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Exhibit 10.2    
    

(Bilateral Form) (ISDA Agreements Subject to New York Law Only)  

         

  

CREDIT SUPPORT ANNEX  

to
the Schedule to the 

1992
ISDA MASTER AGREEMENT 

dated
as of January 22, 2003 

between

	Credit Suisse First Boston International	 	and	 	Cephalon, Inc.
	("Party A")	 	 	 	("Party B")

        This
Annex supplements, forms part of, and is subject to, the above-referenced Agreement, is part of its Schedule and is a Credit Support Document under this Agreement with respect to
each party. 

        Accordingly,
the parties agree as follows: 

Paragraph 1. Interpretation  

        (a)   Definitions and Inconsistency. Capitalized terms not otherwise defined herein or elsewhere in this Agreement have the
meanings specified pursuant to Paragraph 12, and all references in this Annex to Paragraphs are to Paragraphs of this Annex. In the event of any inconsistency between this Annex and the other
provisions of this Schedule, this Annex will prevail, and in the event of any inconsistency between Paragraph 13 and the other provisions of this Annex, Paragraph 13 will prevail. 

        (b)   Secured Party and Pledgor. All references in this Annex to the "Secured Party" will be to either
party when acting in that capacity and all corresponding references to the "Pledgor" will be to the other party when acting in that capacity; provided,
however, that if Other Posted Support is held by a party to this Annex, all references herein to that party as the Secured Party with respect to that Other Posted Support will
be to that party as the beneficiary thereof and will not subject that support or that party as the beneficiary thereof to provisions of law generally relating to security interests and secured
parties. 

Paragraph 2. Security Interest  

        Each party, as the Pledgor, hereby pledges to the other party, as the Secured Party, as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-off against all Posted Collateral Transferred to or received by the Secured Party hereunder. Upon the Transfer by the
Secured Party to the Pledgor of Posted Collateral, the security interest and lien granted hereunder on that Posted Collateral will be released immediately and, to the extent possible, without any
further action by either party. 

Paragraph 3. Credit Support Obligations  

        (a)   Delivery Amount. Subject to Paragraphs 4 and 5, upon a demand made by the Secured Party on or promptly following a
Valuation Date, if the Delivery Amount for that Valuation Date equals or exceeds the Pledgor's Minimum Transfer Amount, then the Pledgor will Transfer to the Secured Party Eligible Credit Support
having a Value as of the date of Transfer at least equal to the applicable 

 

Delivery
Amount (rounded pursuant to Paragraph 13). Unless otherwise specified in Paragraph 13, the "Delivery Amount" applicable to the
Pledgor for any Valuation Date will equal the amount by which: 

        (i)    the
Credit Support Amount 

exceeds 

        (ii)   the
Value as of that Valuation Date of all Posted Credit Support held by the Secured Party. 

        (b)   Return Amount. Subject to Paragraphs 4 and 5, upon a demand made by the Pledgor on or promptly following a Valuation
Date, if the Return Amount for that Valuation Date equals or exceeds the Secured Party's Minimum Transfer Amount, then the Secured Party will Transfer to the Pledgor Posted Credit Support specified by
the Pledgor in that demand having a Value as of the date of Transfer as close as practicable to the applicable Return Amount (rounded pursuant to Paragraph 13). Unless otherwise specified in
Paragraph 13, the "Return Amount" applicable to the Secured Party for any Valuation Date will equal the amount by which: 

        (i)    the
Value as of that Valuation Date of all Posted Credit Support held by the Secured Party 

exceeds

        (ii)   the
Credit Support Amount. 

        "Credit Support Amount" means, unless otherwise specified in Paragraph 13, for any Valuation Date (i) the Secured Party's
Exposure for that Valuation Date plus (ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any, minus (iii) all Independent Amounts applicable to the Secured
Party, if any, minus (iv) the Pledgor's Threshold; provided, however, that the Credit Support Amount will be deemed to be zero whenever the
calculation of Credit Support Amount yields a number less than zero. 

Paragraph 4. Conditions Precedent, Transfer Timing, Calculations and Substitutions  

        (a)   Conditions Precedent. Each Transfer obligation of the Pledgor under Paragraphs 3 and 5 and of the
Secured Party under Paragraphs 3, 4(d)(ii), 5 and 6(d) is subject to the conditions precedent that: 

        (i)    no
Event of Default, Potential Event of Default or Specified Condition has occurred and is continuing with respect to the other party; and 

        (ii)   no
Early Termination Date for which any unsatisfied payment obligations exist has occurred or been designated as the result of an Event of Default or Specified
Condition with respect to the other party. 

        (b)   Transfer Timing. Subject to Paragraphs 4(a) and 5 and unless otherwise specified, if a demand for the Transfer of
Eligible Credit Support or Posted Credit Support is made by the Notification Time, then the relevant Transfer will be made not later than the close of business on the next Local Business Day; if a
demand is made after the Notification Time, then the relevant Transfer will be made not later than the close of business on the second Local Business Day thereafter. 

        (c)   Calculations. All calculations of Value and Exposure for purposes of Paragraphs 3 and 6(d) will be made by the Valuation
Agent as of the Valuation Time. The Valuation Agent will notify each party (or the other party, if the Valuation Agent is a party) of its calculations not later than the Notification Time on the Local
Business Day following the applicable Valuation Date (or in the case of Paragraph 6(d), following the date of calculation). 

2

 

        (d)   Substitutions.

        (i)    Unless
otherwise specified in Paragraph 13, upon notice to the Secured Party specifying the items of Posted Credit Support to be exchanged, the Pledgor may, on
any Local Business Day, Transfer to the Secured Party substitute Eligible Credit Support (the "Substitute Credit Support"); and 

        (ii)   subject
to Paragraph 4(a), the Secured Party will Transfer to the Pledgor the items of Posted Credit Support specified by the Pledgor in its notice not later
than the Local Business Day following the date on which the Secured Party receives the Substitute Credit Support, unless otherwise specified in Paragraph 13 (the "Substitution Date");  provided that
the Secured Party will only be obligated to Transfer Posted Credit Support with a Value as of the date of Transfer of that Posted Credit
Support equal to the Value as of that date of the Substitute Credit Support. 

