Exhibit 10.1

 

SWORN STATEMENT IN PROOF OF LOSS

AND FULL AND FINAL SETTLEMENT, RELEASE, AND INDEMNITY AGREEMENT

 

I. FINAL PROOF OF LOSS

 

Various Layers USD 1,250,000,000

 

PROP 05-01

Amount of Policy at Time of Loss

 

Policy No.

 

 

 

1st July 2005

 

Houston, Texas

Date Issued

 

Agency at

 

 

 

1st July 2006

 

Alliant Insurance Services, Inc. f/k/a JLT

Date Expires

 

Agent

 

 

To the Various North American, British and Continental European Reinsurers at
risk of North America, United Kingdom, Germany, Switzerland, France and
Bermuda.  At time of loss, through various facultative reinsurance certificates,
you reinsured International Risk Insurance Company, who insured Huntsman
Corporation by All Risk to the property described in the above indicated policy
according to the terms and conditions of said policy and all forms,
endorsements, transfers and assignments attached thereto.

 

1.             Time and Origin:  Fire occurring at the hour of 07.28 a.m., on
the 29th day of April 2006.

 

2.             Occupancy:  The property described, or containing the property
described, was occupied at the time of the loss as and for no other purpose
whatever: as intended.

 

3.             Title and Interest:  At the time of the loss, the interest of the
named insured in the property described herein was as intended.  No other person
or persons had any interest therein or encumbrance thereon, except: none.

 

4.             Changes:  Since the said policy was issued, there has been no
assignment thereof, or change of interest, use, occupancy, possession, location
or exposure of the property described, except: (a) the sale of the A&O Plant
located in Port Arthur, Texas pursuant to the 15 February 2007 Asset Purchase
Agreement by and among Flint Hills Resources, LLC and Huntsman International,
LLC, Huntsman Petrochemical Corp., Huntsman International Chemicals Corp.,
Huntsman Polymers Holdings Corp., Huntsman Expandable Polymers Co., LLC,
Huntsman Polymers Corp., and Huntsman Chemical Co. of Canada, Inc., the 22
June 2007 Amended and Restated Asset Purchase Agreement by and among Flint Hills
Resources, LP, Flint Hills Resources, LLC and the above-named Huntsman entities,
and the Letter Side Agreement effective 22 June 2007; and (b) the sale of the
assets of the U.S. butadiene and MTBE business, including the C4 Plant located
in Port Neches, Texas, pursuant to the 5 April 2006 Asset Purchase Agreement by
and among Texas Petrochemicals, LP and Huntsman Petrochemical Corp. and Huntsman
Fuels, LP, including the 27 April 2006 and 14 June 2006 amendments thereto.

 

5.             Total Insurance:  The total amount of insurance applicable to the
aforementioned loss on this property was, at the time of the loss, USD
1,250,000,000.

 

6.             The Total Amount Claimed under the above-numbered policy for the
property damage and time element losses described in paragraph No. 1 herein is
USD 475,000,000 as agreed.  This includes prior

 

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payments totaling USD 365,000,000, and a final payment of USD 110,000,000
pursuant to the terms of the Full and Final Settlement, Release, and Indemnity
Agreement below.  The Total Amount claimed represents a compromise between the
parties to this Full and Final Settlement, Release , and Indemnity Agreement,
and the payments made in respect of this Final Proof of Loss are subject to the
conditions set forth in the Full and Final Settlement, Release, and Indemnity
Agreement below.

 

II. FULL AND FINAL SETTLEMENT, RELEASE, AND INDEMNITY AGREEMENT

 

This is a Full and Final Settlement, Release, and Indemnity Agreement by and
between Huntsman Corporation (“Huntsman”), International Risk Insurance Company
(“IRIC”), and Ace American Insurance Company, Chartis Property Casualty Company
f/k/a AIG Casualty Company f/k/a Birmingham Fire Insurance Company of
Pennsylvania, Allianz Global Risks US Insurance Company, Arch Reinsurance
Company of Nebraska, AXIS Specialty Ltd.,(1) Limit No. 2, Ltd., Commonwealth
Insurance Company, HDI Industrie Versicherung AG, Simon Andrew White as Lead
Underwriter for Heritage Syndicate 1200 ROC at Lloyd’s, in his Individual
Capacity (Heritage Syndicate 1200 ROC at Lloyd’s), R. J. Kiln & Company, Ltd.,
Cathedral Underwriting, Ltd., Munich Reinsurance Company (Mūnchener
Rūckversicherungs-Gesellschaft AG), Partner Reinsurance Company, Ltd., SCOR UK
Company, Ltd., Wurttembergische Versicherung AG, Zurich American Insurance
Company, XL Insurance (Bermuda) Ltd. (“XL”), and Max Re, Ltd. (“Max Re”)
(collectively “Reinsurers”).

 

WITNESSETH THAT:

 

WHEREAS (utilizing the defined and capitalized terms above and below), Huntsman
procured Policy No. PROP 05-01 (“Policy”) through its wholly-owned and
controlled captive insurer, IRIC, and

 

WHEREAS, the Policy insures Huntsman for property damage and time element
losses, subject to stated terms, limits, deductibles and waiting periods, and

 

WHEREAS, IRIC concurrently reinsures 100% of the Policy’s designated risk
through various facultative reinsurance certificates issued by various
reinsurers, including Reinsurers herein (“Certificates”), and

 

WHEREAS, on April 29, 2006, there was a large-scale fire in the ethylene
refrigeration and processing area of the Port Arthur Base Chemicals Light
Olefins Unit in the Aromatic and Olefins Plant (the “A&O Plant”) in Port Arthur,
Texas (“Loss”).  The A&O Plant was, at all relevant times, owned and operated by
Huntsman Petrochemical LLC f/k/a Huntsman Petrochemical Corporation, an
indirect, wholly-owned subsidiary of Huntsman Corporation.  Huntsman
Petrochemical LLC is included in the definition of named insured under the
Policy, and

 

WHEREAS, Huntsman sustained property damage and time element losses at its A&O
Plant resulting from the fire which occurred on April 29, 2006, and

 

WHEREAS, a dispute arose among Huntsman, IRIC, and Reinsurers regarding, among
other things, the degree of insurance and reinsurance coverage for, and the
ultimate quantum of, the Loss.  Thereafter, two separate lawsuits were filed in
which Huntsman, IRIC, and Reinsurers were named parties: (i) Ace Am. Ins. Co.,
et al. v. Huntsman Corp. and IRIC, U.S. District Court for the Southern District
of Texas; Civil Action No. 4:07-CV-02796 (“Ace American Action”) and
(ii) Huntsman Corp. v. IRIC v. Ace Am. Ins.

 

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(1) AXIS Specialty Ltd. is referred to in the pleadings filed in the Arbitration
and Federal Actions as AXIS Specialty Limited Bermuda.

 

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Co., et al., U.S. District Court for the Southern District of Texas, Civil
Action No. 4:08-CV-1542 (“Huntsman Action”) (collectively, the “Federal
Actions”),(2) and

 

WHEREAS, on December 29, 2008, Huntsman, IRIC, and Reinsurers entered into a
Settlement Agreement and Arbitration Submission Agreement, whereby they agreed,
among other things, to resolve their disputes through mediation, and if
mediation was unsuccessful, through arbitration rather than in
court.(3) Specifically, the parties agreed to dismiss the Huntsman Action and
stay the Ace American Action until the rendition of an arbitral decision and the
satisfaction of any arbitral award, and

 

WHEREAS, Huntsman and Reinsurers are currently named parties to the following
arbitration:  Huntsman Corp. v. Ace Am. Ins. Co., et al.
(“Arbitration”),(4) presently pending before Honorable John S. Martin, Honorable
Layn Phillips, and Honorable James Carrigan, and

 

WHEREAS, various reinsurers, including Reinsurers herein, have currently paid
Huntsman USD 365,000,000 for amounts claimed by Huntsman for property damage and
time element coverage as a direct result of the Loss pursuant to certain Sworn
Statements in Proof of Loss, dated November 13, 2006, March 16, 2007, June 18,
2007, and December 19, 2007, and pursuant to a Sworn Statement in Proof of Loss
dated December 29, 2008, which was executed subject to the terms and conditions
of the Settlement Agreement and Arbitration Submission Agreement referenced
above, and

 

WHEREAS, Huntsman, IRIC, and Reinsurers wish to fully compromise and settle
finally and forever any and all disputes and claims arising out of, relating to,
or in connection with Huntsman’s and/or IRIC’s claims for property damage and
time element losses resulting from, related to and/or which could have resulted
from the fire at the A&O Plant that occurred on the April 29, 2006.

 

NOW THEREFORE, in full consideration of the foregoing and of the agreements
herein contained and intending to be legally bound, Huntsman, IRIC, and
Reinsurers agree as follows:

 

A.            Definitions:

 

1.             “Agreement” shall mean this Full and Final Settlement, Release,
and Indemnity Agreement.

 

2.             “Loss” shall mean any and all property damage, time element
losses and/or other losses or claims of any nature resulting from, related to
and/or which could have resulted from the fire at the A&O Plant that occurred on
April 29, 2006.

 

3.             “Huntsman” shall mean the Named Insured as defined in Section 1
of the Policy, and all other additional named or other insureds as defined in
the Policy, and any and all of its present and former officers, shareholders,
directors, attorneys, employees, partners, limited partners, members,
subsidiaries, affiliates, parent, successors, predecessors, sister

 

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(2) Swiss Reinsurance Company was also a party to the Federal Actions.  Max Re
and XL were not parties to the Federal Actions.

(3) Swiss Reinsurance Company, Max Re, and XL are also parties to the Settlement
Agreement and Arbitration Submission Agreement.  Therein, the Parties agreed
that Swiss Reinsurance Company would pay the remainder of its quota share and be
dismissed from all litigation, released from all claims relating to the Loss,
and would not be a party to the mediation or Arbitration.  The Parties also
agreed that XL and Max Re would pay their quota share of the USD 40,000,000
payment made pursuant to the Settlement Agreement and Arbitration Submission
Agreement, in exchange for the release and other provisions contained therein,
but would not be a party to the Arbitration.

(4) Max Re and XL are not parties to the Arbitration.

