EXHIBIT 10.1

 

SETTLEMENT AGREEMENT AND RELEASE

            This Settlement Agreement (“Agreement”) is entered into and is
effective as of this 14th day of December, 2008 (the “Effective Date”), by and
between, on the one hand, Hexion Specialty Chemicals, Inc. (“Hexion”), Hexion
LLC, Nimbus Merger Sub Inc., and Craig O. Morrison (collectively, the “Hexion
Parties”), and Apollo Investment Fund IV, L.P., Apollo Overseas Partners IV,
L.P., Apollo Investment Fund V, L.P., Apollo Overseas Partners V, L.P., Apollo
Netherlands Partners V(A), L.P., Apollo Netherlands Partners V(B), L.P., Apollo
German Partners V GmbH & Co. KG, Apollo Investment Fund VI, L.P., Apollo
Overseas Partners VI, L.P., Apollo Overseas Partners (Delaware) VI, L.P., Apollo
Overseas Partners (Delaware 892) VI, L.P, Apollo Overseas Partners (Germany) VI,
L.P., Apollo Advisors IV, L.P., Apollo Management IV, L.P., Apollo Advisors V,
L.P., Apollo Management V, L.P., Apollo Advisors VI, L.P., Apollo Management VI,
L.P., Apollo Management, L.P., Apollo Global Management, LLC., Leon Black and
Joshua J. Harris (collectively, the “Apollo Parties”); and, on the other,
Huntsman Corp. (“Huntsman”), Jon M. Huntsman and Peter Huntsman (collectively,
the “Huntsman Parties”) and Huntsman Family Holdings Company LLC, The Jon and
Karen Huntsman Foundation, Karen H. Huntsman Inheritance Trust, Huntsman
Financial Corporation, and Brynn B. Huntsman, as Custodian under the Utah
Uniform Transfers to Minors Act, for the benefit of Rebecca Brynn Huntsman,
Rachel Brynn Huntsman, Caroline Brynn Huntsman, Amber Brynn Huntsman, Virginia
Brynn Huntsman and James B. Huntsman (collectively, the “Huntsman Family
Shareholders”), (the Hexion Parties, the Apollo Parties, the Huntsman Parties
and the Huntsman Family Shareholders collectively, the “Parties,” and each
individually a “Party”).

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            WHEREAS, prior to the execution of this Agreement, Huntsman validly
terminated the Merger Agreement;

        WHEREAS, one or more of the Parties are involved in the following
litigations in which the parties thereto have asserted claims, counterclaims or
third-party claims arising from or related to the Agreement and Plan of Merger
among Hexion Specialty Chemicals, Inc., Nimbus Merger Sub Inc. and Huntsman
Corporation, dated as of July 12, 2007 (the “Merger Agreement”), the
Transactions referred to therein, and related matters:

    •    Hexion Specialty Chemicals, Inc.; Nimbus Merger Sub Inc.; Apollo       
  Investment Fund IV, L.P.; Apollo Overseas Partners IV, L.P.; Apollo         
Advisors IV, L.P.; Apollo Management IV, L.P.; Apollo Investment Fund         
V, L.P.; Apollo Overseas Partners V, L.P.; Apollo Netherlands Partners         
V(A), L.P.; Apollo Netherlands Partners V(B), L.P.; Apollo German         
Partners V GmbH & Co. Kg; Apollo Advisors V, L.P.; Apollo          Management V,
L.P.; Apollo Investment Fund VI, L.P.; Apollo Overseas          Partners VI,
L.P.; Apollo Overseas Partners (Delaware) VI, L.P.; Apollo          Overseas
Partners (Delaware 892) VI, L.P.; Apollo Overseas Partners          (Germany)
VI, L.P.; Apollo Advisors VI, L.P.; Apollo Management VI,          L.P.; Apollo
Management, L.P.; and Apollo Global Management, LLC v.          Huntsman Corp.,
C.A. No. 3841-VCL (Court of Chancery, Delaware) (the          “Delaware
Action”);            •    Huntsman Corp. v. Leon Black, Joshua J. Harris, Apollo
Global          Management, L.L.C., Apollo Management, L.P., Apollo Management
IV,          L.P., Apollo Management V, L.P., Apollo Management VI, L.P.,
Apollo          Investment Fund IV, L.P., Apollo Overseas Partners IV, L.P.,
Apollo          Advisors IV, LP., Apollo Investment Fund V, L.P., Apollo
Overseas          Partners V, L.P., Apollo Netherlands Partners V(A),L.P.,
Apollo          Netherlands Partners V(B), L.P., Apollo German Partners V GmbH &
Co.          KG, Apollo Advisors V, L.P., Apollo Investment Fund VI, L.P.,
Apollo          Overseas Partners VI, L.P., Apollo Overseas Partners (Delaware)
VI,          L.P., Apollo Overseas Partners (Delaware 892) VI, L.P., Apollo
Overseas          Partners (Germany) VI, L.P., and Apollo Advisors VI, L.P.,
Cause No. 08-          06-06037 (Montgomery County, Texas) (the “Texas Action
Against          Apollo”);            •    Hexion Specialty Chemicals, Inc.,
Hexion LLC and Nimbus Merger Sub          Inc. v. Credit Suisse, Cayman Islands
Branch, Credit Suisse Securities 

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        (USA) LLC, Deutsche Bank AG Cayman Islands Branch, Deutsche Bank       
  AG New York Branch, Deutsche Bank Securities Inc., and Deutsche Bank         
Trust Company Americas, Index No. 114552/08 (New York Supreme          Court,
New York County) (the “New York Action Against the Banks”);            •   
Huntsman Corp. v. Credit Suisse Securities (USA) LLC, and Deutsche          Bank
Securities, Inc., Cause No. 08-09-09258 (Montgomery County,          Texas) (the
“Texas Action Against the Banks”);            •    Hexion Specialty Chemicals,
Inc.; Apollo Global Management, LLC;          Apollo Management, L.P.; Apollo
Management IV, L.P.; Apollo          Management V, L.P.; Apollo Management VI,
L.P.; Apollo Investment          Fund IV, L.P.; Apollo Overseas Partners IV,
L.P.; Apollo Advisors IV,          L.P.; Apollo Investment Fund V, L.P.; Apollo
Overseas Partners V, L.P.;          Apollo Netherlands Partners V(A), L.P.;
Apollo Netherlands Partners          V(B), L.P.; Apollo German Partners V GmbH &
Co. Kg; Apollo Advisors          V, L.P.; Apollo Investment Fund VI, L.P.;
Apollo Overseas Partners VI,          L.P.; Apollo Overseas Partners (Delaware)
VI, L.P.; Apollo Overseas          Partners (Delaware 892) VI, L.P.; Apollo
Overseas Partners (Germany)          VI, L.P.; Apollo Advisors VI, L.P.; Leon
Black and Joshua Harris v.          Huntsman Corp., Index No. 602394/08 (New
York Supreme Court, New          York County) (the “New York Action Against
Huntsman”); and            •    Sandra Lifschitz et al. v. Hexion Specialty
Chemicals, Inc., Craig O.          Morrison and Joshua J. Harris, 08-CV-06394
(RMB) (S.D.N.Y.) (the          “Huntsman Shareholder Action”) (all the foregoing
collectively, the          “Litigations”); 

            WHEREAS, without any admission by any Party of any fact or issue of
law, or concerning the merits of any claim or defense that has been, could have
been, or could be asserted in the Litigations, the Parties desire to settle all
disputes and controversies between them upon the terms and subject to the
conditions set forth below.

            NOW THEREFORE, in consideration of the mutual promises, covenants
and agreements contained herein, the adequacy and sufficiency of all of which
are hereby acknowledged, the Parties agree as follows:

            1.       Capitalized Terms. Capitalized terms not otherwise defined
in this Agreement shall be defined as set forth in the Merger Agreement.

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            2.     Termination of the Merger Agreement. Huntsman has validly
terminated the Merger Agreement in accordance with its terms pursuant to Section
7.1 of the Merger Agreement. Promptly following the Effective Date, Hexion shall
take all actions reasonably required to terminate any tender offers for
securities of Huntsman and its affiliates then outstanding in connection with
the Transactions contemplated by the Merger Agreement, including the Debt Offer.

            3.      Settlement Payments.

                     (a)     The Apollo entities set forth in Paragraph 1 of
Annex A attached hereto shall purchase from Huntsman $250 million ($250,000,000)
of convertible notes of Huntsman on substantially the terms and conditions set
forth in Annex B attached hereto and such other terms and conditions as may be
reasonably agreed to by the parties to such purchase. The parties to the
purchase shall negotiate in good faith the documentation relating to such
purchase to effect the purchase on or before December 31, 2008.

                     (b)     In settlement of the claim against the Apollo
entities set forth in Paragraph 2 of Annex A attached hereto by Huntsman in the
Delaware Action for commercial disparagement, the Apollo entities set forth in
Paragraph 2 of Annex A, on a joint and several basis, shall pay Huntsman the
amount of $200 million ($200,000,000).

                     (c)     In settlement of the claim against Hexion and the
Apollo entities set forth in Paragraph 3 of Annex A attached hereto by Huntsman
in the Delaware Action for commercial disparagement, Hexion, on a joint and
several basis with the Apollo entities set forth in Paragraph 3 of Annex A
attached hereto, shall pay Huntsman the amount of $225 million ($225,000,000).
In the event that any of the

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Apollo entities set forth in Paragraph 3 of Annex A attached hereto satisfies
any portion of such amount, Hexion agrees to use diligent efforts to obtain
reimbursement or other recovery from its insurance providers; provided, however,
that this obligation to use diligent efforts shall not be deemed to require
Hexion to waive or compromise its rights to insurance coverage for any other
liability or claim. Any amounts so recovered, net of expenses incurred for such
recovery, shall be promptly paid by Hexion pro rata to the Apollo entity or
entities set forth in Paragraph 3 of Annex A attached hereto up to the amount
that such entity has paid in satisfaction of the payment obligation set forth in
this paragraph.

                     (d)      Hexion shall pay Huntsman the $325 million
($325,000,000) termination fee, which fee is due and payable pursuant to Section
7.3(d) of the Merger Agreement. The Hexion Parties shall (i) use diligent
efforts to finalize the documentation for the Termination Facility with the
Banks on terms consistent with the Commitment Letter and to execute the
Termination Facility, (ii) draw down the Termination Facility and upon receipt
of the proceeds deliver them to Huntsman, and (iii) use diligent efforts to
pursue appropriate remedies in the event the Banks refuse to finalize such
documentation or to fund the Termination Facility. The Huntsman Parties shall
cooperate in good faith with and provide reasonable assistance to Hexion to
secure the proceeds of the Termination Facility.

                     (e)      At least $500 million ($500,000,000) of the
purchases from and payments to Huntsman set forth in Paragraphs 3(a)-(c) above
shall be made on or before December 31, 2008 and, in addition, the payment set
forth in paragraph 3(d) above will be paid as soon as any of the Hexion Parties
receives the proceeds of the Termination

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Facility. Any purchases from and payments to Huntsman set forth in Paragraphs
3(a)-(d) above that have not been made on or before December 31, 2008 shall be
made on or before March 31, 2009 whether or not the Hexion Parties have received
the proceeds from the Termination Facility.

                     (f)      The Apollo entities set forth in Paragraph 4 of
Annex A attached hereto shall provide financing to Hexion LLC in an amount equal
to $200 million ($200,000,000) on terms and conditions as may be reasonably
agreed to by Hexion LLC and the Apollo entities set forth in Paragraph 4 of
Annex A attached hereto.

                     (g)      Except as provided in Paragraphs 3(a)-(e) above,
the Hexion Parties and Apollo Parties shall have no obligation to make any
payment to the Huntsman Parties in connection with the Merger Agreement, the
Transactions or the Indemnified Matters (as defined in Paragraph 7(a) below).

                     (h)      Each Party shall retain all payments previously
made under the Merger Agreement.

                     (i)      The Apollo Parties (except for Leon Black and
Joshua J. Harris) and the Hexion Parties (except for Craig O. Morrison) are
jointly and severally liable for the payment of all sums due to Huntsman under
this Paragraph 3. In the event any payment by or on behalf of any of the Hexion
Parties is rescinded or required by any court to be returned for any reason
having to do with the Hexion Parties, the joint and several obligation of the
Apollo Parties (except for Leon Black and Joshua J. Harris) and the Hexion
Parties (except for Craig O. Morrison) to pay such amount shall continue in full
force and effect.

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            4.       Undertakings Concerning the Litigations.

                      (a)      Upon full and final payment of all amounts due
Huntsman under Paragraph 3 above, the Parties shall promptly take all necessary
and appropriate action to obtain the dismissal with prejudice of the Delaware
Action, the Texas Action Against Apollo and the New York Action Against
Huntsman, with each Party to bear its own costs, expenses, and attorneys’ fees
in connection with the Delaware Action, the Texas Action Against Apollo and the
New York Action Against Huntsman. Pending dismissal, the Parties will jointly
move to stay the Delaware Action, the Texas Action Against Apollo and the New
York Action Against Huntsman.

                      (b)      Huntsman will promptly move to sever and dismiss
the Apollo Parties from the Texas Action Against the Banks.

                      (c)      Promptly after the Effective Date, Hexion will
seek leave to withdraw its claims in the New York Action Against the Banks,
except that Hexion will not be required to withdraw any claims in the New York
Action Against the Banks relating to the Termination Facility.

