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 

     

    
      
        
        

      

      
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    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 

     

    
      
        
        

      

      
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    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
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    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.

     

    
      
        
        

      

      
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    (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 Purchase, if any, 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 3(a) above (the “Debt Purchase Preferred
Shares”).

     

    (c)           The
Company’s issuance of Notes in consideration for the purchase of the Debt
Purchase Preferred Shares from the Investors shall occur simultaneously with the
closing of the Debt Public Offering (the “Debt Purchase
Time”).  The principal amount of the Notes to be issued (the
“Issued Notes”)
to the Investors in consideration for the Debt Purchase Preferred Shares shall
be determined by dividing (x) the aggregate Original Purchase Price of the Debt
Purchase Preferred Shares 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 Debt Public Offering, by (y) the
aggregate public offering price less the underwriting discount of the Notes in
the Debt Public Offering (the “Debt Offering
Price”).  The foregoing calculation will be made by the Company
and shall be reasonably acceptable to the Investors.  The principal
amount of the Issued Notes shall be set forth in the Debt Underwriting Agreement
(as defined below).

     

    (d)           At
the Debt Purchase Time: (i) each Investor shall transfer to the Company all of
its right, title and interest in and to the Investor’s Debt Purchase Preferred
Shares anticipated to be purchased by the Company at such Debt Purchase Time in
consideration for the Issued Notes, and shall surrender to the Company the
certificates representing the Debt Purchase Preferred Shares, and (ii) the
Company shall issue the related Issued Notes to such Investor.

     

    (e)           The
parties acknowledge and agree that upon surrender by each Investor of its Debt
Purchase Preferred Shares in consideration for the issuance by the Company of
the Issued Notes, such Investor shall cease to have any further claim against
the Company in respect of its Debt Purchase Preferred Shares.

     

    (f)           Except
as otherwise set forth in this Agreement, upon the occurrence of the Debt
Purchase hereunder, all of the Debt Purchase Preferred Shares shall be canceled
and shall cease to be outstanding without any further action by the Company or
the holders thereof, all rights of the holders in respect of such Debt Purchase
Preferred Shares shall cease.

     

    
      
        
        

      

      
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    (g)           Provided
the Company has delivered a Debt Notice, each Investor agrees to enter into an
underwriting agreement relating to the Debt Public Offering with the Company and
the Underwriters covering the Issued Notes to be sold by such Investor in a form
substantially consistent with the terms of the Equity Underwriting Agreement
with such changes as shall be necessary in the agreement of all parties thereto
to conform to the Debt Public Offering (the “Debt Underwriting
Agreement”) and each Investor will deliver such Issued Notes to such
Underwriters to be sold in the Debt Public Offering in accordance with, and on
the terms and conditions of, the Debt Underwriting Agreement.  It
shall be a condition precedent to each Investor’s obligation to deliver Notes to
such Underwriters pursuant to the Debt Underwriting Agreement that the Company
shall have delivered to the Investors such aggregate amount of Issued Notes in
accordance with Section 3(c).  It is understood that each Investor
shall provide indemnification and contribution under the Debt 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 Debt Underwriting Agreement for any amount in
excess of the net proceeds received by such Investor from the offering of the
Issued Notes pursuant to the Debt Underwriting Agreement.

     

    (h)           This
Section 3 will terminate upon the completion of the Debt Public Offering or ten
(10) business days after the date hereof, whichever is earlier.

     

    SECTION
4.  Representations and
Warranties.

     

    (a)           Each
party hereto hereby represents and warrants to the other party that the
transactions contemplated hereby will not violate (i) its charter, articles or
certificate of incorporation or bylaws (or other organizational documents), if
applicable, or any agreement, indenture or other instrument to which it is a
party, (ii) any judgment, decree, order or award or any court, governmental body
or arbitrator to which it is subject or (iii) any law, rule or regulation
applicable to it.

