Document:

Exhibit
10.21

 

Execution
Copy

 

HUNTSMAN
COMPANY LLC

 

AMENDED
AND RESTATED

 

CREDIT
AGREEMENT

 

with

 

DEUTSCHE
BANK TRUST COMPANY

 

AMERICAS
(f/k/a Bankers Trust Company),

 

as
Administrative Agent,

 

and

 

THE
FINANCIAL INSTITUTIONS PARTY HERETO

 

dated
as of September 30, 2002

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  	
  DEFINITIONS AND ACCOUNTING
  TERMS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Definitions.

  	
   

  
	
   

  	
  1.2

  	
  Accounting
  Terms; Financial Statements.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  AMOUNT AND TERMS OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  The Term Loans.

  	
   

  
	
   

  	
  2.2

  	
  Term Notes

  	
   

  
	
   

  	
  2.3

  	
  Conversion and
  Continuation Elections for Eurodollar Loans and Base Rate Loans.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  INTEREST AND FEES

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Interest.

  	
   

  
	
   

  	
  3.2

  	
  Fees

  	
   

  
	
   

  	
  3.3

  	
  Computation of
  Interest and Fees.

  	
   

  
	
   

  	
  3.4

  	
  Compensation For
  Funding Losses.

  	
   

  
	
   

  	
  3.5

  	
  Increased Costs,
  Illegality, Etc.

  	
   

  
	
   

  	
  3.6

  	
  Replacement
  of Lenders.

  	
   

  
	
   

  	
  3.7

  	
  Change
  of Lending Office.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  PAYMENTS AND PREPAYMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Voluntary
  Prepayments.

  	
   

  
	
   

  	
  4.2

  	
  Mandatory
  Prepayments.

  	
   

  
	
   

  	
  4.3

  	
  Application of Prepayments.

  	
   

  
	
   

  	
  4.4

  	
  Method and
  Place of Payment by Borrower.

  	
   

  
	
   

  	
  4.5

  	
  Net Payments.

  	
   

  
	
   

  	
  4.6

  	
  Sharing
  of Payments; etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  CONDITIONS OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Conditions
  Precedent to the Effectiveness of the Agreement.

  	
   

  
	
   

  	
  5.2

  	
  Extension
  of Forbearance and Interim Maturity.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Corporate
  Status.

  	
   

  
	
   

  	
  6.2

  	
  Corporate Power and
  Authority.

  	
   

  
	
   

  	
  6.3

  	
  No Violation.

  	
   

  
	
   

  	
  6.4

  	
  Governmental and Other
  Approvals.

  	
   

  
	
   

  	
  6.5

  	
  Financial
  Statements; Financial Condition; Undisclosed Liabilities; etc.

  	
   

  
	
   

  	
  6.6

  	
  Litigation.

  	
   

  
	
   

  	
  6.7

  	
  True and Complete
  Disclosure.

  	
   

  
	
   

  	
  6.8

  	
  Margin
  Regulations.

  	
   

  
	
   

  	
  6.9

  	
  Tax
  Returns and Payments.

  	
   

  

 

i

 

	
   

  	
  6.10

  	
  Compliance
  With ERISA.

  	
   

  
	
   

  	
  6.11

  	
  Ownership
  of Property.

  	
   

  
	
   

  	
  6.12

  	
  Capitalization of Borrower.

  	
   

  
	
   

  	
  6.13

  	
  Subsidiaries.

  	
   

  
	
   

  	
  6.14

  	
  Compliance
  With Law, etc.

  	
   

  
	
   

  	
  6.15

  	
  Investment
  Company Act.

  	
   

  
	
   

  	
  6.16

  	
  Public Utility
  Holding Company Act.

  	
   

  
	
   

  	
  6.17

  	
  Environmental
  Matters.

  	
   

  
	
   

  	
  6.18

  	
  Labor Relations.

  	
   

  
	
   

  	
  6.19

  	
  Intellectual
  Property.

  	
   

  
	
   

  	
  6.20

  	
  Certain Fees.

  	
   

  
	
   

  	
  6.21

  	
  Security
  Documents.

  	
   

  
	
   

  	
  6.22

  	
  Charitable
  Contributions

  	
   

  
	
   

  	
  6.23

  	
  Asbestos
  Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  AFFIRMATIVE
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Financial
  Statements.

  	
   

  
	
   

  	
  7.2

  	
  Certificates; Other
  Information.

  	
   

  
	
   

  	
  7.3

  	
  Notices.

  	
   

  
	
   

  	
  7.4

  	
  Maintenance
  of Existence.

  	
   

  
	
   

  	
  7.5

  	
  Payment
  of Obligations.

  	
   

  
	
   

  	
  7.6

  	
  Inspection of
  Property, Books and Records.

  	
   

  
	
   

  	
  7.7

  	
  ERISA.

  	
   

  
	
   

  	
  7.8

  	
  Maintenance of
  Property; Insurance.

  	
   

  
	
   

  	
  7.9

  	
  Environmental
  Laws.

  	
   

  
	
   

  	
  7.10

  	
  Additional
  Security; Further Assurances.

  	
   

  
	
   

  	
  7.11

  	
  End of Fiscal
  Years; Fiscal Quarters.

  	
   

  
	
   

  	
  7.12

  	
  Operating
  Accounts

  	
   

  
	
   

  	
  7.13

  	
  Polymers Notes

  	
   

  
	
   

  	
  7.14

  	
  Compensation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Liens.

  	
   

  
	
   

  	
  8.2

  	
  Indebtedness.

  	
   

  
	
   

  	
  8.3

  	
  Fundamental
  Changes.

  	
   

  
	
   

  	
  8.4

  	
  Dividends or Other
  Distributions.

  	
   

  
	
   

  	
  8.5

  	
  Issuance of
  Stock.

  	
   

  
	
   

  	
  8.6

  	
  Disposition
  of Assets.

  	
   

  
	
   

  	
  8.7

  	
  Loans
  and Investments.

  	
   

  
	
   

  	
  8.8

  	
  Transactions with
  Affiliates.

  	
   

  
	
   

  	
  8.9

  	
  Sale-Leasebacks.

  	
   

  
	
   

  	
  8.10

  	
  Lines of
  Business.

  	
   

  
	
   

  	
  8.11

  	
  Fiscal
  Year

  	
   

  
	
   

  	
  8.12

  	
  Amendments
  to Organizational and Other Documents.

  	
   

  
	
   

  	
  8.13

  	
  Limitation
  on Certain Restrictions on Subsidiaries.

  	
   

  
	
   

  	
  8.14

  	
  Accounting
  Changes.

  	
   

  

 

ii

 

	
   

  	
  8.15

  	
  Restrictions
  on Certain Unrestricted Subsidiaries

  	
   

  
	
   

  	
  8.16

  	
  Amendments,
  Modifications or Supplements to Priority Credit Agreement

  	
   

  
	
   

  	
  8.17

  	
  Charitable Contributions

  	
   

  
	
   

  	
  8.18

  	
  Collateral Account
  Agreements

  	
   

  
	
   

  	
  8.19

  	
  Borrowings Under
  Priority Credit Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  FINANCIAL COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Leverage Ratio.

  	
   

  
	
   

  	
  9.2

  	
  Interest
  Coverage Ratio.

  	
   

  
	
   

  	
  9.3

  	
  Fixed Charge Coverage Ratio

  	
   

  
	
   

  	
  9.4

  	
  Capital
  Expenditures.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Events of
  Default.

  	
   

  
	
   

  	
  10.2

  	
  Rights
  Not Exclusive.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  11.1

  	
  Appointment.

  	
   

  
	
   

  	
  11.2

  	
  Nature of
  Duties.

  	
   

  
	
   

  	
  11.3

  	
  Rights,
  Exculpation, Etc.

  	
   

  
	
   

  	
  11.4

  	
  Reliance.

  	
   

  
	
   

  	
  11.5

  	
  Indemnification.

  	
   

  
	
   

  	
  11.6

  	
  Administrative
  Agent in its Individual Capacity.

  	
   

  
	
   

  	
  11.7

  	
  Notice
  of Defaults

  	
   

  
	
   

  	
  11.8

  	
  Holders
  of Obligations

  	
   

  
	
   

  	
  11.9

  	
  Resignation by
  Administrative Agent.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  No Waiver;
  Modifications in Writing.

  	
   

  
	
   

  	
  12.2

  	
  Further
  Assurances.

  	
   

  
	
   

  	
  12.3

  	
  Notices, Etc.

  	
   

  
	
   

  	
  12.4

  	
  Costs, Expenses and Taxes.

  	
   

  
	
   

  	
  12.5

  	
  Confirmations.

  	
   

  
	
   

  	
  12.6

  	
  Adjustment.

  	
   

  
	
   

  	
  12.7

  	
  Execution in Counterparts.

  	
   

  
	
   

  	
  12.8

  	
  Binding Effect; Assignment;
  Addition and Substitution of Lenders.

  	
   

  
	
   

  	
  12.9

  	
  CONSENT
  TO JURISDICTION; MUTUAL WAIVER OF JURY TRIAL.

  	
   

  
	
   

  	
  12.10

  	
  GOVERNING LAW

  	
   

  
	
   

  	
  12.11

  	
  Severability of Provisions

  	
   

  
	
   

  	
  12.12

  	
  Transfers
  of Notes

  	
   

  
	
   

  	
  12.13

  	
  Registry

  	
   

  
	
   

  	
  12.14

  	
  Headings

  	
   

  
	
   

  	
  12.15

  	
  Termination
  of Agreement

  	
   

  
	
   

  	
  12.16

  	
  Confidentiality

  	
   

  

 

iii

 

	
   

  	
  12.17

  	
  Concerning
  the Collateral and the Loan Documents.

