Exhibit
10.1


 


SETTLEMENT AGREEMENT AND RELEASE


 


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


 

















 


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


 


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


 


·                                          Hexion
Specialty Chemicals, Inc.; Nimbus Merger Sub Inc.; Apollo Investment Fund
IV, L.P.; Apollo Overseas Partners IV, L.P.; Apollo Advisors IV, L.P.; Apollo
Management IV, L.P.; Apollo Investment Fund V, L.P.; Apollo Overseas Partners
V, L.P.; Apollo Netherlands Partners V(A), L.P.; Apollo Netherlands Partners
V(B), L.P.; Apollo German Partners V GmbH & Co. Kg; Apollo Advisors V,
L.P.; Apollo Management V, L.P.; Apollo Investment Fund VI, L.P.; Apollo
Overseas Partners VI, L.P.; Apollo Overseas Partners (Delaware) VI, L.P.;
Apollo Overseas Partners (Delaware 892) VI, L.P.; Apollo Overseas Partners
(Germany) VI, L.P.; Apollo Advisors VI, L.P.; Apollo Management VI, L.P.;
Apollo Management, L.P.; and Apollo Global Management, LLC v. Huntsman Corp., C.A. No. 3841-VCL (Court of Chancery,
Delaware) (the “Delaware Action”);


 


·                                          Huntsman Corp. v. Leon Black, Joshua J.
Harris, Apollo Global Management, L.L.C., Apollo Management, L.P., Apollo
Management IV, L.P., Apollo Management V, L.P., Apollo Management VI, L.P.,
Apollo Investment Fund IV, L.P., Apollo Overseas Partners IV, L.P., Apollo
Advisors IV, LP., Apollo Investment Fund V, L.P., Apollo Overseas Partners V,
L.P., Apollo Netherlands Partners V(A),L.P., Apollo Netherlands Partners V(B),
L.P., Apollo German Partners V GmbH & Co. KG, Apollo Advisors V, L.P.,
Apollo Investment Fund VI, L.P., Apollo Overseas Partners VI, L.P., Apollo
Overseas Partners (Delaware) VI, L.P., Apollo Overseas Partners (Delaware 892)
VI, L.P., Apollo Overseas Partners (Germany) VI, L.P., and Apollo Advisors VI,
L.P., Cause No. 08-06-06037 (Montgomery County, Texas) (the “Texas
Action Against Apollo”);


 


·                                          Hexion Specialty Chemicals, Inc., Hexion LLC and Nimbus Merger Sub
Inc. v. Credit Suisse, Cayman Islands Branch,
Credit Suisse Securities 


 


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(USA) LLC, Deutsche Bank AG Cayman Islands Branch,
Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., and Deutsche
Bank Trust Company Americas, Index No. 114552/08 (New
York Supreme Court, New York County) (the “New York Action Against the Banks”);


 


·                                          Huntsman Corp. v. Credit Suisse Securities
(USA) LLC, and Deutsche Bank
Securities, Inc., Cause No. 08-09-09258 (Montgomery
County, Texas) (the “Texas Action Against the Banks”);


 


·                                          Hexion Specialty Chemicals, Inc.; Apollo Global Management, LLC; Apollo Management,
L.P.; Apollo Management IV, L.P.; Apollo Management V, L.P.; Apollo Management
VI, L.P.;  Apollo Investment Fund IV,
L.P.; Apollo Overseas Partners IV, L.P.; Apollo Advisors IV, L.P.; Apollo
Investment Fund V, L.P.; Apollo Overseas Partners V, L.P.; Apollo Netherlands
Partners V(A), L.P.; Apollo Netherlands Partners V(B), L.P.; Apollo German
Partners V GmbH & Co. Kg; Apollo Advisors V, L.P.; Apollo Investment
Fund VI, L.P.; Apollo Overseas Partners VI, L.P.; Apollo Overseas Partners
(Delaware) VI, L.P.; Apollo Overseas Partners (Delaware 892) VI, L.P.; Apollo
Overseas Partners (Germany) VI, L.P.; Apollo Advisors VI, L.P.; Leon Black and Joshua
Harris v. Huntsman
Corp., Index No. 602394/08 (New York Supreme Court, New
York County) (the “New York Action Against Huntsman”); and


