EFiled: Mar 3 2009 10:37PM EST

Transaction ID 24039391
Case No. 4309-CC
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

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ROHM AND HAAS COMPANY, :

Plaintiff, :

v. :
C.A. No. 4309-CC
THE DOW CHEMICAL COMPANY and :
RAMSES ACQUISITION CORP.,
:
Defendants.
:
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JOINT PRE-TRIAL STIPULATION AND ORDER

Pursuant to Court of Chancery Rule 16 and subject to the approval of the Court,

the parties to this action, through their undersigned counsel, hereby submit this Joint Pre-Trial

Stipulation and Order and state as follows:

I. NATURE OF THE ACTION

On July 10, 2008, Plaintiff Rohm and Haas entered into an Agreement and Plan of

Merger (“the Merger Agreement”) with Defendants The Dow Chemical Company and Ramses

Acquisition Corp. (collectively, “Dow”). Under the Merger Agreement, Dow agreed to acquire

all outstanding shares of Rohm and Haas common stock for $78 per share in cash (plus addi-

tional consideration). Dow has not closed the Merger. On January 26, 2009, Rohm and Haas

brought this action, seeking, among other things: (a) an order of specific performance requiring

Dow to perform its obligations under the Merger Agreement and close the Merger immediately,

and (b) an injunction preventing Dow from further breaching its obligations under the Merger

Agreement.

W/1386848v5
 On February 3, 2009, Dow filed an Answer and Defenses denying Rohm and

Haas’s claims, denying that Dow is in breach of the Merger Agreement and asserting frustration

of purpose, commercial impracticability, impossibility of performance, undue hardship and

adequacy of a legal remedy as defenses.

Pursuant to the Court’s Orders of February 5 and February 6, 2009, an expedited

trial is to be held, beginning on March 9, 2009, to address Rohm and Haas’s cause of action set

forth in the Verified Complaint.

II. FACTS THAT ARE ADMITTED AND REQUIRE NO PROOF

The following facts are admitted by the parties and require no proof, although in-

clusion of any fact herein is not an admission of its relevance or materiality to this proceeding:

1. Plaintiff Rohm and Haas is a leading global specialty materials company.

In 2008, Rohm and Haas reported sales of $9.6 billion on a portfolio of global businesses includ-

ing electronic materials, specialty materials and salt. Rohm and Haas is incorporated under the

laws of Delaware. Its principal executive offices are in Philadelphia, Pennsylvania.

2. Defendant The Dow Chemical Company is a diversified chemical com-

pany engaged in the manufacture and sale of chemicals, plastic materials, and agricultural and

other specialized products and services. In 2008, it had annual sales of $57.6 billion and em-

ployed approximately 46,000 people worldwide. The Dow Chemical Company is incorporated

under the laws of Delaware. Its principal executive offices are in Midland, Michigan.

3. Defendant Ramses Acquisition Corp. is a Delaware corporation, wholly

owned by The Dow Chemical Company, which was formed solely for the purpose of facilitating

the acquisition of Rohm and Haas.

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 4. On July 10, 2008, after a competitive auction, Rohm and Haas and Dow

executed the Merger Agreement, pursuant to which Dow agreed to acquire all outstanding shares

of Rohm and Haas common stock for $78 per share in cash (plus additional consideration of a

“ticking fee” if the Merger did not close by January 10, 2009).

III. STATEMENT OF ISSUES OF FACT AND LAW TO BE LITIGATED

A. Plaintiff

1. Whether Dow has breached the Merger Agreement by failing to consum-

mate the Merger.

2. Whether Section 8.5 of the Merger Agreement entitles Rohm and Haas to

an order of specific performance.

3. Whether Rohm and Haas is entitled to an order of specific performance

under applicable equitable standards (in the event the Court finds that such a showing is required

despite Section 8.5 of the Merger Agreement).

4. Whether Section 8.5 of the Merger Agreement precludes Dow from argu-

ing that its breaches of the Merger Agreement have not caused irreparable harm to Rohm and

Haas.

5. Whether Dow has demonstrated that it will suffer legally cognizable

harms in amount and type sufficient to entitle it under the equities to avoid an order of specific

performance.

6. Whether Dow has met its burden of establishing its affirmative defenses of

frustration of purpose, commercial impracticability, impossibility of performance, undue hard-

ship or adequacy of legal remedy, and whether those affirmative defenses permit the Court to

excuse Dow from its obligations under the Merger Agreement.

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 7. Whether Dow’s inequitable conduct, including its acting with unclean

hands, bars its defenses to specific performance.

Rohm and Haas’s arguments and contentions regarding the issues for trial will be

set forth more fully in its pre-trial brief, which it incorporates by reference.

