FORM 8-K

FOR RELEASE:

IMMEDIATELY

Media Contact:

Rosemarie Yancosek

(908) 298-7476

Investor Contact:

Alex Kelly

(908) 298-7436

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H1j1iZvdKK+m0J+4A8DW7DB6/18CwUetrPn/cVucg5OQh03ZdWBNoMWOckvn9VAC NKjuMVHAkymRgkIOqhpCQA== 0000950123-07-011316.txt : 20070813 0000950123-07-011316.hdr.sgml : 20070813 20070810182115 ACCESSION NUMBER: 0000950123-07-011316 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20070809 ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070813 DATE AS OF CHANGE: 20070810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCHERING PLOUGH CORP CENTRAL INDEX KEY: 0000310158 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 221918501 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06571 FILM NUMBER: 071046690 BUSINESS ADDRESS: STREET 1: 2000 GALLOPING HILL ROAD CITY: KENILWORTH STATE: NJ ZIP: 07033 BUSINESS PHONE: 9082984000 MAIL ADDRESS: STREET 1: 2000 GALLOPING HILL ROAD CITY: KENILWORTH STATE: NJ ZIP: 07033 8-K 1 y36685k1e8vk.htm FORM 8-K FORM 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 9, 2007

SCHERING-PLOUGH CORPORATION

(Exact Name of Registrant as Specified in its Charter)


New Jersey	1-6571	22-1918501
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2000 Galloping Hill Road
Kenilworth, NJ 07033
(Address of Principal Executive Office)

Registrant’s telephone number, including area code: (908) 298-4000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.03. Amendments to Articles of Incorporation or Bylaws: Change in Fiscal Year.

In connection with the offering of the 6.00% Mandatory Convertible Preferred Stock, Schering-Plough has adopted a Certificate of Amendment to its Certificate of Incorporation. The Certificate of Amendment is attached as Exhibit 4.

Item 8.01. Other Events.

On August 9, 2007, Schering-Plough Corporation priced its registered public offering of 50,000,000 common shares at $27.50 per share and its registered public offering of 10,000,000 shares of its 6.00% mandatory convertible preferred stock at $250 per share. The underwriters have an option to purchase up to an additional 7,500,000 common shares from Schering-Plough. The underwriters have an option to purchase up to an additional 1,500,000 shares of 6.00% mandatory convertible preferred stock from Schering-Plough with an aggregate liquidation value of $375 million. The offerings of the 6.00% Mandatory Convertible Preferred Stock and the common shares were made pursuant to Schering-Plough Corporation’s Registration Statement on Form S-3 (File No. 333-145055). Schering-Plough Corporation has filed Prospectus Supplements pursuant to Rule 424(b)(2) under the Securities Act of 1933 relating to the offerings.

In connection with the offerings, Schering-Plough Corporation entered into:

(i) an underwriting agreement relating to the issuance of its 6.00% Mandatory Convertible Preferred Stock among Schering-Plough Corporation and Goldman, Sachs & Co., Banc of America Securities LLC, Bear, Sterns & Co. Inc., Citigroup Global Markets Inc., and Morgan Stanley & Co. Incorporated (as representatives of the underwriters named therein), dated August 9, 2007 pursuant to which Schering-Plough has agreed to issue and sell to the underwriters 11,500,000 shares of its 6.00% Mandatory Convertible Preferred Stock, including 1,500,000 shares subject to an overallotment option, and

(ii) an underwriting agreement relating to the issuance of its common shares entered into among Schering-Plough Corporation and Goldman, Sachs & Co., Banc of America Securities LLC, Bear, Sterns & Co. Inc., Citigroup Global Markets Inc., and Morgan Stanley & Co. Incorporated (as representatives of the underwriters named therein), dated August 9, 2007, pursuant to which Schering-Plough has agreed to issue and sell to the underwriters 57,500,000 common shares, including 7,500,000 shares subject to an overallotment option.

The underwriting agreements are attached hereto as Exhibits 1.1 and 1.2.

The shares of 6.00% mandatory convertible preferred stock have a liquidation preference of $250 per share, for an aggregate liquidation value of $2.5 billion. The preferred stock will pay dividends at a rate of 6.00 percent per annum, payable quarterly. The first dividend payment date will be November 15, 2007. Unless earlier converted, the 6.00% mandatory convertible preferred stock will automatically convert on August 13, 2010, into between approximately 74,206,000 and 90,909,000 common shares, assuming no exercise of the underwriters’ option to purchase additional shares. The conversion rate will be subject to anti-dilution adjustments in certain circumstances. The 6.00% mandatory convertible preferred stock has been approved for listing on the New York Stock Exchange under the ticker symbol “SGP PrB”, subject to issuance.

Item 9.01. Financial Statements and Exhibits.

Schering-Plough Corporation is filing the Exhibits listed below pursuant to this Form 8-K for incorporation by reference into Schering-Plough Corporation’s Registration Statement on Form S-3 (File No. 333-145055).

(d)

Exhibits.

1.1		Underwriting Agreement, dated August 9, 2007, among Schering-Plough Corporation and Goldman, Sachs & Co., Banc of America Securities LLC, Bear, Sterns & Co. Inc., Citigroup Global Markets Inc., and Morgan Stanley & Co. Incorporated (as representatives of the several underwriters named therein) relating to the issuance of the 6.00% Mandatory Convertible Preferred Stock.

1.2		Underwriting Agreement, dated August 9, 2007, among Schering-Plough Corporation and Goldman, Sachs & Co., Banc of America Securities LLC, Bear, Sterns & Co. Inc., Citigroup Global Markets Inc., and Morgan Stanley & Co. Incorporated (as representatives of the several underwriters named therein) relating to the issuance of the common shares.

4		Certificate of Amendment to Schering-Plough Corporation’s Certificate of Incorporation relating to the 6.00% Mandatory Convertible Preferred Stock.

5.1		Opinion of McCarter & English, LLP relating to the common shares.

5.2		Opinion of McCarter & English, LLP relating to the 6.00% Mandatory Convertible Preferred Stock.

23.1		Consent of McCarter & English, LLP relating to the common shares (included in Exhibit 5.1).

23.2		Consent of McCarter & English, LLP relating to the 6.00% Mandatory Convertible Preferred Stock (included in Exhibit 5.2).

99.1		Press release dated August 9, 2007.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Schering-Plough Corporation

By: /S/ Susan Ellen Wolf

Susan Ellen Wolf
Corporate Secretary,
Vice President — Corporate Governance and
Associate General Counsel

Date: August 10, 2007

EXHIBIT INDEX


Number		Description
1.1		Underwriting Agreement, dated August 9, 2007, among Schering-Plough Corporation and Goldman, Sachs & Co., Banc of America Securities LLC, Bear, Sterns & Co. Inc., Citigroup Global Markets Inc., and Morgan Stanley & Co. Incorporated (as representatives of the several underwriters named therein) relating to the issuance of the 6.00% Mandatory Convertible Preferred Stock.

1.2		Underwriting Agreement, dated August 9, 2007, among Schering-Plough Corporation and Goldman, Sachs & Co., Banc of America Securities LLC, Bear, Sterns & Co. Inc., Citigroup Global Markets Inc., and Morgan Stanley & Co. Incorporated (as representatives of the several underwriters named therein) relating to the issuance of the common shares.

4		Certificate of Amendment to Schering-Plough Corporation’s Certificate of Incorporation relating to the 6.00% Mandatory Convertible Preferred Stock.

5.1		Opinion of McCarter & English, LLP relating to the common shares.

5.2		Opinion of McCarter & English, LLP relating to the 6.00% Mandatory Convertible Preferred Stock.

23.1		Consent of McCarter & English, LLP relating to the common shares (included in Exhibit 5.1).

23.2		Consent of McCarter & English, LLP relating to the 6.00% Mandatory Convertible Preferred Stock (included in Exhibit 5.2).

99.1		Press release dated August 9, 2007.

EX-1.1 2 y36685k1exv1w1.htm EX-1.1: UNDERWRITING AGREEMENT EX-1.1

Exhibit 1.1

EXECUTION VERSION

SCHERING-PLOUGH CORPORATION

6.00% Mandatory Convertible Preferred Stock

Underwriting Agreement

August 9, 2007

Goldman, Sachs & Co.,
Banc of America Securities LLC,
Bear, Stearns & Co. Inc.,
Citigroup Global Markets Inc.,
Morgan Stanley & Co. Incorporated
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004

Ladies and Gentlemen:

Schering-Plough Corporation, a New Jersey corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell to the Underwriters named in Schedule I hereto (the “Underwriters”), for whom you are acting as representatives, (the “Representatives”) an aggregate of 10,000,000 shares of its 6.00% mandatory convertible preferred stock, par value $1.00 per share (the “Preferred Stock”) convertible into common shares, par value $0.50 per share (the “Common Shares”) of the Company (the “Firm Securities”) and, at the election of the Underwriters, up to 1,500,000 additional shares of Preferred Stock (the “Optional Securities”) (the Firm Securities and the Optional Securities that the Underwriters elect to purchase pursuant to Section 2 hereof being collectively called the “Securities”). The proceeds from the sale of the Securities are intended to be used to fund a portion of the purchase price for the Company’s planned acquisition of Organon BioSciences N.V., a Netherlands company (“Organon BioSciences”) pursuant to a Letter of Offer, dated March 12, 2007, between the Company and Akzo Nobel N.V., or, if the acquisition is not completed, for general corporate purposes. The Securities will be established by the certificate of amendment to the certificate of incorporation of the Company to be filed with the Department of Treasury of the State of New Jersey before the First Time of Delivery (the “Certificate of Amendment”).

1. The Company represents and warrants to, and agrees with, each of the Underwriters that:

(a) An “automatic shelf registration statement” as defined under Rule 405 under the Securities Act of 1933, as amended (the “Act”) on Form S-3 (File No. 333-

145055) in respect of the Securities was filed with the Securities and Exchange Commission (the “Commission”) on August 2, 2007; such registration statement, and any post-effective amendment thereto, became effective on filing; and no stop order suspending the effectiveness of such registration statement or any part thereof has been issued and no proceeding for that purpose has been initiated or threatened by the Commission, and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act has been received by the Company (the base prospectus filed as part of such registration statement, in the form in which it has most recently been filed with the Commission on or prior to the date of this Agreement, is hereinafter called the “Basic Prospectus”; any preliminary prospectus (including any preliminary prospectus supplement) relating to the Securities filed with the Commission pursuant to Rule 424(b) under the Act is hereinafter called a “Preliminary Prospectus”; the various parts of such registration statement, including all exhibits thereto but excluding Form T-1 and including any prospectus supplement relating to the Securities that is filed with the Commission and deemed by virtue of Rule 430B to be part of such registration statement, each as amended at the time such part of the registration statement became effective, are hereinafter collectively called the “Registration Statement”; the Basic Prospectus, as amended and supplemented immediately prior to the Applicable Time (as defined in Section 1(c) hereof), is hereinafter called the “Pricing Prospectus”; the form of the final prospectus relating to the Securities filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof is hereinafter called the “Prospectus”; any reference herein to the Basic Prospectus, the Pricing Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date of such prospectus; any reference to any amendment or supplement to the Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any post-effective amendment to the Registration Statement, any prospectus supplement relating to the Securities filed with the Commission pursuant to Rule 424(b) under the Act and any documents filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and incorporated therein, in each case after the date of the Basic Prospectus, such Preliminary Prospectus, or the Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement; and any “issuer free writing prospectus” as defined in Rule 433 under the Act relating to the Securities is hereinafter called an “Issuer Free Writing Prospectus”);

(b) No order preventing or suspending the use of any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in

reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through Goldman, Sachs & Co. expressly for use therein;

(c) For the purposes of this Agreement, the “Applicable Time” is 5:15 pm (Eastern time) on the date of this Agreement. The Pricing Prospectus, and the Pricing Prospectus as supplemented by those Issuer Free Writing Prospectuses and other documents listed in Schedule II(c) hereto, taken together (collectively, the “Pricing Disclosure Package”) as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus listed on Schedule II(a) or Schedule II(c) hereto does not conflict with the information contained in the Registration Statement, the Pricing Prospectus or the Prospectus and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements or omissions made in an Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through Goldman, Sachs & Co. expressly for use therein;

(d) The documents incorporated by reference in the Pricing Prospectus and the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; any further documents so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through Goldman, Sachs & Co. expressly for use therein; and no such documents were filed with the Commission since the Commission’s close of business on the business day immediately prior to the date of this Agreement and prior to the execution of this Agreement, except as set forth on Schedule II(c) hereto;

regulations of the Commission thereunder. The Registration Statement does not and will not, as of the applicable effective date as to each part of the Registration Statement and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus does not and will not, as of the applicable filing date of the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, the representations and warranties in this subsection shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through Goldman, Sachs & Co. expressly for use therein;

(f) Neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial statements included or incorporated by reference in the Pricing Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Pricing Prospectus, there has not been any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, financial position, or results of operations, of the Company and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business (a “Material Adverse Effect”), otherwise than as set forth or contemplated in the Pricing Prospectus.

(g) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of New Jersey with power and authority to own, lease and operate its properties and conduct its business as described in the Pricing Prospectus and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases property, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not have a Material Adverse Effect.

(h) The execution and delivery of this Agreement, and the consummation of the transactions contemplated herein, including, without limitation, the issue and sale of the Securities, have been duly authorized by all necessary corporate action and will not result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company, as applicable, pursuant to any indenture, loan agreement, contract or other agreement or instrument to which the Company is a party or by which the Company may be bound or to which any of the property or assets of the Company is subject, except for such breaches, defaults, liens, charges or encumbrances that individually or in the aggregate would not reasonably be expected to result in a Material Adverse Effect, nor, to its knowledge, will such actions result in any violation of any applicable law, order, rule or regulation applicable to the Company of

any court or of any federal, state or other regulatory authority or other governmental body having jurisdiction over the Company, except for such violations that individually or in the aggregate would not reasonably be expected to result in a Material Adverse Effect, nor will such actions result in any violation of the provisions of the charter or by-laws of the Company.

(i) Neither the Company nor any of its subsidiaries listed on Schedule IV hereto is in violation of its respective charter or by-laws or similar organizational document. None of the other subsidiaries of the Company is in violation of its respective charter or by-laws or similar organizational document, except for such violations as would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries is in default in the performance or observance of any obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except as would not reasonably be expected to have a Material Adverse Effect.

(j) The Company has an authorized capitalization as set forth in the Pricing Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable.

(k) The Common Shares initially issuable upon conversion of the Preferred Stock and Optional Securities have been duly and validly authorized and reserved for issuance and, when issued and delivered upon conversion and in accordance with the provisions of the Certificate of Amendment, will be duly and validly issued, fully paid and non-assessable and will conform in all material respects to the description of the Preferred Stock contained in the Pricing Disclosure Package and the Prospectus.

(l) The Certificate of Amendment creating the Securities, the proposed form of which has been furnished to the Representatives, will have been duly filed with the Department of Treasury of the State of New Jersey on or before the First Time of Delivery.

(m) No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign, is necessary or required for the due authorization, execution and delivery by the Company of this Agreement, for the use of proceeds by the Company described in the Pricing Prospectus and the Prospectus, or for the performance by the Company of the transactions contemplated by this Agreement, except (1) such as have been already made, obtained or rendered, as applicable, (2) as may be required under state securities or blue sky laws, (3) as may be required by any national securities exchange in connection with listing of the Securities and Common Shares issuable upon conversion of the Preferred Stock and Optional Preferred Stock, (4) the filing of the Certificate of Amendment with the Department of Treasury of the State of New Jersey, or (5) as disclosed in or incorporated by reference into the Registration Statement or the Prospectus.

(n) Except as disclosed in or incorporated by reference into the Registration Statement or the Pricing Prospectus, there is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or to the knowledge of the Company threatened in writing, against or affecting the Company or any of its subsidiaries that is required to be disclosed in the Registration Statement and the Pricing Prospectus (other than as stated therein), or which, if determined adversely to the Company or any of its subsidiaries, would reasonably be expected to result in a Material Adverse Effect, or that would reasonably be expected to materially and adversely affect the consummation of the transactions contemplated under this Agreement or the performance by the Company of its obligations hereunder. Except for such proceedings, investigations and claims disclosed in or incorporated by reference into the Registration Statement or the Pricing Prospectus, the aggregate of all pending legal or governmental proceedings to which the Company or any of its subsidiaries is a party or of which any of their respective assets, properties or operations is the subject would not reasonably be expected to result in a Material Adverse Effect.

(o) The statements set forth in the Pricing Prospectus and Prospectus under the captions “Certain United States Federal Income Tax Consequences”, “Underwriting” and under the caption “Description of the Mandatory Convertible Preferred Stock”, insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair.

(p) Deloitte & Touche LLP, who have certified certain financial statements of the Company and its subsidiaries, and have audited the Company’s internal control over financial reporting and management’s assessment thereof are an independent registered public accounting firm with respect to the Company as required by the Act and the rules and regulations of the Commission thereunder;

(q) The financial statements of the Company included or incorporated by reference in the Registration Statement and the Pricing Prospectus, together with the related schedules and notes, present fairly the financial position of the Company and its consolidated subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved. The supporting schedules, if any, present fairly in accordance with GAAP the information required to be stated therein. The summary historical financial information included in the Pricing Prospectus and the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement. The pro forma financial statements and the related notes thereto included in the Registration Statement and the Pricing Prospectus present fairly the information shown therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial statements and have been properly compiled on the basis described therein, and the assumptions used in the preparation

thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein;

(r) The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof in the manner described in the Pricing Prospectus, will not be an “investment company”, as such term is defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”);

(s) (A) (i) At the time of filing the Registration Statement, (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), and (iii) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the Act) made any offer relating to the Securities in reliance on the exemption of Rule 163 under the Act, the Company was a “well-known seasoned issuer” as defined in Rule 405 under the Act; and (B) at the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of the Securities, the Company was not an “ineligible issuer” as defined in Rule 405 under the Act;

(t) The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that complies with the requirements of the Exchange Act and has been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting is effective and the Company is not aware of any material weaknesses in its internal control over financial reporting;

(u) Except as disclosed in the Pricing Prospectus, since the date of the latest audited financial statements included or incorporated by reference in the Pricing Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;

(v) The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective;

(w) To the Company’s knowledge, the Company and any of the Company’s directors or officers, in their capacities as such, is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and

regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications;

(x) Neither the Company nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”) that would be reasonably likely to result in an enforcement action thereunder, including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the Company and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith;

(y) Neither the Company nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or person acting on behalf of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC;

(z) Neither the Company nor any of its subsidiaries has conducted its business in a manner that has resulted in a failure to comply with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency;

(aa) The Company and its subsidiaries possess adequate permits, authorities or permits issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by them, except such certificates, authorities or permits which are not material to such conduct of their business and except where the failure so to possess would not, singly or in the aggregate, result in a Material Adverse Effect; and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect;

(bb) The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know

how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would result in a Material Adverse Effect; and

(cc) Except as described or incorporated by reference in the Registration Statement and the Pricing Prospectus with respect to the stock options (the “Stock Options”) granted pursuant to the stock-based compensation plans of the Company and its subsidiaries (the “Company Stock Plans”), (i) each Stock Option designated by the Company at the time of grant as an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), so qualifies, (ii) each grant of a Stock Option was duly authorized no later than the date on which the grant of such Stock Option was by its terms to be effective (the “Grant Date”) by all necessary corporate action, including, as applicable, approval by the board of directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto, (iii) each such grant was made in accordance with the terms of the Company Stock Plans, the Exchange Act and all other applicable laws and regulatory rules or requirements, including the rules of the New York Stock Exchange and any other exchange on which Company securities are traded, (iv) the per share exercise price of each Stock Option was equal to or greater than the fair market value of a Common Share on the applicable Grant Date and (v) each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company and disclosed in the Company’s filings with the Commission in accordance with the Exchange Act and all other applicable laws. The Company has not knowingly granted, and there is no and has been no policy or practice of the Company of granting, Stock Options prior to, or otherwise coordinating the grant of Stock Options with, the release or other public announcement of material information regarding the Company or its subsidiaries or their results of operations or prospects.

as to eliminate fractional shares) determined by multiplying such number of Optional Securities by a fraction, the numerator of which is the maximum number of Optional Securities which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is the maximum number of Optional Securities that all of the Underwriters are entitled to purchase hereunder.

The Company hereby grants to the Underwriters the right to purchase at their election up to 1,500,000 Optional Securities, at the purchase price per share set forth in the paragraph above, for the sole purpose of covering sales of shares in excess of the number of Firm Securities, provided that the purchase price per Optional Securities shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Securities but not payable on the Optional Securities. Any such election to purchase Optional Securities may be exercised only by written notice from you to the Company, given within a period of 30 calendar days after the date of this Agreement, setting forth the aggregate number of Optional Securities to be purchased and the date on which such Optional Securities are to be delivered, as determined by you but in no event earlier than the First Time of Delivery (as defined in Section 4 hereof) or, unless you and the Company otherwise agree in writing, earlier than two or later than ten business days after the date of such notice.

3. Upon the authorization by you of the release of the Firm Securities, the several Underwriters propose to offer the Firm Securities for sale upon the terms and conditions set forth in the Prospectus.

4. (a) The Securities to be purchased by each Underwriter hereunder, in definitive form, and in such authorized denominations and registered in such names as Goldman, Sachs & Co. may request upon at least forty-eight hours’ prior notice to the Company shall be delivered by or on behalf of the Company to Goldman, Sachs & Co., through the facilities of the Depository Trust Company (“DTC”), for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified by the Company to Goldman, Sachs & Co. at least forty-eight hours in advance. The Company will cause the certificates representing the Securities to be made available for checking and packaging at least twenty-four hours prior to the Time of Delivery (as defined below) at the office of DTC or its designated custodian (the “Designated Office”). The time and date of such delivery and payment shall be, with respect to the Firm Securities, 9:30 a.m., New York City time, on August 15, 2007 or such other time and date as Goldman, Sachs & Co. and the Company may agree upon in writing, and, with respect to the Optional Securities, 9:30 a.m., New York City time, on the date specified by Goldman, Sachs & Co. in the written notice given by Goldman, Sachs & Co. of the Underwriters’ election to purchase such Optional Securities, or such other time and date as Goldman, Sachs & Co. and the Company may agree upon in writing. Such time and date for delivery of the Firm Securities is herein called the “First Time of Delivery”, such time and date for delivery of the Optional Securities, if not the First Time of Delivery, is herein called the “Second Time of Delivery”, and each such time and date for delivery is herein called a “Time of Delivery”.

delivered at the offices of Shearman & Sterling LLP, 599 Lexington Avenue, New York, New York, 10022 (the “Closing Location”), and the Securities will be delivered at the Designated Office, all at such Time of Delivery. A meeting will be held at the Closing Location at 3:00 p.m., New York City time, on the New York Business Day next preceding such Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 4, “New York Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive order to close.

