INVESTMENTAGREEMENT dated asof March 9, 2009, among THE DOWCHEMICAL COMPANY and THEINVESTORS NAMED HEREIN

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INVESTMENT AGREEMENT

 

dated as of March 9, 2009,

 

among

 

THE DOW CHEMICAL COMPANY

 

and

 

THE INVESTORS NAMED HEREIN

 

 

 

 

 

 

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INVESTMENT AGREEMENT dated as of March 9, 2009 (this “Agreement”), among The Dow Chemical Company, a Delaware corporation (the “Company”), and the investors identified on the signature pages hereto (each, an “Investor” and, collectively, the “Investors”).

 

WHEREAS the Company desires to issue, sell and deliver to the Trusts, and the Trusts desire to purchase and acquire from the Company, pursuant to the terms and conditions set forth in this Agreement, an aggregate of 500,000 shares (the “Purchased Convertible Preferred Shares”) of the Company’s Convertible Preferred Stock, Series C (“Convertible Preferred Stock”), convertible into shares of the common stock, par value $2.50 per share, of the Company (“Company Common Stock”), having the powers, preferences and rights, and the qualifications, limitations and restrictions, as specified in the Certificate of Designations in the exact form attached hereto as Annex A (the “Convertible Preferred Certificate of Designations”); and

 

WHEREAS the Company desires to issue, sell and deliver to the Investors, and the Investors desire to purchase and acquire from the Company, pursuant to the terms and conditions set forth in this Agreement, an aggregate of 2,500,000 shares (the “Purchased Perpetual Preferred Shares” and, together with the Purchased Convertible Preferred Shares, the “Purchased Shares”) of the Company’s Cumulative Perpetual Preferred Stock, Series B (“Perpetual Preferred Stock”), having the powers, preferences and rights, and the qualifications, limitations and restrictions, as specified in the Certificate of Designations in the exact form attached hereto as Annex B (the “Perpetual Preferred Certificate of Designations”).

 

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, and subject to the conditions set forth herein, the parties hereto, intending to be legally bound, hereby agree as follows:

 

 

ARTICLE I

 

 

SECTION 1.01.  Purchase and Sale of the Purchased Perpetual Preferred Shares.  On the terms and subject to the conditions set forth in this Agreement, at the Initial Closing, the Company shall issue, sell and deliver to each Investor, and each Investor shall purchase and acquire from the Company, the number of Purchased Perpetual Preferred Shares set forth opposite such Investor’s name on Schedule I hereto for a purchase price per Purchased Perpetual Preferred Share equal to $1,000, payable as set forth in Section 1.02.  The purchase and sale of the Purchased Perpetual Preferred Shares is referred to in this Agreement as the “Perpetual Preferred Share Purchase”.

 

SECTION 1.02.  Initial Closing.  (a) The closing of the Perpetual Preferred Share Purchase (the “Initial Closing”) shall occur immediately after the consummation of the Merger (the date on which the consummation of the Merger occurs, the “Initial Closing Date”), subject only to the satisfaction or (to the extent permitted by law) waiver of the conditions to the Initial Closing set forth in Section 1.02(c) and 1.02(d), at the offices of Shearman & Sterling LLP, 599

 

 

 

Lexington Avenue, New York, New York 10022, unless another time, date or place is agreed to in writing by the Investors and the Company.

 

(b)  At the Initial Closing, (i) the Company shall deliver to each Investor certificates representing the Purchased Perpetual Preferred Shares to be sold to such Investor, duly registered in the name of such Investor, and (ii) each Investor shall pay to the Company the amount set forth opposite such Investor’s name on Schedule I hereto, and such payment shall be (A) in the case of each Trust, effected as a deduction from the Merger Consideration (as defined in the Merger Agreement) to be received by such Investor pursuant to and in accordance with the terms of the Merger Agreement and (B) in all other cases, effected as a deduction from the Merger Consideration to be received by such Investor pursuant to and in accordance with the terms of the Merger Agreement; provided, however, that the Company will cooperate with such Investor in respect of the allocation of preferred stock certificates among such Investor’s accounts and in respect of the appropriate allocation of cash deposits (the deductions described in (A) and (B) above, each a “Perpetual Preferred Deduction”).

 

(c)  The respective obligation of each Investor and the Company to effect the Perpetual Preferred Share Purchase is subject to the satisfaction at the Initial Closing of each of the following conditions:

 

(i)  no injunction, restraint or prohibition by any court or other tribunal of competent jurisdiction which prohibits the Perpetual Preferred Share Purchase shall have been entered and shall continue to be in effect; and

 

(ii)  the merger of Ramses Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of the Company (“Ramses”), with and into Rohm and Haas Company, a Delaware corporation (the “Merger”), shall have been consummated in accordance with the terms of the Merger Agreement.

 

(d)  The obligation of each Investor to effect the Perpetual Preferred Share Purchase is also subject to the satisfaction or waiver by such Investor at or prior to the Initial Closing of each of the following conditions:

 

(i)  each Investor shall have been paid by wire transfer of immediately available funds the Merger Consideration (as reduced by the Perpetual Preferred Deduction and, in the case of each Trust and so long as the Company has not exercised its Option, the Convertible Preferred Deduction) to be received by such Investor pursuant to and in accordance with the terms of the Merger Agreement;

 

(ii)  each Investor shall have been paid on the date of this Agreement by wire transfer of immediately available funds a commitment fee equal to 2.25% of the aggregate purchase price (set forth opposite such Investor’s name on Schedule I hereto) to be paid by such Investor for the Purchased Perpetual Preferred Shares to be sold to such Investor;

 

(iii)  the Purchased Perpetual Preferred Shares shall have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be (A) validly issued, fully paid and nonassessable, (B) not have been issued in violation of

 

 

 

any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right and (C) be free and clear of all pledges, liens, charges, mortgages, encumbrances or security interests of any kind or nature whatsoever other than those for the benefit of any Investor or affiliate thereof;

 

(iv)  the Board of Directors of the Company shall have duly adopted resolutions approving the Perpetual Preferred Certificate of Designations, and the Company shall have filed the Perpetual Preferred Certificate of Designations with the Secretary of State of the State of Delaware and the Perpetual Preferred Certificate of Designations shall have become effective;

 

(v)  each Trust shall have been paid on the date of this Agreement by wire transfer of immediately available funds a commitment fee equal to 0.75% of the aggregate purchase price (set forth opposite such Trust’s name on Schedule II hereto) to be paid by such Trust for the Purchased Convertible Preferred Shares to be sold to such Trust;

 

(vi)  so long as the Company has not exercised its Option, the Purchased Convertible Preferred Shares shall have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be (A) validly issued, fully paid and nonassessable, (B) not have been issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right and (C) be free and clear of all pledges, liens, charges, mortgages, encumbrances or security interests of any kind or nature whatsoever other than those for the benefit of any Investor or affiliate thereof; and

 

(vii)  so long as the Company has not exercised its Option, the Board of Directors of the Company shall have duly adopted resolutions approving the Convertible Preferred Certificate of Designations, and the Company shall have filed the Convertible Preferred Certificate of Designations with the Secretary of State of the State of Delaware and the Convertible Preferred Certificate of Designations shall have become effective.

 

SECTION 1.03.  Purchase and Sale of the Purchased Convertible Preferred Shares.  (a) On the terms and subject to the conditions set forth in this Agreement, at the Convertible Preferred Stock Closing, the Company shall issue, sell and deliver to each Trust, and each Trust shall purchase and acquire from the Company, the number of Purchased Convertible Preferred Shares set forth opposite such Trust’s name on Schedule II hereto for a purchase price per Purchased Convertible Preferred Share equal to $1,000, payable as set forth in Section 1.04.  The purchase and sale of the Purchased Convertible Preferred Shares is referred to in this Agreement as the “Convertible Preferred Share Purchase”.  The “Share Purchase” means, collectively, the Perpetual Preferred Share Purchase and the Convertible Preferred Share Purchase.

 

(b)  Notwithstanding anything to the contrary contained herein, the Company may elect not to effect and close the Convertible Preferred Share Purchase (the “Option”) by delivering a written notice to that effect (the “Option Notice”) to the Trusts.  If the Option Notice is not delivered by 5:00 p.m., New York time, on the date that is two business day prior to the Initial Closing, the Option shall terminate and be of no further force and effect.  If the Company

 

 

 

 

SECTION 1.04.  Convertible Preferred Stock Closing.  (a) The closing of the Convertible Preferred Share Purchase (the “Convertible Preferred Stock Closing”) shall occur simultaneously with the Initial Closing so long as the Company has not exercised its Option, subject only to the satisfaction or (to the extent permitted by law) waiver of the conditions to the Convertible Preferred Stock Closing set forth in Section 1.04(c) and 1.04(d), at the offices of Shearman & Sterling LLP, 599 Lexington Avenue, New York, New York 10022, unless another time, date or place is agreed to in writing by the Trusts and the Company.

 

(b)  At the Convertible Preferred Stock Closing, (i) the Company shall deliver to each Trust certificates representing the Purchased Convertible Preferred Shares to be sold to such Trust, duly registered in the name of such Trust, and (ii) each Trust shall pay to the Company the amount set forth opposite such Trust’s name on Schedule II hereto, and such payment shall be effected as a deduction (the “Convertible Preferred Deduction”) from the aggregate Merger Consideration (as defined in the Merger Agreement) to be received by such Investor pursuant to and in accordance with the terms of the Merger Agreement.

 

(c)  The respective obligation of each Trust and the Company to effect the Convertible Preferred Share Purchase is subject to the satisfaction at the Convertible Preferred Stock Closing of each of the following conditions:

 

(i)  no injunction, restraint or prohibition by any court or other tribunal of competent jurisdiction which prohibits the Convertible Preferred Share Purchase shall have been entered and shall continue to be in effect; and

 

(ii)  the Merger shall have been consummated in accordance with the terms of the Merger Agreement.

 

(d)  The obligation of each Trust to effect the Convertible Preferred Share Purchase is also subject to the satisfaction or waiver by such Trust at or prior to the Convertible Preferred Stock Closing of the following condition:  the Initial Closing shall occur simultaneously.

 

SECTION 1.05.  Frustration of Closing Conditions.  Neither the Company nor any Investor may assert that a condition set forth in Section 1.02 or 1.04 has not been satisfied or waived if such failure was caused by such party’s breach of Section 3.01 or any other provision of this Agreement.

 

 

 

ARTICLE II

 

 

SECTION 2.01.  Representations and Warranties of the Company.  Except as previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2008, or its other reports and forms (collectively, the “SEC Reports”) filed with the Securities and Exchange Commission (the “Commission”) under Section 12, 13, 14 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) subsequent to January 1, 2009 and prior to the date of this Agreement, the Company hereby represents and warrants to each Investor that as of the date hereof (or such other date so specified):

 

(a)  Organization, Authority and Significant Subsidiaries.  The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with the requisite corporate power and authority to own, lease and operate its properties and assets and conduct its business as currently conducted.  Each subsidiary of the Company that is a “significant subsidiary” within the meaning of Rule 1-01(w) of Regulation S-X under the Securities Act of 1933, as amended (the “Securities Act”) and the Exchange Act (individually, a “Significant Subsidiary” and, collectively, the “Significant Subsidiaries”) has been duly organized or formed and is validly existing and in good standing under the laws of its jurisdiction of organization or formation, except where the failure to be so organized or formed, validly existing or in good standing would not reasonably be expected to have a material adverse effect on the ability of the Company to consummate the transactions contemplated by this Agreement.

 

(b)  Capitalization.  The authorized capital stock of the Company consists of 1,500,000,000 shares of Company Common Stock and 250,000,000 shares of preferred stock, par value $1.00 per share (the “Company Preferred Stock” and, together with the Company Common Stock, the “Company Capital Stock”).  At the close of business on February 28, 2009 (the “Capitalization Date”), (i) 925,778,423 shares of Company Common Stock were issued and outstanding; (ii) 55,599,130 shares of Company Common Stock were held by the Company as treasury shares; (iii) 63,784,379 shares of Company Common Stock were subject to outstanding options to acquire shares of Company Common Stock (“Company Stock Options”); (iv) the Company had granted deferred, performance deferred and restricted stock for a total of 2,978,040 shares of Company Common Stock and maintained a balance in its employee stock purchase plan of 10,409,704 shares of Company Common Stock; and (v) no shares of Company Preferred Stock were issued or outstanding or held by the Company as treasury shares.  Except as set forth above or in connection with an aggregate of 4,000,000 shares of the Company’s Cumulative Convertible Perpetual Preferred Stock, Series A, to be issued to Berkshire Hathaway Inc. and to the Kuwait Investment Authority, at the Capitalization Date, no shares of Company Common Stock or other capital stock or other voting securities of the Company were issued,  reserved for issuance or outstanding.  Since the Capitalization Date through the date of this Agreement, other than in connection with the issuance of Company Common Stock pursuant to the exercise of Company Stock Options, no shares of Company Common Stock or other capital stock or voting securities of the Company were issued and there has been no change in the number of outstanding Company Stock Options.  All outstanding shares of Company Capital Stock are, and all such shares that may be issued prior to the Initial Closing or the Convertible

 

 

 

Preferred Stock Closing will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right.  There are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Company Common Stock may vote (“Voting Company Debt”).  Except for any obligations under any Company Benefit Plan, in connection with an aggregate of 4,000,000 shares of the Company’s Cumulative Convertible Perpetual Preferred Stock, Series A, to be issued to Berkshire Hathaway Inc. and to the Kuwait Investment Authority or as otherwise set forth above, as of the date of this Agreement, there are no options, warrants, calls, rights, convertible or exchangeable securities, stock-based performance units, contracts or undertakings of any kind to which the Company or any of its subsidiaries is a party or by which any of them is bound (i) obligating the Company or any such subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exchangeable for any capital stock of or other equity interest in, the Company or of any of its subsidiaries or any Voting Company Debt or (ii) obligating the Company or any such subsidiary to issue, grant or enter into any such option, warrant, call, right, convertible or exchangeable security, stock-based performance unit, contract or undertaking.

 

(c)  Authorization; Enforceability.  The Company has the requisite power and authority to enter into this Agreement and to carry out its obligations hereunder.  The execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company, and no other actions or proceedings on the part of the Company (including any approval of the holders of any shares of capital stock of the Company) are necessary to authorize the consummation of the transactions contemplated hereby (except for the approval by the Company’s Board of Directors of the Perpetual Preferred Certificate of Designations and the Convertible Preferred Certificate of Designations).  This Agreement has been duly and validly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and general equitable principles, regardless of whether such enforceability is considered in a proceeding at law or in equity (“Bankruptcy Exceptions”).

 

(d)  No Conflict.

 

(i)  Neither the execution, delivery and performance by the Company of this Agreement, nor the consummation of the transactions contemplated hereby, nor compliance by the Company with any of the provisions hereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of the Company or any Significant Subsidiary under any of the terms, conditions or provisions of (1) its certificate of incorporation or by-laws or (2) any note, bond, mortgage, indenture, deed of

 

 

 

trust, license, lease, agreement or other instrument or obligation to which the Company or any Significant Subsidiary is a party or by which it may be bound, or to which the Company or any Significant Subsidiary or any of the properties or assets of the Company or any Significant Subsidiary may be subject, or (B) subject to compliance with the statutes and regulations referred to in the next paragraph, violate any statute, rule or regulation or any judgment, ruling, order, writ, injunction or decree applicable to the Company or any Significant Subsidiary or any of their respective properties or assets except, in the case of clauses (A)(2) and (B) above, for those occurrences that would not reasonably be expected to have a material adverse effect on the ability of the Company to consummate the transactions contemplated by this Agreement.

 

(ii)  Other than (x) in connection or in compliance with the provisions of the Securities Act and the securities or blue sky laws of the various states, (y) the filing of the Perpetual Preferred Certificate of Designations and the Convertible Preferred Certificate of Designations and (z) the filing of the certificate of merger relating to the Merger, no notice to, filing with, review by, or authorization, consent or approval of, any governmental authority is necessary for the consummation by the Company of the transactions contemplated by this Agreement.

 

(e)  Company Financial Statements.

 

(i)  The consolidated financial statements of the Company and its consolidated subsidiaries included or incorporated by reference in the SEC Reports fairly present in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as of the dates indicated therein and the consolidated results of their operations for the periods specified therein; and except as stated therein, such financial statements were prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis (except as may be noted therein).

 

(ii)  Deloitte & Touche LLP, who have certified certain financial statements of the Company and its subsidiaries, are independent public accountants as required by the Securities Act and the rules and regulations of the Commission.

 

(f)  Authorization of Purchased Perpetual Preferred Shares and Purchased Convertible Preferred Shares.  As of the Initial Closing Date, the Purchased Perpetual Preferred Shares and the Purchased Convertible Preferred Shares will (i) be duly authorized by all necessary corporate action on the part of the Company, (ii) be validly issued, fully paid and nonassessable, (iii) not have been issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right and (iv) be free and clear of all pledges, liens, charges, mortgages, encumbrances or security interests of any kind or nature whatsoever.

 

(g)  Reports.  Since December 31, 2008 through the date of this Agreement, the Company has complied in all material respects with the filing requirements of Sections 13(a), 14(a) and 15(d) of the Exchange Act.  The SEC Reports, 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 Exchange Act, 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 any 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.

 

(h)  NYSE.  Shares of the Company Common Stock are registered pursuant to Section 12(b) of the Exchange Act and are listed on the New York Stock Exchange (“NYSE”), and the Company has no action pending to terminate the registration of the Company Common Stock under the Exchange Act or delist the Company Common Stock from the NYSE, nor has the Company received any notification that the Commission or the NYSE is currently contemplating terminating such registration or listing.

 

(i)  Automatic Shelf Registration Statement.  The Company is and, at the time of initial filing of an automatic shelf registration statement on Form S-3 (the “Automatic Shelf Registration Statement”) under the Securities Act with the Commission, covering the Purchased Convertible Preferred Shares, the Company Common Stock issuable upon conversion of the Convertible Preferred Shares and the Purchased Perpetual Preferred Shares, will be a “well-known seasoned issuer” (as defined in Rule 405 of the Securities Act) and is and, at the time of initial filing of an Automatic Shelf Registration Statement, will be eligible to file an automatic shelf registration statement on Form S-3 under the Securities Act.  Upon filing of an Automatic Shelf Registration Statement, covering the Purchased Convertible Preferred Shares, the Company Common Stock issuable upon conversion of the Convertible Preferred Shares and the Purchased Perpetual Preferred Shares, such Automatic Shelf Registration Statement will be effective and will conform in all respects to the requirements of the Securities Act, and the rules and regulations of the Commission thereunder, and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.  The preceding sentence does not apply to any information furnished in writing to the Company by any Investor expressly for inclusion therein.

 

(j)  Authorization of Company Common Stock Issuable upon Conversion of Convertible Preferred Shares.  The Company Common Stock issuable upon conversion of the Convertible Preferred Shares has been duly authorized and reserved and, when issued and delivered upon conversion of the Convertible Preferred Shares in accordance with the terms of the Convertible Preferred Certificate of Designations, will (i) be validly issued, fully paid and nonassessable, (ii) not have been issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right and (iii) be free and clear of all pledges, liens, charges, mortgages, encumbrances or security interests of any kind or nature whatsoever.

 

SECTION 2.02.  Representations and Warranties of the Investors.  Each Investor, with respect to itself and not with respect to any other Investor, hereby represents and warrants to the Company that as of the date hereof:

 

(a)  Organization and Authority.  Such Investor has been duly organized or formed and, if applicable, is validly existing and in good standing under the laws of its jurisdiction of organization or formation, with the requisite power and authority to own, lease and operate its properties and assets and conduct its business as currently conducted.

 

 

 

(b)  Authorization; Enforceability.  Such Investor has the requisite power and authority to enter into this Agreement and to carry out its obligations hereunder.  The execution, delivery and performance of this Agreement by such Investor and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of such Investor, and no other actions or proceedings on the part of such Investor are necessary to authorize the consummation of the transactions contemplated hereby.  This Agreement has been duly and validly executed and delivered by such Investor and constitutes a legal, valid and binding obligation of such Investor, enforceable against such Investor in accordance with its terms, except as may be limited by the Bankruptcy Exceptions.

 

(c)  No Conflict.  Neither the execution, delivery and performance by such Investor of this Agreement, nor the consummation by such Investor of the transactions contemplated hereby, nor compliance by such Investor with any of the provisions hereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of such Investor under any of the terms, conditions or provisions of (1) its certificate of incorporation or by-laws or other equivalent organizational or formation document or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which such Investor is a party or by which it may be bound, or to which such Investor or any of the properties or assets of such Investor may be subject, or (B) subject to compliance with the statutes and regulations referred to in the next paragraph, violate any statute, rule or regulation or any judgment, ruling, order, writ, injunction or decree applicable to such Investor or any of its respective properties or assets except, in the case of clauses (A)(2) and (B) above, for those occurrences that would not reasonably be expected to have a material adverse effect on the ability of such Investor to consummate the transactions contemplated by this Agreement.

 

(d)  Consents.  Other than in connection or in compliance with the provisions of the Securities Act and the securities or blue sky laws of the various states, no notice to, filing with, review by, or authorization, consent or approval of any governmental authority is necessary for the consummation by such Investor of the transactions contemplated by this Agreement.

 

(e)  Purchase for Investment.  Such Investor acknowledges that the Purchased Perpetual Preferred Shares have not been registered under the Securities Act or under any state securities laws.  Such Investor (i) is acquiring the Purchased Perpetual Preferred Shares pursuant to an exemption from registration under the Securities Act solely for investment with no present intention or view to distribute any of the Purchased Perpetual Preferred Shares to any person in violation of the Securities Act, (ii) will not sell or otherwise dispose of any of the Purchased Perpetual Preferred Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, (iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Purchased Perpetual Preferred Shares and of making an informed investment decision, and has conducted an independent review and analysis of the business and affairs of the Company that it considers sufficient and reasonable for purposes of its making its investment in the Purchased Perpetual

 

 

 

Preferred Shares, and (iv) is an “accredited investor” (as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act).

 

 

ARTICLE III

 

 

SECTION 3.01.  Further Assurances.  (a) Upon the terms and subject to the conditions set forth in this Agreement, each of the parties hereto shall use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Perpetual Preferred Share Purchase, the Convertible Preferred Share Purchase and the other transactions contemplated by this Agreement, including using reasonable best efforts to accomplish the following:  (i) the taking of all acts necessary to cause the conditions to the Initial Closing and the Convertible Preferred Stock Closing to be satisfied as promptly as reasonably practicable; and (ii) the execution and delivery of any additional instruments reasonably necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement.  For the avoidance of doubt, the foregoing shall not be construed to impose on the Company any obligation with respect to the Merger or otherwise require the Company to take any action under the Merger Agreement.