 

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or related companies or entities that claim or may claim to be an insured or a
reinsured, or in any way insured or reinsured, directly or indirectly, by the
Policy and/or Certificates.

 

4.             “IRIC” shall mean International Risk Insurance Company, and any
and all of its present and former officers, shareholders, directors, attorneys,
employees, partners, limited partners, members, subsidiaries, affiliates,
parent, successors, predecessors, sister or related companies or entities that
claim or may claim to be an insured or reinsured, or in any way insured or
reinsured, directly or indirectly, by the Policy and/or the Certificates.

 

5.             “Reinsurers” shall mean collectively Ace American Insurance
Company, Chartis Property Casualty Company f/k/a AIG Casualty Company f/k/a
Birmingham Fire Insurance Company of Pennsylvania, Allianz Global Risks US
Insurance Company, Arch Reinsurance Company of Nebraska, AXIS Specialty Ltd.,
Limit No. 2, Ltd., Commonwealth Insurance Company, HDI Industrie Versicherung
AG, Simon Andrew White as Lead Underwriter for Heritage Syndicate 1200 ROC at
Lloyd’s, in his Individual Capacity (Heritage Syndicate 1200 ROC at Lloyd’s), R.
J. Kiln & Company, Ltd., Cathedral Underwriting, Ltd., Munich Reinsurance
Company, Partner Reinsurance Company, Ltd., SCOR UK Company, Ltd.,
Wurttembergische Versicherung AG, Zurich American Insurance Company, XL
Insurance (Bermuda) Ltd., Max Re, Ltd., and any and all of their present and
former officers, directors, employees, partners, limited partners, shareholders,
owners, members, names, reinsurers, subsidiaries, affiliates, successors,
predecessors, parent, sister, or related companies or entities of any nature,
attorneys, managing agents, run-off agents; consultants, adjusters, or advisors.

 

6.             “Parties” shall mean Huntsman, IRIC, and Reinsurers as defined
herein collectively.

 

7.             “Person” shall mean an individual, corporation, limited liability
company, partnership, association, trust, any other legal entity or
organization, and any State, Federal or local government or any government or
quasi-governmental body or political subdivision or any agency, department,
board or instrumentality thereof.

 

8.             “Policy” shall mean Policy No. PROP 05-01, with effective dates
of July 1, 2005 to July 1, 2006.

 

9.             “Certificates” shall mean the various facultative reinsurance
certificates issued collectively by Reinsurers for reinsurance of the Policy.

 

10.          “Released Parties” shall mean all reinsurers that severally
subscribe, each in his or its own proportionate share, at all layers to the
reinsurance of the Policy, including, but not limited to, the Reinsurers that
severally subscribe, each in his or its own proportionate share, to the
reinsurance of the Policy as set forth more fully in Schedule A, and any and all
of their present and former officers, directors, employees, partners, limited
partners, shareholders, owners, members, names, reinsurers, subsidiaries,
affiliates, parent, sister, or related companies or entities of any nature,
attorneys, managing agents, run-off agents, consultants, adjusters, experts, or
advisors including without limitation:

 

a.             Their respective heirs, executors, administrators, successors,
predecessors, assigns, insurers, and reinsurers;

 

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b.             Any other person that has been acquired by, merged into, or
combined with Reinsurers and their past or present subsidiaries, affiliates,
successors and assigns; and

 

c.             Any of their insurers, reinsurers and/or retrocessionaires.

 

11.          “Settled Claims” shall mean any and all manners or causes of
action, suits, debts, accounts, promises, warranties, damages (consequential,
extra-contractual, exemplary or punitive), agreements, costs, pre-judgment
interest, post-judgment interest, attorneys’ fees, expenses, claims or demands
whatsoever in law or in equity related to the Loss, whether presently known or
unknown, asserted or unasserted, whether sounding in tort or contract or arising
under the statutes or administrative regulations of any jurisdiction or under
any allocation agreement with any Person with respect to any and all past,
existing, potential, present or future claims of any type whatsoever related to
the Loss that Huntsman or IRIC ever had, now has or hereafter may have, fully
and finally:(5)

 

a.             For any insurance coverage, including indemnification under any
and all claims with respect to the Policy and/or Certificates related to the
Loss, any actual, alleged or threatened claim or obligation, whether known or
unknown, which currently exists or will subsequently accrue, which Huntsman or
IRIC ever had, now has or hereafter can, shall or may have, for or upon or by
reason of any manner, cause or thing whatsoever, whether now known or unknown,
fixed or unliquidated, conditioned or contingent, whether obtained by
subrogation, assignment or otherwise howsoever related to the Loss, including
Huntsman’s claim for coverage, that has been made or could be made to IRIC or
Reinsurers, now or in the future, with respect to the Policy and/or
Certificates, under any of their sections, related to the Loss.  This Agreement
applies to any and all damages of any nature whatsoever, including without
limitation, property damage claims, preservation of property claims, extra
expense claims, expedited expense claims, time element claims, business
interruption claims, contingent business interruption claims, appraisers’ fees,
auditors’ fees, arbitrators’ fees or expenses, consultants’ fees, attorneys’
fees, pre-judgment interest, post-judgment interest and/or any other damages
against the Released Parties arising out of, or in any way connected with,
whether known or unknown, or which could have arisen out of, the Loss; and

