Astolfi

  	
   

  
	
   

  	
  Name/Title:

  	
  Daniel J. Astolfi, SVP

  	
   

  
												

 

11

 

Schedule A

 

Pro Rata Line Percentages, Pro Rata Line Share

 

	
  Financial

  Institution

  	
   

  	
  Working
  Capital

  Line

  (“Pro Rata Line

  Percentage”)

  	
   

  	
   

  	
  Pro
  Rata Line Share

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Univest National

  Bank and Trust Co. 

  	
  13.3333334  

  	
  % 

  	
  November 20, 2007 through
  and including April 30, 2008 - $18,666,668.00

  May 1, 2008 and at
  all times thereafter - $13,333,334.00

  
	
   

  	
   

  	
   

  	
   

  
	
  Wachovia Bank,

  National Association 

  	
  34.5833333
  

  	
  % 

  	
  November 20, 2007 through
  and including April 30, 2008 - $48,416,666.00

  May 1, 2008 and at
  all times thereafter - $34,583,333.00

  
	
   

  	
   

  	
   

  	
   

  
	
  Fulton Bank

  	
  17.5

  	
  %

  	
  November 20, 2007 through
  and including April 30, 2008 - $24,500,000.00

  May 1, 2008 and at
  all times thereafter - $17,500,000.00

  
	
   

  	
   

  	
   

  	
   

  
	
  Citizens Bank of

  Pennsylvania  

  	
  34.5833333   

  	
  %  

  	
  November 20, 2007 through
  and including April 30, 2008 - $48,416,666.00

  May 1, 2008 and at
  all times thereafter - $34,583,333.00

  

 

12Exhibit
10.1

 

CEPHALON,
INC.

 

ADVISORY
SERVICES AGREEMENT AND RELEASE

 

 

THIS ADVISORY SERVICES
AGREEMENT (the “Agreement”), is entered into
as of February 8, 2008, by and between Cephalon, Inc., a Delaware
corporation (the “Company”), and John E. Osborn
(“Advisor”).

 

WHEREAS, Advisor has been a
good and valuable employee of the Company since March 17, 1997;

 

WHEREAS, Advisor has served
as chief legal officer of the Company since 1998, and in that capacity has been
responsible for managing all legal matters and strategies, including matters
related to intellectual property and litigation;

 

WHEREAS, Advisor is
currently Executive Vice President, General Counsel and Secretary of the
Company, and in that capacity is a party to an Executive Severance Agreement, dated
July 25, 2002, by and between Advisor and the Company (the “Severance Agreement”);

 

WHEREAS, Advisor intends to
resign his position as Executive Vice President, General Counsel and Secretary
of the Company, effective March 31, 2008.

 

WHEREAS, the Company
recognizes that Advisor’s unique knowledge and insight concerning the Company’s
legal and policy matters is valuable to the Company and the Company wishes to
obtain the continued services of Advisor in connection with such legal and
policy matters, subject to the terms and conditions of this Agreement.

 

NOW, THEREFORE, in
consideration of the mutual promises hereinafter set forth, and intending to be
legally bound hereby, the Company and Advisor hereby agree as follows:

 

1.     Term.  The term of this Agreement shall begin on April 1,
2008 (the “Effective Date”) and shall
continue until March 31, 2011, unless terminated prior thereto pursuant to
Paragraph 7 below (the “Term”).

 

2.     Conditions.  Advisor understands and agrees that this
Agreement will not become effective unless Advisor resigns his position as
Executive Vice President, General Counsel and Secretary of the Company, and
thereby terminates his employment with the Company, on March 31,
2008.  Advisor also agrees that at such
time he will also resign as an officer and/or director of any subsidiary of the
Company.  Advisor further understands and
agrees that this Agreement will not become effective unless and until Advisor
executes, and does not revoke, the Company’s standard written release, a copy of
which is attached hereto as Schedule 1 (the “Release”),
of any and all claims against the Company and all related parties with respect
to all matters arising out of Advisor’s employment by the Company (other than
any entitlements under the terms of this Agreement or under any other plans or
programs of the Company in which Advisor participated and under which Advisor
has accrued or become entitled to a benefit) or the termination thereof.  Advisor further understands and agrees that
as a condition to the effectiveness of this Agreement, Advisor hereby waives
all of his rights and privileges under the Severance Agreement and both the
Company and Advisor hereby agree that the Severance Agreement shall terminate
and be of no further force and effect as of March 31, 2008.