 

(b)  Between the date hereof and the Initial Closing Date, the Company shall not, without the prior written consent of each of the Investors, which consent may not be unreasonably withheld:  (i) adjust, split, combine, reclassify, redeem, repurchase or otherwise acquire any capital stock or other equity interests or rights or otherwise amend the terms of its capital stock or other equity interests or rights; (ii) make, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire or encumber, any shares of its capital stock or other equity interest or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock or other equity interests, except in connection with exercises or similar transactions pursuant to the exercise of stock options or settlement of other awards or obligations outstanding as of the date hereof; or (iii) issue or sell any additional shares of capital stock or other equity interests, any securities convertible into, or any rights, warrants or options to acquire, any such shares of capital stock or other equity interests, except pursuant to the exercise of stock options or settlement of other awards outstanding as of the date hereof and in accordance with the terms of such instruments or as required under any Benefit Plan, other than the issuance of an aggregate of 4,000,000 shares of the Company’s Cumulative Convertible Perpetual Preferred Stock, Series A, to Berkshire Hathaway Inc. and to the Kuwait Investment Authority.

 

SECTION 3.02.  Expenses.  (a) With respect to the Trusts, the Company shall bear and pay all reasonable and documented (i) costs, fees and expenses incurred by the Company and each Trust after February 16, 2009 in connection with this Agreement, the Share Purchase and the other transactions contemplated by this Agreement, (ii) costs, fees and expenses incurred by the Company and each Trust relating to the discovery in the Dow – Rohm and Haas Litigation and (iii) public relations costs, fees and expenses incurred by the Company

 

 

 

and each Trust relating to the Dow – Rohm and Haas Litigation, this Agreement, the Share Purchase and the other transactions contemplated by this Agreement; provided, however, that the sum of all expenses to be paid pursuant to (i), (ii) and (iii) of this Section 3.02(a) shall not exceed $1,000,000; and provided further that the Trusts shall make available and permit the Company and its representatives to review supporting documentation evidencing such costs, fees and expenses as reasonably requested by the Company.

 

(b)  With respect to each other Investor, the Company shall bear and pay all reasonable and documented costs, fees and expenses incurred by such Investor in connection with this Agreement and the other transactions contemplated by this Agreement; provided that such Investor shall make available and permit the Company and its representatives to review supporting documentation evidencing such costs, fees and expenses as reasonably requested by the Company.

 

SECTION 3.03.  Confidentiality.  Each Investor shall treat as confidential all nonpublic, proprietary information provided to it by or on behalf of the Company in connection with the matters contemplated hereby and expressly designated by the Company as being confidential information of the Company; provided that nothing in this Agreement shall prevent such Investor from disclosing any such information (i) pursuant to the order of any court, administrative agency or other tribunal of competent jurisdiction or in any pending legal or administrative proceeding, or otherwise as required by applicable law or compulsory legal process, (ii) upon the request or demand of any regulatory authority having jurisdiction over it, (iii) to the extent that such information becomes available other than by reason of disclosure by it in violation of this Section 3.03, (iv) to its affiliates and to its and their respective employees, legal counsel, independent auditors and other experts, agents or representatives who are informed of the confidential nature of such information, (v) to the extent that such information is received by such Investor from a third party that is not to its knowledge subject to confidentiality obligations to the Company, (vi) to the extent that such information is independently developed by each Investor and (vii) in connection with any filings and public disclosures such Investor is required by law, in the opinion of the Investor’s counsel, to make.

 

SECTION 3.04.  Sufficiency of Outstanding Company Common Stock.  During the period from the date of this Agreement until the date of conversion of all of the Convertible Preferred Shares, the Company shall at all times have reserved for issuance a sufficient number of shares of authorized and unissued Company Common Stock for the conversion of Convertible Preferred Shares into shares of Company Common Stock.

 

 

ARTICLE IV

 

 

SECTION 4.01.  Release of Claims.  Except for the obligations set forth in this Agreement, effective as of the Effective Time (as defined in the Merger Agreement), each Investor releases and forever discharges the Company and its stockholders and members, officers, directors, employees, attorneys, advisors, agents, parents, subsidiaries, affiliates, heirs, executors, administrators, predecessors, successors and assigns (collectively, “Related Persons”), and the Company releases and forever discharges each Investor and its Related Persons, from all

 

 

 

actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bills, specialties, covenants, contracts, controversies, agreements, promises, damages, judgments, executions, claims, and demands whatsoever, past, present, direct, indirect, or derivative, in law or equity, which against the Company or such Investor, as applicable, it ever had, now have, or hereafter can, shall or may have, by reason of any matter, cause or thing whatsoever, from the beginning of the world, including those that in any way arise from or out of, are based upon, or are in connection with or relate to the Merger Agreement or the Voting Agreement, any breach, non-performance, or failure to act under the Merger Agreement or the Voting Agreement, or the transactions contemplated thereby, but excluding  those to the extent they arise from or out of, are based upon, or are in connection with or relate to this Agreement, any breach, non-performance, or failure to act under this Agreement, or the transactions contemplated hereby (hereinafter, the “Released Claims”).  It is the intention of each Investor and the Company to extinguish all Released Claims and consistent with such intention, each Investor hereby expressly waives its rights to the fullest extent permitted by law, to any benefits of the provisions of Section 1542 of the California Civil Code or any other similar state law, federal law or principle of common law, which may have the effect of limiting the releases set forth herein.  Section 1542 of the California Civil Code provides:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

Each Investor and the Company acknowledge that they may discover facts in addition to or different from those that they now know or believe to be true with respect to the subject matter of the releases granted herein, but acknowledge that it is their intention to fully, finally and forever settle, release and discharge any and all claims hereby known or unknown, suspected or unsuspected, which do or do not exist, or heretofore existed, and without regard to the subsequent discovery or existence of such additional or different facts.

 

SECTION 4.02.  Commitment Fees.  (a) The Company shall pay each Investor on the date of this Agreement by wire transfer of immediately available funds a commitment fee equal to 2.25% of the aggregate purchase price (set forth opposite such Investor’s name on Schedule I hereto) to be paid by such Investor for the Purchased Perpetual Preferred Shares to be sold to such Investor.

 

(b)   The Company shall pay each Trust on the date of this Agreement by wire transfer of immediately available funds a commitment fee equal to 0.75% of the aggregate purchase price (set forth opposite such Trust’s name on Schedule II hereto) to be paid by such Trust for the Purchased Convertible Preferred Shares to be sold to such Trust.

 

(c)  The Company shall pay each Trust on the date of the Convertible Preferred Stock Closing by wire transfer of immediately available funds a commitment fee equal to 0.75% of the aggregate purchase price (set forth opposite such Trust’s name on Schedule II hereto) to be paid by such Trust for the Purchased Convertible Preferred Shares to be sold to such Trust.

 

 

 

ARTICLE V

 

 

SECTION 5.01.  Shelf Registration.  (a) Automatic Shelf Registration Statement.  The Company shall prepare and file an Automatic Shelf Registration Statement with the Commission no later than May 5, 2009, covering the Covered Securities, which shall automatically become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act and contain a prospectus in such form as to permit any Holder to sell its Registrable Securities at any time beginning on or after the filing thereof with the Commission pursuant to Rule 415 under the Securities Act or any successor or similar rule that may be adopted by the Commission.  If the Company is not eligible to use an Automatic Shelf Registration Statement at any time of determination of eligibility, the Company shall promptly post-effectively amend the Automatic Shelf Registration Statement or file a new Registration Statement on a Form S-3, in either case to permit any Holder to sell its Registrable Securities pursuant to Rule 415 under the Securities Act or any successor or similar rule that may be adopted by the Commission.  The term “Shelf Registration Statement” as used herein means the Automatic Shelf Registration Statement or any post-effective amendment thereto or a new Registration Statement so filed pursuant to this Section 5.01.  Upon any Shelf Registration Statement having been filed:

 

(i)  the Company shall use its reasonable best efforts to keep such Shelf Registration Statement continuously effective (including by filing any necessary post-effective amendments to such Shelf Registration Statement or a new Shelf Registration Statement) until the earlier of (x) the date on which all Registrable Securities have been sold pursuant to such Shelf Registration Statement or another shelf registration statement filed under the Securities Act (but in no event prior to the applicable period referred to in Section 4(3) of the Securities Act and Rule 174 thereunder) and (y) such time as the Registrable Securities are no longer outstanding or otherwise no longer constitute Registrable Securities; and

 

(ii)  the Company shall pay the registration fee for all the Registrable Securities at the time of filing of the Automatic Shelf Registration Statement and shall not elect to pay any portion of the registration fee on a deferred basis.

 

Subject to Section 5.01(e), the Company shall not be deemed to have used its reasonable best efforts to keep the Shelf Registration Statement effective if the Company voluntarily takes any action or omits to take any action that would result in any Holder covered thereby not being able to offer and sell any Registrable Securities pursuant to such Shelf Registration Statement, unless such action or omission is required by applicable law.  The Company shall use its reasonable best efforts to remain a well-known seasoned issuer (as defined in Rule 405 under the Securities Act) and to not become an ineligible issuer (as defined in Rule 405 under the Securities Act).  An Investor shall provide notice to the Company prior to any use of the Shelf Registration Statement by such Investor.

 

(b)  Shelf Demand Notice.  If at any time following the filing of any Shelf Registration Statement, an Investor desires to sell all or any portion of its Registrable Securities

 

 

 

under such Shelf Registration Statement in an Underwritten Offering (any such sale, a “Shelf Demand Offering”), the applicable Investor Representative shall (i) notify (such notice, the “Shelf Demand Notice”) the Company of such intent at least three business days prior to such proposed sale and (ii) simultaneously with delivery of the Shelf Demand Notice to the Company, deliver written notice of such Shelf Demand Offering to each other Holder (if any) that holds Registrable Securities on the date that such Shelf Demand Notice is delivered to the Company.  The Shelf Demand Notice shall:  (1) specify (x) the aggregate number of Registrable Securities requested to be sold in such Shelf Demand Offering and (y) the identity of the Investor or Investors requesting such Shelf Demand Offering; and (2) if the Shelf Demand Notice is not delivered by an Investor, provide a representation from the proposed selling Holders that all the shares proposed for sale under such Shelf Demand Offering constitute Registrable Securities.

 

(c)  Shelf Demand Offering.  The Company shall include in the Shelf Demand Offering covered by such Shelf Demand Notice all Registrable Securities of each Holder with respect to which the Company has received a written request for inclusion therein from such Holder within three business days after the Company has received the Shelf Demand Notice.  The Company shall prepare and file a prospectus supplement, post-effective amendment to the Shelf Registration Statement and/or Exchange Act reports incorporated by reference into the Shelf Registration Statement and take such other actions as reasonably necessary or appropriate to permit the consummation of such Shelf Demand Offering.  The Company shall take all reasonable actions to enable the Holders with respect to which the Company has received a written request for inclusion in such offering in accordance with the first sentence of this paragraph (c) to price such offering within five business days of receipt of the Shelf Demand Notice.  The applicable Investor Representative having notified or directed the Company to commence a Shelf Demand Offering or to include any of their Registrable Securities therein shall have the right to withdraw such notice or direction by giving written notice to the Company.

 

(d)  Limitation on Shelf Demand Offerings and Demand Registrations.  The Company shall be obligated to effect a total of only two Demand Registrations or Shelf Demand Offerings pursuant to Sections 5.01 and 5.02, in the aggregate, at the request of the Paulson Representative and two Demand Registrations or Shelf Demand Offerings pursuant to Sections 5.01 and 5.02, in the aggregate, at the request of the Trusts Representative; provided, however, that any such Demand Registration or Shelf Demand Offering shall in no event be in an amount less than $250 million.  In the event the Company has failed to keep the Shelf Registration Statement continuously effective, and the Company receives from an Investor Representative a notice requesting that the Company effect a registration on Form S-3 (provided that the Company is eligible to effect such registration on Form S-3 at such time), the Company shall be obligated to effect any such requested registration on Form S-3 without regard to the number of Demand Registrations made.  The Paulson Representative and the Trusts Representative shall use commercially reasonable efforts to coordinate the timing of their Shelf Demand Notices under this Section 5.01 so as to not unduly burden the Company in connection with its fulfilling its obligations under this Article V, it being understood that the Company shall fulfill all its obligations under this Article V if the Company receives any Shelf Demand Notice.