  	
   

  
	
   

  	
  12.18

  	
  Certain Guarantee
  Obligations

  	
   

  
	
   

  	
  12.19

  	
  Steering
  Committee

  	
   

  
	
   

  	
  12.20

  	
  Effectiveness

  	
   

  
	
   

  	
  12.21

  	
  Effect of
  Amendment and Restatement

  	
   

  

 

iv

 

EXHIBITS

 

	
  Exhibit 2.2(a)

  	
   

  	
  Form of Term Note for Term A
  Loan

  	
   

  	
   

  
	
  Exhibit 2.2(b)

  	
   

  	
  Form of Term Note for Term B
  Loan

  	
   

  	
   

  
	
  Exhibit 2.3(b)

  	
   

  	
  Form of Notice of Conversion
  or Continuation

  	
   

  	
   

  
	
  Exhibit 4.5(d)(ii)

  	
   

  	
  Lender Certificate

  	
   

  	
   

  
	
  Exhibit
  5.1(b)(ii)

  	
   

  	
  Form of
  Security Agreement

  	
   

  	
   

  
	
  Exhibit 5.1(b)(iii)(A)

  	
   

  	
  Form of
  Amended and Restated Subsidiary Guarantee Agreement

  	
   

  	
   

  
	
  Exhibit 5.1(b)(iii)(B)

  	
   

  	
  Form of
  HSCC Subsidiary Guarantee Agreement

  	
   

  	
   

  
	
  Exhibit 5.1(b)(iv)

  	
   

  	
  Form of Collateral Account
  Agreement

  	
   

  	
   

  
	
  Exhibit 5.1(b)(v)

  	
   

  	
  Form of Pledge Agreement

  	
   

  	
   

  
	
  Exhibit 5.1(c)(i)

  	
   

  	
  Form of GOF Restructuring
  Agreement

  	
   

  	
   

  
	
  Exhibit 5.1(c)(ii)

  	
   

  	
  Form of Holdco Term Sheet

  	
   

  	
   

  
	
  Exhibit 5.1(e)(i)

  	
   

  	
  Priority Credit Agreement Term
  Sheet

  	
   

  	
   

  
	
  Exhibit 5.1(f)(i)

  	
   

  	
  Form of Officer’s Certificate Pursuant
  to Section 5.1(f)(i)

  	
   

  	
   

  
	
  Exhibit 5.1(f)(ii)-1

  	
   

  	
  Form of Opinion of Skadden,
  Arps, Slate, Meagher & Flom LLP

  	
   

  	
   

  
	
  Exhibit
  5.1(f)(ii)-2

  	
   

  	
  Form of
  Opinion of Stoel Rives LLP

  	
   

  	
   

  
	
  Exhibit
  5.1(g)

  	
   

  	
  Form of
  Tax Sharing Agreement

  	
   

  	
   

  
	
  Exhibit
  5.2(a)

  	
   

  	
  Form of
  Original Credit Forbearance Extension Agreements

  	
   

  	
   

  
	
  Exhibit
  5.2(b)

  	
   

  	
  Form of
  Original Term Loan Forbearance Extension Agreements

  	
   

  	
   

  
	
  Exhibit 7.2(a)

  	
   

  	
  Form of Auditor’s Certificate

  	
   

  	
   

  
	
  Exhibit 7.2(b)-1

  	
   

  	
  Form of Certificate of
  Responsible Financial Officer Pursuant to Section 7.2(b)

  	
   

  	
   

  
	
  Exhibit 7.2(b)-2

  	
   

  	
  Form of Certificate of
  Responsible Officer pursuant to Section 7.2(b)

  	
   

  	
   

  
	
  Exhibit 12.8(c)

  	
   

  	
  Form of Assignment and
  Assumption Agreement

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1.1

  	
   

  	
  Permitted Turnaround Capital
  Expenditures

  	
   

  	
   

  
	
  Schedule 1.1(a)

  	
   

  	
  Restructuring Charges

  	
   

  	
   

  
	
  Schedule 1.1(c)

  	
   

  	
  Unrestricted Subsidiaries

  	
   

  	
   

  
	
  Schedule 4.2(b)

  	
   

  	
  Asset Dispositions

  	
   

  	
   

  
	
  Schedule 6.3

  	
   

  	
  Approvals and Consents

  	
   

  	
   

  
	
  Schedule 6.4

  	
   

  	
  Governmental Approval

  	
   

  	
   

  
	
  Schedule 6.5(a)

  	
   

  	
  Historical Financial Statements

  	
   

  	
   

  
	
  Schedule 6.5(d)

  	
   

  	
  Indebtedness and Other
  Material Liabilities

  	
   

  	
   

  
	
  Schedule 6.5(e)

  	
   

  	
  Pro Forma Balance Sheet

  	
   

  	
   

  
	
  Schedule 6.5(f)

  	
   

  	
  Financial Projections

  	
   

  	
   

  
	
  Schedule 6.12

  	
   

  	
  Capitalization of Borrower

  	
   

  	
   

  
	
  Schedule 6.13

  	
   

  	
  Restricted Subsidiaries

  	
   

  	
   

  
	
  Schedule 6.17

  	
   

  	
  Environmental Matters

  	
   

  	
   

  
	
  Schedule 6.21(c)

  	
   

  	
  Real Property

  	
   

  	
   

  
	
  Schedule 6.21(d)

  	
   

  	
  Deposit Accounts

  	
   

  	
   

  
	
  Schedule 8.1(a)

  	
   

  	
  Existing Liens

  	
   

  	
   

  
	
  Schedule 8.7

  	
   

  	
  Investments

  	
   

  	
   

  
	
  Schedule 8.15

  	
   

  	
  Restrictions on HSCC and HSCHC

  	
   

  	
   

  

 

v

 

	
  Schedule 8.18(a)

  	
   

  	
  Procedures for IRIC with
  respect to Insurance Proceeds

  	
   

  	
   

  
	
  Schedule 8.18(b)

  	
   

  	
  Foreign Deposit Accounts

  	
   

  	
   

  

 

vi

 

AMENDED AND RESTATED CREDIT
AGREEMENT

 

THIS AMENDED AND RESTATED CREDIT AGREEMENT is
dated as of September 30, 2002 and is made by and among Huntsman Company LLC, a
Utah limited liability company (“Borrower”), the financial institutions
party hereto, including Deutsche Bank Trust Company Americas (f/k/a Bankers
Trust Company), in their capacities as lenders hereunder (collectively, the “Lenders,”
and each individually, a “Lender”), and Deutsche Bank Trust Company
Americas (f/k/a Bankers Trust Company), as agent (“Administrative Agent”)
for the Lenders.

 

W
I T N E S S E T H:

 

WHEREAS, Borrower, Administrative Agent, Deutsche Bank
Trust Company Americas (f/k/a Bankers Trust Company) and the other financial
institutions parties thereto have entered into that certain Credit Agreement
dated as of January 29, 1996, as amended and restated as of February 23, 1996,
as amended by the First Amendment to Amended and Restated Credit Agreement
dated as of September 27, 1996, the Second Amendment to Amended and Restated
Credit Agreement dated as of July 2, 1997, the Third Amendment to Amended and
Restated Credit Agreement dated as of November 4, 1998, the Fourth Amendment to
Amended and Restated Credit Agreement dated as of November 20, 1998, the Fifth
Amendment to Amended and Restated Credit Agreement dated as of March 26, 1999,
the Second Amended and Restated Credit Agreement dated as of March 30, 2000,
the First Amendment to Second Amended and Restated Credit Agreement dated as of
December 8, 2000, the Second Amendment, Forbearance and Waiver Agreement to
Second Amended and Restated Credit Agreement dated as of December 20, 2001, the
Third Amendment to Second Amended and Restated Credit Agreement dated as of
March 15, 2002, the Fourth Amendment, Forbearance and Waiver Agreement to
Second Amended and Restated Credit Agreement dated as of June 28, 2002, the
Original Credit Forbearance Extension Agreement dated as of August 14, 2002 and
the Limited Waiver and Consent under Second Amended and Restated Credit
Agreement dated as of August 19, 2002 (as amended, restated or otherwise
modified, the “Original Credit Agreement”);

 

WHEREAS, Borrower, Administrative Agent, Deutsche Bank
Trust Company Americas (f/k/a Bankers Trust Company) and the other financial
institutions parties thereto have entered into that certain Term Loan Agreement
dated as of October 23, 1996, as amended by the First Amendment to the Term
Loan Agreement dated as of July 2, 1997, the Second Amendment to the Term Loan
Agreement dated as of November 4, 1998, the Third Amendment to the Term Loan
Agreement dated as of November 20, 1998, the Fourth Amendment to the Term Loan
Agreement dated as of March 26, 1999, that certain Amended and Restated Term
Loan Agreement dated as of March 30, 2000, that certain First Amendment to
Amended and Restated Term Loan Agreement dated as of December 8, 2000, the
Second Amendment, Forbearance and Waiver Agreement to the Amended and Restated
Term Loan Agreement dated as of December 20, 2001, the Third Amendment to the
Amended and Restated Term Loan Agreement dated as of March 15, 2002, the
Forbearance and Waiver Agreement to Amended and Restated Term Loan Agreement
dated as of June 28, 2002, the Original Term Loan Forbearance Extension
Agreement dated as of August 14, 2002 and the Limited Waiver and Consent under
Amended and Restated Term Loan Agreement dated as of August 19, 2002 (as
amended, restated or otherwise modified, the “Original Term Loan Agreement”);

 

 

WHEREAS, the Lenders on the Closing Date are lenders
under either the Original Credit Agreement or the Original Term Loan Agreement
or both (collectively, the “Existing Lenders”) with loans outstanding
under such credit facilities and obligations under existing Hedging Agreements
(collectively, the “Original Loans”);

 

WHEREAS, Borrower has requested that the Lenders enter
into this Agreement in order to amend and restate the Original Credit Agreement
and the Original Term Loan Agreement and reconstitute the principal Obligations
(as defined in the Original Credit Agreement) and the principal Obligations (as
defined in the Original Term Loan Agreement) to reflect combined Obligations
hereunder of up to $1,388,067,490.87 in the aggregate to be provided by the
Lenders to Borrower on the terms and conditions set forth herein; and

 

WHEREAS, the Lenders are willing to, as further
provided for in this Agreement, convert the Original Loans into loans hereunder
and to permit the loans hereunder to remain outstanding for the purposes
specified herein and only on the terms and subject to the conditions set forth
herein.

 

NOW, THEREFORE, in consideration of the premises and
of the mutual covenants herein contained, the parties hereto agree that the
Original Credit Agreement and the Original Term Loan Agreement are hereby
amended and restated as follows:

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

1.1                               Definitions.

 

As used herein, and unless the context requires a
different meaning, the following terms have the meanings indicated:

 

“Acquisition” means, with respect to Borrower
or any Restricted Subsidiary, any transaction or series of related transactions
for the purpose of, or resulting directly or indirectly in, the acquisition by
Borrower or any Restricted Subsidiary of all or a significant part of the
assets of another Person, any Investment in any Person which, after the Closing
Date as a result of such Investment, becomes a Subsidiary of Borrower or,
except as permitted by Section 8.3(a), any merger, consolidation or
amalgamation with any other Person.