     

    (b)           The
Company hereby represents and warrants to each Investor that (i) upon issuance
in accordance with the terms of this Agreement, the Issued Shares to be issued
by it pursuant hereto will be duly and validly authorized and issued, fully paid
and non-assessable, and that such Investor will acquire such Issued Shares free
and clear of any liens, encumbrances, pledges, security interests or other
restrictions or claims of third parties, other than any of the foregoing created
by the Investor; (ii) the Issued Notes have been duly authorized, and, when
issued and delivered pursuant to this Agreement, the Issued Notes will have been
duly executed, issued and delivered and (assuming the due authentication thereof
by the trustee of the Issued Notes) will constitute valid and legally binding
obligations of the Company, will be entitled to the benefits provided by the
indenture governing the Issued Notes and will be enforceable in accordance with
their terms except as the same may be limited by bankruptcy, insolvency,
reorganization or other laws of general applicability relating to or affecting
the enforcement of creditors’ rights and to general equity
principles.

     

    (c)           Each
Investor hereby represents and warrants to the Company that (i) such Investor is
the sole legal and beneficial owner of the Preferred Shares to be surrendered
hereunder, and (ii) upon purchase, the Company will acquire the Preferred Shares
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    for
purchase by such Investor free and clear of any liens, encumbrances, pledges,
security interests or other restrictions or claims of third
parties.

     

    SECTION
5.  Miscellaneous.

     

    (a)           No
Obligation.  The Company shall be under no obligation to
consummate either or both of the Offerings and/or the Equity Purchase or the
Debt Purchase.  It is understood and agreed that the Company shall not
purchase any Preferred Shares from the Investors, and the Investors shall not be
obligated to sell any Preferred Shares to the Company, unless the parties have
entered into the Equity Underwriting Agreement and/or the Debt Underwriting
Agreement with the underwriters specified therein, as the case may
be.

     

    (b)           Independent
Transactions.  The Equity Transactions, if and to the extent
they may occur, shall occur prior to the Debt Transactions, if and to the extent
they may occur.  The consummation of the Equity Transactions shall not
be a condition to the Debt Transactions and the consummation of the Debt
Transactions shall not be a condition to the Equity Transactions.

     

    (c)           Expenses.  Each
party shall bear and pay its own fees and expenses incurred in connection with
this Agreement and the transactions contemplated by this Agreement, including
any underwriting discounts and commissions with respect to the sale of the
Issued Shares and/or the Issued Notes, fees and disbursements of counsel and any
other advisory fees and expenses.

     

    (d)           No
Proceeds.  The Company shall not receive any proceeds from the
sale of the Issued Shares in the Equity Public Offering and/or the Issued Notes
in the Debt Public Offering, in each case, if and to the extent they may
occur.

     

    (e)           Registration
Rights.  The parties hereby agree that the registration of the
Notes and/or the Common Stock in connection with the Offering(s) shall not be
counted as a “Demand Registration” or a “Piggyback Registration” (as such terms
are defined in the Series B and C Investment Agreement).  Except as
otherwise stated herein, the Investors shall be entitled to the registration and
other rights provided under Article V of the Series B and C Investment
Agreement, which shall apply, mutatis mutandis, to the registration and sale of
the Issued Shares and/or the Issued Notes, as the case may be.

     

    (f)           Indemnification. (A)
By the Company.
The Company agrees to indemnify and hold harmless, to the fullest extent
permitted by law, (i) each Investor and, as applicable, its affiliates,
officers, directors, employees, representatives and agents (collectively, the
“Investor 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
Investor Indemnified Persons, 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 (x) 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 (y) any omission
or alleged omission to state therein a material fact required to be stated
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    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 Investor expressly
for inclusion therein.  Reimbursements payable pursuant to the
indemnification contemplated by this Section 5(f)(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 Investors. In
connection with any Registration Statement in which a holder of Issued Shares or
Issued Notes is participating, each participating Investor will furnish to the
Company in writing information regarding such Investor’s ownership of Issued
Shares or Issued Notes 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 (x) 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 (y) 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
Investor expressly for inclusion therein; provided, however, that each
Investor’s obligation to indemnify the Company hereunder shall, to the extent
more than one Investor is subject to the same indemnification obligation, be
apportioned among such Investors based upon the net amount received by each
Investor from the sale of Registrable Securities, as compared to the total net
amount received by all of the Investors holding Registrable Securities sold
pursuant to such Registration Statement. Notwithstanding the foregoing, no
Investor shall be liable to the Company for amounts in excess of the lesser of
(I) such apportionment and (II) the amount received by such holder in the
offering giving rise to such liability. Reimbursements payable pursuant to the
indemnification contemplated by this Section 5(f)(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
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    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)           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 Investor 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.