Paragraph 5. Dispute Resolution  

        If a party (a "Disputing Party") disputes (I) the Valuation Agent's calculation of a Delivery Amount or a Return Amount or (II) the Value of any
Transfer of Eligible Credit Support or Posted Credit Support, then (1) the Disputing Party will notify the other party and the Valuation Agent (if the Valuation Agent is not the other party)
not later than the close of business on the Local Business Day following (X) the date that the demand is made under Paragraph 3 in the case of (I) above or (Y) the date of
Transfer in the case of (II) above, (2) subject to Paragraph 4(a), the appropriate party will Transfer the undisputed amount to the other party not later than the close of
business on the Local Business Day following (X) the date that the demand is made under Paragraph 3 in the case of (I) above or (Y) the date of
Transfer in the case of (II) above, (3) the parties will consult with each other in an attempt to resolve the dispute and (4) if they fail to resolve the dispute by the Resolution
Time, then: 

        (i)    In
the case of a dispute involving a Delivery Amount or Return Amount, unless otherwise specified in Paragraph 13, the Valuation Agent will recalculate the
Exposure and the Value as of the Recalculation Date by: 

        (A)  utilizing
any calculations of Exposure for the Transactions (or Swap Transactions) that the parties have agreed are not in dispute; 

        (B)  calculating
the Exposure for the Transactions (or Swap Transactions) in dispute by seeking four actual quotations at mid-market from Reference Market-makers
for purposes of calculating Market Quotation, and taking the arithmetic average of those obtained; provided that if four quotations are not available
for a particular Transaction (or Swap Transaction), then fewer than four quotations may be used for that Transaction (or Swap Transaction); and if no quotations are available for a particular
Transaction (or Swap Transaction), then the Valuation Agent's original calculations will be used for that Transaction (or Swap Transaction); and 

        (C)  utilizing
the procedures specified in Paragraph 13 for calculating the Value, if disputed, of Posted Credit Support. 

        (ii)   In
the case of a dispute involving the Value of any Transfer of Eligible Credit Support or Posted Credit Support, the Valuation Agent will recalculate the Value as of
the date of Transfer pursuant to Paragraph 13. 

        Following
a recalculation pursuant to this Paragraph, the Valuation Agent will notify each party (or the other party, if the Valuation Agent is a party) not later than the Notification
Time on the Local Business Day following the Resolution Time. The appropriate party will, upon demand following that 

3

 

notice
by the Valuation Agent or a resolution pursuant to (3) above and subject to Paragraphs 4(a) and 4(b), make the appropriate Transfer. 

Paragraph 6. Holding and Using Posted Collateral  

        (a)   Care of Posted Collateral. Without limiting the Secured Party's rights under Paragraph 6(c), the Secured Party
will exercise reasonable care to assure the safe custody of all Posted Collateral to the extent required by applicable law, and in any event the Secured Party will be deemed to have exercised
reasonable care if it exercises at least the same degree of care as it would exercise with respect to its own property. Except as specified in the preceding sentence, the Secured Party will have no
duty with respect to Posted Collateral, including, without limitation, any duty to collect any Distributions, or enforce or preserve any rights pertaining thereto. 

        (b)   Eligibility to Hold Posted Collateral; Custodians.

        (i)    General. Subject to the satisfaction of any conditions specified in Paragraph 13 for
holding Posted Collateral, the Secured Party will be entitled to hold Posted Collateral or to appoint an agent (a "Custodian") to hold Posted Collateral for the Secured Party. Upon notice by the
Secured Party to the Pledgor of the appointment of a Custodian, the Pledgor's obligations to make any Transfer will be discharged by making the Transfer to that Custodian. The holding of Posted
Collateral by a Custodian will be deemed to be the holding of that Posted Collateral by the Secured Party for which the Custodian is acting. 

        (ii)   Failure to Satisfy Conditions. If the Secured Party or its Custodian fails to satisfy any
conditions for holding Posted Collateral, then upon a demand made by the Pledgor, the Secured Party will, not later than five Local Business Days after the demand, Transfer or cause its Custodian to
Transfer all Posted Collateral held by it to a Custodian that satisfies those conditions or to the Secured Party if it satisfies those conditions. 

        (iii)  Liability. The Secured Party will be liable for the acts or omissions of its Custodian to the
same extent that the Secured Party would be liable hereunder for its own acts or omissions. 

        (c)   Use of Posted Collateral. Unless otherwise specified in Paragraph 13 and without limiting the rights and
obligations of the parties under Paragraphs 3, 4(d)(ii), 5, 6(d) and 8, if the Secured Party is not a Defaulting Party or an Affected Party with respect to a Specified Condition and no Early
Termination Date has occurred or been designated as the result of an Event of Default or Specified Condition with respect to the Secured Party, then the Secured Party will, notwithstanding
Section 9-207 of the New York Uniform Commercial Code, have the right to: 

        (i)    sell,
pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose of, or otherwise use in its business any Posted Collateral it holds, free from any claim
or right of any nature whatsoever of the Pledgor, including any equity or right of redemption by the Pledgor; and 

        (ii)   register
any Posted Collateral in the name of the Secured Party, its Custodian or a nominee for either. 

        For
purposes of the obligation to Transfer Eligible Credit Support or Posted Credit Support pursuant to Paragraphs 3 and 5 and any rights or remedies authorized under this Agreement, the
Secured Party will be deemed to continue to hold all Posted Collateral and to receive Distributions made thereon, regardless of whether the Secured Party has exercised any rights with respect to any
Posted Collateral pursuant to (i) or (ii) above. 

        (d)   Distributions and Interest Amount.

        (i)    Distributions. Subject to Paragraph 4(a), if the Secured Party receives or is deemed to receive Distributions on a
Local Business Day, it will Transfer to the Pledgor not later than the 

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following
Local Business Day any Distributions it receives or is deemed to receive to the extent that a Delivery Amount would not be created or increased by that Transfer, as calculated by the
Valuation Agent (and the date of calculation will be deemed to be a Valuation Date for this purpose). 

        (ii)   Interest Amount. Unless otherwise specified in Paragraph 13 and subject to Paragraph 4(a), in lieu of any
interest, dividends or other amounts paid or deemed to have been paid with respect to Posted Collateral in the form of Cash (all of which may be retained by the Secured Party), the Secured Party will
Transfer to the Pledgor at the times specified in Paragraph 13 the Interest Amount to the extent that a Delivery Amount would not be created or increased by that Transfer, as calculated by the
Valuation Agent (and the date of calculation will be deemed to be a Valuation Date for this purpose). The Interest Amount or portion thereof not Transferred pursuant to this Paragraph will constitute
Posted Collateral in the form of Cash and will be subject to the security interest granted under Paragraph 2. 

Paragraph 7. Events of Default  

        For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will exist with respect to a party if: 

        (i)    that
party fails (or fails to cause its Custodian) to make, when due, any Transfer of Eligible Collateral, Posted Collateral or the Interest Amount, as applicable,
required to be made by it and that failure continues for two Local Business Days after notice of that failure is given to that party; 

        (ii)   that
party fails to comply with any restriction or prohibition specified in this Annex with respect to any of the rights specified in Paragraph 6(c) and that
failure continues for five Local Business Days after notice of that failure is given to that party; or 

        (iii)  that
party fails to comply with or perform any agreement or obligation other than those specified in Paragraphs 7(i) and 7(ii) and that failure continues
for 30 days after notice of that failure is given to that party. 