 

“Additional Security Documents” shall mean all
mortgages, pledge agreements, security agreements and other security documents
entered into pursuant to Section 7.10 with respect to additional
Collateral.

 

“Administrative Agent” shall mean Deutsche Bank
Trust Company Americas (f/k/a Bankers Trust Company) in its capacity as
administrative agent hereunder, and any successor agents in such capacity.

 

“Affiliate” means, with respect to any Person,
any Person or group acting in concert in respect of the Person in question
that, directly or indirectly, controls (including but not limited to all
directors and officers of such Person) or is controlled by or is under common

 

2

 

control with such Person; provided, that
neither DB nor any Affiliate of DB shall be deemed to be an Affiliate of
Borrower.  For the purposes of this
definition, “control” (including, with correlative meanings, the terms
“controlled by” and “under common control with”), as used with respect to any
Person or group of Persons, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of management and policies of
such Person, whether through the ownership of voting securities or by contract
or otherwise.  A Person shall be deemed
to control a corporation or other entity if such Person possesses, directly or
indirectly, the power to vote 10% or more of the securities having ordinary
voting power for the election of directors of such corporation or other entity.

 

“Agreement” means this Amended and Restated
Credit Agreement, as the same may at any time be amended, supplemented, waived
or otherwise modified in accordance with the terms hereof and in effect.

 

“Airstar Aircraft Financing Documents” means
Operating Leases and related documents entered into by Airstar Corporation
relating to aircraft owned or acquired by it and any agreements or documents
entered into by Airstar Corporation.

 

“Amended and Restated Polymers Indenture” means
that certain indenture, as amended and restated dated as of June 14, 2002 by
Polymers and HSBC Bank USA, a copy of which is attached as Appendix M to the
Disclosure Materials.

 

“Amended and Restated Senior Notes Indentures”
means that certain indenture as amended by that certain amendment, dated as of
June 14, 2002 by and between Borrower, as Issuer, each of the Guarantors named
therein and Wilmington Trust Company, as Trustee and that certain indenture as
amended by that certain amendment dated as of June 14, 2002 by and between
Borrower, as Issuer, each of the Guarantors named therein and Wilmington Trust
Company, as Trustee, a copy of which is attached as Appendix M to the
Disclosure Materials.

 

“Amended and Restated Subsidiary Guarantee
Agreement” has the meaning assigned to that term in Section
5.1(b)(iii)(A).

 

“Applicable Base Rate Margin” means at any date
(i) with respect to Term A Loans, 3.5%; provided, however, that
to the extent that a Minimum Term B Prepayment is made on or prior to December
31, 2004, the Applicable Base Rate Margin applicable to Term A Loans shall be
2.75% beginning on the first Business Day after such prepayment, and (ii) with
respect to Term B Loans, 5.0% and shall without further action increase by .50%
on the first Business Day after the 6-month anniversary of the Closing Date if
this Agreement becomes effective pursuant to Section 12.20(a) (or, if
this Agreement becomes effective pursuant to Section 12.20(b) the
first Business Day after the 12-month anniversary of the Closing Date) and, in
each case, on each 3-month anniversary thereafter up to a maximum of 8.0%.

 

“Applicable Eurodollar Margin” means at any
date (i) with respect to Term A Loans, 4.5%; provided, however,
that to the extent that a Minimum Term B Prepayment is made on or prior to
December 31, 2004, the Applicable Eurodollar Margin applicable to Term A Loans
shall be 3.75% beginning on the first Business Day after such prepayment, and
(ii) with respect to Term B Loans, 6.0% and shall without further action
increase by .50% on the first Business

 

3

 

Day after the 6-month anniversary of the Closing Date
if this Agreement becomes effective pursuant to Section 12.20(a) (or, if
this Agreement becomes effective pursuant to Section 12.20(b), the
first Business Day after the 12-month anniversary of the Closing Date) and, in
each case, on each 3-month anniversary thereafter up to a maximum of 9.0%.

 

“Asset Disposition” means any sale, lease,
transfer or other disposition (or series of related sales, leases, transfers or
dispositions) of all or any part of an interest in shares of Capital Stock of a
Restricted Subsidiary of Borrower (other than directors’ qualifying shares and
similar arrangements required by applicable law with respect to any Foreign
Subsidiary), property or other assets (each referred to for the purposes of
this definition as a “disposition” or any variation thereof) by Borrower or any
of its Restricted Subsidiaries; provided, that (i) any
disposition by Borrower or a Subsidiary to the Borrower or a Wholly-Owned
Subsidiary which is not an Unrestricted Subsidiary, (ii) the disposition of
equipment the proceeds of which are used to purchase other equipment used in
Borrower’s or any of its Restricted Subsidiaries’ business within 180 days from
the date of sale (provided that pending any such purchase the Net Sale Proceeds
thereof are used to repay Loans (as defined in the Priority Credit Agreement)
outstanding on the date of receipt of such proceeds) and (iii) dispositions
permitted by Section 8.4 or Sections 8.6(b), (e), (f), (g), (h)
or (i) shall not constitute an Asset Disposition for purposes of this
definition.

 

“Assignee” has the meaning assigned to that
term in Section 12.8(c) of this Agreement.

 

“Assignment and Assumption Agreement” means an
Assignment and Assumption Agreement substantially in the form of Exhibit
12.8(c) annexed hereto and made a part hereof by any applicable Lender, as
assignor, and such Lender’s assignee in accordance with Section 12.8 of
this Agreement.

 

“Attorney Costs” means all reasonable fees and
disbursements of any law firm or other external counsel and the reasonable allocated
cost of internal legal services, including all reasonable disbursements of
internal counsel.

 

“Australian Joint Ventures Interests” means
CPH’s 50% equity interest in HCPH Holdings Pty Limited, 50% equity interest in
Huntsman Chemical Australia Unit Trust and 20% equity interest in Huntsman
Surfactants Technology Corporation.

 

“Available Liquidity” means, as of any date of
termination, Cash or Cash Equivalents of the Borrower and its Restricted
Subsidiaries, but excluding amounts on deposit in any Lock-Box (as defined in
the Priority Credit Agreement) or Lock-Box Account (as defined in the Priority
Credit Agreement) and the Master Collection Account (as defined in the Priority
Credit Agreement).

 

“Base Rate” means the greater of (i) the rate
most recently announced by DB at its principal office as its “prime rate”,
which is not necessarily the lowest rate made available by DB or (ii) the
Federal Funds Rate plus 1/2 of 1% per annum. 
The “prime rate” announced by DB is evidenced by the recording thereof after
its announcement in such internal publication or publications as DB may
designate.  Any change in the interest
rate resulting from a change in

 

4

 

such “prime rate” announced by DB shall become effective
without prior notice to Borrower as of 12:01 A.M. (New York City time) on the
Business Day on which each change in such “prime rate” is announced by DB.  DB may make commercial or other loans to
others at rates of interest at, above or below its “prime rate”.

 

“Base Rate Loan” means any Loan which bears
interest at a rate determined with reference to the Base Rate.

 

“BASF Note” shall mean that certain Promissory
Note dated March 4, 1997 of HSCC to BASF Corporation in the original principal
amount of $75,000,000, as in effect on the Closing Date.

 

“Board” means the Board of Governors of the
Federal Reserve System.

 

“Borrower” has the meaning assigned to that
term in the introduction to this Agreement.

 

“Business Day” as it relates to any payment,
determination, funding or notice to be made or given in connection with any
Loan, or otherwise to be made or given to or from Administrative Agent, a day
other than a Saturday, Sunday or other day on which commercial banks in New
York City are authorized or required by law to close; provided, however,
that when used in connection with a Eurodollar Loan, the term “Business Day”
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market. 
For purposes of this Agreement (other than for purposes of determining
the end of any applicable Interest Period), “Business Day” shall not include
Pioneer Day as recognized in the State of Utah in any year.

 

“Capital Stock” means, with respect to any
Person, any and all shares, interests, participations, rights in or other
equivalents (however designated) of such Person’s capital stock, partnership
interests, membership interests or other equivalent interests and any rights
(other than debt securities convertible into or exchangeable for capital
stock), warrants or options exchangeable for or convertible into such capital
stock or other equity interests.

 

“Capitalized Lease” means, at the time any
determination thereof is to be made, any lease of property, real or personal,
in respect of which the present value of the minimum rental commitment is
capitalized on the balance sheet of the lessee in accordance with GAAP.

 

“Capitalized Lease Obligation” means, at the
time any determination thereof is to be made, the amount of the liability in
respect of a Capitalized Lease which would at such time be required to be
capitalized on the balance sheet of the lessee in accordance with GAAP.

 

“Cash” means money, currency or the available
credit balance in a Deposit Account.

 

“Cash Equivalents” means any Investment in (i)
a marketable obligation, maturing within one year after issuance thereof,
issued or guaranteed by the USA or an instrumentality or agency thereof, (ii) a
certificate of deposit or banker’s acceptance, maturing within one year after
issuance thereof, issued by any Lender, or a national or state bank or trust

 

5

 

company or a European, Canadian or Japanese bank, in
each case having capital, surplus and undivided profits of at least
$100,000,000 and whose long-term unsecured debt has a rating of “A” or better
by S&P or A2 or better by Moody’s or the equivalent rating by any other
nationally recognized rating agency (provided that the aggregate face amount of
all Investments in certificates of deposit or bankers’ acceptances issued by
the principal offices of or branches of such European or Japanese banks located
outside the USA shall not at any time exceed 33-1/3% of all Investments
described in this definition), (iii) open market commercial paper, maturing
within 270 days after issuance thereof, which has a rating of A-1 or better by
S&P or P-1 or better by Moody’s, or the equivalent rating by any other
nationally recognized rating agency, (iv) repurchase agreements and reverse
repurchase agreements with a term not in excess of one year with any financial
institution which has been elected primary government securities dealers by the
Federal Reserve Board or whose securities are rated AA- or better by S&P or
Aa3 or better by Moody’s or the equivalent rating by any other nationally
recognized rating agency relating to marketable direct obligations issued or
unconditionally guaranteed by the USA or any agency or instrumentality thereof
and backed by the full faith and credit of the USA, (v) “Money Market”
preferred stock maturing within six months after issuance thereof or municipal
bonds issued by a corporation organized under the laws of any state of the USA,
which has a rating of “A” or better by S&P or Moody’s or the equivalent
rating by any other nationally recognized rating agency and (vi) tax exempt
floating rate option tender bonds backed by letters of credit issued by a
national or state bank whose long-term unsecured debt has a rating of AA or
better by S&P or Aa2 or better by Moody’s or the equivalent rating by any
other nationally recognized rating agency.