 


·                                          Sandra Lifschitz et al. v. Hexion
Specialty Chemicals, Inc., Craig O. Morrison and Joshua J. Harris,
08-CV-06394 (RMB) (S.D.N.Y.) (the “Huntsman Shareholder Action”) (all the
foregoing collectively, the “Litigations”);


 


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


 


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


 


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


 


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


 


3.                                      Settlement
Payments.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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4.                                      Undertakings
Concerning the Litigations.


 


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


 


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


 


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


 


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


 


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


 


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


 


5.                                      Mutual
Releases.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


7.                                      Indemnification.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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8.                                      Representations
and Warranties.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


14.                               General
Provisions.


 


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


 


17
















 


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


 


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


 


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


 


18

















 


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


 


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


 


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


 


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


 


19

















 


	
   

  	
  HEXION SPECIALTY CHEMICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Craig O. Morrison

  
	
   

  	
   

  	
  Name:
  Craig O. Morrison

  
	
   

  	
   

  	
  Title:
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HEXION LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Craig O. Morrison

  
	
   

  	
   

  	
  Name:
  Craig O. Morrison

  
	
   

  	
   

  	
  Title:
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NIMBUS MERGER SUB INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Craig O. Morrison

  
	
   

  	
   

  	
  Name:
  Craig O. Morrison

  
	
   

  	
   

  	
  Title:
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/
  Craig O. Morrison

  
	
   

  	
  Craig
  O. Morrison

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APOLLO INVESTMENT FUND IV, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Advisors IV, L.P., its general 

  
	
   

  	
   

  	
  partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Capital Management IV, Inc., its

  
	
   

  	
   

  	
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  John J. Suydam

  
	
   

  	
   

  	
  Name:
  John J. Suydam

  
	
   

  	
   

  	
  Title:
  Vice President

  
					



 

















 


	
   

  	
  APOLLO OVERSEAS PARTNERS IV, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo Advisors IV, L.P., its managing 

  
	
   

  	
   

  	
  partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo Capital Management IV, Inc., its 

  
	
   

  	
   

  	
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  John J. Suydam

  
	
   

  	
   

  	
  Name:
  

  	
  John
  J. Suydam

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APOLLO INVESTMENT FUND VI, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo Advisors VI, L.P., its general 

  
	
   

  	
   

  	
  partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo Capital Management VI, LLC,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  John J. Suydam

  
	
   

  	
   

  	
  Name:
  

  	
  John
  J. Suydam

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  APOLLO OVERSEAS PARTNERS VI, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo Advisors VI, L.P.,

  
	
   

  	
   

  	
  its managing
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo Capital Management VI, LLC,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  John J. Suydam

  
	
   

  	
   

  	
  Name:
  

  	
  John
  J. Suydam

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  President

  
								



 

















 


	
   

  	
  APOLLO OVERSEAS PARTNERS

  
	
   

  	
  (DELAWARE) VI, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Advisors VI, L.P.,

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Capital Management VI, LLC,

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  John J. Suydam

  
	
   

  	
   

  	
  Name:

  	
  John
  J. Suydam

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APOLLO OVERSEAS PARTNERS

  
	
   

  	
  (DELAWARE 892) VI, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Advisors VI, L.P.,

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Capital Management VI, LLC,

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  John J. Suydam

  
	
   

  	
   

  	
  Name:

  	
  John
  J. Suydam

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APOLLO OVERSEAS PARTNERS

  
	
   

  	
  (GERMANY) VI, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Advisors VI, L.P.,

  
	
   

  	
   

  	
  its
  managing general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Capital Management VI, LLC,

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  John J. Suydam

  
	
   

  	
   

  	
  Name:

  	
  John
  J. Suydam

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
													



 

















 


