Exhibit 10.1
EXECUTION VERSION
PURCHASE AGREEMENT dated as of May 5, 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 ”).
RECITALS
WHEREAS, the Company has outstanding shares of
the Company’s cumulative perpetual preferred stock, series B
(the “ Series B Preferred Stock ”), having the
powers, preferences and rights, and the qualifications, limitations
and restrictions, as specified in the certificate of designations
establishing the terms of the Series B Preferred Stock (the “
Series B Certificate of Designations ”) and issued
pursuant to the terms of an investment agreement dated March 9,
2009 (the “ Series B and C Investment Agreement
”) among the Company and the Investors;
WHEREAS, each Investor is the holder of that
number of shares of Series B Preferred Stock set forth opposite
such Investor’s name on Schedule I hereto (the “
Preferred Shares ”);
WHEREAS, the Company intends to offer and sell
to the public, in two separate registered public offerings, (a)
shares of the Company’s common stock, par value $2.50 per
share (the “ Common Stock ”) and (b) notes in
one or more tranches (the “ Notes ”);
WHEREAS, the Company has offered to purchase all
or a portion of the Preferred Shares from the Investors, and each
Investor has indicated a willingness to sell all or a portion of
its Preferred Shares in consideration for shares of Common Stock
and/or Notes to be sold in the Offerings, and such parties have
agreed to effect such transaction(s) on the terms and conditions
hereinafter set forth.
AGREEMENT
NOW THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby
expressly acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
SECTION 1. Definitions
. Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have the
following meanings:
“ Company Indemnified Persons
” has the meaning given to it in Section 5(f)(B)
hereof.
“ Debt Notice ” has the
meaning given to it in Section 3(a) hereof.
“ Debt Purchase ” means the
purchase of all or a portion of the Preferred Shares as described
in Section 3 below.
“ Debt Public Offering ”
means a public offering of the Notes of the Company pursuant to an
effective registration statement under the Securities
Act.
“ Debt Transactions ” means
the Debt Public Offering and the Debt Purchase.
“ Debt Underwriting Agreement
” has the meaning given to it in Section 3(g)
hereof
“ Equity Notice ” has the
meaning given to it in Section 2(a) hereof.
“ Equity Purchase ” means the
purchase of all or a portion of the Preferred Shares as described
in Section 2 hereof.
“ Equity Public Offering ”
means a public offering of the Common Stock of the Company pursuant
to an effective registration statement under the Securities
Act.
“ Equity Transactions ” means
the Equity Public Offering and the Equity Purchase.
“ Equity Underwriting Agreement
” has the meaning given to it in Section 2(i)
hereof.
“ Exchange Act ” means the
Securities Exchange Act of 1934, as amended.
“ Investor Indemnified Persons
” has the meaning given to it in Section 5(f)(A)
hereof.
“ 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.
“ Losses ” has the meaning
given to it in Section 5(f)(A) hereof.
“ Minimum Amount ” has the
meaning given to it in Section 2(a) hereof.
“ Offerings ” means the Debt
Public Offering and the Equity Public Offering.
“ Original Purchase Price ”
has the meaning given to it in the Series B Certificate of
Designations.
“ Person ” means any
individual, corporation, association, partnership (general or
limited), joint venture, trust, estate, limited liability company,
or any legal entity or organization.
“ 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.
“ Rescission ” has the
meaning given to it in Section 2(j) hereof.
“ Registrable Securities ”
means the Issued Notes and the Issued Shares 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.
“ 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.
“ Securities Act ” means the
Securities Act of 1933, as amended.
“ SEC ” means the Securities
and Exchange Commission.
“ Series B Replacement Capital
Covenant ” means the Replacement Capital Covenant
relating to the Series B Preferred Stock, dated April 1,
2009.
“ Series C Certificate of
Designations ” means the certificate of designations
establishing the terms of the Series C Preferred Stock.
“ Series C Preferred Stock ”
means the Company’s cumulative convertible preferred stock,
Series C, convertible into shares of the Common Stock, having the
powers, preferences and rights, and the qualifications, limitations
and restrictions, as specified in the Series C Certificate of
Designations.
“ Underwriters ” means Morgan
Stanley & Co. Incorporated, Citigroup Global Markets Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and HSBC
Securities (USA) Inc.
SECTION 2. Equity Purchase
.
