Exhibit 10.1


 


EXECUTION COPY


 




 





HUNTSMAN CORPORATION


 


$250,000,000


 


7% Convertible Senior Notes due 2018


 


 






 


NOTE PURCHASE AGREEMENT


 






 


 


Dated December 23, 2008


 




 





 

















 


TABLE OF CONTENTS


 


	
  SECTION 1.  Authorization
  of Notes

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 2.  Sale
  and Acceptance of Notes

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 3.  Closing

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 4.  Conditions
  to Closing

  	
   

  	
  1

  
	
  Section 4.1

  	
  Conditions
  to Purchaser’s Obligations

  	
   

  	
  1

  
	
  Section 4.2

  	
  Conditions
  to Company’s Obligations

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.  Representations
  and Warranties of the Company

  	
   

  	
  3

  
	
  Section 5.1

  	
  Organization;
  Power and Authority

  	
   

  	
  3

  
	
  Section 5.2

  	
  Authorization,
  Etc

  	
   

  	
  4

  
	
  Section 5.3

  	
  Underlying
  Shares

  	
   

  	
  4

  
	
  Section 5.4

  	
  Compliance
  with Rulings, Other Instruments, Etc

  	
   

  	
  4

  
	
  Section 5.5

  	
  Governmental
  Authorizations, Etc

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.  Representations
  and Agreements of the Purchasers

  	
   

  	
  4

  
	
  Section 6.1

  	
  Authorization

  	
   

  	
  5

  
	
  Section 6.2

  	
  Acknowledgements
  and Waiver

  	
   

  	
  5

  
	
  Section 6.3

  	
  Matters
  Concerning the Securities

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.  Covenants
  of the Company

  	
   

  	
  7

  
	
  Section 7.1

  	
  Financial
  Statements

  	
   

  	
  7

  
	
  Section 7.2

  	
  Consolidation,
  Merger, Sale or Lease of Assets by the Company

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.  Prepayment
  of the Notes

  	
   

  	
  8

  
	
  Section 8.1

  	
  Prepayments
  at the Option of the Company

  	
   

  	
  8

  
	
  Section 8.2

  	
  Notice of
  Optional Prepayments

  	
   

  	
  8

  
	
  Section 8.3

  	
  Mandatory
  Prepayment

  	
   

  	
  8

  
	
  Section 8.4

  	
  Maturity;
  Surrender, Etc

  	
   

  	
  9

  
	
  Section 8.5

  	
  Mandatory
  Exchange

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.  Conversion
  Rights

  	
   

  	
  9

  
	
  Section 9.1

  	
  Right to
  Convert

  	
   

  	
  9

  
	
  Section 9.2

  	
  Exercise of
  Conversion Right; Issuance of Common Stock on Conversion; No Adjustment for
  Interest or Dividends

  	
   

  	
  9

  
	
  Section 9.3

  	
  Cash
  Payments in Lieu of Fractional Shares

  	
   

  	
  11

  
	
  Section 9.4

  	
  Adjustment
  of Conversion Rate

  	
   

  	
  11

  
	
  Section 9.5

  	
  Effect of
  Reclassification, Consolidation, Merger or Sale

  	
   

  	
  17

  
	
  Section 9.6

  	
  Taxes

  	
   

  	
  18

  
	
  Section 9.7

  	
  Reservation
  of Shares, Shares to be Fully Paid; Listing of Common Stock

  	
   

  	
  18

  
	
  Section 9.8

  	
  Notice to
  Holders Prior to Certain Actions

  	
   

  	
  19

  
	
  Section 9.9

  	
  Cooperation

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.  Events
  of Default

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.  Remedies
  on Default, Etc

  	
   

  	
  21

  
	
  Section 11.1

  	
  Acceleration

  	
   

  	
  21

  



 


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  Section 11.2

  	
  Rescission

  	
   

  	
  22

  
	
  Section 11.3

  	
  No Waivers
  or Election of Remedies, Expenses, Etc

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.  Registration;
  Exchange; Substitution of Notes

  	
   

  	
  22

  
	
  Section 12.1

  	
  Registration
  of Notes

  	
   

  	
  22

  
	
  Section 12.2

  	
  Transfer and
  Exchange of Notes

  	
   

  	
  22

  
	
  Section 12.3

  	
  Replacement
  of Notes

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.  Payments
  on Notes

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 14.  Amendment
  and Waiver

  	
   

  	
  23

  
	
  Section 14.1

  	
  Requirements

  	
   

  	
  23

  
	
  Section 14.2

  	
  Binding
  Effect, Etc

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 15.  Notices

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  SECTION 16.  Miscellaneous

  	
   

  	
  25

  
	
  Section 16.1

  	
  Section 16
  Matters

  	
   

  	
  25

  
	
  Section 16.2

  	
  Successors
  and Assigns

  	
   

  	
  25

  
	
  Section 16.3

  	
  Payments Due
  on Non-Business Days

  	
   

  	
  25

  
	
  Section 16.4

  	
  Severability

  	
   

  	
  25

  
	
  Section 16.5

  	
  Counterparts

  	
   

  	
  25

  
	
  Section 16.6

  	
  Governing
  Law; Submission to Jurisdiction; Waiver of Jury Trial

  	
   

  	
  25

  
	
  Section 16.7

  	
  Construction

  	
   

  	
  26

  



 


	
  Schedule A

  	
   

  	
  Information
  Relating To Purchasers

  
	
  Schedule B

  	
   

  	
  Defined
  Terms

  
	
   

  	
   

  	
   

  
	
  Exhibit 1

  	
   

  	
  Form of
  7% Convertible Senior Notes due 2018

  
	
  Exhibit 2

  	
   

  	
  Form of
  Registration Rights Agreement

  
	
  Exhibit 3

  	
   

  	
  Form of
  Voting and Standstill Agreement

  
	
  Exhibit 4

  	
   

  	
  Form of
  Opinion of Counsel to the Company

  
	
  Exhibit 5

  	
   

  	
  Form of
  Opinion of Counsel to the Purchasers

  



 


ii

















 


7% Convertible Senior Notes due 2018


 


December 23, 2008


 


TO EACH OF THE
PURCHASERS


LISTED IN
SCHEDULE A HERETO:


 


Ladies and
Gentlemen:


 


Huntsman
Corporation, a Delaware  corporation
(the “Company”), agrees with each
of the purchasers whose names appear at the end hereof (each, a “Purchaser” and, collectively, the “Purchasers”) as follows:


 


SECTION 1.   AUTHORIZATION
OF NOTES.


 


The Company
will authorize the issue and delivery of $250,000,000  aggregate principal amount of its 7% Convertible Senior Notes
due 2018 (the “Notes”, such term
to include any such notes issued in substitution therefor pursuant to Section 9.2(b) or
Section 12).  The Notes shall be
substantially in the form set out in Exhibit 1, subject to the
changes contemplated thereunder for Exchange Notes.  Certain capitalized and other terms used in
this Note Purchase Agreement (this “Agreement”)
are defined in Schedule B.


 


SECTION 2.   SALE AND
ACCEPTANCE OF NOTES.


 


Subject to the
terms and conditions of this Agreement, the Company will issue to each
Purchaser and each Purchaser will accept from the Company, at the Closing
provided for in Section 3, Notes in the principal amount specified
opposite such Purchaser’s name in Schedule A upon delivery by such
Purchaser of 100% of the principal amount thereof.  The Purchasers’ obligations hereunder are
joint and several obligations.


 


SECTION 3.   CLOSING.


 


The delivery
of the Notes to be accepted by each Purchaser shall occur at the offices of
Vinson & Elkins L.L.P., First City Tower, 1001 Fannin, Suite 2500,
Houston, Texas 77002, at 9:00 a.m., Houston time, at a closing (the “Closing”) on December 23, 2008 or on
such other Business Day thereafter as may be agreed upon by the Company and the
Purchasers.  At the Closing the Company
will deliver to each Purchaser the Notes to be accepted by such Purchaser in
the form of a single Note dated the date of the Closing and registered in such
Purchaser’s name, against delivery by such Purchaser to the Company or its
order of immediately available funds in the amount of the principal amount
thereof by wire transfer to an account number designated by the Company at
least 24 hours before the Closing.


 


SECTION 4.   CONDITIONS
TO CLOSING.


 


Section 4.1             Conditions
to Purchaser’s Obligations. 
Each Purchaser’s obligation to accept the Notes to be delivered to such
Purchaser at the Closing is subject to the fulfillment to such Purchaser’s
satisfaction, prior to or at the Closing, of the following conditions:


 

















 


(a)                                  The
Company shall have delivered to such Purchaser the Notes, duly authorized and
issued, to be accepted by such Purchaser in the form of a single Note dated as
of the Closing Date and registered in such Purchaser’s name.


 


(b)                                 The
representations and warranties of the Company in this Agreement shall be true
and correct in all material respects (without regard to qualifications or
exceptions contained therein as to materiality) when made and at the time of
the Closing as though made on and as of the Closing.


 


(c)                                  The
Company shall have performed and complied in all material respects with all
agreements and conditions contained in this Agreement required to be performed
or complied with by it prior to or at the Closing.


 


(d)                                 The
Registration Rights Agreement, in substantially the form attached hereto as Exhibit 2
(the “Registration Rights Agreement”),
shall have been duly authorized, executed and delivered to the Purchasers by
the Company.


 


(e)                                  The
Voting and Standstill Agreement, in substantially the form attached hereto as Exhibit 3,
shall have been duly authorized, executed and delivered to the Purchasers by
the Company.


 


(f)                                    No
Governmental Authority having jurisdiction over any party hereto shall have
issued any order, decree, ruling, injunction or other action that is in effect
(whether temporary, preliminary or permanent) restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated by this
Agreement, and no law or regulation shall have been adopted that makes
consummation of the transaction contemplated by this Agreement illegal or
otherwise prohibited.


 


(g)                                 The
Purchasers shall have received from counsel to the Company an opinion
substantially in the form attached hereto as Exhibit 4.


 


(h)                                 The
Company has not, in any material respect, violated or breached any terms, agreements
or conditions contained in that certain Settlement Agreement and Release dated
as of December 14, 2008 (the “Settlement
Agreement”) by and among the Company and certain of its affiliates,
on the one hand, and certain of the Purchasers and their respective affiliates
who are party thereto (the “Apollo Settlement
Parties”), on the other hand.


 


Section 4.2                                      Conditions to Company’s Obligations.  The Company’s obligation to issue the Notes
to be delivered to any of the Purchasers at the Closing is subject to the
fulfillment to the Company’s satisfaction, prior to or at the Closing, of the
following conditions:


 


(a)                                  Each
Purchaser shall have delivered, or caused to be delivered, to the Company or
its order, immediately available funds in the amount specified opposite such
Purchaser’s name in Schedule A.


 


(b)                                 The
representations and warranties of all of the Purchasers in this Agreement shall
be true and correct in all material respects (without regard to qualifications
or exceptions contained therein as to materiality) when made and at the time of
the Closing.


 


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(c)                                  All
of the Purchasers shall have performed and complied in all material respects
with all agreements and conditions contained in this Agreement required to be
performed or complied with by them prior to or at the Closing.


 


(d)                                 The
Voting and Standstill Agreement, in the form attached hereto as Exhibit 3
(the “Voting and Standstill Agreement”)
shall have been duly authorized, executed and delivered to the Company by all
parties thereto (other than the Company).


 


(e)                                  The
Purchasers shall have executed and delivered to the Company the Registration
Rights Agreement.


 


(f)                                    No
Governmental Authority having jurisdiction over any party hereto shall have issued
any order, decree, ruling, injunction or other action that is in effect
(whether temporary, preliminary or permanent) restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated by this
Agreement, and no law or regulation shall have been adopted that makes
consummation of the transaction contemplated by this Agreement illegal or
otherwise prohibited.


 


(g)                                 The
Company shall have received from counsel to the Apollo Settlement Parties an
opinion substantially in the form attached hereto as Exhibit 5.