     

    (F)           Survival. The
indemnification and contribution 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.

     

    
      	
               
      

            	
              (g)

            	
              Series C Certificate
      of Designations.

            


    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (i)            The
Company and the Haas Trust Investors hereby agree that (i) the deadline for the
automatic conversion of the Series C Preferred Stock set forth in Section 7 of
the Series C Certificate of Designations shall be extended to June 8, 2009 and
(ii) the Automatic Conversion Rate shall be determined based on the Conversion
Pricing Period commencing on the Effective Shelf Registration
Date.  The Company and the Haas Trust Investors further agree that in
the event that a Market Disruption Event occurs during, or the Company gives a
notice under the Investment Agreement that the prospectus with respect to the
resale of the Common Stock (as defined in the Series C Certificate of
Designations) has become unavailable during, trading hours on the Relevant
Exchange on a day (each such day, a “Disrupted Day”) that would otherwise be a
Trading Day during the Automatic Conversion Pricing Period, then the Automatic
Conversion Rate shall be adjusted as follows: (i) a VWAP Conversion Fraction
shall be included for such Disrupted Day and shall be calculated as the quotient
of (A) the dollar value of  Common Stock (as defined in the Series C
Certificate of Designations) sold by the Holders’ underwriters on such Disrupted
Day prior to the occurrence (and, if applicable, after the cessation) of such
Market Disruption Event or the time the Company gives notice of such
unavailability, as applicable, and (B) the product of (1) the VWAP on such
Disrupted Day, calculated based solely on trades prior to the occurrence (and,
if applicable, after the cessation) of such Market Disruption Event or the time
the Company gives notice of such unavailability, as applicable and (2) the
aggregate number of outstanding shares of Convertible Preferred Stock; (ii) such
Disrupted Day shall not be considered a Trading Day and, except as provided in
clause (i), shall not be included in the calculation of the Automatic Conversion
Rate; and (iii) the VWAP Conversion Fraction for the next Trading Day shall be
equal to the following: ((Liquidation Preference/(10*0.95))-(the dollar value of
Common Stock (as defined in the Series C Certificate of Designations) sold by
the Holders’ underwriters on such Disrupted Day/the aggregate number of
outstanding shares of Convertible Preferred Stock))/VWAP for such Trading Day;
provided that for purposes of the foregoing calculations the dollar value of the
Common Stock (as defined in the Series C Certificate of Designations) sold by
the Holders' underwriters on a Disrupted Day shall be the lesser of (i) the
actual dollar value sold and (ii) the aggregate Liquidation Preference of all
outstanding shares of Convertible Preferred Stock divided by the product of (A)
10 and (B) 0.95. The foregoing shall constitute an amendment to the Series C
Certificate of Designations, and except as so amended, the Series C Certificate
of Designations shall remain in full force and effect.  The Haas Trust
Investors agree that if the Company determines that it is required to file an
amendment to the Series C Certificate of Designations to give effect to the
foregoing, the Haas Trust Investors hereby consent to such
filing.  The “Haas Trust Investors”
means the First 1945 Trust, the Second 1945 Trust, the 1955 Trust, the 1956
Trust, the 1961 Trust A and the 1961 Trust B, as identified on the signature
pages hereto.

     

    (ii)           For
the avoidance of doubt, the Haas Trust Investors confirm that, subject to clause
(i) above, for purposes of the proviso in the first sentence of Section 7(b) of
the Series C Certificate of Designations, if the prospectus under the Series B
and C Investment Agreement is unavailable with respect to a day included in the
Automatic Conversion Pricing Period that would otherwise constitute a Trading
Day, then such day shall not constitute a Trading Day under the Series C
Certificate of Designations.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (iii)           Any
term used in this Section 5 but not defined herein shall have the meaning
ascribed to it in the Investment Agreement.

     

    SECTION
6.  Notices.  All
notices 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:

     

    (a)           If
to a Haas Trust Investor, addressed to such Haas Trust Investor at the address
specified for such communications on Schedule I attached
hereto, with a copy (which shall not constitute notice) to:

     

    Cravath,
Swaine & Moore LLP

    825
Eighth Avenue

    New York,
NY 10019

    Attention: 
Richard Hall, Esq.
Andrew R.
Thompson, Esq.