Paragraph 8. Certain Rights and Remedies  

        (a)   Secured Party's Rights and Remedies. If at any time (1) an Event of Default or Specified Condition with respect to
the Pledgor has occurred and is continuing or (2) an Early Termination Date has occurred or been designated as the result of an Event of Default or Specified Condition with respect to the
Pledgor, then, unless the Pledgor has paid in full all of its Obligations that are then due, the Secured Party may exercise one or more of the following rights and remedies: 

        (i)    all
rights and remedies available to a secured party under applicable law with respect to Posted Collateral held by the Secured Party; 

        (ii)   any
other rights and remedies available to the Secured Party under the terms of Other Posted Support, if any; 

        (iii)  the
right to Set-off any amounts payable by the Pledgor with respect to any Obligations against any Posted Collateral or the Cash equivalent of any Posted
Collateral held by the Secured Party (or any obligation of the Secured Party to Transfer that Posted Collateral); and 

        (iv)  the
right to liquidate any Posted Collateral held by the Secured Party through one or more public or private sales or other dispositions with such notice, if any, as
may be required under applicable law, free from any claim or right of any nature whatsoever of the Pledgor, including any equity or right of redemption by the Pledgor (with the Secured Party having
the right to purchase any or all of the Posted Collateral to be sold) and to apply the proceeds (or the Cash 

5

 

equivalent
thereof) from the liquidation of the Posted Collateral to any amounts payable by the Pledgor with respect to any Obligations in that order as the Secured Party may elect. 

        Each
party acknowledges and agrees that Posted Collateral in the form of securities may decline speedily in value and is of a type customarily sold on a recognized market, and,
accordingly, the Pledgor is not entitled to prior notice of any sale of that Posted Collateral by the Secured Party, except any notice that is required under applicable law and cannot be waived. 

        (b)   Pledgor's Rights and Remedies. If at any time an Early Termination Date has occurred or been designated as the result of
an Event of Default or Specified Condition with respect to the Secured Party, then (except in the case of an Early Termination Date relating to less than all Transactions (or Swap Transactions) where
the Secured Party has paid in full all of its obligations that are then due under Section 6(e) of this Agreement): 

        (i)    the
Pledgor may exercise all rights and remedies available to a pledgor under applicable law with respect to Posted Collateral held by the Secured Party; 

        (ii)   the
Pledgor may exercise any other rights and remedies available to the Pledgor under the terms of Other Posted Support, if any; 

        (iii)  the
Secured Party will be obligated immediately to Transfer all Posted Collateral and the Interest Amount to the Pledgor; and 

        (iv)  to
the extent that Posted Collateral or the Interest Amount is not so Transferred pursuant to (iii) above, the Pledgor may: 

        (A)  Set-off
any amounts payable by the Pledgor with respect to any Obligations against any Posted Collateral or the Cash equivalent of any Posted Collateral held
by the Secured Party (or any obligation of the Secured Party to Transfer that Posted Collateral); and 

        (B)  to
the extent that the Pledgor does not Set-off under (iv)(A) above, withhold payment of any remaining amounts payable by the Pledgor with respect to any
Obligations, up to the Value of any remaining Posted Collateral held by the Secured Party, until that Posted Collateral is Transferred to the Pledgor. 

        (c)   Deficiencies and Excess Proceeds. The Secured Party will Transfer to the Pledgor any proceeds and Posted Credit Support
remaining after liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b) after satisfaction in full of all amounts payable by the Pledgor with respect to any Obligations; the
Pledgor in all events will remain liable for any amounts remaining unpaid after any liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b). 

        (d)   Final Returns. When no amounts are or thereafter may become payable by the Pledgor with respect to any Obligations
(except for any potential liability under Section 2(d) of this Agreement), the Secured Party will Transfer to the Pledgor all Posted Credit Support and the Interest Amount, if any. 

Paragraph 9. Representations  

        Each party represents to the other party (which representations will be deemed to be repeated as of each date on which it, as the Pledgor, Transfers Eligible
Collateral) that: 

        (i)    it
has the power to grant a security interest in and lien on any Eligible Collateral it Transfers as the Pledgor and has taken all necessary actions to authorize the
granting of that security interest and lien; 

        (ii)   it
is the sole owner of or otherwise has the right to Transfer all Eligible Collateral it Transfers to the Secured Party hereunder, free and clear of any security
interest, lien, encumbrance or other restrictions other than the security interest and lien granted under Paragraph 2; 

6

 

        (iii)  upon
the Transfer of any Eligible Collateral to the Secured Party under the terms of this Annex, the Secured Party will have a valid and perfected first priority
security interest therein (assuming that any central clearing corporation or any third-party financial intermediary or other entity not within the control of the Pledgor involved in the Transfer of
that Eligible Collateral gives the notices and takes the action required of it under applicable law for perfection of that interest); and 

        (iv)  the
performance by it of its obligations under this Annex will not result in the creation of any security interest, lien or other encumbrance on any Posted Collateral
other than the security interest and lien granted under Paragraph 2. 

Paragraph 10. Expenses  

        (a)   General. Except as otherwise provided in Paragraphs 10(b) and 10(c), each party will pay its own costs and expenses in
connection with performing its obligations under this Annex and neither party will be liable for any costs and expenses incurred by the other party in connection herewith. 

        (b)   Posted Credit Support. The Pledgor will promptly pay when due all taxes, assessments or charges of any nature that are
imposed with respect to Posted Credit Support held by the Secured Party upon becoming aware of the same, regardless of whether any portion of that Posted Credit Support is subsequently disposed of
under Paragraph 6(c), except for those taxes, assessments and charges that result from the exercise of the Secured Party's rights under Paragraph 6(c). 

        (c)   Liquidation/Application of Posted Credit Support. All reasonable costs and expenses incurred by or on behalf of the
Secured Party or the Pledgor in connection with the liquidation and/or application of any Posted Credit Support under Paragraph 8 will be payable, on demand and pursuant to the Expenses Section
of this Agreement, by the Defaulting Party or, if there is no Defaulting Party, equally by the parties. 

Paragraph 11. Miscellaneous  

        (a)   Default Interest. A Secured Party that fails to make, when due, any Transfer of Posted Collateral or the Interest Amount
will be obligated to pay the Pledgor (to the extent permitted under applicable law) an amount equal to interest at the Default Rate multiplied by the Value of the items of property that were required
to be Transferred, from (and including) the date that Posted Collateral or Interest Amount was required to be Transferred to (but excluding) the date of Transfer of that Posted Collateral or Interest
Amount. This interest will be calculated on the basis of daily compounding and the actual number of days elapsed. 

        (b)   Further Assurances. Promptly following a demand made by a party, the other party will execute, deliver, file and record
any financing statement, specific assignment or other document and take any other action that may be necessary or desirable and reasonably requested by that party to create, preserve, perfect or
validate any security interest or lien granted under Paragraph 2, to enable that party to exercise or enforce its rights under this Annex with respect to Posted Credit Support or an Interest
Amount or to effect or document a release of a security interest on Posted Collateral or an Interest Amount. 

        (c)   Further Protection. The Pledgor will promptly give notice to the Secured Party of, and defend against, any suit, action,
proceeding or lien that involves Posted Credit Support Transferred by the Pledgor or that could adversely affect the security interest and lien granted by it under Paragraph 2, unless that
suit, action, proceeding or lien results from the exercise of the Secured Party's rights under Paragraph 6(c). 