(a) On
or prior to the pricing of the Equity Public Offering and the
execution of the Equity Underwriting Agreement, the Company shall
be entitled, but not obligated, to specify in writing, at its sole
discretion, the aggregate amount in value of the Preferred Shares
that the Company shall purchase from the Investors in consideration
for shares of Common Stock to be sold in the Equity Public Offering
(including identifying separately the aggregate value of the
Over-Allotment Preferred Shares assuming the full over-allotment is
exercised) (the “ Equity Notice ”),
provided that such amount of Preferred Shares shall not be
less than $125 million without giving effect to any Over-Allotment
Preferred Shares (as defined below) (the “ Minimum
Amount ”). In the event the Company delivers an Equity
Notice, it shall be obligated to purchase from the Investors the
amount of Preferred Shares specified therein, provided the
Equity Public Offering is consummated.
(b) Each
Investor hereby agrees to sell to the Company up to the number of
such Investor’s Preferred Shares set forth opposite such
Investor’s name on Schedule I hereto, and the number
of Preferred Shares that the Company will purchase from such
Investor shall be pro rated based on the Investors’
respective holdings of the Preferred Shares and the aggregate
number of
Preferred Shares to be purchased in
accordance with the Company’s determination pursuant to
Section 2(a) above (the “ Equity Purchase Preferred
Shares ”).
(c) If
and to the extent that the aggregate amount in value of Common
Stock to be sold by the Company in the Equity Public Offering is at
least $1 billion and the Minimum Amount is met for the Investors,
upon exercise of the over-allotment option by the Underwriters, the
Company shall purchase from the Investors an additional number of
Preferred Shares (the “ Over-Allotment Preferred
Shares ”) in consideration for additional Common Stock
that the Investors will sell in the Equity Public
Offering.
(d) As
contemplated by the Series B Replacement Capital Covenant, (i) the
Company’s issuance of shares of Common Stock in consideration
for the purchase of the Equity Purchase Preferred Shares from the
Investors shall occur simultaneously with the pricing of the Equity
Public Offering and (ii) the Company’s issuance of shares of
additional Common Stock in consideration for the purchase of the
Over-Allotment Preferred Shares, if any, shall occur simultaneously
with the over-allotment option closing or closings under the Equity
Underwriting Agreement (each an “ Equity Purchase Time
”). The number of shares of Common Stock to be issued (the
“ Issued Shares ”) to the Investors in
consideration for the Equity Purchase Preferred Shares and the
Over-Allotment Preferred Shares, if any, shall be determined by
dividing (x) the Original Purchase Price of the Equity Purchase
Preferred Shares or the Over-Allotment Preferred Shares, as the
case may be, plus accrued and unpaid dividends and any dividends
added to the Liquidation Preference (as defined in the Series B
Certificate of Designations) to the date of closing of the Equity
Public Offering (with respect to the Equity Purchase Preferred
Shares) or the date of closing of the exercise of the
over-allotment option (with respect to the Over-Allotment Preferred
Shares, if any) by (y) the public offering price per share less the
underwriting discount per share of the Common Stock in the Equity
Public Offering (the “ Equity Offering Price
”). The foregoing calculation will be made by the
Company and shall be reasonably acceptable to the
Investors. The number of Issued Shares shall be set
forth in the Equity Underwriting Agreement.
(e) At
each Equity Purchase Time: (i) each Investor shall transfer to the
Company all of its right, title and interest in and to the
Investor’s Equity Purchase Preferred Shares and/or the
Over-Allotment Preferred Shares, as the case may be, anticipated to
be purchased by the Company at such Equity Purchase Time in
consideration for the Issued Shares, and, as soon as practicable
after the Equity Purchase Time, shall surrender to the Company the
certificates representing the Equity Purchase Preferred Shares
and/or the Over-Allotment Preferred Shares, as the case may be, and
(ii) the Company shall issue the related Issued Shares to such
Investor.
(f) No
fractional shares shall be issued in respect of any Equity Purchase
Preferred Shares and/or the Over-Allotment Preferred Shares, as the
case may be, surrendered for purchase. In lieu thereof,
the Company shall pay an amount in cash based upon the Equity
Offering Price.