 


(h)                                 The
Apollo Settlement Parties have not, in any material respect, violated or
breached any terms, agreements or conditions contained in the Settlement
Agreement.


 


SECTION 5.   REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.


 


The Company
represents and warrants to each Purchaser that:


 


Section 5.1                                      Organization; Power and Authority.  The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, and is duly qualified as a foreign corporation and is in good
standing in each jurisdiction in which it owns or leases properties or conducts
any business, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of the
Company to perform its obligations under this Agreement or the Notes (including
the payment of interest thereon or principal thereof).  The Company has the corporate power and
authority to conduct its business as currently conducted.  The Company has all requisite power and
authority to execute and deliver this Agreement, the Voting and Standstill
Agreement and the Registration Rights Agreement, to perform its obligations
hereunder and thereunder and to consummate the transactions that are the
subject of this Agreement, the Voting and Standstill Agreement and the
Registration Rights Agreement.  Any
person signing this Agreement, the Registration Rights Agreement and the Voting
and Standstill Agreement on behalf of the Company has been duly authorized by
the Company to do so.  No other consent,
approval or authorization of any Person is required in connection with the
execution, delivery or performance by the Company of this Agreement, the
Registration Rights Agreement and the Voting and Standstill Agreement other
than (1) as may be required under the HSR Act or similar foreign
competition laws and (2) such other consents, approvals or authorizations,
as to which the failure to obtain could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the


 


3

















 


ability of the
Company to perform its obligations under this Agreement or the Notes (including
the payment of interest thereon or principal thereof).


 


Section 5.2                                      Authorization, Etc.  This Agreement, the Voting and Standstill
Agreement, the Registration Rights Agreement and the Notes have been duly
authorized by all necessary corporate action on the part of the Company, and
this Agreement constitutes, and upon execution and delivery thereof each Note
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).


 


Section 5.3                                      Underlying Shares. 
The issuance of the Common Stock issuable upon conversion of
the Notes, and the payment of any interest under the Notes, has been duly
authorized by all necessary corporate action, and such shares, when so issued,
shall be duly authorized, validly issued, fully paid and non-assessable.


 


Section 5.4                                      Compliance with Rulings, Other Instruments, Etc.  The execution, delivery and performance by
the Company of this Agreement, the Voting and Standstill Agreement, the
Registration Rights Agreement and the Notes and the performance by the Company
of its obligations hereunder and thereunder (including the issuance of any
Common Stock upon conversion of the Notes) will not (i)  violate, conflict
with, result in any breach or violation of, or constitute a default (with or
without notice or lapse of time or both), or result in the termination of or
acceleration of performance required by, or result in a right of termination or
acceleration under, any agreement, indenture, mortgage, deed of trust, loan,
bond, lease, purchase or credit agreement or the Company’s corporate charter or
by-laws or the governing documents of any subsidiary of the Company, or any
other agreement or instrument to which the Company or any of its subsidiaries
or its or their respective properties or assets are bound, or (ii) conflict
with or result in a breach of any of the terms, conditions or provisions of any
order, judgment, decree, or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any of its subsidiaries, in each case
except as would not have a material adverse effect on the ability of the
Company to perform its obligations under this Agreement or the Notes, or
adversely affect the validity thereof.


 


Section 5.5                                      Governmental Authorizations, Etc.  Assuming the accuracy of the Purchasers’
representations in Section 6, no consent, approval or authorization of, or
registration, filing or declaration with, any Governmental Authority is
required in connection with the execution, delivery or performance by the
Company of this Agreement or the Notes, other than as may be required under the
HSR Act or similar foreign competition laws.


 


SECTION 6.   REPRESENTATIONS
AND AGREEMENTS OF THE PURCHASERS.


 


Each Purchaser
hereby, jointly and severally, represents and warrants to and agrees with the
Company as follows:


 


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Section 6.1                                      Authorization.  Each
Purchaser has all requisite power and authority to execute and deliver this
Agreement, the Registration Rights Agreement and the Voting and Standstill
Agreement, to perform its obligations hereunder and thereunder and to
consummate the transactions that are the subject of this Agreement, the
Registration Rights Agreement and the Voting and Standstill Agreement.  The execution and delivery of this Agreement,
the Registration Rights Agreement and the Voting and Standstill Agreement, and
the performance by each Purchaser of its obligations hereunder and thereunder,
will not violate or constitute a default under the terms of any agreement,
indenture or other instrument, license, judgment, decree, order, law, statute,
ordinance or other governmental rule or regulation by which such Purchaser
is bound.  Any Person signing this
Agreement, the Registration Rights Agreement and the Voting and Standstill
Agreement on behalf of any Purchaser has been duly authorized by such Purchaser
to do so.  No other consent, approval or
authorization of any Person is required in connection with the execution,
delivery or performance by any Purchaser of this Agreement, the Registration
Rights Agreement and the Voting and Standstill Agreement other than (1) as
may be required under the HSR Act or similar foreign competition laws and (2) such
other consents, approvals or authorizations as to which the failure to obtain
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of any Purchaser to perform its
obligations under this Agreement or the Voting and Standstill Agreement.


 


Section 6.2                                      Acknowledgements and Waiver.  Each Purchaser acknowledges and
agrees that:


 


(a)                                  The
Securities are being acquired by each Purchaser as part of the settlement (the “Settlement”) contemplated by the Settlement
Agreement.


 


(b)                                 Each
Purchaser has had access to all public filings made by the Company with the
Securities and Exchange Commission. The Company may possess material, nonpublic
information about the Company and its subsidiaries and their condition
(financial and otherwise), financial status, results of operations, businesses,
properties, management, plans and prospects, including but not limited to
certain information concerning the Company’s recent consolidated results of
operations and its outlook for future periods (collectively, the “Information”), and each Purchaser did not
request or receive such Information in making the decision to accept the
Securities pursuant to this Agreement. 
Each Purchaser agrees that any such additional Information the Company
may possess would not have been material to each Purchaser’s decision to enter
into this Agreement and acquire the Securities because of the overall benefits
of the Settlement to each Purchaser and its respective affiliates.  Each Purchaser has had access to, and is
familiar with, the information regarding the Company and the Settlement in the
possession of the Apollo Parties in connection with its purchase of the Notes
and did not rely on the Company or its Affiliates or representatives to provide
any such information.


 


(c)                                  The
parties to the Settlement Agreement agreed to the Settlement, including the
acceptance by each of the Purchasers of the Securities pursuant to this
Agreement, on the belief that no Purchasers or their Affiliates would have any
claims or causes of action against the Company and its agents and their
respective affiliates, controlling persons, officers, directors, employees,
representatives, agents, attorneys and managers, with respect to the purchase
and sale of the Securities pursuant to this Agreement, based upon, relating to
or arising


 


5

















 


out of
representations not expressly given by the Company in this Agreement, including
claims related to nondisclosure of any Information.  Accordingly, each Purchaser hereby waives and
releases, to the fullest extent permitted by law, any and all claims and causes
of action it or any of its Affiliates has or may have against any of the
foregoing Persons with respect to the purchase and sale of the Securities,
based upon, relating to or arising out of representations not expressly given
by the Company herein, including claims related to nondisclosure of any
Information.


 


Section 6.3                                      Matters Concerning the Securities.


 


(a)                                  Each
Purchaser acknowledges and agrees that:  (i) the
Securities have not been registered under the Securities Act, the securities
laws of any state or the securities laws of any other jurisdiction; and (ii) no
governmental or regulatory agency has passed upon, or will pass upon, the
Securities or has made, or will make, any finding or determination as to the
fairness of investment in the Securities.


 


(b)                                 Each
Purchaser acknowledges and agrees that (i) the Securities cannot be sold
unless they are subsequently registered under the Securities Act or unless an
exemption therefrom is available, (ii) the Securities have not been
registered under applicable state securities laws and, therefore, cannot be
sold unless they are subsequently registered under applicable state securities
laws or unless an exemption therefrom is available, and (iii) there are
significant restrictions on the transferability and voting of the Securities as
set forth in the Voting and Standstill Agreement.  Each Purchaser acknowledges and agrees to the
restrictions on transfer of the Notes set forth in the legends thereon.


 


(c)                                  Each
Purchaser acknowledges that it, together with its Affiliates, is familiar with
the Company due to their involvement in the matters resolved by the Settlement
Agreement.  Each Purchaser is a
sophisticated party fully capable of evaluating the Settlement and all of its
elements, including the acceptance of the Notes pursuant to this Agreement,
without the need for any possible additional material non-public Information
that the Company may possess.


 


(d)                                 Each
Purchaser’s acquisition and ownership of the Securities will not be prohibited
under Section 406 of the United States Employee Retirement Income Security
Act of 1974, as amended, or constitute a “prohibited transaction” (as defined
in Section 4975(c)(1) of the United States Internal Revenue Code of
1986 (as amended, the “Code”)) for
which an exemption does not apply.


 


(e)                                  In
formulating a decision to enter into this Agreement, including the acceptance
of the Securities by the Purchasers under this Agreement, no Purchaser has
relied or acted on the basis of any representations not expressly given in this
Agreement.


 


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SECTION 7.   COVENANTS OF
THE COMPANY.


 


Section 7.1                                      Financial Statements.  If, at any time, the Company is no longer
subject to the reporting requirements of the Exchange Act, then each holder of
Notes will be entitled, upon its request, to receive:


 


(a)                                  no
later than 45 days after the end of each of the first three quarters of each
fiscal year, (i) an unaudited consolidated balance sheet of the Company
and its subsidiaries as at the end of such quarter, and (ii) unaudited
consolidated statements of income, changes in shareholders’ equity and cash
flows of the Company and its subsidiaries, for such quarter, in each case
prepared in accordance with GAAP applicable to quarterly financial statements
generally, and


 


(b)                                 no
later than 90 days after the end of each fiscal year, (i) a consolidated
balance sheet of the Company and its subsidiaries as at the end of such year,
and (ii) consolidated statements of income, changes in shareholders’
equity and cash flows of the Company and its subsidiaries for such year, in
each case accompanied by an opinion thereon of independent accountants to the
effect that such financial statements present fairly, in all material respects,
the consolidated financial position and results of operations and cash flows of
the Company and its subsidiaries in conformity with GAAP.


 


Section 7.2                                      Consolidation, Merger, Sale or Lease of Assets by the
Company.


 


(a)                                  The
Company, without the consent of the holders of any of the outstanding Notes,
may


 


(i)                                     consolidate with
or merge with or into any Person, or


 


(ii)                                  sell, convey, transfer,
or otherwise dispose of or lease all or substantially all of its assets as an
entirety or substantially an entirety, in one transaction or a series of
related transactions, to any Person;


 


provided that


 


(A)                              either (x) the
Company is the continuing Person or (y) the resulting, surviving or
transferee Person expressly assumes by supplement to this Agreement all of the
obligations of the Company under this Agreement and the Notes;


 


(B)                                immediately after
giving effect to the transaction, no Event of Default or Default, in each case
relating to the failure to pay interest or principal on the Notes when due, has
occurred and is continuing; and


 


(C)                                the Company delivers to
the holders an Officers’ Certificate stating that the consolidation, merger,
transfer or lease and the supplement hereto (if any) comply with this
Agreement;


 


provided, however, that in the event of a
consolidation or merger of the Company with or into a wholly-owned subsidiary
of the Company, the requirement of clause (C) shall not apply.


 


7
















 


(b)                                 Upon the consummation
of any transaction effected in accordance with these provisions, if the Company
is not the continuing Person, the resulting, surviving or transferee Person
will succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Agreement and the Notes with the same effect as if
such successor Person had been named as the Company hereunder.


 


SECTION 8.    PREPAYMENT
OF THE NOTES.


 


Section 8.1                                      Prepayments at the Option of the Company.


 


(a)                                  Except as provided in
clause (b) below and in Section 8.3, the Company shall not be
entitled to prepay the Notes prior to maturity. 
The foregoing shall not affect the right of the Company to purchase
Notes from any holder through tender offer, open market purchase or other
negotiated purchase or to exchange the Notes for Exchange Notes as provided in
the form of the Notes initially issued hereunder.