7

 

        (d)   Good Faith and Commercially Reasonable Manner. Performance of all obligations under this Annex, including, but not
limited to, all calculations, valuations and determinations made by either party, will be made in good faith and in a commercially reasonable manner. 

        (e)   Demands and Notices. All demands and notices made by a party under this Annex will be made as specified in the Notices
Section of this Agreement, except as otherwise provided in Paragraph 13. 

        (f)    Specifications of Certain Matters. Anything referred to in this Annex as being specified in Paragraph 13 also may
be specified in one or more Confirmations or other documents and this Annex will be construed accordingly. 

Paragraph 12. Definitions  

        As used in this Annex: 

        "Cash" means the lawful currency of the United States of America. 

        "Credit Support Amount" has the meaning specified in Paragraph 3. 

        "Custodian" has the meaning specified in Paragraphs 6(b)(i) and 13. 

        "Delivery Amount" has the meaning specified in Paragraph 3(a). 

        "Disputing Party" has the meaning specified in Paragraph 5. 

        "Distributions" means with respect to Posted Collateral other than Cash, all principal, interest and other payments and distributions of
cash or other property with respect thereto, regardless of whether the Secured Party has disposed of that Posted Collateral under Paragraph 6(c). Distributions will not include any item of
property acquired by the Secured Party upon any disposition or liquidation of Posted Collateral or, with respect to any Posted Collateral in the form of Cash, any distributions on that collateral,
unless otherwise specified herein. 

        "Eligible Collateral" means, with respect to a party, the items, if any, specified as such for that party in Paragraph 13. 

        "Eligible Credit Support" means Eligible Collateral and Other Eligible Support. 

        "Exposure" means for any Valuation Date or other date for which Exposure is calculated and subject to Paragraph 5 in the case of a
dispute, the amount, if any, that would be payable to a party that is the Secured Party by the other party (expressed as a positive number) or by a party that is the Secured Party to the other party
(expressed as a negative number) pursuant to Section 6(e)(ii)(2)(A) of this Agreement as if all Transactions (or Swap Transactions) were being terminated as of the relevant Valuation Time;  provided
that Market Quotation will be determined by the Valuation Agent using its estimates at mid-market of the amounts that would be paid
for Replacement Transactions (as that term is defined in the definition of "Market Quotation"). 

        "Independent Amount" means, with respect to a party, the amount specified as such for that party in Paragraph 13; if no amount is
specified, zero. 

        "Interest Amount" means, with respect to an Interest Period, the aggregate sum of the amounts of interest calculated for each day in that
Interest Period on the principal amount of Posted Collateral in the form of Cash held by the Secured Party on that day, determined by the Secured Party for each such day as follows: 

        (x)   the
amount of that Cash on that day; multiplied by 

        (y) the
Interest Rate in effect for that day; divided by 

        (z) 360.

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        "Interest Period" means the period from (and including) the last Local Business Day on which an Interest Amount was Transferred (or, if no
Interest Amount has yet been Transferred, the Local Business Day on which Posted Collateral in the form of Cash was Transferred to or received by the Secured Party) to (but excluding) the Local
Business Day on which the current Interest Amount is to be Transferred. 

        "Interest Rate" means the rate specified in Paragraph 13. 

        "Local Business Day", unless otherwise specified in Paragraph 13, has the meaning specified in the Definitions Section of this
Agreement, except that references to a payment in clause (b) thereof will be deemed to include a Transfer under this Annex. 

        "Minimum Transfer Amount" means, with respect to a party, the amount specified as such for that party in Paragraph 13; if no amount
is specified, zero. 

        "Notification Time" has the meaning specified in Paragraph 13. 

        "Obligations" means, with respect to a party, all present and future obligations of that party under this Agreement and any additional
obligations specified for that party in Paragraph 13. 

        "Other Eligible Support" means, with respect to a party, the items, if any, specified as such for that party in Paragraph 13. 

        "Other Posted Support" means all Other Eligible Support Transferred to the Secured Party that remains in effect for the benefit of that
Secured Party. 

        "Pledgor" means either party, when that party (i) receives a demand for or is required to Transfer Eligible Credit Support under
Paragraph 3(a) or (ii) has Transferred Eligible Credit Support under Paragraph 3(a). 

        "Posted Collateral" means all Eligible Collateral, other property, Distributions, and all proceeds thereof that have been Transferred to
or received by the Secured Party under this Annex and not Transferred to the Pledgor pursuant to Paragraph 3(b), 4(d)(ii) or 6(d)(i) or released by the Secured Party under
Paragraph 8. Any Interest Amount or portion thereof not Transferred pursuant to Paragraph 6(d)(ii) will constitute Posted Collateral in the form of Cash. 

        "Posted Credit Support" means Posted Collateral and Other Posted Support. 

        "Recalculation Date" means the Valuation Date that gives rise to the dispute under Paragraph 5;  provided, however, that if a subsequent Valuation Date occurs under Paragraph 3 prior to the
resolution of the dispute, then the "Recalculation Date" means the most recent Valuation Date under Paragraph 3. 

        "Resolution Time" has the meaning specified in Paragraph 13. 

        "Return Amount" has the meaning specified in Paragraph 3(b). 

        "Secured Party" means either party, when that party (i) makes a demand for or is entitled to receive Eligible Credit Support under
Paragraph 3(a) or (ii) holds or is deemed to hold Posted Credit Support. 

        "Specified Condition" means, with respect to a party, any event specified as such for that party in Paragraph 13. 

        "Substitute Credit Support" has the meaning specified in Paragraph 4(d)(i). 

        "Substitution Date" has the meaning specified in Paragraph 4(d)(ii). 

        "Threshold" means, with respect to a party, the amount specified as such for that party in Paragraph 13; if no amount is specified,
zero. 

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        "Transfer" means, with respect to any Eligible Credit Support, Posted Credit Support or Interest Amount, and in accordance with the
instructions of the Secured Party, Pledgor or Custodian, as applicable: 

        (i)    in
the case of Cash, payment or delivery by wire transfer into one or more bank accounts specified by the recipient; 

        (ii)   in
the case of certificated securities that cannot be paid or delivered by book-entry, payment or delivery in appropriate physical form to the recipient or
its account accompanied by any duly executed instruments of transfer, assignments in blank, transfer tax stamps and any other documents necessary to constitute a legally valid transfer to the
recipient; 

        (iii)  in
the case of securities that can be paid or delivered by book-entry, the giving of written instructions to the relevant depository institution or other
entity specified by the recipient, together with a written copy thereof to the recipient, sufficient if complied with to result in a legally effective transfer of the relevant interest to the
recipient; and 

        (iv)  in
the case of Other Eligible Support or Other Posted Support, as specified in Paragraph 13. 

        "Valuation Agent" has the meaning specified in Paragraph 13. 

        "Valuation Date" means each date specified in or otherwise determined pursuant to Paragraph 13. 

        "Valuation Percentage" means, for any item of Eligible Collateral, the percentage specified in Paragraph 13. 

        "Valuation Time" has the meaning specified in Paragraph 13. 

        "Value" means for any Valuation Date or other date for which Value is calculated and subject to Paragraph 5 in the case of a
dispute, with respect to: 

        (i)    Eligible
Collateral or Posted Collateral that is: 

        (A)  Cash,
the amount thereof; and 

        (B)  a
security, the bid price obtained by the Valuation Agent multiplied by the applicable Valuation Percentage, if any; 

        (ii)   Posted
Collateral that consists of items that are not specified as Eligible Collateral, zero; and 

        (iii)  Other
Eligible Support and Other Posted Support, as specified in Paragraph 13. 

10

Elections and Variables

to the ISDA Credit Support Annex

dated as of January 22, 2003

between  

	Credit Suisse First Boston International	 	and	 	Cephalon, Inc.
	("Party A")	 	 	 	("Party B")

Paragraph 13.  

        (a)   Security Interest for "Obligations". 

        The
term "Obligations" as used in this Annex includes the following additional obligations: 

        With
respect to Party A: None. 

        With
respect to Party B: None. 

        (b)   Credit Support Obligations.

        (i)    Delivery Amount, Return Amount and Credit Support Amount.

        (A)  "Delivery Amount" has the meaning specified in Paragraph 3(a). 

        (B)  "Return Amount" has the meaning specified in Paragraph 3(b). 

        (C)  "Credit Support Amount" has the meaning specified in Paragraph 3. 

        (ii)   Eligible Collateral. On any date, the following items will qualify as "Eligible
Collateral" for each party: 

	 
	 	 
	 	Valuation

Percentage
	 
	(A)	 	Cash	 	100	%
	

(B)	
 	

negotiable debt obligations issued after 18 July 1984 by the U.S. Treasury Department having a residual maturity on such date of less than 1 year	
 	

100	
%
	

(C)	
 	

negotiable debt obligations issued after 18 July 1984 by the U.S. Treasury Department having a residual maturity on such date equal to or greater than 1 year but less than 5 years	
 	

97	
%
	

(D)	
 	

negotiable debt obligations issued after 18 July 1984 by the U.S. Treasury Department having a residual maturity on such date equal to or greater than 5 years but less than 10 years	
 	

95	
%

        (iii)  Other Eligible Support. With respect to a party, such Other Eligible Support as the other party
may from time to time specify in writing as qualifying as "Other Eligible Support" and for the avoidance of doubt there are no items which qualify as
Other Eligible Support for either party as of the date of this Annex. 

        (iv)  Thresholds.

	(A)
	"Independent Amount" means with respect to Party A: To be determined on a
trade-by-trade basis
"Independent Amount" means with respect to Party B: To be determined on a trade-by-trade
basis

	(B)
	"Threshold" means with respect to Party A: $1,000,000
 "Threshold" means with respect to
Party B: $1,000,000

	(C)
	"Minimum Transfer Amount" means with respect to Party A: US$250,000
 "Minimum Transfer Amount" means with respect to Party B: US$250,000 

 

	(D)
	Rounding The Delivery Amount and the Return Amount will be rounded up and down respectively to the nearest integral multiple of
US$50,000. 

        (c)   Valuation and Timing.

        (i)    "Valuation Agent" means Party A. 

        (ii)   "Valuation Date" means ach Local Business Day that, if treated as a Valuation Date, would result in a Delivery Amount or
Return Amount. 

        (iii)  "Valuation Time" means the close of business in the city of the Valuation Agent on the Local Business Day before the
Valuation Date or date of calculation, as applicable, provided that the calculations of Value and Exposure will be made as of approximately the same
time on the same date. 

        (iv)  "Notification Time" means 3:00 p.m., London time, on a Local Business Day. 

        (d)   Conditions Precedent and Secured Party's Rights and Remedies.

        (i)    Subject
to Paragraphs 13(d)(ii) and 13(d)(iii), for the purposes of this Annex the following events will each be a "Specified
Condition" for the party specified (that party being the Affected Party if the event occurs with respect to that party): 

	 
	 	Party A
	 	Party B

	-Illegality	 	x	 	x
	-Credit Event Upon Merger	 	x	 	x
	-Additional Termination Event(s):	 	 	 	 
	

-An event which, with the giving of notice or the passage of time, or both, would constitute one or more of the foregoing event[s]	
 	

 	
 	

 

        (ii)   For
the purposes of sub-Paragraphs 4(a)(ii), 8(a)(2) and 8(b), the words "Specified Condition" shall be
deleted and the words "Termination Event" shall be substituted therefor and
provided further that for the purposes of Paragraph 8(b) the words "or been designated" shall be deleted in their entirety; 

        (iii)  For
the purposes of sub-Paragraph 8(a)(1) the words "Specified Condition" shall be deleted in their
entirety. 

        (e)   Substitution.

        (i)    "Substitution Date" has the meaning specified in Paragraph 4(d)(ii). 

        (ii)   Consent. The Pledgor must obtain the Secured Party's prior consent to any substitution pursuant to Paragraph 4(d)
and shall give to the Secured Party not less than two (2) Local Business Days notice thereof specifying the items of Posted Credit Support intended for substitution. 

        (iii)  Return Procedure. In Paragraph 4(d)(ii) the words "not later than the Local Business Day following" shall
be deleted and replaced with the words "as soon as practical after, in any event within three Local Business Days". 

        (f)    Dispute Resolution.

        (i)    "Resolution Time" means 4:00 p.m. London time on the Local Business Day following the date on which the notice of
the dispute is given under Paragraph 5. 

2

 

        (ii)   Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), on any date, the Value of Eligible Collateral and Posted
Collateral will be calculated as follows: 

        (A)  with
respect to any Cash; the amount thereof; 

        (B)  with
respect to any Eligible Collateral comprising securities; the sum of (a)(x) the last bid price on such date for such securities on the principal national
securities exchange on which such securities are listed, multiplied by the applicable Valuation Percentage or (y) where any such securities are not listed on a national securities exchange, the
bid price for such securities quoted as at the close of business on such date by any principal market maker for such securities chosen by the Valuation Agent, multiplied by the applicable Valuation
Percentage or (z) if no such bid price is listed or quoted for such date, the last bid price listed or quoted (as the case may be), as of the day next preceding such date on which such prices
were available; multiplied by the applicable Valuation Percentage; plus (b) the accrued interest on such securities (except to the extent that such interest shall have been paid to the Pledgor
pursuant to Paragraph 6(d)(ii) or included in the applicable price referred to in subparagraph (a) above) as of such date; and 

        (C)  with
respect to any Eligible Collateral other than Cash and securities; the fair market value of such Eligible Collateral on such date, as determined in any reasonable
manner chosen by the Valuation Agent, multiplied by the applicable Valuation Percentage. 

        (iii)  Alternative. The provisions of Paragraph 5 will apply provided that the obligation of the appropriate party to
deliver the undisputed amount to the other party will not arise prior to the time that would otherwise have applied to the Transfer pursuant to, or deemed made, under Paragraph 3 if no dispute
had arisen. 

        (g)   Holding and Using Posted Collateral.

        (i)    Eligibility to Hold Posted Collateral; Custodians: 

Party
A or its Custodian will be entitled to hold Posted Collateral pursuant to Paragraph 6(b); provided that

        (1)   whichever
of Party A or its Custodian that is holding Posted Collateral, shall at all times either have a long term debt or deposit rating of at least A-
from S&P and at least A3 from Moody's or have net capital in excess of US$500 million; 

        (2)   shall
be an account holder in the US Federal Reserve System, unless otherwise be approved by Party B; and 

        (3)   if
it is Party A that is holding Posted Collateral, Party A is not a Defaulting Party. 

Initially,
the Custodian for Party A is Credit Suisse First Boston LLC. 

Party
B or its Custodian will be entitled to hold Posted Collateral pursuant to Paragraph 6(b); provided that

        (1)   whichever
of Party B or its Custodian that is holding Posted Collateral, shall at all times have a long term debt or deposit rating of at least A- from S&P
and at least A3 from Moody's and have net capital in excess of US$500 million; 

        (2)   the
Custodian for Party B shall first be approved by Party A and shall be an account holder in the US Federal Reserve System; and 

        (3)   if
it is Party B that is holding Posted Collateral, Party B is not a Defaulting Party; 

Initially,
the Custodian for Party B is Wachovia Bank, NA 

3

 

        (ii)   Use of Posted Collateral. The provisions of Paragraph 6(c) will apply to Party A and will apply to Party B. 

        (h)   Distributions and Interest Amount.

        (i)    Interest Rate. The "Interest Rate" will be, the effective rate for Federal Funds, as published on Telerate Page 118,
provided that if, for any reason, Telerate Page 118 should be unavailable the Interest Rate shall be such rate as the Secured Party shall reasonably determine. 

        (ii)   Transfer of Interest Amount. The Transfer of the Interest Amount will be made on the second Local Business Day following
the end of each calendar month, to the extent that a Delivery Amount would not be created or increased by that transfer in which event such Interest Amount will be retained by the Secured Party, and
on any Local Business Day on which all Posted Collateral in the form of Cash is Transferred to the Pledgor pursuant to Paragraph 3(b). 

        (iii)  Alternative to Interest Amount. The provisions of Paragraph 6(d)(ii) will apply and for the purposes of
calculating the Interest Amount the amount of interest calculated for each day of the Interest Period shall be compounded daily. 

        (i)    Additional Representation(s).

        There
are no additional representations by either party. 

        (j)    Other Eligible Support and Other Posted Support.

        (i)    "Value"
with respect to Other Eligible Support and Other Posted Support shall have such meaning as the parties shall agree in writing from time to time. 

        (ii)   "Transfer"
with respect to Other Eligible Support and Other Posted Support shall have such meaning as the parties shall agree in writing from time to time. 

        (k)   Demands and Notices.

        All
demands, specifications and notices under this Annex will be made pursuant to the Notices Section of this Agreement, save that any demand, specification or notice: 

        (i)    shall
be given to or made at the following addresses: 

	If to Party A:	 
	 	

Address:	

One Cabot Square,

London E14 4QJ

England.
	 	

Telephone:	

44 20 7883 8083
	 	Facsimile:	44 20 7883 7987
	 	Attention:	Collateral Management Unit
	

If to Party B:	

 
	 	

Address:	

145 Brandywine Parkway

West Chester, PA 19380
	 	

Tel:	

(610) 344-0200
	 	

Facsimile:	

(610) 344-7563
	 	

Attention:	

Chief Financial Officer

or
at such other address as the relevant party may from time to time designate by giving notice (in accordance with the terms of this paragraph) to the other party; 

4

 

        (ii)   shall
(unless otherwise stated in this Annex) be deemed to be effective at the time such notice is actually received unless such notice is received on a day which is
not a Local Business Day or after the Notification Time on any Local Business Day in which event such notice shall be deemed to be effective on the next succeeding Local Business Day. 

        (l)    Address for Transfers.

Party
A: To be notified to Party B by Party A at the time of the request for the Transfer. 

Party
B: To be notified to Party A by Party B at the time of the request for the Transfer. 

        (m)  Other Provisions.

        (i)    Additional Definitions

As
used in this Annex: 

"Equivalent Collateral" means, with respect to any security constituting Posted Collateral, a security of the same issuer and, as applicable,
representing or having the same class, series, maturity, interest rate, principal amount or liquidation value and such other provisions as are necessary for that security and the security constituting
Posted Collateral to be treated as equivalent in the market for such securities; 

"Local Business Day" means: (i) any day on which commercial banks are open for business (including dealings in foreign exchange and foreign
currency deposits) in London, and (ii) in relation to a Transfer of Eligible Collateral, a day on which the clearance system agreed between the parties for the delivery of Eligible Collateral
is open for acceptance and execution of settlement instructions (or in the case of a Transfer of Cash or other Eligible Collateral for which delivery is contemplated by other means, a day on which
commercial banks are open for business (including dealings for foreign exchange and foreign deposits) in New York and such other places as the parties shall agree); 

"Moody's" means Moody's Investors Service, Inc. (or its successor);  

"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill Inc. (or its successor). 

        (ii)   Transfer Timing

	(a)
	Paragraph 4(b)
shall be deleted and replaced in its entirety by the following paragraph: 

"Subject
to Paragraphs 4(a) and 5 and unless otherwise specified, if a demand for the Transfer of Eligible Credit Support or Posted Credit Support is made by the Notification Time, then the relevant
Transfer will be made not later than the close of business on the second Local Business Day thereafter; if a demand is made after the Notification Time then the relevant Transfer will be made not
later than the close of business on the third Local Business Day thereafter." 

	(b)
	Paragraph 6(d)(i) shall
be amended so that the reference therein to "the following Local Business Day" shall be replaced by reference to "the second Local Business Day
thereafter". 

        (iii)  Events of Default

Paragraph 7
shall be amended so that the references in Paragraph 7(i), Paragraph 7(ii) and Paragraph 7(iii) to "two Local Business Days", "five Local Business
Days" and "thirty days" respectively, shall instead be replaced by "one Local Business Day", "three Local Business Days" and "three Local Business Days" respectively. 

5

 

        (iv)  Return of Fungible Securities

In
lieu of returning to the Pledgor pursuant to Paragraphs 3(b), 4(d),5 and 8(d) any Posted Collateral comprising securities the Secured Party may return Equivalent Collateral. 

        (v)   Covenants of the Pledgor

So
long as the Agreement is in effect, the Pledgor covenants that it will keep the Posted Collateral free from all security interests or other encumbrances created by the Pledgor, except the security
interest created hereunder and any security interests or other encumbrances created by the Secured Party; and
will not sell, transfer, assign, deliver or otherwise dispose of, or grant any option with respect to any Posted Collateral or any interest therein, or create, incur or permit to exist any pledge,
lien, mortgage, hypothecation, security interest, charge, option or any other encumbrance with respect to any Posted Collateral or any interest therein, without the prior written consent of the
Secured Party. 

        (vi)  No Counterclaim

A
party's rights to demand and receive the Transfer of Eligible Collateral as provided hereunder and its rights as Secured Party against the Posted Collateral or otherwise shall be absolute and
subject to no counterclaim, set off, deduction or defence in favour of the Pledgor except as contemplated in Sections 2 and 6 of the Agreement and Paragraph 8 of this Annex. 

        (vii) Costs of Transfer on Substitution

Notwithstanding
Paragraph 10(a), the Pledgor will be responsible for, and will reimburse the Secured Party for, all transfer and other taxes and other costs involved in the Transfer of
Collateral either from the Pledgor to the Secured Party (or any agent or custodian for safekeeping of the Secured Party) or from the Secured Party (or any agent or custodian for safekeeping of the
Secured Party) to the Pledgor pursuant to Paragraph 4(d). 

        (viii)     Holding Collateral

The
Secured Party shall cause any Custodian appointed hereunder to open and maintain a segregated account and to hold, record and identify all the Posted Collateral in such segregated account and,
subject to Paragraphs 6(c) and 8(a), such Posted Collateral shall at all times be and remain the property of the Pledgor and shall at no time constitute the property of, or be commingled with the
property of, the Secured Party or the Custodian. 

        (ix)  Security and Performance Assurance

Eligible
Collateral Transferred to the Secured Party: 

        (i)    if
in the form of Cash, is not, and shall not be deemed to be, "client money" for the purposes of the Financial Services Authority Client Assets Rules (the "Rules"), as
amended from time to time, and as a consequence such Cash will not be segregated from that of the Secured Party, will be used by the
Secured Party in the ordinary course of its business and will not be subject to the protections conferred by the Rules. In such circumstances the Pledgor will be a general creditor of the Secured
Party; 

        (ii)   constitutes
security and performance assurance without which the Secured Party would not otherwise enter into and continue any and all Transactions. 

6

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Exhibit 10.2QuickLinks
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Exhibit 10.3    
    

	

 	 	CREDIT SUISSE FIRST BOSTON INTERNATIONAL
	 	 	One Cabot

Square, London

E14 4QJ	 	Telephone 0207 888 2000

Facsimile 0207 888 4125/3862

January 22, 2003 

Cephalon, Inc.

145 Brandywine Parkway

West Chester, PA 19380-4245 

Attn:
J. Kevin Buchi

Fax: 610-344-7563 

Dear
Sirs: 

        The
purpose of this letter agreement (this "Confirmation") is to confirm the terms and conditions of the Transaction entered into between Party A and Party B on the Trade Date specified
below (the "Transaction") on the terms set out below. This Confirmation constitutes a "Confirmation" as referred to in the Agreement specified below. 

        1.     The
definitions and provisions contained in the 2000 ISDA Definitions (as published by the International Swaps and Derivatives Association, Inc.) are incorporated
into this Confirmation. In the event of any inconsistency between those definitions and provisions and this Confirmation, this Confirmation will govern. References herein to a "Transaction" shall be
deemed to be references to a "Swap Transaction" for the purposes of the 2000 ISDA Definitions. 

        This
Confirmation supplements, forms part of, and is subject to, the 1992 ISDA Master Agreement dated as of 22 January 2003, as amended and supplemented from time to time (the
"Agreement"). All provisions contained in the Agreement govern this Confirmation except as expressly modified below. 

        The
Agreement and each Confirmation thereunder will be governed by and construed in accordance with the law of the State of New York without reference to choice of law doctrine and each
party hereby submits to the jurisdiction of the Courts of the State of New York. For purposes of Section 6 of the Agreement, Second Method and Loss shall apply to this Transaction. 

        Party
A and Party B each represents to the other that it has entered into this Transaction in reliance upon such tax, accounting, regulatory, legal, and financial advice as it deems
necessary and not upon any view expressed by the other. 

        In this Confirmation, "Party A" means Credit Suisse First Boston International, "Party B" means Cephalon, Inc.

        2.     General
terms of the Transaction: 

	 	 	Notional Amount:	 	$200,000,000, subject to a Conversion Event, Redemption Event, Amendment Event, Repayment Event (as each term is defined below) or any other similar occurrences as determined by the Calculation Agent.
	

 	
 	

Trade Date:	
 	

January 22, 2002
	

 	
 	

Effective Date:	
 	

January 24, 2002
	 	 	 	 	 

 

	

 	
 	

Termination Date:	
 	

The earlier of: (i) December 15, 2006, subject to adjustment in accordance with the Following Business Day Convention, and (ii) the Early Termination Date, subject to the Early Termination and Additional Termination Event provisions
set forth below
	

Fixed Amounts:	
 	

 
	

 	
 	

Fixed Rate Payer:	
 	

Party A
	

 	
 	

Fixed Rate Payer Payment Dates:	
 	

Each June 15 and December 15, subject to adjustment in accordance with the Following Business Day Convention, using no Adjustment of Period End Dates; provided, however, that upon a Redemption Event or Conversion Event, Party A's obligation to pay the Fixed Amount in respect of the related Terminated Amount (as defined below) shall terminate.
	

 	
 	

Fixed Rate:	
 	

2.5%
	

 	
 	

Accrued Fixed Amounts Upon a Redemption or Conversion Event:	
 	

In the event of a Redemption Event, Party A shall pay any accrued but unpaid Fixed Amounts in respect of the related Terminated Amount to, but excluding, the date fixed for such redemption pursuant to the terms of the Indenture. In the event a
Conversion Event, no Fixed Amounts accrued but unpaid since the most recent Fixed Rate Payer Payment Date in respect of the related Terminated Amount shall be paid upon such Conversion Event.
	

 	
 	

Fixed Rate Day Count Fraction:	
 	

30/360
	

Floating Amounts:	
 	

 
	

 	
 	

Floating Rate Payer:	
 	

Party B
	

 	
 	

Floating Rate Payer Payment Dates:	
 	

The last Business Day of each March, June, September and December, subject to adjustment in accordance with the Modified Following Business Day Convention, subject to Early Termination; provided,
however, that upon a Redemption Event or Conversion Event, Party B's obligation to pay the Floating Amount in respect of the related Terminated Amount shall terminate.
	

 	
 	

Floating Rate for initial Calculation Period:	
 	

1.65%
	

 	
 	

Floating Rate Option:	
 	

USD-LIBOR-BBA
	 	 	 	 	 

2

 

	

 	
 	

Accrued Floating Amounts Upon a Redemption or Conversion Event:	
 	

In the event of a Redemption Event, Party B shall pay any accrued but unpaid Floating Amounts in respect of the related Terminated Amount to, but excluding, the date fixed for such redemption pursuant to the terms of the Indenture. In the event of a
Conversion Event, no Floating Amounts accrued but unpaid since the most recent Floating Rate Payer Payment Date in respect of the related Terminated Amount shall be paid upon such Conversion Event.
	