    Facsimile:
(212) 474-3700

    


    (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 (which shall
not constitute notice) to:

     

    


    Fried
Frank Harris Shriver & Jacobson LLP

    One New
York Plaza

    New York,
NY 10004

    Attention:
Christopher Ewan, Esq.

    Facsimile:
(212) 859-4000

    


     

    (c)           If
to the Company:

    The Dow Chemical Company

    2030 Dow Center

    Midland, Michigan 48674

    Attention:  Executive Vice
President and General Counsel

    Facsimile: (989) 638-9347

    


    with a copy (which shall not constitute
notice) to:

    


    Shearman & Sterling
LLP

    599 Lexington Avenue

    New York, NY 10022

    Attention:  Joel S.
Klaperman, Esq.

    Facsimile: (212) 848-7179

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
 

    SECTION
7.  Governing
Law.  THIS AGREEMENT AND ALL RIGHTS HEREUNDER AND PROVISIONS
HEREOF SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW
PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION)
THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF NEW YORK.

     

    SECTION
8.  Counterparts.  This
Agreement may be executed in any number of counterparts (including by
facsimile), each of which shall be an original as against any party whose
signature appears thereon and all of which together shall constitute one and the
same instrument.  This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the parties reflected hereon as signatories.

     

    


    [SIGNATURE
PAGE FOLLOWS.]

     

     

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

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

     

    
       

      
        	THE
      DOW CHEMICAL COMPANY,	 
	 	 	 	 
	
                by

              	 	 
	 	
                /s/ Geoffery
      Merszei

              	 
	 	Name: 
      	Geoffery
      Merszei	 
	 	Title: 
      	Chief Financial
      Officer	 
	 	 	 	 


      

    

     

    
 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


     

     

    
      
         

        
          	THE
      FIRST 1945 TRUST 

                  THE
      SECOND 1945 TRUST

                  THE
      1955 TRUST

                  THE
      1956 TRUST

                	 
	 	 	 	 
	
                  by

                	 	 
	 	
                  /s/ John
      C. Haas

                	 
	 	Name: 
      	John C.
    Haas	 
	 	Title: 
      	Trustee	 
	 	 	 	 


        

      

       

      
        
           

          
            	 	 	 	 
	
                     

                  	 	 
	 	
                    /s/ John
      Otto Haas

                  	 
	 	Name: 
      	John Otto
      Haas	 
	 	Title: 
      	Trustee	 
	 	 	 	 


          

        

        
           

          
            
               

              
                	 	 	 	 
	
                         

                      	 	 
	 	
                        /s/ Thomas
      Willaman Haas

                      	 
	 	Name: 
      	Thomas
      Willaman Haas	 
	 	Title: 
      	Trustee	 
	 	 	 	 


              

            

            
               

              
                
                   

                  
                    	 	 	 	 
	
                             

                          	 	 
	 	
                            /s/ William
      David Haas

                          	 
	 	Name: 
      	William
      David Haas	 
	 	Title: 
      	Trustee	 
	 	 	 	 


                  

                

                 

                
                  
                     

                    
                      	

                              

                                WACHOVIA
      BANK, N.A.,
as
      Trustee

                              

                            	 
	 	 	 	 
	
                              by

                            	 	 
	 	
                              /s/ Jason
      R. Davis

                            	 
	 	Name: 
      	Jason R.
    Davis	 
	 	Title: 
      	S.V.P.	 
	 	 	 	 


                    

                  

                   

                  
                    
                       

                      
                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                      

                    

                  

                

              

            

            

              
                 

                
                  	

                          

                            1961
      TRUST A

                          

                        	 
	 	 	 	 
	
                          by

                        	 	 
	 	
                          /s/ Carole
      Haas Gravagno

                        	 
	 	Name: 
      	Carole Haas
      Gravagno	 
	 	Title: 
      	Trustee	 
	 	 	 	 


                

              

               

              
                
                   

                  
                    	 	 	 	 
	
                             

                          	 	 
	 	
                            /s/ John
      Otto Haas

                          	 
	 	Name: 
      	John Otto
      Haas	 
	 	Title: 
      	Trustee	 
	 	 	 	 


                  

                

                
                   

                  
                    
                       

                      
                        	 	 	 	 
	
                                 

                              	 	 
	 	
                                /s/ Thomas
      Willaman Haas

                              	 
	 	Name: 
      	Thomas
      Willaman Haas	 
	 	Title: 
      	Trustee	 
	 	 	 	 


                      