 

(e)  Suspension of Shelf Registration Statement.  For purposes of this Agreement, the term “Suspension Period” shall mean (i) the period, beginning on the Closing Date and

 

 

 

continuing until the date that the Automatic Shelf Registration Statement is filed with the Commission and made available for the sale of Registrable Securities (the “Delay Period”) or (ii) any period during which the Company has required the Holders to suspend the use of the Prospectus for sales of Registrable Securities under a Shelf Registration Statement or a Demand Registration Statement (as defined below).  Notwithstanding anything to the contrary contained in this Agreement, the Company shall be entitled, from time to time on or after the Closing Date, to declare a Suspension Period, provided that such Suspension Period is for a reasonable period of time not to exceed 30 days in succession (other than the Delay Period) or 90 days in the aggregate in any 12-month period, and provided further that the Company shall deliver a written certificate to the Holders signed by either the Chief Executive Officer of the Company or the Chief Financial Officer of the Company, certifying that the Company has determined, in its good faith judgment, that such action or proposed action (x) would adversely affect or interfere with any proposal or plan by the Company or any of its affiliates to engage in any material financing or in any material acquisition, merger, consolidation, tender offer, business combination, securities offering or other material transaction or (y) would require the Company to make an Adverse Disclosure.  Notwithstanding the foregoing, the Company shall have the right, exercisable one time from and after the Closing Date under either this Section 5.01(e) or Section 5.02(e), to extend the successive 30-day or aggregate 90-day Suspension Period limitation for up to an additional 15 days, provided that the Company shall deliver a written certificate to the Holders signed by either the Chief Executive Officer of the Company or the Chief Financial Officer of the Company certifying that the Company has a proposal or plan with respect to a material acquisition, merger, consolidation, tender offer, business combination or other strategic transaction and that, in its good faith judgment, such action would adversely affect or interfere with such proposal or plan.  Immediately upon receipt of such notice, the Holders covered by the Shelf Registration Statement (if any) shall discontinue the disposition of Registrable Securities under such Shelf Registration Statement until the requisite changes to the Prospectus have been made as required below.  Each Holder shall keep confidential any communications received by it from the Company regarding the suspension of, or the use of the Shelf Registration Statement, except as required by applicable law or court order.  The Company agrees that it will terminate any such Suspension Period as promptly as reasonably practicable and will promptly notify the Holders of such termination.  After the expiration of any Suspension Period and without any further request from any Holder, the Company shall as promptly as reasonably practicable prepare a post-effective amendment or supplement to the Shelf Registration Statement or the Prospectus, or any document incorporated therein by reference, or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(f)  If any of the Registrable Securities to be registered pursuant to a Shelf Demand Offering are to be sold in a firm commitment underwritten offering, and the managing underwriter(s) of such underwritten offering advise the Holders in writing that it is their good faith opinion that the total number or dollar amount of Registrable Securities proposed to be sold in such offering exceeds the total number or dollar amount of such securities that can be sold without having an adverse effect on the price, timing or distribution of the Registrable Securities to be so included, then there shall be included in such firm commitment underwritten offering the number or dollar amount of Registrable Securities that in the opinion of such managing

 

 

 

underwriter(s) can be sold without so adversely affecting such offering, and such number of Registrable Securities shall be allocated for inclusion pro rata (if applicable) among the Holders of the Registrable Securities for which inclusion in such underwritten offering was requested, based on the number of Registrable Securities Beneficially Owned by each such Holder.

 

(g)  In the event of a Shelf Demand Offering, the Company shall be required to use its reasonable best efforts to maintain the continuous effectiveness of the applicable Registration Statement for a period of at least 180 days after the effective date thereof or such shorter period in which all Registrable Securities included in such Registration Statement have actually been sold.

 

SECTION 5.02.  Demand Registration.  (a) If the Company is unable to file, cause to be effective or maintain the effectiveness of a Shelf Registration Statement as required under Section 5.01, each Investor Representative shall have the right by delivering a written notice to the Company (a “Demand Notice”) to require the Company to, pursuant to the terms of this Agreement, register under and in accordance with the provisions of the Securities Act the number of Registrable Securities held by any Holders and requested by such Demand Notice to be so registered (a “Demand Registration”).  A Demand Notice shall also specify the expected method or methods of disposition of the applicable Registrable Securities.  Following receipt of a Demand Notice, the Company shall use its reasonable best efforts to file, as promptly as reasonably practicable, but not later than 45 days after receipt by the Company of such Demand Notice (subject to paragraph (e) of this Section 5.02), a Registration Statement relating to the offer and sale of the Registrable Securities requested to be included therein by the Holders thereof in accordance with the methods of distribution elected by such Holders (a “Demand Registration Statement”) and shall use its reasonable best efforts to cause such Registration Statement to be declared effective under the Securities Act as promptly as practicable after the filing thereof.

 

(b)  If any of the Registrable Securities to be registered pursuant to a Demand Registration are to be sold in a firm commitment underwritten offering, and the managing underwriter(s) of such underwritten offering advise the Holders in writing that it is their good faith opinion that the total number or dollar amount of Registrable Securities proposed to be sold in such offering, together with any other securities proposed to be included by Holders which are entitled to exercise piggyback registration rights as set forth herein with respect to such Registration Statement, exceeds the total number or dollar amount of such securities that can be sold without having an adverse effect on the price, timing or distribution of the Registrable Securities to be so included together with all such Other Piggyback Securities, then there shall be included in such firm commitment underwritten offering the number or dollar amount of Registrable Securities and such other securities that in the opinion of such managing underwriter(s) can be sold without so adversely affecting such offering, and such number of Registrable Securities and other securities shall be allocated for inclusion as follows:

 

(i)           first, among the Holders of the Registrable Securities set forth in the Demand Notice, pro rata (if applicable), based on the number of Registrable Securities Beneficially Owned by each such Holder; and

 

(ii)          second, among the Holders holding Registrable Securities

 

 

 

exercising piggyback registration rights under Section 5.03 with respect to such Demand Registration.

 

(c)  In the event of a Demand Registration, the Company shall be required to maintain the continuous effectiveness of the applicable Registration Statement for a period of at least 180 days after the effective date thereof or such shorter period in which all Registrable Securities included in such Registration Statement have actually been sold.

 

(d)  The Company shall be obligated to effect a total of only two Demand Registrations or Shelf Demand Offerings pursuant to Sections 5.01 and 5.02, in the aggregate, at the request of the Paulson Representative and two Demand Registrations or Shelf Demand Offerings pursuant to Sections 5.01 and 5.02, in the aggregate, at the request of the Trusts Representative; provided, however, that any such Demand Registration or Shelf Demand Offering shall in no event be in amount less than $250 million.  In the event the Company has failed to keep the Shelf Registration Statement continuously effective, and the Company receives from an Investor Representative a notice requesting that the Company effect a registration on Form S-3 (provided that the Company is eligible to effect such registration on Form S-3 at such time), the Company shall be obligated to effect any such requested registration on Form S-3 without regard to the number of Demand Registrations made.  The Paulson Representative and the Trusts Representative shall use commercially reasonable efforts to coordinate the timing of their Demand Notices under this Section 5.02 so as to not unduly burden the Company in connection with its fulfilling its obligations under this Article V, it being understood that the Company shall fulfill all its obligations under this Article V if the Company receives any Demand Notice.

 

(e)  Notwithstanding anything to the contrary contained in this Agreement, the Company shall be entitled, from time to time on or after the Closing Date, to declare a Suspension Period, provided that the Company delivers a written certificate to the Holders signed by either the Chief Executive Officer of the Company or the Chief Financial Officer of the Company, certifying that the Company has determined, in its good faith judgment, that such action or proposed action (i) would adversely affect or interfere with any proposal or plan by the Company or any of its affiliates to engage in any material financing or in any material acquisition, merger, consolidation, tender offer, business combination, securities offering or other material transaction or (ii) would require the Company to make an Adverse Disclosure.  Notwithstanding the foregoing, the Company shall have the right, exercisable one time from and after the Closing Date under either this Section 5.01(e) or Section 5.02(e), to extend the successive 30-day or aggregate 90-day Suspension Period limitation for up to an additional 15 days, provided that the Company shall deliver a written certificate to the Holders signed by either the Chief Executive Officer of the Company or the Chief Financial Officer of the Company certifying that the Company has a proposal or plan with respect to a material acquisition, merger, consolidation, tender offer, business combination or other strategic transaction and that, in its good faith judgment, such action would adversely affect or interfere with such proposal or plan.  Immediately upon receipt of such notice, the Holders covered by the Demand Registration Statement shall discontinue the disposition of Registrable Securities under such Demand Registration Statement until the requisite changes to the Prospectus have been made as required below.  Each Holder shall keep confidential any communications received by it from the Company regarding the suspension of, or the use of the Demand Registration Statement, except

 

 

 

as required by applicable law or court order.  The Company agrees that it will terminate any such Suspension Period as promptly as reasonably practicable and will promptly notify the Holders of such termination.  After the expiration of any Suspension Period and without any further request from any Holder, the Company shall as promptly as reasonably practicable prepare a post-effective amendment or supplement to the Demand Registration Statement or the Prospectus, or any document incorporated therein by reference, or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(f)  The Demanding Investor Representative, as applicable, shall have the right to notify the Company that it has determined that the Registration Statement relating to a Demand Registration be abandoned or withdrawn, in which event the Company shall promptly abandon or withdraw such Registration Statement; provided, however, that such abandonment or withdrawal of the Demand Registration shall be permissible only if, at the time of such notice to the Company, (i) no action has been taken under Section 5.04(xiv) and (ii) no offers for the Registrable Securities had been made under such Demand Registration.

 

SECTION 5.03.  Piggyback Registrations.  (a) If, other than pursuant to Section 5.01, the Company proposes or is required to file a registration statement under the Securities Act with respect to an offering of preferred stock of the Company, whether or not for sale for its own account (other than a registration statement (i) on Form S-4, Form S-8 or any successor forms thereto or (ii) filed solely in connection with any employee benefit or dividend reinvestment plan), then the Company shall give prompt written notice of such proposed filing at least 30 days before the anticipated filing date (the “Piggyback Notice”) to the Holders. The Piggyback Notice shall offer the Holders the opportunity to include in such registration statement the number of Registrable Securities as they may request (a “Piggyback Registration”). Subject to Section 5.02(b) hereof, the Company shall include in each such Piggyback Registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein within 15 days after notice has been given to the Holders. The Holders shall be permitted to withdraw all or part of the Registrable Securities from a Piggyback Registration at any time at least two business days prior to the effective date of the registration statement relating to such Piggyback Registration. The Company shall be required to maintain the effectiveness of the registration statement for a Piggyback Registration for a period of 180 days after the effective date thereof or such shorter period in which all Registrable Securities included in such Registration Statement have actually been sold.  If the Company shall determine for any reason not to proceed with the registration that is the subject of the Piggyback Notice, the Company shall give notice to the Holders and thereupon shall be relieved of its obligation to register any Registrable Securities in connection with the Piggyback Registration relating to such registration, but shall not be relieved of its obligation hereunder for registration expenses with respect to such registration.