 

“Cash Interest Expense” means Net Interest
Expense but excluding, however, Interest Expense not currently payable in cash.

 

“Change of Control” means (i) prior to an
Initial Public Offering, (x) the failure by Mr. Jon M. Huntsman, his spouse,
direct descendants, an entity controlled by any of the foregoing and/or by a
trust of the type described hereafter, and/or a trust for the benefit of any of
the foregoing (the “Huntsman Group”), collectively to own and control at
least 51% of the outstanding voting Capital Stock of Borrower, Holdco I and
Holdco II, (y) any sale, assignment, transfer or other disposition by GOF or
the Huntsman Group of any membership interests of Holdco I held by GOF or the
Huntsman Group on the Closing Date, other than a Permitted Transfer or (z) the
failure of Borrower to be a Wholly-Owned Direct Subsidiary of Holdco II or of
Holdco II to be a Subsidiary of Holdco I (except in the case of the Borrower, in
respect of (i) the preferred interests held by Huntsman Cancer Foundation on
the Closing Date and (ii) the interests held by Huntsman Chemical Corporation
or any other Wholly-Owned Subsidiary of Borrower on the Closing Date for so
long as such interests are held by a Wholly-Owned Subsidiary of Borrower) or
(ii) after an Initial Public Offering, the occurrence of the following: (x) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities and Exchange Act of 1934, as amended (the “Exchange Act”)),
other than GOF or one or more members of the Huntsman Group, is or becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a person shall be deemed to have “beneficial ownership” of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 35% or more of the then outstanding voting Capital Stock of
Borrower or Issuer other than in a transaction having the approval of the board
of directors of Borrower at least a majority of which

 

6

 

members are Continuing Directors; or (y) Continuing
Directors shall cease to constitute at least a majority of the directors
constituting the board of directors of Borrower or Issuer.

 

“Closing Date” means September 30, 2002.

 

“Code” means the Internal Revenue Code of 1986,
as from time to time amended, including the regulations proposed or promulgated
thereunder, or any successor statute and the regulations proposed or
promulgated thereunder.

 

“Collateral” means, collectively, “Collateral”
as such term is defined in any Security Document or any other collateral
pledged by any Credit Party to secure the Obligations.

 

“Collateral Account Agreement” has the meaning
assigned to such term in Section 5.1(b)(iv) of this Agreement.

 

“Collateral Agent” means DB acting in the
capacity of Collateral Agent as such term is defined in the Security Agreement
until a successor is approved pursuant to Article XI of the Security Agreement
and thereafter shall mean such successor and all successors thereto.

 

“Consolidated Capital Expenditures” shall mean,
for Borrower and its Restricted Subsidiaries, for any period, the aggregate of
all expenditures (whether paid in cash or accrued as liabilities and including
in all events all Capitalized Lease Obligations) by the Borrower and its
Restricted Subsidiaries during that period that, in conformity with GAAP, are
or are required to be included in the property, plant or equipment reflected in
the consolidated balance sheet of the Borrower; provided that
Consolidated Capital Expenditures shall not include any portion of expenditures
to replace destroyed or damaged property, plant or equipment to the extent such
capital expenditures are financed with casualty insurance proceeds not required
to be applied to prepay the obligations hereunder.

 

“Consolidated Debt” means, without duplication,
the sum of (i) Indebtedness of Borrower and its Restricted Subsidiaries (other
than the Horizon Subordinated Note) to the extent reflected on a consolidated
balance sheet of Borrower, determined on a consolidated basis in accordance
with GAAP (but net of Cash and Cash Equivalents) and (ii) Indebtedness of
Borrower and its Restricted Subsidiaries of the type referred to in clauses (x)
and (xi) of the definition of such term.

 

“Consolidated Fixed Charges” means, for any
period, for Borrower and its Restricted Subsidiaries, the sum of (without
duplication) (i) Cash Interest Expense, (ii) all scheduled payments of
principal on Indebtedness of Borrower and its Restricted Subsidiaries
(including, without limitation, principal payments in respect of Capitalized
Leases), (iii) net income taxes paid in cash (excluding the effect of cash
taxes on extraordinary items to the extent of cash proceeds on such items to
the extent that such cash proceeds are excluded in computing EBITDA and net of
tax distributions received from HIH), and (iv) Consolidated Capital Expenditures
payable in cash, as each of the foregoing is made during such period of
determination in accordance with GAAP on a consolidated basis.

 

“Consolidated Net Income” and “Consolidated
Net Loss” mean, respectively, with respect to any period, the aggregate of
the net income (loss) of Borrower for such period,

 

7

 

determined in accordance with GAAP on a consolidated
basis, plus or minus, to the extent not included therein, the net
income (loss) of any Restricted Subsidiary attributable to a minority interest
in such Restricted Subsidiary, less the amount of cash dividends paid on any
preferred stock of Borrower in such period; provided, that the net
income (loss) of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition shall be excluded in computing
Consolidated Net Income provided  further, that as used in the
definition of Restricted Subsidiary Adjusted Earnings, Consolidated Net Income
and Consolidated Net Loss shall be determined without giving effect to non-cash
adjustments (whether positive or negative) (the “Equity Deferral Plan Non-Cash
Adjustments”) attributable (without duplication) to changes in employees’
accounts due to (i) the matching amount in any “Employer Credit Accounts” (as
defined in the Equity Deferral Plan) and matching associated with Expatriate
Credits (as defined in the Equity Deferral Plan), (ii) changes in the value of
employees’ “Deferral Accounts” (as defined in the Equity Deferral Plan)
resulting from changes in the value of the Employer Stock (as defined in the
Equity Deferral Plan) and (iii) changes in the value of the vested portion of
such “Employer Credit Accounts” (as defined in the Equity Deferral Plan) and
the vested portion of Expatriate Credits (as defined in the Equity Deferral
Plan) resulting from changes in the value of the Employer Stock (as defined in
the Equity Deferral Plan), provided  still  further, that
any amounts paid or distributed in cash (the “Equity Deferral Plan Cash
Adjustments”) pursuant to the Equity Deferral Plan attributable to such changes
in employees’ accounts described in clauses (i), (ii) and (iii) above
shall, to the extent not otherwise deducted in determining Consolidated Net
Income or Consolidated Net Loss, be deemed to be expenses at the time of
payment thereof and shall, for such period, be deducted in determining
Consolidated Net Income and Consolidated Net Loss as used in the definition of
Restricted Subsidiary Adjusted Earnings.

 

“Consolidated Total Assets” means, with respect
to any Person, the book value, determined on a consolidated basis in accordance
with GAAP, of all assets of such Person and its Subsidiaries.

 

“Contaminant” means any pollutant, contaminant
(as those terms are defined in 42 U.S.C. § 9601(33)), toxic pollutant (as that
term is defined in 33 U.S.C. § 1362(13)), hazardous substance (as that term is
defined in 42 U.S.C. § 9601(14)), hazardous chemical (as that term is defined
by 29 CFR § 1910.1200(c)), hazardous waste (as that term is defined in 42
U.S.C. § 6903(5)), or any state or local equivalent of such laws and
regulations, including, without limitation, radioactive material, special
waste, polychlorinated biphenyls, asbestos, petroleum, including crude oil or
any petroleum-derived substance, waste, or breakdown or decomposition product
thereof, or any constituent of any such substance or waste, including but not
limited to polychlorinated biphenyls and asbestos.

 

“Continuation Date” shall mean, with respect to
Eurodollar Loans, the day, which shall be the last day of an Interest Period
with respect thereto, on which a Eurodollar Loan has been continued pursuant to
Sections 2.3(a) or 2.3(c) of this Agreement.

 

“Continuing Directors” means, as of any date,
the collective reference to (i) all members of the board of directors of
Borrower or Issuer who have held office continuously since a date no later than
twelve months prior to the Initial Public Offering, and (ii) all members of the
board of directors of Borrower or Issuer who assumed office after such date and
whose

 

8

 

appointment or nomination for election by shareholders
of Borrower or Issuer was approved by a vote of at least 50% of the Continuing
Directors in office immediately prior to such appointment or nomination.

 

“Contractual Obligation” means, as to any
Person, any provision of any Securities issued by such Person or of any
indenture or credit agreement or any agreement, instrument or other undertaking
to which such Person is a party or by which it or any of its property is bound.

 

“Conversion Date” shall mean with respect to
Eurodollar Loans, the day, which shall be the last day of an Interest Period,
on which Borrower has elected to convert its Eurodollar Loans into Base Rate
Loans pursuant to Section 2.3(a)(ii) of this Agreement.

 

“CPH” means Consolidated Press Holdings
Limited, an Australian corporation.

 

“Credit Exposure” has the meaning set forth in Section
12.8(b).

 

“Credit
Party” shall mean Borrower and any Subsidiary Guarantor.

 

“Currency Agreement” means any foreign exchange
contract, currency swap agreement, futures contract, option contract, synthetic
cap or other similar agreement designed to protect the Persons entering into
same against fluctuations in currency values.