5. The Company agrees with each of the Underwriters:

(a) To prepare the Prospectus in a form approved by you and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement; to make no further amendment or any supplement to the Registration Statement, the Basic Prospectus or the Prospectus prior to the last Time of Delivery which shall be disapproved by you promptly after reasonable notice thereof; to advise you, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any amendment or supplement to the Prospectus has been filed and to furnish you with copies thereof; to file promptly all other material required to be filed by the Company with the Commission pursuant to Rule 433(d) under the Act; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required in connection with the offering or sale of the Securities; to advise you, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus in respect of the Securities, of any notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act, of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus or suspending any such qualification, to promptly use its best efforts to obtain the withdrawal of such order; and in the event of any such issuance of a notice of objection, promptly to take such steps including, without limitation, amending the Registration Statement or filing a new registration statement, at its own expense, as may be necessary to permit offers and sales of the Securities by the Underwriters (references herein to the Registration Statement shall include any such amendment or new registration statement);

(b) If required by Rule 430B(h) under the Act, to prepare a form of prospectus in a form approved by you and to file such form of prospectus pursuant to Rule 424(b) under the Act not later than may be required by Rule 424(b) under the Act; and to make no further amendment or supplement to such form of prospectus which shall be disapproved by you promptly after reasonable notice therereof;

(c) If by the third anniversary (the “Renewal Deadline”) of the initial effective date of the Registration Statement, any of the Securities remain unsold by the Underwriters, the Company will file, if it has not already done so and is eligible to do so, a new automatic shelf registration statement relating to the Securities, in a form reasonably satisfactory to you. If at the Renewal Deadline the Company is no longer eligible to file an automatic shelf registration statement, the Company will, if it has not already done so, file a new shelf registration statement relating to the Securities, in a form reasonably satisfactory to you and will use its best efforts to cause such registration statement to be declared effective within 180 days after the Renewal Deadline. The Company will take all other action necessary or appropriate to permit the public offering and sale of the Securities to continue as contemplated in the expired registration statement relating to the Securities. References herein to the Registration Statement shall include such new automatic shelf registration statement or such new shelf registration statement, as the case may be;

(d) To endeavor in good faith to qualify the Securities for offer and sale under the applicable securities laws of such jurisdictions as the Representatives may reasonably designate; provided, however, that the Company shall not be obligated to file any general consent to service or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. The Company will maintain such qualifications in effect for as long as may be reasonably required for the distribution of the Securities, provided, however, that the Company shall not be obligated to file any general consent to service or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject;

(e) Prior to 10:00 a.m., New York City time, on the New York Business Day next succeeding the date of this Agreement and from time to time, to furnish the Underwriters with printed and electronic copies of the Prospectus in New York City in such quantities as you may reasonably request, and, if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Securities and if at such time any event shall have occurred or condition shall exist as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act or the Exchange Act, to notify you and upon your request to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many written and electronic copies as you may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; and in case any Underwriter is required to deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) in connection with sales of any of the Securities at any time nine months or more after the time of issue of the Prospectus, upon your request but at the expense of such Underwriter, to prepare and deliver to

such Underwriter as many written and electronic copies as you may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act;

(f) To make generally available to its securityholders as soon as practicable, but in any event not later than sixteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earning statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158);

(g) During the period beginning from the date hereof and continuing to and including the date 90 days after the date of the Prospectus, except as set forth below, the Company shall not offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any Common Shares of the Company, or any options or warrants to purchase any Common Shares of the Company, or any securities of the Company that are substantially similar to the Common Shares, including, but not limited to, any securities that are convertible into or exchangeable for, or that represent the right to receive, Common Shares or any substantially similar securities, without the prior written consent of the Representatives; provided, however, that (i) the Company may issue and sell Common Shares or issue options for the purchase of its Common Shares, and file related registration statements, pursuant to any employee or director stock incentive or option plans, or dividend reinvestment plans of the Company in effect as of the date of this Agreement, or to current or prospective employees or directors, (ii) the Company may issue Common Shares issuable upon the conversion or exchange of securities or the exercise of warrants or options outstanding as of the date of this Agreement, or hereafter granted under the Company’s stock incentive or option plans that exist as of the date of this Agreement, or stock or option grants to current or prospective employees or directors, (iii) the Company may repurchase shares issued pursuant to the Company’s stock incentive program that represent shares delivered by holders for payment of the exercise price and/or tax withholding obligations in connection with stock options and stock awards; provided that the Company does not resell such shares, (iv) the Company may issue Common Shares pursuant to the underwriting agreement entered into on the date hereof in connection with the concurrent offering of Common Shares and (v) the Company may issue and sell the Securities and the Common Shares issuable upon conversion of the Securities and do other acts contemplated by this Agreement;

(h) To pay the required Commission filing fees relating to the Securities within the time required by Rule 456(b)(1) under the Act without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) under the Act;

(i) To use the net proceeds received by it from the sale of the Securities pursuant to this Agreement in the manner specified in the Pricing Prospectus under the caption “Use of Proceeds”;

(j) To use its best efforts to list, subject to notice of issuance, the Securities and the Common Shares issuable upon conversion of the Securities on the New York Stock Exchange;

line offering of the Securities (the “License”); provided, however, that the License shall be used solely for the purpose described above, is granted without any fee and may not be assigned or transferred;

(l) Prior to the First Time of Delivery, the Company shall file the Certificate of Amendment creating the Securities, the proposed form of which has been furnished to the Representatives, with the Department of Treasury of the State of New Jersey.

(m) To reserve and keep available at all times, free of preemptive rights, Common Shares for the purpose of enabling the Company to satisfy any obligations to issue Common Shares upon conversion of the Securities.

(a) The Company represents and agrees that, without the prior consent of Goldman, Sachs & Co., it has not made and will not make any offer relating to the Securities that would constitute a “free writing prospectus” as defined in Rule 405 under the Act; each Underwriter represents and agrees that, without the prior consent of the Company and Goldman, Sachs & Co., it has not made and will not make any offer relating to the Securities that would constitute a free writing prospectus; any such free writing prospectus the use of which has been consented to by the Company and Goldman, Sachs & Co. is listed on Schedule II(a) or Schedule II(c) hereto;

(b) The Company has complied and will comply with the requirements of Rule 433 under the Act applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or retention where required and legending; and

(c) The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, the Pricing Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to Goldman, Sachs & Co. and, if requested by Goldman, Sachs & Co., will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided, however, that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through Goldman, Sachs & Co. expressly for use therein.

accordance with the provisions of Section 3(d), including filing fees and the fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of any Blue Sky Surveys and Legal Investment Surveys, (v) the printing and delivery to the Underwriters in quantities as hereinabove stated of copies of the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus and the Prospectus, and any amendments or supplements thereto, (vi) the printing and delivery to the Underwriters of copies this Agreement, any Blue Sky Surveys and Legal Investment Surveys, (vii) the fees, if any, of rating agencies for rating the Securities, (viii) the costs and expenses related to any filing with any national securities exchange, (ix) the costs and expenses incident to the preparation of the Certificate of Amendment and the filing of the Certificate of Amendment with the Department of Treasury of the State of New Jersey, (x) any expenses incurred by the Company in connection with a “road show” presentation to potential investors, (xi) the cost and charges of any transfer agent or registrar and (xii) the fees and expenses, if any, incurred in connection with the listing of the Securities and the Common Shares issuable upon conversion of the Securities on any national securities exchange. It is understood, however, that, except as provided in this Section, and Sections 9 and 12 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities by them, and any advertising expenses connected with any offers they may make.

8. The obligations of the Underwriters hereunder, as to the Securities to be delivered at each Time of Delivery, shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company herein are, at and as of such Time of Delivery, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:

(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; all material required to be filed by the Company pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the applicable time period prescribed for such filings by Rule 433; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission and no notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act shall have been received; no stop order suspending or preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with;

(b) Shearman & Sterling LLP, counsel for the Underwriters, shall have furnished to you such written opinion or opinions, dated such Time of Delivery, in form and substance satisfactory to you with respect to such matters as you may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;

(c) Allen & Overy LLP, counsel for the Company, shall have furnished to you their written opinion (a draft of such opinion is attached as Annex II(a) hereto), dated such Time of Delivery, in form and substance satisfactory to you, to the effect that:

(i) The statements set forth in the Pricing Prospectus and the Prospectus under the caption “Underwriting,” insofar as such statements purport to summarize the provisions of the documents referred to therein, have been reviewed by such counsel and fairly summarize the matters described therein in all material respects.

(ii) The statements set forth in the Pricing Prospectus and the Prospectus under the caption “Certain United States Federal Income Tax Consequences,” insofar as such statements purport to summarize the provisions of the laws referred to therein, have been reviewed by such counsel and fairly summarize the matters described therein in all material respects.

(iii) Except where the failure to file or to obtain such authorization, approval, consent, license, order, registration, qualification or decree, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect or as disclosed in or incorporated by reference into the Registration Statement, Pricing Prospectus or Prospectus or as required under state securities or blue sky laws or as may be required by any national securities exchange in connection with listing of the Securities and Common Shares issuable upon conversion of the Securities or the filing of the Certificate of Amendment with the Department of Treasury of the State of New Jersey, no filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign, is necessary or required for the due authorization, execution or delivery by the Company of this Agreement or for the performance by the Company of the transactions contemplated under the Pricing Prospectus, the Prospectus or this Agreement, other than under the Act and the rules and regulations of the Commission thereunder, which have already been made, obtained or rendered, as applicable.

(iv) The Company is not and, after giving effect to the offering and sale of the Securities and the application of the net proceeds thereof, will not be an “investment company” or entity “controlled” by an “investment company”, as such terms are defined in the Investment Company Act.

Pricing Disclosure Package (except information of a financial or accounting nature included therein or omitted therefrom, as to which such counsel need express no opinion), as of the Applicable Time, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (iii) the Organon BioSciences Disclosure in the Prospectus or any further amendment or supplement thereto made by the Company prior to such Time of Delivery (except information of a financial or accounting nature included therein or omitted therefrom, as to which such counsel need express no opinion), as of its date and as of such Time of Delivery, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

In rendering such opinion, such counsel may rely, without independent verification, (A) as to matters involving the application of laws of any jurisdiction other than the States of Delaware and New York or the Federal laws of the United States, to the extent they deem proper and specified in such opinion, upon the opinion of other counsel of good standing whom they believe to be reliable and who are reasonably satisfactory to counsel for the Underwriters; and (B) as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company, Organon BioSciences and public officials. Such counsel may further state that their opinion and belief are based upon their participation in the preparation of the Registration Statement, the Pricing Prospectus and the Prospectus and any amendments or supplements thereto and review and discussion of the contents thereof, but are without independent check or verification except as specified. Such opinion may contain customary assumptions, exceptions, limitations, qualifications and comments;

(d) The Executive Vice President and General Counsel of the Company and the Corporate Secretary, Vice-President — Corporate Governance and Associate General Counsel of the Company shall have furnished to you their written opinion (a draft of such opinion is attached as Annex II(b) hereto), dated such Time of Delivery, in form and substance satisfactory to you, to the effect that:

(i) This Agreement has been duly authorized, executed and delivered by the Company.

(ii) The Company is a corporation duly incorporated and validly existing in good standing under the laws of the State of New Jersey.

(iii) The Company is duly qualified to transact business and is in good standing in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where the failure to so qualify would have (either individually or in the aggregate) a Material Adverse Effect.

Company or, (B) any agreement, indenture or other instrument of which the Company is a party or by which it is bound, or (C) any law, administrative regulation or administrative or court order known to such counsel to be applicable to the Company; except, solely in the case of clause (B), for such conflicts, breaches or defaults that individually or in the aggregate would not reasonably be expected to result in a Material Adverse Effect.

(v) The Registration Statement is effective under the Act and, to such counsel’s knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued under the Act or proceedings therefor initiated or threatened by the Commission.

(vi) Except as disclosed in or incorporated by reference into the Registration Statement or the Pricing Prospectus, to such counsel’s knowledge, there is not pending or threatened any action, suit, proceeding, inquiry or investigation to which the Company or any of its subsidiaries thereof is a party or to which the assets, properties or operations of the Company or any of its subsidiaries thereof is subject, before or by any court or governmental agency or body, domestic or foreign, which, if determined adversely to the Company or any of its subsidiaries, would reasonably be expected to result in a Material Adverse Effect or which would reasonably be expected to materially and adversely affect the consummation of the transactions contemplated under this Agreement, or the performance by the Company of its obligations hereunder.

(vii) The documents incorporated by reference in the Pricing Prospectus and the Prospectus (except for the financial statements and other financial data included therein or omitted therefrom and the exhibits thereto, as to which such counsel need express no opinion), as of the dates they were filed with the Commission, appear on their face to have been appropriately responsive in all material respects to the requirements of the 1934 Act and the rules and regulations of the Commission thereunder; and such counsel has no reason to believe that any of such documents, when such documents were so filed, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading.

(viii) Neither the Company nor any of its subsidiaries is in violation of its charter or bylaws or in default in the performance or observance of any material obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound.

(ix) Such counsel does not know of any amendment to the Registration Statement required to be filed or of any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Prospectus or required to be described in the Registration Statement, the Basic Prospectus or the Prospectus which are not filed or incorporated by reference or described as required.

(x) The Registration Statement, the Pricing Prospectus and the Prospectus, and each amendment or supplement thereto (except for the financial statements and other financial data included therein or omitted therefrom, as to which such counsel need express no opinion), excluding the documents incorporated by reference therein, as of their respective effective or issue dates, appear on their face to have been appropriately responsive in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder.

(xi) The Company is not and, after giving effect to the offering and sale of the Securities and the application of the net proceeds thereof, will not be an “investment company” or entity “controlled” by an “investment company”, as such terms are defined in the Investment Company Act.

Such opinion shall also state that in the course of such counsel’s review and discussion in connection with the preparation of the Registration Statement, the Pricing Prospectus and the Prospectus, although they do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement, the Pricing Prospectus or the Prospectus, they have no reason to believe (i) that any part of the Registration Statement, or any further amendment thereto made by the Company prior to such Time of Delivery (other than the financial and accounting data contained therein or omitted therefrom, as to which such counsel need express no opinion), when such part or amendment became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) that the Pricing Disclosure Package (other than the financial and accounting data contained therein or omitted therefrom, as to which such counsel need express no opinion), as of the Applicable Time, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (iii) that, as of its date and as of such Time of Delivery, the Prospectus or any further amendment or supplement thereto made by the Company prior to such Time of Delivery (other than the financial and accounting data contained therein or omitted therefrom, as to which such counsel need express no opinion) contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(e) McCarter & English, LLP, special counsel for the Company, shall have furnished to you their written opinion (a draft of such opinion is attached as Annex II(c) hereto), dated such Time of Delivery, in form and substance satisfactory to you, to the effect that:

(i) The Securities have been duly authorized for issuance and sale by the Company and, when issued and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable.

(ii) The Certificate of Amendment creating the Securities has been duly filed with the Department of Treasury of the State of New Jersey on or before the First Time of Delivery.

(iii) The issue and sale of the Securities, the execution and delivery of this Agreement, the fulfillment of the terms herein set forth and the consummation of the transactions herein contemplated will not conflict with or constitute a breach of, or default under, (A) the charter or by-laws of the Company or, (B) except for such conflicts, breaches or defaults that individually or in the aggregate would not reasonably be expected to result in a Material Adverse Effect, any law or administrative regulation that in such counsel’s experience is normally applicable to transactions of the type contemplated by the Agreement, or any administrative or court order known to such counsel to be applicable to the Company.

(iv) Except as disclosed in or incorporated by reference into the Registration Statement or Pricing Prospectus or as required under state securities or blue sky laws or as may be required by any national securities exchange in connection with listing of the Securities and the Common Shares issuable upon conversion of the Securities or the filing of the Certificate of Amendment with the Department of Treasury of the State of New Jersey, no filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign, is necessary or required for the due authorization, execution or delivery by the Company of this Agreement or for the performance by the Company of the transactions contemplated under the Pricing Prospectus and the Prospectus, this Agreement, and the Certificate of Amendment, other than under the Act and the Regulations.

(v) The Company has an authorized capitalization as set forth in the Pricing Prospectus and the Prospectus, and the Common Shares initially issuable upon conversion of the Securities have been duly and validly authorized and reserved for issuance and, when issued and delivered in accordance with the provisions of the Certificate of Amendment, will be duly and validly issued and fully paid and non-assessable.

(vi) The statements set forth in the Pricing Prospectus and the Prospectus under the caption “Description of Mandatory Convertible Preferred Stock” and “Description of Capital Stock” and in the Registration Statement in Item 15, insofar as such statements constitute a summary of the terms of the Preferred Stock, the Common Shares, the Certificate of Amendment, the Company’s certificate of incorporation, as amended, and the New Jersey Business Corporation Act, as amended, have been reviewed by such counsel and fairly summarize the matters described therein in all material respects.

Such opinion may contain customary assumptions, exceptions, limitations, qualifications and comments;

(f) (A) On the date of the Prospectus at a time prior to the execution of this Agreement, (B) at 9:30 a.m., New York City time, on the effective date of any post effective amendment to the Registration Statement filed subsequent to the date of this Agreement and on or prior to the earlier of the Time of Delivery relating to the exercise in full of the Underwriters’ option to purchase the Optional Securities set forth in Section 2 hereof and the date which is 30 calendar days after the date of this Agreement and (C) also at each Time of Delivery, each of Deloitte & Touche LLP and KPMG Accountants N.V. shall have furnished to you a letter or letters, dated the respective dates of delivery thereof, in form and substance satisfactory to you, to the effect set forth in Annex I hereto (the executed copy of the letter delivered prior to the execution of this Agreement is attached as Annex I(a) hereto and a form of letter to be delivered on the effective date of any post-effective amendment to the Registration Statement, and as of the Time of Delivery is attached as Annex I(b) hereto);

(g) (i) Neither the Company nor any of its subsidiaries shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Pricing Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus, and (ii) since the respective dates as of which information is given in the Pricing Prospectus there shall not have been any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, financial position, or results of operations, of the Company and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business, otherwise than as set forth or contemplated in the Pricing Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in your judgment so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities being delivered at such Time of Delivery on the terms and in the manner contemplated in the Prospectus;

(h) On or after the Applicable Time (i) no downgrading shall have occurred in the rating accorded the Company’s debt securities or preferred stock by any “nationally recognized statistical rating organization”, as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company’s debt securities or preferred stock;

(i) On or after the Applicable Time there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange; (ii) a suspension or material limitation in trading in the Company’s securities on the New York Stock Exchange; (iii) a general moratorium on commercial banking activities declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in your judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities being delivered at such Time of Delivery on the terms and in the manner contemplated in the Prospectus;

(j) The Company shall have complied with the provisions of Section 5(e) hereof with respect to the furnishing of prospectuses on the New York Business Day next succeeding the date of this Agreement;

(k) The Securities and the Common Shares issuable upon conversion of the Securities shall have been duly listed, subject to notice of issuance, on the Exchange;

(l) The Company shall have obtained and delivered to the Underwriters executed copies of the agreement attached hereto as Exhibit A from the directors and officers listed on Schedule III hereto; and

(m) The Company shall have furnished or caused to be furnished to you at such Time of Delivery certificates of officers of the Company satisfactory to you as to the accuracy of the representations and warranties of the Company herein at and as of such time, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to such time, as to the matters set forth in subsections (a) and (g) of this Section and as to such other matters as you may reasonably request.

(n) The Underwriters shall have received a certificate of the Acting Chief Financial Officer of Organon BioSciences substantially in the form of Annex II hereto.

(a) The Company will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Act, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Act, in the light of the circumstances under which they were made) not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred and documented by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Company by any Underwriter through Goldman, Sachs & Co. expressly for use therein.

(b) Each Underwriter will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in the light of the circumstances under which they were made) not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus or any such amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Company by such Underwriter through Goldman, Sachs & Co. expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred.

(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party (not to be unreasonably withheld), effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.

each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint.

(e) The obligations of the Company under this Section 9 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act and each broker-dealer affiliate of any Underwriter; and the obligations of the Underwriters under this Section 9 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Act.

10. (a) If any Underwriter shall default in its obligation to purchase the Securities which it has agreed to purchase hereunder at a Time of Delivery, you may in your discretion arrange for you or another party or other parties to purchase such Securities on the terms contained herein. If within thirty six hours after such default by any Underwriter you do not arrange for the purchase of such Securities, then the Company shall be entitled at its option to a further period of thirty six hours within which to procure another party or other parties satisfactory to you to purchase such Securities on such terms. In the event that, within the respective prescribed periods, you notify the Company that you have so arranged for the purchase of such Securities, or the Company notifies you that it has so arranged for the purchase of such Securities, you or the Company shall have the right to postpone such Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in your opinion may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Securities.

(b) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the aggregate number of such Securities which remains unpurchased does not exceed one eleventh of the aggregate number of all the Securities to be purchased at such Time of Delivery, then the Company shall have the right to require each non-defaulting Underwriter to purchase the number of shares which such Underwriter agreed to purchase hereunder at such Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of Securities which such Underwriter agreed to purchase hereunder) of the Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

(c) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the aggregate number of such Securities which remains unpurchased exceeds one eleventh of the aggregate number of all the Securities to be purchased at such Time of Delivery, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Securities of a defaulting Underwriter or Underwriters, then this Agreement (or, with respect to the Second Time of Delivery, the obligations of the Underwriters to purchase and of the Company to sell the Optional Securities) shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 7 hereof and the indemnity and contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

behalf of any Underwriter or any controlling person of any Underwriter, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Securities.

12. If this Agreement shall be terminated pursuant to Section 10 hereof, the Company shall not then be under any liability to any Underwriter except as provided in Sections 7 and 9 hereof; but, if for any other reason, any of the Securities are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Underwriters through you for all out of pocket expenses approved in writing by you, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of the Securities not so delivered, but the Company shall then be under no further liability to any Underwriter except as provided in Sections 7 and 9 hereof.

13. In all dealings hereunder, you shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by you jointly or by Goldman, Sachs & Co. on behalf of you as the representatives.

All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to you as the representatives in care of Goldman, Sachs & Co., One New York Plaza, 42nd Floor, New York, New York 10004, Attention: Registration Department; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 9(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters’ Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by you upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.

In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company, which information may include the name and address of their respective clients, as well as other information that will allow the underwriters to properly identify their respective clients.

14. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and, to the extent provided in Sections 9 and 11 hereof, the officers and directors of the Company and each person who controls the Company or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.