                     (d)      Huntsman will cooperate with the Hexion Parties
and the Apollo Parties in the Huntsman Shareholder Action.

                     (e)      The Apollo Parties and the Hexion Parties agree to
make witnesses available for reasonable times and dates and to cooperate in the
presentation of Huntsman’s claims in the Texas Action Against the Banks,
including by providing witness interviews and appearing voluntarily for oral
depositions without the necessity of a subpoena. Hexion and the Apollo entities
shall also cause Craig O. Morrison, William

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Carter, Joshua J. Harris and Jordan Zaken to appear in Texas to testify at the
trial of the Texas Action Against the Banks if Huntsman so requests.

            5.      Mutual Releases.

                     (a)       Upon full and final payment of all amounts due
Huntsman under Paragraph 3 above, the Hexion Parties on behalf of themselves and
each of their parents, affiliates, predecessors, successors and assigns, and on
behalf of each of their respective current and former officers, directors,
managers, members, employees, agents and other representatives in their
capacities as such (collectively, the “Hexion Releasors”), hereby release,
acquit, and forever discharge the Huntsman Parties, the Huntsman Family
Shareholders and each of their parents, affiliates, predecessors, successors and
assigns, and their respective current and former officers, directors, employees,
contractors, subcontractors, agents, security holders, attorneys and other
representatives in their capacities as such (collectively, the “Huntsman
Releasees”) and the Apollo Parties and their respective parents, affiliates,
predecessors, successors and assigns, and their respective current and former
officers, directors, managers, members, partners, employees, contractors,
subcontractors, agents, security holders, attorneys and other representatives in
their capacities as such (collectively, the “Apollo Releasees”), from any and
all actions, causes of action, counterclaims, suits, debts, sums of money,
accounts, contracts, agreements, promises, contribution, indemnification,
damages, judgments, executions and demands whatsoever, at law, in equity or
otherwise, which the Hexion Releasors, or any of them, now or hereafter can,
shall or may have against the Huntsman Releasees and/or the Apollo Releasees, or
any of them, whether known or unknown, from the beginning of the world to the
date of this Agreement; provided,

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however, that this release does not extend to claims arising out of ordinary
course of business commercial dealings between the Hexion Releasors and either
the Apollo Releasees or the Huntsman Releasees. The claims released by the
Hexion Releasors against the Apollo Releasees pursuant to this paragraph include
but are not limited to any and all claims that the Hexion Releasors may have
against Joshua J. Harris or Craig O. Morrison and rights of contribution that
the Hexion Releasors may have against Joshua J. Harris or Craig O. Morrison
arising from the Huntsman Shareholder Action. The Hexion Releasors also
acknowledge that nothing contained in this Agreement shall in any way negate or
reduce or otherwise affect the rights of indemnification of Joshua J. Harris or
Craig O. Morrison or any other Apollo Releasee under applicable law, including
any contractual agreements, or the By-Laws or Articles of Incorporation of
Hexion.

                     (b)       Upon full and final payment of all amounts due
Huntsman under Paragraph 3 above, the Apollo Parties on behalf of themselves and
each of their parents, affiliates, predecessors, successors and assigns, and on
behalf of their respective current and former officers, directors, managers,
members, employees, agents, security holders, attorneys and other
representatives in their capacities as such (collectively, the “Apollo
Releasors”), hereby release, acquit, and forever discharge the Huntsman
Releasees and the Hexion Parties and their parents, affiliates, predecessors,
successors and assigns, and its and their respective current and former
officers, directors, employees, contractors, subcontractors, agents, security
holders, attorneys and other representatives in their capacities as such
(collectively, the “Hexion Releasees”) from any and all actions, causes of
action, counterclaims, suits, debts, sums of money, accounts, contracts,
agreements, promises, contribution, indemnification, damages, judgments,
executions

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and demands whatsoever, at law, in equity or otherwise, which the Apollo
Releasors, or any of them, now or hereafter can, shall or may have against the
Huntsman Releasees and/or the Hexion Releasees, or any of them, whether known or
unknown, from the beginning of the world to the date of this Agreement;
provided, however, that this release does not extend to claims arising out of
ordinary course of business commercial dealings between the Apollo Releasors and
either the Hexion Releasees or the Huntsman Releasees. The claims released by
the Apollo Releasors against the Hexion Releasees pursuant to this paragraph
include but are not limited to any and all claims that the Apollo Releasors may
have against Joshua J. Harris or Craig O. Morrison and rights of contribution
that the Apollo Releasors may have against Joshua J. Harris or Craig O. Morrison
arising from the Huntsman Shareholder Action. The Apollo Releasors also
acknowledge that nothing contained in this Agreement shall in any way negate or
reduce or otherwise affect the obligations of indemnification of any of the
Hexion Releasees to Joshua J. Harris or Craig O. Morrison or any other Apollo
Releasor under applicable law, including any contractual agreements, or the
By-Laws or Articles of Incorporation of Hexion.

                     (c)      Upon full and final payment of all amounts due
Huntsman under Paragraph 3 above, including purchase of the convertible notes,
the Huntsman Parties and the Huntsman Family Shareholders on behalf of
themselves and their parents, affiliates, predecessors, successors and assigns,
and on behalf of their respective current and former officers, directors,
trustees, beneficiaries, employees, agents, security holders, attorneys and
other representatives in their capacities as such (collectively, the “Huntsman
Releasors”), hereby release, acquit, and forever discharge the Apollo

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Releasees and the Hexion Releasees from any and all actions, causes of action,
counterclaims, suits, debts, sums of money, accounts, contracts, agreements,
promises, contribution, indemnification, damages, judgments, executions and
demands whatsoever, at law, in equity or otherwise, which the Huntsman
Releasors, or any of them, now or hereafter can, shall or may have against the
Hexion Releasees and/or the Apollo Releasees, or any of them, for, whether known
or unknown, from the beginning of the world to the date of this Agreement;
provided, however, that this release does not extend to claims arising out of
ordinary course of business commercial dealings between the Huntsman Releasors
and either the Hexion Releasees or the Apollo Releasees. The claims released by
the Huntsman Releasors against the Apollo Releasees and the Hexion Releasees
pursuant to this paragraph include but are not limited to any and all claims
that Jon M. Huntsman, Peter Huntsman and the Huntsman Family Shareholders, each
and all as shareholders of Huntsman, may have in the Huntsman Shareholder Action
or as a result of any settlement of the Huntsman Shareholder Action and, with
respect to Peter Huntsman and Jon M. Huntsman, to the extent of their beneficial
ownership interests in any shares of Huntsman common stock held by the HMP
Equity Trust.