 

“Customary Permitted Liens” means:

 

(i)                                     Liens for taxes not yet due and payable or which are
being contested in good faith by appropriate proceedings diligently pursued,
provided that (A) any proceedings commenced for the enforcement of such Liens
shall have been stayed or suspended within 30 days of the commencement thereof
and (B) provision for the payment of all such taxes known to such Person has
been made on the books of such Person to the extent required by GAAP;

 

(ii)                                  mechanics’, processor’s, materialmen’s, carriers’,
warehousemen’s, landlord’s and similar Liens arising by operation of law and
arising in the ordinary course of business and securing obligations of such
Person that are not overdue for a period of more than 30 days or are being
contested in good faith by appropriate proceedings diligently pursued; provided
that (A) any proceedings commenced for the enforcement of such Liens shall have
been stayed or suspended within 30 days of the commencement thereof and (B) provision
for the payment of such Liens has been made on the books of such Person to the
extent required by GAAP;

 

(iii)                               Liens arising in connection with worker’s
compensation, unemployment insurance, old age pensions and social security
benefits which are not overdue or are being contested in good faith by
appropriate proceedings diligently pursued, provided that (A) any proceedings
commenced for the enforcement of such Liens shall have been stayed or suspended
within 30 days of the commencement thereof and (B) provision for the payment of
such Liens has been made on the books of such Person to the extent required by
GAAP;

 

9

 

(iv)                              (A)  Liens
incurred or deposits made in the ordinary course of business to secure the
performance of bids, tenders, statutory obligations, fee and expense
arrangements with trustees and fiscal agents (exclusive of obligations incurred
in connection with the borrowing of money or the payment of the deferred
purchase price of property) and customary deposits granted in the ordinary
course of business under Operating Leases and (B) Liens securing surety,
indemnity, performance, appeal and release bonds, provided that full provision
for the payment of all such obligations has been made on the books of such
Person to the extent required by GAAP;

 

(v)                                 such imperfections of title, covenants, restrictions,
easements and other encumbrances on real property (except for such which are
specifically insured for in a lender’s title policy delivered pursuant to the
terms of this Agreement) which in each case do not arise out of the incurrence
of any Indebtedness and which as to Mortgaged Properties, do not interfere with
or impair in any material respect the utility, operation, value or
marketability of the real property on which such Lien is imposed and, as to all
other properties, do not impair the value or marketability of such properties,
taken as a whole;

 

(vi)                              attachment, judgment or other similar Liens arising in
connection with court or arbitration proceedings involving individually and in
the aggregate liability of $15,000,000 or less at any one time, provided the
same are discharged, or that execution or enforcement thereof is stayed pending
appeal, within 60 days or, in the case of any stay of execution or enforcement
pending appeal, within such lesser time during which such appeal may be taken;

 

(vii)                           leases or subleases granted to others not interfering
in any material respect with the business of Borrower or any of its
Subsidiaries and any interest or title of a lessor under any lease permitted by
this Agreement; and

 

(viii)                        Environmental Liens, to the extent that (A) any
proceedings commenced for the enforcement of such Liens shall have been
suspended or are being contested in good faith, (B) provision for all liability
and damages that are the subject of said Environmental Liens has been made on
the books of such Person to the extent required by GAAP and (C) such Liens do
not relate to obligations exceeding $5,000,000 in the aggregate at any one
time.

 

“DB” means Deutsche Bank Trust Company
Americas, a New York banking corporation, and its successors.

 

“Default Rate” means a variable rate per annum
which shall be the Default Rate Margin plus (x) the then applicable
interest rate hereunder, or (y) if there is no such applicable interest rate,
the Base Rate plus the Applicable Base Rate Margin, in respect of the amount on
which the Default Rate is being assessed, but in no event in excess of that
permitted by applicable law.

 

“Default Rate Margin” means two percent (2%)
per annum.

 

10

 

“Deposit Account” means a demand, time,
savings, passbook or like account with a bank, savings and loan association,
credit union or like organization, other than an account evidenced by a
negotiable certificate of deposit.

 

“Disclosure Materials” means that certain Plan
of Reorganization, the Disclosure Statement to accompany the Plan of
Reorganization and the Appendices thereto, each dated July 15, 2002, and each
amendment or supplement thereafter to the extent posted on Intralinks at least
five (5) Business Days prior to the Closing Date.

 

“Dollar” and “$” means lawful money of
the USA.

 

“Dollar Equivalent” means, at any time, (i) as
to any amount denominated in Dollars, the amount thereof at such time, and (ii)
as to any amount denominated in any other currency, the equivalent amount in
Dollars as determined by the Administrative Agent at such time on the basis of
the exchange rate at such time.

 

“Domestic Subsidiary” means each Subsidiary of
Borrower other than a Foreign Subsidiary.

 

“EBITDA” means, for any applicable period,
Restricted Subsidiary Adjusted Earnings plus, to the extent deducted in
determining the foregoing amount (i) Net Interest Expense for such period of
Borrower and its Restricted Subsidiaries, (ii) provision for taxes for such
period for Borrower and its Restricted Subsidiaries, (iii) depreciation and
amortization expense for such period for Borrower and its Restricted
Subsidiaries, (iv) the Huntsman Polymers Non-Cash Charge and (v) Restructuring
Charges.

 

“Eligible Assignee” means a commercial bank,
financial institution, financial company, fund (whether a corporation,
partnership, trust or other entity) or insurance company in each case, together
with its Affiliates or Related Funds, which extends credit or buys loans in the
ordinary course of its business or any other Person approved by the
Administrative Agent and Borrower, such approval not to be unreasonably
withheld.

 

“Environmental Claim” means any notice of
violation, claim, suit, demand, abatement order or other order or direction
(conditional or otherwise) by any Governmental Authority or any Person for any
damage, including personal injury (including sickness, disease or death),
tangible or intangible property damage, contribution, indemnity, indirect or
consequential damages, damage to the environment, nuisance, pollution,
contamination or other adverse effects on the environment, human health, or
natural resources, or for fines, penalties, restrictions or injunctive relief,
resulting from or based upon (a) the occurrence or existence of a Release or
substantial threat of a material Release (whether sudden or non-sudden or
accidental or non-accidental) of, or exposure to, any Contaminant in, into or
onto the environment at, in, by, from or related to any real estate owned,
leased or operated at any time by Borrower or any of its Subsidiaries (the “Premises”),
(b) the use, handling, generation, transportation, storage, treatment or
disposal of Contaminants in connection with the operation of any Premises, or
(c) the violation, or alleged violation, of any statutes, ordinances, codes,
orders, rules, regulations, permits, or licenses or authorizations of or from
any Governmental Authority or court relating to environmental matters connected
with Borrower’s operations or any Premises.

 

11

 

“Environmental Laws” means any and all
applicable foreign, federal, state or local laws, statutes, ordinances, codes,
rules, regulations, orders, decrees, judgments, directives or Environmental
Permits and cleanup or action standards, levels or objectives imposing
liability or standards of conduct for or relating to the protection of health,
safety or the environment, including, but not limited to, the following
statutes as now written and amended, and as amended hereafter: the Federal
Water Pollution Control Act, as codified in 33 U.S.C. § 1251 et seq.,
the Clean Air Act, as codified in 42 U.S.C. § 7401 et seq., the Toxic
Substances Control Act, as codified in 15 U.S.C. § 2601 et seq., the
Solid Waste Disposal Act, as codified in 42 U.S.C. § 6901 et seq., the
Comprehensive Environmental Response, Compensation and Liability Act, as
codified in 42 U.S.C. § 9601 et seq., the Emergency Planning and
Community Right-to-Know Act of 1986, as codified in 42 U.S.C. § 11001 et
seq., and the Safe Drinking Water Act, as codified in 42 U.S.C.§ 300f et
seq. and any related regulations, as well as all state and local
equivalents.

 

“Environmental Lien” means a Lien in favor of
any Governmental Authority for (i) any liability under foreign, federal, state
or local environmental laws, regulations or orders of any Government Authority
or court, or (ii) damages arising from, or costs incurred by such Governmental
Authority in response to, a Release or threatened Release of a Contaminant into
the environment.

 

“Environmental Permits” means all permits,
licenses, certificates, registrations and approvals of Governmental Authorities
required by Environmental Laws or necessary for the business of Borrower or a
Subsidiary of Borrower.

 

“Equity Deferral Plan” means Borrower’s July 1,
1999 Equity Deferral Plan, as amended from time to time.

 

“ERISA” means the Employee Retirement Income
Security Act of 1974, as from time to time amended.

 

“ERISA Affiliate” means, with respect to any
Person, any trade or business (whether or not incorporated) which, together
with such Person, is under common control as described in Section 414(c) of the
Code, is a member of a controlled group, as defined in Section 414(b) of the
Code, or is a member of an affiliated service group as defined in Section
414(m) of the Code which includes such Person. 
Unless otherwise qualified, all references to an “ERISA Affiliate” in this
Agreement shall refer to an ERISA Affiliate of Borrower or any Subsidiary.

 

“Eurodollar Loan” means any Loan bearing
interest at a rate determined by reference to the Eurodollar Rate.

 

“Eurodollar Rate” means the arithmetic average
(rounded upwards, if necessary, to the nearest 1/16 of 1%) of the offered
quotation, if any, to first class banks in the New York interbank market by DB
for U.S. Dollar deposits of amounts in immediately available funds comparable
to the principal amount of the applicable Eurodollar Loan to be made or
continued by DB for which the Eurodollar Rate is being determined with
maturities comparable to the Interest Period for which such Eurodollar Rate
will apply as of approximately 10:00 A.M. (New York City time) on the
applicable Interest Rate Determination Date. 
The determination of the

 

12

 

Eurodollar Rate by Administrative Agent shall be
conclusive and binding on Borrower absent manifest error.

 

“Eurodollar Reserve Rate” means, with respect
to each day during each Interest Period pertaining to a Eurodollar Loan, a rate
per annum determined for such day in accordance with the following formula
(rounded upwards, if necessary, to the nearest 1/100th of 1%):

 

	
   

  	
  Eurodollar
  Rate

  	
   

  
	
   

  	
  1.00
  - Eurodollar Reserve Requirements

  	
   

  

 

“Eurodollar Reserve Requirements” means, for
any day as applied to a Eurodollar Loan, the aggregate (without duplication) of
the maximum rates (expressed as a decimal fraction) of reserve requirements in
effect on such day (including, without limitation, basic, supplemental,
marginal and emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for Eurodollar funding (currently referred to
as “Eurocurrency liabilities” in Regulation D of the Board).

 

“Event of Default” has the meaning assigned to
that term in Section 10.1 of this Agreement.

 

“Excess Cash Flow” means, for any Fiscal Year
(commencing with the Fiscal Year ending December 31, 2002), an amount not less
than zero calculated by April 30 of such year, equal to (i) the sum of (x) the
average daily Unused Revolver Availability during the period of February 15
through and including April 15 of such year plus (y) the average daily
balance of cash, Cash Equivalents and the amount of Foreign Cash Equivalents
(calculated using the applicable exchange rate used by the Company in its
internal financial statements), held during such period of such year (after giving
pro forma effect to the amount of the Scheduled Term Loan Principal Payments,
if any, made during such period as if such payments were made on February 15),
but in any event excluding any cash from time to time in a Recovery Event
Escrow Account in accordance with Section 4.2(h)), minus (ii)
$200,000,000.

 

“Existing Forbearance Agreements” means that
certain Fourth Amendment, Forbearance and Waiver to Second Amended and Restated
Credit Agreement dated as of June 28, 2002, by and among the Borrower, Administrative
Agent and the financial institutions party thereto and that certain Forbearance
and Waiver to the Amended and Restated Term Loan Agreement dated as of June 28,
2002, by and among the Borrower, Administrative Agent and the financial
institutions party thereto.

 

“Existing L/C Obligations” shall mean all LC
Obligations (as defined in the Original Credit Agreement) under the Original
Credit Agreement, immediately prior to the Closing Date.