 

(b)  If any of the securities to be registered pursuant to the registration giving rise to the Holders’ rights under this Section 5.03 are to be sold in an underwritten offering, the Holders shall be permitted to include all Registrable Securities requested to be included in such registration in such offering on the same terms and conditions as any other shares of stock or

other equity, if any, of the Company included therein; provided, however, that if such offering involves a firm commitment underwritten offering and the managing underwriter(s) of such underwritten offering advise the Company in writing that it is their good faith opinion that the total amount of Registrable Securities requested to be so included, together with all other securities that the Company and any other Persons having rights to participate in such registration intend to include in such offering (such other securities being referred to herein as “Other Piggyback Securities”), exceeds the total number or dollar amount of such securities that can be sold without having an adverse effect on the price, timing or distribution of the Registrable Securities to be so included together with all Other Piggyback Securities, then there shall be included in such firm commitment underwritten offering the number or dollar amount of Registrable Securities and such Other Piggyback Securities that in the opinion of such managing underwriter(s) can be sold without so adversely affecting such offering, and such number of Registrable Securities and Other Piggyback Securities shall be allocated for inclusion as follows:

 

(i)  first, all Other Piggyback Securities being sold by the Company;

 

(ii)  second, all Registrable Securities requested to be included by any Holders, pro rata (if applicable), based on the number of shares of Registrable Securities Beneficially Owned by each such Holder; and

 

(iii)  third, among any other holders of Other_Piggyback_Securities requesting such registration, pro rata, based on the number of Other_Piggyback_Securities Beneficially Owned by each such holder of Other Piggyback Securities.

 

SECTION 5.04.  Registration Procedures.  (a) Registration.  Subject to the provisions of Sections 5.01, 5.02 and 5.03, including the Company’s obligation to file the Automatic Shelf Registration Statement and the timing thereof, if and whenever the Company is required to use reasonable best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in this Article V, the Company shall effect such registration to permit the sale of such Registrable Securities in accordance with the intended methods of disposition thereof, and pursuant thereto the Company shall cooperate in the sale of the securities and shall, as expeditiously as possible:

 

(i)  prepare and file with the Commission a Registration Statement or Registration Statements on such form which shall be available for the sale of the Registrable Securities by the Holders or the Company in accordance with the intended method or methods of distribution thereof, and use its reasonable best efforts to cause such Registration Statement to become and remain effective pursuant to the terms of this Agreement; provided, however, that the Company may discontinue any registration of its securities that are not Registrable Securities at any time prior to the effective date of the Registration Statement relating thereto; provided further that before filing such Registration Statement or a Prospectus (including any Issuer Free Writing Prospectus  related thereto) or any amendments or supplements thereto (including documents that would be incorporated or deemed to be incorporated therein by reference), the Company will furnish to each selling Holder, the counsel of each selling Holder and the managing underwriter(s), if any, copies of all such documents proposed to be filed, which documents will be subject to the reasonable review and comment of such counsel (such

 

 

 

review to be conducted with reasonable promptness), and such other documents reasonably requested by such counsel, including any comment letter from the Commission, and, if requested by such counsel, provide such counsel reasonable opportunity to participate in the preparation of such Registration Statement and each Prospectus included therein (including any Issuer Free Writing Prospectus  related thereto) and such other opportunities to conduct a reasonable investigation within the meaning of the Securities Act, including reasonable access to the Company’s books and records, officers, accountants and other advisors.  The Company shall not file any such Registration Statement or Prospectus (including any Issuer Free Writing Prospectus  related thereto) or any amendments or supplements thereto (including such documents that, upon filing, would be incorporated or deemed to be incorporated by reference therein) with respect to any registration pursuant to a Shelf Demand Offering or Demand Registration to which an Investor Representative, its counsel, or the managing underwriter(s), if any, shall reasonably object, in writing, on a timely basis, unless, in the opinion of the Company, such filing is necessary to comply with applicable law;

 

(ii)  prepare and file with the Commission such amendments, post-effective amendments and supplements to each Registration Statement and the Prospectus used in connection therewith as may be necessary to (A) keep such Registration Statement continuously effective during the period provided herein, (B) comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement, and cause the related Prospectus to be supplemented by any prospectus supplement or Issuer Free Writing Prospectus  as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of the securities covered by such Registration Statement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provision then in force) under the Securities Act and (C) complete the disposition of such securities in accordance with the intended methods of disposition set forth in such Registration Statement;

 

(iii)  furnish without charge to Holder and each underwriter, if any, of the securities being sold by such Holder such number of conformed copies of such Registration Statement and of each amendment, post-effective amendment and supplement thereto, including financial statements (in each case including all exhibits), such number of copies of the Prospectus contained in such Registration Statement (including each preliminary Prospectus), such number of copies of any and all transmittal letters or other correspondence with the Commission or any other governmental entity relating to such offering and such other documents as such Holder or underwriter, if any, may reasonably request;

 

(iv)  prior to any public offering of Registrable Securities, use its reasonable best efforts to register or qualify or cooperate with the selling Holders, the managing underwriter(s), if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer or sale under the securities or “blue sky laws” of such jurisdictions as any Holder or any underwriter shall reasonably request in writing and to keep each such registration or qualification (or exemption therefrom) effective during the period that such Registration Statement is required to be kept effective and to take any other action

 

 

 

that may be necessary or advisable to enable such Holder or underwriter to consummate the disposition in such jurisdictions of the Registrable Securities, except that the Company shall not for any such purpose be required to (A) qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this paragraph (iv) be obligated to be so qualified, or (B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject;

 

(v)  on the earlier of (A) June 2, 2009 and (B) the date of conversion of all of the Convertible Preferred Shares, submit a listing application for the Perpetual Preferred Stock to the NYSE and use its reasonable best efforts to cause the Perpetual Preferred Stock to be listed on the NYSE upon commencement of any offering or sales of Registrable Securities under the Shelf Registration Statement;

 

(vi)  promptly make available for inspection by any Holder, any underwriter participating in any disposition pursuant to any Registration Statement, and any attorney, accountant or other agent or representative retained by any such Holder or underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall be reasonably necessary to enable them to conduct customary due diligence, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such Inspector in connection with such Registration Statement; provided, however, that, unless the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, the Company shall not be required to provide any information under this paragraph (viii) if (A) the Company believes, after consultation with counsel for the Company, that to do so would cause the Company to forfeit an attorney-client privilege that was applicable to such information or (B) if either (1) the Company has requested and been granted from the Commission confidential treatment of such information contained in any filing with the Commission or documents provided supplementally or otherwise or (2) the Company reasonably determines in good faith that such Records are confidential and so notifies the Inspectors in writing unless prior to furnishing any such information with respect to clause (A) or (B) above such Holder requesting such information agrees, and causes each of its Inspectors, to enter into a confidentiality agreement on terms reasonably acceptable to the Company and the Inspectors in accordance with market norms; provided further that each Holder agrees that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Company and allow the Company to, at its expense, undertake appropriate action and to prevent disclosure of the Records deemed confidential;

 

(vii)  promptly notify in writing each Holder and the underwriters, if any, of the following events:

 

(1) the filing of the Registration Statement, the Prospectus or any prospectus supplement related thereto, any Issuer Free Writing Prospectus , or any post-effective amendment to the Registration Statement and, with

 

 

respect to the Registration Statement or any post-effective amendment thereto, when the same has become effective;

 

(2) any request by the Commission or any other governmental entity for amendments or supplements to the Registration Statement or related Prospectus or Issuer Free Writing Prospectus or for additional information;

 

(3) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings by any person for that purpose;

 

(4) the receipt by the Company of any notification with respect to the suspension of the qualification or exception from qualification of any Registrable Securities for sale in any jurisdiction or the initiation or threat of any proceeding for such purpose;

 

(5) of the happening of any event that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference or any Issuer Free Writing Prospectus related thereto untrue in any material respect or that requires the making of any changes in such Registration Statement, Prospectus, documents or Issuer Free Writing Prospectus so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, not misleading, and that in the case of any Prospectus or Issuer Free Writing Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; and

 

(6) if at any time the representations and warranties of the Company contained in any agreement (including any underwriting agreement contemplated by Section 5.04(a)(xiv) below) cease to be true and correct;

 

(viii)  (A) promptly notify in writing each Holder, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that the Prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and (B) upon such discovery and at the request of any Holder, promptly prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such Prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus shall not include 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;

 

 

(ix)  use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of such Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction at the reasonably earliest practical date;

 

(x)  otherwise use reasonable best efforts to comply with all applicable rules and regulations of the Commission and any applicable national securities exchange, and make available to its security holders, as soon as reasonably practicable (but not more than 18 months), an earnings statement of the Company covering the period of at least 12 months, beginning with the first day of the Company’s first full quarter after the effective date of such Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

 

(xi)  cooperate with the Holders and the managing underwriter(s), if any, to facilitate the timely preparation and delivery of certificates (which shall not bear any restrictive legends) representing Registrable Securities to be sold under any Registration Statement, and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriter(s) or selling Holders may request and keep available and make available to the Company’s transfer agent prior to the effectiveness of such Registration Statement a supply of such certificates;

 

(xii)  in connection with an underwritten offering, enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwritten offerings) and take all such other actions reasonably requested by the Holders of a majority of the Registrable Securities being sold in connection therewith or by the managing underwriter(s), if any, to expedite or facilitate the disposition of such Registrable Securities, and in connection therewith, whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration, (i) make such representations and warranties to the selling Holders and the managing underwriter(s), if any, with respect to the business of the Company and its subsidiaries, and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers in underwritten offerings, and, if true, confirm the same if and when requested, (ii) use its reasonable best efforts to furnish to the selling Holders of such Registrable Securities 10b-5 statements and opinions of counsel to the Company and updates thereof (which 10b-5 statements, and counsel and opinions, as the case may be, (in form, scope and substance) shall be reasonably satisfactory to the managing underwriter(s), if any, and counsels to the selling Holders of the Registrable Securities), addressed to each selling Holder of Registrable Securities and each of the managing underwriter(s), if any, covering the matters customarily covered by 10b-5 statements and in opinions requested in underwritten offerings, as the case may be, and such other matters as may be reasonably requested by such counsel and managing underwriter(s), (iii) use its reasonable best efforts to obtain “comfort” letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement) who have

 

 

certified the financial statements included in such Registration Statement, addressed to each selling Holder of Registrable Securities (unless such accountants shall be prohibited from so addressing such letters by applicable standards of the accounting profession, in which case an “agreed-upon procedures” letter may be required) and each of the managing underwriter(s), if any, such letters to be in customary form and covering matters of the type customarily covered in “comfort” letters in connection with underwritten offerings, (iv) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures substantially to the effect set forth in Section 5.06 hereof with respect to all parties to be indemnified pursuant to said Section except as otherwise agreed by the Holders holding a majority of the Registrable Securities being sold in connection therewith and the managing underwriter(s) and (v) deliver such documents and certificates as may be reasonably requested by the Holders holding a majority of the Registrable Securities being sold in connection therewith, their counsel and the managing underwriter(s), if any, to evidence the continued validity of the representations and warranties made pursuant to clause (i) above and to evidence compliance with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. The above shall be done at each closing under such underwriting or similar agreement, or as and to the extent required thereunder;

 

(xiii)  upon execution of a customary confidentiality agreement, make available for inspection by a representative of the selling Holders, the managing underwriter(s), if any, and any attorneys or accountants retained by such selling Holders or managing underwriter(s), at the offices where normally kept, during reasonable business hours, financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and cause the officers, directors and employees of the Company and its subsidiaries to supply all information in each case reasonably requested by any such representative, managing underwriter(s), attorney or accountant in connection with such Registration Statement;

 