15. Time shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.

16. The Company acknowledges and agrees that (i) the purchase and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the several Underwriters, on the other, (ii) in connection therewith and with the process leading to such transaction each Underwriter is acting solely as a principal and not the agent or fiduciary of the Company, (iii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) or any other obligation to the Company except the obligations expressly set forth in this Agreement and (iv) the Company has consulted its own legal and financial advisors to the extent it deemed appropriate. The Company agrees that it will not claim that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.

17. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, or any of them, with respect to the subject matter hereof.

18. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

19. The Company and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

20. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument.

21. Notwithstanding anything herein to the contrary, the Company is authorized to disclose to any persons the U.S. federal and state income tax treatment and tax structure of the potential transaction and all materials of any kind (including tax opinions and other tax analyses) provided to the Company relating to that treatment and structure, without the Underwriters’ imposing any limitation of any kind. However, any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to comply with securities laws. For this purpose, “tax structure” is limited to any facts that may be relevant to that treatment.

EXECUTION VERSION

If the foregoing is in accordance with your understanding, please sign and return to us counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement between each of the Underwriters and the Company. It is understood that your acceptance of this letter on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on your part as to the authority of the signers thereof.


Very truly yours, SCHERING-PLOUGH CORPORATION
By:	/s/ Robert J. Bertolini
	Name:	Robert J. Bertolini
	Title:	Executive Vice President and Chief Financial Officer


Accepted as of the date hereof:

Goldman, Sachs & Co.
Banc of America Securities LLC
Bear, Stearns & Co. Inc.
Citigroup Global Markets Inc.
Morgan Stanley & Co. Incorporated

By:		/s/ Goldman, Sachs & Co.

		(Goldman, Sachs & Co.)

SCHEDULE I


			Optional Preferred
			Stock to be
	Total Preferred		Purchased if
	Stock		Maximum Option
Underwriter	to be Purchased		Exercised

Goldman, Sachs & Co.		2,172,500		325,875
Banc of America Securities LLC		1,481,250		222,188
Bear, Stearns & Co. Inc.		1,481,250		222,188
Citigroup Global Markets Inc.		1,481,250		222,187
Morgan Stanley & Co. Incorporated		1,481,250		222,187
BNP Paribas Securities Corp.		444,375		66,657
J.P. Morgan Securities Inc.		444,375		66,656
Credit Suisse Securities (USA) LLC		444,375		66,656
Daiwa Securities America Inc.		148,125		22,219
Santander Investment Securities Inc.		148,125		22,218
The Williams Capital Group, L.P.		99,063		14,860
Utendahl Capital Partners, L.P.		74,062		11,109
ABN AMRO Rothschild LLC		25,000		3,750
BNY Capital Markets, Inc.		25,000		3,750
ING Financial Markets LLC		25,000		3,750
Mizuho Securities USA Inc.		25,000		3,750

Total		10,000,000		1,500,000

SCHEDULE II

(a)

Issuer Free Writing Prospectuses Not Included in the Pricing Disclosure Package

(1)

Any Electronic Roadshow used on or after August 2, 2007 relating to the offering of the Securities

(b)		Additional Documents Incorporated by Reference:

		None.

(c)		Materials Other than the Pricing Prospectus that Comprise the Pricing Disclosure Package

(1)

Final Term Sheet, dated August 9, 2007, filed with the Commission pursuant to Rule 433

SCHEDULE III

Individuals Subject to Lockup Agreements

Fred Hassan

Robert J. Bertolini

C. Ron Cheeley

Carrie S. Cox

Steven H. Koehler

Thomas P. Koestler

Raul E. Kohan

Lori Queisser

Thomas J. Sabatino, Jr.

Brent Saunders

Hans W. Becherer

Thomas J. Colligan

C. Robert Kidder

Philip Leder, M.D.

Eugene R. McGrath

Carl E. Mundy, Jr.

Antonio M. Perez

Patricia F. Russo

Jack L. Stahl

Kathryn C. Turner

Robert F. W. van Oordt

Authur F. Weinbach

SCHEDULE IV

Material Subsidiaries


Schering Corporation		New Jersey
Schering-Plough Animal Health Corporation		Delaware
Schering-Plough Holdings (Ireland) Company		Ireland
Schering-Plough Investments Company GmbH		Switzerland
Schering-Plough Ltd.		Switzerland
Essex Chemie A.G.		Switzerland
Schering-Plough Kabushiki Kaisha		Japan
Schering-Plough S.A. de C.V.		Mexico
Schering-Plough HealthCare Products, Inc.		Delaware
Schering-Plough S.A.		France
Essex Pharma GmbH		Germany
Schering-Plough (Singapore) Research Pte. Ltd.		Singapore
Schering-Plough Canada, Inc.		Canada
Schering-Plough Central East A.G.		Switzerland
Schering-Plough (Singapore) Pte. Ltd.		Singapore
Schering-Plough Products LLC		Delaware

ANNEX I

FORM OF ANNEX I DESCRIPTION OF COMFORT LETTER
FOR REGISTRATION STATEMENTS ON FORM S-3

Pursuant to Section 8(f) of the Underwriting Agreement, the accountants shall furnish letters to the Underwriters to the effect that:

[OMITTED]

ANNEX II

FORM OF CERTIFICATE OF THE ACTING CHIEF FINANCIAL OFFICER OF
ORGANON BIOSCIENCES N.V.

Pursuant to Section 8(n) of the Underwriting Agreement, the Acting Chief Financial Officer of Organon BioSciences N.V. shall furnish a certificate to the Underwriters to the effect that:

In connection with the offering by Schering-Plough Corporation (the “Issuer”) of (A) its shares of mandatory convertible preferred stock, par value $1.00 per share, pursuant to an Underwriting Agreement dated August 9, 2007 among the Issuer and the several underwriters named in Schedule I thereto (the “Preferred Stock Underwriting Agreement”) and (B) its common shares, par value $0.50 per share, pursuant to an Underwriting Agreement dated August 9, 2007 among the Issuer and the several underwriters named in Schedule I thereto (the “Common Share Underwriting Agreement”, and collectively with the Preferred Stock Underwriting Agreement, the “Agreements”), I, Rudolf Derk Huisman, the acting Chief Financial Officer of Organon BioSciences N.V. (the “Company”), have been asked to deliver this certificate to the underwriters named in Schedule I of the respective Agreements.

Based on (i) my examination of the Company’s financial records and schedules undertaken by myself or members of my staff who are responsible for the Company’s financial and accounting matters and (ii) my review of such other corporate records of the Company, certificates of public officials and of officers of the Company and agreements and other documents as I have deemed necessary as a basis for the certifications expressed below, I hereby certify to the best of my knowledge that:

1. KPMG Accountants N.V., who have certified certain financial statements of the Company and its subsidiaries, are independent certified public accountants under Rule 101 of the AICPA Code of Professional Conduct, and its interpretations.

2. The financial statements of the Company included or incorporated by reference in the Registration Statement and the Pricing Prospectus, together with the related schedules and notes, present fairly the financial position of the Company and its combined subsidiaries at the dates indicated and the statement of income, changes in invested equity and cash flows of the Company and its combined subsidiaries for the periods specified; and said financial statements have been prepared in conformity with international financial reporting standards as adopted by the European Union and applied on a consistent basis throughout the periods involved.

3. Neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial statements included in the Pricing Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus; and, since the respective dates as of which information is given in the Pricing Prospectus, there has not been any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, or results of operations of the

Company and its subsidiaries, otherwise than as set forth or contemplated in the Pricing Prospectus.

EX-1.2 3 y36685k1exv1w2.htm EX-1.2: UNDERWRITING AGREEMENT EX-1.2

Exhibit 1.2

EXECUTION VERSION

SCHERING-PLOUGH CORPORATION

Common Shares

Underwriting Agreement

August 9, 2007

Ladies and Gentlemen:

Schering-Plough Corporation, a New Jersey corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell to the Underwriters named in Schedule I hereto (the “Underwriters”), for whom you are acting as representatives, (the “Representatives”) an aggregate of 50,000,000 of its common shares, par value $0.50 per share (the “Firm Securities”) and, at the election of the Underwriters, up to 7,500,000 additional common shares (the “Optional Securities”) of the Company (the Firm Securities and the Optional Securities that the Underwriters elect to purchase pursuant to Section 2 hereof being collectively called the “Securities”). The common shares, par value $0.50 per share, of the Company are herein referred to as the “Common Shares”. The proceeds from the sale of the Securities are intended to be used to fund a portion of the purchase price for the Company’s planned acquisition of Organon BioSciences N.V., a Netherlands company (“Organon BioSciences”) pursuant to a Letter of Offer, dated March 12, 2007, between the Company and Akzo Nobel N.V., or, if the acquisition is not completed, for general corporate purposes.

1. The Company represents and warrants to, and agrees with, each of the Underwriters that:

(a) An “automatic shelf registration statement” as defined under Rule 405 under the Securities Act of 1933, as amended (the “Act”) on Form S-3 (File No. 333-145055) in respect of the Securities was filed with the Securities and Exchange Commission (the “Commission”) on August 2, 2007; such registration statement, and any post-effective amendment thereto, became effective on filing; and no stop order suspending the effectiveness of such registration statement or any part thereof has been issued and no proceeding for that purpose has been

initiated or threatened by the Commission, and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act has been received by the Company (the base prospectus filed as part of such registration statement, in the form in which it has most recently been filed with the Commission on or prior to the date of this Agreement, is hereinafter called the “Basic Prospectus”; any preliminary prospectus (including any preliminary prospectus supplement) relating to the Securities filed with the Commission pursuant to Rule 424(b) under the Act is hereinafter called a “Preliminary Prospectus”; the various parts of such registration statement, including all exhibits thereto but excluding Form T-1 and including any prospectus supplement relating to the Securities that is filed with the Commission and deemed by virtue of Rule 430B to be part of such registration statement, each as amended at the time such part of the registration statement became effective, are hereinafter collectively called the “Registration Statement”; the Basic Prospectus, as amended and supplemented immediately prior to the Applicable Time (as defined in Section 1(c) hereof), is hereinafter called the “Pricing Prospectus”; the form of the final prospectus relating to the Securities filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof is hereinafter called the “Prospectus”; any reference herein to the Basic Prospectus, the Pricing Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date of such prospectus; any reference to any amendment or supplement to the Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any post-effective amendment to the Registration Statement, any prospectus supplement relating to the Securities filed with the Commission pursuant to Rule 424(b) under the Act and any documents filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and incorporated therein, in each case after the date of the Basic Prospectus, such Preliminary Prospectus, or the Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement; and any “issuer free writing prospectus” as defined in Rule 433 under the Act relating to the Securities is hereinafter called an “Issuer Free Writing Prospectus”);

(e) The Registration Statement conforms, and the Prospectus and any further amendments or supplements to the Registration Statement and the Prospectus will conform, in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder. The Registration Statement does not and will not, as of the applicable effective date as to each part of the Registration Statement and any amendment or supplement thereto, contain an untrue statement of a material fact or

omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus does not and will not, as of the applicable filing date of the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, the representations and warranties in this subsection shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through Goldman, Sachs & Co. expressly for use therein;

nor will such actions result in any violation of the provisions of the charter or by-laws of the Company.

(k) The Securities to be issued and sold by the Company to the Underwriters hereunder have been duly and validly authorized and, when issued and delivered against payment therefor as provided herein, will be duly and validly issued, fully paid and non-assessable and will conform in all material respects to the description of the Common Shares contained in the Pricing Disclosure Package and the Prospectus.

(l) No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign, is necessary or required for the due authorization, execution and delivery by the Company of this Agreement, for the use of proceeds by the Company described in the Pricing Prospectus and the Prospectus, or for the performance by the Company of the transactions contemplated by this Agreement, except (1) such as have been already made, obtained or rendered, as applicable, (2) as may be required under state securities or blue sky laws, (3) as may be required by any national securities exchange in connection with listing of the Securities, or (4) as disclosed in or incorporated by reference into the Registration Statement or the Prospectus.

(m) Except as disclosed in or incorporated by reference into the Registration Statement or the Pricing Prospectus, there is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or to the knowledge of the Company threatened in writing, against or affecting the Company or any of its subsidiaries that is required to be disclosed in the Registration Statement and the Pricing Prospectus (other than as stated therein), or which, if determined adversely to the Company or any of its subsidiaries, would reasonably be expected to result in a Material Adverse Effect, or that would reasonably be expected to materially and adversely affect the consummation of the transactions contemplated under this Agreement or the performance by the Company of its obligations hereunder. Except for such proceedings, investigations and claims disclosed in or incorporated by reference into the Registration Statement or the Pricing Prospectus, the

aggregate of all pending legal or governmental proceedings to which the Company or any of its subsidiaries is a party or of which any of their respective assets, properties or operations is the subject would not reasonably be expected to result in a Material Adverse Effect.

(n) The statements set forth in the Pricing Prospectus and Prospectus under the captions “Certain United States Federal Income Tax Consequences” “Underwriting” and under the caption “Description of Capital Stock”, insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair.

(o) Deloitte & Touche LLP, who have certified certain financial statements of the Company and its subsidiaries, and have audited the Company’s internal control over financial reporting and management’s assessment thereof are an independent registered public accounting firm with respect to the Company as required by the Act and the rules and regulations of the Commission thereunder;

(p) The financial statements of the Company included or incorporated by reference in the Registration Statement and the Pricing Prospectus, together with the related schedules and notes, present fairly the financial position of the Company and its consolidated subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved. The supporting schedules, if any, present fairly in accordance with GAAP the information required to be stated therein. The summary historical financial information included in the Pricing Prospectus and the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement. The pro forma financial statements and the related notes thereto included in the Registration Statement and the Pricing Prospectus present fairly the information shown therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial statements and have been properly compiled on the basis described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein;

(q) The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof in the manner described in the Pricing Prospectus, will not be an “investment company”, as such term is defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”);

(r) (A) (i) At the time of filing the Registration Statement, (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), and (iii) at the time the Company or any person acting on its behalf (within the meaning,

for this clause only, of Rule 163(c) under the Act) made any offer relating to the Securities in reliance on the exemption of Rule 163 under the Act, the Company was a “well-known seasoned issuer” as defined in Rule 405 under the Act; and (B) at the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of the Securities, the Company was not an “ineligible issuer” as defined in Rule 405 under the Act;

(s) The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that complies with the requirements of the Exchange Act and has been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting is effective and the Company is not aware of any material weaknesses in its internal control over financial reporting;

(t) Except as disclosed in the Pricing Prospectus, since the date of the latest audited financial statements included or incorporated by reference in the Pricing Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;

(u) The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective;

(v) To the Company’s knowledge, the Company and any of the Company’s directors or officers, in their capacities as such, is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications;

(w) Neither the Company nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”) that would be reasonably likely to result in an enforcement action thereunder, including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the

FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the Company and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith;

(x) Neither the Company nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or person acting on behalf of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC;

(y) Neither the Company nor any of its subsidiaries has conducted its business in a manner that has resulted in a failure to comply with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency;

(z) The Company and its subsidiaries possess adequate permits, authorities or permits issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by them, except such certificates, authorities or permits which are not material to such conduct of their business and except where the failure so to possess would not, singly or in the aggregate, result in a Material Adverse Effect; and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect;

(aa) The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would result in a Material Adverse Effect; and

(bb) Except as described or incorporated by reference in the Registration Statement and the Pricing Prospectus with respect to the stock options (the “Stock Options”) granted pursuant to the stock-based compensation plans of the Company and its subsidiaries (the “Company Stock Plans”), (i) each Stock Option designated by the Company at the time of grant as an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), so qualifies, (ii) each grant of a Stock Option was duly authorized no later than the date on which the grant of such Stock Option was by its terms to be effective (the “Grant Date”) by all necessary corporate action, including, as applicable, approval by the board of directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto, (iii) each such grant was made in accordance with the terms of the Company Stock Plans, the Exchange Act and all other applicable laws and regulatory rules or requirements, including the rules of the New York Stock Exchange and any other exchange on which Company securities are traded, (iv) the per share exercise price of each Stock Option was equal to or greater than the fair market value of a Common Share on the applicable Grant Date and (v) each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company and disclosed in the Company’s filings with the Commission in accordance with the Exchange Act and all other applicable laws. The Company has not knowingly granted, and there is no and has been no policy or practice of the Company of granting, Stock Options prior to, or otherwise coordinating the grant of Stock Options with, the release or other public announcement of material information regarding the Company or its subsidiaries or their results of operations or prospects.

2. Subject to the terms and conditions herein set forth, (a) the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price per share of $26.8125, the number of Firm Securities set forth opposite the name of such Underwriter in Schedule I hereto, and (b) in the event and to the extent that the Underwriters shall exercise the election to purchase Optional Securities as provided below, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at the purchase price per share set forth in clause (a) of this Section 2, that portion of the number of Optional Securities as to which such election shall have been exercised (to be adjusted by you so as to eliminate fractional shares) determined by multiplying such number of Optional Securities by a fraction, the numerator of which is the maximum number of Optional Securities which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is the maximum number of Optional Securities that all of the Underwriters are entitled to purchase hereunder.

The Company hereby grants to the Underwriters the right to purchase at their election up to 7,500,000 Optional Securities, at the purchase price per share set forth in the paragraph above, for the sole purpose of covering sales of shares in excess of the number of Firm Securities, provided that the purchase price per Optional Securities shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Securities but not payable on the Optional Securities. Any such election to purchase

Optional Securities may be exercised only by written notice from you to the Company, given within a period of 30 calendar days after the date of this Agreement, setting forth the aggregate number of Optional Securities to be purchased and the date on which such Optional Securities are to be delivered, as determined by you but in no event earlier than the First Time of Delivery (as defined in Section 4 hereof) or, unless you and the Company otherwise agree in writing, earlier than two or later than ten business days after the date of such notice.

4. (a) The Securities to be purchased by each Underwriter hereunder, in definitive form, and in such authorized denominations and registered in such names as Goldman, Sachs & Co. may request upon at least forty-eight hours’ prior notice to the Company shall be delivered by or on behalf of the Company to Goldman, Sachs & Co., through the facilities of the Depository Trust Company (“DTC”), for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified by the Company to Goldman, Sachs & Co. at least forty-eight hours in advance. The Company will cause the certificates representing the Securities to be made available for checking and packaging at least twenty-four hours prior to the Time of Delivery (as defined below) at the office of DTC or its designated custodian (the “Designated Office”). The time and date of such delivery and payment shall be, with respect to the Firm Securities, 9:30 a.m., New York City time, on August 15, 2007 or such other time and date as Goldman, Sachs & Co. and the Company may agree upon in writing, and, with respect to the Optional Securities, 9:30 a.m., New York City time, on the date specified by Goldman, Sachs & Co. in the written notice given by Goldman, Sachs & Co. of the Underwriters’ election to purchase such Optional Securities, or such other time and date as Goldman, Sachs & Co. and the Company may agree upon in writing. Such time and date for delivery of the Firm Securities is herein called the “First Time of Delivery”, such time and date for delivery of the Optional Securities, if not the First Time of Delivery, is herein called the “Second Time of Delivery”, and each such time and date for delivery is herein called a “Time of Delivery”.

(b) The documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant to Section 8 hereof, including the cross-receipt for the Securities and any additional documents requested by the Underwriters pursuant to Section 8(k) hereof, will be delivered at the offices of Shearman & Sterling LLP, 599 Lexington Avenue, New York, New York, 10022 (the “Closing Location”), and the Securities will be delivered at the Designated Office, all at such Time of Delivery. A meeting will be held at the Closing Location at 3:00 p.m., New York City time, on the New York Business Day next preceding such Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 4, “New York Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive order to close.

5. The Company agrees with each of the Underwriters:

such new automatic shelf registration statement or such new shelf registration statement, as the case may be;

(g) During the period beginning from the date hereof and continuing to and including the date 90 days after the date of the Prospectus, except as set forth below, the Company shall not

offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any Common Shares of the Company, or any options or warrants to purchase any Common Shares of the Company, or any securities of the Company that are substantially similar to the Common Shares, including, but not limited to, any securities that are convertible into or exchangeable for, or that represent the right to receive, Common Shares or any substantially similar securities, without the prior written consent of the Representatives; provided, however, that (i) the Company may issue and sell Common Shares or issue options for the purchase of its Common Shares, and file related registration statements, pursuant to any employee or director stock incentive or option plans, or dividend reinvestment plans of the Company in effect as of the date of this Agreement, or to current or prospective employees or directors, (ii) the Company may issue Common Shares issuable upon the conversion or exchange of securities or the exercise of warrants or options outstanding as of the date of this Agreement, or hereafter granted under the Company’s stock incentive or option plans that exist as of the date of this Agreement, or stock or option grants to current or prospective employees or directors, (iii) the Company may repurchase shares issued pursuant to the Company’s stock incentive program that represent shares delivered by holders for payment of the exercise price and/or tax withholding obligations in connection with stock options and stock awards; provided that the Company does not resell such shares, (iv) the Company may issue Common Shares upon conversion of shares of the Company’s Mandatory Convertible Preferred Stock, par value $1.00 per share (the “2007 Preferred Stock”), that are being sold pursuant to the underwriting agreement entered into on the date hereof in connection with the concurrent offering of shares of the 2007 Preferred Stock, and (v) the Company may issue and sell the Securities and do other acts contemplated by this Agreement;

(i) To use the net proceeds received by it from the sale of the Securities pursuant to this Agreement in the manner specified in the Pricing Prospectus under the caption “Use of Proceeds”;

(j) To use its best efforts to list, subject to notice of issuance, the Securities on the New York Stock Exchange;

(k) Upon request of any Underwriter, to furnish, or cause to be furnished, to such Underwriter an electronic version of the Company’s trademarks, servicemarks and corporate logo for use on the website, if any, operated by such Underwriter for the purpose of facilitating the on-line offering of the Securities (the “License”); provided, however, that the License shall be used solely for the purpose described above, is granted without any fee and may not be assigned or transferred.

it has not made and will not make any offer relating to the Securities that would constitute a free writing prospectus; any such free writing prospectus the use of which has been consented to by the Company and Goldman, Sachs & Co. is listed on Schedule II(a) or Schedule II(c) hereto;

7. The Company covenants and agrees with the several Underwriters that the Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the printing and filing of the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, any Issuer Free Writing Prospectus and the Prospectus, and all amendments and supplements thereto, (ii) the preparation, issuance and delivery of the Securities to the Underwriters (iii) the fees and disbursements of the Company’s counsel and accountants, (iv) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(d), including filing fees and the fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of any Blue Sky Surveys and Legal Investment Surveys, (v) the printing and delivery to the Underwriters in quantities as hereinabove stated of copies of the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus and the Prospectus, and any amendments or supplements thereto, (vi) the printing and delivery to the Underwriters of copies this Agreement, any Blue Sky Surveys and Legal Investment Surveys, (vii) the fees, if any, of rating agencies for rating the Securities, (viii) the costs and expenses related to any filing with any national securities exchange, (ix) any expenses incurred by the Company in connection with a “road show” presentation to potential investors, (x) the cost and charges of any transfer agent or registrar and (xi) the fees and expenses, if any, incurred in connection with the listing of the Securities on any national securities exchange. It is understood, however, that, except as provided in this Section, and Sections 9 and 12 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities by them, and any advertising expenses connected with any offers they may make.