 

“Existing Lenders” shall have the meaning
assigned to that term in the third recitals to this Agreement.

 

“Existing Obligations” shall have the meaning
assigned to that term in Section 6.5(d) of this Agreement.

 

13

 

“Facility” means any of the credit facilities
established under this Agreement.

 

“Federal Funds Rate” means on any one day, the
rate per annum equal to the weighted average (rounded upwards, if necessary, to
the nearest 1/100th of 1%) of the rate on overnight federal funds transactions
with members of the Federal Reserve System only arranged by federal funds
brokers, as published as of such day by the Federal Reserve Bank of New York,
or, if such rate is not so published, the average of the quotations for such
day on such transactions received by DB from three federal funds brokers of
recognized standing selected by DB.

 

“Finance Subsidiary” means any Restricted
Subsidiary existing on the date of this Agreement or subsequently formed in
accordance with the terms of this Agreement, (i) which is a special purpose
entity which does not engage in any business other than borrowing funds from
Borrower and lending funds to Restricted Subsidiaries pursuant to Pledged
Intercompany Notes pursuant to documentation satisfactory to Administrative
Agent with all rights of the Finance Subsidiary under such documentation
pledged to the Collateral Agent in a manner satisfactory to Administrative
Agent, (ii) which has provisions in its articles of incorporation satisfactory
to Administrative Agent and (iii) all of the Capital Stock of which is pledged
by the applicable Credit Party to the Collateral Agent on behalf of the
Lenders, pursuant to the Security Documents.

 

“First Mortgage Notes” means all of the
outstanding 11% First Mortgage Notes due 2004 of Huntsman Petrochemical, issued
pursuant to that certain Indenture between the Borrower and the United States
Trust Company of New York, a New York corporation, as trustee, dated as of
April 15, 1994, as amended, supplemented, restated or otherwise modified.

 

“Fiscal Quarter” has the meaning assigned to
such term in Section 7.11 of this Agreement.

 

“Fiscal Year” has the meaning assigned to such
term in Section 7.11 of this Agreement.

 

“Forbearance Extension Agreement” means either
the Original Credit Forbearance Extension Agreement, the Original Term Loan
Forbearance Extension Agreement or both, as the context may require.

 

“Foreign Cash Equivalent” means (i) debt
securities with a maturity of 365 days or less issued by any member nation of
the European Union, Switzerland or any other country whose debt securities are
rated by S&P and Moody’s A-1 or P-1, or the equivalent thereof (if a
short-term debt rating is provided by either) or at least AA or Aa2, or the
equivalent thereof (if a long-term unsecured debt rating is provided by either)(each
such jurisdiction, an “Approved Jurisdiction”), or any agency or
instrumentality of an Approved Jurisdiction, provided that the full faith and
credit of the Approved Jurisdiction is pledged in support of such debt
securities or such debt securities constitute a general obligation of the
Approved Jurisdiction and (ii) debt securities in an aggregate principal amount
not to exceed the Dollar Equivalent of $2,000,000 with a maturity of 365 days
or less issued by any nation in which the Borrower or its Subsidiaries has cash
which is the subject of restrictions on export or any agency or instrumentality
of such

 

14

 

nation, provided that the full faith and credit of
such nation is pledged in support of such debt securities or such debt
securities constitute a general obligation of such nation.

 

“Foreign Overdraft Facility” means one or more
foreign overdraft lines of credit in a maximum aggregate principal amount of
$5,000,000 at any time outstanding.

 

“Foreign Subsidiary” means any Restricted
Subsidiary of Borrower that (A) is incorporated under the laws of a
jurisdiction other than any State of the U.S., the District of Columbia or any
territory or possession of the U.S. and (B) maintains a majority of its assets
outside the U.S.; provided, however, that Huntsman International
Sales Corporation shall be a Foreign Subsidiary for so long as it is treated as
a foreign subsidiary under Section 956 of the Code.

 

“GAAP” means generally accepted accounting
principles in the U.S. as in effect from time to time.

 

“GOF” means Matlin Patterson Global
Opportunities Partners L.P. (f/k/a CSFB Global Opportunities Partners L.P.) by
its investment advisor Matlin Patterson Global Advisers LLC (f/k/a CSFB Global
Advisers LLC)

 

“GOF Bonds” means Senior Subordinated Notes and
Polymers Senior Notes held from time to time by GOF immediately prior to the
Closing Date.  For purpose of this
Agreement, all Senior Subordinated Notes and Polymers Senior Notes held from
time to time by CPH  or its Affiliate shall be deemed to be GOF Bonds.

 

“GOF Restructuring Agreement” has the meaning
assigned to that term in Section 5.1(c)(i).

 

“Governmental Authority” means any nation or
government, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of government.

 

“Guarantee Obligations” means, as to any
Person, without duplication, any direct or indirect obligation of such Person
guaranteeing or intended to guarantee any Indebtedness, dividend, Capitalized
Lease or Operating Lease, any other lease or other obligation (“primary
obligations”) of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent: (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor; (ii) to advance or supply funds (a) for the purchase or payment of
any such primary obligation, or (b) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor; (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation; or (iv) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof provided, however,
that the term Guarantee Obligations shall not include endorsements of
instruments for deposit or collection in the ordinary course of business.  The amount of any Guarantee Obligation at
any time shall be deemed to be an amount equal to the lesser at such time of
(x) the stated or determinable amount of the primary obligation in

 

15

 

respect of which such Guarantee Obligation is made or
(y) the maximum amount for which such Person may be liable pursuant to the terms
of the instrument embodying such Guarantee Obligation; or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof.

 

“Headquarters Mortgage Loan Documents” means a
mortgage or deed of trust, assignment of rents and leases and other customary
mortgage loan documents entered into by Huntsman Headquarters Corporation, a
Utah corporation, in connection with the mortgaging of the building located at
500 Huntsman Way, Salt Lake City, Utah and any agreements or documents entered
into by Huntsman Headquarters Corporation evidencing the renewal, replacement
or refinancing of the Indebtedness governed thereby to the extent such
Indebtedness is permitted by Section 8.2(e).

 

“Hedging Agreement” means any Interest Rate
Agreement, Currency Agreement, commodity purchase or option agreement or
commodity price hedging agreement or other hedging arrangement.

 

“HIH” means Huntsman International Holdings,
LLC, a Delaware limited liability company.

 

“HIH Unit Transfer” shall mean (a) the dividend
of one common unit of HIH (the “Transferred Unit”) by HSCC to HSCHC, the
dividend of the Transferred Unit from HSCHC to the Borrower, and the dividend
of the Transferred Unit from the Borrower to Holdco II or (b) the transfer of
the Transferred Unit from HSCC to Holdco II; provided, however, that (i) such
dividends or transfer shall only take place on the Business Day prior to the
payment of the Alta Interest Purchase Price (as defined in the ICI Agreement)
pursuant to the ICI Agreement, (ii) the Transferred Unit shall at all times
remain subject to the pledge in favor of the Collateral Agent and (iii) the
Transferred Unit shall, promptly (a) be contributed from Holdco II to Borrower,
from Borrower to HSCHC, and from HSCHC to HSCC or (b) transferred from Holdco
II to HSCC, in each case pursuant to such documentation as may be satisfactory
in form and substance to Administrative Agent.

 

“Historical Financial Statements” means each of
the financial statements of Borrower or its Subsidiaries set forth on Schedule
6.5(a) hereto.

 

“Holdco Agreement” has the meaning assigned to
such term in Section 5.1(b)(viii) of this Agreement.

 

“Holdco I” means Huntsman Holdings, LLC, a
Delaware limited liability company.

 

“Holdco II” means HMP Equity Holdings Corporation,
a Delaware corporation.

 

“Horizon Subordination Agreement” has the
meaning given thereto in Section 5.1(b)(ix) of this Agreement.

 

“Horizon Subordinated Note” means that certain
Amended and Restated Subordinated Promissory Note dated July 2, 2001 made
by Borrower and payable to the order of

 

16

 

Horizon Ventures, L.C., a Utah limited liability
company, as amended or modified in accordance with the terms hereof.

 

“HSCC” means Huntsman Specialty Chemicals
Corporation, a Delaware corporation.

 

“HSCC Agreement” means that certain letter
agreement dated as of the date hereof by and among Borrower, HSCC, the
Collateral Agent and the Priority Collateral Agent, as amended, modified or
supplemented from to time.

 

“HSCHC” means Huntsman Specialty Chemicals
Holdings Corporation, a Utah corporation.

 

“HSCC Subsidiary Guarantee Agreement” has the
meaning given thereto in Section 5.1(b)(iii)(B).

 

“Huntsman Group” has the meaning given thereto
in the definition of Change of Control in Section 1.1.

 

“Huntsman Petrochemical” means Huntsman
Petrochemical Corporation, a Delaware corporation.

 

“Huntsman Polymers Non-Cash Charge” means, for
any period of four consecutive Fiscal Quarters that includes the last Fiscal
Quarter of 2001, the one time, actual non-cash write down charge incurred in
the last Fiscal Quarter of 2001 in connection with Polymers asset write-downs.

 

“ICI” means ICI Alta, Inc., a Delaware
corporation.

 

“ICI Agreement” means the Sale and Purchase
Agreement dated as of June 14, 2002 by and among Imperial Chemical Industries
PLC, ICI Americas Inc., ICI, ICI Finance PLC, BNAC Inc. and GOF, as the same
may be amended in accordance with the terms of this Agreement.

 

“Indebtedness” means, as applied to any Person
(without duplication):

 

(i)                                     all indebtedness of such Person for borrowed money;

 

(ii)                                  the
deferred and unpaid balance of the purchase price of assets or services (other
than trade payables and other accrued liabilities incurred in the ordinary
course of business that are not overdue by more than 90 days unless being
contested in good faith) which purchase price is (a) due more than six months
from the date of incurrence of the obligation in respect thereof or (b)
evidenced by a note or a similar instrument;

 

(iii)                               all
Capitalized Lease Obligations;

 

17

 

(iv)                              all
indebtedness secured by any Lien (other than Customary Permitted Liens) on any
property owned by such Person, whether or not such indebtedness has been assumed
by such Person or is nonrecourse to such Person;

 

(v)                                 notes
payable and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money (other than such notes or drafts
for the deferred purchase price of assets or services which does not constitute
Indebtedness pursuant to clause (ii) above);

 

(vi)                              indebtedness
or obligations of such Person, in each case, evidenced by bonds, notes or
similar instruments;

 

(vii)                           the
face amount of all letters of credit and bankers’ acceptances issued for the
account of such Person, and without duplication, all drafts drawn thereunder
other than, in each case, commercial or standby letters of credit or the
functional equivalent thereof issued in connection with performance, bid or
advance payment obligations incurred in the ordinary course of business,
including, without limitation, performance requirements under workers
compensation or similar laws;

 

(viii)                        all
obligations of such Person under Hedging Agreements;

 

(ix)                                Guarantee
Obligations of such Person;

 

(x)                                   the aggregate outstanding amount of Receivables Facility Attributed
Indebtedness or the gross proceeds from any similar transaction, regardless of
whether such transaction is effected without recourse to such Person or in a
manner that would not otherwise be reflected as a liability on a balance sheet
of such Person in accordance with GAAP; and

 

(xi)                                the
principal balance outstanding under any synthetic lease, tax retention,
operating lease, off-balance sheet loan or similar off-balance sheet financing
product to which such Person is a party, where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an operating
lease in accordance with GAAP.

