Exhibit 10.2


 


SUPPLEMENT
NO.1 TO


COLLATERAL
SECURITY AGREEMENT


 


This SUPPLEMENT NO. 1
dated as of December 20, 2005 (this “Supplement”) to the Agreement (as
defined below) is by Huntsman Advanced Materials Holdings LLC, a Delaware
limited liability company, Huntsman Advanced Materials LLC, a Delaware limited
liability company, and Huntsman Advanced Materials Americas, Inc., a
Delaware corporation (each, a “New Assignor” and, collectively, “New Assignors”),
each a Subsidiary of the Company, in favor of Deutsche Bank AG New York Branch,
as Collateral Agent under the Collateral Security Agreement dated as of August 16,
2005, by and among Huntsman International LLC, a Delaware limited liability
company, as an Assignee, certain subsidiaries of Huntsman International LLC
from time to time party thereto, as Assignors, and Deutsche Bank AG New York
Branch, as Collateral Agent (such Collateral Security Agreement, as amended,
restated, supplemented, replaced or otherwise modified from time to time, the “Agreement”)
for the benefit of the Secured Parties thereunder.


 


W
I  T  N  E  S  S  E  T  H:


 


WHEREAS, pursuant to the
Credit Agreement dated as of August 16, 2005, among Huntsman International
LLC, a Delaware limited liability company, as Borrower, Deutsche Bank AG New
York Branch, as Administrative Agent for the Lenders thereunder, Deutsche Bank
Securities, Inc., as Joint Lead Arranger and Joint Book Runner, Citigroup
Global Markets, as Co-Syndication Agent, Joint Lead Arranger and Joint Book
Runner, Credit Suisse, as Co-Syndication Agent, Joint Lead Arranger and Joint
Book Runner, and the Lenders identified therein, as amended by the Consent and
First Amendment to Credit Agreement dated as of December 20, 2005 (such
Credit Agreement, as so amended, and as same may hereafter be amended,
modified, extended, renewed, replaced, restated, waived or supplemented from
time to time, and including any agreement extending the maturity of or
restructuring all or any portion of the Indebtedness under such agreement or
any successor agreement, the “Credit Agreement”), the Lenders have agreed to
extend certain credit facilities to the Company on terms and conditions
provided therein;


 


WHEREAS, pursuant to Section 7.11(d) of
the Credit Agreement, the Company is required to cause each Domestic Subsidiary
that was not in existence (other than a Receivable Subsidiary or an
Unrestricted Subsidiary) on the dates of such respective Loan Documents to
become a party to the Agreement;


 


WHEREAS, Section 14.2(d) of
the Agreement provides that additional Subsidiaries of the Company may become
Assignors under the Agreement by execution and delivery of a document in the
form of this Supplement;


 


WHEREAS, pursuant to Section 7.11(b) of
the Credit Agreement, the Company is required to cause (i) each Subsidiary
(other than a Receivables Subsidiary) that is organized under the laws of a
state of the United States of America or the District of Columbia and (ii) each
other Subsidiary that is wholly owned by a corporation organized under the laws
of a state of the United States or the District of Columbia and is disregarded
as an entity separate from that owner under Treasury Regulation section 301.7701-3,
in each case, that was not in existence on the 


 


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Closing Date, to
become a party to the Subsidiary Guaranty (as defined in the Credit Agreement);
and


 


WHEREAS, concurrently
with its execution and delivery of this Supplement, each New Assignor is
executing and delivering either a Subsidiary Guaranty in favor of the Secured
Parties or a supplement to the Subsidiary Guaranty pursuant to which it is
becoming a party thereto;


 


NOW, THEREFORE, in
consideration of the premises above and as set forth in the Security Agreement,
the parties hereto agree as follows:


 


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ARTICLE I


 


SUPPLEMENT
TO SECURITY AGREEMENT


 


1.1.         Supplement to Security Agreement.   In accordance with Section 14.2(d) of
the Agreement, each New Assignor, by its execution and delivery of this
Supplement, becomes a party to the Agreement as an Assignor with the same force
and effect as if originally named therein as an “Assignor”, and each New
Assignor hereby (a) agrees to all the terms and provisions of the
Agreement and agrees to be bound by, subject to, and to perform all obligations
duties and liabilities of an Assignor under the Agreement, (b) represents
and warrants that the representations and warranties made by it as an Assignor
thereunder are true and correct in all material respects on and as of the date
hereof and agrees that the Schedules hereto (each of which is designated as a
supplement to a corresponding Schedule to the Agreement) are hereby
incorporated in their entirety into such corresponding Schedules to the
Agreement.  Each reference to a “Subsidiary”
or an “Assignor” in the Agreement shall be deemed to include each New
Assignor.  All of the terms of the
Security Agreement are hereby incorporated in their entirety.