(xiv)  in connection with a Shelf Demand Offering or a Demand Registration, cause its officers or other members of management to use their reasonable best efforts to support the marketing of the Registrable Securities covered by the Registration Statement (including by participation in “road shows”);

 

(xv)  if requested by the managing underwriter(s), if any, or the Holders of a majority of the Registrable Securities being sold in connection with an underwritten offering, promptly include in a Prospectus supplement, post-effective amendment or Issuer Free Writing Prospectus such information as the managing underwriter(s), if any, or such Holders may reasonably request in order to permit the intended method of distribution of such securities and make all required filings of such Prospectus supplement, such post-effective amendment or Issuer Free Writing Prospectus as soon as practicable after the Company has received such request;

 

(xvi)  deliver to each selling Holder, and the managing underwriter(s), if any, without charge, as many copies of the Prospectus or Prospectuses (including each form of Prospectus and any Issuer Free Writing Prospectus related to any such Prospectuses) and each amendment or supplement thereto as such Persons may reasonably request in

 

 

connection with the distribution of the Registrable Securities; and the Company, subject to the last paragraph of this Section 5.04, hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders and the managing underwriter(s), if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any such amendment or supplement thereto;

 

(xvii)  use its reasonable best efforts to cause the Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental entities within the United States, except as may be required solely as a consequence of the nature of such selling Holder’s business, in which case the Company will cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals, as may be necessary to enable the seller or sellers thereof or the managing underwriter(s), if any, to consummate the disposition of such Registrable Securities;

 

(xviii)  upon the occurrence of any event contemplated by Section 5.04(a)(viii)(2), (3), (4), (5) or (6) hereof, prepare a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference or an Issuer Free Writing Prospectus related thereto, or file any other required document so that, as thereafter delivered to the selling Holders, such Prospectus 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 light of the circumstances under which they were made, not misleading;

 

(xix)  prior to the effective date of the Registration Statement relating to the Registrable Securities, use its reasonable best efforts to obtain a CUSIP number for the Registrable Securities;

 

(xx)  provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such Registration Statement from and after a date not later than the effective date of such Registration Statement; and

 

(xxi)  otherwise use its reasonable best efforts to cooperate and take such other actions as reasonably requested by the Holders and the underwriters in the offering, marketing or selling of the Registrable Securities.

 

The Company may require each Holder and each underwriter, if any, to furnish the Company in writing such information required in connection with such registration regarding such Holder or underwriter and the distribution of such Registrable Securities as the Company may from time to time reasonably request to complete or amend the information required by such Registration Statement or comply with applicable laws.

 

Each selling Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 5.04(a)(viii)(2), (3), (4), (5) or (6) hereof, such Holder will forthwith discontinue disposition of such Registrable Securities covered by such

Registration Statement or Prospectus until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5.04(a)(xx) hereof, or until it is advised in writing by the Company that the use of the applicable Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus; provided, however, that the Company shall extend the time periods under Section 5.02 and Section 5.03 with respect to the length of time that the effectiveness of a Registration Statement must be maintained by the amount of time the Holder is required to discontinue disposition of such securities.

 

(b)  Underwriting.  Without limiting any of the foregoing, in the event that any offering of Registrable Securities is to be made by or through an underwriter, the investment banker and managers that will administer the offering will be selected by the Demanding Investor Representative in connection with the offering, subject to approval by the Company, not to be unreasonably withheld.  The Company, if requested by such underwriter, shall enter into an underwriting agreement with a managing underwriter or underwriters in connection with such offering containing representations, warranties, indemnities and agreements customarily included by an issuer of preferred stock in underwriting agreements with respect to offerings of preferred stock for the account of, or on behalf of, such issuers, and customary in form and substance.

 

(c)  Return of Prospectuses.  Each Holder agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in Section 5.02(a)(x)(A), such Holder shall forthwith (i) discontinue such Holder’s disposition of Registrable Securities pursuant to the applicable Registration Statement and Prospectus relating thereto until (A) such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5.02(a)(x) or (B) such supplemented or amended Prospectus has been filed with the Commission, and (ii) if so directed by the Company, deliver to the Company, at the Company’s expense, all copies, other than permanent file copies, then in such Holder’s possession of the Prospectus covering Registrable Securities at the time of receipt of such notice.  In the event the Company gives such notice, any applicable period during which the applicable Registration Statement must remain effective pursuant to this Agreement shall be extended by the number of days during the period from the date of giving of such notice to the date when all Holders shall receive such a supplemented or amended Prospectus or such Prospectus shall have been filed with the Commission.

 

SECTION 5.05.  Registration Expenses.  All expenses incident to the Company’s performance of, or compliance with, its obligations under this Article V including all (a) registration and filing fees, all fees and expenses of compliance with securities and “blue sky” laws, (b) fees and expenses associated with filings required to be made with The Financial Industry Regulatory Authority, (c) printing and copying expenses (including expenses of printing certificates for Registrable Securities in a form eligible for deposit with The Depository Trust Company), (d) messenger, telephone and delivery expenses, (e) fees and expenses of all independent certified public accountants and counsel (including with respect to “comfort” letters and opinions) and any other persons, including special experts retained by the Company, (f) expenses of the Company incurred in connection with any road show, (g) all transfer taxes incurred or payable by each Holder in connection with sale of such Holder’s Registrable Securities and (h) fees and disbursements of counsel for the selling Holders, shall be borne by the Company, regardless of whether a registration is effected.  The Company will pay its internal

 

 

 

expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties, the expense of any annual audit and the expense of any liability insurance) and the expenses and fees for listing the securities to be registered on each securities exchange and included in each established over-the-counter market on which similar securities issued by the Company are then listed or traded.

 

SECTION 5.06.  Indemnification.  (a)  By the Company.  The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, (i) each Holder and, as applicable, its affiliates, officers, directors, employees, representatives and agents (collectively, the “Holder Indemnified Persons”) and (ii) each person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) any such Holder Indemnified Person, in each case, from and against all losses, claims, actions, judgments, damages, liabilities, costs and expenses, including reasonable expenses of investigation and reasonable attorneys’ fees and expenses (collectively, “Losses”) caused by, arising out of, resulting from, based on or relating to (A) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment or supplement thereto, or any documents incorporated therein by reference, or (B) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case, except insofar as the same are caused by any information furnished in writing to the Company by any Holder Indemnified Persons expressly for inclusion therein.  In connection with an Underwritten Offering and without limiting any of the Company’s other obligations under this Agreement, the Company shall also provide customary indemnities to (i) such underwriters and their affiliates, officers, directors, employees, representatives and agents (collectively, the “Underwriter Indemnified Persons”) and (ii) each person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) any such Underwriter Indemnified Person to the same extent as provided above with respect to the indemnification (and exceptions thereto) of the Holder Indemnified Person and the person controlling such Holder Indemnified Persons.  Reimbursements payable pursuant to the indemnification contemplated by this Section 5.06(a) will be made by periodic payments during the course of any investigation or defense, as and when bills are received or expenses incurred.

 

(b)  By the Holders.  In connection with any Registration Statement in which a holder of Registrable Securities is participating, each participating Holder will furnish to the Company in writing information regarding such Holder’s ownership of Registrable Securities and its intended method of distribution thereof and, to the extent permitted by law, shall, severally and not jointly, indemnify (i) the Company and its affiliates, directors, officers, employees, representatives and agents (collectively, the “Company Indemnified Persons”) and (ii) each person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) any such Company Indemnified Person against all Losses caused by (A) any untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment or supplement thereto, or any documents incorporated therein by reference, or (B) any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but, in each case, only to the extent that such untrue statement or omission is caused by any information furnished in writing by such Holder Indemnified Person expressly for inclusion therein; provided, however, that each Holder’s obligation to indemnify the Company hereunder shall, to the extent more than one

 

 

 

Holder is subject to the same indemnification obligation, be apportioned between each Holder based upon the net amount received by each Holder from the sale of Registrable Securities, as compared to the total net amount received by all of the Holders holding Registrable Securities sold pursuant to such Registration Statement.  Notwithstanding the foregoing, no Holder shall be liable to the Company for amounts in excess of the lesser of (x) such apportionment and (y) the amount received by such holder in the offering giving rise to such liability.  In connection with an Underwritten Offering and without limiting any of the other obligations of the Holders under this Agreement, the Holders shall also provide customary indemnities to (i) such Underwriter Indemnified Persons and (ii) each person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) any such Underwriter Indemnified Person to the same extent as provided above with respect to the indemnification (and exceptions thereto) of the Company Indemnified Person and the person controlling such Company Indemnified Persons.  Reimbursements payable pursuant to the indemnification contemplated by this Section 5.06(b) will be made by periodic payments during the course of any investigation or defense, as and when bills are received or expenses incurred.

 

(c)  Notice.  Any person entitled to indemnification hereunder shall give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification; provided, however, that the failure to give such notice shall not release the indemnifying party from its obligation, except to the extent that the indemnifying party has been materially prejudiced by such failure to provide such notice on a timely basis.

 

(d)  Defense of Actions.  In any case in which any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein, and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not (so long as it shall continue to have the right to defend, contest, litigate and settle the matter in question in accordance with this paragraph) be liable to such indemnified party hereunder for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation, supervision and monitoring (unless (i) such indemnified party reasonably objects to such assumption on the grounds that there may be defenses available to it that are different from or in addition to the defenses available to such indemnifying party or (ii) the indemnifying party shall have failed within a reasonable period of time to assume such defense and the indemnified party is or is reasonably likely to be prejudiced by such delay, in either event the indemnified party shall be promptly reimbursed by the indemnifying party for the expenses incurred in connection with retaining separate legal counsel).  An indemnifying party shall not be liable for any settlement of an action or claim effected without its consent.  The indemnifying party shall lose its right to defend, contest, litigate and settle a matter if it shall fail to diligently contest such matter (except to the extent settled in accordance with the next following sentence).  No matter shall be settled by an indemnifying party without the consent of the indemnified party, which consent shall not be unreasonably withheld (it being understood that the indemnified party shall not be deemed to be unreasonable in withholding its consent if the proposed settlement imposes any obligation on the indemnified party other than the payment of money).

 

 

 

(e)  Survival.  The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified person and will survive the transfer of the Registrable Securities and the termination of this Agreement.

 

(f)  Contribution.  If recovery is not available or insufficient to hold harmless an indemnified party in respect of any Losses under the foregoing indemnification provisions for any reason or reasons other than as specified therein, any person who would otherwise be entitled to indemnification by the terms thereof shall nevertheless be entitled to contribution with respect to any Losses with respect to which such person would be entitled to such indemnification but for such reason or reasons.  In determining the amount of contribution to which the respective persons are entitled, there shall be considered the persons’ relative fault, relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission and other equitable considerations appropriate under the circumstances.  It is hereby agreed that it would not necessarily be equitable if the amount of such contribution were determined by pro rata or per capita allocation.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation.  Notwithstanding the foregoing, no Holder shall be required to make a contribution in excess of the net amount received by such holder from its sale of Registrable Securities in connection with the offering that gave rise to the contribution obligation.

 

(g)  Request for Information.  Not less than five business days before the expected filing date of each Registration Statement pursuant to this Agreement, the Company shall notify each Holder who has timely provided the requisite notice hereunder entitling the Holder to register Registrable Securities in such Registration Statement of the information, documents and instruments from such Holder that the Company or any underwriter reasonably requests in connection with such Registration Statement, including a questionnaire, custody agreement, power of attorney, lock-up letter and underwriting agreement (the “Requested Information”).  If the Company has not received, on or before the second day before the expected filing date, the Requested Information from such Holder, the Company may file the Registration Statement without including Registrable Securities of such Holder.  The failure to so include in any Registration Statement the Registrable Securities of a Holder (with regard to that Registration Statement) shall not in and of itself result in any liability on the part of the Company to such Holder.