Time of Delivery, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:

contemplated under the Pricing Prospectus, the Prospectus or this Agreement, other than under the Act and the rules and regulations of the Commission thereunder, which have already been made, obtained or rendered, as applicable.

Such opinion shall also state that, solely with respect to the disclosure regarding Organon BioSciences contained in the Registration Statement, Pricing Prospectus and Prospectus (the “Organon BioSciences Disclosure”), in the course of such counsel’s review and discussion in connection with the preparation of the Registration Statement, the Pricing Prospectus and the Prospectus, although they do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement, the Pricing Prospectus or the Prospectus, except for those referred to in the opinion in subsection (ii) or (iii) of this Section 8(c), they have no reason to believe that (i) the Organon BioSciences Disclosure in any part of the Registration Statement, or any further amendment thereto made by the Company prior to such Time of Delivery (except information of a financial or accounting nature included therein or omitted therefrom, as to which such counsel need express no opinion), when such part or amendment became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) the Organon BioSciences Disclosure in the Pricing Disclosure Package (except information of a financial or accounting nature included therein or omitted therefrom, as to which such counsel need express no opinion), as of the Applicable Time, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (iii) the Organon BioSciences Disclosure in the Prospectus or any further amendment or supplement thereto made by the Company prior to such Time of Delivery (except information of a financial or accounting nature included therein or omitted therefrom, as to which such counsel need express no opinion), as of its date and as of such Time of Delivery, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

and discussion of the contents thereof, but are without independent check or verification except as specified. Such opinion may contain customary assumptions, exceptions, limitations, qualifications and comments;

(i) This Agreement has been duly authorized, executed and delivered by the Company.

(ii) The Company is a corporation duly incorporated and validly existing in good standing under the laws of the State of New Jersey.

(iv) The execution and delivery of this Agreement, the fulfillment of the terms herein and the consummation of the transactions herein contemplated will not conflict with or constitute a breach of, or default under, (A) the charter or by-laws of the Company or, (B) any agreement, indenture or other instrument of which the Company is a party or by which it is bound, or (C) any law, administrative regulation or administrative or court order known to such counsel to be applicable to the Company; except, solely in the case of clause (B), for such conflicts, breaches or defaults that individually or in the aggregate would not reasonably be expected to result in a Material Adverse Effect.

necessary to make the statements therein not misleading; (ii) that the Pricing Disclosure Package (other than the financial and accounting data contained therein or omitted therefrom, as to which such counsel need express no opinion), as of the Applicable Time, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (iii) that, as of its date and as of such Time of Delivery, the Prospectus or any further amendment or supplement thereto made by the Company prior to such Time of Delivery (other than the financial and accounting data contained therein or omitted therefrom, as to which such counsel need express no opinion) contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(ii) The issue and sale of the Securities, the execution and delivery of this Agreement, the fulfillment of the terms herein set forth and the consummation of the transactions herein contemplated will not conflict with or constitute a breach of, or default under, (A) the charter or by-laws of the Company or, (B) except for such conflicts, breaches or defaults that individually or in the aggregate would not reasonably be expected to result in a Material Adverse Effect, any law or administrative regulation that in such counsel’s experience is normally applicable to transactions of the type contemplated by the Agreement, or any administrative or court order known to such counsel to be applicable to the Company.

(iii) Except as disclosed in or incorporated by reference into the Registration Statement or Pricing Prospectus or as required under state securities or blue sky laws or as may be required by any national securities exchange in connection with listing of the Securities, no filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign, is necessary or required for the due authorization, execution or delivery by the Company of this Agreement or for the performance by the Company of the transactions contemplated under the Pricing Prospectus and the Prospectus and this Agreement, other than under the Act and the Regulations.

(iv) The Company has an authorized capitalization as set forth in the Pricing Prospectus and the Prospectus.

(v) The statements set forth in the Pricing Prospectus and the Prospectus under the caption “Description of Capital Stock” and in the Registration Statement in

Item 15, insofar as such statements constitute a summary of the terms of the Common Shares, the Company’s certificate of incorporation, as amended, and the New Jersey Business Corporation Act, as amended, have been reviewed by such counsel and fairly summarize the matters described therein in all material respects.

Such opinion may contain customary assumptions, exceptions, limitations, qualifications and comments;

activities declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in your judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities being delivered at such Time of Delivery on the terms and in the manner contemplated in the Prospectus;

(j) The Company shall have complied with the provisions of Section 5(e) hereof with respect to the furnishing of prospectuses on the New York Business Day next succeeding the date of this Agreement;

(k) The Securities shall have been duly listed, subject to notice of issuance, on the Exchange;

(l) The Company shall have obtained and delivered to the Underwriters executed copies of the agreement attached hereto as Exhibit A from the directors and officers listed on Schedule III hereto; and

(n) The Underwriters shall have received a certificate of the Acting Chief Financial Officer of Organon BioSciences substantially in the form of Annex II hereto.

defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Company by any Underwriter through Goldman, Sachs & Co. expressly for use therein.

indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.

(d) If the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint.

terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 7 hereof and the indemnity and contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

11. The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Securities.

14. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and, to the extent provided in Sections 9 and 11 hereof, the officers

and directors of the Company and each person who controls the Company or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.

15. Time shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.

17. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, or any of them, with respect to the subject matter hereof.

18. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

EXECUTION VERSION

Very truly yours,


SCHERING-PLOUGH CORPORATION
By:	/s/ Robert J. Bertolini
	Name:	Robert J. Bertolini
	Title:	Executive Vice President and Chief Financial Officer

Accepted as of the date hereof:

Goldman, Sachs & Co.
Banc of America Securities LLC
Bear, Stearns & Co. Inc.
Citigroup Global Markets Inc.
Morgan Stanley & Co. Incorporated


By:		/s/ Goldman, Sachs & Co.

		(Goldman, Sachs & Co.)

SCHEDULE I


			Optional Common
	Total Common		Shares to be
Underwriter	Shares		Purchased if
	to be Purchased		Maximum Option
			Exercised
Goldman, Sachs & Co.		10,917,500		1,637,625
Banc of America Securities LLC		7,443,750		1,116,562
Bear, Stearns & Co. Inc.		7,443,750		1,116,562
Citigroup Global Markets Inc.		7,443,750		1,116,563
Morgan Stanley & Co. Incorporated		7,443,750		1,116,563
BNP Paribas Securities Corp.		2,358,125		353,719
J.P. Morgan Securities Inc.		2,233,125		334,969
Credit Suisse Securities (USA) LLC		2,233,125		334,969
Daiwa Securities America Inc.		744,375		111,656
Santander Investment Securities Inc.		744,375		111,656
Utendahl Capital Partners, L.P.		372,188		55,828
The Williams Capital Group, L.P.		372,187		55,828
Banca IMI SpA		125,000		18,750
BBVA Securities Inc.		125,000		18,750

Total		50,000,000		7,500,000

SCHEDULE II

(a)

Issuer Free Writing Prospectuses Not Included in the Pricing Disclosure Package:

(1)

Any Electronic Roadshow used on or after August 2, 2007 relating to the offering of the Securities

(b)		Additional Documents Incorporated by Reference:

		None.

(c)		Materials Other than the Pricing Prospectus that Comprise the Pricing Disclosure Package

(1)

Final Term Sheet, dated August 9, 2007, filed with the Commission pursuant to Rule 433

SCHEDULE III

Individuals Subject to Lockup Agreements

Fred Hassan

Robert J. Bertolini

C. Ron Cheeley

Carrie S. Cox

Steven H. Koehler

Thomas P. Koestler

Raul E. Kohan

Lori Queisser

Thomas J. Sabatino, Jr.

Brent Saunders

Hans W. Becherer

Thomas J. Colligan

C. Robert Kidder

Philip Leder, M.D.

Eugene R. McGrath

Carl E. Mundy, Jr.

Antonio M. Perez

Patricia F. Russo

Jack L. Stahl

Kathryn C. Turner

Robert F. W. van Oordt

Authur F. Weinbach

SCHEDULE IV

Material Subsidiaries


Schering Corporation		New Jersey
Schering-Plough Animal Health Corporation		Delaware
Schering-Plough Holdings (Ireland) Company		Ireland
Schering-Plough Investments Company GmbH		Switzerland
Schering-Plough Ltd.		Switzerland
Essex Chemie A.G.		Switzerland
Schering-Plough Kabushiki Kaisha		Japan
Schering-Plough S.A. de C.V.		Mexico
Schering-Plough HealthCare Products, Inc.		Delaware
Schering-Plough S.A.		France
Essex Pharma GmbH		Germany
Schering-Plough (Singapore) Research Pte. Ltd.		Singapore
Schering-Plough Canada, Inc.		Canada
Schering-Plough Central East A.G.		Switzerland
Schering-Plough (Singapore) Pte. Ltd.		Singapore
Schering-Plough Products LLC		Delaware

ANNEX I

FORM OF ANNEX I DESCRIPTION OF COMFORT LETTER
FOR REGISTRATION STATEMENTS ON FORM S-3

Pursuant to Section 8(f) of the Underwriting Agreement, the accountants shall furnish letters to the Underwriters to the effect that:

[OMITTED]

ANNEX II

FORM OF CERTIFICATE OF THE ACTING CHIEF FINANCIAL OFFICER OF
ORGANON BIOSCIENCES N.V.

Pursuant to Section 8(n) of the Underwriting Agreement, the Acting Chief Financial Officer of Organon BioSciences N.V. shall furnish a certificate to the Underwriters to the effect that:

Company and its subsidiaries, otherwise than as set forth or contemplated in the Pricing Prospectus.

EX-4 4 y36685k1exv4.htm EX-4: CERTIFICATE OF AMENDMENT TO CERTIFICATE OF INCORPORATION EX-4

Exhibit 4

CERTIFICATE OF AMENDMENT OF THE
CERTIFICATE OF INCORPORATION OF
SCHERING-PLOUGH CORPORATION

Pursuant to Section 14A:7-2(4) of the New Jersey Business Corporation Act (the “NJBCA”), the undersigned certifies as follows:

1. The name of the corporation is Schering-Plough Corporation (the “CORPORATION”).

2. The Certificate of Incorporation of the Corporation, as amended (the “CERTIFICATE OF INCORPORATION”), is hereby amended so that the designation and number of shares of the class and series acted upon in the following resolution, and the relative rights, preferences and limitations of such class and series, are as stated in such resolution.

3. The following resolution was duly adopted in accordance with the August 9, 2007 meeting of a duly authorized committee of the Board of Directors of the Corporation, as required by Subsection 14A:-7-2(3) of the NJBCA:

RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of the Corporation (the “BOARD”) in accordance with the provisions of Article Fourth of its Certificate of Incorporation, the Board has directed the Corporation to and the Corporation hereby amends the Article Fourth of the Certificate of Incorporation to add a new subsection (d) and Annex B to the Certificate of Incorporation in order to create a new series of Preferred Shares of the Corporation (the “PREFERRED STOCK”) and hereby authorizes and designates such new series of Preferred Stock and fixes the designations, voting powers, preferences, rights, qualifications, limitations and restrictions thereof as herein set forth:

“(d) Pursuant to the authority conferred by this Article Fourth, the following series of Preferred Shares has been designated with such series consisting of the number of shares, with such designations, voting powers, preferences, rights, qualifications, limitations and restrictions as are stated in Annex B attached hereto and incorporated herein by reference:

Annex B 6.00% Mandatory Convertible Preferred Stock”

ANNEX B

6.00% MANDATORY CONVERTIBLE PREFERRED STOCK

(1)

Designation and Amount. This series of Preferred Shares shall be designated as 6.00% Mandatory Convertible Preferred Stock” (the “CONVERTIBLE PREFERRED STOCK”) and the number of shares constituting such series shall be 11,500,000, with a par value of $1.00 per share.

(2)

Ranking. The Convertible Preferred Stock shall rank, as to payment of dividends and distribution of assets upon dissolution, liquidation or winding up of the Corporation, (a) senior to (i) the Common Stock and (ii) any class or series of capital stock issued by the Corporation which by its terms ranks junior to the Convertible Preferred Stock (collectively, the “JUNIOR SECURITIES”), (b) junior to any class or series of capital stock issued by the Corporation which by its terms ranks senior to the Convertible Preferred Stock (the “SENIOR SECURITIES”), and (c) pari passu with any other class or series of capital stock issued by the Corporation not included in clauses (a) or (b) of this paragraph, including the 2004 Preferred Stock (the “PARITY SECURITIES”), in each case, whether now outstanding or to be issued in the future.

(3)

Dividends.

	(a)		Dividends on the Convertible Preferred Stock will be payable quarterly when, as and if declared by the Board, or a duly authorized committee thereof, when the Corporation is legally permitted to do so, on each Dividend Payment Date, at the annual rate of 6.00% per year on the Liquidation Preference. The initial dividend on the Convertible Preferred Stock for the first Dividend Period, commencing on the date of first issuance of the Convertible Preferred Stock (assuming a date of first issuance of August 15, 2007), to but excluding November 15, 2007, will be $3.75 per share, subject to adjustment as provided for in Section 18(c), and when, as and if declared, will be payable on November 15, 2007; PROVIDED that the Corporation is legally permitted to pay such dividends at such time. Each subsequent quarterly dividend on the Convertible Preferred Stock, when, as and if declared (other than the dividend payable on the Mandatory Conversion Date), will be $3.75 per share, subject to adjustment as provided for in Section 18(c). The dividend payable on the Mandatory Conversion Date will be $3.67 per share, subject to adjustment as provided for in Section 18(c). Dividends payable, when, as and if declared, on a Dividend Payment Date will be payable to Record Holders for the applicable Dividend Payment Date, except as otherwise provided in Section 6(a).

	(b)		The amount of dividends payable for any period that is shorter or longer than a full quarterly dividend period will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends on the Convertible Preferred Stock shall accrue and cumulate if the Corporation fails to declare one or more dividends on the Convertible Preferred Stock in any amount, whether or not the Corporation is then legally permitted to pay such dividends.

	(c)		No interest or sum of money in lieu of interest shall be payable in respect of any dividend not paid on a Dividend Payment Date or any other late payment. The Corporation will also not pay Holders of the Convertible Preferred Stock any dividend in excess of the full dividends on the Convertible Preferred Stock that are payable as described above.

	(d)		Dividends in arrears on the Convertible Preferred Stock not declared for payment or not paid on any Dividend Payment Date may later be declared by the Board, or a duly authorized committee thereof, and paid on any date fixed by the Board, or a duly authorized committee thereof, whether or not a Dividend Payment Date, to the Holders of record as they appear on the stock register of the Corporation on a record date selected by the Board, or a duly authorized committee thereof, which shall (i) not precede the date the Board, or an authorized committee thereof, declares the dividend payable and (ii) not be more than 60 days prior to the date the dividend is paid.

	(e)		There is no sinking fund with respect to dividends.

(4)

Payment Restrictions.

(a)

Unless all accrued, cumulated and unpaid dividends on the Convertible Preferred Stock for all prior Dividend Periods have been paid, the Corporation may not:

	(i)		declare or pay any dividend or make any distribution of assets on any Junior Securities, other than dividends or distributions in the form of Junior Securities and cash solely in lieu of fractional shares in connection with any such dividend or distribution;

	(ii)		redeem, purchase or otherwise acquire any Junior Securities or pay or make any monies available for a sinking fund for such Junior Securities, other than (A) upon conversion or exchange for other Junior Securities or (B) the purchase of

			fractional interests in shares of any Junior Securities pursuant to the conversion or exchange provisions of such Junior Securities;

	(iii)		declare or pay any dividend or make any distribution of assets on any Parity Securities unless it is on the 2004 Preferred Stock, other than dividends or distributions in the form of Parity Securities or Junior Securities and cash solely in lieu of fractional shares in connection with any such dividend or distribution; or

	(iv)		redeem, purchase or otherwise acquire any Parity Securities, except upon conversion into or exchange for other Parity Securities or Junior Securities and cash solely in lieu of fractional shares in connection with any such conversion or exchange, PROVIDED, HOWEVER, that a redemption, purchase or other acquisition of Parity Securities upon conversion into or exchange for other Parity Securities is only permitted if (A) the aggregate amount of the liquidation preference of such other Parity Securities does not exceed the aggregate amount of the liquidation preference, plus accrued, cumulated and unpaid dividends, of the Parity Securities that are converted into or exchanged for such other Parity Securities, (B) the aggregate number of shares of Common Stock issuable upon conversion, redemption or exchange of such other Parity Securities does not exceed the aggregate number of shares of Common Stock issuable upon conversion, redemption or exchange of the Parity Securities that are converted into or exchanged for such other Parity Securities and (C) such other Parity Securities contain terms and conditions (including, without limitation, with respect to the payment of dividends, dividend rates, liquidation preferences, voting and representation rights, payment restrictions, anti-dilution rights, change of control rights, covenants, remedies and conversion and redemption rights) that are not materially less favorable, taken as a whole, to the Corporation or the Holders of the Convertible Preferred Stock than those contained in the Parity Securities that are converted or exchanged for such other Parity Securities.

(5)

Voting Rights.

	(a)		Except as otherwise required by law, the Certificate of Incorporation or set forth in this Section 5, Holders of the Convertible Preferred Stock are not entitled to any voting rights and their consent shall not be required for the taking of any corporate action.

	(b)		So long as any shares of Convertible Preferred Stock are outstanding, the Corporation will not, without the approval of the Holders of at least two-thirds of the shares of Convertible Preferred Stock then outstanding, given in person or by proxy either at an annual meeting or at a special meeting called for that purpose, at which the Holders of the Convertible Preferred Stock shall vote separately as a single class, amend, alter or repeal (by merger, consolidation, combination, reclassification or otherwise) any of the provisions of the Certificate of Incorporation so as to affect adversely the rights, preferences or voting powers of the Holders of the Convertible Preferred Stock; PROVIDED that any amendment of the provisions of the Certificate of Incorporation so as to issue, authorize or increase the authorized amount of, or issue or authorize any obligation or security convertible into or evidencing a right to purchase, any Parity Securities or Junior Securities shall be deemed not to affect adversely the rights, preferences or voting powers of the Holders of the Convertible Preferred Stock. Notwithstanding anything in this Section 5 to the contrary, any amendment, alteration or repeal of any of the provisions of the Certificate of Incorporation occurring in connection with any merger or consolidation of the Corporation of the type described in Section

			14(e)(i) or any statutory exchange of securities of the Corporation with another Person (other than in connection with a merger or acquisition) of the type described in Section 14(e)(iv) shall be deemed not to adversely affect the rights, preferences or voting power of the Holders of the Convertible Preferred Stock, PROVIDED that, subject to Section 10, in the event the Corporation does not survive the transaction, the shares of the Convertible Preferred Stock will become shares of the successor Person, having in respect of such successor Person the same rights, preferences or voting powers of the Holders of the Convertible Preferred Stock immediately prior to the consummation of such merger, consolidation, or statutory exchange and shall be convertible into the kind and amount of net cash, securities and other property as determined in accordance with Section 14(e) hereof, PROVIDED FURTHER that following any such merger, consolidation or statutory exchange, such successor Person shall succeed to and be substituted for, and may exercise all of the rights and powers of the Corporation under, the Convertible Preferred Stock.

	(c)		If at any time dividends on the then-outstanding shares of Convertible Preferred Stock or any other class or series of Preferred Shares in an amount equivalent to six quarterly dividends, whether or not consecutive, shall not have been (i) paid or (ii)(A) declared and (B) a sum sufficient for the payment thereof set aside, the holders of Preferred Shares (including the Convertible Preferred Stock), voting separately as a single class, shall be entitled to increase the authorized number of directors on the Board by two and elect such two directors (the “PREFERRED STOCK DIRECTORS”) at the next annual or special meeting of the shareholders called in the manner described below. At any such annual or special meeting of the shareholders, or any adjournment thereof, if the holders of at least a majority of the Preferred Shares then outstanding shall be present or represented by proxy, then, (1) by vote of the holders of at least a majority of the Preferred Shares, voting as a class, then present or so represented, the authorized number of directors of the Corporation shall be increased by two, and (2) at such meeting the holders of the Preferred Shares, voting as a class, shall be entitled to elect the Preferred Stock Directors by vote of the holders of at least a majority of the Preferred Shares then present or so represented. Such right of the holders of the Preferred Shares to elect the Preferred Stock Directors may be exercised until all dividends in default on such Preferred Shares shall have been (i) paid in full or (ii)(A) declared and (B) a sum sufficient for the payment thereof set aside. When so paid or provided for, (i) the right of the holders of Preferred Shares to elect the Preferred Stock Directors shall cease, (ii) the terms of all of the Preferred Stock Directors shall terminate at the next annual meeting, and (iii) the authorized number of directors of the Corporation shall be reduced accordingly. Not later than 40 days after such entitlement arises, the Board will convene a special meeting of the holders of Preferred Shares for the above purpose. If the Board fails to convene such meeting within such 40-day period, the holders of 10% of the outstanding Preferred Shares, considered as a single class, will be entitled to convene such meeting to elect the initial Preferred Stock Directors. Any director who shall have been elected by the holders of Preferred Shares as a class pursuant to this Section 5(c) may be removed at any time, either for or without cause by, and only by, the affirmative vote of the holders of record of a majority of the outstanding Preferred Shares given at a special meeting of such shareholders called for such purpose by the Corporation or at the annual meeting of shareholders, and any vacancy created by such removal may also be filled at such meeting. Any vacancy caused by the death or resignation of a director who shall have been elected by the holders of Preferred Shares as a class pursuant to this Section 5(c) may be filled only by the holders of outstanding Preferred Shares at a meeting called for such purpose. The provisions of the Certificate of Incorporation and By-laws of the

			Corporation relating to the convening and conduct of special meetings of shareholders and the nomination of directors will apply with respect to any special meeting of the holders of Preferred Shares; PROVIDED that the notice of the nomination need only be delivered to the Secretary of the Corporation not more than 10 days after the Corporation (or the holders of 10% of the outstanding Preferred Shares, if applicable) has notified the holders of Preferred Shares of the date of the special meeting to elect the initial Preferred Stock Directors.