                    

                    
                       

                      
                        
                           

                          
                            	 	 	 	 
	
                                     

                                  	 	 
	 	
                                    /s/ William
      David Haas

                                  	 
	 	Name: 
      	William
      David Haas	 
	 	Title: 
      	Trustee	 
	 	 	 	 


                          

                        

                         

                        
                          
                            
 

                            
                              
                                
                                

                              

                              
                                
                                

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    

      
         

        
          	

                  

                    1961
      TRUST B

                  

                	 
	 	 	 	 
	
                  by

                	 	 
	 	
                  /s/ John
      C. Haas

                	 
	 	Name: 
      	John C.
    Haas	 
	 	Title: 
      	Trustee	 
	 	 	 	 


        

      

       

      
        
           

          
            	 	 	 	 
	
                     

                  	 	 
	 	
                    /s/ David
      W. Haas

                  	 
	 	Name: 
      	David W.
    Haas	 
	 	Title: 
      	Trustee	 
	 	 	 	 


          

        

        
           

          
            
               

              
                	 	 	 	 
	
                         

                      	 	 
	 	
                        /s/ Leonard
      C. Haas

                      	 
	 	Name: 
      	Leonard C.
      Haas	 
	 	Title: 
      	Trustee	 
	 	 	 	 


              

            

            
               

              
                
                   

                  
                    	 	 	 	 
	
                             

                          	 	 
	 	
                            /s/ Frederick
      R. Haas

                          	 
	 	Name: 
      	Frederick R.
      Haas	 
	 	Title: 
      	Trustee	 
	 	 	 	 


                  

                

                 

                
                  
                    


                    
                      
                        
                        

                      

                      
                        
                        

                        
                          

                        

                      

                      
                        
                        

                      

                    

                  

                

              

            

          

        

      

    

    
       

      

        
           

          
            	

                    

                      PAULSON
      & CO. INC.,


                        on
      behalf of the several funds and accounts 
managed by
      it,

                      

                    

                  	 
	 	 	 	 
	
                    by

                  	 	 
	 	
                    /s/ Michael
      Waldorf

                  	 
	 	Name: 
      	Michael
      Waldorf	 
	 	Title: 
      	Senior Vice
      President	 
	 	 	 	 


          

        

         



    

     

    


     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
I

     

    
      	
              
                Investor

              

            	 	
              
                Number
      of Preferred 
Shares

              

            
	 
      	 	 
      
	
              Otto
      Haas 1945 Income Trust dated 12/20/1945

            	 	
              44,875

            
	
              Phoebe
      Haas 1945 Income Trust dated 12/21/1945

            	 	
              528,375

            
	
              Otto
      Haas Trust #1 dated 8/3/1955

            	 	
              114,250

            
	
              Otto
      Haas Trust #2 dated 9/28/1956

            	 	
              425,500

            
	
              Phoebe
      Haas Charitable Trust “A” dated 8/24/1961

            	 	
              68,500

            
	
              Phoebe
      Haas Charitable Trust “B” dated 8/24/1961

            	 	
              68,500

            
	
              Paulson
      Partners LP

            	 	
              15,301

            
	
              Paulson
      International LTD

            	 	
              50,370

            
	
              Paulson
      Partners Enhanced LP

            	 	
              25,087

            
	
              Paulson
      Enhanced LTD

            	 	
              123,639

            
	
              Paulson
      Advantage Master LTD

            	 	
              196,203

            
	
              Paulson
      Advantage Plus Master LTD

            	 	
              554,599

            
	
              HFR
      MA Strategic Master Trust

            	 	
              2,019

            
	
              Institutional
      Benchmarks Series (Master Feeder) Limited

            	 	
              2,830

            
	
              dbX
      – Risk Arbitrage 1 Fund

            	 	
              1,189

            
	
              dbX
      – Risk Arbitrage 6 Fund

            	 	
              2,703

            
	
              Paulson
      Advantage Select Master Fund Ltd

            	 	
              4,434

            
	
              Lyxor/Paulson
      International Fund Limited

            	 	
              5,466

            
	
              Lyxor/Paulson
      Advantage Fund Limited

            	 	
              16,160

            
	
              Paulson
      Credit Opportunities Master Limited

            	 	
              250,000