                     (d)      The claims released pursuant to this Paragraph 5
include but are not limited to all claims, if any, the Hexion and Apollo
Releasees may have that are in any way related to the April 29, 2006 fire at the
Port Arthur Base Chemicals Light Olefins Unit in the Aromatic and Olefins Plant
in Port Arthur, Texas (the “April 29, 2006 Fire”), including claims in
connection with: (i) Ace Am. Ins. Co., et al. v. Huntsman Corp. and IRIC, U.S.
District Court Southern District of Texas; Civil Action No. 4:07-CV-02796, (ii)
Huntsman Corp. and IRIC v. Ace Am. Ins. Co., et al., U.S. District Court

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Southern District of Texas, Civil Action No. 4:08-CV-1542, (iii) any insurance
proceeds or other monies received by Huntsman through the adjustment process, by
settlement or otherwise in connection with the April 29, 2006 Fire, or (iv) the
adjustment or payment of insurance proceeds in connection with the April 29,
2006 Fire.

                     (e)      Nothing in this Agreement is intended or shall be
construed to release or discharge any of the Parties from any obligation set
forth, or liability for any representation or warranty made, in this Agreement,
Annex A or B attached hereto, or any agreements entered into in connection with
the purchase provided for in Paragraph 3(a) of this Agreement or the financing
provided for in Paragraph 3(f) of this Agreement.

                     (f)      Nothing in this Agreement is intended or shall be
construed to release or waive any claims that the Parties have against the
Banks.

            6.      Covenant Not to Sue. Each of the Parties covenants, on
behalf of itself and, in the case of the Huntsman Parties, on behalf of the
Huntsman Releasors; in the case of the Apollo Parties, on behalf of the Apollo
Releasors; and in the case of the Hexion Parties, on behalf of the Hexion
Releasors, not to bring any claim or cause of action released pursuant to
Paragraph 5 of this Agreement before any court, arbitrator, or other tribunal in
any jurisdiction, whether as a claim, cross-claim, counterclaim or otherwise.
Any Party released pursuant to Paragraph 5 of this Agreement may plead this
Agreement as a complete bar to any such claim, cause of action or defense
brought in derogation of this covenant not to sue.

            7.      Indemnification.

                     (a)       Huntsman shall indemnify and hold the Hexion
Releasees and Apollo Releasees harmless from any claim for indemnification or
contribution or any

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other claim asserted against either the Hexion Releasees or the Apollo Releasees
by any of Credit Suisse, Cayman Islands Branch, Credit Suisse Securities (USA)
LLC, Deutsche Bank AG Cayman Islands Branch, Deutsche Bank AG New York Branch,
Deutsche Bank Securities Inc., and Deutsche Bank Trust Company Americas, or any
of their respective affiliates or assignees (collectively, the “Banks”), that in
any way relates to or arises out of any claims made by the Huntsman Parties
against the Banks (collectively, the “Indemnified Matters”). Such
indemnification by Huntsman shall include but is not limited to the claim for
indemnification asserted by the Banks against Hexion in the New York Action
Against the Banks, and the claim for contribution asserted by the Banks against
the Apollo Parties in the Texas Action Against the Banks; provided, however,
that Huntsman will not be required to indemnify the Apollo Parties or the Hexion
Parties for any legal fees or expenses incurred by the Banks. The aggregate
amount paid by Huntsman to the Hexion Releasees and/or the Apollo Releasees
pursuant to the terms of this paragraph shall not exceed the amounts of
Huntsman’s recovery collected, if any, in the Texas Action Against the Banks net
of attorney fees, costs and expenses related to the Texas Action Against the
Banks. Notwithstanding the foregoing, the Hexion Releasees and Apollo Releasees
shall bear and not be indemnified for their own attorneys fees and expenses in
defending such Banks’ claims.

                    (b)      In furtherance of but without limiting its
indemnification obligation, Huntsman agrees that it will reduce or credit,
against any judgment or settlement that it may obtain against any of the Banks,
an amount equal to the full amount of any judgment that the Banks may at any
time obtain or have obtained against any of the Hexion Releasees or Apollo
Releasees on any claim, including any claim for

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contribution or indemnification, that in any way relates to or arises out of any
of the Indemnified Matters.

                    (c)      In the event Huntsman settles any claim against any
of the Banks that in any way relates to or arises out of any of the Indemnified
Matters, Huntsman shall obtain a release in favor of the Hexion Releasees and
the Apollo Releasees of any and all liability that any of the Hexion Releasees
or the Apollo Releasees may have to any of the Banks that arises out of the
Indemnified Matters.

                    (d)      Huntsman shall take all appropriate and necessary
actions (including delaying distribution of amounts payable under a judgment) so
as to assure the full and complete effectuation of the protections set forth in
this section of the Settlement Agreement. It is agreed that any breach of the
obligations set forth in this Paragraph 7 will result in irreparable injury to
the Hexion Releasees and the Apollo Releasees and that Huntsman shall be subject
to (in addition to and without limiting any other available remedies) injunctive
relief and shall be liable for all attorneys’ fees, costs and expenses incurred
in connection with procuring injunctive relief or otherwise enforcing the
obligations set forth herein.

                    (e)      The Hexion Releasees and the Apollo Releasees agree
to use diligent efforts to vigorously defend and contest any claim, action or
proceeding in respect of which indemnification could be sought under this
Paragraph 7. The Hexion Releases and the Apollo Releasees agree that they will
not settle, compromise or consent to the entry of any judgment with respect to
any claim, action or proceeding in respect of which indemnification could be
sought under this Paragraph 7 without the prior written consent of the Huntsman
Parties, which consent shall not be unreasonably withheld.

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            8.     Representations and Warranties.

                    (a)      Each of the Parties acknowledges, agrees,
represents and warrants to the other Parties and the releasees hereunder that:

                              (i)      It has not heretofore assigned or
transferred, or purported to assign or transfer, to any person or entity any
claim or cause of action released pursuant to Paragraph 5 of this Agreement;

                              (ii)      There are no liens or claims of lien, or
assignments in law or equity or otherwise, of or against any claim or cause of
action released pursuant to Paragraph 5 of this Agreement;

                              (iii)      It has duly executed and delivered this
Agreement and is fully authorized to enter into and perform this Agreement and
every term hereof;

                              (iv)      It has been represented by legal counsel
in the negotiation and joint preparation of this Agreement, has received advice
from legal counsel in connection with this Agreement and is fully aware of this
Agreement’s provisions and legal effect;

                              (v)      It enters into this Agreement freely,
without coercion, and based on its own judgment and not in reliance upon any
representations or promises made by the other Party, apart from those set forth
in this Agreement; and

                              (vi)      It has the authority, and has obtained
all necessary approvals, including but not limited to approval of the Parties’
respective Boards of Directors, as necessary, to enter into this Agreement and
all the releases, undertakings, covenants, representations, warranties and other
obligations and provisions contained in this Agreement.

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                           (b)      Each of the Parties acknowledges the
materiality of the foregoing representations and warranties.

            9.      No Admission or Acknowledgement. The Hexion Parties and the
Apollo Parties, on the one hand, and the Huntsman Parties, on the other hand,
deny and in no way admit any liability to each other with respect to any and all
matters that were or could have been alleged in the Litigations. This Agreement
has been made to spare the Parties the burden and expense of further litigation
and shall not be considered an admission of fact, issue of law or liability by
any Party for any purpose.

            10.    Mutual Non-Disparagement. The Huntsman Parties shall not make
or knowingly encourage any other person to make any public or private statement,
whether written or oral, that disparages, defames, is derogatory about, or
misrepresents the rights of the Hexion Parties and/or the Apollo Parties in
connection with the matters alleged in or that are the subject of the
Litigations. Neither the Hexion Parties nor the Apollo Parties shall make or
knowingly encourage any other person to make, any public or private statement,
whether written or oral, that disparages, defames, is derogatory about, or
misrepresents the rights of Huntsman in connection with the matters alleged in
or that are the subject of the Litigations. Nothing herein prevents any Party
from taking any position or making any statement in the Litigations.

            11.    Announcement of Settlement. Immediately following the
execution and delivery of this Agreement, each of Huntsman, Hexion and Apollo
shall issue a press release announcing the execution of this Agreement, which
press releases shall be subject to the prior review and approval of the other
Parties. Other than as a Party may determine is necessary to respond to any
legal or regulatory process or

16

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proceeding or to give appropriate testimony or file any necessary documents in
any legal or regulatory proceeding or as may be required by law, each of the
Parties will use its commercially reasonable efforts not to make any public
statements (including in any filing with the SEC or any other regulatory or
governmental agency, including any stock exchange) that are inconsistent with,
or otherwise contrary to, the jointly approved statements in the press
release(s) issued pursuant to this Paragraph 11.

            12.      Choice of Law. This Agreement and all matters arising out
of or relating to this Agreement, and all transactions and events contemplated
hereby or thereby, shall be governed by, and construed, performed, and enforced
in accordance with, the laws of the State of Delaware, without giving effect to
its conflicts or choice of law rules.

            13.      Jurisdiction. Any action or proceeding asserting any claim
of any kind between the Parties or brought by any Party in any way arising from
or related to, or to enforce, this Agreement or any term hereof shall be brought
exclusively in the Court of Chancery of the State of Delaware or, if that Court
lacks jurisdiction, the Superior Court of the State of Delaware. The parties
unconditionally waive any right to trial by jury in any such action or
proceeding.

            14.      General Provisions.

                       (a)       No Third Party Beneficiaries. Except as
provided in Paragraphs 5, 6, 7 and 8 of this Agreement, nothing in this
Agreement is intended to or shall be construed to give to any person or entity,
other than the Parties, any legal or equitable right, remedy, or claim under or
in respect of this Agreement or any provisions contained herein.

17

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                     (b)      Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors and
permitted assigns. This Agreement shall not be assignable except by operation of
law or by mutual written consent of the Parties. Any assignment in derogation of
this provision shall be null and void.

                     (c)      Severability. Whenever possible, each provision
and term of this Agreement shall be interpreted in such a manner as to be valid
and enforceable. In the event that any such provision or term should be
determined to be or rendered invalid or unenforceable, all other provisions and
terms of this Agreement shall remain unaffected to the extent permitted by law.

                     (d)      Confidentiality. This Agreement and all
correspondence related hereto are intended to be confidential to the Parties,
and except as specifically provided herein, no Party shall publish, reproduce,
transmit or disclose any of the information contained in this Agreement or any
related correspondence (hereinafter “Confidential Information”) to any non-party
without the prior written consent of the non-disclosing Party. Such obligation
shall not apply to disclosures to professional advisers of the Parties or their
respective insurers or accountants, or to any information publicly disclosed
pursuant to Paragraph 11. In addition, such obligations shall not apply to
disclosures required by any appropriate governmental authority having specific
jurisdiction or to the extent required by applicable law or any applicable
listing agreement with any securities exchange; provided, however, that prior to
any such disclosure the disclosing Party shall: (i) provide the non-disclosing
Party with timely advance written notice of its intent to so disclose; (ii) use
reasonable efforts to minimize

18

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the amount of Confidential Information to be provided in a manner consistent
with the interests of the non-disclosing Party and the requirements of the
governmental authority involved; and (iii) use reasonable efforts (which shall
include, to the extent reasonably practicable, participation by the
non-disclosing Party in discussions with the governmental authority involved) to
secure confidential treatment of the Confidential Information to be provided.

                     (e)      Amendments. No provision or term of this Agreement
shall be amended, waived, discharged or terminated except by an instrument in
writing signed by the Parties expressly referring to the provision or term of
this Agreement to which such instrument relates; and no such amendment or waiver
shall extend to, or affect or impair any right with respect to, any obligation
that is not dealt with expressly therein. No course of dealing or delay or
omission on the part of any of the Parties in exercising any right under or
pursuant to this Agreement shall operate as a waiver thereof or otherwise be
prejudicial thereto.

                     (f)      Counterparts. This Agreement may be executed
simultaneously or in actual or telecopied counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.

                     (g)      Entire Agreement. This Agreement, together with
the annexes hereto, represents the entire agreement between the Parties
concerning the subject matter hereof and supersedes all prior written or oral
negotiations, representations and agreements with respect thereto. No Party is
relying on any statement or representation other than as explicitly stated in
this Agreement.

19

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HEXION SPECIALTY CHEMICALS, INC.                                               
     By:     /s/  Craig O. Morrison                                      Name:  
Craig O. Morrison                    Title:      President and Chief Executive
Officer     HEXION LLC             By:    /s/  Craig O.
Morrison                                      Name:    Craig O. Morrison
                   Title:       President and Chief Executive Officer     NIMBUS
MERGER SUB INC.              By:      /s/  Craig O. Morrison                    
               Name:      Craig O. Morrison                  Title:        
President and Chief Executive Officer                           /s/  Craig O.
Morrison                                            Craig O. Morrison     
APOLLO INVESTMENT FUND IV, L.P.             By:     Apollo Advisors IV, L.P.,
its general                     partner             By:     Apollo Capital
Management IV, Inc., its                     general partner              By:   
  /s/ John J. Suydam                           Name:    John J. Suydam
                   Title:      Vice President

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APOLLO OVERSEAS PARTNERS IV, L.P.           By: Apollo Advisors IV, L.P., its
managing      partner                     By: Apollo Capital Management IV,
Inc., its       general partner                     By:     /s/ John J.
Suydam             Name:  John J. Suydam      Title:     Vice President    
APOLLO INVESTMENT FUND VI, L.P.           By:    Apollo Advisors VI, L.P., its
general      partner                     By: Apollo Capital Management VI, LLC, 
         its general partner                     By:     /s/ John J.
Suydam                 Name:  John J. Suydam          Title:     Vice President
    APOLLO OVERSEAS PARTNERS VI, L.P.           By:    Apollo Advisors VI,
L.P.,      its managing general partner                     By: Apollo Capital
Management VI, LLC,           its general partner                     By:    
/s/ John J. Suydam                   Name:  John J. Suydam            Title:    
Vice President