 


(b)                                 On or after December 23,
2011, the Company shall be entitled to prepay the Notes in whole, for cash, provided that the Closing Sale Price of
the Common Stock, for at least 20 consecutive Trading Days prior to the notice
of prepayment described below, exceeds 135% of the Conversion Price in effect
on each such Trading Day.


 


Section 8.2                                      Notice of Optional Prepayments.  The Company will give each holder of Notes
written notice of the exercise of the optional prepayment right under Section 8.1(b) not
less than 35 days (or, if the holders of Notes are not then restricted from
acquiring shares of Common Stock upon conversion of the Notes, under the HSR
Act or any similar foreign antitrust law, 15 days) and not more than 60 days
prior to the date fixed for such prepayment. 
Such notice shall specify such date, and the interest to be paid on the
prepayment date with respect to the principal amount being prepaid and the place or places at which Notes shall
be surrendered for prepayment. 
Delivery of a notice pursuant to this Section 8.2 shall in no way
preclude the ability of any holder to sell, transfer or convert the Notes prior
to the prepayment date specified in such notice.


 


Section 8.3                                      Mandatory Prepayment


 


(a)                                  If a Mandatory
Prepayment Event shall occur when any Notes remain outstanding, each holder of
Notes shall have the right, at such holder’s option, to require the Company to
prepay all or any portion of such holders’ Notes on a date specified by the
Company (the “Mandatory Prepayment Date”)
that is not less than 20 nor more than 35 Business Days  after the date on which the Company gives the
notice of such Mandatory Prepayment Event pursuant to clause (b) below.


 


(b)                                 Within 15 days after
the occurrence of a Mandatory Prepayment Event, the Company shall give to
holders of Notes a written notice (the “Mandatory Prepayment Event Notice”) of the Mandatory
Prepayment Event and of the prepayment right at the option of the holders
arising as a result thereof.  Each
Mandatory Prepayment Event Notice shall specify the events causing the
Mandatory Prepayment Event, the Mandatory Prepayment Date, the place or places
where Notes shall be surrendered for prepayment, and reasonable procedures that



 


8

















 


holders must follow to require the Company to prepay their Notes.  A holder desiring to exercise its right to
prepayment of its Notes pursuant to this Section 8.3 must give notice of
such election, which shall be irrevocable, to the Company on or prior to the
close of business on the Business Day immediately preceding the Mandatory
Prepayment Date. No failure of the Company to give the foregoing notice and no
defect therein shall limit the Note holders’ repurchase rights or affect the
validity of the proceedings for the repurchase of the Notes pursuant to this Section 8.3.


 


(c)                                  In connection with
any prepayment offer, the Company will, to the extent applicable, comply with
the provisions of Rule 13e-4, Rule 14e-1 and any other applicable
tender offer rules under the Exchange Act.


 


(d)                                 Upon surrender of a
Note that is to be prepaid, in part pursuant to this Section 8.3, as
applicable, the Company shall execute and deliver to the holder a new Note in
an authorized denomination equal in principal amount to the unpaid portion of
the Note surrendered, in accordance with the procedures provided in Section 12.2.


 


Section 8.4                                      Maturity; Surrender, Etc. 
In the case of each prepayment of Notes pursuant to this Section 8,
the principal amount of each Note to be prepaid, unless it is converted in
accordance with Section 9.2 prior to the specified prepayment date, shall
mature and become due and payable, without premium or penalty in cash on the
date fixed for such prepayment, together with interest on such principal amount
accrued to such date, in each case upon surrender of such Note for prepayment
in accordance with the notice described in Section 8.2 or 8.3, as
applicable.  From and after such date,
unless the Company shall fail to pay such principal amount when so due and
payable, together with the interest, if any, as aforesaid, interest on such
principal amount shall cease to accrue.


 


Section 8.5                                      Mandatory Exchange. 
Notes in the form initially issued hereunder shall be subject to
mandatory exchange for Exchange Notes as provided in the form of such Notes,
subject to the terms thereof.


 


SECTION 9.    CONVERSION RIGHTS.


 


Section 9.1                                      Right to Convert.  Subject to and upon compliance with the
provisions of this Agreement, the holder of any Notes not previously prepaid
shall have the right, at such holder’s option, to convert the principal amount
of the Notes held by such holder, or any portion of such principal amount which
is an integral multiple of $1,000, into fully paid and non-assessable shares of
Common Stock (as such shares shall then be constituted), by surrender of the
Notes so to be converted in whole or in part in the manner provided in Section 9.2.  Upon any such conversion, subject to the
terms hereof, a holder will receive, for each $1,000 principal amount of Notes
converted, a number of shares of Common Stock equal to the Conversion Rate.  The “Conversion Rate”
shall initially be 127.2750 (which is approximately equivalent to an initial
Conversion Price of $7.857), and shall be subject to adjustment as provided in Section 9.4.


 


Section 9.2                                      Exercise of Conversion Right; Issuance of Common Stock
on Conversion; No Adjustment for Interest or Dividends.


 


(a)                                  In order to exercise
the conversion right with respect to any Notes, a holder of Notes must deliver
such Notes to the Company with the original or facsimile of the 


 


9

















 


form entitled “Conversion Notice” on the reverse thereof, duly
completed and manually signed, together with such Notes duly endorsed for
transfer, together with any other required transfer documents as specified
herein.  Such notice shall also state the
name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock which shall be issuable on such
conversion (and any Note or Notes issuable pursuant to Section 9.2(b))
shall be issued, and shall be accompanied by transfer or similar taxes, if
required pursuant to Section 9.6. 
To validly effect conversion of a Note, all of the foregoing must be
received by the Company prior to 5:00 p.m. New York City time on the
Business Day immediately preceding the maturity date of the Notes, provided that, with respect to Notes for
which a notice of prepayment pursuant to Section 8.1(b) has been
given, such documents and instruments must be delivered no later than 5:00 p.m.
New York City time on the second Business Day immediately preceding the date
fixed for such prepayment.  A holder of
Notes who has given a prepayment election notice following receipt of a
Mandatory Prepayment Event Notice pursuant to Section 8.3 shall not
thereafter be entitled to convert such Notes, unless the Company does not
timely pay for such Notes.  Notices of
conversion shall be irrevocable.


 


(b)                                 In case any Notes
shall be surrendered for partial conversion, and subject to Section 12.2,
the Company shall execute and deliver to the holder of the Notes so surrendered
a new Note or Notes in authorized denominations in an aggregate principal
amount equal to the unconverted portion of the surrendered Notes.


 


(c)                                  Each conversion shall
be deemed to have been effected as to any such Notes (or portion thereof) on
the date on which the requirements set forth in Section 9.2(a) have
been satisfied as to such Notes (or portion thereof) (the “Conversion Date”), and such Notes will be
deemed to have been converted immediately prior to 5:00 p.m., New York
City time, on the Conversion Date.  At
such time, a holder of Notes shall be entitled to all rights of a holder of
Common Stock, as though such shares had been issued on the Conversion Date, and
any property or economic benefit to which such holder would have been entitled
as a recipient of a dividend or other distribution on such shares from and
after the Conversion Date shall be held in trust for the benefit of such
holder, without any interest thereon. 
The Person in whose name any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become, on said date, the holder of record of the shares represented thereby; provided that any such surrender on any
date when the stock transfer books of the Company shall be closed shall
constitute the Person in whose name the certificates are to be issued as the
record holder thereof for all purposes on the next succeeding day on which such
stock transfer books are open.  Prior to
the Conversion Date, holders of Notes, in their capacity as such, shall not be
entitled to any rights of holders of Common Stock.


 


(d)                                 Upon the conversion of
any Notes, accrued but unpaid interest with respect to the converted Notes
shall be deemed to be paid in full to the holder thereof through delivery of
the Common Stock in exchange for the Notes being converted pursuant to the
provisions hereof, and no payment shall be made with respect to such interest; provided that, with respect to any conversion of Notes
effected after a notice of optional prepayment is given by the Company pursuant
to Section 8.2, following any such conversion of Notes, any accrued but
unpaid interest up to but including the Conversion Date with respect to the
converted Notes shall be due and payable to the holder converting such Notes on
the next succeeding date which 


 


10

















 


would have been a semiannual interest payment date with respect to such
Notes if such Notes were still outstanding.


 


(e)                                  The Company will
deliver shares of Common Stock and cash in lieu of fractional shares to
converting holders no later than the third Business Day immediately following
the related Conversion Date for such Notes, provided that
the Company may delay any such delivery as necessary for the applicable Holder(s) and
the Company to comply with the HSR Act or other foreign competition laws.  Certificates representing shares of Common
Stock issued upon conversion of Notes shall bear legends concerning transfer
restrictions, to the extent applicable, substantially similar to the legend
provided in the form of Note, unless the Company determines otherwise.  The Company agrees to remove any such legends
promptly at the request of the converting holders to the extent such
restrictions no longer apply.


 


Section 9.3                                      Cash Payments in Lieu of Fractional Shares.  No fractional shares of Common Stock or scrip
certificates representing fractional shares shall be issued upon conversion of
Notes. If more than one Note shall be surrendered for conversion at one time by
the same holder, the number of full shares that shall be issuable upon
conversion shall be computed on the basis of the aggregate principal amount of
the Notes (or specified portions thereof to the extent permitted hereby) so
surrendered.  With respect to any
fractional share of stock that would be issuable upon the conversion of any
Note or Notes, the Company shall make an adjustment and payment therefor in
cash to the holder of Notes at a price equal to the product of such fractional
share times the Closing Sale Price on the last Trading Day prior to the
Conversion Date.


 


Section 9.4                                      Adjustment of Conversion Rate.  The Conversion Rate shall be adjusted from
time to time by the Company as follows; provided, that no single event shall
cause an adjustment under more than one subsection of this Section 9.4 so
as to result in duplication:


 


(a)                                  In case the Company
shall, at any time or from time to time while any of the Notes are outstanding,
pay a dividend in shares of Common Stock or make a distribution in shares of
Common Stock to all holders of its outstanding shares of Common Stock, then the
Conversion Rate in effect at the opening of business on the “ex” date for such
dividend or other distribution shall be increased by multiplying such
Conversion Rate by a fraction,


 


(i)                                     the
numerator of which shall be the sum of the number of shares of Common Stock
outstanding at the close of business on the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution plus the
total number of shares of Common Stock constituting such dividend or other
distribution; and


 


(ii)                                  the
denominator of which shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination,


 


such increase
to become effective immediately after the opening of business on “ex” date for
such distribution.  If any dividend or
distribution of the type described in this Section 9.4(a) is 


 


11

















 


declared but
not so paid or made, the Conversion Rate shall again be adjusted to the
Conversion Rate that would then be in effect if such dividend or distribution
had not been declared.


 


(b)                                 In case outstanding
shares of Common Stock shall be subdivided into a greater number of shares of
Common Stock, the Conversion Rate in effect at the opening of business on the
day following the day upon which such subdivision becomes effective shall be
proportionately increased, and conversely, in case outstanding shares of Common
Stock shall be combined into a smaller number of shares of Common Stock, the
Conversion Rate in effect at the opening of business on the day following the
day upon which such combination becomes effective shall be proportionately
reduced, such increase or reduction, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.


 


(c)                                  In case the Company
shall distribute rights or warrants (other than any rights or warrants referred
to in Section 9.4(d)) to all holders of its outstanding shares of Common
Stock entitling them to subscribe or purchase, for a period of 45 calendar days
or less, shares of Common Stock at a price per share less than the Current
Market Price on the declaration date of the distribution, the Conversion Rate
shall be increased so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect at the opening of business on the “ex”
date for such distribution by a fraction,


 


(i)                                     the
numerator of which shall be the number of shares of Common Stock outstanding on
the date fixed for determination of stockholders entitled to receive such
rights or warrants plus the total number of additional shares of Common Stock
offered for subscription or purchase, and


 


(ii)                                  the
denominator of which shall be the sum of the number of shares of Common Stock
outstanding at the close of business on the date fixed for determination of
stockholders entitled to receive such rights or warrants plus the number of
shares that the aggregate offering price of the total number of shares so
offered would purchase at such Current Market Price.


 


Such
adjustment shall be successively made whenever any such rights or warrants are
distributed, and shall become effective immediately after the opening of
business on the “ex” date for such distribution.  To the extent that shares of Common Stock are
not delivered after the expiration of such rights or warrants, the Conversion
Rate shall be readjusted to the Conversion Rate that would then be in effect
had the adjustments made upon the issuance of such rights or warrants been made
on the basis of delivery of only the number of shares of Common Stock actually
delivered.  If such rights or warrants
are not so issued, the Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if the “ex” date for the
distribution had not been fixed.  In
determining whether any rights or warrants entitle the holders to subscribe for
or purchase shares of Common Stock at less than such Current Market Price, and
in determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received by the Company for
such rights or warrants and any amount payable on exercise or conversion
thereof, the Fair Market Value of such consideration, if other than cash, to be
determined in good faith by the Board of Directors.


 


12

















 


(d)                                 In case the Company
shall, by dividend or otherwise, distribute to all holders of its outstanding
shares of Common Stock shares of any class of capital stock of the Company or
evidences of its indebtedness or assets (including securities, but excluding (i) any
Permitted Special Dividend, (ii) any rights or warrants of the type
described in Section 9.4(c), (iii) any dividends or distributions in
connection with a reclassification, change, consolidation, merger, sale, lease,
transfer, conveyance or other disposition to which Section 9.5 applies, (iv) any
dividends or distributions paid exclusively in cash or (v) any dividends
or distributions referred to in Section 9.4(a)) (any of the foregoing
hereinafter in this Section 9.4(d) called the “Distributed Assets”), then, in each such
case, the Conversion Rate shall be increased so that the same shall be equal to
the rate determined by multiplying the Conversion Rate in effect at the opening
of business on the “ex” date for such distribution by a fraction,


 


(i)                                     the
numerator of which shall be the Current Market Price on the “ex” date for such
distribution, and


 


(ii)                                  the
denominator of which shall be the Current Market Price on the “ex” date less
the Fair Market Value (as determined in good faith by the Board of Directors)
of the portion of the Distributed Assets so distributed applicable to one share
of Common Stock,


 


such
adjustment to become effective immediately after the opening of business on the
“ex” date; provided that if the Fair Market Value
(as so determined) of the portion of the Distributed Assets so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price on the “ex” date or such Current Market Price exceeds such Fair
Market Value by less than $1.00, then in lieu of the foregoing adjustment,
adequate provision may be made so that each holder of Notes shall have the
right to receive upon conversion, for each $1,000 principal amount of Notes,
the amount of Distributed Assets that such holder would have received had such
holder owned a number of shares of Common Stock equal to the Conversion Rate on
the record date for such distribution, in addition to the shares of Common
Stock to which such holder is entitled upon conversion. If such distribution is
not so paid or made, the Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if such distribution had not been
declared.


 


Rights or
warrants distributed by the Company to holders of Common Stock entitling the
holders thereof to subscribe for or purchase shares of the Company’s capital
stock (either initially or under certain circumstances), which rights or
warrants, until the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be
transferred with such shares of Common Stock; (ii) are not exercisable;
and (iii) are also issued in respect of future issuances of Common Stock,
shall be deemed not to have been distributed for purposes of this Section 9.4
(and no adjustment to the Conversion Rate under this Section 9.4 will be
required) until the occurrence of the earliest Trigger Event, whereupon such
rights and warrants shall be deemed to have been distributed and an appropriate
adjustment (if any is required) to the Conversion Rate shall be made under this
Section 9.4(d).  In addition, in the
event of any distribution (or deemed distribution) of rights or warrants, or
any Trigger Event with respect thereto for which an adjustment to the
Conversion Rate under this Section 9.4 was made, (1) in the case of
any such rights or warrants that shall all have been redeemed or repurchased
without exercise by any holders thereof, the Conversion Rate shall be
readjusted upon such final redemption or 


 


13

















 


repurchase to give effect to such distribution or Trigger Event, as the
case may be, as though it were a cash distribution, in an amount equal to the
per share redemption or repurchase price received by a holder or holders of
Common Stock with respect to such rights or warrants (assuming such holder had
retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such
rights or warrants that shall have expired or been terminated without exercise
by any holders thereof, the Conversion Rate shall be readjusted as if such
rights and warrants had not been issued.


 


No adjustment
of the Conversion Rate shall be made pursuant to this Section 9.4(d) in
respect of rights or warrants distributed on any Trigger Event to the extent
that holders of the Notes participate in the distribution without conversion as
a result of holding the Notes at the same time as holders of Common Stock
participate with respect to such distribution and on the same terms as holders
of Common Stock participate with respect to such distribution as if holders of
the Notes, at such time, held a number of shares of Common Stock equal to the
Conversion Rate, multiplied by the principal amount (expressed in thousands) of
Notes held by such holder, without having to convert their Notes.


 


For purposes
of this Section 9.4(d) and Sections 9.4(a) and 9.4(b), any
dividend or distribution to which this Section 9.4(d) is applicable
that also includes shares of Common Stock, shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock (and any Conversion Rate
adjustment required by this Section 9.4(d) with respect to such
dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock (and any further
Conversion Rate adjustment required by Section 9.4(a) or 9.4(b) with
respect to such dividend or distribution shall then be made.


 


(e)                                  In case the Company
shall, by dividend or otherwise, distribute to all holders of its Common Stock
cash (excluding (x) any Permitted Special Dividend, (y) any dividend
or distribution in connection with the liquidation, dissolution or winding up
of the Company, whether voluntary or involuntary and (z) any dividend or
distribution in connection with a merger, consolidation or sale to which Section 9.5
applies), in an amount per share of Common Stock that exceeds of $0.15 per
share of Common Stock in any fiscal quarter (the “Quarterly Dividend Amount”) then the Conversion Rate shall be
increased so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect at the opening of business on the “ex” date for such
distribution by a fraction,


 


(i)                                     the
numerator of which shall be the Current Market Price of Common Stock on the “ex”
date for the distribution; and


 


(ii)                                  the
denominator of which shall be the Current Market Price of Common Stock on the “ex”
date for the distribution less the amount of the cash dividend or distribution
applicable to one share of Common Stock in excess of the Quarterly Dividend
Amount and for which an adjustment has not already been made pursuant to this
provision,


 


such
adjustment to be effective immediately after the opening of business on the “ex”
date for such distribution; provided
that if the portion of the cash so distributed applicable to one share of 


 


14

















 


Common Stock
is equal to or greater than the Current Market Price on the “ex” date for the
distribution or such Current Market Price exceeds such portion by less than
$1.00, then, in lieu of the foregoing adjustment, adequate provision may be
made so that each holder of Notes shall have the right to receive upon
conversion for each $1,000 principal amount of Notes, the amount of cash such
holder would have received had such holder owned a number of shares equal to
the Conversion Rate on the record date for such dividend or distribution, in
addition to the shares of Common Stock to which such holder is entitled upon
conversion.  If such dividend or
distribution is not so paid or made, the Conversion Rate shall again be
adjusted to be the Conversion Rate that would then be in effect if such
dividend or distribution had not been declared. 
The Quarterly Dividend Amount is subject to inversely proportional
adjustment as and when the Conversion Rate is adjusted pursuant to Sections 9.4(a) and
(b).


 


(f)                                    In case a tender or
exchange offer made by the Company or any subsidiary for all or any portion of
the Common Stock shall expire and such tender or exchange offer (as amended
upon the expiration thereof) shall require the payment to stockholders of
consideration per share of Common Stock having a Fair Market Value (which, if
other than cash, shall be as determined in good faith by the Board of
Directors) that as of the last time (the “Expiration
Time”) tenders or exchanges may be made pursuant to such tender or
exchange offer (as it may be amended) exceeds the Closing Sale Price of a share
of Common Stock on the Trading Day next succeeding the Expiration Time, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to
the Expiration Time by a fraction,


 


(i)                                     the
numerator of which shall be the sum of (x) the Fair Market Value
(determined as aforesaid) of the aggregate consideration paid to stockholders
for all shares accepted for purchase in the tender or exchange offer (the “Purchased Shares”) and (y) the product
of the number of shares of Common Stock outstanding (less any Purchased Shares)
at the Expiration Time and the Closing Sale Price of a share of Common Stock on
the Trading Day next succeeding the Expiration Time, and


 


(ii)                                  the
denominator of which shall be the number of shares of Common Stock outstanding
(including any Purchased Shares) at the Expiration Time multiplied by the
Closing Sale Price of a share of Common Stock on the Trading Day next
succeeding the Expiration Time,


 


such
adjustment to become effective immediately prior to the opening of business on
the day following the Expiration Time. 
If the Company is obligated to purchase shares pursuant to any such
tender or exchange offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or any such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion
Rate that would then be in effect if such tender or exchange offer had not been
made for the shares not purchased.


 


(g)                                 For purposes of this Section 9.4,
the following terms shall have the meaning indicated:


 


(i)                                     “Current Market Price” on any date means the
average of the daily Closing Sale Prices per share of Common Stock for the ten
consecutive Trading 


 


15

















 


Days immediately prior to such date (the “day in question”); provided
that if the “ex” date for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the Conversion Rate
pursuant to Section 9.4(a), 9.4(b), 9.4(c), 9.4(d), 9.4(e) or 9.4(f) occurs
during such ten consecutive Trading Days, the Closing Sale Price for each
Trading Day prior to the “ex” date for such other event shall be adjusted by
dividing such Closing Sale Price by the same fraction by which the Conversion
Rate is so required to be multiplied as a result of such other event.


 


Notwithstanding the foregoing,
whenever successive adjustments to the Conversion Rate are called for pursuant
to this Section 9.4, such adjustments shall be made to the Current Market
Price as may be necessary or appropriate to effectuate the intent of this Section 9.4
and to avoid unjust or inequitable results as determined in good faith by the
Board of Directors.


 


(ii)                                  “Fair Market Value” shall mean the amount
which a willing buyer would pay a willing seller in an arm’s-length
transaction.  The Fair Market Value of
cash shall be the amount of the cash.


 


(iii)                               “record date” shall mean, with respect to
any dividend, distribution or other transaction or event in which the holders
of Common Stock (or other applicable security) have the right to receive any
cash, securities or other property or in which the Common Stock (or other
applicable security) is exchanged for or converted into any combination of
cash, securities or other property, the date fixed for determination of  the holders of Common Stock (or other
applicable security) entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).


 


(h)                                 The Company may make
such increases in the Conversion Rate, in addition to those required by Section 9.4(a)-(f),
as it considers to be advisable to avoid or diminish any income tax to holders
of Common Stock or rights to purchase Common Stock resulting from any dividend
or distribution of stock (or rights to acquire stock) or from any event treated
as such for income tax purposes, or as the Company otherwise deems to be in the
Company’s best interests.


 


(i)                                     No adjustment in
the Conversion Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in such rate; provided that any adjustments that by
reason of this Section 9.4(i) are not required to be made shall be
carried forward and the Company shall make such carry forward adjustments,
regardless of whether the aggregate adjustment is less than 1%, (1) five
Business Days prior to the maturity of the Notes, and (2) on the Business
Day prior to any prepayment date pursuant to Section 8.  All calculations under this Section 9
shall be made by the Company and shall be made to the nearest cent or to the
nearest one-ten thousandth (1/10,000) of a share, as the case may be.  Interest will not accrue on any cash into which
the Notes are convertible.


 


(j)                                     Whenever the
Conversion Rate is adjusted as herein provided, the Company will promptly send
notice thereof to the holders, which notice shall contain a summary 


 


16

















 


of the transaction or event relating to the adjustment, the details of
such adjustment and the Conversion Rate as adjusted.