 

provided, however, notwithstanding the foregoing,
“Indebtedness” shall not include deferred taxes or unsecured indebtedness of
Borrower and/or its Restricted Subsidiaries incurred to finance insurance
premiums in a principal amount not in excess of the casualty and other
insurance premiums to be paid by Borrower and/or its Restricted Subsidiaries
for a three year period beginning on the date of any incurrence of such
indebtedness.

 

“Initial Pro-Rata Share” means, for any Lender,
subject to any adjustments provided pursuant to Section 2.1(a), (x) the
sum of such Lender’s Original Loans on the Closing Date, immediately prior to
giving effect to the Transactions divided by (y) the sum of the total
Original Loans of all Lenders outstanding on the Closing Date, immediately
prior to giving effect to the Transactions.

 

18

 

“Initial Public Offering” means the initial
public offering of the common equity of Borrower or an entity (“Issuer”) of
which Borrower is a Wholly-Owned Subsidiary.

 

“Intercompany Indebtedness” means, Indebtedness
of Borrower or any of its Restricted Subsidiaries which, in the case of
Borrower, is owing to any Subsidiary of Borrower and which, in the case of any
Subsidiary of Borrower, is owing to Borrower or any of its other Subsidiaries.

 

“Intercreditor Agreement” means that certain
Intercreditor Agreement, dated the date hereof, by and among the Collateral
Agent, the Priority Collateral Agent and Borrower, in the form of Exhibit 1.3
to the Security Agreement, as amended, modified or supplemented in accordance
with the terms thereof.

 

“Interest Coverage Ratio” has the meaning
assigned to that term in Section 9.2 of this Agreement.

 

“Interest Expense” means, for Borrower and its
Restricted Subsidiaries with respect to any period, the sum of (x) total
interest expense for Borrower and its Restricted Subsidiaries to the extent
reflected on a consolidated financial statement of Borrower, determined on a
consolidated basis in accordance with GAAP and (y) total cash dividends paid on
any preferred Capital Stock of Borrower and its Restricted Subsidiaries to a
Person other than Borrower or any of its Restricted Subsidiaries.  As used in this definition, the term
“interest” shall include, without limitation, all interest and fees payable
with respect to the Obligations under this Agreement (other than fees which may
be capitalized as transaction costs in accordance with GAAP), any discount in
respect of sales of accounts receivable and/or related contract rights and the
interest portion of Capitalized Lease Obligations during such period, all as
determined in accordance with GAAP.

 

“Interest Payment Date” means (a) as to any
Base Rate Loan, (x) the last Business Day of each March, June, September
and December to occur while such Loan is outstanding, (y) the date on
which all of the Loans hereunder are paid in full and (z) if the Closing
Date shall not have occurred prior to September 30, 2002, no later than
the tenth Business Day following the Closing Date, (b) as to any Eurodollar
Loan, the last day of the Interest Period applicable thereto and (c) as to
any Eurodollar Loan having an Interest Period longer than three months, at the
end of each three month anniversary of the first day of the Interest Period
applicable thereto; provided, however, that, in addition to the
foregoing, the date upon which any of the Term Loans have been paid in full
shall be deemed to be an “Interest Payment Date” with respect to any interest
which is then accrued hereunder for such Loans.

 

“Interest Period” means with respect to any
Eurodollar Loan, the period commencing on the Business Day such Loan is
disbursed or continued (or on the date on which any Base Rate Loan is converted
to a Eurodollar Loan) and ending on the date one (or such shorter period as may
be agreeable to the Administrative Agent), two, three or six months thereafter,
as selected by Borrower in its Notice of Borrowing, Notice of Continuation or
Notice of Conversion or Continuation;

 

provided that:

 

19

 

(i)                                     if any Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Loan, the result of such
extension would be to carry such Interest Period into another calendar month,
in which event such Interest Period shall end on the immediately preceding
Business Day;

 

(ii)                                  any
Interest Period pertaining to a Eurodollar Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month which is one, two,
three or six months, as the case may be, after the calendar month in which such
Interest Period began; and

 

(iii)                               no
Interest Period for any Term Loan shall extend beyond the final maturity date
for such loan.

 

“Interest Rate Agreement” means any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate futures contract, interest rate option contract or
other similar agreement or arrangement to which Borrower or any Restricted
Subsidiary is a party, designed to protect Borrower or any of its Restricted
Subsidiaries against fluctuations in interest rates.

 

“Interest Rate Determination Date” means the
date for calculating the Eurodollar Rate for an Interest Period, which date
shall be the second Business Day prior to the first day of the related Interest
Period for such Loan.

 

“Investment” means, as applied to any Person,
(i) any direct or indirect purchase or other acquisition by that Person of, or
a beneficial interest in, Securities of any other Person, or a capital
contribution by that Person to any other Person, (ii) any direct or indirect
loan or advance to any other Person (other than prepaid expenses or accounts
receivable created or acquired in the ordinary course of business), including
all Indebtedness to such Person arising from a sale of property by such person
other than in the ordinary course of its business or (iii) any purchase by that
Person of all or a significant part of the assets of a business conducted by
another Person (including by way of merger, consolidation or amalgamation).  The amount of any Investment by any Person
on any date of determination shall be the acquisition price of the gross assets
acquired (including any liability assumed by such Person to the extent such
liability would be reflected on a balance sheet prepared in accordance with
GAAP) plus all additional capital contributions or purchase price paid
in respect thereof, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment minus
the amount of all cash returns of principal or capital thereon, cash dividends
thereon and other cash returns on investment thereon or liabilities expressly
assumed by another Person (other than Borrower or another Subsidiary of
Borrower) in connection with the sale of such Investment.  Whenever the term “outstanding” is used in
this Agreement with reference to an Investment, it shall take into account the
matters referred to in the preceding sentence.

 

“IRIC” means International Risk Insurance
Company, a Vermont corporation.

 

20

 

“IRS” means the United States Internal Revenue
Service, or any successor or analogous organization.

 

“Issuer” has the meaning assigned to that term
within the definition of Initial Public Offering in this Section 1.1.

 

“Lender” and “Lenders” have the
respective meanings assigned to those terms in the introduction to this
Agreement and shall include any other Person which becomes a Lender pursuant to
Section 12.8; provided, however, that each Participant
shall be deemed to be a Lender for purposes of Section 4.5 of this
Agreement.

 

“Lending Office” means, with respect to each
Lender, the office specified under such Lender’ name on the signature page
hereto, or on the signature page to any Assignment and Assumption Agreement,
with respect to each Type of Loan, as the case may be, or such other office as
such Lender may designate in writing from time to time to Borrower and
Administrative Agent with respect thereto.

 

“Leverage Ratio” has the meaning as defined in Section
9.1 of this Agreement.

 

“Lien” means (i) any judgment lien or
execution, attachment, levy, distraint or similar legal process and (ii) any
mortgage, pledge, hypothecation, collateral assignment, security interest,
encumbrance, lien, charge or deposit arrangement (other than a deposit to a
Deposit Account in the ordinary course of business and not intended as
security) of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof, any agreement
to give any of the foregoing, any filing or agreement or authorization to file
a financing statement as debtor under the Uniform Commercial Code or any
similar statute (other than (x) filings for which an agreement to release such
statement has been obtained and delivered to Administrative Agent, (y) filings
improperly made against the Borrower or any of its Subsidiaries without their
consent or (z) filings to reflect ownership by a third party of property leased
or consigned to Borrower or any of its Subsidiaries under a lease or
consignment agreement which is not in the nature of a conditional sale or title
retention agreement, or any sale of receivables with recourse against the
seller or any Affiliate of the seller).

 

“Loan” means an extension of credit by a Lender
to Borrower pursuant to Article II, and “Loans” means all of such Loans by all
Lenders collectively.

 

“Loan Documents” means, collectively, this
Agreement, the Subsidiary Guarantee Agreements, the Notes, each Security
Document, the Holdco Agreement, the HSCC Agreement and all other agreements,
instruments and documents executed in connection therewith, in each case as the
same may at any time be amended, supplemented, restated or otherwise modified
and in effect.

 

“Majority Lenders” as of any date and with
respect to any Facility, means those Lenders that would constitute the Required
Lenders under, and as defined in, this Agreement assuming all outstanding
Obligations of the other Facilities under this Agreement were repaid in full.

 

21

 

“Management Fees” means for any period, all
management fees or similar compensation, excluding amounts representing
reimbursement of out-of-pocket expenses incurred in the ordinary course of
business in connection with the performance of management services.

 

“Material Adverse Effect” means a material
adverse effect on (a) the business, condition (financial or otherwise), assets,
liabilities or operations of Borrower and its Restricted Subsidiaries taken as
a whole, (b) the ability of any Credit Party to perform its respective
obligations under any Loan Document to which it is a party, or (c) the validity
or enforceability of this Agreement or any of the Security Documents or the
rights or remedies of Administrative Agent and the Lenders hereunder or
thereunder.

 

“Material Agreement” means (i) any Contractual
Obligation, the breach of which or the failure to maintain would be reasonably
likely to result in a Material Adverse Effect and (ii) any material Contractual
Obligation entered into in connection with an Acquisition.