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APOLLO OVERSEAS PARTNERS  (DELAWARE) VI, L.P.           By:    Apollo Advisors
VI, L.P.,      its general partner                     By: Apollo Capital
Management VI, LLC,           its general partner                     
 By:       /s/ John J. Suydam                   Name:  John J. Suydam          
 Title:     Vice President     APOLLO OVERSEAS PARTNERS  (DELAWARE 892) VI,
L.P.           By:    Apollo Advisors VI, L.P.,      its general partner       
             By: Apollo Capital Management VI, LLC,           its general
partner                     By:       /s/ John J. Suydam                 
 Name:  John J. Suydam            Title:     Vice President     APOLLO OVERSEAS
PARTNERS  (GERMANY) VI, L.P.           By:    Apollo Advisors VI, L.P.,  its
managing general partner                    By: Apollo Capital Management VI,
LLC,           its general partner                     By:       /s/ John J.
Suydam                   Name:  John J. Suydam            Title:     Vice
President

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APOLLO INVESTMENT FUND V, L.P.           By:    Apollo Advisors V, L.P.,     
its general partner                     By: Apollo Capital Management V, Inc., 
    its general partner                       By:     /s/  John J. Suydam      
         Name:  John J. Suydam            Title:     Vice President   APOLLO
OVERSEAS PARTNERS V, L.P.           By:    Apollo Advisors V, L.P.,  its
managing general partner                    By: Apollo Capital Management V,
Inc.,      its general partner                       By:     /s/  John J.
Suydam                Name:  John J. Suydam            Title:     Vice President
  APOLLO NETHERLANDS PARTNERS V(A),  L.P.               By:    Apollo Advisors
V, L.P.,  its managing general partner                    By: Apollo Capital
Management V, Inc.,             its general partner                   
 By:     /s/  John J. Suydam                Name:  John J. Suydam          
 Title:     Vice President

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APOLLO NETHERLANDS PARTNERS V(B),  L.P.               By:         Apollo
Advisors V, L.P.,  its managing general partner                    By: Apollo
Capital Management V, Inc.,                   its general partner               
       By:       /s/  John J. Suydam                      Name:  John J. Suydam 
                 Title:     Vice President   APOLLO GERMAN PARTNERS V  GMBH &
CO., KG           By:         Apollo Advisors V, L.P.,  its managing limited
partner                    By: Apollo Capital Management V, Inc.,               
 its general partner                       By:       /s/  John J. Suydam        
             Name:  John J. Suydam                  Title:     Vice President  
APOLLO ADVISORS IV, L.P.           By: Apollo Capital Management IV, Inc., its 
    general partner           By:           /s/  John J. Suydam         Name: 
John J. Suydam     Title:     Vice President

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APOLLO MANAGEMENT IV, L.P.           By: Apollo Management, L.P., its general   
                   partner                     By: Apollo Management GP, LLC,
its                               general partner                   
 By:    /s/  John J. Suydam                                     Name:  John J.
Suydam                              Title:     Vice President     APOLLO
ADVISORS V, L.P.           By: Apollo Capital Management V, Inc., its           
           general partner                     By:    /s/  John J. Suydam       
                             Name:  John J. Suydam                            
 Title:     Vice President     APOLLO MANAGEMENT V, L.P.           By: AIF V
Management, LLC, its general                       partner                   
 By:    /s/  John J. Suydam                                     Name:  John J.
Suydam                              Title:     Vice President     APOLLO
ADVISORS VI, L.P.           By: Apollo Capital Management VI, LLC,             
         its general partner                     By:    /s/  John J.
Suydam                                     Name:  John J. Suydam                
             Title:     Vice President

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APOLLO MANAGEMENT VI, L.P.           By: AIF VI Management, LLC,               
       its general partner                     By:      /s/  John J.
Suydam                                     Name:  John J. Suydam                
             Title:  Vice President     APOLLO MANAGEMENT, L.P.           By:
Apollo Management GP, LLC,                       its general partner   
                 By:      /s/  John J. Suydam                                   
 Name:  John J. Suydam                              Title:  Vice President    
APOLLO GLOBAL MANAGEMENT, LLC           By: AGM Management, LLC, its Manager   
               By: BRH Holdings GP, Ltd., its Sole                             
 Member                     By:      /s/  John J. Suydam                       
           Name:  John J. Suydam                            Title:  Vice
President                 /s/ Leon Black               Leon Black         
/s/ Joshua J. Harris             Joshua J. Harris 

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HUNTSMAN CORPORATION             By:   /s/ Peter R. Huntsman                    
       Name: Peter R. Huntsman           Title: President and Chief Executive
Officer       /s/ Jon M. Huntsman                     Jon M. Huntsman     /s/
Peter Huntsman                       Peter Huntsman      HUNTSMAN FAMILY
HOLDINGS  COMPANY LLC               By:   /s/ Jon M.
Huntsman                              Name:   Jon M. Huntsman         
 Title:      Manager      THE JON AND KAREN HUNTSMAN  FOUNDATION             
 By:   /s/ Jon M. Huntsman                              Name:    Jon M.
Huntsman           Title:       President      KAREN H. HUNTSMAN INHERITANCE 
TRUST             By:       /s/ Karen H. Huntsman                     Name:   
Karen H. Huntsman           Title:       Trustee 

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HUNTSMAN FINANCIAL CORPORATION               By:        /s/  Jon M. Huntsman    
         Name:    Jon M. Huntsman           Title:       President      BRYNN B.
HUNTSMAN, AS CUSTODIAN  UNDER THE UTAH UNIFORM TRANSFERS  TO MINORS ACT, FOR THE
BENEFIT OF  REBECCA BRYNN HUNTSMAN, RACHEL  BRYNN HUNTSMAN, CAROLINE BRYNN 
HUNTSMAN, AMBER BRYNN HUNTSMAN,  VIRGINIA BRYNN HUNTSMAN, AND   JAMES B.
HUNTSMAN               /s/ Brynn B. Huntsman                        Brynn B.
Huntsman 

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Annex A

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     2. nnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnn

     3. nnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnn

     4. nnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnn

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Annex B   Terms of the Huntsman Convertible Notes   Issuer:           Huntsman
Corporation (“Issuer”) 

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Investor:           Affiliates of Apollo Investment Fund VI, L.P. (“Investor”) 

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Security:           7% Convertible Senior Notes (the “Notes”) 

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Principal Amount:           $250 million 

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  Conversion:           The Notes shall be convertible at any time, at the
option of the             holder, into the number of shares of Common Stock
determined             by dividing (i) the principal amount of the Notes so
converted             by (ii) the Conversion Price then in effect. The initial 
           “Conversion Price” equals 135% of the Original Common Price,         
   subject to anti-dilution provisions as described further below.           
 The “Original Common Price” means the closing price for one             share
of common stock of the Issuer (“Common Stock”) on             December 10, 2008.
The Issuer shall provide appropriate notice             prior to the record date
for any dividend or similar payment or             other distribution on the
Common Stock to the holders of the             Notes to permit conversion, and
provided notice of conversion             has been received by the Issuer prior
to the applicable record             date, the holder will be entitled to the
dividend or other payment             or distribution at such time as it is made
to holders of Common             Stock. Interest payments on the Notes shall
cease as of the date             of notice of conversion. 