(g) Subject
to subparagraph (j) below, the parties acknowledge and agree that
upon surrender by each Investor of its Equity Purchase Preferred
Shares and/or the Over-Allotment Preferred Shares, as the case may
be, in consideration for the issuance by the Company of the Issued
Shares, such Investor shall cease to have any further claim against
the Company in respect
of its Equity Purchase Preferred
Shares and/or the Over-Allotment Preferred Shares, as the case may
be.
(h) Except
as otherwise set forth in this Agreement, upon the occurrence of
the applicable Equity Purchase hereunder, all of the Equity
Purchase Preferred Shares and/or the Over-Allotment Preferred
Shares, as the case may be, shall be canceled and shall cease to be
outstanding without any further action by the Company or the
holders thereof, and all rights of the holders in respect of such
Equity Purchase Preferred Shares and the Over-Allotment Preferred
Shares shall cease.
(i) Provided
the Company has delivered an Equity Notice, each Investor agrees to
enter into an underwriting agreement substantially in the form of
Exhibit A hereto relating to the Equity Public Offering
with the Company and the Underwriters covering the Issued Shares to
be sold by such Investor (the “ Equity Underwriting
Agreement ”) and each Investor will deliver such Issued
Shares to such Underwriters to be sold in the Equity Public
Offering in accordance with, and on the terms and conditions of,
the Equity Underwriting Agreement. It shall be a
condition precedent to each Investor’s obligation to deliver
Common Stock to such Underwriters pursuant to the Equity
Underwriting Agreement that the Company shall have delivered to the
Investors such aggregate amount of Issued Shares in accordance with
Section 2(d). It is understood that the Equity
Underwriting Agreement shall not contain any restrictions on the
Investors from selling any Series B Preferred Stock or any Common
Stock acquired in secondary trading or, in the case of the Haas
Trust Investors, upon conversion of the Series C Preferred
Stock. It is further understood that each Investor shall
provide indemnification and contribution under the Equity
Underwriting Agreement only to the extent any losses arise out of
or are based on written information furnished to the Company by or
on behalf of such Investor, and no Investor shall be liable under
the Equity Underwriting Agreement for any amount in excess of the
net proceeds received by such Investor from the offering of the
Issued Shares pursuant to the Equity Underwriting
Agreement.
(j) If,
for whatever reason, the Equity Public Offering is not consummated
by the date of closing under the Equity Underwriting Agreement, the
parties hereby agree that the Equity Purchase shall be rescinded
and the parties shall take all such action and do all such things
as may be necessary to restore the parties to their respective
positions prior to the Equity Purchase, including but not limited
to the Company’s returning to the Investors any surrendered
certificates representing the Equity Purchase Preferred Shares, the
Investors being entitled to the same amount of dividends on the
Equity Purchase Preferred Shares to which they would have been
entitled had they held the Equity Purchase Preferred Shares
throughout the intervening period and the Investors not retaining
any dividends declared or paid on the Issued Shares during the
intervening period, it being understood and agreed that such
rescission and restoration shall not be deemed to be a violation of
Section 12 of the Series B Certificate of Designations (such
rescission and restoration a “ Rescission
”). The parties agree that any Rescission shall be
treated and reported as a rescission for all purposes including tax
purposes.
(k) This
Section 2 will terminate upon the completion of the Equity Public
Offering or ten (10) business days after the date hereof, whichever
is earlier.
SECTION 3. Debt Purchase
.
(a) On
or prior to the pricing of the Debt Public Offering and the
execution of the Debt Underwriting Agreement by the Investors, the
Company shall be entitled, but not obligated, to specify in
writing, at its sole discretion, the aggregate amount in value of
the Preferred Shares that the Company shall purchase from the
Investors in consideration for a principal amount of Notes to be
sold in the Debt Public Offering (the “ Debt Notice
”), provided that such amount of Preferred Shares
shall not be less than the Minimum Amount. In the event
the Company delivers a Debt Notice, it shall be obligated to
purchase from the Investors the amount of Preferred Shares
specified therein, provided the Debt Public Offering is
consummated. It is understood that the principal amount
of such Notes to be sold by the Investors in the Debt Public
Offering, if any, shall not exceed the limit permitted under the
Series B Replacement Capital Covenant.
(b) Each
Investor hereby agrees to sell to the Company up to the number of
such Investor’s Preferred Shares set forth opposite such
Investor’s name on Schedule I hereto, less the number
of Preferred Shares to be purchased from such Investor in the
Equity Purchas