 

b.             Arising out of or related to any act, omission, representation,
or conduct of any sort of Reinsurers in connection with the Loss for which
Huntsman or IRIC could seek compensatory, exemplary, extra-contractual,
punitive, statutory or other damages or relief, based on alleged breach of
contract, bad faith, breach of the duty of good faith and fair dealing, unfair
claim practice, unfair trade practices, deceptive trade practices, any alleged
improper act or failure to act in connection with the underwriting,
investigation, handling, adjustment or settlement relating to the Loss, other
alleged misconduct or other extra-contractual claims relating to the Loss, or
any obligations arguably arising under any statutes or administrative
regulations of any jurisdiction in any way related to the Policy and/or
Certificates arising out of or relating to any act, omission, representation, or
conduct of any

 

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(5) Certain of these claims were previously released and settled under the terms
of the Settlement and Arbitration Submission Agreement dated December 29, 2008. 
By including such claims in the “Settled Claims” description herein, it is not
intended to and does not alter or modify the prior release of claims contained
in said agreement.

 

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sort in connection with the Loss, whether or not those claims are now known or
unknown, currently exist or subsequently accrue, for any act, omission,
representation or conduct of the Reinsurers in connection with the Policy and/or
Certificates related to the Loss.

 

c.             With respect to the Settled Claims, it is Huntsman’s and IRIC’s
intention to reserve no rights or benefits whatsoever under or in connection
with Huntsman’s or IRIC’s claims against Reinsurers for coverage or benefits
under the Policy, Certificates, or otherwise in connection with or with respect
to any past, present or future claims in any way related to the Loss and to
assure Reinsurers their full and complete peace and freedom from such claims
related to the Loss and from all assertions of rights in connection with such
claims under the Policy and/or Certificates related to the Loss.

 

12.          “Settlement Amount” shall mean the gross amount of USD 475,000,000,
which includes the gross amount of Previous Unallocated Payments as defined
herein from Reinsurers. The Settlement Amount (being USD 475,000,000) less all
Previous Unallocated Payments (being USD 365,000,000), equals a gross final
payment amount of USD 110,000,000, which shall be paid to Huntsman by each
individual Reinsurer, based on its quota share percentage, by check or wire
transfer by the earlier of thirty (30) days from the execution of this Agreement
by all Parties or June 30, 2010.  To be clear, Reinsurers will each pay the
amount listed for each respective company in Schedule A as their allocated
payment of the final payment amount.  The total of these separate payments of
the final payment amount by Reinsurers equals USD 110,000,000, as shown in
Schedule A, and no further monies or remuneration of any type will be paid by
Reinsurers as this is a full and final settlement of this matter.

 

13.          “Severally” or “Several” shall mean that with respect to the
obligations of any Reinsurer, each agrees only for its own part, and not one for
the other, in accordance with its individual, respective Certificate or several
subscription to the Policy as set forth in Schedule A.

 

14.          “Previous Unallocated Payments” shall mean the certain payments in
the total gross amount of USD 365,000,000 made by various reinsurers, including
Reinsurers herein, based on their respective quota share percentages on an
unallocated basis in accordance with the terms of the Policy and/or
Certificates.

 

B.            In consideration of the agreements contained herein, the Parties
agree that:

 

1.             Reinsurers will pay the final payment amount of the Settlement
Amount to Huntsman based on their respective quota shares as set forth in
Schedule A in settlement of the Settled Claims, the sufficiency as good and
valuable consideration of which is hereby acknowledged.  The final payment
amount of the Settlement Amount shall be paid to Huntsman by each individual
Reinsurer, based on its quota-share percentage, by check or wire transfer by the
earlier of thirty (30) days from the execution of this Agreement by all Parties
or June 30, 2010.  The wire payment instructions are as follows:

 

 

ABA No:

043000261

 

Swift Code:

MELNUS3P

 

Bank Name:

The Bank of New York Mellon

 

Address:

500 Ross Street, Pittsburgh, PA 15262

 

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Beneficiary:

Huntsman Petrochemical LLC

 

Account No:

126-5975

 

Tax ID No:

58-1594518

 

 

 

Payments by check should be sent to the following:

 

 

 

 

Huntsman Petrochemical LLC

 

Attn: Amy Smedley, Esq.

 

500 Huntsman Way

 

Salt Lake City, UT 84108

 

(801) 584-5700

 

Tax ID No. 58-1594518

 

2.             Huntsman and IRIC agree, upon execution of this Agreement by all
Parties and Huntsman’s receipt of the final payment amount of the Settlement
Amount, to release, remise, covenant not to sue, and forever discharge the
Released Parties irrevocably, unconditionally, fully, finally and forever of,
from and against the Settled Claims.

 

3.             Because the purpose of this Agreement is to permanently preclude
any further action by Huntsman, IRIC, and any of their agents, assigns or
representatives of any capacity, from pursuing any further claims relating to
the Policy, the Certificates and/or the Loss against the Released Parties under
the subject Policy, Certificates, or otherwise relating to the Loss, the Federal
Actions, and/or the Arbitration, Huntsman, IRIC, and Reinsurers agree, covenant
and warrant that should it develop that there are any errors or mistakes,
whether legal or factual, and whether mutual or unilateral, that cause this
Agreement to be defective, or that cause the release of any Party hereto to be
defective or less than full and complete as to such matters, then Huntsman,
IRIC, and Reinsurers specifically agree to execute any and all instruments and
do any and all things necessary to effectuate a valid Agreement as set forth
above.