	(d)		So long as any of the Convertible Preferred Stock is outstanding, the Corporation will not, without the approval of the Holders of at least two-thirds of the shares of Convertible Preferred Stock then outstanding and any class or series of Parity Securities then outstanding, voting together as a single class, given in person or by proxy either at an annual meeting or at a special meeting called for that purpose:

	(i)		reclassify any of the Corporation’s authorized shares into any shares of any class, or any obligation or security convertible into or evidencing a right to purchase such shares, ranking senior to the Convertible Preferred Stock as to payment of dividends or distribution of assets upon the dissolution, liquidation or winding up of the Corporation; or

	(ii)		issue, authorize or increase the authorized amount of, or issue or authorize any obligation or security convertible into or evidencing a right to purchase, any stock of any class or series ranking senior to the Convertible Preferred Stock as to payment of dividends or distribution of assets upon the dissolution, liquidation or winding up of the Corporation; PROVIDED that the Corporation may issue, authorize or increase the authorized amount of, or issue or authorize any obligation or security convertible into or evidencing a right to purchase, any shares of capital stock ranking on a parity with or junior to the Convertible Preferred Stock as to payment of dividends or distribution of assets upon the dissolution, liquidation or winding up of the Corporation without the vote of the Holders of the Convertible Preferred Stock.

(e)

In exercising the voting rights set forth in this Section 5, each share of Convertible Preferred Stock shall have one vote per share. In any case where the Holders of the Convertible Preferred Stock are entitled to vote as a class with holders of Parity Securities or other classes or series of Preferred Shares, each class or series shall have a number of votes proportionate to the aggregate liquidation preference of its outstanding shares.

(6)

Liquidation, Dissolution or Winding Up.

(a)

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, subject to the rights of holders of any shares of capital stock of the Corporation then outstanding ranking senior to or pari passu with the Convertible Preferred Stock in respect of distributions upon liquidation, dissolution or winding up of the Corporation and before any amount shall be paid or distributed with respect to holders of any shares of capital stock of the Corporation then outstanding ranking junior to the Convertible Preferred Stock in respect of distributions upon liquidation, dissolution or winding up of the Corporation, the Holders of the Convertible Preferred Stock at the time outstanding will be entitled to receive, out of the net assets of the Corporation legally available for distribution to shareholders, the Liquidation Preference, plus an amount equal to the sum of all accrued, cumulated and unpaid dividends, whether or not declared, for the portion of the then-current Dividend Period until the payment date and all prior Dividend Periods and such Holders shall be deemed to be the Holders of record for such

Dividend Periods or portions thereof. After the payment to the Holders of the Convertible Preferred Stock of the full amounts provided for in this Section 6(a), the Holders of the Convertible Preferred Stock will have no right or claim to any of the Corporation’s remaining assets.

(b)

For the purpose of this Section 6, none of the following shall constitute or be deemed to constitute a voluntary or involuntary liquidation, dissolution or winding up of the Corporation:

	(i)		the sale, transfer, lease or conveyance of all or substantially all of the Corporation’s property or business;

	(ii)		the consolidation or merger of the Corporation with or into any other Person; or

	(iii)		the consolidation or merger of any other Person with or into the Corporation.

	(c)		If, upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the amounts payable with respect to the Convertible Preferred Stock then outstanding are not paid in full as provided in Section 6(a) hereof, no distribution shall be made on account of any securities ranking pari passu with the Convertible Preferred Stock as to the distribution of assets upon such liquidation, dissolution or winding up, unless a pro rata distribution is made on the Convertible Preferred Stock. The Holders of the Convertible Preferred Stock then outstanding and the holders of any such securities then outstanding shall share ratably in any distribution of assets upon such liquidation, dissolution or winding up. The amount allocable to each series of such securities then outstanding will be based on the proportion of their full respective liquidation preference to the aggregate liquidation preference of the outstanding shares of each such series.

	(d)		Written notice of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, stating the payment date or dates when, and the place or places where, the amounts distributable to holders of Convertible Preferred Stock in such circumstances shall be payable, shall be given by first-class mail, postage prepaid, mailed not less than twenty calendar days prior to any payment date stated therein, to the Holders of Convertible Preferred Stock, at the address shown on the books of the Corporation or the Transfer Agent; PROVIDED, HOWEVER, that a failure to give notice as provided above or any defect therein shall not affect the Corporation’s ability to consummate a voluntary or involuntary liquidation, dissolution or winding up of the Corporation.

(7)

Mandatory Conversion on the Mandatory Conversion Date.

	(a)		Each share of Convertible Preferred Stock will automatically convert (unless previously converted at the option of the Holder in accordance with Section 8 hereof, at the option of the Corporation pursuant to Section 9 or Section 10A hereof or pursuant to a Make-Whole Acquisition Conversion in accordance with Section 10 hereof) on the Mandatory Conversion Date, into a number of shares of Common Stock equal to the Conversion Rate.

	(b)		The “CONVERSION RATE” shall be as follows:

	(i)		if the Applicable Market Value of the Common Stock is equal to or greater than $33.69 (the “THRESHOLD APPRECIATION PRICE”), then the Conversion Rate shall be equal to 7.4206 shares of Common Stock per share of Convertible Preferred Stock (the “MINIMUM CONVERSION RATE”), which is equal to $250.00 divided by the Threshold Appreciation Price;

	(ii)		if the Applicable Market Value of the Common Stock is less than the Threshold Appreciation Price but greater than $27.50 (the “INITIAL PRICE”), then the

			Conversion Rate shall be equal to $250.00 divided by the Applicable Market Value of the Common Stock;

	(iii)		if the Applicable Market Value of the Common Stock is less than or equal to the Initial Price, then the Conversion Rate shall be equal to 9.0909 shares of Common Stock per share of Convertible Preferred Stock (the “MAXIMUM CONVERSION RATE”), which is equal to $250.00 divided by the Initial Price; and

	(iv)		the Minimum Conversion Rate, the Maximum Conversion Rate, the Threshold Appreciation Price and the Initial Price are each subject to adjustment in accordance with the provisions of Section 14 hereof.

	(c)		In addition to the shares issuable or the Mandatory Conversion Date pursuant to Section 7(a), the Holders of Convertible Preferred Stock on the Mandatory Conversion Date shall have the right to receive on the Mandatory Conversion Date an amount in cash equal to the sum of (i) all accrued, cumulated and unpaid dividends that have not been declared on the shares of Convertible Preferred Stock then outstanding for all Dividend Periods up to and excluding the Mandatory Conversion Date, plus (ii) any declared but unpaid dividends if the Holder was the Record Holder on the Record Date relating to such dividends; PROVIDED that the Corporation is legally permitted to pay such dividends at such time.

	(d)		On the Mandatory Conversion Date, certificates representing the shares of Common Stock into which the Convertible Preferred Stock has been converted will be issued and delivered to the Holders upon receipt by the Transfer Agent of any certificate(s) representing share(s) of Convertible Preferred Stock to be converted (if held in certificated form) surrendered by the Holder and any other transfer forms, tax forms or other relevant documentation required and specified by the Transfer Agent, if necessary, to effect the conversion.

(8)

Early Conversion at the Option of the Holder.

	(a)		Shares of the Convertible Preferred Stock are convertible, in whole or in part at the option of the Holder thereof (“EARLY CONVERSION”) at any time prior to the Mandatory Conversion Date, into shares of Common Stock at the Minimum Conversion Rate, subject to adjustment as set forth in Section 14 hereof.

	(b)		Any written notice of conversion pursuant to Section 8 hereof shall be duly executed by the Holder, and specify:

	(i)		the number of shares of Convertible Preferred Stock to be converted;

	(ii)		the name(s) in which such Holder desires the shares of Common Stock issuable upon conversion to be registered (subject to compliance with applicable legal requirements if any of such certificates are to be issued in a name other than the name of the Holder);

	(iii)		if certificates are to be issued, the address to which such Holder wishes delivery to be made of such new certificates to be issued upon such conversion; and

	(iv)		any other transfer forms, tax forms or other relevant documentation required and specified by the Transfer Agent, if necessary, to effect the conversion.

(c)

If specified by the Holder in the notice of conversion that shares of Common Stock issuable upon conversion of the Convertible Preferred Stock shall be issued to a person other than the Holder surrendering the shares of Convertible Preferred Stock being

			converted, the Holder shall pay or cause to be paid any transfer or similar taxes payable in connection with the shares of Common Stock so issued.

	(d)		Upon receipt by the Transfer Agent of (i) a completed and duly executed notice of conversion as set forth in Section 8(b), (ii) confirmation by the Holder of the payment of any transfer or similar taxes in compliance with Section 8(c) (if applicable), (iii) any certificate(s) representing share(s) of Convertible Preferred Stock to be converted (if held in certificated form) surrendered by the Holder, (iv) any appropriate endorsements and transfer documents from the Holder (if applicable); and (v) if such dividend has been declared, payment from the Holder of an amount in cash equal to the full dividend payable on the Dividend Payment Date for the then-current Dividend Period on the Convertible Preferred Stock being converted, the Corporation shall, within three Business Days or as soon as possible thereafter, issue and shall instruct the Transfer Agent to register the number of shares of Common Stock to which such Holder shall be entitled upon conversion in the name(s) specified by such Holder in the notice of conversion. If a Holder elects to hold its shares of Common Stock issuable upon conversion of the Convertible Preferred Stock in certificated form, the Corporation shall promptly send or cause to be sent, by hand delivery (with receipt to be acknowledged) or by first-class mail, postage prepaid, to the Holder thereof, at the address designated by such Holder in the written notice of conversion, a certificate or certificates representing the number of shares of Common Stock to which such Holder shall be entitled upon conversion. In the event that there shall have been surrendered a certificate or certificates representing shares of Convertible Preferred Stock, only part of which are to be converted, the Corporation shall issue and deliver to such Holder or such Holder’s designee in the manner provided in the immediately preceding sentence a new certificate or certificates representing the number of shares of Convertible Preferred Stock that shall not have been converted.

	(e)		The issuance by the Corporation of shares of Common Stock upon a conversion of shares of Convertible Preferred Stock in accordance with the terms hereof shall be deemed effective immediately prior to the close of business on the day of receipt by the Transfer Agent of the notice of conversion and other documents or payments, if any, set forth in Section 8(b) and 8(d) hereof, compliance with Section 8(c), if applicable, and the surrender by such Holder or such Holder’s designee of the certificate or certificates representing the shares of Convertible Preferred Stock to be converted (if held in certificated form), duly assigned or endorsed for transfer to the Corporation (or accompanied by duly executed stock powers relating thereto).

	(f)		A Holder of a share of Convertible Preferred Stock then outstanding on the Early Conversion Date with respect to such share shall have the right to receive an amount in cash equal to all accrued, cumulated and unpaid dividends that have not been declared for all prior Dividend Periods ending on or prior to the Dividend Payment Date immediately preceding the Early Conversion Date. If the Early Conversion Date is prior to the Record Date for the Dividend Period in which a Holder elects to exercise an Early Conversion, such Holder will not receive any declared dividends for that Dividend Period. If the Early Conversion Date is after the Record Date for any declared but unpaid dividend, a Holder exercising its Early Conversion right will receive that dividend on the relevant Dividend Payment Date if it was the Record Holder on the Record Date for that dividend; however, whether or not such Holder was the Record Holder on the Record Date for that dividend, such Holder must pay to the Transfer Agent, on or prior to the Early Conversion Date, an amount in cash equal to the full dividend payable on the Dividend Payment Date for the then-current Dividend Period on the Convertible Preferred Stock

that is being converted by such Holder. Holders will only receive dividends if the Corporation is then legally permitted to pay such dividends.

(9)

Provisional Conversion.

	(a)		Prior to the Mandatory Conversion Date, if the Closing Price of the Common Stock has exceeded 150% of the Threshold Appreciation Price for at least 20 Trading Days within a period of 30 consecutive Trading Days ending on the Trading Day prior to the date (the “PROVISIONAL CONVERSION NOTICE DATE”) on which the Corporation notifies the Holders (pursuant to clause (b) below) that it is exercising its option to cause the conversion of the Convertible Preferred Stock pursuant to this Section 9, the Corporation may, at its option, cause the conversion of all, but not less than all, the shares of Convertible Preferred Stock then outstanding into shares of Common Stock at the Minimum Conversion Rate for each share of Convertible Preferred Stock, subject to adjustment as set forth in Section 14. The Corporation shall be able to cause this conversion only if, in addition to issuing the Holders shares of Common Stock, the Corporation is then legally permitted to, and does, pay the Holders in cash an amount equal to the sum of (i) all accrued, cumulated and unpaid dividends on the shares of Convertible Preferred Stock then outstanding that have not been declared for all Dividend Periods to, but excluding, the Provisional Conversion Date, plus (ii) if the Provisional Conversion Date is prior to the Record Date for any declared dividend, all accrued, cumulated and unpaid dividends on the shares of Convertible Preferred Stock then outstanding that have been declared for all Dividend Periods to, but excluding, the Provisional Conversion Date, plus (iii) the present value of all remaining future dividend payments on the shares of Convertible Preferred Stock then outstanding through and including the Mandatory Conversion Date (excluding (A) any unpaid dividends accrued during the portion of the then-current Dividend Period through, but excluding, the Provisional Conversion Date, and (B) if the Provisional Conversion Date is after the Record Date for the then-current Dividend Period, any declared and unpaid dividends for the then-current Dividend Period). The present value of all remaining future dividend payments will be computed using a discount rate equal to the Treasury Yield. If the Provisional Conversion Date is after the Record Date for any declared but unpaid dividend, a Holder will receive that dividend on the relevant Dividend Payment Date if it was the Record Holder on the Record Date for that dividend.

	(b)		A written notice (the “PROVISIONAL CONVERSION NOTICE”) shall be sent by or on behalf of the Corporation, by first class mail, postage prepaid, to the Holders of record as they appear on the stock register of the Corporation on the Provisional Conversion Notice Date (i) notifying such Holders of the election of the Corporation to convert and of the Provisional Conversion Date, which date shall not be less than 30 days nor be more than 60 days after the Provisional Conversion Notice Date, and (ii) stating the Corporate Trust Office of the Transfer Agent at which the shares of Convertible Preferred Stock called for conversion shall, upon presentation and surrender of the certificate(s) (if such shares are held in certificated form) evidencing such shares, be converted, and the Minimum Conversion Rate to be applied thereto. The Corporation shall also issue a press release containing such information and publish such information on its website http://www.scheringplough.com, PROVIDED that failure to issue such press release or publish such information on the Corporation’s website shall not act to prevent or delay conversion pursuant to this Section 9.

	(c)		The Corporation shall deliver to the Transfer Agent irrevocable written instructions authorizing the Transfer Agent, on behalf and at the expense of the Corporation, to cause the Provisional Conversion Notice to be duly mailed as soon as practicable after receipt

			of such irrevocable instructions from the Corporation and in accordance with the above provisions. The shares of Common Stock to be issued upon conversion of the Convertible Preferred Stock pursuant to this Section 9 and cash with respect to dividends calculated pursuant to Section 9(a) shall be deposited with the Transfer Agent in trust at least one Business Day prior to the Provisional Conversion Date, for the pro rata benefit of the Holders of record as they appear on the stock register of the Corporation, so as to be and continue to be available therefor. Neither failure to mail such Provisional Conversion Notice to one or more such Holders nor any defect in such Provisional Conversion Notice shall affect the sufficiency of the proceedings for conversion as to other Holders.

	(d)		If a Provisional Conversion Notice shall have been given as hereinbefore provided, then each Holder shall be entitled to all preferences and relative, participating, optional and other special rights accorded by this Certificate of Amendment until immediately prior to the close of business on the Provisional Conversion Date. From and after the close of business on the Provisional Conversion Date, upon delivery by the Corporation of the Common Stock and payment of the funds to the Transfer Agent as described in paragraph (c) above, the Convertible Preferred Stock shall no longer be deemed to be outstanding, and all rights of such Holders shall cease and terminate, except the right of the Holders, upon surrender of certificates therefor, to receive Common Stock and any amounts to be paid hereunder.

	(e)		The deposit of monies in trust with the Transfer Agent up to the amount necessary for the Provisional Conversion shall be irrevocable except that the Corporation shall be entitled to receive from the Transfer Agent the interest or other earnings, if any, earned on any monies so deposited in trust, and the Holders of the shares converted shall have no claim to such interest or other earnings, and any balance of monies so deposited by the Corporation and unclaimed by the Holders entitled thereto at the expiration of two years from the Provisional Conversion Date shall be repaid, together with any interest or other earnings thereon, to the Corporation, and after any such repayment, the Holders of the shares entitled to the funds so repaid to the Corporation shall look only to the Corporation for such payment without interest.

(10)

Early Conversion Upon Make-Whole Acquisition.

	(a)		In the event of a Make-Whole Acquisition, each Holder of Convertible Preferred Stock shall have the option to convert its shares of Convertible Preferred Stock then outstanding at the Make-Whole Acquisition Conversion Rate, as adjusted pursuant to Section 14, during a period (the “MAKE-WHOLE ACQUISITION CONVERSION PERIOD”) that begins on the effective date of such Make-Whole Acquisition and ends on the date that is 15 days after the effective date, or such earlier date ending on the earlier of the Mandatory Conversion Date and the Provisional Conversion Notice Date; PROVIDED that the Provisional Conversion Date occurs within the period contemplated by Section 9(b) hereof (such right of the Holders to convert their shares pursuant to this Section 10 being the “MAKE-WHOLE ACQUISITION CONVERSION”).

	(b)		On or before the twentieth day prior to the date on which the Corporation anticipates consummating the Make-Whole Acquisition, a written notice (the “MAKE-WHOLE ACQUISITION CONVERSION NOTICE”) shall be sent by or on behalf of the Corporation, by first-class mail, postage prepaid, to the Record Holders as they appear on the stock register of the Corporation. Such notice shall contain:

	(i)		the date on which the Make-Whole Acquisition is anticipated to be effected;

	(ii)		the Make-Whole Conversion Rate;

	(iii)		the amount of cash, securities and other consideration payable per share of Common Stock or Convertible Preferred Stock, respectively;

	(iv)		(A) the first date, which shall be the effective date of such Make-Whole Acquisition, on which the Make-Whole Acquisition Conversion option may be exercised and (B) the date, which shall be 15 days after the effective date of the Make-Whole Acquisition, by which the Make-Whole Acquisition Conversion option must be exercised; and

	(v)		the instructions a Holder must follow to exercise the Make-Whole Acquisition Conversion option in connection with such Make-Whole Acquisition.

	(c)		To exercise a Make-Whole Acquisition Conversion option, a Holder shall deliver to the Transfer Agent at its Corporate Trust Office by 5:00 p.m., New York City time on or before the date by which the Make-Whole Acquisition Conversion option must be exercised as specified in the notice, the certificate(s) (if such shares are held in certificated form) evidencing the shares of Convertible Preferred Stock or of the Successor Security with respect to which the Make-Whole Acquisition Conversion option is being exercised, duly assigned or endorsed for transfer to the Corporation or its successor, or accompanied by duly executed stock powers relating thereto, or in blank, with a written notice to the Corporation or its successor stating the Holder’s intention to convert early in connection with the Make-Whole Acquisition containing the information set forth in Section 8(b) and providing the Corporation or its successor with payment instructions.

	(d)		If a Holder does not elect to exercise the Make-Whole Acquisition Conversion option pursuant to this Section 10, the shares of Convertible Preferred Stock or successor security held by it will remain outstanding.

	(e)		Upon a Make-Whole Acquisition Conversion, the Transfer Agent shall, in accordance with the instructions provided by the Holder thereof in the written notice provided to the Corporation or its successor as set forth in Section 10(c), deliver to the Holder such cash, securities or other property as are issuable with respect to shares of Common Stock in the Make-Whole Acquisition. Such delivery shall take place upon, and only to the extent of, the consummation of such Make-Whole Acquisition Conversion.

	(f)		In the event that a Make-Whole Acquisition Conversion is effected with respect to shares of Convertible Preferred Stock or a successor security representing less than all the shares of Convertible Preferred Stock or a successor security held by a Holder, upon such Make-Whole Acquisition Conversion the Corporation or its successor shall execute and the Transfer Agent shall, unless otherwise instructed in writing, countersign and deliver to the Holder thereof, at the expense of the Corporation, a certificate evidencing the shares of Convertible Preferred Stock or such successor security held by the Holder as to which Make-Whole Acquisition Conversion was not effected.

	(g)		Upon any conversion pursuant to Section 10, in addition to issuing to any converting Holders of Convertible Preferred Stock or a successor security then outstanding such cash, securities or other property as are issuable with respect to shares of Common Stock in the Make-Whole Acquisition at the Make-Whole Acquisition Conversion Rate, the Corporation or its successor shall pay such Holders in cash an amount equal to the sum of (i) all accrued, cumulated and unpaid dividends on the shares of Convertible Preferred Stock and such successor security then outstanding that have not been declared for all Dividend Periods to, but excluding, the Make-Whole Acquisition Conversion Date, plus (ii) if the Make-Whole Acquisition Conversion Date is prior to the Record Date for any

declared dividend, all accrued, cumulated and unpaid dividends on the shares of Convertible Preferred Stock or such successor security then outstanding that have been declared for all Dividend Periods to, but excluding, the Make-Whole Acquisition Conversion Date, plus (iii) the present value of all remaining future dividend payments on the shares of Convertible Preferred Stock or such successor security then outstanding through and including the Mandatory Conversion Date (excluding (A) any unpaid dividends accrued during the portion of the then-current Dividend Period through, but excluding, the Provisional Conversion Date, and (B) if the Provisional Conversion Date is after the Record Date for the then-current Dividend Period, any unpaid dividends for the then-current Dividend Period), computed using a discount rate equal to 6.75%; PROVIDED, in all cases, that at such time the Corporation is then legally permitted to pay such dividends. If the Make-Whole Acquisition Conversion Date is after the Record Date for any declared dividend, a Holder will receive that dividend on the relevant Dividend Payment Date if it was the Record Holder on the Record Date for that dividend.

10A. Mandatory Early Conversion Upon Certain Reorganizations.