B. Defendants

1. Whether Rohm and Haas has satisfied its burden of showing by clear and

convincing evidence that it is entitled to specific performance at this time.

2. Whether Rohm and Haas has satisfied its burden of showing by clear and

convincing evidence that an award of specific performance at this time would not result in undue

hardship on Dow, the merged enterprise (including Rohm and Haas), and other affected persons

and entities.

3. Whether Rohm and Haas has satisfied its burden of demonstrating by clear

and convincing evidence that it will suffer irreparable injury in the absence of the relief of spe-

cific performance.

4. Whether Rohm and Haas has satisfied its burden of demonstrating by clear

and convincing evidence that the harms resulting from consummation of the merger – including

the hardships upon Dow, the merged enterprise, the employees and retirees of the merged enter-

prise, the customers and suppliers of the merged enterprise, the affected communities, and the

public – are outweighed by the benefit to Rohm and Haas that would result from specific per-

formance at this time.

5. Whether Rohm and Haas has satisfied its burden of demonstrating by clear

and convincing evidence that it has no adequate legal remedy.

6. Whether Rohm and Haas has unclean hands.

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 7. Whether Rohm and Haas can recover damages or other relief on behalf of

its shareholders, in light of the parties’ agreement in Section 8.10 to exclude third-party benefici-

ary rights including those of shareholders.

8. Whether Rohm and Haas has met its burden of proving that the conditions

precedent to closing have been satisfied.

Dow’s arguments and contentions regarding the issues for trial will be set forth

more fully in its pre-trial brief, which is incorporated by reference.

IV. STATEMENT OF RELIEF SOUGHT

A. Plaintiff

Rohm and Haas respectfully requests that the Court enter judgment:

1. Ordering Dow to specifically perform its obligations under the Merger

Agreement and to consummate the Merger immediately.

2. Temporarily, preliminarily and permanently enjoining Dow and any of its

directors, officers, employees, affiliates or agents and any other person acting in concert with it

or on its behalf from breaching Dow’s obligations under the Merger Agreement and directing

Dow to perform its obligations under the Merger Agreement and consummate the Merger.

3. Granting such other, further and different relief as the Court may deem

just and proper together with the costs and expenses of this action.

B. Defendants

Dow respectfully requests that the Court enter judgment:

1. Ordering that Rohm and Haas is not entitled to specific performance.

2. Ordering that any remedy of Rohm and Haas shall be limited to damages

to Rohm and Haas.

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 3. Dismissing Plaintiff’s Complaint.

4. Granting such other, further and different relief as the Court may deem

just and proper together with the costs and expenses of this action.

V. WITNESSES

A. Plaintiff

Rohm and Haas presently intends to offer live testimony from the following wit-

nesses in its case-in-chief:

1. Gary Barancik

2. Pierre Brondeau

3. Bill Chambers

4. Andrew Dvoroscik

5. Paul Graves

6. Raj Gupta

7. Robert Lonergan

8. Alan Sheriff

Rohm and Haas presently intends to call Prof. Greg Jarrell and Stephanie Selig-

man as rebuttal witnesses.

Identification of the foregoing witnesses represents those persons Rohm and Haas

may call to testify, and is not a representation that those persons will definitely be present at trial.

Rohm and Haas further reserves the right to call any of the witnesses listed below by Defendants

(even if such witness is not called by Defendants at trial) and to revise its witness list after it has

reviewed Dow’s pre-trial brief.

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 B. Defendants

Defendants presently intend to offer testimony from the following witnesses at

trial:

1. George Biltz

2. George Cary

3. Heinz Haller

4. Charles Kalil

5. David Kepler

6. Andrew Liveris

7. Geoffery Merszei

8. Scott Petepiece

9. James Ringler

10. Fernando Ruiz

11. Howard Ungerleider

12. Kenneth Buckfire

13. Daniel Fischel

14. Todd Gray

15. Jonathan Tyler

16. Sandra Moose

Identification of the foregoing witnesses represents those persons Defendants may

call to testify, and is not a representation that those persons will definitely be present at trial.

Defendants further reserves the right to call any of the witnesses listed above by Plaintiff (even if

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such witness is not called by Plaintiff at trial) and to revise its witness list after it has reviewed

Rohm and Haas’s pre-trial brief.

C. Presentation of Witnesses

1. Subject to the time limitations imposed by the Court, each party reserves

the right to call additional witnesses or recall any witnesses for rebuttal or impeachment.

2. Pursuant to Court of Chancery Rule 32(a)(2), the depositions of a party

may be used by an adverse party for any proper purpose.

3. As to any witness, the scope of cross-examination shall not be limited to

the scope of the direct examination. Unless recalled for rebuttal, each witness will be called only

once.

4. The parties shall exchange the then-anticipated order of their trial wit-

nesses for their respective cases-in-chiefs at 5:00 p.m. EST on Friday, March 6, 2009.

5. At 9:00 a.m. EST each day beginning on Saturday, March 7, 2009, the

parties shall provide notice of the witnesses they will call on the trial day starting forty-eight (48)

hours later and the order of those witnesses.

D. Deposition Designations

1. Plaintiff’s Proposal

In lieu of deposition designations, each side may lodge deposition transcripts with

the Court at the start of trial. Each side may lodge deposition transcripts of any witness (includ-

ing witnesses set forth in Section V hereto); provided, however, that neither party may seek to

admit as evidence the deposition transcript of any witness the party actually calls as a live wit-

ness. If one side lodges a deposition transcript, the other party need not also lodge the same

transcript. The parties may cite in their pretrial briefs to any deposition testimony that they in

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good faith believe to be admissible. The parties reserve their rights to object to the admissibility

of any such testimony.

2. Defendants’ Proposal

In lieu of deposition designations, each side may lodge deposition transcripts with

the Court at the start of trial. If one side lodges a deposition transcript, the other party need not

also lodge the same transcript. The parties may cite in their pretrial briefs to any deposition

testimony that they in good faith believe to be admissible. The parties reserve their rights to

object to the admissibility of any such testimony.

VI. AMENDMENT OF PLEADINGS

A. Plaintiff

Rohm and Haas does not have any amendments to its pleadings at this time, but

reserves the right to amend the pleadings to conform to the evidence adduced at trial or other-

wise.

B. Defendants

Dow does not have any amendments to its pleadings at this time, but reserves the

right to amend the pleadings to conform to the evidence adduced at trial or otherwise.

VII. LIST OF EXHIBITS

A. Plaintiff

The list of Rohm and Haas’s trial exhibits shall be submitted to the Court by 5:00

p.m. EST on Friday, March 6, 2009 (“Plaintiff’s Trial Exhibit List”). Rohm and Haas may admit

into evidence each of the premarked exhibits listed on Plaintiff’s Trial Exhibit List; provided,

however, that Dow may submit written objections, stating the basis for such objections, by Sun-

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day, March 8, 2009 at 5:00 p.m. EST. In addition, Rohm and Haas may use and rely upon any of

the exhibits identified by Dow on Defendants’ Trial Exhibit List (even if any such exhibit is

withdrawn by Dow), subject to the Court’s determination of admissibility. Rohm and Haas

reserves the right to add or subtract documents from such lists on reasonable grounds. Rohm and

Haas reserves the right to use documents not listed for cross-examination, impeachment or rebut-

tal purposes.

B. Defendants

The list of Dow’s trial exhibits shall be submitted to the Court by 5:00 p.m. EST

on Friday, March 6, 2009 (“Defendants’ Trial Exhibit List”). Dow may admit into evidence each

of the premarked exhibits listed on Defendants’ Trial Exhibit List; provided, however, that Rohm

and Haas may submit written objections, stating the basis for such objections, by Sunday, March

8, 2009 at 5:00 p.m. EST. In addition, Dow may use and rely upon any of the exhibits identified

by Rohm and Haas on Plaintiff’s Trial Exhibit List (even if any such exhibit is withdrawn by

Rohm and Haas), subject to the Court’s determination of admissibility. Dow reserves the right to

add or subtract documents from such lists on reasonable grounds. Dow reserves the right to use

documents not listed for cross-examination, impeachment or rebuttal purposes.

C. Exhibit Numbering

Plaintiff will assign each exhibit listed on Plaintiff’s Trial Exhibit List a unique

“PX” number and Defendants will assign each exhibit listed on Defendants’ Trial Exhibit List a

unique “DX” number. Plaintiff’s Trial Exhibit List and Defendants’ Trial Exhibit List shall

identify each exhibit respectively contained therein by bates number (where applicable) and a

brief description of the document. The parties agree that the descriptions are to be used for

identification purposes only. All exhibits appearing on both Plaintiff’s Trial Exhibit List and

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Defendants’ Trial Exhibit List shall be re-designated as Joint Exhibits and listed on a “Joint Trial

Exhibit List” (which Rohm and Haas shall submit to the Court by 5:00 p.m. EST on Friday,

March 6, 2009). Joint Exhibits shall retain the numeral assigned to them on Plaintiff’s Trial

Exhibit List, but shall be re-designated as “JX” ___. (For instance, if “PX 7” and “DX 10” are

the same document, they will become “JX 7.”).

D. Objections To Exhibits

Prior to trial, the parties shall attempt in good faith to resolve any objections to the

proposed trial exhibits. Any objections to the proposed trial exhibits that are not resolved by the

parties prior to the trial shall be presented to the Court for determination.

VIII. DESCRIPTION OF ANY EVIDENTIARY ISSUES THAT

WILL REQUIRE RESOLUTION

A. Plaintiff

Plaintiff does not at this time have any evidentiary issues requiring resolution in

advance of trial. Plaintiff notes this Court’s decision in United Rentals, Inc. v. RAM Holdings,

Inc., et al., No. 3360-CC (Del. Ch. Dec. 17, 2007), that “evidence of one side’s undisclosed,

private mental impressions or understandings [of a contract] is useless” and should not be con-

sidered by the Court. Plaintiff objects to defendants’ offering at trial testimonial or documentary

evidence about which it has asserted privilege objections, including attorney-client, work product

and/or business strategy privilege.

B. Defendants

Dow expects to file a motion in limine to exclude Goldman Sachs or its represen-

tatives from offering expert opinion testimony because Goldman Sachs’ Paul Graves was not

disclosed as an expert witness.

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 In addition, Dow anticipates making certain proposals for sealing the record in

light of the material non-public information that Dow expects to be the subject of trial testimony,

evidence, and exhibits. Dow expects to raise this issue at the pretrial conference.

With regard to United Rentals, Dow agrees that subjective, undisclosed private

mental impressions of a contract are irrelevant, but extrinsic evidence of what “both parties knew

or should have known” is probative of the meaning of any ambiguous contract provision.

IX. ESTIMATED TIME FOR TRIAL

The trial has been scheduled to commence on March 9, 2009 at 10:00 a.m. Pur-

suant to the Court’s February 5, 2009 Scheduling Order, the trial will take five (5) days. Pursu-

ant to the Scheduling Order, trial time, in the aggregate, shall be divided equally between the

parties. Each party’s direct examinations plus that party’s cross-examinations of witnesses

called by the opposing party shall total not more than 50% of the total trial time allotted by the

Court. Unless otherwise ordered by the Court, time spent addressing in-trial motions or eviden-

tiary issues shall be split equally between each side.

X. OTHER ISSUES

This Pretrial Order shall control the course of the trial in this action, unless modi-

fied by the Court to prevent manifest injustice.

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March 3, 2009

CONNOLLY BOVE LODGE & HUTZ LLP
__/s/ Collins J. Seitz, Jr.______________
Collins J. Seitz, Jr. (No. 2237)
Henry E. Gallagher, Jr. (No. 495)
David E. Ross (No. 5228)
Bradley R. Aronstam (No. 5129)
The Nemours Building
1007 North Orange Street
P.O. Box 2207
Wilmington, Delaware 19899
Telephone: (302) 658-9141
Facsimile: (302) 658-5614
Attorneys for Plaintiff Rohm and Haas Com-
pany
MORRIS, NICHOLS, ARSHT & TUNNELL
LLP
__/s/ Kenneth J. Nachbar______________
Martin P. Tully (No. 465)
Kenneth J. Nachbar (No. 2067)
J.R. Biondi (No. 3987)
1201 N. Market Street
P.O. Box 1347
Wilmington, Delaware 19899
Telephone: (302) 658-9200
Facsimile: (302) 658-3989
Attorneys for Defendants The Dow Chemical
Company and Ramses Acquisition Corp.

OF COUNSEL: OF COUNSEL:

Kenneth B. Forrest David M. Bernick, P.C.

Paul K. Rowe Michael P. Foradas, P.C.
Marc Wolinsky John Donley
George T. Conway III KIRKLAND & ELLIS LLP
David C. Bryan 200 East Randolph Drive
Ian Boczko Chicago, Illinois 60601
Elaine P. Golin Telephone: (302) 861-2000
Garrett B. Moritz Facsimile: (302) 861-2200
Joshua A. Naftalis
WACHTELL, LIPTON, ROSEN & KATZ Stephen C. Neal
51 West 52nd Street John C. Dwyer
New York, New York 10019 Scott D. Devereaux
Telephone: (212) 403-1000 COOLEY GODWARD KRONISH LLP
Facsimile: (212) 403-2000
Five Palo Alto Square
Robert A. Lonergan 3000 El Camino Real
ROHM AND HAAS COMPANY Palo Alto, CA 94306-2155
100 Independence Mall West Phone: (650) 843-5000
Philadelphia, Pennsylvania 19106 Facsimile: (650) 857-0663
Telephone: (215) 592-3000
Facsimile: (215) 592-3377

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 Charles J. Kalil
Duncan A. Stuart
THE DOW CHEMICAL COMPANY
2030 Dow Center
Midland, Michigan 48674
Telephone: (989) 636-1000

SO ORDERED:

March __, 2009 ______________________________________

Chancellor

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