 


(k)                                  In any case in which
this Section 9.4 provides that an adjustment shall become effective (1) upon
the opening of business on an “ex” date, (2) immediately after the record
date for an event, or (3) immediately after the Expiration Time for any
tender or exchange offer pursuant to Section 9.4(f), (each a “Determination Date”), the Company may elect
to defer until the occurrence of the applicable distribution, issuance of
Common Stock or payment (an “Adjustment Event”)
triggering a Conversion Rate adjustment (x) issuing to the holder of any
Notes converted after such Determination Date and before the occurrence of such
Adjustment Event, the shares of Common Stock issuable upon such conversion by
reason of the adjustment required by such Adjustment Event over and above the
Common Stock issuable upon such conversion before giving effect to such
adjustment and (y) paying to such holder any amount in cash in lieu of any
fractional share.


 


(l)                                     For purposes of
this Section 9.4, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company.


 


(m)                               No adjustment to the
Conversion Rate with respect to any dividend or distribution shall be made
pursuant to the this Section 9.4 if the holders of the Notes will
otherwise participate in such dividend or distribution without conversion as a
result of holding the Notes at the same time as holders of Common Stock
participate with respect to such dividend or distribution and on the same terms
as holders of Common Stock participate with respect to such dividend or
distribution, as if holders of the Notes held the number of shares of Common
Stock that they would have received upon conversion of the Notes at such time.


 


Section 9.5                                      Effect of Reclassification, Consolidation, Merger or
Sale.  If any of the following
events occur:


 


(a)                                  any reclassification
or change of the outstanding Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination),


 


(b)                                 any consolidation or
merger of the Company with or into another Person,


 


(c)                                  any statutory share
exchange of the Company with another Person, or


 


(d)                                 any sale, lease,
transfer, conveyance or other disposition of all or substantially all of the
Company’s assets and those of its subsidiaries taken as a whole to another
Person,


 


in each case
as a result of which holders of Common Stock shall be entitled to receive
stock, other securities or other property or assets (including cash or any
combination thereof) with respect to or in exchange for such Common Stock, in
each case, the Company or the successor or purchasing Person, as the case may
be, shall modify or supplement the terms of this Agreement, which shall not
require consent of any holder of Notes, to provide that the Notes shall
thereafter be convertible into the kind and amount of shares of stock and other
securities or property or assets (including cash or any combination thereof)
(the “Applicable Consideration”)
that such


 


17






 












 


holder would have been entitled to receive upon such reclassification,
change, consolidation, merger, share exchange, sale, lease, transfer,
conveyance or other disposition had such holder’s Notes been converted into
Common Stock immediately prior to such reclassification, change, consolidation,
merger, share exchange, sale, lease, transfer, conveyance or other
disposition.  If the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
share exchange, sale, lease, transfer, conveyance or other disposition is not
the same for each share of Common Stock because of rights of election available
to holders of Common Stock, then for the purposes of this Section 9.5, the kind
and amount of securities, cash or other property receivable upon such
consolidation, merger, sale, lease, transfer, conveyance or other disposition
shall be proportionately the same as the kind and amount per share received by
all Common Stock holders in the aggregate and the term “Applicable Consideration”
shall be construed accordingly.  Such
supplement or modification to this Agreement shall provide for adjustments that
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 9 and shall otherwise be in form and substance determined
in good faith by the Board of Directors or the board of directors of the
successor or purchasing Person, as the case may be.  If, in the case of any such reclassification,
change, consolidation, merger, sale, lease, transfer, conveyance or other
disposition, the stock or other securities and assets receivable thereupon by a
holder of Common Stock includes shares of stock of a corporation other than the
successor or purchasing corporation, as the case may be, in such reclassification,
change, consolidation, merger, sale, lease, transfer, conveyance or other
disposition, then such supplement or modification to this Agreement shall also
be executed by such other corporation and shall contain such provisions to
protect the interests of the holders of the Notes consistent with the intent of
this Agreement as the Board of Directors shall reasonably consider necessary by
reason of the foregoing.


 


The Company
shall cause notice of the execution of such supplement or modification to be
mailed to each holder, at the address of such holder as it appears on the
register of the Notes, within 10 Business Days after execution thereof.  Failure to deliver such notice shall not
affect the legality or validity of such modification or supplement.


 


If this Section 9.5 applies to any event
or occurrence,  Section 9.4 shall not
apply.


 


Section 9.6                                     Taxes. 
The issue of stock certificates on conversions of Notes shall be made
without charge to the converting holder of Notes for any documentary, stamp or
similar issue or transfer tax in respect of the issue thereof.  The Company shall not, however, be required
to pay any such tax which may be payable in respect of any transfer involved in
the issue and delivery of stock in any name other than that of the holder of
any Notes converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the Person or Persons requesting
the issue thereof shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company that such tax has
been paid.


 


Section 9.7                                     Reservation of Shares, Shares to be Fully Paid;
Listing of Common Stock.


 


(a)                                  The Company shall at
all times reserve and keep available, free from pre-emptive rights, out of its
authorized but unissued Common Stock, solely for the purpose of issue upon
conversion of Notes as herein provided, such number of shares of Common Stock
as shall 


 


18

















 


then be issuable upon the conversion of all Notes.  The Company covenants that all shares of
Common Stock issuable upon conversion of Notes or in payment of interest
thereon will upon issue be duly and validly issued and fully paid and
non-assessable by the Company and free from all taxes, liens, adverse claims,
preemptive or similar rights  and charges
with respect to the issue thereof.


 


(b)                                 The Company further
covenants that, if at any time the Common Stock shall be listed on the New York
Stock Exchange or any other national securities exchange, the Company will, if
permitted by the rules of such exchange, list and keep listed, so long as
the Common Stock shall be so listed on such exchange, all Common Stock issuable
upon conversion of the Notes; provided
that if the rules of such exchange permit the Company to defer the listing
of such Common Stock until the first conversion of the Notes into Common Stock
in accordance with the provisions of this Agreement, the Company covenants to
list such Common Stock issuable upon conversion of the Notes in accordance with
the requirements of such exchange at such time.


 


Section 9.8                                     Notice to Holders Prior to Certain Actions.  In case:


 


(a)                                  the Company shall
declare a dividend (or any other distribution) on its Common Stock;


 


(b)                                 the Company shall
authorize the granting to the holders of all or substantially all of its Common
Stock of rights or warrants to subscribe for or purchase any share of any class
of its Capital Stock or any other rights or warrants that would require an
adjustment in the Conversion Rate pursuant to Section 9.4;


 


(c)                                  of any
reclassification or reorganization of the Common Stock of the Company (other
than a subdivision or combination of its outstanding Common Stock, or a change
in par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company; or


 


(d)                                 of the voluntary or
involuntary dissolution, liquidation or winding up of the Company;


 


then the
Company shall give notice to each holder of Notes in accordance with Section 15
at least ten days prior to the applicable date hereinafter specified stating (x) the
date on which a record is to be taken for the purpose of such dividend,
distribution or rights or warrants, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record to be entitled to such
dividend, distribution or rights are to be determined, or (y) the date on
which such reclassification, reorganization, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up is expected to become
effective or occur, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reclassification,
reorganization, consolidation, merger, sale, transfer, dissolution, liquidation
or winding up; provided that a
separate notice shall not be required under this Section if such notice
has been effectively provided under another 


 


19

















 


provision of
this Agreement at least ten days prior to the relevant date described above; provided further that separate notice
shall not be required if the Company has issued a press release at least ten
days prior to the relevant date described above containing the information
otherwise required in such notice. 
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
reorganization, consolidation, merger, sale, transfer, dissolution, liquidation
or winding up.


 


Section 9.9                                     Cooperation.  The
Company and the Purchasers acknowledge that one or more filings under the HSR
Act or other foreign competition laws may be necessary in connection with the
issuance of shares of Common Stock as contemplated in this Agreement. If any
such filing is necessary, each party shall cooperate with the other party in
preparing such filings and ensuring that they are made promptly and prior to
the expiration of any legal deadline, and shall use their reasonable best
efforts to expedite the termination of any required waiting periods or the
grant of any approvals necessary to the issuance of shares. The Purchasers
shall be permitted to make any such filings at any time.


 


SECTION 10.                                                                   EVENTS OF DEFAULT.


 


An “Event of Default” shall exist if any of the following conditions
or events shall occur and be continuing:


 


(a)                                  the Company defaults
in the payment of any principal on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise;


 


(b)                                 the Company defaults
in the payment of any interest on any Note for more than 30 days after the same
becomes due and payable;


 


(c)                                  a default by the
Company in the delivery when due of any shares of Common Stock (or any cash in
lieu of fractional shares of Common Stock) deliverable upon conversion of the
notes, which default continues for 10 days;


 


(d)                                 failure by the Company
to provide a Mandatory Prepayment Event Notice to any holder of Notes within
the time required to provide such notice as set forth in Section 8.3(b),
unless such holders are otherwise given effective notice and a reasonable
opportunity to exercise the prepayment rights contemplated by Section 8.3(b);


 


(e)                                  the Company defaults
in the performance of or compliance with any other term contained herein and
such default is not remedied within 30 days after the Company receives written
notice of such default from any holder of a Note (any such written notice to be
identified as a “notice of default” and to refer specifically to this Section 10(e));


 


(f)                                    the Company or any
Significant Subsidiary (i) files, or consents by answer or otherwise to
the filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy, insolvency, reorganization, moratorium or other
similar law of any jurisdiction, (ii) makes an assignment for the benefit
of its creditors, (iii) consents to the appointment of a custodian, 


 


20

















 


receiver, trustee or other officer with similar powers with respect to
it or with respect to any substantial part of its property, or (iv) is
adjudicated as insolvent or to be liquidated;


 


(g)                                 a court or
Governmental Authority of competent jurisdiction enters an order appointing,
without consent by the Company or any Significant Subsidiary, a custodian,
receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, or constituting an order for
relief or approving a petition for relief or reorganization or any other
petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company or such Significant Subsidiary, or any
such petition shall be filed against the Company or such Significant Subsidiary
and such petition shall not be dismissed within 60 days; or


 


(h)                                 the occurrence of any
default under any agreement governing Debt of the Company if that default: (A) is
caused by the failure to pay at final maturity the principal amount of any Debt
after giving effect to any applicable grace periods and any extensions of time
for payment of such Debt; or (B) results in the acceleration of the final
stated maturity of any such Debt, and in each case the aggregate principal
amount of such Debt unpaid or accelerated aggregates $200 million or more at
any time and such Debt has not been discharged in full or such acceleration has
not been rescinded or annulled within 30 days of such final maturity or
acceleration.


 


SECTION 11.                                                                   REMEDIES ON DEFAULT, ETC.


 


Section 11.1                               Acceleration.


 


(a)                                  If an Event of
Default with respect to the Company described in Section 10(f) or (g) has
occurred, all the Notes then outstanding shall automatically become immediately
due and payable.


 


(b)                                 If any other Event of
Default has occurred and is continuing, any holder or holders of more than 50%
in principal amount of the Notes at the time outstanding may at any time at its
or their option, by notice or notices to the Company, declare all the Notes
then outstanding to be immediately due and payable.


 


(c)                                  If any Event of
Default described in Section 10(a) or (b) has occurred and is
continuing, any holder or holders of Notes at the time outstanding affected by
such Event of Default may at any time, at its or their option, by notice or
notices to the Company, declare all such Notes held by it or them to be
immediately due and payable, together with any accrued interest thereon.


 


Upon any Notes
becoming due and payable under this Section 11.1, whether automatically or
by declaration, such Notes will forthwith mature and the entire unpaid
principal amount of such Notes, plus all accrued and unpaid interest thereon
shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby waived.


 


21

















 


Section 11.2                               Rescission.  At any
time after any Notes have been declared due and payable pursuant to Section 11,
the holders of a majority in principal amount of the Notes then outstanding, by
written notice to the Company, may rescind and annul any such declaration and
its consequences if (a) the Company has paid all overdue interest on the
Notes, all principal of and any Notes that are due and payable and are unpaid
other than by reason of such declaration, and (b) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes which would conflict with such rescission.  No rescission and annulment under this Section 11.2
will extend to or affect any subsequent Event of Default or Default or impair
any right consequent thereon.


 


Section 11.3                               No Waivers or Election of Remedies, Expenses, Etc.  No course of dealing and no delay on the part
of any holder of any Note in exercising any right, power or remedy shall
operate as a waiver thereof or otherwise prejudice such holder’s rights, powers
or remedies.  No right, power or remedy
conferred by this Agreement or by any Note upon any holder thereof shall be
exclusive of any other right, power or remedy referred to herein or therein or
now or hereafter available at law, in equity, by statute or otherwise.


 


SECTION 12.                                                                   REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.


 


Section 12.1                               Registration of Notes. 
The Company shall keep at its principal executive office a register for
the registration of transfers of Notes. 
The name and address of each holder of one or more Notes, each transfer
thereof and the name and address of each transferee of one or more Notes shall
be registered in such register.  Prior to
due presentment for registration of transfer, the Person in whose name any Note
shall be registered shall be deemed and treated as the owner and holder thereof
for all purposes hereof, and the Company shall not be affected by any notice or
knowledge to the contrary.


 


Section 12.2                               Transfer and Exchange of Notes.  Subject to (i) the terms of the Voting
and Standstill Agreement and (ii) subject to the receipt by the Company of
evidence reasonably satisfactory to it (it being understood that the receipt of
an opinion of counsel to such effect is sufficient evidence) that such transfer
is exempt from registration under the Securities Act, upon surrender of any Note to the Company at the address and to
the attention of the designated officer (each as specified in Section 15(iii)),
for registration of transfer or exchange (and in the case of a surrender for
registration of transfer accompanied by a written instrument of transfer duly
executed by the registered holder of such Note and accompanied by the relevant
name, address and other information for notices of each transferee of such Note
or part thereof), within ten Business Days thereafter, the Company shall
execute and deliver, at the Company’s expense (except as provided below), one
or more new Notes (as requested by the holder thereof) in exchange therefor, in
an aggregate principal amount equal to the unpaid principal amount of the
surrendered Note.  Each such new Note
shall be payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1.  Each such new Note shall be dated and bear
interest from the date to which interest shall have been paid on the surrendered
Note or dated the date of the surrendered Note if no interest shall have been
paid thereon.  The Company may require
payment of a sum sufficient to cover any stamp tax or governmental charge
imposed in respect of any such transfer of Notes.  Notes shall not be transferred in
denominations of less than $1,000,000, provided
that, if necessary to enable the registration of transfer by a holder of its
entire holding of Notes, one Note may be in a denomination of less than
$1,000,000.  Any 


 


22

















 


transferee of a Note shall, by acceptance of such Note, be bound by
this Agreement, including the terms of the Notes concerning exchange for
Exchange Notes.


 


Section 12.3                               Replacement of Notes. 
Upon receipt by the Company at the address and to the attention of the
designated officer (all as specified in Section 15(iii)) of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note, and


 


(a)                                  in the case of loss,
theft or destruction, of indemnity reasonably satisfactory to it, or


 


(b)                                 in the case of
mutilation, upon surrender and cancellation thereof,


 


within ten
Business Days thereafter, the Company shall execute and deliver, in lieu
thereof, a new Note, dated and bearing interest from the date to which interest
shall have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest shall
have been paid thereon.


 


SECTION 13.                                                                   PAYMENTS ON NOTES.


 


The Company
shall at all times maintain an office or agency in the United States at which
the Notes may be presented for payment. 
The Company initially designates its office at 500 Huntsman Way, Salt
Lake City, Utah 84108 as such office. 
The Company shall notify the holders of Notes of any change in such
designated office.  Except as provided in
the Notes, payment of the principal of and interest on the Notes shall be made
at such office, in such lawful money of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts.  Payments of cash interest to the
Purchasers shall be made in the manner specified in Schedule A with
respect to such Purchaser.  For other
holders of Notes, each installment of cash interest may be paid by check mailed
to such holder’s address as it appears in the Note register; provided, however, that,
with respect to any Note holder with an aggregate principal amount in excess of
$1,000,000, at the application of such holder in writing to the Company not
later than 15 Business Days prior to the relevant interest payment date,
accrued and unpaid cash interest on such holder’s Notes shall be paid by wire
transfer in immediately available funds to such holder’s account in the United
States, which application shall remain in effect until the Note holder notifies
the Company to the contrary.


 


SECTION 14.                                                                   AMENDMENT AND WAIVER.


 


Section 14.1                               Requirements.  This
Agreement and the Notes may be amended, and the observance of any term hereof
or of the Notes may be waived (either retroactively or prospectively), with
(and only with) the written consent of the Company and the Required Holders,
except that (a) no amendment or waiver of any of the provisions of
Sections 1, 2, 3 or 4 will be effective as to any Purchaser unless consented to
by such Purchaser in writing, (b) no such amendment or waiver may, without
the written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of Section 11 relating to
acceleration or rescission, change the amount or time of any prepayment (other
than Section 8.3 and related definitions) or payment of principal of, or
reduce the rate or change the time of payment of interest on, such Note, (ii) change
the percentage of the principal amount of the 


 


23

















 


Notes the holders of which are required to consent to any such
amendment or waiver, (iii) amend any of Sections 10(a), 10(b) or
11(c), or (iv) adversely affect in any material respect, the right of
holders of Notes to convert their Notes pursuant to Section 9 and (c) the
written consent of the holders of 75% in principal amount of the Notes at the
time outstanding shall be required to (i) make any of the Notes payable in
money or securities other than that stated in the Notes, (ii) make any
change that adversely affects the holders’ rights to require the Company to
prepay the Notes in accordance with this Agreement, or (iii) impair the
right to institute suit for the enforcement of any payment on or with respect
to any Note or with respect to the conversion of any Note.  Notwithstanding any thing herein to the
contrary, this Agreement may be amended or supplemented without the consent of
any holder to comply with Section 7.2 or in circumstances contemplated by Section 9.5.


 


Section 14.2                               Binding Effect, Etc. 
Any amendment or waiver consented to as provided in this Section 14
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver.  No such amendment or waiver will extend to or
affect any obligation, covenant, agreement, Default or Event of Default not
expressly amended or waived or impair any right consequent thereon.  No course of dealing between the Company and
the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note.  As used herein, the term “this
Agreement” and references thereto shall mean this Agreement as it may from time
to time be amended or supplemented.


 


SECTION 15.                                                                   NOTICES.


 


Except as
otherwise provided in this Agreement, all notices and communications provided
for hereunder shall be in writing and sent (a) by facsimile if the sender
on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered or
certified mail with return receipt requested (postage prepaid), or (c) by
a recognized overnight delivery service (with charges prepaid), or (d) if
consented to by the recipient as set forth on Schedule A hereto, by electronic
mail.  Any such notice must be sent:


 


(i)                                     if
to any Purchaser or its nominee, to such Purchaser or nominee at the address
specified for such communications in Schedule A, or at such other
address as such Purchaser or nominee shall have specified to the Company in
writing,


 


(ii)                                  if
to any other holder of any Note, to such holder at such address as such other
holder shall have specified to the Company in writing, or


 


(iii)                               if
to the Company, to the Company at 500 Huntsman Way, Salt Lake City, Utah 84108  to the attention of
the Treasurer, facsimile number: (801) 584-5788 (with a copy to the
General Counsel, facsimile number: (801) 584-5782), or at such other address as
the Company shall have specified to the holder of each Note in writing.


 


Notices under
this Section 15 will be deemed given only when (x) delivered by
physical delivery or electronic mail, (or if such date is not a Business Day,
on the next Business Day) (y) facsimile 


 


24

















 


confirmation
is received (or if such receipt is not on a Business Day, on the next Business
Day) or (z) if sent by registered or certified mail, three Business Days
after the date of mailing.


 


SECTION 16.                                                                   MISCELLANEOUS.


 


Section 16.1                               Section 16 Matters.  The
Company will use its reasonable efforts to cooperate with the Purchasers to
exempt shares of Common Stock 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.


 


Section 16.2                               Successors and Assigns. 
All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any
subsequent holder of a Note) whether so expressed or not.


 


Section 16.3                               Payments Due on Non-Business Days.  Anything in this Agreement or the Notes to
the contrary notwithstanding, any payment of principal of or interest on any
Note that is due on a date other than a Business Day shall be made on the next
succeeding Business Day without including the additional days elapsed in the
computation of the interest payable on such next succeeding Business Day.


 


Section 16.4                               Severability.  Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.


 


Section 16.5                               Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.


 


Section 16.6                               Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.


 


(a)                                  This Agreement shall
be construed and enforced in accordance with, and the rights of the parties
shall be governed by, the laws of the State of New York.


 


(b)                                 THE PARTIES HERETO OF
NOTES IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE
STATE OF NEW YORK SOLELY IN CONNECTION WITH ANY DISPUTE THAT ARISES IN RESPECT
OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND
THE DOCUMENTS REFERRED TO IN THIS AGREEMENT OR IN RESPECT OF THE TRANSACTIONS
CONTEMPLATED HEREBY, AND HEREBY WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN
ANY ACTION, SUIT OR PROCEEDING FOR INTERPRETATION OR ENFORCEMENT HEREOF OR ANY
SUCH DOCUMENT THAT IT IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR
PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS 


 


25

















 


OR THAT VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS
AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS,
AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH
ACTION, SUIT OR PROCEEDING SHALL BE HEARD AND DETERMINED EXCLUSIVELY BY SUCH A
NEW YORK STATE OR FEDERAL COURT. THE PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH
COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER
OF SUCH DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION
WITH SUCH ACTION, SUIT OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 15
OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW SHALL BE VALID AND
SUFFICIENT SERVICE THEREOF.


 


(c)                                  EACH PARTY
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER; (II) SUCH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THE FOREGOING WAIVER; (III) SUCH PARTY
MAKES THE FOREGOING WAIVER VOLUNTARILY AND (IV) SUCH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER
AND CERTIFICATIONS IN THIS SECTION 16.6.


 


Section 16.7                               Construction.  All
references in this Agreement to Exhibits, Schedules, Sections, subsections
and other subdivisions refer to the corresponding Exhibits, Schedules, 
Sections, subsections and other subdivisions of this Agreement unless expressly
provided otherwise.  Titles appearing at
the beginning of any Sections, subsections or other subdivisions of this
Agreement are for convenience only, do not constitute any part of such Articles,
Sections, subsections or other subdivisions, and shall be disregarded in
construing the language contained therein. 
The words “this Agreement,” “herein,” “hereby,” “hereunder” and “hereof”
and words of similar import, refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited.  The words “this Section,” “this subsection”
and words of similar import, refer only to the Sections or subsections hereof
in which such words occur.  The word “including”
(in its various forms) means “including, without limitation.”  Pronouns in masculine, feminine or neuter
genders shall be construed to state and include any other gender and words,
terms and titles (including terms defined herein) in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
expressly requires.  Unless the context
otherwise requires, all defined terms contained herein shall include the
singular and plural and the conjunctive and disjunctive forms of such defined terms.


 


26

















 


*    *   
*    *    *


 


27
















 


If you are in
agreement with the foregoing, please sign the form of agreement on a
counterpart of this Agreement and return it to the Company, whereupon this
Agreement shall become a binding agreement between you and the Company.


 


	
   

  	
  HUNTSMAN
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Sean Douglas

  
	
   

  	
  Name: Sean Douglas

  
	
   

  	
  Title: Vice President and
  Treasurer

  



 


[Signature page to Note Purchase Agreement]


 

















 


This Agreement is hereby


accepted and agreed to as


of the date thereof.


 


	
   

  	
  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

  
	
   

  	
   

  	
   

  	
   

  



 


[Signature page to Note Purchase Agreement]


 

















 


	
   

  	
  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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AAA
  GUARANTOR - CO-INVEST VI, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  AAA MIP
  Limited,

  
	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Apollo
  Alternative Assets, L.P.,

  
	
   

  	
   

  	
   

  	
  its
  investment manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Apollo
  Alternative Assets GP 

  Limited, its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John J.
  Suydam

  
	
   

  	
   

  	
   

  	
  Name: John
  J. Suydam

  
	
   

  	
   

  	
   

  	
  Title: Vice
  President

  
							



 


[Signature page to Note Purchase Agreement]


 

















 


Schedule A


 


INFORMATION RELATING TO PURCHASERS


 


	
  Name and Address of Purchaser

  	
   

  	
  Principal Amount of Notes to be Purchased

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Apollo
  Investment Fund VI, L.P.