 	
 	

Designated Maturity:	
 	

Three (3) months
	

 	
 	

Spread:	
 	

..29%
	

 	
 	

Floating Rate Day Count Fraction:	
 	

Actual/360
	

 	
 	

Reset Dates:	
 	

The first day of each Calculation Period
	

 	
 	

Compounding:	
 	

Inapplicable
	

Early Termination:	
 	

 
	

 	
 	

Early Termination Upon Redemption or Conversion:	
 	

If Party B receives notice of a Conversion Event (defined below) with respect to any Reference Bonds or in the event of a Redemption Event (defined below), Party B shall immediately (and no later than one (1) Business Day following receipt of
such notice) provide written notice (each a "Termination Notice") to Party A, specifying the details of such event, including the principal amount of Reference Bonds being converted or redeemed.
	

 	
 	

Notional Adjustment:	
 	

If Party A receives a Termination Notice, then a portion of this Transaction shall terminate equal to the Notional Amount multiplied by the Termination Ratio (defined below) (the "Terminated Amount") and the Calculation Agent shall reduce the
Notional Amount of this Transaction by the Terminated Amount.
	

 	
 	

 	
 	

There shall be no payment due to either party hereunder under Section 6 of the Agreement in respect of a Terminated Amount.
	

 	
 	

 	
 	

Notwithstanding any right of Party B to reissue or resell the Reference Bonds, Party A has no obligation to increase or otherwise take into consideration any such reissued or resold Reference Bonds in respect of the Notional Amount.
	

 	
 	

Conversion Event:	
 	

The conversion of all or a portion of the Reference Bonds into Shares by the Issuer pursuant to the terms of the Indenture.
	

 	
 	

Redemption Event:	
 	

The redemption of all or a portion of the Reference Bonds by the Issuer pursuant to the Indenture
	 	 	 	 	 

3

 

	

 	
 	

Termination Ratio:	
 	

With respect to any Conversion Event or Redemption Event, the ratio of (a) the principal amount of the Reference Bonds converted or redeemed in connection therewith to (b) the total principal amount of Reference Bonds originally
issued.
	

 	
 	

Reference Bonds:	
 	

Party B's (also sometimes referred to as the "Issuer's") $600,000,000 aggregate principal amount of 21/2% Convertible Subordinated Notes Due December 15, 2006, CUSIP Numbers 156708AD1 and 156708AE9, convertible into
7,407,480 shares of common stock of $0.01 par value common stock of Party B (the "Shares")
	

 	
 	

Indenture:	
 	

The Indenture dated as of December 11, 2001 between the Issuer and State Street Bank and Trust Company, as trustee, as amended or supplemented from time to time
	

 	
 	

Business Days:	
 	

London and New York
	

 	
 	

Calculation Agent:	
 	

Party A, whose determinations and calculations will be binding in the absence of manifest error. The Calculation Agent will have no responsibility for good faith errors or omissions in making any determination as provided herein.

        3.     Additional
Termination Events: 

        3.1   The
parties hereto agree that (a) the occurrence of any of the following shall automatically be an Additional Termination Event with respect to Party B in which
Party B is the sole Affected Party and this Transaction is the only Affected Transaction, and (b) notwithstanding anything to the contrary in the Agreement, Party A may designate the date of
the occurrence of any of the following events, or any date thereafter, as the Early Termination Date and Party B hereby agrees that upon verbal notice thereof by Party A, such notice shall be deemed
effective for purposes of Section 6 of the Agreement 

        (a)   an
Amendment Event occurs (in which case the entirety of this Transaction shall be subject to termination); or 

        (b)   a
Repayment Event occurs (in which case this Transaction shall only be subject to termination in respect of the Additional Terminated Amount (defined below)). The
Calculation Agent shall reduce the Notional Amount by the Additional Terminated Amount and, for the avoidance of doubt, the terms of this Transaction shall continue to apply to the remaining Notional
Amount, if any. 

        3.2   As
used in this Section 3: 

        "Amendment
Event" means that the Issuer amends, modifies, supplements or waives any term of the Indenture or the Reference Bonds if such amendment, modification, supplement or waiver has
a material effect on this transaction or Party A'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. 

        "Repayment
Event" means that (a) any Reference Bonds are repurchased or redeemed (in each case whether in connection with or as a result of a change of control, howsoever defined,
or for any other reason) by the Issuer, (b) any Reference Bonds are delivered to the Issuer in exchange for delivery of any property or assets of the Issuer or any of its affiliates (howsoever
described), (c) any principal of any of the Reference Bonds is repaid prior to the scheduled maturity date of the Reference Bonds (whether following acceleration of the Reference Bonds or
otherwise), or (d) any Reference 

4

 

Bonds
are exchanged by or for the benefit of holders thereof for any other securities of the Issuer or any of its affiliates (or any other property, or any combination thereof) pursuant to any
exchange offer or similar transaction. 

        "Additional
Terminated Amount" means the Notional Amount multiplied by the ratio of (a) the principal amount of the Reference Bonds subject to the Repayment Amount to
(b) the total principal amount of Reference Bonds originally issued. 

        4.     Additional
Party B Covenants and Representations: 

        4.1   Party
B agrees to notify Party A in writing immediately, and in no event later than within one (1) Business Day, of the occurrence of any Conversion Event,
Redemption Event, Amendment Event or Repayment Event. Such notice shall include a detailed description of any such Amendment Event, shall
identify the nature of any such Repayment Event and the principal amount of the Reference Bonds being paid and contain details of any Conversion Event or Redemption Event. 

        4.2.  Party
B hereby represents that, on the Trade Date, it has publicly disclosed all material information concerning the Issuer and the Reference Bonds as may be required
to allow Party B to purchase or sell Shares or the Reference Bonds in compliance with the applicable federal securities laws and that it has publicly disclosed all material information required to be
disclosed by it under applicable federal securities laws. 

        5.     Credit
Support Documents: 

	

Party A and Party B:	
 	

The Credit Support Annex to the Schedule to the Agreement
	Independent Amount:	 	Party A:	None
	 	 	Party B:	An amount in U.S. dollars equal to not less than 1.5 percent of the Notional Amount

        6.     Account
Details: 

	Interest Rate Swap Transaction:	 	 	 
	 	Payments to Party A:	 	To be advised
	 	Payments to Party B:	 	To be advised

        Credit
Suisse First Boston International is regulated by The Financial Services Authority and has entered into this transaction as principal. The time at which the above transaction was
executed will be notified to Party B on request. 

5

 

        Please
confirm that the foregoing correctly sets forth the terms of our agreement by signing and returning this Confirmation. 

	 	 	Yours faithfully,
	

 	
 	

CREDIT SUISSE FIRST BOSTON INTERNATIONAL

By its Agent: CREDIT SUISSE FIRST BOSTON LLC
	

 	
 	

	

 
	

 	
 	

By:	

/s/  LISA F. LINDBLOM      

	 	 	Name:	Lisa F. Lindblom
	 	 	Title:	Vice President

        Confirmed
as of the date first written above: 

	CEPHALON, INC.	 
	

By:	
 	

/s/  JOHN E. OSBORN      
	

 
	Name:	 	John E. Osborn	 
	Title:	 	Senior Vice President, General Counsel and Secretary	 

6

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Exhibit 10.3

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