Exhibit 10.2

 

Execution Version

 

TAX MATTERS AGREEMENT

 

by and among

 

HUNTSMAN CORPORATION

 

and

 

VENATOR MATERIALS PLC

 

Dated as of August 7, 2017

 

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TAX MATTERS AGREEMENT

 

This TAX MATTERS AGREEMENT (this “Agreement”) is entered into as of August 7,
2017, by and among Huntsman Corporation, a Delaware corporation (“Huntsman”),
and Venator Materials PLC, a public company limited by shares and incorporated
under the laws of England and Wales (“Venator”), and is effective as of the
Effective Date.  Each of Huntsman and Venator is sometimes referred to herein as
a “party” and, collectively, the “parties.”

 

RECITALS

 

WHEREAS, the board of directors of Huntsman has determined that it is in the
best interests of Huntsman and its shareholders that Venator operate the
Pigments Business as a separate publicly-traded entity;

 

WHEREAS, prior to the IPO, Venator was an indirect, wholly-owned subsidiary of
Huntsman;

 

WHEREAS, prior to and in preparation for the IPO, Huntsman and its subsidiaries
completed an internal reorganization through a series of transactions, including
taxable and nontaxable asset transfers, dividends, contributions and similar
transactions in order to transfer the Pigments Business to Venator (the
“Internal Reorganization”);

 

WHEREAS, on the Offering Date, ordinary shares of Venator will be sold to the
public (the “IPO”);

 

WHEREAS, immediately after, and as a result of, the IPO, Venator ceased to be an
indirect, wholly-owned subsidiary of Huntsman; and

 

WHEREAS, the parties wish to (a) provide for the payment of Tax Liabilities and
entitlement to refunds thereof, (b) allocate responsibility for, and cooperation
in, the filing of Tax Returns, and (c) provide for and agree on certain other
matters relating to Taxes.

 

NOW, THEREFORE, in consideration of the mutual promises and undertakings
contained herein and in any other document executed in connection with this
Agreement, the parties agree as follows:

 

ARTICLE I
DEFINITIONS; CERTAIN OPERATING CONVENTIONS

 

1.1                               For purposes of this Agreement, the following
terms have the meanings set forth below:

 

“Additional Basis Tax Benefit” means, with respect to each Post-Offering Taxable
Period, the excess, if any, of the Cumulative Adjusted Tax Liability over the
Cumulative Actual Tax Liability.

 

“Affiliated Group” means an affiliated group of corporations, within the meaning
of Section 1504(a) of the Code, or any similar group of entities as defined
under corresponding

 

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provisions of the laws of other jurisdictions, including the common parent
corporation and any member of such group.  For the avoidance of doubt,
Affiliated Group includes the group relief provisions, and all similar
provisions, under the tax law, rules and regulations of the United Kingdom. 
Huntsman shall be deemed and treated as if it were, (even where a “parent” is
not required) the parent company of the United Kingdom Affiliated Group.

 

“Agreement” has the meaning set forth in the introductory paragraph of this
Agreement.

 

“Audit” means any audit, assessment of Taxes, other examination by any Tax
Authority, or proceeding or appeal of a proceeding relating to Taxes, whether
administrative or judicial, including proceedings relating to competent
authority determinations.

 

“Basis Increases” means any increases in the basis of the assets of the U.S.
Pigments Business for U.S. federal income tax purposes resulting from (i) the
Internal Reorganization and from payments made pursuant to Section 2.7 and
(ii) any immediate deduction resulting from payments made pursuant to
Section 2.7.  For the avoidance of doubt, the Parties acknowledge that this will
create an iterative gross-up calculation where a payment by Venator will create
additional Basis Increases, which will create an additional payment, which will
create additional Basis Increases and so on until the amount reaches a whole one
dollar.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Cumulative Actual Tax Liability” with respect to each taxable year, means the
cumulative cash payments for U.S. federal income Taxes of the Venator Group for
all taxable years beginning after the Internal Reorganization through the end of
such taxable year.  Cumulative Actual Tax Liability shall be calculated within
30 days following the filing of the relevant U.S. income tax returns for the
applicable taxable year.  To the extent there are amendments to a relevant
income tax return of a Venator Group member or a Final Determination affecting
the U.S. federal income Taxes of the Venator Group, such amendment or Final
Determination shall be treated as changing the Cumulative Actual Tax Liability
for the taxable year during which the amendment or Final Determination occurs.

 

“Cumulative Adjusted Tax Liability” with respect to each taxable year, means the
cumulative hypothetical cash payments for U.S. federal income Taxes of the
Venator Group for all taxable years beginning after the Internal Reorganization
through the end of such taxable year (calculated using the same methods,
elections, conventions, U.S. federal income tax rate and similar practices used
on the relevant actual federal income tax returns) but without taking into
account any Basis Increases.  To the extent there are amendments to a relevant
income tax return of a Venator Group member or a Final Determination affecting
the U.S. federal income Taxes of the Venator Group, such amendment or Final
Determination shall be treated as changing the Cumulative Adjusted Tax Liability
for the taxable year during which the amendment or Final Determination occurs.