  	
   

  	
  $

  	
  131,070,494.63

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Apollo
  Overseas Partners VI, L.P.

  	
   

  	
  $

  	
  35,766,557.97

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Apollo
  Overseas Partners (Delaware) VI, L.P.

  	
   

  	
  $

  	
  14,814,264.28

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Apollo
  Overseas Partners (Delaware 892) VI, L.P.

  	
   

  	
  $

  	
  36,645,624.97

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Apollo
  Overseas Partners (Germany) VI, L.P.

  	
   

  	
  $

  	
  453,058.16

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  AAA
  Guarantor – Co-Invest VI, L.P.

  	
   

  	
  $

  	
  31,250,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  250,000,000.00

  	
   

  



 


(1)           All payments by wire transfer of
immediately available funds to:


 


	
  Purchaser

  	
   

  	
  Wire Instructions

  
	
  Apollo
  Investment Fund VI, L.P.

  	
   

  	
  JPMorgan
  Chase & Co. 

  ABA: 021000021 

  BNF:  JPMorgan Chase & Co. 

  A/C#: 900-9-000150 

  BNF:  Apollo Overseas Partners VI, LP 

  A/C#:  P87091 

  ATTN: Robert Vasquez (212) 623 – 8694 

  REF:   Apollo Co-Investors VI, LLC

  
	
   

  	
   

  	
   

  
	
  Apollo
  Overseas Partners VI, L.P.

  	
   

  	
  JPMorgan
  Chase & Co. 

  ABA: 021000021 

  BNF:  JPMorgan Chase & Co. 

  A/C#: 900-9-000150 

  BNF:  Apollo Overseas Partners VI, LP 

  A/C#:  P87087 

  ATTN: Robert Vasquez (212) 623 – 8694 

  REF:   Apollo Co-Investors VI, LLC

  
	
   

  	
   

  	
   

  
	
  Apollo
  Overseas Partners (Delaware) VI, 

  L.P.

  	
   

  	
  JPMorgan
  Chase & Co. 

  ABA: 021000021 

  BNF:  JPMorgan Chase & Co. 

  A/C#: 900-9-000150 

  BNF: Apollo Overseas Partners (Delaware) VI, LP 

  



 


1


 

















 


 


	
   

  	
   

  	
  A/C#: 
  P87090 

  ATTN: Robert Vasquez (212) 623 – 8694 

  REF:   Apollo Co-Investors VI, LLC

  
	
   

  	
   

  	
   

  
	
  Apollo
  Overseas Partners (Delaware 

  892) VI, L.P.

  	
   

  	
  JPMorgan
  Chase & Co. 

  ABA: 021000021 

  BNF:  JPMorgan Chase & Co. 

  A/C#: 900-9-000150 

  BNF:  Apollo Overseas Partners (Delaware 892) VI, 

  LP 

  A/C#:  P87089 

  ATTN: Robert Vasquez (212) 623 – 8694 

  REF:   Apollo Co-Investors VI, LLC

  
	
   

  	
   

  	
   

  
	
  Apollo
  Overseas Partners (Germany) VI, 

  L.P.

  	
   

  	
  JPMorgan
  Chase & Co. 

  ABA: 021000021 

  BNF:  JPMorgan Chase & Co. 

  A/C#: 900-9-000150 

  BNF:  Apollo Overseas Partners (Germany) VI, LP 

  A/C#:  P87088 

  ATTN: Robert Vasquez (212) 623 – 8694 

  REF:   Apollo Co-Investors VI, LLC

  
	
   

  	
   

  	
   

  
	
  AAA
  Guarantor – Co-Invest VI, L.P.

  	
   

  	
  JPMorgan Private Bank
  

  ABA# 021000021  
 Credit T & I  
 Account Number: 099999651  
 F/F/C to Account Number: Q94259001
  
 Account Name: AAA Guarantor –
  Co-Invest VI, L.P

  



 


with sufficient information to identify the source and application of
such funds.


 


2

















 


(2)           All communications, including notices
of payments and written confirmations of such wire transfers:


 


With respect to each of:


 


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.


 


One Manhattanville Road


Suite 201


Purchase, New York  10577


Attention:       
General Counsel


Facsimile:    
   (646) 607-0539


 


and with respect to AAA
Guarantor – Co-Invest VI, L.P.


 


Trafalgar
Court


Les Banques


St. Peter Port, Guernsey


Attention:     
  Managing General Partner


Facsimile:       +44 (14) 8174-5054


 


with a copy to:


 


 


Jodi Sarsfield


c/o Apollo Management, L.P.


9 West 57th Street, 14th Floor


New York, New York  10019


E-mail:    JSarsfield@ApolloLP.com


Facsimile: (646) 607 - 0717


 


3
















 


Schedule B


 


DEFINED TERMS


 


As used
herein, the following terms have the respective meanings set forth below or set
forth in the Section hereof following such term:


 


“Adjustment Event” is defined in Section 9.4(k).


 


“Affiliate” of any specified Person means any other person
which, directly or indirectly, is in control of, is controlled by, or is under
common control with, such specified Person. 
For purposes of this definition, control of a Person means the power,
direct or indirect, to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise; and the terms “controlling”
and “controlled” have meanings correlative to the foregoing.


 


“Agreement” is defined in Section 1.


 


“Apollo Parties” has the meaning assigned to such term in the
Settlement Agreement.


 


“Apollo Settlement Parties” is defined in Section 4.1(h).


 


“Applicable Consideration” is defined in Section 9.5.


 


“Board of Directors” means the Board of Directors of the
Company or, other than in the case of the definition of “Continuing
Directors,” any committee thereof duly authorized to act on behalf
of such board.


 


“Business Day” means any day other than a
Saturday, a Sunday or a day on which commercial banks in New York, New York or
Houston, Texas are required or authorized to be closed.


 


“Closing” is defined in Section 3.


 


“Closing Sale Price” of any share of Common Stock on any
Trading Day means the closing sale price of such security (or, if no closing
sale price is reported, the average of the closing bid and ask prices or, if
more than one in either case, the average of the average closing bid and the
average closing ask prices) on such date as reported in composite transactions
for the principal U.S. securities exchange on which the shares of Common Stock
are (or the other security is) traded or, if the shares of Common Stock are (or
the other security is) not listed on a U.S. national or regional securities
exchange, as reported by Pink Sheets LLC. 
In the absence of such a quotation, the Closing Sale Price shall be
determined by the  Board of Directors in
good faith.  The Closing Sale Price shall
be determined without reference to extended or after hours trading.


 


“Code” means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated thereunder
from time to time.


 


1

















 


“Common Stock”
means any stock of any class of the Company which has no preference in respect
of dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and which is not subject
to redemption by the Company.  Subject to
the provisions of Section 9.5, however, shares issuable on conversion of
Notes shall include only shares of the class designated as common stock of the
Company at the date of this Agreement or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which are not subject to redemption by the Company; provided
that if at any time there shall be more than one such resulting class, the
shares of each such class then so issuable on conversion shall be substantially
in the proportion which the total number of shares of such class resulting from
all such reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.


 


“Company” means  Huntsman Corporation, a Delaware
corporation or any successor to its obligations hereunder.


 


“Conversion
Date” is defined in Section 9.2(c).


 


“Conversion Price”
shall mean, at any time, the price obtained by dividing $1,000 by the
Conversion Rate then in effect.


 


“Conversion Rate” is defined in Section 9.1,
and is subject to adjustment as provided in Section 9.4.


 


“Current Market Price” is defined in Section 9.4(g)(i).


 


“Debt” means, with respect to any Person, without duplication,
(1) all indebtedness of such Person for borrowed money (other than
non-recourse obligations); and (2) all indebtedness of such Person
evidenced by bonds, debentures, notes or other similar instruments.


 


“Default” means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of notice or
both, become an Event of Default.


 


“Determination Date” is defined in Section 9.4(k).


 


“Disqualified Foreign Merger” means completion of a merger or
consolidation of the Company, or a sale, conveyance, transfer or other
disposition by the Company of all or substantially all of its assets as an
entirety or substantially as an entirety, in one or a series of related
transactions, to any Person, in each case in which the resulting, surviving or
transferee Person is not the Company and is not a corporation, partnership,
limited liability company or trust organized and validly existing under the
laws of the United States of America, any State thereof or the District of Columbia,
unless in any case such transaction will not adversely affect in any
significant respect the rights of the holders of Notes with respect to the
payment and conversion obligations of the Company hereunder (other than the
substitution of Applicable Consideration pursuant to a transaction described in
Section 9.5).


 


“Distributed Assets” is defined in Section 9.4(d).


 


2

















 


“Event of Default” is defined in Section 10.


 


“ex” date, when used with respect to any issuance
or distribution, means the first date on which the shares of Common Stock trade
regular way on the relevant exchange or in the relevant market from which the
Closing Sale Price was obtained without the right to receive such issuance or
distribution.


 


“Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.


 


“Exchange Notes” is defined in Exhibit 1.


 


“Expiration Time” is defined in Section 9.4(f).


 


“Fair Market Value” is defined in Section 9.4(g)(ii).


 


“GAAP” means generally accepted accounting principles as in
effect from time to time in the United States of America.


 


“Governmental Authority” means the government of the United
States of America or any State or other political subdivision thereof, or any
other jurisdiction in which the Company or any subsidiary conducts all or any
part of its business, or which asserts jurisdiction over any properties of the
Company or any subsidiary, or any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to, any such
government.


 


“holder” means, with respect to any Note the Person in whose
name such Note is registered in the register maintained by the Company pursuant
to Section 12.1.


 


“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.


 


“Information” is defined in Section 6.2(b).


 


“Issue Date” means the date on which Notes are first issued
under this Agreement.


 


“Mandatory Prepayment Date” is defined in Section 8.3(a).


 


“Mandatory Prepayment Event” means the occurrence of either a
Non-Stock Change of Control or a Disqualified Foreign Merger.


 


“Mandatory Prepayment Event Notice” is defined in Section 8.3(b).


 


“Non-Stock Change of Control” means the occurrence of any of
the following: (i) the acquisition by any person or “group” (as defined in
Section 13(d)(3) under the Exchange Act) of (a) more than 50% of
the outstanding Voting Stock of the Company (whether by merger, stock purchase,
tender or exchange offer, recapitalization, reorganization, redemption,
issuance of capital stock or otherwise) or (b) assets constituting all or
substantially all of the assets of the Company, (ii) Continuing Directors
cease to constitute a majority of the Board of Directors, or 


 


3

















 


(iii) any merger, consolidation or reorganization, or series of
such related transactions, involving the Company, unless the stockholders of
the Company immediately prior to such transaction or transactions will, after
such transaction or transactions, own at least 50% of the combined equity and
voting power of the Company (or if the Company 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.  For purposes of the
foregoing, (i) “Voting Stock” means capital stock that is ordinarily
entitled to vote in the election of directors, and (ii) “Continuing
Directors” means members of the Board of Directors on the Issue Date or persons
who become such members subsequently and whose appointment, election or
nomination for election is duly approved, which may be evidenced by inclusion
in a proxy statement approved by such directors, by a majority of the
Continuing Directors on the Board of Directors at the time of such approval.


 


“Notes” is defined in Section 1.


 


“Officers’ Certificate” means a certificate signed in the
name of the Company (i) by the chairman of the Board of Directors, the
president or chief executive officer or a vice president and (ii) by the
chief financial officer, the chief accounting officer, the treasurer or any
assistant treasurer or the secretary or any assistant secretary.