 


1.2.         Additional Representations, Warranties and
Covenants.  Each New Assignor
represents and warrants to the Collateral Agent that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting creditors’ rights and by equitable principles (regardless
of whether enforcement is sought in equity or at law).


 


ARTICLE II


 


SECURITY
INTERESTS


 


2.1          Grant of Security Interests.  (a) As collateral security for the
prompt and complete payment and performance of the Secured Obligations when
due, and to induce the Administrative Agent and the Lenders to continue to
provide the financial accommodations to Borrower under the Credit Agreement,
each New Assignor does hereby grant, pledge, assign and transfer unto the
Collateral Agent, in its capacity as Collateral Agent for the benefit of the
Secured Parties, a continuing security interest of first priority in all of the
right, title and interest of such New Assignor in, to and under all of the
following, whether now existing or hereafter from time to time arising, and
whether now owned or hereafter from time to time acquired or created:  (i) all cash, accounts, deposits,
Deposit Accounts, Investment Property, securities accounts, securities and
insurance policies now or at any time hereafter in the possession or under
control of such New Assignor or its respective bailees and any interest
therein, (ii) each and every Receivable, (iii) all Contracts,
together with all Contract Rights arising thereunder, and all equity and debt
securities and other interests in any and all Unrestricted Subsidiaries, (iv) all
Inventory, (v) any cash collateral account established with respect to
such New Assignor and all monies, securities and instruments deposited or
required to be deposited in such cash collateral account, (vi) all
Equipment, (vii) all Marks, together with the registrations and right to
all 


 


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renewals thereof,
and the goodwill of the business of such New Assignor symbolized by the Marks,
and all Intellectual Property Causes of Action, (viii) all Patents and
Copyrights, and all reissues, renewals or extensions thereof, (ix) all
computer programs and all intellectual property rights therein and all other
proprietary information, including, but not limited to, Trade Secrets, (x) all
vehicles, aircraft, vessels, barges, railcars, rolling stock and Fixtures,
together with accessions thereto and replacement parts therefor, (xi) (A) all
Intercompany Notes described in Schedule B (as it may, from time to
time, be supplemented in accordance with the terms of the Agreement), all other
Intercompany Notes and all other promissory notes owing to such New Assignor; (B) (1) all
Capital Stock described in Schedule C (as it may, from time to
time, be supplemented in accordance with the terms of the Agreement) and (2) all
other Capital Stock; and (C) all Stock Rights, (xii) all books and
records, customer lists, ledger cards, credit files, print-outs, and other
materials and records pertaining to any of the foregoing, whether now owned or
hereafter acquired, (xiii) all other Goods, General Intangibles, Chattel Paper,
Documents and Instruments, (xiv) all Letter-of-Credit Rights, (xv) any
Commercial Tort Claims described on Schedule 2.1(k), (xvi) all
other personal property of such New Assignor, whether now owned or hereafter
acquired, (xvii) all documents of title evidencing or issued with respect to
any of the foregoing, and (xviii) all Proceeds and products of any and all of
the foregoing (including, without limitation, all insurance and claims for
insurance effected or held for the benefit of such New Assignor in respect
thereof) (all of the above, as limited below in Sections 2.1(c) and
2.1(d) of this Supplement and Sections 1.1(c) and 1.1(d) of
the Agreement, collectively, the “Collateral”); provided, however,
that the security interests granted hereunder shall only cover any New Assignor’s
right, title and interest in any asset subject to liens described in clause (2) of
Section 8.1(h) of the Credit Agreement, to the extent that the Lender
(as defined in that certain Loan Agreement by and among Huntsman Headquarters
Corporation, Huntsman Petrochemical Corporation, Huntsman Chemical Corporation,
Huntsman Packaging Corporation and U.S. Bank of Utah dated as of December 17,
1996 (the “Headquarters Loan Agreement”) has consented to the grant by
Huntsman Headquarters Corporation of a security interest in any Collateral (as
defined in the Headquarters Loan Agreement) hereunder.