 

SECTION 5.07.  Lockup.  In the event that any offering of Registrable Securities is to be made in an Underwritten Offering, if requested by an underwriter, the Company shall not effect, and shall use its reasonable best efforts to cause its directors and officers not to effect, any offer, sale, pledge, transfer or other distribution or disposition or any agreement with respect to the foregoing of the Company Common Stock, the Perpetual Preferred Stock or the Convertible Preferred Stock, whichever is the subject of the Underwritten Offering, or of a similar security of the Company, or any securities convertible into, or exchangeable or exercisable for such securities, including a sale pursuant to Rule 144 under the Securities Act, during the period beginning at the Closing and continuing to and including 90 days from the Closing.

 

 

 

SECTION 5.08.  No Grant of Future Registration Rights.  The Company shall not (a) grant any registration rights that are senior to the rights granted to the Holders hereunder to any other person and (b) enter into any agreement that will impair its ability to perform its obligations under this Article V, in each case without the prior written consent of each Holder.

 

SECTION 5.09.  Termination of Registration Rights.  This Article V (other than Sections 5.05 and 5.06) will terminate on the date on which all Shares subject to this Agreement cease to be Registrable Securities.

 

 

ARTICLE VI

 

 

SECTION 6.01.  Survival.  Except for the representations and warranties contained in Section 2.01(f), 2.01(i) and 2.01(j), none of the representations and warranties in this Agreement shall survive the Convertible Preferred Stock Closing.  This Section 6.01 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Initial Closing or the Convertible Preferred Stock Closing.  

 

SECTION 6.02.  Termination.  This Agreement may be terminated at any time prior to the Initial Closing:

 

(a)  by the Investors if the Initial Closing shall not have occurred on or before April 1, 2009;

 

(b)  by either the Investors or the Company if an injunction shall have been entered permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger and such injunction shall have become final and non-appealable;

 

(c)  by the mutual written consent of the Investors and the Company; or

 

(d)  by the Company if the Initial Closing shall not have occurred on or before the End Date (as defined in the Merger Agreement) and the Company shall not have breached in any material respect its obligations under the Merger Agreement in any manner that has been a principal cause of or resulted in the failure to consummate the Merger on or before such date.

 

In the event of termination or abandonment of this Agreement by either the Company or the Investor as provided in this Section 6.02, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of any Investor or the Company, other than the provisions of Sections 3.02, 3.03, 4.01 and 4.02 and this Article VI (other than Section 6.04), which provisions shall survive such termination or abandonment; provided, however, that nothing herein shall relieve the Company or any Investor from liability for any intentional breach of any of the provisions set forth in this Agreement prior to such termination.

 

SECTION 6.03.  Indemnity for Investors. The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, (a) each Investor and, as applicable, its affiliates, officers, directors, employees, representatives and agents (collectively, the

 

 

 

“Indemnified Persons”) and (b) each person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) any such Indemnified Person, in each case, from and against all Losses caused by, arising out of, resulting from, based on or relating to any investigation, suit, action, claim or other proceeding by any governmental authority, stockholder of the Company or any other person (other than the Company) relating to this Agreement or the transactions contemplated by this Agreement (other than any Losses, as determined by a court of competent jurisdiction, that resulted from or arose out of or which would not have occurred but for one or more of the following:  (i) any representation or warranty by such Indemnified Person in this Agreement being incorrect in any material respect; (ii) the failure by such Indemnified Person to perform or observe any agreement, covenant or condition in this Agreement applicable to it (except to the extent such failure was caused directly by the failure of the Company to perform any obligation under this Agreement); or (iii) the wilful misconduct or the gross negligence of such Indemnified Person (or any of its affiliates), other than any Loss resulting from or arising out of actions performed at the request of, with the consent of, or in conformity with actions taken or omitted to be taken by, the Company).  With respect to any Losses in respect of which indemnification may be sought under this Section 6.03, the respective rights, obligations and procedures contained in Section 5.04 shall apply as if restated in this Section 6.03.

 

SECTION 6.04.  Rule 144; Rule 144A.  The Company covenants that it shall file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder (or, if it is not required to file such reports, it shall, upon the request of any holder of Registrable Securities, make publicly available other information so long as necessary to permit sales of such Registrable Securities in compliance with Rule 144 or 144A under the Securities Act), and it shall take such further reasonable action, to the extent required from time to time to enable any holder of Registrable Securities to sell such Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 or 144A or Regulation S under the Securities Act, as such Rules  may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission.  Upon the reasonable request of any holder of Registrable Securities, the Company will deliver to such holder a written statement as to whether it has complied with such information and filing requirements and, if not, the specifics thereof.

 

SECTION 6.05.  Amendments, Waivers, Etc.  Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed by the Company and each of the Investors; provided, however, that any provision that relates to the Convertible Preferred Share Purchase or Company Common Stock may be amended or waived if, and only if, such amendment or waiver is in writing and signed by the Company and each of the Trusts.  The failure of any party hereto to exercise any right, power or remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with its obligations hereunder, shall not constitute a waiver by such party of its right to exercise any such or other right, power or remedy or to demand such compliance.

 

SECTION 6.06.  Counterparts and Facsimile.  This Agreement may be executed in two or more consecutive counterparts (including by facsimile), each of which shall be an original, with the same

 

 

 

effect as if the signatures thereto and hereto were upon the same instrument, and shall become effective when one or more counterparts have been signed by each of the parties and delivered (by telecopy or otherwise) to the other parties.

 

SECTION 6.07.  SPECIFIC ENFORCEMENT; GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.  (a)  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.

 

(b)  THE PARTIES ACKNOWLEDGE AND AGREE THAT IRREPARABLE DAMAGE WOULD OCCUR IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS AGREEMENT WERE NOT PERFORMED IN ACCORDANCE WITH THEIR SPECIFIC TERMS OR WERE OTHERWISE BREACHED AND THAT THE PARTIES WOULD NOT HAVE ANY ADEQUATE REMEDY AT LAW.  IT IS ACCORDINGLY AGREED THAT THE PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR INJUNCTIONS TO PREVENT BREACHES OR THREATENED BREACHES OF THIS AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS OF THIS AGREEMENT EXCLUSIVELY IN THE DELAWARE COURT OF CHANCERY, OR IN THE EVENT (BUT ONLY IN THE EVENT) THAT SUCH COURT DOES NOT HAVE SUBJECT MATTER JURISDICTION OVER SUCH ACTION OR PROCEEDING, IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE OR ANOTHER COURT SITTING IN THE STATE OF DELAWARE.  THE FOREGOING IS IN ADDITION TO ANY OTHER REMEDY TO WHICH ANY PARTY IS ENTITLED AT LAW, IN EQUITY OR OTHERWISE.  IN ADDITION, EACH OF THE PARTIES HERETO IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS ARISING HEREUNDER, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT OF THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS ARISING HEREUNDER BROUGHT BY THE OTHER PARTY HERETO OR ITS SUCCESSORS OR ASSIGNS SHALL BE BROUGHT AND DETERMINED EXCLUSIVELY IN THE DELAWARE COURT OF CHANCERY, OR IN THE EVENT (BUT ONLY IN THE EVENT) THAT SUCH COURT DOES NOT HAVE SUBJECT MATTER JURISDICTION OVER SUCH ACTION OR PROCEEDING, IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE OR ANOTHER COURT SITTING IN THE STATE OF DELAWARE.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY SUBMITS WITH REGARD TO ANY SUCH ACTION OR PROCEEDING FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, TO THE PERSONAL JURISDICTION OF THE AFORESAID COURTS AND AGREES THAT IT WILL NOT BRING ANY ACTION RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IN ANY COURT OTHER THAN THE AFORESAID COURTS.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF

 

 

 

 

 

(c)  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.  EACH PARTY HERETO (1) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (2) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 6.07(C).

 

SECTION 6.08.  Notices.  Any notice required to be given hereunder shall be sufficient if in writing, and sent by facsimile transmission (provided that any notice received by facsimile transmission or otherwise at the addressee’s location on any business day after 5:00 p.m. (addressee’s local time) shall be deemed to have been received at 9:00 a.m. (addressee’s local time) on the next business day), by reliable overnight delivery service (with proof of service), or hand delivery, addressed as follows:

 

 

Cravath, Swaine & Moore LLP

825 Eighth Avenue

New York, NY 10019

 

Attention:  Richard Hall, Esq.

Andrew R. Thompson, Esq.

Facsimile:   ###-###-####

 

 

 

(b)   If to Paulson & Co. Inc., addressed to such Investor at the address specified for such communications on Schedule I attached hereto, with a copy to:

 

Fried Frank Harris Shriver & Jacobson LLP

One New York Plaza

New York, NY 10004

Attention:  Christopher Ewan, Esq.

Facsimile:   ###-###-####

(c)   If to the Company:

 

The Dow Chemical Company

2030 Dow Center

Midland, Michigan 48674

Attention:  Executive Vice President and General Counsel

Facsimile:   ###-###-####

 

with a copy to:

 

Shearman & Sterling LLP

599 Lexington Avenue

New York, NY 10022-6069

 

Attention:  Joel S. Klaperman, Esq.

John A. Marzulli, Jr., Esq.

Facsimile:   ###-###-####

 

or to such other address as any party shall specify by written notice so given, and such notice shall be deemed to have been delivered as of the date so telecommunicated, personally delivered or scheduled to be received if so mailed.  Any party to this Agreement may notify any other party of any changes to the address or any of the other details specified in this paragraph; provided, however, that such notification shall only be effective on the date specified in such notice or five business days after the notice is given, whichever is later.  Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice as of the date of such rejection, refusal or inability to deliver.

 

SECTION 6.09.  Entire Agreement, Etc.  This Agreement, the Merger Agreement, the Voting Agreement and any agreements being executed and delivered contemporaneously therewith (including any attachments hereto or thereto) constitute the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, both written and oral, between the parties, with respect to the subject matter hereof and thereof.

 

SECTION 6.10.  Definitions.  (a) The term “Adverse Disclosure” means public disclosure of material nonpublic information that has not been, and is not otherwise required to

 

 

 

be, disclosed to the public, and that, in the Company’s good-faith judgment after consultation with outside counsel to the Company:  (i) would be required to be made in any Registration Statement or report filed with the Commission by the Company so that such Registration Statement or report would not be materially misleading; (ii) would not be required to be made at such time but for the filing of such Registration Statement; and (iii) would not be in the best interests of the Company to disclose in a Registration Statement at such time.

 

(b)  The term “affiliate” means, with respect to any person, any person directly or indirectly controlling, controlled by or under common control with, such other person.  For purposes of this definition, “control” when used with respect to any person, means the possession, directly or indirectly, of the power to cause the direction of management and/or policies of such person, whether through the ownership of voting securities, by contract or otherwise.

 

(c)  “Beneficial Ownership” by a Person of any securities includes ownership by any Person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares (i) voting power which includes the power to vote, or to direct the voting of, such security; and/or (ii) investment power which includes the power to dispose, or to direct the disposition, of such security; and shall otherwise be interpreted in accordance with the term “beneficial ownership” as defined in Rule 13d-3 adopted by the Commission under the Exchange Act; provided, that for purposes of determining Beneficial Ownership, in no event will an Investor be deemed to Beneficially Own any securities which it has the right to acquire pursuant to this Agreement unless, and then only to the extent that, such Investor shall have actually exercised such right.  The term “Beneficially Own” shall have a correlative meaning.

 

(d)  The term “Benefit Plans” means employee benefit plans as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, and all other employee benefit practices or arrangements, including any such practices or arrangements providing severance pay, sick leave, vacation pay, salary continuation for disability, retirement benefits, deferred compensation, bonus pay, incentive pay, stock options or other stock-based compensation, hospitalization insurance, medical insurance, life insurance, scholarships or tuition reimbursements, maintained by the Company or any of its subsidiaries or to which the Company or any of its subsidiaries is obligated to contribute for employees or former employees.

 

(e)  The term “Covered Securities” means the Purchased Convertible Preferred Shares, the Company Common Stock issuable upon conversion of the Convertible Preferred Shares and the Purchased Perpetual Preferred Shares.

 

(f)  The term “Demanding Investor Representative” means the Investor Representative who has delivered a Shelf Demand Notice or a Demand Notice pursuant to Sections 5.01 or 5.02, respectively.

 

(g)  The term “Dow – Rohm and Haas Litigation” means the action of Rohm and Haas Company v. The Dow Chemical Company, C.A. No. 4309-CC, in the Court of Chancery of the State of Delaware.

 

 

 

(h)  The term “Holder” means any Investor and any Transferee of Registrable Securities.

 

(i)  The term “Investor Representative” means the Trusts Representative or the Paulson Representative.

 

(j)  The term “Issuer Free Writing Prospectus” means an Issuer Free Writing Prospectus, as defined in Rule 433 under the Securities Act, relating to an offer of the Registrable Securities.

 

(k)  The term “Merger Agreement” means the Agreement and Plan of Merger dated as of July 10, 2008, among the Company, Ramses and Rohm and Haas Company, a Delaware corporation.

 

(l)  The term “Paulson Representative” means Paulson & Co. Inc.

 

(m)  The term “Person” or “person” means an individual, corporation, association, partnership (as such term is used in Section 13(d)(3) of the Exchange Act), limited liability company, limited or general partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivisions thereof or any group (within the meaning of Section 13(d)(3) of the Exchange Act) comprised of two or more of the foregoing.

 

(n)  The term “Prospectus” means the prospectus included in any Registration Statement (including a prospectus that discloses information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement, any Issuer Free Writing Prospectus related thereto, and all other amendments and supplements to such prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such prospectus.

 

(o)  The term “Registrable Securities” means the Covered Securities and any securities which may be issued or distributed in respect thereof by way of stock dividend or stock split or other distribution, recapitalization or reclassification.  As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) a Registration Statement registering such securities under the Securities Act has been declared effective and such securities have been sold or otherwise transferred by the holder thereof pursuant to such effective Registration Statement, (ii) such securities have been sold to the public in accordance with Rule 144 or (iii) such securities are no longer outstanding.

 

(p)  The term “Registration Statement” means any registration statement of the Company under the Securities Act which permits the public offering of any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

 

 

 

 

(q)  The term “Stockholder Group” means, with respect to any Investor, such Investor and its controlled affiliates.

 

(r)  The term “subsidiary” means, with respect to any person, any corporation, association or other entity of which such person owns or controls more than 50% of the outstanding voting securities directly or indirectly.

 

(s)  The term “Transferee” means (i) the transferee of all or any portion of the Registrable Securities held by any Investor or (ii) the subsequent transferee of all or any portion of the Registrable Securities held by any Transferee.

 

(t)  The term “Trusts Representative” means any of the First 1945 Trust, the Second 1945 Trust, the 1955 Trust, the 1956 Trust, the 1961 Trust A and the 1961 Trust B.

 

(u)  The term “Trusts” means, collectively, (i) the trust (Tax Identification No. 23 ###-###-####) (the “First 1945 Trust”) formed pursuant to the agreement dated December 20, 1945, between Otto Haas, as grantor, and Girard Trust Company, Phoebe W. Haas, John C. Haas and F. Otto Haas, as original trustees, (ii) the trust (Tax Identification No. 23 ###-###-####) (the “Second 1945 Trust”) formed pursuant to the agreement dated December 21, 1945, between Phoebe W. Haas, as grantor, and Girard Trust Company, Otto Haas, John C. Haas and F. Otto Haas, as original trustees, (iii) the trust (Tax Identification No. 23 ###-###-####) (the “1955 Trust”) formed pursuant to the trust agreement dated August 3, 1955, between Otto Haas, as grantor, and F. Otto Haas, John C. Haas and The Philadelphia National Bank, as original trustees, (iv) the trust (Tax Identification No. 23 ###-###-####) (the “1956 Trust”) formed pursuant to the trust agreement dated as of September 28, 1956, between Otto Haas, as grantor, and F. Otto Haas, John C. Haas and The Philadelphia National Bank, as original trustees, (v) the Trust A - for issue of F. Otto Haas (Tax Identification No. 23 ###-###-####) (the “1961 Trust A”) formed pursuant to the trust agreement dated August 24, 1961, between Phoebe W. Haas, as grantor, and F. Otto Haas and John C. Haas, as original trustees, and (vi) the Trust B - for issue of John C. Haas (Tax Identification No. 23 ###-###-####) (the “1961 Trust B”) formed pursuant to the trust agreement dated August 24, 1961, between Phoebe W. Haas, as grantor, and F. Otto Haas and John C. Haas, as original trustees.

 

(v)  The term “Underwritten Offering” means a sale of securities of the Company to an underwriter or underwriters for reoffering to the public.

 

(w)  The term “Voting Agreement” means the Voting Agreement dated as of July 10, 2008, among the Company, Rohm and Haas Company, a Delaware corporation, and the Trusts.

 

SECTION 6.11.  Interpretation.  When a reference is made in this Agreement to an Article, Section or Schedule, such reference shall be to an Article or Section of, or a Schedule to, this Agreement unless otherwise indicated.  The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.  The words “hereof”, “herein” and “hereunder” and words of similar import when used in this

 

 

 

 

Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  All references to “$” mean the lawful currency of the United States of America.  The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term.  Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein.  References to a person are also to its permitted successors and assigns.  Each of the parties has participated in the drafting and negotiation of this Agreement.  If an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if it is drafted by all the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship of any of the provisions of this Agreement.

 

SECTION 6.12.  Severability.  Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement in any other jurisdiction.  If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

 

SECTION 6.13.  No Third-Party Beneficiaries.  Nothing expressed or referred to in this Agreement will be construed to give any person, other than the parties to this Agreement, any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement.

 

SECTION 6.14.  Assignment.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties; provided that any Investor is permitted to assign its rights and obligations under Article V hereof to a Transferee.

 

SECTION 6.15.  Independent Nature of Investors’ Obligations and Rights.  The obligations of each Investor under this Agreement are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under this Agreement.  Nothing contained herein, and no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement and the Company acknowledges that the Investors are not acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement.  Each Investor confirms that it has independently participated in the negotiation of the transactions contemplated hereby with the advice of its own counsel and advisors.  Each Investor shall be entitled to independently protect and enforce its rights, including the rights arising out of this Agreement, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose.

 

 

 

 

SECTION 6.16.  Repurchases.  The Company shall not purchase any Perpetual Preferred Stock or Convertible Preferred Stock from any Investor without offering, upon identical terms, to purchase shares of Perpetual Preferred Stock or shares of Convertible Preferred Stock, as applicable, from all Investors who then hold Perpetual Preferred Stock or Convertible Preferred Stock, as applicable, and in the event that the shares of Perpetual Preferred Stock or shares of Convertible Preferred Stock, as applicable, sought to be sold in response to such offer exceeds the amount the Company is willing to purchase, then the amount purchased by the Company from each such Investor shall be pro rated based on the number of shares of Perpetual Preferred Stock or shares of Convertible Preferred Stock, as applicable, sought to be sold by such Investors.

 

SECTION 6.17.  Public Announcements.  Each party hereto shall consult with the other parties hereto before issuing, and provide the other parties the opportunity to review and comment upon, any press release or other public statements with respect to the transactions contemplated by this Agreement, and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law, court process or by obligations pursuant to any listing agreement with any national securities exchange.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the parties hereto as of the date first written above.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor	Number of Perpetual Preferred Shares to be Purchased	Aggregate Amount to be Paid by Such Investor for the Perpetual Preferred Shares to be Purchased
THE FIRST 1945 TRUST   Address for Communications:   Haas Trust Office 1717 Arch St., 14th Floor Philadelphia, PA 19103 Attn:      Dr. Janet Haas,               Executive Trust Advisor Tel:        (215) 988-1830 Fax:       (215) 557-8077   Wachovia Bank, N.A., as Trustee Calibre 1500 Market Street, PA 4394 Philadelphia, PA 19102 Attn:      Jason Davis and               Jack Ginter Tel:        ###-###-#### Fax:        ###-###-####               (215) 973-3190	53,850	53,850,000
THE SECOND 1945 TRUST     Address for Communications:   Haas Trust Office 1717 Arch St., 14th Floor Philadelphia, PA 19103 Attn:      Dr. Janet Haas,               Executive Trust Advisor Tel:        (215) 988-1830 Fax:        ###-###-####   Wachovia Bank, N.A., as Trustee Calibre 1500 Market Street, PA 4394 Philadelphia, PA 19102 Attn:      Jason Davis and               Jack Ginter Tel:        ###-###-#### Fax:        ###-###-####               (215) 973-3190	634,050	634,050,000

 

 

 

 

THE 1955 TRUST   Address for Communications:   Haas Trust Office 1717 Arch St., 14th Floor Philadelphia, PA 19103 Attn:      Dr. Janet Haas,               Executive Trust Advisor Tel:        ###-###-#### Fax:        ###-###-####   Wachovia Bank, N.A., as Trustee Calibre 1500 Market Street, PA 4394 Philadelphia, PA 19102 Attn:     Jason Davis and              Jack Ginter Tel:        ###-###-#### Fax:        ###-###-####               (215) 973-3190	137,100	137,100,000
THE 1956 TRUST   Address for Communications:   Haas Trust Office 1717 Arch St., 14th Floor Philadelphia, PA 19103 Attn:      Dr. Janet Haas,               Executive Trust Advisor Tel:        (215) 988-1830 Fax:        ###-###-####   Wachovia Bank, N.A., as Trustee Calibre 1500 Market Street, PA 4394 Philadelphia, PA 19102 Attn:     Jason Davis and              Jack Ginter Tel:        ###-###-#### Fax:        ###-###-####               (215) 973-3190	510,600	510,600,000

 

 

 

 

1961 TRUST A   Address for Communications:   Haas Trust Office 1717 Arch St., 14th Floor Philadelphia, PA 19103 Attn:      Dr. Janet Haas,               Executive Trust Advisor Tel:        (215) 988-1830 Fax:        ###-###-####	82,200	82,200,000
1961 TRUST B   Address for Communications:   Haas Trust Office 1717 Arch St., 14th Floor Philadelphia, PA 19103 Attn:      Dr. Janet Haas,               Executive Trust Advisor Tel:        (215) 988-1830 Fax:        ###-###-####	82,200	82,200,000
PAULSON & CO. INC.   Address for Communications:   Paulson & Co. Inc. 1251 Avenue of the Americas 50th Floor New York, NY 10020 Attn:      Michael Waldorf Tel:          ###-###-#### Fax:        (212) 351-5887	1,000,000	1,000,000,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust	Number of Convertible Preferred Shares to be Purchased	Aggregate Amount to be Paid by Such Investor for the Convertible Preferred Shares to be Purchased
THE FIRST 1945 TRUST	17,950	17,950,000
THE SECOND 1945 TRUST	211,350	211,350,000
THE 1955 TRUST	45,700	45,700,000
THE 1956 TRUST	170,200	170,200,000
1961 TRUST A	27,400	27,400,000
1961 TRUST B	27,400	27,400,000