(a)

In the event that the Corporation plans to undertake a Reorganization Event (including a Reorganization Event which constitutes a Make-Whole Acquisition) in which (i) the Corporation would not be the surviving entity, and (ii) the shares of Convertible Preferred Stock cannot become shares of the surviving entity with, in respect of such surviving entity, the same rights, preferences and voting powers as the Convertible Preferred Stock because the surviving entity shall not have the legal authority to issue, or amend its governing documents to provide for the issuance of, such shares, then the Corporation may, at its option, cause the conversion of all, but not less than all, of the shares of Convertible Preferred Stock then outstanding into shares of Common Stock at the Make-Whole Acquisition Conversion Rate as if such Reorganization Event were a Make-Whole Acquisition, subject to adjustment as set forth in Section 14 (such option of the Corporation to convert the Convertible Preferred Stock pursuant to this Section 10A being the “MANDATORY REORGANIZATION CONVERSION”), with the Mandatory Reorganization Conversion to take effect immediately prior to the closing of the Reorganization Event (the “REORGANIZATION CONVERSION DATE”). For purposes of determining the Make-Whole Acquisition Conversion Rate applicable to a Mandatory Reorganization Conversion, the “effective date” shall be the Reorganization Conversion Date and the Make-Whole Acquisition Stock Price shall be the consideration payable per Common Share in the Reorganization Event. The Corporation shall be able to cause this conversion only if, in addition to issuing the Holders shares of Common Stock, the Corporation is then legally permitted to, and does, pay the Holders in cash an amount equal to the sum of (i) all accrued, cumulated and unpaid dividends on the shares of Convertible Preferred Stock then outstanding that have not been declared for all Dividend Periods to, but excluding, the Reorganization Conversion Date, plus (ii) if the Reorganization Conversion Date is prior to the Record Date for any declared dividend, all accrued, cumulated and unpaid dividends on the shares of Convertible Preferred Stock then outstanding that have been declared for all Dividend Periods to, but excluding, the Reorganization Conversion Date, plus (iii) the present value of all remaining future dividend payments on the shares of Convertible Preferred Stock then outstanding through and including the Mandatory Conversion Date (excluding (A) any unpaid dividends accrued during the portion of the then-current Dividend Period through, but excluding, the Reorganization Conversion Date, and (B) if the Reorganization Conversion Date is after the Record Date for the then-current Dividend Period, any unpaid dividends for the then-current Dividend Period). The present value of all remaining future dividend payments will be computed using a discount rate equal to 6.75%. If the Reorganization

			Conversion Date is after the Record Date for any declared dividend, a Holder will receive that dividend on the relevant Dividend Payment Date if it was the Record Holder on the Record Date for that dividend.

	(b)		A written notice (the “REORGANIZATION CONVERSION NOTICE”), which may be contingent on the closing of the reorganization transaction and which shall be irrevocable, shall be sent by or on behalf of the Corporation, by first class mail, postage prepaid, (the Trading Day prior to the date on which such notice is mailed being the “REORGANIZATION CONVERSION NOTICE DATE”) to the Holders of record as they appear on the stock register of the Corporation on the Reorganization Conversion Notice Date (i) notifying such Holders of the election of the Corporation to convert and of the anticipated Reorganization Conversion Date, which date shall not be less than 30 days nor be more than 60 days after the Reorganization Conversion Notice Date, and (ii) stating the Corporate Trust Office of the Transfer Agent at which the shares of Convertible Preferred Stock called for conversion shall, upon presentation and surrender of the certificate(s) (if such shares are held in certificated form) evidencing such shares, be converted, and the Make-Whole Acquisition Conversion Rate to be applied thereto. The Corporation shall also issue a press release containing such information and publish such information on its website on the World Wide Web, PROVIDED that failure to issue such press release or publish such information on the Corporation’s website shall not act to prevent or delay conversion pursuant to this Section 10A.

	(c)		The Corporation shall deliver to the Transfer Agent irrevocable written instructions authorizing the Transfer Agent, on behalf and at the expense of the Corporation, to cause the Reorganization Conversion Notice to be duly mailed as soon as practicable after receipt of such irrevocable instructions from the Corporation and in accordance with the above provisions. The consideration issuable in the Reorganization Event with respect to shares of Common Stock to be issued upon conversion of the Convertible Preferred Stock pursuant to this Section 10A and all funds necessary for the payment in cash of an amount as calculated in Section 10A(a) shall be deposited with the Transfer Agent in trust at least one Business Day prior to the Reorganization Conversion Date, for the pro rata benefit of the Holders of record as they appear on the stock register of the Corporation, so as to be and continue to be available therefor. Neither failure to mail such Reorganization Conversion Notice to one or more such Holders nor any defect in such Reorganization Conversion Notice shall affect the sufficiency of the proceedings for conversion as to other Holders.

	(d)		If a Reorganization Conversion Notice shall have been given as hereinbefore provided, then each Holder shall be entitled to all preferences and relative, participating, optional and other special rights accorded by this Certificate of Amendment until immediately prior to the closing of the Reorganization Event. If the Corporation has complied with Section 10A(c), from and after the closing of the Reorganization Event, the Convertible Preferred Stock shall no longer be deemed to be outstanding, and all rights of such Holders shall cease and terminate, except the right of the Holders, upon surrender of certificates therefor, to receive such cash, securities or other property as are issuable with respect to shares of Common Stock in the Make-Whole Acquisition and any other amounts to be paid hereunder.

	(e)		The deposit of monies in trust with the Transfer Agent up to the amount necessary for the Mandatory Reorganization Conversion shall be irrevocable except that the Corporation shall be entitled to receive from the Transfer Agent the interest or other earnings, if any, earned on any monies so deposited in trust, and the Holders of the shares converted shall have no claim to such interest or other earnings, and any balance of monies so deposited

by the Corporation and unclaimed by the Holders entitled thereto at the expiration of two years from the Reorganization Conversion Date shall be repaid, together with any interest or other earnings thereon, to the Corporation, and after any such repayment, the Holders of the shares entitled to the funds so repaid to the Corporation shall look only to the Corporation for such payment without interest.

(11)

Conversion Procedures.

	(a)		Effective immediately prior to the close of business on the Mandatory Conversion Date, the Provisional Conversion Date, the Make-Whole Acquisition Conversion Date, the Reorganization Conversion Date or any Early Conversion Date (collectively, a “CONVERSION DATE”), dividends on any shares of Convertible Preferred Stock converted to Common Stock and/or cash, securities or other property shall cease to accrue and cumulate, and such shares of Convertible Preferred Stock shall cease to be outstanding, in each case, subject to the right of Holders of such shares to receive any accrued, cumulated and unpaid dividends on such shares and any other payments to which they are otherwise entitled pursuant to Section (7), (8), (9), (10) or (10A) hereof, as applicable.

	(b)		The person or persons entitled to receive the Common Stock and/or cash, securities or other property issuable upon such conversion shall be treated for all purposes as the record holder(s) of such shares of Common Stock and/or securities as of the close of business on the Mandatory Conversion Date, the Make-Whole Acquisition Conversion Date, the Provisional Conversion Date, the Reorganization Conversion Date or any Early Conversion Date, as the case may be. No allowance or adjustment, except as set forth in Section 14, shall be made in respect of dividends payable to holders of Common Stock of record as of any date prior to such effective date. Prior to such effective date, shares of Common Stock issuable upon conversion of, or other securities issuable upon conversion of, any shares of Convertible Preferred Stock shall not be deemed outstanding for any purpose, and Holders of shares of Convertible Preferred Stock shall have no rights with respect to the Common Stock or other securities issuable upon conversion (including voting rights, rights to respond to tender offers for the Common Stock or other securities issuable upon conversion and rights to receive any dividends or other distributions on the Common Stock or other securities issuable upon conversion) by virtue of holding shares of Convertible Preferred Stock.

	(c)		Shares of Convertible Preferred Stock duly converted in accordance with this Certificate of Amendment, or otherwise reacquired by the Corporation, will resume the status of authorized and unissued Preferred Stock, undesignated as to series and available for future issuance.

	(d)		In the event that a Holder of shares of Convertible Preferred Stock shall not by written notice designate the name in which shares of Common Stock to be issued upon conversion of such shares should be registered or the address to which the certificate or certificates representing such shares should be sent, the Corporation shall be entitled to register such shares, and make such payment, in the name of the Holder of such Convertible Preferred Stock as shown on the records of the Corporation and to send the certificate or certificates representing such shares to the address of such Holder shown on the records of the Corporation.

(12)

Reservation of Common Stock.

(a)

The Corporation shall at all times reserve and keep available out of its authorized and unissued Common Stock or shares held in the treasury of the Corporation, solely for

			issuance upon the conversion of shares of Convertible Preferred Stock as herein provided, free from any preemptive or other similar rights, such number of shares of Common Stock as shall from time to time be issuable upon the conversion of all the shares of Convertible Preferred Stock then outstanding. For purposes of this Section 12(a), the number of shares of Common Stock that shall be deliverable upon the conversion of all outstanding shares of Convertible Preferred Stock shall be computed as if at the time of computation all such outstanding shares were held by a single Holder.

	(b)		Notwithstanding the foregoing, the Corporation shall be entitled to deliver upon conversion of shares of Convertible Preferred Stock, as herein provided, shares of Common Stock reacquired and held in the treasury of the Corporation (in lieu of the issuance of authorized and unissued shares of Common Stock), so long as any such treasury shares are free and clear of all liens, charges, security interests or encumbrances (other than liens, charges, security interests and other encumbrances created by the Holders).

	(c)		All shares of Common Stock delivered upon conversion of the Convertible Preferred Stock shall be duly authorized, validly issued, fully paid and non-assessable, free and clear of all liens, claims, security interests and other encumbrances (other than liens, charges, security interests and other encumbrances created by the Holders).

	(d)		Prior to the delivery of any securities that the Corporation shall be obligated to deliver upon conversion of the Convertible Preferred Stock, the Corporation shall use its reasonable best efforts to comply with all federal and state laws and regulations thereunder requiring the registration of such securities with, or any approval of or consent to the delivery thereof by, any governmental authority.

	(e)		The Corporation hereby covenants and agrees that, if at any time the Common Stock shall be listed on the New York Stock Exchange or any other national securities exchange or automated quotation system, the Corporation will, if permitted by the rules of such exchange or automated quotation system, list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, all Common Stock issuable upon conversion of the Convertible Preferred Stock; PROVIDED, HOWEVER, that if the rules of such exchange or automated quotation system permit the Corporation to defer the listing of such Common Stock until the first conversion of Convertible Preferred Stock into Common Stock in accordance with the provisions hereof, the Corporation covenants to list such Common Stock issuable upon conversion of the Convertible Preferred Stock in accordance with the requirements of such exchange or automated quotation system at such time.

(13)

Fractional Shares.

	(a)		No fractional shares of Common Stock will be issued as a result of any conversion of shares of Convertible Preferred Stock.

	(b)		In lieu of any fractional share of Common Stock otherwise issuable in respect of any mandatory conversion pursuant to Section 7 hereof, any conversion at the option of the Corporation pursuant to Section 9 or Section 10A hereof or a conversion at the option of the holder pursuant to Section 8 or Section 10 hereof, the Corporation shall pay an amount in cash (computed to the nearest cent) equal to the same fraction of:

(i)

in the case of a conversion pursuant to Section 7 or Section 9 hereof, a Make-Whole Acquisition Conversion pursuant to Section 10, or a Mandatory Reorganization Conversion pursuant to Section 10A, the Current Market Price; or

(ii)

in the case of an Early Conversion pursuant to Section 8 hereof, the Closing Price of the Common Stock determined as of the second Trading Day immediately preceding the effective date of conversion.

(c)

If more than one share of the Convertible Preferred Stock is surrendered for conversion at one time by or for the same Holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of the Convertible Preferred Stock so surrendered.

(14)

Anti-Dilution Adjustments to the Fixed Conversion Rates.

(a)

Anti-Dilution Adjustments. Each Fixed Conversion Rate and the number of shares of Common Stock to be delivered upon conversion shall be subject to the following adjustments.

	(i)		Stock Dividends and Distributions. If the Corporation shall pay or make a dividend or other distribution on the Common Stock in shares of Common Stock, each Fixed Conversion Rate, as in effect at the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such dividend or other distribution, shall be increased by dividing such Fixed Conversion Rate by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination and the denominator shall be the sum of such number of shares of Common Stock outstanding and the total number of shares of Common Stock constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this sub-section (i), the number of shares of Common Stock at the time outstanding shall not include shares held in the treasury of the Corporation but shall include any shares issuable in respect of any scrip certificates issued in lieu of fractions of shares of Common Stock. The Corporation will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Corporation.

	(ii)		Subdivisions, Splits and Combinations of the Common Stock. In case outstanding shares of Common Stock shall be subdivided or split into a greater number of shares of Common Stock, each Fixed Conversion Rate in effect at the opening of business on the day following the day upon which such subdivision or split becomes effective shall be proportionately increased, and, conversely, in case outstanding shares of Common Stock shall each be combined into a smaller number of shares of Common Stock, such Fixed Conversion Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision, split or combination becomes effective.

	(iii)		Issuance of Stock Purchase Rights. In case the Corporation shall issue rights or warrants to all holders of its Common Stock (other than rights or warrants issued pursuant to a dividend reinvestment plan or share purchase plan or other similar plans), entitling such holders, for a period of up to 45 days from the date of issuance of such rights or warrants, to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price on the date fixed for the determination of shareholders entitled to receive such rights or warrants, each Fixed Conversion Rate in effect at the opening of business on the

			day following the date fixed for such determination shall be increased by multiplying such Fixed Conversion Rate by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase and the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this clause (iii), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Corporation but shall include any shares issuable in respect of any scrip certificates issued in lieu of fractions of shares of Common Stock. The Corporation shall not issue any such rights or warrants in respect of shares of Common Stock held in the treasury of the Corporation.

	(iv)		Debt or Asset Distribution.

(A) If the Corporation shall, by dividend or otherwise, distribute to all holders of its Common Stock evidences of its indebtedness, shares of capital stock, securities, cash or other assets (excluding any dividend or distribution referred to in Section 14(a)(i) or Section 14(a)(ii) hereof, any rights or warrants referred to in Section 14(a)(iii) hereof, any dividend or distribution paid exclusively in cash, any consideration payable in connection with a tender or exchange offer made by the Corporation or any subsidiary of the Corporation, and any dividend of shares of capital stock of any class or series, or similar equity interests, of or relating to a subsidiary or other business unit in the case of a Spin-Off referred to in Section 14(a)(iv)(B) below), each Fixed Conversion Rate in effect immediately prior to the close of business on the date fixed for the determination of shareholders entitled to receive such distribution will be increased by multiplying each Fixed Conversion Rate by the following fraction:

SP₀

SP₀ – FMV

Where,

SP₀= the Current Market Price per share of Common Stock on the date fixed for distribution.

FMV= the fair market value of the portion of the distribution applicable to one share of Common Stock as determined by the Board,

Any adjustment to the Conversion Rate under this clause (iv)(A) of this Section 14(a) will become effective immediately prior to the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such distribution. In any case in which this clause (iv)(A) is applicable, clause (iv)(B) of this Section 14(a) shall not be applicable.

(B) In the case of a Spin-Off, each Fixed Conversion Rate in effect immediately before the close of business on the record date fixed for determination of

shareholders entitled to receive that distribution will be increased by multiplying each Fixed Conversion Rate by the following fraction:

MP₀ + MP_S

MP₀

Where,

MP₀= the Current Market Price per share of Common Stock on the fifteenth Trading Day after the “ex-date” for the distribution.

MPs= the Current Market Price of the shares representing the portion of distribution applicable to one share of Common Stock on the fifteenth Trading Day after the “ex-date” for the distribution.

Any adjustment to the Conversion Rate under this clause (iv)(B) of this Section 14(a) will occur on the 15th Trading Day from, but excluding, the “ex-date” with respect to the Spin-Off.

(v)

Cash Distributions. If the Corporation shall distribute cash to all holders of the Common Stock, excluding (i) any cash that is distributed in a Reorganization Event to which Section 14(e) applies or as part of a distribution referred to in paragraph (iv) of this Section 14(a), (ii) any dividend or distribution in connection with the liquidation, dissolution or winding up of the Corporation, (iii) any consideration payable in connection with a tender or exchange offer made by the Corporation or any subsidiary of the Corporation or (iv) any cash dividends on the Common Stock to the extent that the aggregate cash dividend per share of Common Stock does not exceed $0.065 in any fiscal quarter (such number, the “DIVIDEND THRESHOLD AMOUNT”), then each Fixed Conversion Rate in effect immediately prior to the close of business on the date for determination of the shareholders of the Corporation entitled to receive such distribution shall be increased by multiplying each Fixed Conversion Rate by the following fraction:

SP₀

SP₀ – DIV

Where,

SP₀ = the Current Market Price per share of Common Stock on the “ex-date”.

DIV = the amount per share of Common Stock of the dividend or distribution.

Any adjustment to the Conversion Rate under this clause (v) of this Section 14(a) will become effective immediately prior to the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such distribution.

If an adjustment is required to be made as set forth in this clause (v) as a result of a distribution (1) that is a regularly scheduled quarterly dividend, such adjustment would be based on the amount by which such dividend exceeds the Dividend Threshold Amount

or (2) that is not a regularly scheduled quarterly dividend, such adjustment would be based on the full amount of such distribution.

The Dividend Threshold Amount is subject to an inversely proportional adjustment whenever the Fixed Conversion Rates are adjusted, PROVIDED that no adjustment will be made to the Dividend Threshold Amount for any adjustment made to the Fixed Conversion Rates pursuant to this clause (v) or clause (iii), (iv), (vi), (vii) or (viii) of this Section 14(a).

(vi)

Self Tender Offers and Exchange Offers. If the Corporation or any of its subsidiaries successfully complete a tender or exchange offer for Common Stock where the cash and the value of any other consideration included in the payment per share of the Common Stock exceeds the Current Market Price per share of the Common Stock on the seventh Trading Day after the expiration of the tender or exchange offer, then each Fixed Conversion Rate in effect on immediately prior to the opening on business on the eighth Trading Day after the expiration of the tender or exchange offer will be increased by multiplying by the following fraction:

(SP₀ x OS₀) - AC

SP₀ x (OS₀- TS)

			Where,

			SP₀= the Current Market Price per share of Common Stock on the seventh Trading Day after the expiration of the tender or exchange offer.

			OS₀= the number of shares of Common Stock outstanding at the expiration of the tender or exchange offer, including any shares validly tendered and not withdrawn.

			AC= the aggregate cash and fair market value of the other consideration payable in the tender or exchange offer, as determined by the Board.

			TS= the number of shares of Common Stock validly tendered and not withdrawn at the expiration of the tender or exchange offer.

	(vii)		Third Party Tender Offers and Exchange Offers. In case any Person other than the Corporation or any subsidiary of the Corporation makes a payment in respect of a tender offer or exchange offer in which, as of the last time (the “OFFER EXPIRATION TIME”) that tenders or exchanges may be made pursuant to such tender or exchange offer (as it may have been amended), the Board is not recommending rejection of the offer, then each Fixed Conversion Rate will be adjusted by multiplying the Fixed Conversion Rate in effect immediately prior to the Offer Expiration Time by the following fraction:

FMV + (OS₁ x SP₀)

OS₀x SP₀

Where,

			FMV = the fair market value of the aggregate consideration payable to all holders of the Common Stock based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the expiration of the offer, as determined by the Board.

			OS₁= the number of shares of Common Stock outstanding immediately prior to the expiration of the offer, less all shares validly tendered or exchanged and not withdrawn as of the expiration of the offer, as determined by the Board.

			SP₀= the Current Market Price per share of Common Stock on the seventh Trading Day after the expiration of the tender or exchange offer.

			OS₀= the number of shares of Common Stock outstanding immediately prior to the expiration of the offer, including any tendered or exchanged shares.

			The adjustment referred to in this clause (vii) will only be made if (1) the tender offer or exchange offer is for an amount that increases the offeror’s ownership of common stock to more than 30% of the total shares of Common Stock outstanding immediately prior to the Offer Expiration Time; and (2) the cash and Fair Market Value of any other consideration included in the payment per share of Common Stock exceeds the Current Market Price of the Common Stock on the seventh Trading Day next succeeding the Offer Expiration Time.

			However, the adjustment referred to in this clause will not be made if as of the Offer Expiration Time, the offering documents disclose a plan or an intention to cause the Corporation to engage in a consolidation or merger or a sale of all or substantially all of the Corporation’s assets. In the event the offeror is obligated to purchase shares pursuant to any such tender or exchange offer, but such Person is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, each Fixed Conversion Rate shall be readjusted to what would have been in effect if such tender or exchange offer had not been made.

	(viii)		Rights Plans. To the extent that the Corporation has a rights plan in effect on any Conversion Date, upon conversion of any Convertible Preferred Stock, Holders shall receive, in addition to the Common Stock, the rights under such rights plan, unless, prior to such Conversion Date, the rights have separated from the Common Stock, in which case each Fixed Conversion Rate will be adjusted at the time of separation of such rights as if the Corporation made a distribution to all holders of the Common Stock as described in clause (iv) above, subject to readjustment in the event of the expiration, termination or redemption of such rights.

(b)

Adjustment for Tax Reasons. The Corporation may make such increases in each Fixed Conversion Rate, in addition to any other increases required by this Section 14, if the Board deems it advisable to avoid or diminish any income tax to holders of the Common Stock resulting from any dividend or distribution of shares (or issuance of rights or warrants to acquire shares) or from any event treated as such for income tax purposes or for any other reasons; PROVIDED that the same proportionate adjustment must be made to each Fixed Conversion Rate.

(c)

Calculation of Adjustments. (i) All adjustments to the Conversion Rate shall be calculated to the nearest 1/10,000th of a share (or, if there is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a share) of Common Stock. Prior to the Mandatory Conversion Date, no adjustment in the Conversion Rate shall be required unless such adjustment would require an increase or decrease of at least one percent therein; PROVIDED, that any adjustments which by reason of this subparagraph are not required to be made shall be carried forward and taken into account in any subsequent adjustment; PROVIDED FURTHER that on the earliest of the Mandatory Conversion Date, the Provisional Conversion Date, the Make-Whole Acquisition Conversion Date and the Reorganization Conversion Date, adjustments to the Conversion Rate will be made with respect to any such adjustment carried forward and which has not been taken into account before such date. If an adjustment is made to the Conversion Rate pursuant to Sections 14(a)(i), 14(a)(ii), 14(a)(iii), 14(a)(iv), 14(a)(v), 14(a)(vi), 14(a)(vii) or 14(b), an inversely proportional adjustment shall also be made to the Threshold Appreciation Price and the Initial Price solely for purposes of determining which of clauses (i), (ii) and (iii) of Section 7(b) will apply on the Conversion Date. Such adjustment shall be made by dividing each of the Threshold Appreciation Price and the Initial Price by a fraction, the numerator of which shall be the Conversion Rate immediately after such adjustment pursuant to Sections 14(a)(i), 14(a)(ii), 14(a)(iii), 14(a)(iv), 14(a)(v), 14(a)(vi) or 14(a)(vii) or 14(b) and the denominator of which shall be the Conversion Rate immediately before such adjustment.