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  Interest:           The Notes shall bear interest at the rate of 7% per
annum.             Interest shall be payable semi-annually on July 1 and January
1             of each year, beginning July 1, 2009. Interest shall be payable   
         either in cash, or at the option of the Issuer, by delivery of         
   shares of Common Stock having a then current market value           
 equal to the interest payment.                The Issuer and Investor will use
reasonable efforts to exempt             shares issued in payment of interest or
payment of principal at             maturity pursuant to the Notes from the
short-swing profit rules             of Section 16 of the Exchange Act. 

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  Maturity:           The tenth anniversary of the issue date. At maturity, the
Issuer             shall have the option to pay the principal amount of the
Notes in             Common Stock by delivering Common Stock having a value     
       equal to the principal amount of such Notes, plus an amount           
 equal to the underwriting spread of a nationally recognized 

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underwriter chosen by the Issuer that would be paid by a seller of such shares
at such time, in shares of Common Stock valued at the then current market price.

 

Redemption:

The Issuer shall be entitled to redeem the Notes in whole, for cash, at the
principal amount plus accrued and unpaid interest, at any time after the third
anniversary of the issue date provided that the closing price of the Common
Stock, for at least 20 consecutive trading days prior to such notice of
redemption, exceeds 135% of the Conversion Price then in effect. The Issuer
shall not be entitled to redeem the Notes prior to the third anniversary of the
issue date.

 

Change of Control

Upon a Non-Stock Change of Control, holders of Notes shall have the option, but
not the obligation, to require the Issuer to redeem Notes in whole or in part
for an amount equal to the principal amount thereof. Notes not so redeemed shall
become convertible into consideration received by Common Stockholders.

“Non-Stock Change of Control” means the occurrence of any of the following: (i)
the acquisition by any person or “group” (as defined in Rule 13d-3 under the
Securities and Exchange Act of 1934) of (a) more than 50% of the outstanding
voting stock of Issuer (whether by merger, stock purchase, recapitalization,
reorganization, redemption, issuance of capital stock or otherwise) or (b)
assets constituting all or substantially all of the assets of Issuer, (ii)
continuing directors (i.e., members of the Issuer’s board of directors currently
or persons who become such members subsequently and whose appointment, election
or nomination for election is duly approved by a majority of the continuing
directors on the board at the time of such approval) cease to constitute a
majority of the board, or (iii) any merger, consolidation or reorganization, or
series of such related transactions, involving the Issuer, unless the
stockholders of the Issuer immediately prior to such transaction or transactions
will own at least 50% of the combined equity and voting power of the Issuer (or
if the Issuer will not be the surviving entity in such merger, consolidation or
reorganization, such surviving entity or a parent thereof). Notwithstanding the
foregoing, no transaction described in clause (i) or (iii) above shall be a Non-
Stock Change of Control unless, in such transaction, the outstanding shares of
Common Stock are converted into or exchanged for consideration that is less than
90% publicly traded common equity securities.

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Anti-Dilution:

The Notes shall be protected against dilution if the Issuer effects a
subdivision or combination of its outstanding Common Stock or in the event of a
reclassification, recapitalization, stock split, stock dividend or other
distribution payable in securities of the Issuer or any other person or any
dilutive Issuer self-tender offer. The Conversion Price of the Notes shall be
adjusted to prevent dilution from other dividends or distributions, except no
such adjustment shall be made with respect to (i) regular cash dividends paid on
the Common Stock in a per share amount per quarter that does not exceed $0.15
cents per quarter, (ii) any dividend or distribution made out of (or in an
amount that could be made out of) proceeds received by the Issuer or its
affiliates from any settlement or other recovery with respect to the Hexion
merger agreement and related transactions to the extent made within one year of
receipt of such proceeds, or (iii) any dividend or distribution in which the
Holders of Notes otherwise participate on an as converted basis.

 

Ranking:

The Notes shall rank equally with the Issuer’s other senior unsecured
indebtedness.

 

Transfer Restrictions

For a period of one year following issuance of the Notes (the “Lock-Up Period”),
Investor shall not, without the prior written consent of the Issuer, sell or
otherwise transfer any Notes or the Common Stock issued upon conversion thereof
(but not including Common Stock issued in lieu of interest payments) to any
unaffiliated third-party.

 

Information Rights

If the Issuer is no longer subject to the reporting requirements of the
Securities Exchange Act of 1934, Holders of Notes will be entitled, upon their
request, to receive (i) no later than 45 days after the end of each of the first
three fiscal quarters of each year, unaudited quarterly financial statements of
the Issuer and its consolidated subsidiaries, and (ii) no later than 90 days
after the end of each fiscal year, annual audited financial statements of the
Issuer and its consolidated subsidiaries.

 

Registration Rights:

The Issuer will cause to be effective, promptly after the Lock- Up Period, and
thereafter maintain in effect a customary resale shelf registration statement
covering the Common Stock that may be issued upon conversion of the Notes or in
respect of interest thereon. The Issuer shall be reimbursed by the requesting
holders for registration fees incurred in connection with any such registration
and the Issuer shall be responsible for its other costs of such registration.