	
   

  	
  APOLLO INVESTMENT FUND V, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Advisors V, L.P.,

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Capital Management V, Inc.,

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  John J. Suydam

  
	
   

  	
   

  	
  Name:

  	
  John
  J. Suydam

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
  APOLLO OVERSEAS PARTNERS V, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Advisors V, L.P.,

  
	
   

  	
   

  	
  its
  managing general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Capital Management V, Inc.,

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
    /s/
  John J. Suydam

  
	
   

  	
   

  	
  Name:

  	
  John
  J. Suydam

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APOLLO NETHERLANDS PARTNERS V(A), 

  
	
   

  	
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Advisors V, L.P.,

  
	
   

  	
   

  	
  its
  managing general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Capital Management V, Inc.,

  
	
   

  	
   

  	
   its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  John J. Suydam

  
	
   

  	
   

  	
  Name:
  

  	
  John
  J. Suydam

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  President

  
													



 

















 


	
   

  	
  APOLLO NETHERLANDS PARTNERS V(B), 

  
	
   

  	
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Advisors V, L.P.,

  
	
   

  	
   

  	
  its
  managing general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Apollo Capital
  Management V, Inc.,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
    /s/ John J.
  Suydam

  
	
   

  	
   

  	
   

  	
  Name: John J. Suydam

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  APOLLO GERMAN PARTNERS V

  
	
   

  	
  GMBH & CO., KG

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Advisors V, L.P.,

  
	
   

  	
   

  	
  its
  managing limited partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Apollo Capital Management V, Inc.,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
    /s/ John J.
  Suydam

  
	
   

  	
   

  	
   

  	
  Name: John J. Suydam

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  



 


 


	
   

  	
  APOLLO ADVISORS IV, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Capital Management IV, Inc., its

  
	
   

  	
   

  	
  general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ John J. Suydam

  
	
   

  	
   

  	
  Name: John J. Suydam

  
	
   

  	
   

  	
  Title: Vice President

  



 

















 


	
   

  	
  APOLLO MANAGEMENT IV, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Management, L.P., its general 

  
	
   

  	
   

  	
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Management GP, LLC, its 

  
	
   

  	
   

  	
  general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   
  /s/ John J. Suydam

  
	
   

  	
   

  	
  Name:

  	
  John
  J. Suydam

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
						



 


 


	
   

  	
  APOLLO ADVISORS V, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Capital Management V, Inc., its 

  
	
   

  	
   

  	
  general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   
  /s/ John J. Suydam

  
	
   

  	
   

  	
  Name:

  	
  John
  J. Suydam

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
					



 


 


	
   

  	
  APOLLO MANAGEMENT V, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  AIF
  V Management, LLC, its general 

  
	
   

  	
   

  	
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   
  /s/ John J. Suydam

  
	
   

  	
   

  	
  Name:
  John J. Suydam

  
	
   

  	
   

  	
  Title:
  Vice President

  
				



 


 


	
   

  	
  APOLLO ADVISORS VI, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Apollo
  Capital Management VI, LLC,

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   
  /s/ John J. Suydam

  
	
   

  	
   

  	
  Name:
  John J. Suydam

  
	
   

  	
   

  	
  Title:
  Vice President

  
				



 

















 


	
   

  	
  APOLLO MANAGEMENT VI, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  AIF
  VI Management, LLC,

  
	
   

  	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/
  John J. Suydam

  
	
   

  	
   

  	
   

  	
  Name:
  John J. Suydam

  
	
   

  	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  APOLLO MANAGEMENT, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Apollo
  Management GP, LLC,

  
	
   

  	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/
  John J. Suydam

  
	
   

  	
   

  	
   

  	
  Name:
  John J. Suydam

  
	
   

  	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  APOLLO GLOBAL MANAGEMENT, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  AGM
  Management, LLC, its Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  BRH
  Holdings GP, Ltd., its Sole 

  
	
   

  	
   

  	
   

  	
  Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/
  John J. Suydam

  
	
   

  	
   

  	
   