(ii)

No adjustment to the Conversion Rate need be made if Holders may participate, on an as-converted basis, in the transaction that would otherwise give rise to an adjustment, so long as the distributed assets or securities the Holders would receive upon conversion of the Convertible Preferred Stock, if convertible, exchangeable, or exercisable, are convertible, exchangeable or exercisable, as applicable, without any loss of rights or privileges for a period of at least 45 days following conversion of the Convertible Preferred Stock. The applicable Conversion Rate shall not be adjusted:

(A) upon the issuance of any shares of the Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Corporation’s securities and the investment of additional optional amounts in shares of Common Stock under any plan;

(B) upon the issuance of any shares of the Common Stock or rights or warrants to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Corporation or any of its subsidiaries;

(C) upon the issuance of any shares of the Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security outstanding as of the date shares of the Convertible Preferred Stock were first issued;

(D) for a change in the par value or no par value of the Common Stock; or

(E) for accrued, cumulated and unpaid dividends.

(iii)

The Corporation shall have the power to resolve any ambiguity or correct any error in this Section 14 and its action in so doing, as evidenced by a resolution of the Board, or a duly authorized committee thereof, shall be final and conclusive.

(d)

Notice of Adjustment. Whenever each Fixed Conversion Rate is to be adjusted in accordance with Section 14(a) or (b), the Corporation shall: (i) compute each Fixed

			Conversion Rate in accordance with Section 14(a) or (b) and prepare and transmit to the Transfer Agent an Officer’s Certificate setting forth each Fixed Conversion Rate, the method of calculation thereof in reasonable detail, and the facts requiring such adjustment and upon which such adjustment is based; (ii) as soon as practicable following the occurrence of an event that requires an adjustment to each Fixed Conversion Rate pursuant to Section 14(a) or (b), taking into account the one percent threshold set forth in Section 14(c) hereof, (or if the Corporation is not aware of such occurrence, as soon as practicable after becoming so aware), provide, or cause to be provided, a written notice to the Holders of the Convertible Preferred Stock of the occurrence of such event; and (iii) as soon as practicable following the determination of each revised Fixed Conversion Rate in accordance with Section 14(a) or (b) hereof, a statement setting forth in reasonable detail the method by which the adjustment to each Fixed Conversion Rate was determined and setting forth each revised Fixed Conversion Rate.

	(e)		*Reorganization Events*. In the event of:

	(i)		any consolidation or merger of the Corporation with or into another Person (other than a merger or consolidation in which the Corporation is the continuing corporation and in which the Common Stock outstanding immediately prior to the merger or consolidation is not exchanged for cash, securities or other property of the Corporation or another Person);

	(ii)		any sale, transfer, lease or conveyance to another Person of all or substantially all of the property and assets of the Corporation;

	(iii)		any reclassification of Common Stock into securities including securities other than Common Stock; or

	(iv)		any statutory exchange of securities of the Corporation with another Person (other than in connection with a merger or acquisition) (any such event specified in this Section 14(e), a “REORGANIZATION EVENT”);

each share of Convertible Preferred Stock outstanding immediately prior to such Reorganization Event shall, after such Reorganization Event, be convertible into the kind of securities, cash and other property receivable in such Reorganization Event (without any interest thereon and without any right to dividends or distribution thereon which have a record date that is prior to the Conversion Date) (the “EXCHANGE PROPERTY”) by a holder of Common Stock that (1) is not a person with which the Corporation consolidated or into which the Corporation merged or which merged into the Corporation or to which such sale or transfer was made, as the case may be (any such person, a “CONSTITUENT PERSON”), or an Affiliate of a Constituent Person, and (2) failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such Reorganization Event (PROVIDED that if the kind or amount of securities, cash and other property receivable upon such Reorganization Event is not the same for each share of Common Stock held immediately prior to such Reorganization Event by other than a Constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised (“NON-ELECTING SHARE”), then, for the purpose of this Section 14(e) the kind and amount of securities, cash and other property receivable upon such Reorganization Event by each Non-electing Share shall be deemed to be the kind and amount so receivable per share by a plurality of the Non-electing Shares). The amount of Exchange Property receivable upon conversion of any Convertible Preferred Stock in accordance with Section 7, 8, 9, 10 or 10A hereof shall be determined based upon the Conversion Rate in effect on such Conversion Date. The applicable Conversion Rate shall be (x) the Minimum Conversion Rate, in the case of an Early Conversion Date or a Provisional Conversion Date, and (y) determined based

upon the definition of Conversion Rate set forth in Sections 7, 10 or 10A, in the case of the Mandatory Conversion Date, the Make-Whole Acquisition Conversion Date, or the Reorganization Conversion Date, respectively.

After a Reorganization Event, “APPLICABLE MARKET VALUE” shall be deemed to refer to the Applicable Market Value of the Exchange Property and such value shall be determined (A) with respect to any publicly traded securities that compose all or part of the Exchange Property, the average of the Closing Prices of such securities on each of the 20 consecutive Trading Days ending on the third Trading Day immediately preceding the Mandatory Conversion Date, (B) in the case of any cash that composes all or part of the Exchange Property, based on the amount of such cash and (C) in the case of any other property that composes all or part of the Exchange Property, based on the value of such property on the Third Trading Day immediately preceding the Mandatory Conversion Date, as determined by a nationally recognized independent investment banking firm retained by the Corporation for this purpose. For purposes of this Section 14(e), the term “CLOSING PRICE” shall be deemed to refer to the closing sale price, last quoted bid price or mid-point of the last bid and ask prices, as the case may be, of any publicly traded securities that comprise all or part of the Exchange Property. For purposes of this Section 14(e), references to Common Stock in the definition of “TRADING DAY” shall be replaced by references to any publicly traded securities that comprise all or part of the Exchange Property.

The above provisions of this Section 14(e) shall similarly apply to successive Reorganization Events and the provisions of Section 14 shall apply to any shares of capital stock of the Corporation (or any successor) received by the holders of Common Stock in any such Reorganization Event.

The Corporation (or any successor) shall, within 20 days of the occurrence of any Reorganization Event, provide written notice to the Holders of such occurrence of such event and of the kind and amount of the cash, securities or other property that constitutes the Exchange Property. Failure to deliver such notice shall not affect the operation of this Section 14(e).

(f) Adjustment of Make-Whole Acquisition Stock Prices. The Make-Whole Acquisition Stock Prices appearing in the column headings for the table included in the definition of Make-Whole Acquisition Conversion Rate in Section 19 hereof shall be adjusted as of any date on which the Fixed Conversion Rates are adjusted. The adjusted Make-Whole Acquisition Stock Prices will equal the Make-Whole Acquisition Stock Prices applicable immediately prior to such adjustment multiplied by a fraction, the numerator of which is the Minimum Conversion Rate immediately prior to the adjustment and the denominator of which is the Minimum Conversion Rate as so adjusted. In addition, each of the Make-Whole Acquisition Stock Prices appearing in such table will be subject to adjustment in the same manner as each Fixed Conversion Rate is adjusted in accordance with the terms of this Section 14.

(15)

Replacement Stock Certificates.

(a)

If physical certificates are issued, and any of the Convertible Preferred Stock certificates shall be mutilated, lost, stolen or destroyed, the Corporation shall, at the expense of the Holder, issue, in exchange and in substitution for and upon cancellation of the mutilated Convertible Preferred Stock certificate, or in lieu of and substitution for the Convertible Preferred Stock certificate lost, stolen or destroyed, a new Convertible Preferred Stock certificate of like tenor and representing an equivalent amount of shares of Convertible Preferred Stock, but only upon receipt of evidence of such loss, theft or destruction of such Convertible Preferred Stock certificate and indemnity, if requested, satisfactory to the Corporation and the Transfer Agent.

(b)

The Corporation is not required to issue any certificates representing the Convertible Preferred Stock on or after the Mandatory Conversion Date, any Provisional Conversion Date or any Reorganization Conversion Date. In lieu of the delivery of a replacement certificate following the Mandatory Conversion Date, any Provisional Conversion Date or any Reorganization Conversion Date, the Transfer Agent, upon delivery of the evidence and indemnity described above, will deliver the shares of Common Stock or cash, securities or other property issuable pursuant to the terms of the Convertible Preferred Stock formerly evidenced by the certificate.

(16)

Transfer Agent, Registrar, Paying Agent and Conversion Agent. The duly appointed Transfer Agent, Registrar, paying agent and conversion agent for the Convertible Preferred Stock shall be The Bank of New York. The Corporation may, in its sole discretion, remove the Transfer Agent in accordance with the agreement between the Corporation and the Transfer Agent; PROVIDED that the Corporation shall appoint a successor transfer agent who shall accept such appointment prior to the effectiveness of such removal. Upon any such removal or appointment, the Corporation shall send notice thereof by first-class mail, postage prepaid, to the Holders of the Convertible Preferred Stock.

(17)

Form.

(a)

Convertible Preferred Stock shall be issued in the form of one or more permanent global shares of Convertible Preferred Stock in definitive, fully registered form with the global legend (the “GLOBAL SHARES LEGEND”), as set forth on the form of Convertible Preferred Stock certificate attached hereto as Exhibit A (each, a “GLOBAL PREFERRED SHARE”), which is hereby incorporated in and expressly made a part of this Certificate of Amendment. The Global Preferred Share may have notations, legends or endorsements required by law, stock exchange rules, agreements to which the Corporation is subject, if any, or usage (PROVIDED that any such notation, legend or endorsement is in a form acceptable to the Corporation). The Global Preferred Share shall be deposited on behalf of the holders of the Convertible Preferred Stock represented thereby with the Registrar, at its New York office, as custodian for DTC or a Depositary, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Corporation and countersigned and registered by the Registrar as hereinafter provided. The aggregate number of shares represented by each Global Preferred Share may from time to time be increased or decreased by adjustments made on the records of the Registrar and the Depositary or its nominee as hereinafter provided. This Section 17(a) shall apply only to a Global Preferred Share deposited with or on behalf of the Depositary. The Corporation shall execute and the Registrar shall, in accordance with this Section, countersign and deliver initially one or more Global Preferred Shares that (i) shall be registered in the name of Cede & Co. or other nominee of the Depositary and (ii) shall be delivered by the Registrar to Cede & Co. or pursuant to instructions received from Cede & Co. or held by the Registrar as custodian for the Depositary pursuant to an agreement between the Depositary and the Registrar. Members of, or participants in, the Depositary (“AGENT MEMBERS”) shall have no rights under this Certificate with respect to any Global Preferred Share held on their behalf by the Depositary or by the Registrar as the custodian of the Depositary or under such Global Preferred Share, and the Depositary may be treated by the Corporation, the Registrar and any agent of the Corporation or the Registrar as the absolute owner of such Global Preferred Share for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Corporation, the Registrar or any agent of the Corporation or the Registrar from giving effect to any written certification, proxy or other authorization

			furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of the Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Preferred Share. The Holder of the Convertible Preferred Shares may grant proxies or otherwise authorize any Person to take any action that a Holder is entitled to take pursuant to the Convertible Preferred Shares, this Certificate of Amendment or the Certificate of Incorporation. Owners of beneficial interests in Global Preferred Shares shall not be entitled to receive physical delivery of certificated shares of Convertible Preferred Stock, unless (x) the Depositary is unwilling or unable to continue as Depositary for the Global Preferred Share and the Corporation does not appoint a qualified replacement for the Depositary within 90 days, (y) the Depositary ceases to be a “clearing agency” registered under the Exchange Act and the Corporation does not appoint a qualified replacement for the Depositary within 90 days or (z) the Corporation decides to discontinue the use of book-entry transfer through the Depositary. In any such case, the Global Preferred Share shall be exchanged in whole for definitive shares of Convertible Preferred Stock in registered form, with the same terms and of an equal aggregate Liquidation Preference. Definitive shares of Convertible Preferred Stock shall be registered in the name or names of the Person or Persons specified by the Depositary in a written instrument to the Registrar.

	(b)		(i) An Officer shall sign the Global Preferred Share for the Corporation, in accordance with the Corporation’s bylaws and applicable law, by manual or facsimile signature.

			(ii) If an Officer whose signature is on a Global Preferred Share no longer holds that office at the time the Transfer Agent countersigned the Global Preferred Share, the Global Preferred Share shall be valid nevertheless.

			(iii) A Global Preferred Share shall not be valid until an authorized signatory of the Transfer Agent manually countersigns Global Preferred Share. Each Global Preferred Share shall be dated the date of its countersignature.

(18)

Miscellaneous.

	(a)		All notices referred to herein shall be in writing, and, unless otherwise specified herein, all notices hereunder shall be deemed to have been given upon the earlier of receipt thereof or three Business Days after the mailing thereof if sent by registered or certified mail (unless first-class mail shall be specifically permitted for such notice under the terms of this Certificate of Amendment) with postage prepaid, addressed: (i) if to the Corporation, to its office at 2000 Galloping Hill Road, Kenilworth, NJ 07033 (Attention: the Secretary) or to the Transfer Agent at its Corporate Trust Office, or other agent of the Corporation designated as permitted by this Certificate of Amendment, or (ii) if to any Holder of the Convertible Preferred Stock or holder of shares of Common Stock, as the case may be, to such Holder at the address of such Holder as listed in the stock record books of the Corporation (which may include the records of any transfer agent for the Convertible Preferred Stock or Common Stock, as the case may be), or (iii) to such other address as the Corporation or any such Holder, as the case may be, shall have designated by notice similarly given.

	(b)		The Corporation shall pay any and all stock transfer and documentary stamp taxes that may be payable in respect of any issuance or delivery of shares of Convertible Preferred Stock or shares of Common Stock or other securities issued on account of Convertible Preferred Stock pursuant hereto or certificates representing such shares or securities. The Corporation shall not, however, be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or delivery of shares of Convertible Preferred Stock or Common Stock or other securities in a name other than that in which

			the shares of Convertible Preferred Stock with respect to which such shares or other securities are issued or delivered were registered, or in respect of any payment to any person other than a payment to the registered holder thereof, and shall not be required to make any such issuance, delivery or payment unless and until the person otherwise entitled to such issuance, delivery or payment has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid or is not payable.

	(c)		The Liquidation Preference and the dividend amounts set forth herein each shall be subject to equitable adjustment whenever there shall occur a stock split, combination, reclassification or other similar event involving the Convertible Preferred Stock. Such adjustments shall be determined in good faith by the Board and submitted by the Board to the Transfer Agent.

(19)

Definitions. Unless otherwise defined herein, capitalized terms used in this Certificate of Amendment shall have the following meanings:

“2004 PREFERRED STOCK” means the 6.00% Mandatory Convertible Preferred Stock issued by the Corporation in 2004.

“ACCEPTED PURCHASED SHARES” shall have the meaning set forth in Section 14(a) (vii) hereof.

“AFFILIATE” shall have the meaning given to that term in Rule 405 of the Securities Act of 1933, as amended, or any successor rule thereunder.

“AGENT MEMBERS” shall have the meaning set forth in Section 17(a) hereof.

“APPLICABLE MARKET VALUE” means the average of the Closing Prices per share of the Common Stock on each of the 20 consecutive Trading Days ending on the third Trading Day immediately preceding the Mandatory Conversion Date.

“BOARD” means the Board of Directors of the Corporation.

“BUSINESS DAY” means any day other than a Saturday or Sunday or any other day on which banks in The City of New York are authorized or required by law or executive order to close.

“CERTIFICATE OF AMENDMENT” means the Certificate of Amendment of the Certificate of Incorporation dated August 10, 2007.

“CERTIFICATE OF INCORPORATION” means the Certificate of Incorporation of the Corporation, as amended.

“CLOSING PRICE” means, as of any date of determination, the closing sale price or, if no closing sale price is reported, the last reported sale price, of the Common Stock or any securities distributed in a Spin-Off, as the case may be, on the New York Stock Exchange on that date. If the Common Stock or any such securities distributed in a Spin-Off, as the case may be, is not then traded on the New York Stock Exchange on any date of determination, the Closing Price of the Common Stock or such securities on any date of determination means the closing sale price as reported in the composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock or such securities is so listed or quoted, or if the Common Stock or such securities is not so listed or quoted on a U.S. national or regional securities exchange, the last quoted bid price for the Common Stock or such securities in the over-the-counter market as reported by the Pink Sheets LLC or similar organization, or, if that bid price is not available, the market price of the Common Stock or such securities on that date as determined by a nationally recognized independent investment banking firm retained for this purpose by the

Corporation. For the purposes of this Certificate of Amendment, all references herein to the closing sale price of the Common Stock on the New York Stock Exchange shall be such closing sale price as reflected on the website of the New York Stock Exchange (www.nyse.com) and as reported by Bloomberg Professional Service; PROVIDED that, in the event that there is a discrepancy between the closing sale price as reflected on the website of the New York Stock Exchange and as reported by Bloomberg Professional Service, the closing sale price on the website of the New York Stock Exchange shall govern.

“COMMON STOCK” as used in this Certificate of Amendment means the Corporation’s Common Shares, par value $0.50 per share, as the same exists at the date of filing of this Certificate of Amendment relating to the Convertible Preferred Stock, or any other class of stock resulting from successive changes or reclassifications of such Common Shares consisting solely of changes in par value, or from par value to no par value, or from no par value to par value. However, subject to the provisions of Section 14(e), shares of Common Stock issuable on conversion of shares of Convertible Preferred Stock shall include only shares of the class designated as Common Shares of the Corporation at the date of the filing of this Certificate of Amendment with the Secretary of State of the State of New Jersey or shares of any class or classes resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation and which are not subject to redemption by the Corporation; PROVIDED that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all classes resulting from all such reclassifications.

“CONVERSION DATE” shall have the meaning set forth in Section 11(a) hereof.

“CONVERSION RATE” shall have the meaning set forth in Section 7(b) hereof.

“CONVERTIBLE PREFERRED STOCK” shall have the meaning set forth in Section 1 hereof.

“CORPORATE TRUST OFFICE” means the principal corporate trust office of the Transfer Agent at which, at any particular time, its corporate trust business shall be administered.

“CURRENT MARKET PRICE” per share of Common Stock or other securities on any date means the average of the daily Closing Prices for the five consecutive Trading Days preceding the earlier of the day preceding the date in question and the day before the “ex date” with respect to the issuance or distribution requiring such computation, if applicable. The term “ex date,” when used with respect to any issuance or distribution, means the first date on which the Common Stock or other security trades without the right to receive the issuance or distribution. For the purposes of determining the adjustment to the Conversion Rate for the purposes of Section 14(a)(iv)(B) hereof the Current Market Price per share of Common Stock means the average of the Closing Prices over the first ten Trading Days commencing on and including the fifth Trading Day following the “ex-date” for such distribution.

“DEPOSITARY” means DTC or its nominee or any successor appointed by the Corporation.

“DIVIDEND PAYMENT DATE” means (i) the 15th calendar day of February, May, August and November of each year, or the following Business Day if such day is not a Business Day, prior to the Mandatory Conversion Date and (ii) the Mandatory Conversion Date.

“DIVIDEND PERIOD” means the period ending on the day before a Dividend Payment Date and beginning on the preceding Dividend Payment Date or, if there is no preceding Dividend Payment Date, on the first date of issuance of the Convertible Preferred Stock.

“DIVIDEND THRESHOLD AMOUNT” shall have the meaning set forth in Section 14(a)(v) hereof.

“DTC” means The Depository Trust Company.

“EARLY CONVERSION” shall have the meaning set forth in Section 8(a) hereof.

“EARLY CONVERSION DATE” means the effective date of any conversion of Convertible Preferred Stock pursuant to Section 8 hereof.

“EXCHANGE PROPERTY” shall have the meaning set forth in Section 14(e) hereof.

“EXPIRATION TIME” shall have the meaning set forth in Section 14(a)(vi) hereof.

“FAIR MARKET VALUE” means (a) in the case of any Spin-Off, the fair market value of the portion of those shares of capital stock or similar equity interests so distributed applicable to one share of Common Stock as of the fifteenth Trading Day after the “ex-date” for such Spin-Off, and (b) in all other cases the fair market value as determined in good faith by the Board, whose determination shall be conclusive and described in a resolution of the Board.

“FIXED CONVERSION RATES” means the Maximum Conversion Rate and the Minimum Conversion Rate.

“GLOBAL PREFERRED SHARE” shall have the meaning set forth in Section 17(a) hereof.

“GLOBAL SHARES LEGEND” shall have the meaning set forth in Section 17(a) hereof.

“HOLDER” means the person in whose name the shares of the Convertible Preferred Stock are registered, which may be treated by the Corporation and the Transfer Agent as the absolute owner of the shares of Convertible Preferred Stock for the purpose of making payment and settling conversions and for all other purposes.

“INITIAL PRICE” shall have the meaning set forth in Section 7(b) hereof.

“JUNIOR SECURITIES” shall have the meaning set forth in Section 2 hereof.

“LIQUIDATION PREFERENCE” means, as to the Convertible Preferred Stock, $250 per share, as adjusted pursuant to the terms hereof.

“MAKE-WHOLE ACQUISITION” means the consummation of any acquisition (whether by means of a liquidation, share exchange, tender offer, consolidation, recapitalization, reclassification, merger of the Corporation or any sale, lease or other transfer of the consolidated assets of the Corporation and its subsidiaries) or a series of related transactions or events pursuant to which 90% or more of the Corporation’s outstanding shares of Common Stock are exchanged for, converted into or constitutes solely the right to receive cash, securities or other property more than 10% of which consists of cash, securities or other property that are not, or upon issuance will not be, shares of common equity or American depositary receipts in respect of common equity traded on the New York Stock Exchange, the Nasdaq Global Select Market or Nasdaq Global Market.

“MAKE-WHOLE ACQUISITION CONVERSION” shall have the meaning set forth in Section 10(a) hereof.

“MAKE-WHOLE ACQUISITION CONVERSION DATE” means the effective date of a Make-Whole Acquisition Conversion of Convertible Preferred Stock pursuant to Section 10 hereof.

“MAKE-WHOLE ACQUISITION CONVERSION NOTICE” shall have the meaning set forth in Section 10(b) hereof.

“MAKE-WHOLE ACQUISITION CONVERSION PERIOD” shall have the meaning set forth in Section 10(a) hereof.