 

4.             The obligations of Reinsurers are several, and not joint, and
that no Reinsurer entitled to the benefits of this Agreement shall be liable for
any Settlement Amount allocable to any other Reinsurer.  Accordingly, each
Reinsurer listed in Schedule A agrees to pay only its individual, respective,
allocated share of the final payment amount of the Settlement Amount.  Huntsman
and/or IRIC shall not seek to recover from any individual Reinsurer an amount in
excess of its stated, respective, allocated share of the final payment amount of
the Settlement Amount.

 

5.             Huntsman and IRIC agree to indemnify, defend, and hold harmless
the Released Parties from and against:

 

a.             Any and all suits, actions, claims, or demands relating to the
Loss (including, but not limited to, claims in arbitration) of any kind or
nature, whether known, unknown, past, existing, potential, or future, made
against Released Parties for the Settled Claims relating in any way to the Loss,
including any and all liens of any nature and all such claims relating to the
Loss, by way of direct action or otherwise, including without limitation any
cross-claims, counter-claims, third-party claims, or other claims associated
with the Federal Actions or Arbitration, made by, on behalf of, through or under
Huntsman and/or IRIC, and/or by any

 

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Person or entity who has acquired or been assigned a right by Huntsman and/or
IRIC to make a claim relative to the Loss;

 

b.             Any breach of the representations, warranties, and
acknowledgements in paragraph C below.

 

Huntsman and IRIC agree, stipulate, and warrant that hereafter the Released
Parties shall be forever free of liability and will be as free of liability for
the Loss as if the Loss under the Policy and/or Certificates had never occurred
or otherwise come into existence.

 

6.             Huntsman, IRIC, and Reinsurers acknowledge and are aware of the
terms of the “Settlement Agreement and Release” between inter alia, Huntsman,
Hexion Specialty Chemicals, Inc., Nimbus Merger Sub, Inc., and certain Apollo
entities.  Specifically, the Parties acknowledge and rely upon paragraph 5(d) of
the “Settlement Agreement and Release” which provides:

 

The claims released pursuant to this paragraph 5 include but are not limited to
all claims, if any, that 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 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.

 

C.            In consideration of the agreements contained herein, Huntsman and
IRIC represent, warrant, and acknowledge that:

 

1.             They have not assigned to any Person any of their rights under
the Policy and/or Certificates with respect to the Loss, Settled Claims, Federal
Actions and/or the Arbitration, and that there are no other Person(s) who can
assert rights to coverage under the Policy and/or Certificates by, through or
under Huntsman and/or IRIC with respect to the Settled Claims.  Huntsman and
IRIC understand and agree that the Reinsurers have acted in substantial reliance
upon these representations and warrant that there are no such assignments or
other Persons asserting any rights to coverage or benefits under the Policy
and/or Certificates by, through or under Huntsman and/or IRIC with respect to
the Settled Claims.  Huntsman and IRIC further represent, warrant, and
acknowledge that no liens exist as to the Loss, Settled Claims, Federal Actions,
and/or the Arbitration, and that to the extent any such lien exists or arises,
Huntsman and IRIC will be solely responsible for fully satisfying such lien.

 

2.             This Agreement has been fully explained to Huntsman and IRIC, and
that Huntsman’s and IRIC’s entities and their representatives understand all of
the implications thereof, this Agreement having been reviewed and expressly
approved by their attorneys of record, and that this Agreement constitutes the
sole agreement among the Parties.  It is further expressly understood and agreed
that this instrument contains the entire agreement between the Parties, the
terms of which are contractual and not a mere recital.

 

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3.             That Huntsman and/or IRIC is not now, nor has it been involved in
the past, in any bankruptcy proceedings of any nature that would involve the
settlement proceeds herein.

 

4.             That in making this Agreement, Huntsman and IRIC have had the
opportunity to investigate and adjust the Loss that is the subject of this
Agreement, and that to the extent this Agreement is made prior to completion of
the adjustment or arbitration process or upon information that is or may not be
complete, Huntsman and/or IRIC does so intentionally and voluntarily in order to
compromise the disputes and claims at this time.

 

D.            In consideration of the agreements herein contained, the Parties
agree that:

 

1.             This Agreement is a compromise between the Parties and shall not
be construed as an admission by any Party, including, but not limited to, any
admission concerning coverage under the Policy and/or Certificates, or any other
policy of insurance or reinsurance certificate, nor shall this Agreement or any
provision hereof be construed as a waiver, modification or retraction of any
positions of the Parties with respect to the interpretation and application of
the Policy and/or Certificates, or any other policies of insurance or
reinsurance certificates that have previously been taken, are being taken, or
may be taken in the future with respect to the Settled Claims.

 

2.             The Federal Actions and Arbitration, including all claims,
defenses, and counterclaims that were asserted or could have been asserted,
shall be finally and forever dismissed with prejudice as to Huntsman, IRIC, and
Reinsurers with respect to each individual Reinsurer upon the receipt by
Huntsman of payment from such individual Reinsurer of its quota share percentage
of the final payment amount of the Settlement Amount.  The Parties agree to
execute any and all necessary motions, agreed orders, or otherwise, to
facilitate the dismissal with prejudice of all parties named therein.  It is
further agreed that all costs and expenses, including attorney’s fees, related
to the Settled Claims, Loss, Federal Actions, Arbitration, and/or this Agreement
incurred before or after the date of execution of this Agreement shall be paid
by the Party incurring same.  With respect to arbitrators’ fees and expenses,
Huntsman shall pay the fees and expenses for its named arbitrator, Reinsurers
shall pay the fees and expenses for their named arbitrator, and the Arbitration
Parties shall split evenly the fees and expenses of the Chair of the arbitration
panel, such that Huntsman shall pay 50% of the Chair’s fees and expenses and the
Reinsurers shall pay 50% of the Chair’s fees and expenses.

 

3.             If any portion of this Agreement is declared to be invalid or
unenforceable, such portion shall be deemed severed from this Agreement, and the
remaining parts shall remain in full force and effect as if the invalid or
unenforceable portion had not been part of this Agreement.

 

4.             This Agreement may be executed in two or more counterparts, all
of which shall, upon execution and delivery of identical counterparts by all
Parties, comprise a single agreement.  Counterpart signatures may be exchanged
by facsimile and/or email and shall be deemed delivered when received by each of
the Parties.

 

5.             The Parties acknowledge and agree that the payment of the
Settlement Amount is a compromise between Huntsman, IRIC, and Reinsurers, and
the adjustment, settlement, and execution of this Agreement shall have no
precedential or binding effect with respect to the construction of any other
policy of insurance or reinsurance certificate issued or to be issued by
Reinsurers.  The payment described above is for the compromise of disputed

 

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claims and it is agreed that by entering into this Agreement, the Parties intend
to avoid further expenses related to the adjustment, litigation, or arbitration
and to buy complete peace.

 

6.             This Agreement is a product of informed negotiations and involves
compromises of the Parties’ previously stated legal positions.  Accordingly,
this Agreement does not reflect the Parties’ views as to the rights and
obligations with respect to matters or persons outside the scope of this
Agreement.  This Agreement is without prejudice to positions taken by the
Reinsurers with regard to other insureds and without prejudice to positions
taken by Huntsman with regard to other insurers and reinsurers. Except as herein
otherwise provided, the Parties specifically disavow any intention to create
rights in third parties under or in relation to this Agreement, or to release or
otherwise affect any rights with respect to third parties.

 

7.             The terms of this Full and Final Settlement, Release, and
Indemnity Agreement is not considered Confidential Information under the terms
of the Stipulated Protective Order and Confidentiality Agreement, signed by
Honorable John S. Martin on August 13, 2009.  In addition, upon the execution of
this Agreement by all Parties, the parties agree that Huntsman will issue a
press release with language materially similar to the language contained in
Schedule B hereto.

 

8.             The Parties agree that they have been represented by counsel in
connection with the negotiations leading up to this Agreement and including the
drafting of this Agreement.  The Parties waive any arguments or claims they
might otherwise have that they did not have an opportunity to consult with
counsel regarding the force, effect, and meaning of this Agreement.  The Parties
agree that the drafting of this Agreement has been accomplished by counsel for
all Parties, and no party shall claim that any inferences should be drawn
against any other party with respect to the drafting of this Agreement.

 

9.             This Agreement shall not be construed as superseding, waiving,
modifying, or retracting any of the terms and conditions of the Settlement
Agreement and Arbitration Submission Agreement, entered into by Huntsman,
Reinsurers, Swiss Re and IRIC on December 29, 2008.  Specifically, and without
limitation, the provisions contained in Sections 3, 4, 5, 6, 8 (including
subparts 8.1 through 8.3), 12. 13, 17, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28,
29, 30, 31, 32 and 33 of the December 29, 2008, Settlement Agreement and
Arbitration Submission Agreement shall remain valid and enforceable.

 

10.          The Parties agree that this Agreement is a complete and final
agreement concerning the subject matter hereof and supersedes all prior
agreements and understandings, whether oral or written, except as otherwise
noted in Paragraphs A(11) and D(9) of this Agreement.

 

11.          With the exception of Max Re and XL, this Agreement shall be
governed and construed in accordance with Texas law, and any dispute concerning
this Agreement shall be venued in Harris County, Texas and shall be decided by
the United States District Court, Southern District of Texas, Houston Division. 
With respect to Max Re and XL, controlling law and jurisdiction will be as
stated in the facultative reinsurance certificates between IRIC and Max Re or XL
for the 2005-2006 policy year.

 

10

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12.          Huntsman, IRIC, and Reinsurers each represent and warrant that the
signatories to this Agreement have the authority to execute it on behalf of and
to bind Huntsman, IRIC, and Reinsurers respectively.

 

13.          No term in this Agreement may be changed, waived, discharged, or
terminated except by written agreement signed by Huntsman, IRIC, and Reinsurers.