 


(b)           The
security interests of the Collateral Agent under this Supplement and the
Agreement extend to all Collateral of the kind which is the subject of this
Supplement and the Agreement (but subject to the limitations contained in this
Supplement and the Agreement) which any New Assignor may acquire at any time
during the continuation of this Agreement.


 


(c)           The
Collateral shall not include any property or assets (whether tangible or
intangible, including without limitation, Capital Stock) or any right, title or
interest in respect thereof (i) which constitutes the Capital Stock (as
defined in the Senior Secured Notes Indenture) of Subsidiaries (as defined in
the Senior Secured Notes Indenture) of the Borrower or of any Guarantor (as
defined in the Senior Secured Notes Indenture), or any Stock Rights or Proceeds
thereof in any Capital Stock, (ii) which is subject to an agreement that
expressly prohibits the assignment thereof, or the creation of a security
interest therein (including, without limitation, Receivables subject to a
Permitted Accounts Receivables Securitization), (iii) to the extent that
any law or regulation applicable to such rights or property prohibits the
assignment thereof or the creation of a security interest therein and (iv) to
the extent that such collateral is not required to be pledged under Section 7.11(a),
(c) or (d) of the Credit Agreement; provided, however,
that such rights and property described in the preceding clauses (ii) and (iii) shall
be excluded from the Collateral only to the extent and for so long as such
agreement (in the case of clause (ii)) or 


 


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such law (in the
case of clause (iii)) continues to expressly prohibit the creation of such
security interest, and upon the expiration of such prohibition, the rights and
property as to which such prohibition previously applied shall automatically be
included in the Collateral, without further action on the part of any New
Assignor or the Collateral Agent.


 


 (d)          Notwithstanding
Sections 1.1(a) and (b), of the Agreement and Sections
2.1(a) and (b) of this Supplement, for the avoidance of
doubt, Collateral shall not include Capital Stock and equity interests, or
portion thereof, of Persons organized outside the United States which would
otherwise be required to be pledged to the Collateral Agent pursuant to the
terms hereof (“Foreign Equity Interests”) but which are pledged pursuant
to collateral documents (“Foreign Pledge Documents”) governed by the
laws of a jurisdiction other than any State or Federal laws of the United
States of America.


 


2.2          Delivery of Pledged Stock and Pledged
Intercompany Notes.  The Pledged
Intercompany Notes listed on Schedule B and the certificates
representing the Pledged Stock listed on Schedule C (other than the
shares of capital stock of foreign entities which are not certificated) shall
be delivered to the Collateral Agent contemporaneously herewith together with
appropriate undated note powers and stock powers duly executed in blank.  Neither the Collateral Agent nor any Secured
Party shall be obligated to preserve or protect any rights with respect to the
Pledged Intercompany Notes or the Pledged Stock or to receive or give any
notice with respect thereto whether or not the Collateral Agent or any Secured
Party is deemed to have knowledge of such matters.  The Collateral Agent agrees to hold such
Pledged Stock, the Pledged Intercompany Notes and any other Collateral in its
possession for the benefit of the Secured Parties.


 


2.3          Continued Performance by New Assignor.  The assignments and security interests under
the Agreement and this Supplement granted to the Collateral Agent shall not
relieve any New Assignor from the performance of any term, covenant, condition
or agreement on such New Assignor’s part to be performed or observed under or
in respect of any of the Collateral pledged by it hereunder or under the
Agreement or from any liability to any Person under or in respect of any of
such Collateral or impose any obligation on the Collateral Agent to perform or
observe any such term, covenant, condition or agreement on such New Assignor’s
part to be so performed or observed or impose any liability on the Collateral
Agent for any act or omission on the part of such New Assignor relative thereto
or for any breach of any representation or warranty on the part of such New
Assignor contained in this Agreement or any other Loan Document, or in respect
of the Collateral pledged by it hereunder or made in connection herewith or
therewith.