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Voting / Standstill    Apollo, Issuer and Investor shall enter into a
Voting/Standstill  Agreement:    Agreement containing terms satisfactory to
Issuer and Apollo,      which terms shall include:        (a)    The
Apollo-related stockholders and their Affiliates shall          not beneficially
own Issuer common shares or securities          exercisable for or convertible
into Issuer common shares          other than the shares issuable upon
conversion of the          Notes, received in payment of interest or principal
thereon          and shares beneficially owned on the Effective Date or         
otherwise pursuant to a distribution or dividend on the          Notes or shares
of Common Stock issued pursuant to the          Notes.        (b)    In
connection with any matter in which the Apollo-related          stockholders and
their Affiliates have voting rights, the          Issuer shares held by
Apollo-related stockholders and          their Affiliates will be voted, at the
election of Issuer,          either in the manner recommended by a majority of
the          Issuer Board or in the same proportion as the other Issuer         
shareholders. These voting restrictions shall be applicable          to any
transferee of the Notes or other securities other than          transferees
pursuant to (i) a firm commitment          underwritten public offering
involving a broad          distribution, (ii) sales in regular broker
transaction          pursuant to Rule 144 or (iii) private sales to persons who 
        after such sale beneficially and of record own less than          5% of
the Issuer’s outstanding voting securities.        (c)    Neither the
Apollo-related stockholders nor any of their          Affiliates shall seek or
propose to influence or control          (whether through a 13D Group or
otherwise) the          management, Board of Directors, policies or affairs of 
        Huntsman or any of its subsidiaries.        (d)    Neither the
Apollo-related stockholders nor any of their          Affiliates shall initiate
(or solicit other Persons to initiate)          or make any public statement
regarding any tender or          exchange offer for voting securities or other
securities of          Huntsman or any of its Subsidiaries, or any Business     
    Combination or recapitalization, restructuring, liquidation          or
dissolution involving Huntsman or any of its          Subsidiaries.        (e) 
  Neither the Apollo-related stockholders nor any of their          Affiliates
shall form, join or participate in a 13D Group          (other than among
themselves) with respect to acquiring, 

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        disposing or voting of voting securities.        (f)    Neither the
Apollo-related stockholders nor any of their          Affiliates shall request
Huntsman (or any of its directors,          officers, employees or agents),
directly or indirectly, to          amend or waive any of the provisions of the 
        Standstill/Voting Agreement (except in a manner that          does not
require or result in disclosure publicly or to third          parties)       
(g)    The Apollo-related stockholders and each of their          Affiliates
shall not disclose any intention, plan or          arrangement inconsistent with
any of the foregoing.        (h)    Neither the Apollo-related stockholders nor
any of their          Affiliates shall advise, assist or knowingly encourage
any          other Persons to do any of the foregoing.        (i)    Neither the
Apollo-related stockholders nor any of their          Affiliates shall engage in
any short sales or other          derivative or hedging activities with respect
to the Notes          or the Common Stock.        (j)    Standstill Agreement
terminates upon the later to occur of          (i) December 31, 2010 or (ii) the
date on which none of          the Apollo-Related Stockholders or their
Affiliates          beneficially or of record own Notes or any securities       
  issued in respect thereof or otherwise which represent 3%          or more of
the outstanding Common Stock.        For purposes of the foregoing paragraphs
(a)-(j), with respect to      Affiliates of Apollo that are portfolio companies
of Apollo      investment funds (other than Hexion Specialty Chemicals and     
its subsidiaries or any other portfolio company substantially      engaged in
the chemical business), the obligations of Apollo and      its other Affiliates
would be limited to (i) not directing or      otherwise affirmatively causing or
encouraging such portfolio      company to violate such provisions, and (ii) if
they become      aware of a portfolio company acquiring securities of Huntsman 
    or otherwise violating such provisions, using reasonable efforts      to
cause them to sell such securities or otherwise comply with      such
provisions. 

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  Documentation:    Subject to customary definitive documentation.
Representations      and warranties shall only address customary and
fundamental      matters for transactions of this type, but shall not include
any      disclosure or other substantive representations about business or 

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financial matters concerning the Issuer, and the Investor shall waive any claims
with respect to representations not expressly given.

 

Regulatory Matters:

The Issuer and Apollo will reasonably cooperate with respect to any required
regulatory approvals regarding the issuance of shares of Common Stock hereunder,
in order to facilitate the prompt conversion of the Notes at such time as they
may be converted, and to the extent provided herein, provide the benefits of
conversion from the date of delivery of the conversion notice, despite the fact
that there may be a delay in conversion due to regulatory approvals.

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Annex C

 

                                                                                                                                  
December __, 2008

 

 

                      Dear                            :

                      This letter memorializes our agreement as of the Effective
Date of the Settlement Agreement and Release dated December __, 2008 between and
among the Huntsman Parties, the Hexion Parties, and the Apollo Parties
(capitalized terms not otherwise defined in this letter are used as defined in
the Settlement Agreement and Release), that Huntsman shall pay the Apollo
Parties an amount in cash equal to 20% of the value of any cash and noncash
consideration that is in excess of $500 million ($500,000,000) that Huntsman may
obtain or receive in settlement in connection with any claims made by Huntsman
against the Banks arising from or relating to the Merger Agreement, the
Transactions referred to therein (including but not limited to the Financing),
and related matters, such claims including but not limited to the Texas Action
Against the Banks (the “settlement”), after Huntsman first recovers its
attorneys’ fees, costs, and expenses in making that claim; provided, however,
that:

(1)      in no circumstance shall the aggregate amount of any payments owed by
Huntsman to the Apollo Parties under this letter exceed $425 million
($425,000,000);

(2)      in the event trial commences in the Texas Action Against the Banks, any
interest on the part of the Apollo Parties shall terminate immediately, and
Huntsman shall not owe any portion of any subsequent recovery to the Apollo
Parties under this letter; and

(3)      in the event that Huntsman or any of its subsidiaries issues a security
or debt instrument to any of the Banks in connection with the settlement, the
amount of consideration deemed to be obtained or received by Huntsman in
connection therewith shall be the excess of any of the value of the
consideration provided by the Banks over the value of the security or debt
instrument issued.

                      For the purposes of this letter, the value of (1) any
consideration consisting of securities listed on a national securities exchange
or traded on the NASDAQ shall be equal to the average closing price per share of
such security as reported on such exchange or NASDAQ for the 10 trading days
prior to the date of settlement; and (2) any other form of noncash consideration
shall be the full market value of that noncash consideration as determined by a
nationally recognized independent

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investment banking firm mutually selected, within three business days after the
Huntsman Parties advise the Apollo Parties of the settlement, by the Huntsman
Parties and the Apollo Parties, which determination shall be made by such
investment banking firm within 15 business days after the date of their
engagement. The determination of the investment banking firm shall be binding
upon the parties.

                      Payment in full of all amounts due to Huntsman under the
Settlement Agreement is a condition precedent to the obligation to pay any sums
of money pursuant to this letter for the benefit of the Huntsman Parties and if
such condition precedent is not met prior to April 1, 2009, this letter shall
terminate. The obligations of this letter are also separate and severable, in
their entirety, from the Settlement Agreement. The Huntsman Parties shall not
challenge in any way the validity or enforceability of this letter or any
provision thereof. In the event that this letter or any provision hereof is
invalid or unenforceable, or fails for any reason, it shall have no effect on
the validity or enforceability of the Settlement Agreement.

                      The provisions of the Settlement Agreement relating to
Choice of Law and Jurisdiction shall also apply to this letter.

                      This letter may be executed simultaneously or in actual or
telecopied counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same letter.

                      Please countersign below to indicate your acceptance of
these terms.

Very truly yours,

 

                      AGREED AND
ACCEPTED:                                           

 
 
 
                      _____________________________________________________

 

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