“MAKE-WHOLE ACQUISITION CONVERSION RATE” means the conversion rate set forth in the table below for the applicable effective date of the Make-Whole Acquisition and the applicable Make-Whole Acquisition Stock Price (as Make-Whole Acquisition Stock Prices in the column headings for the table below are adjusted pursuant to Section 14 hereof):


	Share Price
Effective Date	$10.00		$15.00		$20.00		$25.00		$27.50		$30.00		$33.69		$35.00		$40.00		$45.00		$50.00		$55.00		$60.00		$65.00		$75.00		$100.00

8/15/2007		8.1797		7.9890		7.8360		7.7129		7.6145		7.4869		7.3271		7.2854		7.1930		7.1697		7.1672		7.1673		7.1676		7.1678		7.1681		7.1685
8/15/2008		8.7368		8.6200		8.4101		8.0711		7.8702		7.6758		7.4494		7.3929		7.2777		7.2515		7.2485		7.2488		7.2494		7.2500		7.2503		7.2523
8/15/2009		8.9569		8.9515		8.8654		8.5305		8.2348		7.9071		7.5392		7.4625		7.3432		7.3303		7.3302		7.3309		7.3315		7.3321		7.3329		7.3343
8/13/2010		9.0909		9.0909		9.0909		9.0909		9.0909		8.3333		7.4206		7.4206		7.4206		7.4206		7.4206		7.4206		7.4206		7.4206		7.4206		7.4206

If the Make-Whole Acquisition Stock Price is in excess of $100 per share (subject to adjustment pursuant to Section 14 hereof), then the Make-Whole Acquisition Conversion Rate will be the Minimum Conversion Rate (subject to adjustment pursuant to Section 14 hereof). If the Make-Whole Acquisition Share Price is less than $10 per share (subject to adjustment pursuant to Section 14 hereof), then the Make-Whole Acquisition Conversion Rate will be the Maximum Conversion Rate (subject to adjustment pursuant to Section 14 hereof).

If the effective date falls between the dates set forth under the heading “Effective Date” in the table above, or if the Make-Whole Acquisition Stock Price falls between two amounts set forth on the table above, the Make-Whole Acquisition Conversion Rate will be determined by straight-line interpolation between the Make-Whole Acquisition Conversion Rates set forth for the higher and lower Make-Whole Acquisition Stock Prices and effective two dates, based on a 365-day year.

The Make-Whole Acquisition Stock Prices set forth in the table above are subject to adjustment pursuant to Section 14(f) hereof.

“MAKE-WHOLE ACQUISITION STOCK PRICE” means the consideration paid per share of Common Stock in a Make-Whole Acquisition. If such consideration consists only of cash, the Make-Whole Acquisition Stock Price shall equal the amount of cash paid per share. If such consideration consists of any property other than cash, the Make-Whole Acquisition Stock Price shall be the average of the Closing Price per share of Common Stock on each of the 10 consecutive Trading Days up to, but not including, the effective date of the Make-Whole Acquisition.

“MANDATORY CONVERSION DATE” means immediately prior to the close of business on August 13, 2010.

“MANDATORY REORGANIZATION CONVERSION” shall have the meaning set forth in Section 10A(a) hereof.

“MAXIMUM CONVERSION RATE” shall have the meaning set forth in Section 7(b) (iii) hereof.

“MINIMUM CONVERSION RATE” shall have the meaning set forth in Section 7(b)(i) hereof.

“NON-ELECTING SHARE” shall have the meaning set forth in Section 14(e) hereof.

“OFFER EXPIRATION TIME” shall have the meaning set forth in Section 14(a)(vii) hereof.

“OFFICER” means the Chief Executive Officer, the Chief Operating Officer, any Vice President, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Corporation.

“OFFICER’S CERTIFICATE” means a certificate of the Corporation, signed by any duly authorized Officer of the Corporation.

“PARITY SECURITIES” shall have the meaning set forth in Section 2 hereof.

“PERSON” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company or trust.

“PREFERRED STOCK DIRECTOR” shall have the meaning set forth in Section 5(c) hereof.

“PROVISIONAL CONVERSION” shall have the meaning set forth in Section 9(a) hereof.

“PROVISIONAL CONVERSION DATE” means the date fixed for conversion of shares of Convertible Preferred Stock into shares of Common Stock pursuant to Section 9 hereof.

“PROVISIONAL CONVERSION NOTICE” shall have the meaning set forth in Section 9(b) hereof.

“PROVISIONAL CONVERSION NOTICE DATE” shall have the meaning set forth in Section 9(a) hereof.

“PURCHASED SHARES” shall have the meaning set forth in Section 14(a)(vi) hereof.

“RECORD DATE” means the first Business Day of the calendar month in which the applicable Dividend Payment Date falls.

“RECORD HOLDER” means the Holder of record of the Convertible Preferred Stock as they appear on the stock register of the Corporation at the close of business on a Record Date.

“REGISTRAR” shall mean the Transfer Agent acting in its capacity as registrar for the Convertible Preferred Stock, and its successors and assigns.

“REORGANIZATION CONVERSION DATE” shall have the meaning set forth in Section 10A(a) hereof.

“REORGANIZATION CONVERSION NOTICE” shall have the meaning set forth in Section 10A(b) hereof.

“REORGANIZATION CONVERSION NOTICE DATE” shall have the meaning set forth in Section 10A(b) hereof.

“REORGANIZATION EVENT” shall have the meaning set forth in Section 14(e) hereof.

“SENIOR SECURITIES” shall have the meaning set forth in Section 2 hereof.

“SPIN-OFF” means a dividend or other distribution of shares of capital stock of any class or series, or similar equity interests, of or relating to a subsidiary or other business unit of the Corporation.

“THRESHOLD APPRECIATION PRICE” shall have the meaning set forth in Section 7(b) hereof.

“TRADING DAY” means a day on which the Common Stock:

(a) is not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business; and

(b) has traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Stock.

“TRANSFER AGENT” means The Bank of New York acting as transfer agent, Registrar, paying agent and conversion agent for the Convertible Preferred Stock, and its successors and assigns.

“TREASURY YIELD” means the yield to maturity at the time of computation of U.S. Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Provisional Conversion Date (or, if such Statistical Release is no longer published, any publicly available source for similar market data)) most nearly equal to the then remaining term through and including the Mandatory Conversion Date; PROVIDED, HOWEVER, that if the then remaining term through and including the Mandatory Conversion Date is not equal to the constant maturity of a U.S. Treasury security for which a weekly average yield is given, the Treasury Yield shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of U.S. Treasury securities for which such yields are given, except that if the then remaining term through and including the Mandatory Conversion Date is less than one year, the weekly average yield on actually traded U.S. Treasury securities adjusted to a constant maturity of one year shall be used.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be duly executed by the undersigned this 10th day of August, 2007.


SCHERING-PLOUGH CORPORATION
By:	/s/ Susan Ellen Wolf
	Name:	Susan Ellen Wolf
	Title:	Corporate Secretary, Vice President, Corporate Governance and Associate General Counsel

EXHIBIT A

FORM OF 6.00% MANDATORY CONVERTIBLE PREFERRED STOCK

SEE REVERSE
FOR LEGEND

Number: [ ]



6.00% Mandatory Convertible Preferred Stock		[ ] Shares



		SCHERING-PLOUGH CORPORATION		CUSIP NO.: 806605705

FACE OF SECURITY

This certifies that Cede & Co. is the owner of fully paid and non-assessable shares of the 6.00% Mandatory Convertible Preferred Stock, par value $1.00 each of Schering-Plough Corporation (hereinafter called the Corporation), transferable on the books of the Corporation by the holder hereof in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby are issued and shall be held subject to all the provisions of the Certificate of Incorporation of Schering-Plough Corporation and all amendments thereto (copies of which are on file at the office of the Transfer Agent) to all of which the holder of this Certificate by acceptance hereof assents. This Certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar.

Witness the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.


Dated		Countersigned and Registered
		The Bank of New York
		Transfer Agent and Registrar


By

	Authorized Signature	Secretary	Chairman and Chief Executive Officer

REVERSE OF SECURITY

SCHERING-PLOUGH CORPORATION

The shares of 6.00% Mandatory Convertible Preferred Stock (the “MANDATORY CONVERTIBLE PREFERRED STOCK”) will automatically convert on August 13, 2010 into a number of common shares, par value $0.50 per share, of the Corporation (the “COMMON SHARES”) as provided in the Certificate of Amendment of the Certificate of Incorporation of the Corporation relating to the Mandatory Convertible Preferred Stock (the “CERTIFICATE OF AMENDMENT”). The shares of the Mandatory Convertible Preferred Stock are also convertible at the option of either the holder or, subject to certain conditions, the Corporation, respectively, into Common Shares at any time prior to August 13, 2010 as provided in the Certificate of Amendment. The preceding description is qualified in its entirety by reference to the Certificate of Amendment, a copy of which will be furnished by the Corporation to any shareholder without charge upon request addressed to the Secretary of the Corporation at its principal office in Kenilworth, New Jersey, or to the Transfer Agent named on the face of this certificate.

The Corporation will furnish to any shareholders, upon request, and without charge, a full statement of the designations, relative rights, preferences and limitations of the shares of each class and series authorized to be issued so far as the same have been determined and of the authority of the Board to divide the shares into classes or series and to determine and change the relative rights, preferences and limitations of any class or series. Any such request should be addressed to the Secretary of the Corporation at its principal office in Kenilworth, New Jersey, or to the Transfer Agent named on the face of this certificate.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE CORPORATION OR THE TRANSFER AGENT NAMED ON THE FACE OF THIS CERTIFICATE, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE CERTIFICATE OF AMENDMENT. IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE TRANSFER AGENT NAMED ON THE FACE OF THIS CERTIFICATE SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

ASSIGNMENT

FOR VALUE RECEIVED, HEREBY SELL, ASSIGN AND TRANSFER UNTO

Please Insert Social Security or
Other Identifying Number of Assignee

(Please Print or Typewrite Name and Address, Including Zip Code, of Assignee)

SHARES OF THE CAPITAL STOCK REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY IRREVOCABLY CONSTITUTE AND APPOINT

ATTORNEY TO TRANSFER THE SAID STOCK ON THE BOOKS OF THE WITHIN NAMED CORPORATION WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.

DATED



		NOTICE:		The Signature to this Assignment Must Correspond with the Name As Written Upon the Face of the Certificate in Every Particular, Without Alteration or Enlargement or Any Change Whatever.


SIGNATURE GUARANTEED

(Signature Must Be Guaranteed by a Member
of a Medallion Signature Program)

EX-5.1 5 y36685k1exv5w1.htm EX-5.1: OPINION OF MCCARTER & ENGLISH, LLP EX-5.1

Exhibit 5.1


McCarter & English, LLP Four Gateway Center 100 Mulberry Street P.O. Box 652 Newark, NJ 07102 T. 973.622.4444 F. 973.624.7070 www.mccarter.com

August 10, 2007

Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, NJ 07033


Re:		Schering-Plough Corporation Common Stock Offering

Ladies and Gentlemen:

We have acted as special New Jersey counsel to Schering-Plough Corporation, a New Jersey corporation (the “Company”), in connection with the Company’s authorization for issuance and sale of an aggregate of 50,000,000 shares of its common stock, par value of $0.50 per share (the “Common Stock”), and of up to 7,500,000 additional shares of Common Stock (to be issued and sold in the event the underwriters exercise their over-allotment option). The Common Stock is to be offered and sold under the Company’s Registration Statement on Form S-3, No. 333-145055 (the “Registration Statement”) filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”).

In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined and relied upon copies of the following documents (collectively, the “Documents”): (1) the Registration Statement; (2) the prospectus supplement dated August 2, 2007 relating to the Common Stock; (3) the final prospectus supplement dated August 9, 2007 relating to the Common Stock; (4) the Amended and Restated Certificate of Incorporation of the Company (the “Charter”), certified as of a recent date by the Department of the Treasury of the State of New Jersey; (5) the bylaws of the Company, as amended to the date hereof; (6) resolutions adopted by the Board of Directors of the Company on March 10, 2007 relating to, among other matters, the registration of the Common Stock, as certified by the Assistant Secretary of the Company on July 26, 2007 as being complete, accurate and in effect; (7) resolutions adopted by the Board of Directors of the Company on June 26, 2007 relating to, among other matters, the issuance of the Common Stock, as certified by the Deputy Secretary of the Company on August 3, 2007 as being complete, accurate and in effect; (8) resolutions adopted by the Pricing Committee of the Board of Directors of the Company on August 9, 2007 relating to, among other matters, the issuance of the Common Stock, as certified by the Assistant Secretary of the Company on August 10, 2007 as being complete, accurate and in effect; and (9) such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth in this letter, subject to the assumptions, limitations and qualifications stated herein.

Schering-Plough Corporation
August 10, 2007
Page 2

In expressing the opinion set forth below, we have assumed, and so far as is known to us there are no facts inconsistent with, the following: (1) each individual executing any of the Documents is legally competent to do so; (2) each individual executing any of the Documents on behalf of a party (other than the Company), is duly authorized to do so; (3) each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such party’s obligations set forth therein are legal, valid and binding; and (4) all Documents submitted to us as originals are authentic; all Documents submitted to us as certified or photostatic copies conform to the original documents; all signatures on all such Documents are genuine; all public records reviewed or relied upon by us or on our behalf are true and complete; all statements and information contained in the Documents and in the factual representations to us by officers of the Company are true and complete; and, there are no oral or written modifications or amendments to the Documents, by action or conduct of the parties or otherwise.

For the purposes of the opinions set forth below, we have assumed that (1) the Registration Statement has become effective under the Securities Act and such effectiveness shall not have been terminated or rescinded; (2) the prospectus supplement dated August 2, 2007 and the final prospectus supplement dated August 9, 2007 have been prepared and filed under the Securities Act describing the terms of such Common Stock offered thereby complying with all applicable laws (3) all applicable provisions of the “Blue Sky” and securities laws of the various states and other jurisdictions in which the Common Stock may be offered and sold shall have been complied with; and (4) none of the terms of the Common Stock, nor the issuance and delivery of the Common Stock, nor the compliance by the Company with the terms of the Common Stock will violate any applicable law or will result in a violation of any provision of any instrument or agreement then binding upon the Company, or any restriction imposed by any court or governmental body having jurisdiction over the Company.

We express no opinion as to the laws of any jurisdiction other than the laws of the State of New Jersey.

Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, we are of the opinion that upon the due execution, countersignature and delivery of certificates evidencing the Common Stock, the Common Stock will be duly authorized and, when and if delivered against payment therefor in accordance with the resolutions of the Board of Directors of the Company authorizing their issuance, will be validly issued, fully paid and nonassessable.

We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof.

Schering-Plough Corporation
August 10, 2007
Page 3

We hereby consent to the reference to our firm under the Section “Validity of Securities” in the prospectus supplement included in the Registration Statement and to the filing of this opinion as Exhibit 5.1 to the Company’s Current Report on Form 8-K. In giving this consent, we do not thereby admit that we are an “expert” within the meaning of the Securities Act.

Very truly yours,

/s/ McCarter & English, LLP

McCARTER & ENGLISH, LLP

EX-5.2 6 y36685k1exv5w2.htm EX-5.2: OPINION OF MCCARTER & ENGLISH, LLP EX-5.2

Exhibit 5.2


McCarter & English, LLP Four Gateway Center 100 Mulberry Street P.O. Box 652 Newark, NJ 07102 T. 973.622.4444 F. 973.624.7070 www.mccarter.com

August 10, 2007

Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, NJ 07033


Re:		Schering-Plough Corporation 6.00% Mandatory Convertible Preferred Stock

Ladies and Gentlemen:

We have acted as special New Jersey counsel to Schering-Plough Corporation, a New Jersey corporation (the “Company”), in connection with the Company’s authorization for issuance and sale of an aggregate of 10,000,000 shares of its 6.00% mandatory convertible preferred stock, par value of $1.00 per share (the “Preferred Stock”), and of up to 1,500,000 additional shares of Preferred Stock (to be issued and sold in the event the underwriters exercise their over-allotment option). The Preferred Stock is to be offered and sold under the Company’s Registration Statement on Form S-3, No. 333-145055 (the “Registration Statement”) filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”).

In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined and relied upon copies of the following documents (collectively, the “Documents”): (1) the Registration Statement; (2) the prospectus supplement dated August 2, 2007 relating to the Preferred Stock; (3) the final prospectus supplement dated August 9, 2007 relating to the Preferred Stock; (4) the Amended and Restated Certificate of Incorporation of the Company (the “Charter”), certified as of a recent date by the Department of the Treasury of the State of New Jersey; (5) the Certificate of Amendment to the Charter filed with the Department of Treasury of the State of New Jersey on August 10, 2007; (6) the bylaws of the Company, as amended to the date hereof; (7) resolutions adopted by the Board of Directors of the Company on March 10, 2007 relating to, among other matters, the registration of the Preferred Stock, as certified by the Assistant Secretary of the Company on July 26, 2007 as being complete, accurate and in effect; (8) resolutions adopted by the Board of Directors of the Company on June 26, 2007 relating to, among other matters, the issuance of the Preferred Stock, as certified by the Deputy Secretary of the Company on August 3, 2007 as being complete, accurate and in effect; (9) resolutions adopted by the Pricing Committee of the Board of Directors of the Company on August 9, 2007 relating to, among other matters, the issuance of the Preferred Stock, as certified by the Assistant Secretary of the Company on August 10, 2007 as being complete, accurate and in effect; and (10) such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth in this letter, subject to the assumptions, limitations and qualifications stated herein.

Schering-Plough Corporation
August 10, 2007
Page 2

For the purposes of the opinions set forth below, we have assumed that (1) the Registration Statement has become effective under the Securities Act and such effectiveness shall not have been terminated or rescinded; (2) the prospectus supplement dated August 2, 2007 and the final prospectus supplement dated August 9, 2007 have been prepared and filed under the Securities Act describing the terms of such Preferred Stock offered thereby complying with all applicable laws (3) all applicable provisions of the “Blue Sky” and securities laws of the various states and other jurisdictions in which the Preferred Stock may be offered and sold shall have been complied with; and (4) none of the terms of the Preferred Stock, nor the issuance and delivery of the Preferred Stock, nor the compliance by the Company with the terms of the Preferred Stock will violate any applicable law or will result in a violation of any provision of any instrument or agreement then binding upon the Company, or any restriction imposed by any court or governmental body having jurisdiction over the Company.

We express no opinion as to the laws of any jurisdiction other than the laws of the State of New Jersey.

Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, we are of the opinion that upon the due execution, countersignature and delivery of certificates evidencing the Preferred Stock, the Preferred Stock will be duly authorized and, when and if delivered against payment therefor in accordance with the resolutions of the Board of Directors of the Company authorizing their issuance, will be validly issued, fully paid and nonassessable.

We hereby consent to the reference to our firm under the Section “Validity of Securities” in the prospectus supplement included in the Registration Statement and to

Schering-Plough Corporation
August 10, 2007
Page 3

the filing of this opinion as Exhibit 5.2 to the Company’s Current Report on Form 8-K. In giving this consent, we do not thereby admit that we are an “expert” within the meaning of the Securities Act.

Very truly yours,

/s/ McCarter & English, LLP

McCARTER & ENGLISH, LLP

EX-99.1 7 y36685k1exv99w1.htm EX-99.1: PRESS RELEASE EX-99.1

Exhibit 99.1

Schering-Plough Corporation Prices Public Offering
of Common Shares and 6.00% Mandatory Convertible Preferred Stock

KENILWORTH, N.J., Aug. 9, 2007 — Schering-Plough Corporation (NYSE: SGP) announced today that it priced its registered public offering of 50,000,000 common shares at $27.50 per share. The underwriters have an option to purchase up to an additional 7,500,000 common shares from Schering-Plough.

Schering-Plough also announced that it has concurrently priced its registered public offering of 10,000,000 shares of its 6.00% mandatory convertible preferred stock at $250 per share. The shares of 6.00% mandatory convertible preferred stock have a liquidation preference of $250 per share, for an aggregate liquidation value of $2.5 billion. The preferred stock will pay dividends at a rate of 6.00 percent per annum, payable quarterly. The first dividend payment date will be November 15, 2007. Unless earlier converted, the 6.00% mandatory convertible preferred stock will automatically convert on August 13, 2010, into between approximately 74,206,000 and 90,909,000 common shares, assuming no exercise of the underwriters’ option to purchase additional shares. The conversion rate will be subject to anti-dilution adjustments in certain circumstances. The underwriters have an option to purchase up to an additional 1,500,000 shares of 6.00% mandatory convertible preferred stock from Schering-Plough with an aggregate liquidation value of $375 million. The 6.00% mandatory convertible preferred stock has been approved for listing on the New York Stock Exchange under the ticker symbol “SGP PrB”, subject to issuance.

These offerings will generate aggregate net proceeds of approximately $3.8 billion, assuming no exercise of the underwriters’ option to purchase additional shares. The offerings are expected to close on August 15, 2007.

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The global coordinator for the offerings is Goldman, Sachs & Co. The joint bookrunners are Banc of America Securities LLC, Bear, Stearns & Co. Inc., Citi and Morgan Stanley. The co-lead managers are BNP PARIBAS, Credit Suisse Securities (USA) LLC and J.P. Morgan Securities Inc. The co-managers are Daiwa Securities America Inc., Santander Investment, Utendahl Capital Partners, L.P. and The Williams Capital Group, L.P.

The offerings are being made under a shelf registration statement filed with the Securities and Exchange Commission on August 2, 2007. This announcement is neither an offer to sell nor a solicitation of an offer to buy any securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any offers of the common shares and shares of the mandatory convertible preferred stock will be made exclusively by means of a prospectus and prospectus supplement.

Copies of the prospectus supplements and accompanying prospectus relating to these offerings may be obtained by contacting Goldman, Sachs & Co., Attn: Prospectus Dept., 85 Broad Street, New York, New York, 10004, Fax: 212 902 9316 or email at prospectus-ny@ny.email.gs.com.

Schering-Plough is a global science-based company that discovers, develops and manufactures pharmaceuticals for three customer markets — human prescription, consumer and animal health. While most of the research and development activity is directed toward prescription products, there are important applications of this central research and development platform into the consumer healthcare and animal health products. Schering-Plough also accesses external innovation via partnering, in-licensing and acquisition for all three customer markets. Schering-Plough is based in Kenilworth, N.J.

DISCLOSURE NOTICE: The information in this press release and other written reports and oral statements made from time to time by Schering-Plough may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not relate strictly to historical or current facts and are based on current expectations or forecasts of future events. You can identify these forward-looking statements by their use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “project,” “intend,” “plan,” “potential,” “will,” and other similar words and terms. Actual results may vary materially from Schering-Plough’s forward-looking statements, and there are no guarantees about the performance of Schering-Plough stock or Schering-Plough’s

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business. Schering-Plough does not assume the obligation to update any forward-looking statement. A number of risks and uncertainties could cause results to differ materially from forward-looking statements. For further details of these risks and uncertainties that may impact forward-looking statements, see Schering-Plough’s Securities and Exchange Commission filings, including Part II, Item 1A, “Risk Factors” in the company’s second quarter 2007 10-Q and the “Risk Factors” section of the prospectus supplements related to the common share and 6.00% mandatory convertible preferred stock offerings.

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59-0807

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