 

“Directly Owned Huntsman Assets” means any assets associated with the Other
Huntsman Businesses that were (i) sold, contributed, or otherwise transferred to
Huntsman or any member of the Huntsman Group as part of the Internal
Reorganization and (ii) treated for a

 

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taxable period, or portion thereof, prior to the Internal Reorganization as
directly owned by any member of the Venator Group for U.S. federal income and
any other applicable Tax purposes.

 

“Directly Owned Venator Assets” means any assets associated with the Pigments
Business that were (i) sold, contributed, or otherwise transferred to Venator or
any member of the Venator Group as part of the Internal Reorganization and
(ii) treated for a taxable period, or portion thereof, prior to the Internal
Reorganization, as directly owned by any member of the Huntsman Group for U.S.
federal income and any other applicable Tax purposes.

 

“Effective Date” has the meaning set forth in the Separation Agreement.

 

“Estimated Tax Installment Date” means the date on which an installment of any
Taxes is required to be made.

 

“Filing Party” has the meaning set forth in Section 6.1.

 

“Final Determination” means the final resolution of cash Tax liability for any
Tax Item or for the Tax Liability for any taxable period, by or as a result of
(i) a final decision, judgment, decree or other order by any court of competent
jurisdiction that can no longer be appealed; (ii) a final settlement with the
IRS, a closing agreement or accepted offer in compromise under Sections 7121 or
7122 of the Code, or a comparable agreement under the laws of other
jurisdictions, which resolves the entire Tax Liability for any taxable period;
(iii) any allowance of a Tax Refund in respect of an overpayment of Tax, but
only after the expiration of all periods during which such refund or credit may
be recovered by the jurisdiction imposing the Tax; or (iv) any other final
resolution, including by reason of the expiration of the applicable statute of
limitations or the execution of a pre-filing agreement with the IRS or other Tax
Authority.

 

“Group Return” means (i) any Huntsman Group Return and (ii) any Venator Group
Return.

 

“Huntsman” has the meaning set forth in the introductory paragraph of this
Agreement.

 

“Huntsman Group” means the Affiliated Group of which Huntsman is the common
parent corporation, and any corporation or other entity which may be, may have
been or may become a member of such group from time to time, but excluding, from
and after the Offering Date, any member of the Venator Group.

 

“Huntsman Group Return” means (i) any Tax Return with respect to any Taxes that
is filed on a consolidated, combined, unitary or similar basis wherein Venator
or any member of the Venator Group joins in the filing of such Tax Return (for
any taxable period or portion thereof) with Huntsman or any member of the
Huntsman Group and (ii) any Tax Return of Huntsman or any member of the Huntsman
Group that includes any Tax Items attributable to any Directly Owned Venator
Assets.

 

“Huntsman Separate Return” means any Tax Return of Huntsman or any member of the
Huntsman Group that is not a Huntsman Group Return.

 

“Huntsman Taxes” has the meaning set forth in Section 2.2.

 

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“Huntsman Tax Refunds” has the meaning set forth in Section 2.6(a).

 

“Indemnifying Party” means any Person from which an Indemnified Party is seeking
indemnification pursuant to the provisions of this Agreement.

 

“Indemnified Party” means any Person which is seeking indemnification from an
Indemnifying Party pursuant to the provisions of this Agreement.

 

“Independent Firm” means an internationally or national recognized, as
appropriate, law firm, in the event of a dispute regarding the interpretation of
this Agreement, or an internationally or national recognized, as appropriate,
accounting firm, in the event of a dispute regarding calculations made pursuant
to this Agreement, in each case, mutually acceptable to Huntsman and Venator.

 

“Internal Reorganization” has the meaning set forth in the Recitals of this
Agreement.

 

“IPO” has the meaning set forth in the Recitals of this Agreement.

 

“IRS” means the United States Internal Revenue Service.

 

“Offering Date” means the closing date of the IPO.

 

“Other Huntsman Businesses” means any businesses of Huntsman and its
subsidiaries other than the Pigments Business.

 

“Payment Period” has the meaning set forth in Section 5.3.

 

“Person” means any individual, corporation, company, association, partnership,
joint venture, limited liability company, joint stock company, trust,
unincorporated organization, or other entity.

 

“Pigments Business” means the manufacturing of pigments and additives that
improve performance and add color to everyday items, such as paints, inks,
plastics, concrete, cosmetics, pharmaceuticals, and food.

 

“Post-Offering Taxable Period” means a taxable period or portion thereof that
begins after the Offering Date.

 

“Pre-Offering Taxable Period” means a taxable period or portion thereof that
ends on or before the Offering Date.

 

“Separation Agreement” means the Separation Agreement, as amended from time to
time, by and between Huntsman and Venator dated as of the date hereof.

 

“Straddle Period” means any taxable period that begins on or before and ends
after the Offering Date.

 

“Tax” or “Taxes” means all taxes, charges, fees, imposts, levies or other
assessments, including all net income, gross receipts, capital, sales, use,
gains, ad valorem, value added,

 

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transfer, franchise, profits, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance, stamp,
occupation, property and estimated taxes, custom duties, fees, assessments and
charges of any kind whatsoever, together with any interest and any penalties,
fines, additions to tax or additional amounts imposed by any Tax Authority and
includes any liability in respect of any of the foregoing that arises by
operation of law.  For the avoidance of doubt, Tax or Taxes means all
liabilities giving rise to a cash tax obligation in the year of Final
Determination.

 

“Tax Authority” means the IRS and any other governmental authority responsible
for the administration and collection of Taxes.

 

“Tax Item” means any item of income, gain, loss, deduction, expense, credit, or
other attribute that may have the effect of increasing or decreasing any Tax
Liability.

 

“Tax Liabilities” means all liabilities for Taxes.

 

“Tax Refund” means any refund or credit of any cash Taxes.

 

“Tax Returns” means any and all reports, returns, declaration forms and
statements (including amendments thereto) filed or required to be filed with
respect to Taxes, and any attachments thereto.

 

“Transfer Taxes” has the meaning set forth in Section 2.4.

 

“Treasury Regulations” means the regulations under the Code promulgated by the
United States Department of the Treasury.

 

“Venator Group” means the Affiliated Group of which Venator will be the common
parent corporation immediately after the Internal Reorganization and IPO, any
predecessor to any such entity, and any corporation or other entity which may
become a member of such group from time to time.  For the avoidance of doubt,
the Venator Group will include any legal entity which is wholly-owned, directly
or indirectly, by members of the Venator Group.

 

“Venator Group Return” means any Tax Return of Venator or any member of the
Venator Group that includes any Tax Items attributable to any Directly Owned
Huntsman Assets, but excluding, for the avoidance of doubt, any Huntsman Group
Return.

 

“Venator Separate Return” means any Tax Return of Venator or any member of the
Venator Group that is not a Venator Group Return.

 

“Venator Taxes” has the meaning set forth in Section 2.1.

 

“Venator Tax Refund” has the meaning set forth in Section 2.6(b).

 

1.2                               References; Construction.

 

(a)                                 Capitalized terms not otherwise defined in
this Agreement have the meaning ascribed to them in the Separation Agreement.

 

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(b)                                 The words “hereof,” “herein,” and
“hereunder” and words of similar import, when used in this Agreement, refer to
this Agreement as a whole and not to any particular provision of this Agreement.

 

(c)                                  The terms defined in the singular have a
comparable meaning when used in the plural, and vice versa.

 

(d)                                 References to any “Article” or “Section,”
without more, are to Articles and Sections to or of this Agreement.  Unless
otherwise expressly stated, clauses beginning with the term “including” or
similar words set forth examples only and in no way limit the generality of the
matters thus exemplified.

 

ARTICLE II
RESPONSIBILITY FOR TAXES; ALLOCATION

 

2.1                               Venator’s Responsibility For Taxes.  Venator
will be responsible for, and will indemnify Huntsman and the members of the
Huntsman Group against, any Venator Taxes.  “Venator Taxes” shall be determined
in good faith by Huntsman and shall equal (a) any cash Taxes reflected on a
Venator Separate Return, plus (b) the excess, if any, of (i) the cash Taxes
reflected on any Group Return over (ii) the hypothetical cash Tax Liability that
would have been shown on such Group Return if such Group Return had not included
any Tax Items attributable to Venator, any member of the Venator Group, or any
Directly Owned Venator Assets; provided, however, that “Tax Items” for purposes
of this clause (ii) will not include Tax Items arising solely as a result of the
Internal Reorganization.

 

2.2                               Huntsman’s Responsibility For Taxes.  Huntsman
will be responsible for, and will indemnify Venator and the members of the
Venator Group against, any Huntsman Taxes.  “Huntsman Taxes” shall be determined
in good faith by Huntsman and shall equal (a) any cash Taxes reflected on a
Huntsman Separate Return, plus (b) the excess, if any, of (i) the cash Taxes
reflected on any Group Return, over (ii) the amount of such cash Taxes that are
Venator Taxes.

 

2.3                               Computation of Venator Taxes and Huntsman
Taxes.

 

(a)                                 Venator Taxes and Huntsman Taxes shall be
calculated in connection with the filing of any relevant Tax Return, the
amendment of any relevant Tax Return and the occurrence of any Final
Determination.

 

(b)                                 At least fifteen (15) days prior to the
filing of any Group Return (or at least fifteen (15) days prior to the filing of
an amendment thereof), Huntsman shall provide Venator with a written calculation
setting forth in reasonable detail the amount of any Venator Taxes with respect
to such Group Return.  Venator will have the right to review and comment on such
calculation, and shall be provided with reasonable access to any supporting
documentation on request.  Any dispute with respect to such calculation will be
resolved pursuant to Section 7.1.  If such dispute has not been resolved prior
to the due date (including extensions) for filing such Tax Return (or amendment
thereof), Venator will pay an amount equal to the Venator Taxes (as determined
by Huntsman) to Huntsman and will be entitled to be reimbursed by Huntsman to
the extent the dispute is resolved in Venator’s favor.

 

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(c)                                  Within 30 days following the amendment of
any Group Return including Venator Taxes or the occurrence of a Final
Determination affecting Venator Taxes, Huntsman shall provide Venator with a
written revised calculation of Venator Taxes and within ten (10) days following
the receipt thereof, Venator shall pay any additional Venator Taxes to Huntsman
(or Huntsman shall pay to Venator any reduction in Venator Taxes previously paid
pursuant to this Section 2.3). Any dispute with respect to such calculation will
be resolved pursuant to Section 7.1.

 

(d)                                 For purposes of calculating Venator Taxes
and Huntsman Taxes, (i) any compensation deductions relating to the issuance or
vesting of Huntsman stock or the exercise of any Huntsman stock options shall be
treated as relating to Huntsman Taxes, and (ii) any compensation deductions
relating to the issuance or vesting of Venator stock or the exercise of any
Venator stock options shall be treated as relating to Venator Taxes.

 

(e)                                  For the avoidance of doubt, to the extent
that any amendment of any Tax Return or any Final Determination results in a
change in the amount of any earnings and profits, previously taxed income,
subpart F income inclusion or similar item, but does not result in a change in
the Taxes reflected on any Group Return, such amendment or Final Determination
shall not result in any payment obligation under Sections 2.1 and 2.2.  Further,
subpart F income, if any, associated with the Internal Reorganization in a
Pre-Offering Taxable Period shall be a Huntsman Tax irrespective of the Final
Determination or amendments.

 

2.4                               Payment of Sales, Use or Similar Taxes. 
Notwithstanding Sections 2.1 and 2.2, all sales, use, transfer, real property
transfer, intangible, recordation, registration, documentary, stamp or similar
Taxes applicable to, or resulting from the Internal Reorganization or from the
sale of Venator shares in connection with the IPO (“Transfer Taxes”) will be
borne one hundred percent (100%) by Huntsman.  Notwithstanding anything in this
Article II to the contrary, the party required by applicable law shall remit
payment for any Transfer Taxes and duly and timely file any Tax Returns required
to be filed with respect to such Transfer Taxes, subject to any indemnification
rights of Venator pursuant to this Section 2.4, which shall be paid by Huntsman
in accordance with Section 5.1.  Venator, Huntsman, and their respective
affiliates will cooperate in (a) determining the amount of such Transfer Taxes,
(b) providing all requisite exemption certificates, and (c) preparing and timely
filing any and all required Tax Returns for or with respect to such Transfer
Taxes with any and all appropriate Tax Authorities.

 

2.5                               Carrybacks.

 

(a)                                 The carryback of any loss, credit, or other
Tax Item from any Post-Offering Taxable Period shall be in accordance with the
provisions of the Code and Treasury Regulations (and any applicable state, local
or foreign laws).

 

(b)                                 Subject to Section 2.5(d), in the event that
any member of the Venator Group realizes any loss, credit or other Tax Item in a
Post-Offering Taxable Period of such member, such member may elect to carry back
such Tax Item to a Pre-Offering Taxable Period or a Straddle Period of Huntsman
or the Huntsman Group.  Huntsman shall cooperate with Venator and such member in
amending the relevant Tax Return or seeking any Tax Refund from the appropriate
Tax Authority that reasonably would result from such carryback (including by

 

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filing an amended Tax Return), at Venator’s cost and expense.  To the extent not
reflected in an adjustment to Venator Taxes pursuant to Sections 2.1 and 2.3,
Venator shall be entitled to any Tax Refund that is directly and exclusively
attributable to such carryback, and Huntsman shall be entitled to any Tax Refund
to which Venator is not entitled pursuant to this Section 2.5(b).

 

(c)                                  Subject to Section 2.5(d), in the event
that any member of the Huntsman Group realizes any loss, credit or other Tax
Item in a Post-Offering Taxable Period of such member, such member may elect to
carry back such loss, credit or other Tax Item to a Pre-Offering Taxable Period
or a Straddle Period of such member.  Venator shall cooperate with Huntsman and
such member in seeking from the appropriate Tax Authority any Tax Refund that
reasonably would result from such carryback (including by filing an amended Tax
Return), at Huntsman’s cost and expense.  To the extent not reflected in an
adjustment to Huntsman Taxes pursuant to Sections 2.2 and 2.3, Huntsman shall be
entitled to any Tax Refund resulting from such carryback.

 

(d)                                 Except as otherwise provided by applicable
law, if any Tax Item of Huntsman or Venator would be eligible to be carried back
or carried forward to the same Pre-Offering Taxable Period (had such carryback
been the only carryback to such taxable period), any Tax Refund resulting
therefrom shall be allocated between Huntsman and Venator proportionately based
on the relative amounts of the Tax Refunds to which Huntsman and Venator,
respectively, would have been entitled.

 

2.6                               Refunds.

 

(a)                                 Tax Refunds for Huntsman’s Account. 
Huntsman shall be entitled to receive and retain all Tax Refunds with respect to
any Huntsman Taxes (“Huntsman Tax Refunds”).  If Venator or any member of the
Venator Group receives a Tax Refund (or any reduction in Tax Liability by means
of offset or otherwise) constituting a Huntsman Tax Refund, within 15 days of
receipt of such Huntsman Tax Refund, Venator shall pay to Huntsman an amount
that is equal to the Huntsman Tax Refund, plus any interest paid by the
applicable Tax Authority with respect to such Huntsman Tax Refund, less any
Taxes payable by Venator or any Venator Group member in connection with the
receipt of such Huntsman Tax Refund.

 

(b)                                 Tax Refunds for Venator’s Account.  Venator
shall be entitled to receive and retain all Tax Refunds with respect to any
Venator Taxes (“Venator Tax Refunds”).  If Huntsman or any member of the
Huntsman Group receives a Tax Refund (or any reduction in Tax Liability by means
of offset or otherwise) constituting a Venator Tax Refund, within 15 days of
receipt of such Venator Tax Refund, Huntsman shall pay to Venator an amount that
is equal to the Venator Tax Refund, plus any interest paid by the applicable Tax
Authority with respect to such Venator Tax Refund, less any Taxes payable by
Huntsman or any Huntsman Group member in connection with the receipt of such
Venator Tax Refund.  For the avoidance of doubt, to the extent that any
adjustments or carrybacks result in an increase in the amount of foreign tax
credits available for use for U.S. federal income tax purposes by any member of
the Huntsman Group, such increased utilization will not be treated as a refund
or offset for purposes of this Section 2.6.

 

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(c)                                  To the extent the amount of any Tax Refund
is reduced by a Tax Authority or a Tax proceeding, such reduction shall be
allocated to the party to which such Tax Refund was allocated pursuant to this
Section 2.6.

 

2.7                               Payment of Additional Basis Tax Benefits.

 

(a)                                 Within 10 days following the determination
of the Cumulative Actual Tax Liability of the Venator Group for each
Post-Offering Taxable Period ending on or before December 31, 2028, Venator
shall deliver to Huntsman a schedule calculating the Additional Basis Tax
Benefit, if any, along with reasonable supporting documentation with respect to
such calculation (such schedule to be delivered even if the Additional Basis Tax
Benefit is zero).  Any dispute with respect to such calculation will be resolved
pursuant to Section 7.1.

 

(b)                                 With respect to each Post-Offering Taxable
Period ending on or before December 31, 2028 in which there is an Additional
Basis Tax Benefit, within 30 days following the delivery of the schedule
described in Section 2.7(a) for such Post-Offering Taxable Period, (i) if the
Additional Basis Tax Benefit on such schedule is greater than the Additional
Basis Tax Benefit on the schedule delivered under Section 2.7(a) with respect to
the immediately preceding Post-Offering Taxable Period (which, for the first
Post-Offering Taxable Period shall be deemed to be zero), then Venator shall pay
to Huntsman an amount equal to such increase, or (ii) if the Additional Basis
Tax Benefit on such schedule is less than the Additional Basis Tax Benefit
delivered with respect to the immediately preceding Post-Offering Taxable
Period, then Huntsman shall pay to Venator an amount equal to such decrease.

 

ARTICLE III
PREPARATION AND FILING OF TAX RETURNS

 

3.1                               Preparation of Tax Returns — Huntsman’s
Responsibility.

 

(a)                                 Huntsman will prepare or cause to be
prepared, and will file or cause to be filed, (i) all Group Returns and (ii) all
Huntsman Separate Returns.

 

(b)                                 Subject to Section 2.4, Huntsman will have
the right, with respect to any Tax Return described in Section 3.1(a), to
determine: (i) the manner in which such Tax Return will be prepared and filed,
including the method of accounting, positions, conventions, and principles of
taxation to be used and the manner in which any Tax Item will be reported;
(ii) whether any extensions may be requested; (iii) the elections that will be
made by Huntsman, any member of the Huntsman Group, Venator, or any member of
the Venator Group on such Tax Return; (iv) whether any amended Tax Returns will
be filed; (v) whether any claims for refund will be made; (vi) whether any
refunds will be paid by way of refund or credited against any liability for the
related Tax; and (vii) whether to retain outside firms to prepare or review such
Tax Returns.

 

(c)                                  Huntsman shall provide Venator with a copy
of any Tax Return that includes Venator, any member of the Venator Group, or any
Directly Owned Venator Assets promptly upon the filing of such Tax Returns.

 

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3.2                               Preparation of Tax Returns — Venator’s
Responsibility.

 

(a)                                 Venator will prepare or cause to be
prepared, and will file or cause to be filed, all Venator Separate Returns.

 

(b)                                 Venator will have the right, with respect to
any Tax Return described in Section 3.2(a), to determine: (i) the manner in
which such Tax Return will be prepared and filed, including the method of
accounting, positions, conventions, and principles of taxation to be used and
the manner in which any Tax Item will be reported; (ii) whether any extensions
may be requested; (iii) the elections that will be made by Venator or any member
of the Venator Group on such Tax Return; (iv) whether any amended Tax Returns
will be filed; (v) whether any claims for refund will be made; (vi) whether any
refunds will be paid by way of refund or credited against any liability for the
related Tax; and (vii) whether to retain outside firms to prepare or review such
Tax Returns.

 

3.3                               Agent.  Subject to the other applicable
provisions of this Agreement, Venator hereby irrevocably designates, and agrees
to cause each member of the Venator Group to so designate, Huntsman as its sole
and exclusive agent and attorney-in-fact to take such action (including
execution of documents) as Huntsman, in its sole discretion, may deem
appropriate in any and all matters (including Audits) relating to any Tax Return
described in Section 3.1(a).

 

3.4                               Manner of Tax Return Preparation.  Unless
otherwise required by applicable law, the parties hereby agree to prepare and
file all Tax Returns for any Pre-Offering Taxable Period and any Straddle Period
in a manner consistent with past practice regarding such preparation and
filings.  All Tax Returns shall be filed on a timely basis (taking into account
applicable extensions) by the party responsible for filing such Tax Returns
under this Agreement.

 

3.5                               Amended Returns and Claims.  Except as
expressly provided herein, without the prior written consent of Huntsman, no
formal or informal claim or request shall be filed with any Tax Authority, or
with any administrative agency or court, for the adjustment, refund, or credit
of Taxes with respect to any Group Return, including (i) any amended Tax Return
claiming an adjustment to the Taxes as reported on such Group Tax Return or, if
applicable, as previously adjusted, (ii) any claim for equitable recoupment or
other offset, and (iii) any claim for refund or credit of Taxes previously paid.

 

3.6                               Payment of Tax Liability.  The party
responsible for filing a Tax Return under Article III will be responsible for
paying to the relevant Tax Authority the entire amount of the Tax Liability
reflected on such Tax Return; provided, however, that the party liable for such
Tax Liability pursuant to Article II shall pay the Taxes for which it is liable
to the filing party as set forth in Article V.

 

ARTICLE IV
COVENANTS

 

4.1                               Tax Assistance and Cooperation.

 

(a)                                 Cooperation.  Huntsman and Venator will each
cooperate fully (and each will cause its respective affiliates to cooperate
fully) with all reasonable requests from the other party in connection with the
preparation and filing of Tax Returns, claims for refund and Audits concerning
issues or other matters covered by this Agreement.  The party requesting
assistance

 

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hereunder shall reimburse the other for reasonable out-of-pocket expenses
incurred in providing such assistance.  Such cooperation will include, without
limitation:

 

(i)                                     the retention until the expiration of
the applicable statute of limitations, and extensions, if any, thereof, and the
provision upon request, of Tax Returns, books, records (including information
regarding ownership and income Tax basis of property), documentation and other
information relating to any Tax Returns, including accompanying schedules,
related work papers, and documents relating to rulings or other determinations
by Tax Authorities;

 

(ii)                                  the execution of any document that may be
necessary or reasonably helpful in connection with any Audit, or the filing of a
Tax Return or refund claim by a member of the Huntsman Group or the Venator
Group, including certification, to the best of a party’s knowledge, of the
accuracy and completeness of the information it has supplied; and

 

(iii)                               the use of the party’s reasonable best
efforts to obtain any documentation that may be necessary or reasonably helpful
in connection with any of the foregoing.  Each party will make its employees and
facilities available on a reasonable and mutually convenient basis in connection
with the foregoing matters.

 

(b)                                 Failure to Perform.  If a party fails to
comply with any of its obligations set forth in Section 4.1(a) upon reasonable
request and notice by the other party, and such failure results in the
imposition of additional Taxes, the nonperforming party will be liable in full
for such additional Taxes.

 

(c)                                  Retention of Records.  A party intending to
dispose of documentation of Huntsman (or any Huntsman affiliate) or Venator (or
any Venator affiliate), including without limitation, books, records, Tax
Returns and all supporting schedules and information relating thereto prior to
the expiration of the statute of limitations (including any waivers or
extensions thereof) of the taxable year or years to which such documentation
relates, shall provide written notice to the other party describing the
documentation to be destroyed or disposed of sixty (60) business days prior to
taking such action.  The other party may arrange to take delivery of the
documentation described in the notice at its expense during the succeeding sixty
(60) day period.

 

ARTICLE V
PAYMENTS

 

5.1                               Payments.  Not later than thirty (30) days
following the provision of the Venator Tax or Huntsman Tax computation to
Venator as provided in Section 2.3, or a Tax Return relating to Transfer Taxes
filed by the Venator Group in accordance with Section 2.4, Venator will pay
Huntsman or Huntsman will pay Venator, as appropriate, any payment required to
be made pursuant to Article II.

 

5.2                               Treatment of Payments.  Unless otherwise
required by any Final Determination, Huntsman agrees (and shall cause the
Huntsman Group) and Venator agrees (and shall cause the Venator Group) to treat
any payments made between parties pursuant to this Agreement as adjustments to
the liabilities assumed (or deemed assumed) or consideration transferred in

 

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connection with the acquisition by Venator as part of the Internal
Reorganization of the portion of the Pigments Business to which the payment
relates.

 

5.3                               Interest.  Payments pursuant to this Agreement
that are not made within the period prescribed in this Agreement (the “Payment
Period”) and that are not otherwise setoff against amounts owed by one party to
the other party will bear interest for the period from and including the date
immediately following the last date of the Payment Period through and including
the date of payment at a per annum rate equal to the applicable rate for large
corporate underpayments set forth in Section 6621(c) of the Code.  Such interest
will be payable at the same time as the payment to which it relates and will be
calculated on the basis of a year of 365 days and the actual number of days for
which due.

 

ARTICLE VI
AUDITS AND TAX PROCEEDINGS

 

6.1                               In General.  Except as otherwise provided in
this Agreement, the party filing a Tax Return (the “Filing Party”) will have the
exclusive right, in its sole discretion, to control, contest, and represent the
interests of Huntsman, any member of the Huntsman Group, Venator, and any member
of the Venator Group in any Audit relating to such Tax Return and to resolve,
settle or agree to any deficiency, claim or adjustment proposed, asserted or
assessed in connection with or as a result of any such Audit.  The Filing
Party’s rights will extend to any matter pertaining to the management and
control of an Audit, including execution of waivers, choice of forum, scheduling
of conferences and the resolution of any Tax Item.  Any costs incurred in
handling, settling, or contesting an Audit will be borne by the Filing Party.

 

6.2                               Notice.  As soon as practicable after a party
receives a written notice from a Tax Authority of a proposed adjustment to a Tax
Item for a Pre-Offering Taxable Period or a Straddle Period (irrespective of
whether such proposed adjustment would reasonably be expected to give rise to an
indemnification obligation or other liability (including a liability for Tax)
under this Agreement), such party shall notify the other party of such proposed
adjustment, and thereafter shall promptly forward to the other party copies of
notices and material communications with any Tax Authority relating to such
proposed adjustment; provided, however, that the failure to provide such notice
will not release the Indemnifying Party from any of its obligations under this
Agreement except to the extent that such Indemnifying Party is materially
prejudiced by such failure.

 

ARTICLE VII
MISCELLANEOUS

 

7.1                               Dispute Resolution.  In the event that
Huntsman and Venator disagree as to the amount or calculation of any payment to
be made under this Agreement, or the interpretation or application of any
provision under this Agreement, the parties will attempt in good faith to
resolve such dispute.  If such dispute is not resolved within ninety (90)
business days following the commencement of the dispute, Huntsman and Venator
will jointly retain an Independent Firm, reasonably acceptable to both parties,
to resolve the dispute; provided, however, that in order to pursue any such
dispute resolution under this Section 7.1, the owing party shall either
(a) first pay to the owed party, or place in an escrow reasonably satisfactory
to the owed party

 

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pending resolution of such dispute, an amount equal to the payment which is the
subject of such dispute, or (b) deliver to the owed party a written opinion of
an independent law or accounting firm reasonably acceptable to both parties,
substantially to the effect that with respect to such dispute the owing party is
more likely than not to prevail in its entirety in the dispute resolution
proceeding.  The Independent Firm will act as an arbitrator to resolve all
points of disagreement and its decision will be final and binding upon all
parties involved.  Following the decision of the Independent Firm, Huntsman and
Venator will each take or cause to be taken any action necessary to implement
the decision of the Independent Firm.  The fees and expenses relating to the
Independent Firm will be borne by the party that does not prevail in the dispute
resolution proceeding.

 

7.2                               Governing Law; Waiver of Trial by Jury.

 

(a)                                 This Agreement (and any claims or disputes
arising out of or related hereto or to the transactions contemplated hereby or
to the inducement of any Party to enter herein, whether for breach of contract,
tortious conduct or otherwise and whether predicated on common law, statute or
otherwise) shall be governed by and construed and interpreted in accordance with
the Laws of the State of Delaware, irrespective of any choice of laws
principles, including all matters of validity, construction, effect,
enforceability, performance and remedies.

 

(b)                                 THE PARTIES EXPRESSLY WAIVE AND FOREGO ANY
RIGHT TO TRIAL BY JURY.

 

7.3                               Changes in Law.  Any reference to a provision
of the Code or a law of another jurisdiction will include a reference to any
applicable successor provision or law.  If, due to any change in applicable law
or regulations or their interpretation by any court of law or other governing
body having jurisdiction subsequent to the date of this Agreement, performance
of any provision of this Agreement or any transaction contemplated thereby
becomes impracticable or impossible, the parties hereto will use their
commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
provision.

 

7.4                               Confidentiality.  Each party will hold and
cause its directors, officers, employees, advisors and consultants to hold in
strict confidence, unless compelled to disclose by judicial or administrative
process or, in the opinion of its counsel, by other requirements of law, all
information (other than any such information relating solely to the business or
affairs of such party) concerning the other parties hereto furnished to it by
such other party or its representatives pursuant to this Agreement (except to
the extent that such information can be shown to have been (a) in the public
domain through no fault of such party, (b) later lawfully acquired from other
sources not known to be under a duty of confidentiality by the party to which it
was furnished, or (c) independently developed), and each party will not release
or disclose such information to any other Person, except its directors,
officers, employees, auditors, attorneys, financial advisors, bankers and other
consultants who will be advised of and agree to be bound by the provisions of
this Section 7.4.  Each party will be deemed to have satisfied its obligation to
hold confidential information concerning or supplied by the other party if it
exercises the same care as it takes to preserve confidentiality for its own
similar information.

 

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7.5                               Amendment, Modification, or Termination.  This
Agreement may be amended, modified, supplemented or terminated only by a written
agreement signed by all of the parties hereto.

 

7.6                               Term/Time Limit for Claims.  This Agreement
shall commence on the date hereof and shall continue in effect until otherwise
agreed to in writing by Huntsman and Venator, or their successors; provided,
however, this Agreement otherwise shall terminate 90 days after the expiration
of the statute of limitations with respect to all the Group Returns, Huntsman
Separate Returns and Venator Separate Returns addressed in this Agreement. 
Notwithstanding the forgoing, this Agreement shall not terminate until all
obligations and liabilities of the parties arising under this Agreement have
been paid in full, including payments under Section 2.7.

 

7.7                               Notices.  All notices and other communications
required or permitted to be given hereunder shall be in writing and will be
deemed given upon (a) a transmitter’s confirmation of a receipt of a facsimile
transmission (but only if followed by confirmed delivery of a standard overnight
courier the following business day or if delivered by hand the following
business day), (b) confirmed delivery of a standard overnight courier or when
delivered by hand or (c) the expiration of five business days after the date
mailed by certified or registered mail (return receipt requested), postage
prepaid, to the parties at the following addresses (or at such other addresses
for a party as may be specified by like notice):

 

If to Huntsman or any member of the Huntsman Group, to:

 

Huntsman Corporation

10003 Woodloch Forest Drive

The Woodlands, Texas 77380

Attention: General Counsel

 

If to Venator or any member of the Venator Group, to:

 

Venator Materials PLC

10001 Woodloch Forest Drive

The Woodlands, Texas 77380

Attention: General Counsel

 

or to such other address as any party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section 7.7.

 

7.8                               Complete Agreement.  This Agreement, with the
other transaction agreements and other documents referred to herein, constitutes
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersedes all previous negotiations, commitments and writings
with respect to such subject matter as well as any prior tax sharing agreements
or arrangements between a member of the Huntsman Group, on the one hand, and a
member of the Venator Group, on the other hand.  In the case of any conflict
between the terms of this Agreement and the terms of the Separation Agreement or
any other transaction agreement, the terms of this Agreement will be applicable.

 

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7.9                               Interpretation.  The Article and
Section headings contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties hereto and should not in
any way affect the meaning or interpretation of this Agreement.

 

7.10                        Counterparts.  This Agreement may be executed in
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

 

7.11                        Successors and Assigns; No Third-Party
Beneficiaries.  This Agreement and all of the provisions hereof will be binding
upon and inure to the benefit of the parties hereto and their successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
and obligations hereunder may be assigned by any party hereto without the prior
written consent of the other parties.  This Agreement is solely for the benefit
of Huntsman and Venator and their respective subsidiaries, affiliates,
successors and assigns, and is not intended to confer upon any third parties any
rights or remedies hereunder.

 

7.12                        Authorization.  Each of Huntsman and Venator hereby
represents and warrants that it has the power and authority to execute, deliver
and perform this Agreement, that this Agreement has been duly authorized by all
necessary corporate action on the part of such party, that this Agreement
constitutes a legal, valid and binding obligation of each such party and that
the execution, delivery and performance of this Agreement by such party does not
contravene or conflict with any provision of law or of its charter or bylaws or
any agreement, instrument or order binding on such party.

 

7.13                        Arbitration.  To the extent any dispute under this
Agreement cannot be resolved pursuant to Section 7.1, Huntsman and Venator shall
resolve such dispute pursuant to the arbitration provisions set forth in
Article IV of the Separation Agreement.

 

7.14                        Waiver of Jury Trial.  Each of the parties hereto
irrevocably and unconditionally waives all right to trial by jury in any
litigation, claim, action, suit, arbitration, inquiry, proceeding, investigation
or counterclaim (whether based in contract, tort or otherwise) arising out of or
relating to this Agreement or the actions of the parties hereto in the
negotiation, administration, performance and enforcement thereof.

 

7.15                        Waivers.  Except as provided in this Agreement, no
action taken pursuant to this Agreement, including any investigation by or on
behalf of any party, will be deemed to constitute a waiver by the party taking
such action of compliance with any representations, warranties, covenants or
agreements contained in this Agreement.  The waiver by any party hereto of a
breach of any provision hereunder will not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.

 

7.16                        Specific Performance.  The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties will be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.

 

7.17                        Setoff.  All payments to be made by any party under
this Agreement may be netted against payments due to such party under this
Agreement, but otherwise shall be made without setoff, counterclaim or
withholding, all of which are hereby expressly waived.

 

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7.18                        Severability.  If any provision of this Agreement or
the application thereof to any Person or circumstance is determined by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and will in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party.

 

7.19                        Effective Date.  This Agreement is effective as of
the Effective Date.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each of the parties has caused this Tax Matters Agreement to
be executed on its behalf by its officers thereunto duly authorized, all as of
the day and year first written above.

 

 

HUNTSMAN CORPORATION

 

 

 

 

 

 

 

By:

/s/ Kevin C. Hardman

 

Name:

Kevin C. Hardman

 

Title:

Vice President, Tax

 

 

 

 

 

 

 

VENATOR MATERIALS PLC

 

 

 

 

 

 

 

By:

/s/ Kurt D. Ogden

 

Name:

Kurt D. Ogden

 

Title:

Senior Vice President and Chief Financial Officer

 

[Signature Page to Tax Matters Agreement]

 

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