 


“Permitted Special Dividend” means any dividend or
distribution made out of (or in an aggregate amount, taken together with other
dividends made in reliance upon this definition, that could be made out of)
payments and proceeds received by the Company or any Affiliate in connection
with the Settlement Agreement and proceeds received by the Company or any
Affiliate thereof from any judgment, settlement or other recovery with respect
to claims made by the Company or any Affiliate against the Banks (as defined in
the Settlement Agreement) arising from or relating to the Merger Agreement
dated as of July 12, 2007 between the Company, Hexion Specialty Chemicals, Inc.
and Nimbus Merger Sub Inc., the transactions referred to therein (including
financing with respect thereto) and related matters, such claims including but
not limited to the Texas Action Against the Banks (as defined in the Settlement
Agreement), to the extent that such dividend or distributions are made within
one year of receipt of such proceeds.


 


“Person” means an individual, partnership (limited or
general), corporation, joint venture, limited liability company, association,
trust, business trust, unincorporated organization or business entity.


 


“Purchased Shares” is defined in Section 9.4(f)(i).


 


“Purchaser” is defined in the first paragraph of this
Agreement.


 


“Quarterly Dividend Amount” is defined in Section 9.4.


 


“record date” is defined in Section 9.4(g)(iii).


 


“Registration Rights Agreement” is defined
in Section 4.1(d).


 


4

















 


“Required Holders” means, at any time, the holders of at
least a majority in principal amount of the Notes at the time outstanding.


 


“Securities” means the Notes and shares of Common Stock that
may be issued upon conversion thereof or in lieu of payment of principal or
interest thereon.


 


“Securities Act” means the Securities Act of 1933, as amended
from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.


 


“Settlement” is defined in Section 6.2(a).


 


“Settlement Agreement” is defined in Section 4.2(h).


 


“Significant Subsidiary” means, in respect of
any Person, a subsidiary of such Person that would constitute a “significant
subsidiary” as such term is defined under Rule 1-02 of Regulation S-X under
the Securities Act and the Exchange Act.


 


“Trading Day” means a day during which (i) trading in
the Common Stock generally occurs, and (ii) a Closing Sale Price for the
Common Stock is provided on The New York Stock Exchange or, if the Common Stock
is not listed on The New York Stock Exchange, on the principal other U.S.
national or regional securities exchange on which the Common Stock is then
listed or, if the Common Stock is not listed on a U.S. national or regional
securities exchange, on the principal other market on which the Common Stock is
then traded.


 


“Trigger Event” is defined in Section 9.4.


 


“Voting and Standstill Agreement” is defined
in Section 4.2(d).


 


5

















 


Exhibit 1


 


THIS NOTE HAS
NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE OR OTHER SECURITIES LAWS. 
NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.  PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER THE COMPANY MAY REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT TO EVIDENCE
COMPLIANCE WITH THE FOREGOING.


 


THIS NOTE IS
SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN THE VOTING AND STANDSTILL
AGREEMENT DATED AS OF DECEMBER 23, 2008 BETWEEN THE COMPANY, THE INITIAL
PURCHASERS OF THE NOTES AND CERTAIN OF THEIR AFFILIATES.  THE COMPANY WILL REFUSE TO REGISTER THE
TRANSFER OF THIS NOTE EXCEPT IN ACCORDANCE WITH SUCH AGREEMENT.


 


[FORM OF NOTE]


 


HUNTSMAN CORPORATION


 


7% Convertible Senior Notes due 2018


 


No. [          ]                                                                                                                                                                                 [Date]


 


$[              ]


 


FOR VALUE
RECEIVED, the undersigned, HUNTSMAN CORPORATION (herein called the “Company”), a corporation organized and existing under the
laws of the State of Delaware, hereby promises to pay to [                        ], or registered assigns, the principal sum of [                                          ] DOLLARS (or so much thereof as shall not have been
prepaid) on December 23, 2018, with interest (computed on the basis of a
360-day year of twelve 30 day months) on the unpaid balance hereof at the rate
of 7.0% per annum from the date hereof (subject to adjustment as described
below), payable semiannually in arrears, on July 1 and January 1 in
each year, commencing July 1, 2009, until the principal hereof shall have
become due and payable.  All accrued and
unpaid interest shall also be due and payable on December 23, 2018.


 


The Company
will pay interest on overdue principal and, to the extent lawful, interest at a
rate per annum of 9%.


 


Payments of
principal of and interest on this Note are to be made in lawful money of the
United States of America, at 500 Huntsman Way, Salt Lake City, Utah 84108 or at
such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to
below.


 


1

















 


Notwithstanding
the foregoing paragraph or any other provisions of this Note or the Note
Purchase Agreement:


 


(a)           the
Company shall have the right at its option to satisfy any interest payment
obligation on this Note by delivering, in lieu of cash, a number of shares of
Common Stock equal to the amount of such interest payment, divided by the
average VWAP of the Common Stock for the ten consecutive Trading Days ending on
the second Trading Day immediately prior to the date on which such payment is
due, rounded to the nearest whole share; and


 


(b)           the
Company shall have the right at its option to satisfy its obligation to pay the
principal of this Note at maturity by delivering, in lieu of cash, a number of
shares of Common Stock equal to such principal amount plus an amount equal to
the underwriting spread of a nationally recognized underwriter chosen by the
Company that would be paid by a seller of such shares at such time, divided by
the average VWAP of the Common Stock for the ten consecutive Trading Days
ending on the second Trading Day immediately prior to the date on which such
payment is due, rounded to the nearest whole share;


 


provided that if (i) the “ex” date for
any event that requires an adjustment to the Conversion Rate pursuant to Section 9.4(a),
9.4(b), 9.4(c), 9.4(d), 9.4(e) or 9.4(f) of the Note Purchase
Agreement (as defined below) occurs during such ten consecutive Trading Day period
described in clause (a) or (b) above, the VWAP of the Common Stock
for each Trading Day prior to the “ex” date for such other event shall be
adjusted by dividing such price by the same fraction by which the Conversion
Rate is so required to be multiplied as a result of such other event and (ii) if
the Conversion Rate is adjusted with respect to any event occurring after such
ten Trading Day period but before delivery of the shares of Common Stock and
for which the adjustment contemplated by the preceding clause (i) has not
been made, then the number of shares of Common Stock to be delivered pursuant
to the above will be adjusted in the same proportion as the Conversion Rate is
so adjusted, it being understood that the there shall be no duplication of adjustments
pursuant to this clause (i) and clause (ii) and that the provisions
of this clause (ii) shall not apply if the recipient of the Common Stock
will upon delivery be entitled to the benefit of the event for which the
Conversion Rate is adjusted with respect to the shares of Common Stock to be
delivered under this paragraph.


 


To exercise
its right described in clause (a) of the preceding paragraph, the Company
shall give the holder of this Note notice of such exercise not later than 10
Trading Days prior to the date such interest payment is made, and to exercise
its right described in clause (b) above, the Company shall give the holder
of this Note notice of such exercise not later than 35 days (or, if the holders
of Notes are not then restricted from acquiring Common Stock upon conversion of
the Notes, under the HSR Act, 15 days)prior to the maturity date.  Section 9.9 of the Note Purchase
Agreement shall apply mutatis mutandis.  For purposes of the foregoing, “VWAP of the Common Stock” means, for each Trading Day of
determination, (i) the per share volume-weighted average price of the
Common Stock as reported by Bloomberg Professional Service in respect of the
period beginning at 9:30 a.m. New York City time and ending at 4:00 p.m.
New York City time on such Trading Day, or (ii) if such volume-weighted
average price is unavailable on such day, the Closing Sale Price of the Common
Stock on such day.


 


2

















 


Notwithstanding
the provisions of clauses (a) or (b) of the second preceding
paragraph, the Company may, at any time when any Notes are outstanding, by
notice to the holder of this Note accompanied by the Tax Opinion described
below, either (i) demand that such holder surrender such Note to the
Company in exchange for a new Note (an “Exchange Note”)
having identical terms to this Note except that the Exchange Note will not
contain this paragraph or the preceding two paragraphs, such Exchange Note to
be dated and bear interest from the date to which interest shall have been paid
on the surrendered Note or dated the date of the surrendered Note if no
interest shall have been paid thereon, or (ii) unilaterally, without the
consent of any holder of Notes, irrevocably terminate its rights described
under clauses (a) or (b) of the second preceding paragraph
above.  Upon completion of an exchange
referred to in clause (i) of the preceding sentence or, upon the making of
an election pursuant to clause (ii) of such sentence, as applicable, the
Company’s rights under clauses (a) and (b) of the second preceding
paragraph shall cease, and thereafter all payments of interest or principal on
this Note shall be made solely in cash as provided elsewhere herein. The
holder, by accepting this Note, agrees to surrender this Note for purposes of
such exchange as promptly as practicable, but in no event later than 10
Business Days following the Company’s request to do so.  For purposes of the foregoing, “Tax Opinion” shall mean an opinion in customary form from
recognized tax counsel to the effect that for U.S. federal income tax purposes,
no gain or loss would be recognized by the holder of this Note with respect to
either the exchange referred to in clause (i) above or the election
referred to in clause (ii) above, as applicable, in each case other than
with respect to accrued but unpaid interest on this Note.


 


This Note is
one of the 7% Convertible Senior Notes (herein called the “Notes”)
issued pursuant to the Note Purchase Agreement, dated as of December 23,
2008 (as from time to time amended, the “Note Purchase Agreement”),
between the Company and the respective Purchasers named therein and is entitled
to the benefits thereof and subject in all respects to all terms and
limitations therein.  Each holder of this
Note will be deemed, by its acceptance hereof, to have made the representations
set forth in Section 6.3(d) of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms
used in this Note shall have the respective meanings ascribed to such terms in
the Note Purchase Agreement.


 


This Note is a
registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the registered holder hereof,
a new Note for a like principal amount will be issued to, and registered in the
name of, the transferee.  Prior to due
presentment for registration of transfer in compliance with the Note Purchase
Agreement, the Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment and for all
other purposes, and the Company will not be affected by any notice to the
contrary.


 


This Note
shall be convertible into Common Stock on terms provided in the Note Purchase
Agreement.


 


This Note is
subject to prepayment at the option of the Company at the times and on the
terms specified in the Note Purchase Agreement. 
The Company shall be required to offer to prepay the Notes following a
Non-Stock Change of Control as specified in the Note Purchase Agreement.


 


3
















 


If an Event of
Default occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price and with the
effect provided in the Note Purchase Agreement.


 


This Note
shall not be valid unless manually signed by an officer of the Company.  This Note shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the State of New York.


 


	
   

  	
  HUNTSMAN
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  [Title]

  



 


4

















 


CONVERSION NOTICE


 


TO:                            HUNTSMAN CORPORATION


 


The undersigned registered owner of this Note
hereby irrevocably exercises the option to convert this Note, or the portion
thereof (which is $1,000 or a multiple thereof) below designated, into Common
Stock of Huntsman Corporation in accordance with the terms of the Note Purchase
Agreement referred to in this Note, and directs that the shares issuable upon
such conversion, cash in lieu of fractional shares and any Notes representing
any unconverted principal amount hereof, be issued and delivered to the
registered holder hereof unless a different name has been indicated below.  Capitalized terms used herein but not defined
shall have the meanings ascribed to such terms in the Note Purchase
Agreement.  If shares or any portion of
this Note not converted are to be issued in the name of a person other than the
undersigned, the undersigned will provide the appropriate information below and
pay all transfer taxes payable with respect thereto.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature(s)

  



 


5

















 


Fill in the registration of shares of Common
Stock to be issued, and Notes, if any, to be delivered, and the person to whom
payment for fractional shares, if any, is to be made, if other than to and in
the name of the registered holder:


 


	
  Please print
  name and address

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Street
  Address)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (City, State
  and Zip Code)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Principal
  amount to be converted

  (if less than all):

  	
   

  
	
   

  	
   

  
	
  $

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Social
  Security or Other Taxpayer

  	
   

  
	
  Identification
  Number:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
			



 


NOTICE:  The signature on this Conversion Notice must
correspond with the name as written upon the face of the Notes in every
particular without alteration or enlargement or any change whatever.


 


6