 


2.4          Power of Attorney.  By way of securing its obligations under the
Agreement and this Supplement, each New Assignor hereby constitutes and
appoints the Collateral Agent its true and lawful attorney, irrevocably, with
full power after the occurrence of and during the continuance of an Event of
Default (in the name of such New Assignor or otherwise), in the Collateral
Agent’s discretion, to take any action and to execute any instrument which the
Collateral Agent may reasonably deem necessary or advisable to accomplish the
purposes of the Agreement and this Supplement, which appointment as attorney is
coupled with an interest.


 


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ARTICLE III


 


MISCELLANEOUS


 


3.1.         Definitions.  Capitalized terms used herein (including in
the recitals hereto) without definition shall have the meanings ascribed to
them in the Agreement (including meanings ascribed pursuant to Section 14.13
of the Agreement).


 


3.2.         Headings.  Article and Section headings used
in this Supplement are for convenience only and shall not affect the
construction of this Supplement.


 


3.3.         Severability.  Any provision of this Supplement which is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.


 


3.4.         Binding Effect; Successors and Assigns.  This Supplement shall be binding upon and
inure to the benefit of each of the parties hereto and each of the Secured
Parties and their respective permitted successors and assigns, and nothing
herein or in the Agreement or in any Mortgage is intended or shall be construed
to give any other Person any right, remedy or claim under, to or in respect of
this Supplement, the Agreement or any Mortgage.


 


3.5.         Governing Law.  THE PROVISIONS OF THIS SUPPLEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND THE
DECISIONS OF THE STATE OF NEW YORK.


 


3.6.         Full Force and Effect.   Except as expressly supplemented hereby, the
Security Agreement shall remain in full force and effect.


 


3.7.         Fees.  Each
New Assignor agrees to reimburse the Collateral Agent for its respective
reasonable out-of-pocket expenses (including Attorney Costs) incurred in
connection with the preparation, execution and delivery of this Supplement and
the taking of all actions required hereby.


 


3.8.         Counterparts.  This Supplement may be executed in separate
counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same instrument.


 


[SIGNATURE
PAGE FOLLOWS]


 


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IN WITNESS WHEREOF, the
parties hereto have caused this Supplement No. 1 to the Collateral
Security Agreement to be duly and properly executed and delivered as of the
date first written above.


 


	
   

  	
  HUNTSMAN
  ADVANCED MATERIALS HOLDINGS

  
	
   

  	
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sean Douglas

  	
   

  
	
   

  	
  Name:

  	
  Sean Douglas

  	
   

  
	
   

  	
  Title:

  	
  Vice President
  and Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address
  for the above Subsidiary:

  
	
   

  	
   

  
	
   

  	
  c/o Huntsman
  International LLC

  
	
   

  	
  500 Huntsman Way

  
	
   

  	
  Salt Lake City,
  Utah 84108

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HUNTSMAN
  ADVANCED MATERIALS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sean Douglas

  	
   

  
	
   

  	
  Name:

  	
  Sean Douglas

  	
   

  
	
   

  	
  Title:

  	
  Vice President
  and Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address
  for the above Subsidiary:

  
	
   

  	
   

  
	
   

  	
  c/o Huntsman
  International LLC

  
	
   

  	
  500 Huntsman Way

  
	
   

  	
  Salt Lake City,
  Utah 84108

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HUNTSMAN
  ADVANCED MATERIALS AMERICAS,

  
	
   

  	
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sean Douglas

  	
   

  
	
   

  	
  Name:

  	
  Sean Douglas

  	
   

  
	
   

  	
  Title:

  	
  Vice President
  and Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address
  for the above Subsidiary:

  
						



 


7





















 


	
   

  	
  c/o Huntsman
  International LLC

  
	
   

  	
  500 Huntsman Way

  
	
   

  	
  Salt Lake City,
  Utah 84108

  



 


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  Acknowledged and
  Agreed to:

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK AG
  NEW YORK BRANCH,

  
	
   

  	
  as Collateral Agent and as UK Security Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Omayra
  Laucella

  	
   

  
	
   

  	
  Name:

  	
  Omayra Laucella

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Susan
  LeFevre

  	
   

  
	
   

  	
  Name:

  	
  Susan LeFevre

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
						



 


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