 

14.          Reinsurers agree that upon the execution of this Agreement by all
Parties and upon Huntsman’s receipt from each individual Reinsurer of its quota
share percentage of the final payment amount of the Settlement Amount to
release, remise, covenant not to sue, and forever discharge Huntsman and IRIC
irrevocably, unconditionally, fully, finally and forever of, from and against
all claims relating to the Loss, the Federal Actions and/or the Arbitration.

 

15.          Reinsurers represent, warrant and acknowledge that this Agreement
has been fully explained to Reinsurers, and that Reinsurers’ entities and their
representatives understand all of the implications thereof, this Agreement
having been reviewed and expressly approved by their attorneys of record, and
that this Agreement constitutes the sole agreement among the Parties.  It is
further expressly understood and agreed that this instrument contains the entire
agreement between the Parties, the terms of which are contractual and not a mere
recital.

 

16.          Reinsurers represent, warrant and acknowledge that in making this
Agreement, Reinsurers have had the opportunity to investigate and adjust the
Loss that is the subject of this Agreement, and that to the extent this
Agreement is made prior to completion of the adjustment or arbitration process
or upon information that is or may not be complete, Reinsurers do so
intentionally and voluntarily in order to compromise the disputes and claims at
this time.

 

17.          This Agreement shall be binding upon and inure to the benefit of
the Parties and those whose interests depend on them, including, but not limited
to, the parties’ respective successors, assigns, shareholders or other capital
providers, principals, agents, servants, legal representatives, directors,
officers, employees, and affiliates of any kind.

 

IN WITNESS WHEREOF the Parties have executed this Agreement by a duly authorized
representative this 14th day of May, 2010.

 

11

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Signed:

/s/ Sean Douglas

 

 

 

 

 

Insured:

Huntsman Corporation

 

 

 

 

 

By:

Sean Douglas

, its duly authorized agent with the express authority to do so.

 

 

 

 

Name:

Sean Douglas

 

 

 

 

Title:

Vice President,  Corporate Development

 

 

 

 

State of:

Utah

 

County of:

Salt Lake

 

 

SUBSCRIBED AND SWORN TO BEFORE ME this 14th day of May, 2010.

 

 

 

/s/ Michelle Fujinami

 

NOTARY PUBLIC

 

 

MY COMMISSION EXPIRES:

 

June 8, 2010

 

 

 

12

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Signed:

/s/ John R. Heskett

 

 

 

 

 

Insurer:

International Risk Insurance Company

 

 

 

 

 

By:

John R. Heskett

, its duly authorized agent with the express authority to do so.

 

 

 

 

Name:

John R. Heskett

 

 

 

 

Title:

Vice President and Treasurer

 

 

 

 

State of:

Utah

 

County of:

Salt Lake

 

 

SUBSCRIBED AND SWORN TO BEFORE ME this 14th day of May, 2010.

 

 

 

/s/ Michelle Fujinami

 

NOTARY PUBLIC

 

MY COMMISSION EXPIRES:

 

June 8, 2010

 

 

 

13

--------------------------------------------------------------------------------

 

Signed:

/s/ Myles A. Parker

 

 

 

 

 

Reinsurers:

Ace American Insurance Company, Chartis Property Casualty Company f/k/a AIG
Casualty Company f/k/a Birmingham Fire Insurance Company of Pennsylvania,
Allianz Global Risks US Insurance Company, Arch Reinsurance Company of Nebraska,
AXIS Specialty Ltd., Limit No. 2, Ltd., Commonwealth Insurance Company, HDI
Industrie Versicherung AG, Simon Andrew White as Lead Underwriter for Heritage
Syndicate 1200 ROC at Lloyd’s, in his Individual Capacity (Heritage Syndicate
1200 ROC at Lloyd’s), R. J. Kiln & Company, Ltd., Cathedral Underwriting, Ltd.,
Munich  Reinsurance Company (Mūnchener Rūckversicherungs-Gesellschaft AG),
Partner Reinsurance Company, Ltd., SCOR UK Company, Ltd., Wurttembergische
Versicherung AG, Zurich American Insurance Company, and XL Insurance (Bermuda)
Ltd.

 

 

 

 

 

 

By:

Myles A. Parker

, Market Counsel, their duly authorized representative with

 

the express authority to do so.

 

 

 

 

Name:

Myles A. Parker

 

 

 

 

Title:

Market Counsel

 

 

 

 

State of:

Mississippi

 

County of:

Hinds

 

 

SUBSCRIBED AND SWORN TO BEFORE ME this 14th day of May, 2010.

 

 

 

/s/ Rayann Craig Dukes

 

NOTARY PUBLIC

 

 

MY COMMISSION EXPIRES:

 

 

 

February 1, 2014

 

 

14

--------------------------------------------------------------------------------

 

Signed:

/s/ Louis A. Adanio

 

 

 

 

 

Reinsurer:

Max Re, Ltd.

 

 

 

 

 

By:

Louis A. Adanio

, their duly authorized representative with the express

 

authority to do so.

 

 

 

 

Name:

Louis A. Adanio

 

 

 

 

Title:

EVP

 

 

 

 

State of:

Bermuda

 

County of:

 

 

 

SUBSCRIBED AND SWORN TO BEFORE ME this 17th day of May, 2010.