  	
  Name:
  John J. Suydam

  
	
   

  	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
    /s/
  Leon D. Black

  
	
   

  	
  Leon
  D. Black

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
    /s/
  Joshua J. Harris

  
	
   

  	
  Joshua
  J. Harris

  
					



 

















 


	
   

  	
  HUNTSMAN CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Peter R. Huntsman

  
	
   

  	
  Name:

  	
  Peter
  R. Huntsman

  
	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/
  Jon M. Huntsman

  
	
   

  	
  Jon
  M. Huntsman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/
  Peter R. Huntsman

  
	
   

  	
  Peter
  R. Huntsman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HUNTSMAN FAMILY HOLDINGS 

  
	
   

  	
  COMPANY LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/
  Jon M. Huntsman

  
	
   

  	
  Name:

  	
  Jon
  M. Huntsman

  
	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE JON AND KAREN HUNTSMAN 

  
	
   

  	
  FOUNDATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
       /s/
  Jon M. Huntsman

  
	
   

  	
  Name:

  	
  Jon
  M. Huntsman

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  KAREN H. HUNTSMAN INHERITANCE 

  
	
   

  	
  TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Karen H. Huntsman

  
	
   

  	
  Name:

  	
  Karen
  H. Huntsman

  
	
   

  	
  Title:

  	
  Trustee

  
				



 

















 


	
   

  	
  HUNTSMAN FINANCIAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Jon M. Huntsman

  
	
   

  	
  Name:

  	
  Jon
  M. Huntsman

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BRYNN B. HUNTSMAN, AS CUSTODIAN UNDER THE UTAH
  UNIFORM TRANSFERS TO MINORS ACT, FOR THE BENEFIT OF REBECCA BRYNN
  HUNTSMAN, RACHEL BRYNN HUNTSMAN, CAROLINE BRYNN HUNTSMAN, AMBER BRYNN
  HUNTSMAN, VIRGINIA BRYNN HUNTSMAN, AND JAMES B. HUNTSMAN

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
     /s/
  Brynn B. Huntsman

  
	
   

  	
  Brynn
  B. Huntsman

  
				



 
















 


Annex A


 


[Redacted]


 

















 


Annex B


 


Terms of the Huntsman Convertible Notes


 


	
  Issuer:

  	
   

  	
  Huntsman
  Corporation (“Issuer”)

  
	
   

  	
   

  	
   

  
	
  Investor:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Security:

  	
   

  	
  7%
  Convertible Senior Notes (the “Notes”)

  
	
   

  	
   

  	
   

  
	
  Principal
  Amount:

  	
   

  	
  $250
  million

  
	
   

  	
   

  	
   

  
	
  Conversion:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Interest:

  	
   

  	
  The
  Notes shall bear interest at the rate of 7% per annum. Interest shall be
  payable semi-annually on July 1 and January 1 of each year,
  beginning July 1, 2009. Interest shall be payable either in cash, or at
  the option of the Issuer, by delivery of shares of Common Stock having a then
  current market value equal to the interest payment.

   

  The
  Issuer and Investor will use reasonable efforts to exempt shares issued in
  payment of interest or payment of principal at maturity pursuant to the Notes
  from the short-swing profit rules of Section 16 of the Exchange
  Act.

  
	
   

  	
   

  	
   

  
	
  Maturity:

  	
   

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

  



 

















 


	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Redemption:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Change
  of Control

  	
   

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

   

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

  



 

















 


	
  Anti-Dilution:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Ranking:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Transfer
  Restrictions

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Information
  Rights

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Registration
  Rights:

  	
   

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

  



 

















 


	
  Voting
  / Standstill

  Agreement:

  	
   

  	
  Apollo,
  Issuer and Investor shall enter into a Voting/Standstill Agreement containing
  terms satisfactory to Issuer and Apollo, which terms shall include :

   

  (a)                   The Apollo-related stockholders and their
  Affiliates shall not beneficially own Issuer common shares or securities
  exercisable for or convertible into Issuer common shares other than the
  shares issuable upon conversion of the Notes, received in payment of interest
  or principal thereon and shares beneficially owned on the Effective Date or
  otherwise pursuant to a distribution or dividend on the Notes or shares of
  Common Stock issued pursuant to the Notes.