 

 

 

 

 

3.     Services to be Provided.  During the Term of this Agreement, Advisor
shall work with and provide such advice, including legal advice, and support to
the Company’s outside counsel, in-house counsel and Company executives as the
Company may reasonably request in connection with legal and policy matters,
including litigation, intellectual property and regulatory matters, as well as
assistance in the transition to Advisor’s replacement as General Counsel (the “Services”).   Advisor shall be subject to the direction of
the Chairman and Chief Executive Officer (“CEO”) of
the Company or such person as the CEO may reasonably designate, including the
new General Counsel once hired.  Advisor
shall perform such other reasonable advisory services as shall be mutually
agreed upon by Advisor and the CEO, or the CEO’s delegate, from time to
time.  The Company contemplates, and
Advisor acknowledges, that the Services to be rendered by Advisor during the
first twelve months of the Term may be substantial.  Advisor shall perform the Services at any one
of the Company’s locations or at other places as may be mutually convenient and
agreed upon by Advisor and the Company.

 

4.     Compensation; No Benefits.

 

(a)     Compensation. 
The Company shall pay Advisor one million nine
hundred thousand dollars (US $1,900,000) on October 1, 2008 and one
hundred thousand dollars (US $100,000) on each of April 1, 2009 and April 1,
2010.  The payment of nine hundred fifty
thousand dollars (US $950,000) of the October 1, 2008 payment (the “Waiver
Compensation”) is expressly conditioned on Advisor’s executing this Agreement,
thereby waiving his rights under the Severance Agreement pursuant to Paragraph
2 above.

 

(b)    Equity Awards. 
Notwithstanding anything in any agreement to the contrary
and as a condition for the Company to enter into this Agreement, Advisor hereby
agrees that all of Advisor’s outstanding equity awards that are not vested as
of March 31, 2008 shall terminate and Advisor shall have no further rights
with respect to such nonvested awards.

 

(c)     Expenses.  The
Company shall reimburse Advisor for all reasonable business and pre-approved
traveling expenses incurred by Advisor in connection with the performance of
the Services in accordance with the Company’s expense reimbursement policies in
effect from time to time.

 

(d)    No Benefits.  Advisor
acknowledges that for purposes of this Agreement and any and all Services to be
provided hereunder, he shall not be an employee of Company and will not be
entitled to participate in or receive any benefit or right as a Company
employee under any Company employee benefit or executive compensation plan,
including, without limitation by way of specification, employee insurance,
pension, savings, medical, healthcare, fringe benefit, stock option, equity
compensation, deferred compensation and bonus plans (collectively, the “Company
Plans”).  If Advisor’s
status is ultimately re-characterized by a third party to constitute employee
status, Advisor shall not be eligible to participate in or receive any benefit
or right as a Company employee under any Company Plan unless and until the
Company consents to such eligibility.

 

5.     Independent Contractor; Performance.  For purposes of this Agreement and all
Services to be provided hereunder, Advisor shall not be considered a partner,
co-venturer, agent, employee, or representative of the Company, but shall
remain in all respects an independent 

 

 

 

 

 

contractor, and neither
party shall have any right or authority to make or undertake any promise, warranty
or representation, to execute any contract, or otherwise to assume any
obligation or responsibility in the name of or on behalf of the other
party.  Advisor shall perform all
Services in a professional manner, consistent with industry standards and the
Company’s goals and ethical standards. 
Notwithstanding anything in this Paragraph 5, the Company’s board of
directors (the “Board”) or a committee
thereof shall designate Advisor an “authorized representative” of the Company
under Section VII of the Company’s bylaws, effective on the Effective
Date, for purposes of Advisor’s eligibility to obtain reimbursement of legal
fees and indemnification by the Company, such reimbursement and indemnification
shall be subject to the terms and conditions of the Company’s relevant
policies.

 

6.     Tax Obligations.  The Company will report the Waiver
Compensation paid on October 1, 2008 on Form W-2 and shall effect the
applicable withholding on such compensation. 
Except as otherwise provided in this Paragraph 6, Advisor shall be
responsible for all income taxes, employment taxes and workers’ compensation
insurance associated with the compensation received under this Agreement and
agrees that the Company will not withhold or pay any of the foregoing in
connection with Advisor’s Services to the Company hereunder.

 

7.     Termination.  Notwithstanding the provisions of Paragraph
1, the Company may terminate this Agreement at any time during the Term upon
written notice to Advisor (“Early Termination”),
if the Services are not being performed. 
In the event of an Early Termination by the Company, the Company shall
not be responsible for any portion of any compensation payments due to be paid
to Advisor under Paragraph 4 after the date of notice of such Early
Termination, except the Waiver Compensation, which shall nevertheless be paid
as scheduled under Paragraph 4.  Within
five days after an Early Termination by the Company, Advisor shall deliver to
the Company all work product resulting from the performance of the Services.

 

8.     Restrictive Covenants.

 

(a)     Confidentiality. 
Advisor shall remain subject to the terms and
conditions of his Employee Confidentiality Agreement, a copy of which is
attached hereto as Schedule 2, which Agreement shall continue in full
force and effect during the Term of this Agreement and thereafter.

 

(b)    Non-Competition.  During the Term of this Agreement, and for a
period of one year thereafter, except with the written consent of the Company,
Advisor shall not directly or indirectly, own, manage, operate, join, control,
finance or participate in the ownership, management, operation, control or
financing of, or be connected as an officer, director, employee, partner,
principal, agent, representative, stockholder, advisor, consultant, investor or
otherwise with, or use or permit his name to be used in connection with, any
person, business or enterprise which directly or indirectly engages in (i) the
development of compounds, or (ii) the sale or marketing of products, that
in either case directly compete with the Company’s compounds or products (the “Company’s
Business”), or which partners or serves as
a joint venturer with the Company in connection with the Company’s
Business.  Notwithstanding anything set
forth herein, nothing shall be construed so as to prevent Advisor from
consulting with or working for any of the leading research-based brand name
pharmaceuticals or biotechnology companies. 
The foregoing restrictions shall not be construed to prohibit Advisor’s
ownership of less than five percent of any class of securities of any
corporation that is engaged in any of the foregoing businesses and has 

 

 

 

 

a class of securities registered pursuant to the Securities
Exchange Act of 1934, as amended, provided that such ownership represents a
passive investment and that neither Advisor nor any group pf persons including
Advisor in any way either directly or indirectly, manages or exercises control
of any such corporation, guarantees any of its financial obligations, otherwise
takes any part in its business, other than exercising Advisor’s rights as a
stockholder, or seeks to do any of the foregoing.

 

(c)     Non-Solicitation. 
During the Term of this Agreement, and for a period
of one (1) year thereafter, Advisor will not:

 

(i)          except with the prior written consent of the Company,
directly or indirectly solicit, entice or induce any customer, including any
customer that was a customer of the Company at any time during the preceding
six months, to become a customer of any other person, firm or corporation with
respect to the Company’s Business or to cease doing business with the Company
or its subsidiaries or affiliates, and Advisor will not approach any such
person, firm or corporation for such purpose or authorize or knowingly approve,
encourage or assist the taking of such actions by any other person, firm or
corporation; or

 

(ii)         directly or indirectly solicit, recruit or hire any
part-time or full-time employee, representative or advisor of the Company or
its subsidiaries or affiliates, or any person who was an employee,
representative or advisor of the Company or its subsidiaries or affiliates at
any time during the preceding six months, to work for a third party other than
the Company or its subsidiaries or affiliates or engage in any activity that
would cause any employee, representative or advisor to violate any agreement
with the Company or its subsidiaries or affiliates.

 

(d)    Return of Property. 
Upon termination of 
this Agreement, Advisor shall deliver to the person designated by the
Company all originals and copies of all documents and property of the Company
in Advisor’s possession, under Advisor’s control or to which Advisor may have
access, including but not limited to, any office, computing or communications
equipment (e.g., laptop computer, facsimile machine, printer, cellular
phone, etc.) that he has had or has been using, and any business or
business-related files that he has had in his possession.  Advisor will not reproduce or appropriate for
Advisor’s own use, or for the use of others, any Proprietary Information (as
defined in the Employee Confidentiality Agreement), and shall use reasonable
efforts to remove from any personal computing or communications equipment all
such Proprietary Information relating to the Company.

 

(e)     Non-Disparagement. 
Advisor agrees that Advisor shall not disparage the
Company, its subsidiaries and parents, and their respective officers,
directors, investors, employees, and agents, and its and their respective
successors and assigns, heirs, executors, and administrators, or make any
public statement reflecting negatively on the Company, its subsidiaries and
parents, and their respective officers, directors, investors, employees, and
agents, and its and their respective successors and assigns, heirs, executors,
and administrators, to third parties, including, but not limited to, any
matters relating to the operation or management of the Company, irrespective of
the truthfulness or falsity of such statement, except as may otherwise be
required by applicable law or compelled by process of law.  The Company agrees that it, and its
subsidiaries, shall not, and shall request their respective officers and
directors, investors 

 

 

 

 

and its and their respective successors and assigns, not to,
make any disparaging or negative remarks, either oral or in writing, regarding
Advisor.

 

(f)     Insider Trading.  Notwithstanding Advisor’s status as an
independent contractor as of and following the Effective Date, Advisor
acknowledges and agrees that he will remain subject to and abide by the Company’s
Policy Statement on Securities Trading, until such time as he is no longer
aware of any material nonpublic information concerning the Company.

 

(g)    Disclosure.  Advisor
acknowledges that the Company intends to publicly disclose the existence and
material terms of this Agreement, and file a copy of this Agreement, as
required by the rules and regulations of the U.S. Securities and Exchange
Commission.  Furthermore, Advisor has
reviewed and approved the form of press release set forth in Schedule 3
attached hereto.

 

(h)    Third Party Information.  Advisor
recognizes that the Company has received and in the future will receive from
third parties their confidential or proprietary information subject to a duty
on the Company’s part to maintain the confidentiality of such information (“Third
Party Information”) and to use such information
only for certain limited purposes. 
Advisor agrees at all times during the Term of this Agreement and
thereafter, to hold in strictest confidence any and all Third Party Information
he has received or will receive, and not to use such information, except in
connection with Advisor’s performance of the Services, or to disclose to any
person or entity such information, except as necessary in performing the
Services, consistent with the Company’s agreement with such third party.

 

(i)      Enforcement.  If,
at the enforcement of Paragraphs 8(a) through (d), a court holds that the
duration or scope restrictions stated herein are unreasonable under
circumstances then existing, the parties agree that the maximum duration or
scope reasonable under the circumstances shall be substituted for the stated
duration or scope, and that the court shall be permitted to revise the
restrictions contained in this Paragraph 8 to cover the maximum duration or
scope permitted by law.

 

(j)      Survival.  The
provisions of this Paragraph 8 shall survive the Term of this Agreement.

 

9.     No Conflicting Agreements; Non-Exclusive
Engagement.

 

(a)     No Conflicting Agreements.  Advisor
represents that Advisor is not a party to any existing agreement that would
prevent Advisor from entering into and performing this Agreement.  Advisor will not enter into any other
agreement that is in conflict with Advisor’s obligations under this
Agreement.  Subject to the foregoing,
Advisor may from time to time act as an advisor or consultant to, perform
professional services for, or enter into agreements similar to this Agreement
with other persons or entities without the necessity of obtaining approval from
the Company.

 

(b)    Non-Exclusive Engagement.  The
Company may from time to time (i) engage other persons and entities to act
as advisors or consultants to the Company and perform services for the Company,
including services that are similar to the 

 

 

 

 

Services, and (ii) enter into agreements similar to
this Agreement with other persons or entities, in all cases without the
necessity of obtaining approval from Advisor.

 

10.   Equitable Relief.  Advisor agrees that it would be impossible or
inadequate to measure and calculate the Company’s damages from any breach of
the covenants set forth in Paragraph 8 of this Agreement.  Accordingly, Advisor agrees that if Advisor
breaches any of such covenants, the Company will have available, in addition to
any other right or remedy available, the right to obtain an injunction from a
court of competent jurisdiction, without the necessity of posting a bond or
other security, restraining such breach or threatened breach and to specific
performance of any such provision of this Agreement

 

11.   Entire Agreement, Amendment and Assignment.  This Agreement is the sole agreement between
Advisor and the Company with respect to the Services to be performed hereunder
and it supersedes all prior agreements and understandings with respect thereto,
whether oral or written.  No modification
to any provision of this Agreement shall be binding unless in writing and
signed by both Advisor and the Company. 
No waiver of any rights under this agreement, will be effective unless
in writing signed by the party to be charged. 
All of the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Advisor
hereunder are of a personal nature and shall not be assignable or delegable in
whole or in part by Advisor.

 

12.   Governing Law.  This Agreement shall be governed by and
interpreted in accordance with laws of the Commonwealth of Pennsylvania,
without giving effect to any conflict of laws provisions.

 

13.   Notices.  All notices and other communications required
or permitted hereunder or necessary or convenient in connection herewith shall
be in writing and shall be deemed to have been given when hand delivered, sent
by facsimile or mailed by registered or certified mail, as follows (provided
that notice of change of address shall be deemed given only when received):

 

	
   

  	
  If to the Company, to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cephalon, Inc.

  
	
   

  	
   

  	
  41
  Moores Road

  
	
   

  	
   

  	
  Frazer,
  PA 19355

  
	
   

  	
   

  	
  Attention: Chairman and
  CEO

  
	
   

  	
   

  	
  (610)

  	
  —

  	
  (facsimile)

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Morgan,
  Lewis and Bockius LLP

  
	
   

  	
   

  	
  1701
  Market Street

  
	
   

  	
   

  	
  Philadelphia,
  PA 19103

  
	
   

  	
   

  	
  Attn:
  I. Lee Falk, Esq.

  
	
   

  	
   

  	
  (215)
  963-5001 (facsimile)

  

 

If to Advisor, to the most recent address on file with
the Company or to such other names or addresses as the Company or Advisor, as
the case may be, shall designate by 

 

 

 

 

 

 

notice to each other person entitled to receive
notices in the manner specified in this Paragraph 13.

 

14.   Counterparts.  This Agreement shall become binding when any
one or more counterparts hereof, individually or taken together, shall bear the
signatures of Advisor and the Company. 
This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original as against any party whose signature
appears thereon, but all of which together shall constitute but one and the
same instrument.

 

15.   Severability.  If any provision of this Agreement or
application thereof to anyone or under any circumstances is adjudicated to be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect any other provision or application of this
Agreement which can be given effect without the invalid or unenforceable
provision or application and shall not invalidate or render unenforceable such
provision or application in any other jurisdiction.

 

16.   Social Security Number.  Advisor certifies that he has provided the
Company with his true and correct Social Security Number.  Advisor acknowledges that Company will rely
upon the foregoing certification in filing certain documents and instruments
required by law in connection with this Agreement including, without limitation,
Form 1099 (or any successor form) under the Internal Revenue Code of 1986,
as amended (the “Code”).

 

17.   Section 409A.  The Company and Advisor agree that
termination of the Advisor’s employment as of March 31, 2008 constitutes a
“separation from service” (within the meaning of section 409A of the Code) as
of such date.  All payments and
reimbursements provided under this Agreement are intended to comply with the
applicable provisions of section 409A of the Code and shall be interpreted to
avoid any penalty sanctions under section 409A of the Codes.

 

IN WITNESS WHEREOF, the
undersigned, intending to be legally bound, have duly executed this Agreement
as of the date first above written.

 

	
   

  	
  CEPHALON, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank
  Baldino, Jr.

  
	
   

  	
  Name:

  	
  Frank Baldino, Jr.,
  Ph.D

  
	
   

  	
  Title:

  	
  Chairman & Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADVISOR

  
	
   

  	
   

  
	
   

  	
  /s/ John E. Osborn

  
	
   

  	
  John E. Osborn

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