 

 

 

/s/ [Illegible]

 

NOTARY PUBLIC

 

MY COMMISSION EXPIRES:

 

continuous

 

 

15

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SCHEDULE A - APPORTIONMENT

 

Company, Name, or Syndicate

 

Percent Share of
USD $110M

 

Payment USD

 

ACE American Insurance Company

 

8.0000

%

$

8,800,000

 

Chartis Property Casualty Company f/k/a AIG Casualty Company f/k/a Birmingham
Fire Insurance Company of Pennsylvania

 

15.0000

%

$

16,500,000

 

Allianz Global Risks US Insurance Company

 

8.0000

%

$

8,800,000

 

Arch Reinsurance Company of Nebraska

 

5.0000

%

$

5,500,000

 

AXIS Specialty Limited Bermuda

 

7.0000

%

$

7,700,000

 

Cathedral Underwriting, Ltd. (MMX)

 

2.2857

%

$

2,514,270

 

Commonwealth Insurance Company (Commonwealth of Vancouver)

 

6.5000

%

$

7,150,000

 

HDI Industrie Versicherung AG

 

3.0000

%

$

3,300,000

 

Simon Andrew White as Lead Underwriter for Heritage Syndicate 1200 ROC at
Lloyd’s, in his Individual Capacity (ROC)

 

9.1429

%

$

10,057,190

 

R. J. Kiln & Company, Ltd.

 

2.2857

%

$

2,514,270

 

Limit No. 2, Ltd. (O’Farrell Syndicate)

 

5.0000

%

$

5,500,000

 

Max Re, Ltd.

 

3.0000

%

$

3,300,000

 

Munich Reinsurance Company (Munich American Risk Partners)

 

9.0000

%

$

9,900,000

 

Partner Reinsurance Company, Ltd.

 

3.2500

%

$

3,575,000

 

SCOR UK Company, Ltd.

 

5.0000

%

$

5,500,000

 

Wurttembergische Versicherung AG

 

2.2857

%

$

2,514,270

 

XL Insurance (Bermuda) Ltd.

 

4.0000

%

$

4,400,000

 

Zurich American Insurance Company (Zurich Global Energy)

 

2.2500

%

$

2,475,000

 

Total

 

100.0000

%

$

110,000,000

 

 

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Schedule B

 

[g104141kg07i001.jpg]

[g104141kg07i002.jpg]

 

May 14, 2010

 

CONTACTS:

 

 

 

 

 

Media:

 

 

Gary Chapman, tel: +1 281 719 4324

 

 

 

 

 

Investor Relations:

 

 

Kurt Ogden, tel: +1 801 584 5959

 

Huntsman to Recover $110 million in Insurance Settlement Proceeds

 

The Woodlands, Texas — Huntsman Corporation (NYSE: HUN) today announced that it
has reached agreement with its reinsurance carriers to settle Huntsman’s claims
related to losses occurring as a result of the April 29, 2006, fire at its Port
Arthur, Texas, olefins facility, subsequently sold to Flint Hills Resources. 
Under the agreement, Huntsman will receive cash proceeds of $110 million in
settlement of its claims, which had been the subject of ongoing arbitration with
its carriers.  Huntsman expects to receive payment within thirty days following
the date of the agreement.  Huntsman previously collected $365 million in
insurance proceeds also related to the 2006 fire.

 

Peter Huntsman, President and CEO of Huntsman, stated, “We are pleased to have
reached this agreement.  As previously indicated, we plan to use these proceeds
to retire secured debt and further strengthen our balance sheet.  After doing so
with these proceeds, we will have prepaid almost $300 million of secured debt
since the beginning of this year.”

 

About Huntsman:

 

Huntsman is a global manufacturer and marketer of differentiated chemicals.  Its
operating companies manufacture products for a variety of global industries,
including chemicals, plastics, automotive, aviation, textiles, footwear, paints
and coatings, construction, technology, agriculture, health care, detergent,
personal care, furniture, appliances and packaging.  Originally known for
pioneering innovations in packaging and, later, for rapid and integrated growth
in petrochemicals, Huntsman today has approximately 11,000 employees and
operates from multiple locations worldwide.  The Company had 2009 revenues of
approximately $8 billion.  For more information about Huntsman, please visit the
Company’s website at www.huntsman.com.

 

--------------------------------------------------------------------------------

 

Forward-Looking Statements:

 

Statements in this release that are not historical are forward-looking
statements. These statements are based on management’s current beliefs and
expectations. The forward-looking statements in this release are subject to
uncertainty and changes in circumstances and involve risks and uncertainties
that may affect the company’s operations, markets, products, services, prices
and other factors as discussed in the Huntsman companies’ filings with the U.S.
Securities and Exchange Commission. Significant risks and uncertainties may
relate to, but are not limited to, financial, economic, competitive,
environmental, political, legal, regulatory and technological factors.  In
addition, the completion of any transactions described in this release is
subject to a number of uncertainties and closing will be subject to approvals
and other customary conditions. Accordingly, there can be no assurance that such
transactions will be completed or that the company’s expectations will be
realized. The company assumes no obligation to provide revisions to any
forward-looking statements should circumstances change, except as otherwise
required by applicable laws.

 

- END -

 

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