   

  (b)                  In connection with any matter in which the
  Apollo-related stockholders and their Affiliates have voting rights, the
  Issuer shares held by Apollo-related stockholders and their Affiliates will
  be voted, at the election of Issuer, either in the manner recommended by a
  majority of the Issuer Board or in the same proportion as the other Issuer
  shareholders. These voting restrictions shall be applicable to any transferee
  of the Notes or other securities other than transferees pursuant to
  (i) a firm commitment underwritten public offering involving a broad
  distribution, (ii) sales in regular broker transaction pursuant to
  Rule 144 or (iii) private sales to persons who after such sale beneficially
  and of record own less than 5% of the Issuer’s outstanding voting securities.

   

  (c)                   Neither the Apollo-related stockholders nor
  any of their Affiliates shall seek or propose to influence or control
  (whether through a 13D Group or otherwise) the management, Board of Directors,
  policies or affairs of Huntsman or any of its subsidiaries.

   

  (d)                  Neither the Apollo-related stockholders nor
  any of their Affiliates shall initiate (or solicit other Persons to initiate)
  or make any public statement regarding any tender or exchange offer for
  voting securities or other securities of Huntsman or any of its Subsidiaries,
  or any Business Combination or recapitalization, restructuring, liquidation
  or dissolution involving Huntsman or any of its Subsidiaries.

   

  (e)                   Neither the Apollo-related stockholders nor
  any of their Affiliates shall form, join or participate in a 13D Group (other
  than among themselves) with respect to acquiring, 

  



 

















 


	
   

  	
   

  	
  disposing
  or voting of voting securities.

   

  (f)                     Neither the Apollo-related stockholders nor
  any of their Affiliates shall request Huntsman (or any of its directors,
  officers, employees or agents), directly or indirectly, to amend or waive any
  of the provisions of the Standstill/Voting Agreement (except in a manner that
  does not require or result in disclosure publicly or to third parties)

   

  (g)                  The Apollo-related stockholders and each of
  their Affiliates shall not disclose any intention, plan or arrangement
  inconsistent with any of the foregoing.

   

  (h)                  Neither the Apollo-related stockholders nor
  any of their Affiliates shall advise, assist or knowingly encourage any other
  Persons to do any of the foregoing.

   

  (i)                      Neither the Apollo-related stockholders nor
  any of their Affiliates shall engage in any short sales or other derivative
  or hedging activities with respect to the Notes or the Common Stock.

   

  (j)                      Standstill Agreement terminates upon the
  later to occur of (i) December 31, 2010 or (ii) the date on
  which none of the Apollo-Related Stockholders or their Affiliates
  beneficially or of record own Notes or any securities issued in respect
  thereof or otherwise which represent 3% or more of the outstanding Common
  Stock.

   

  For
  purposes of the foregoing paragraphs (a)-(j), with respect to Affiliates of
  Apollo that are portfolio companies of Apollo investment funds (other than
  Hexion Specialty Chemicals and its subsidiaries or any other portfolio
  company substantially engaged in the chemical business), the obligations of
  Apollo and its other Affiliates would be limited to (i) not directing or
  otherwise affirmatively causing or encouraging such portfolio company to
  violate such provisions, and (ii) if they become aware of a portfolio
  company acquiring securities of Huntsman or otherwise violating such
  provisions, using reasonable efforts to cause them to sell such securities or
  otherwise comply with such provisions.

  
	
   

  	
   

  	
   

  
	
  Documentation:

  	
   

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

  



 

















 


	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Regulatory
  Matters:

  	
   

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

  



 

















 


Annex C


 


December    ,
2008


 


Dear                      :


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


Please countersign below to indicate your acceptance
of these terms.


 


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGREED AND ACCEPTED: