FRAZER, Pa., Aug. 22, 2011 /PRNewswire/ —
Cephalon, Inc. (Nasdaq:
CEPH) today provided notice to holders of its 2.50 percent
Convertible Senior Subordinated Notes due 2014 (the “2014 Notes”)
and 2.00 percent Convertible Senior Subordinated Notes due 2015
(the “2015 Notes”) in respect of the Merger (as defined below) of
the Company with a wholly-owned subsidiary of Teva Pharmaceutical
Industries Ltd., an Israeli corporation (“Parent”), the
consummation of which will constitute a Fundamental Change under
each of the Indenture governing the 2014 Notes (the “2014
Indenture”) and the Indenture governing the 2015 Notes (the “2015
Indenture”).  The 2014 Notes will be convertible in connection
with the Merger at the option of the holders on the effective date
of the Merger and will remain convertible until 5:00 p.m., New York
City time, on the second scheduled trading day immediately
preceding the Fundamental Change Purchase Date (as defined in the
2014 Indenture) relating to such Fundamental Change (such period,
the “2014 Applicable Conversion Period”).  The 2015 Notes will
be convertible in connection with the Merger at the option of the
holders at any time beginning 40 days before the anticipated
effective date of the Merger and will remain convertible until 5:00
p.m., New York City time, on the second trading day immediately
preceding the Fundamental Change Purchase Date (as defined in the
2015 Indenture) relating to such Fundamental Change (such period,
the “2015 Applicable Conversion Period”).  

If consummated, the Merger will additionally constitute a
Make-Whole Adjustment Event under Section 4.02 of the 2014
Indenture, which will entitle holders converting their 2014 Notes
during the 2014 Applicable Conversion Period to convert such 2014
Notes at an increased conversion rate based on the table set forth
in Section 4.02 of the 2014 Indenture.  

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