 

“Material Subsidiary” means any Restricted
Subsidiary of Borrower, the Consolidated Total Assets of which were more than
2% of Borrower’s Consolidated Total Assets as of the end of the most recently
completed Fiscal Year of Borrower for which audited financial statements are
available; provided that, in the event the aggregate of the Consolidated
Total Assets of all Restricted Subsidiaries that do not constitute Material
Subsidiaries exceeds 5% of Borrower’s Consolidated Total Assets as of such
date, Borrower (or Administrative Agent, in the event Borrower has failed to do
so within 10 days of request therefor by Administrative Agent) shall, to the
extent necessary, designate sufficient Restricted Subsidiaries to be deemed to
be “Material Subsidiaries” to eliminate such excess, and such designated
Restricted Subsidiaries shall thereafter constitute Material Subsidiaries.  Assets of Foreign Subsidiaries shall be
converted into Dollars at the rates used for purposes of preparing the
consolidated balance sheet of Borrower included in such audited financial
statements.

 

“Maturity Date” means March 31, 2007, or such
earlier date as the outstanding Term Loans shall have been reduced to $0
pursuant to this Agreement.

 

“Maximum ICI Settlement Amount” means an amount
equal to the sum of the “B Note Completion Payment” plus the “Alta Interest
Purchase Price”, as each such term is defined in the ICI Agreement, minus cash
and Cash Equivalents held by Holdco I and Holdco II (other than the proceeds of
the Mezzanine Financing) as of the date on which any such amounts are paid to
ICI.

 

“Membership Interests” shall mean the
Membership Interests of Borrower.

 

“Mezzanine Financing” means (i) a debt offering
at Holdco II consisting of the incurrence or issuance of Indebtedness or (ii)
an equity offering at Holdco I or Holdco II consisting of the issuance of
Capital Stock.

 

“Minimum ICI Settlement Amount” means an amount
equal to the sum of the remaining “B Note Completion Payment” plus the
remaining “Alta Interest Partial Payment”, as each such term is defined in the
ICI Agreement, minus cash and Cash Equivalents held by

 

22

 

Holdco I and Holdco II (other than the proceeds of the
Mezzanine Financing) as of the date on which any such amounts are paid to ICI.

 

“Minimum Term B Prepayment” shall mean one or
more prepayments of the principal amount of outstanding Term B Loans which
individually or in the aggregate equal at least $350,000,000 made with the net
proceeds of equity or Permitted Junior Debt of Borrower.

 

“MIOA” means the Membership Interest Option
Agreement by and among Imperial Chemical Industries PLC, ICI and HSCC dated as
of November 2, 2001, as amended and restated as of December 20, 2001, as the
same may be amended in accordance with the terms of this Agreement.

 

“Moody’s” means Moody’s Investors Service, Inc.
or any successor to the rating agency business thereof.

 

“Mortgage Supplements” has the meaning assigned
to such term in Section 5.1(b)(vi).

 

“Mortgaged Property” means, collectively, all
of the properties of Borrower and the Subsidiaries of Borrower defined as
“Mortgaged Property” in each of the respective Mortgages including, without
limitation, the properties listed on Schedule 6.21(c) identified as
Mortgaged Property and any other property which becomes Mortgaged Property
pursuant to Section 7.10.

 

“Mortgages” means, collectively, (i) the
mortgage and leasehold mortgages in form and substance satisfactory to
Administrative Agent each dated as of the Closing Date or a date prior thereto
and executed by Borrower or any Restricted Subsidiary of Borrower, as
mortgagor, in favor of the Collateral Agent (or its designee) for the benefit
of the Lenders, as mortgagee, relating to the Mortgaged Property, and (ii) any
other mortgage, deed of trust or similar agreement executed by Borrower or a
Subsidiary of Borrower pursuant to which such Person shall have granted a
mortgage to Administrative Agent (or its designee) for the benefit of the
Lenders, as each such agreement may at any time be amended, supplemented,
restated or otherwise modified in accordance with the terms thereof and in
effect.

 

“Multiemployer Plan” means any plan described
in Section 4001(a)(3) of ERISA to which contributions are or have within the
preceding six years, been made, or are or were, within the preceding six years,
required to be made, by Borrower or any of its ERISA Affiliates or any
Subsidiary of Borrower or ERISA Affiliates to such Subsidiary.

 

“Net Interest Expense” means, for Borrower and
its Restricted Subsidiaries with respect to any period, Interest Expense net of
interest income on Cash and Cash Equivalents, net of amounts received under
Interest Rate Agreements, to the extent permitted hereunder.

 

“Net Offering Proceeds” means the proceeds
received from the issuance of any Capital Stock (other than Capital Stock
issued in connection with the exercise of stock options granted pursuant to the
stock option plan described in Schedule 6.12 hereof) or from any
contribution to capital with respect to existing Capital Stock net of the
actual liabilities for reasonably anticipated cash taxes in connection with
such issuance or incurrence, if any, any

 

23

 

underwriting, brokerage and other customary selling
commissions incurred in connection with such issuance or incurrence, and
reasonable legal, advisory and other fees and expenses, including title and
recording tax expenses, if any, incurred in connection with such issuance or
incurrence.

 

“Net Sale Proceeds” means, with respect to any
Asset Disposition the aggregate cash payments received by Borrower, HSCC, HSCHC
or any Restricted Subsidiary from such Asset Disposition (including, without
limitation, cash received by way of deferred payment pursuant to a note
receivable, conversion of non-cash consideration, cash payments in respect of
purchase price adjustments or otherwise, but only as and when such cash is
received) minus the direct costs and expenses incurred in connection
therewith (including in the case of any Asset Disposition, the payment of the
outstanding principal amount of, premium, if any, and interest on any
Indebtedness (other than hereunder) required to be repaid as a result of such
Asset Disposition), and any provision for taxes in respect thereof made in
accordance with GAAP provided that such expenses shall only include
taxes to the extent that taxes are payable in cash in the current year or the
following year as a result of such Asset Disposition.  Any proceeds received in a currency other than Dollars shall, for
purposes of the calculation of the amount of Net Sale Proceeds, be in an amount
equal to the Dollar Equivalent thereof as of the date of receipt thereof by
Borrower or any Restricted Subsidiary of Borrower.

 

“Notice of Conversion or Continuation” or “Notice of Borrowing” has the meaning
assigned to that term in Section 2.3(b) of this Agreement.

 

“Notice Office” means the office of the
Administrative Agent located at 31 West 52nd Street, New York, NY 10022 or such
other office as the Administrative Agent may designate to Borrower and the
Lenders from time to time.

 

“Obligations” means all liabilities and
obligations of Borrower and any Subsidiary of Borrower now or hereafter arising
under this Agreement and all of the other Loan Documents, whether for
principal, interest, fees, expenses, indemnities or otherwise, and whether
primary, secondary, direct, indirect, contingent, fixed or otherwise (including
obligations of performance).

 

“Operating Lease” of any Person, means any
lease (including, without limitation, leases which may be terminated by the
lessee at any time) of any property (whether real, personal or mixed) by such
Person, as lessee, which is not a Capitalized Lease.

 

“Organizational Documents” means, with respect
to any Person, such Person’s articles or certificate of incorporation, bylaws,
partnership agreement, limited liability company agreement, joint venture
agreement or other similar governing documents and any document setting forth
the designation, amount and/or relative rights, limitations and preferences of
any class or series of such Person’s Capital Stock.

 

“Original Credit Agreement” has the meaning set forth in the recitals to
this Agreement.

 

“Original Credit
Forbearance Extension Agreement” means the provisions of the agreements set
forth on Exhibit 5.2(a) hereto.

 

24

 

“Original Loans” has the meaning set forth in
the recitals to this Agreement.

 

“Original Term Loan
Agreement” has the meaning set forth in the recitals to this Agreement.

 

“Original Term Loan Forbearance Extension Agreement”
means the provisions of the agreements set forth on Exhibit 5.2(b)
hereto.

 

“Participants” has the meaning assigned to that
term in Section 12.8(b) of this Agreement.

 

“Payment Office” means, with respect to
Administrative Agent, 31 West 52nd Street, New York, NY 10022 or such other
address as Administrative Agent may from time to time specify in accordance
with Section 12.3 of this Agreement.

 

“PBGC” means the Pension Benefit Guaranty
Corporation created by Section 4002(a) of ERISA.

 

“Permitted Junior Debt” means Indebtedness
which is structured so as to be junior to the obligations under the Senior
Secured Credit Facilities (including the Obligations) in that it is either
(i) unsecured and subordinated to the Obligations, (ii) unsecured or (iii)
secured with Liens that are expressly subordinated to the Liens securing the
Obligations, in each case on terms and conditions and in form and substance
satisfactory to Administrative Agent; provided, that such terms and
conditions shall not be more restrictive to Borrower than those set forth
herein and shall be at or below a market interest rate for comparable
instruments and, in no event shall any scheduled principal payments be required
to be made prior to the Maturity Date.

 

“Permitted Liens” has the meaning assigned to
that term in Section 8.1 of this Agreement.

 

“Permitted Mezzanine
Proceeds” means (a) net cash proceeds of Mezzanine Financing in an
aggregate amount not less than the Minimum ICI Settlement Amount or more than
the Maximum ICI Settlement Amount, in each case, to the extent that such net
cash proceeds are used to satisfy the options or obligations of Holdco II under
the ICI Agreement in one or more transactions where on or before the date of
receipt of such cash proceeds by Holdco I or Holdco II, (i) ICI shall have
released (or caused to be released) 210 membership units of HIH as collateral
for the obligations of HSCC under the MIOA and such released units shall have
been pledged to the Collateral Agent in accordance with Section 7.10(f)
hereof such that an aggregate of not less than 51% of the equity interests of
HIH shall have been pledged to the Lenders as Collateral and (ii) the
“Completion Payment” (as defined in the MIOA) shall have been reduced by the
Completion Payment Deduction (as defined in the ICI Agreement); provided,
however, that if such net cash proceeds equal or exceed the Maximum ICI
Settlement Amount, (y) the obligations of HSCC under the MIOA (including the
obligation to purchase additional equity interests in HIH and the related
pledge of 300 membership units of HIH as collateral) shall have been terminated
and (z) ICI shall have released (or caused to be released) such 300 membership
units of HIH as collateral and such released units shall have been pledged to
the Collateral Agent in accordance with Section 7.10(f) hereof, such
that an aggregate of not

 

25

 

less than 60% of the equity
interests of HIH shall have been pledged to the Lenders as Collateral, (b)
Reinvestment Mezzanine Proceeds and (c) Permitted Mezzanine Refinancing
Proceeds.

 

“Permitted Mezzanine Refinancing Proceeds”
means net proceeds of a Mezzanine Financing to the extent that such proceeds
are used to refinance, repay or purchase Indebtedness (and instruments which
were issued with such Indebtedness) the proceeds of which were used solely (i)
to make a payment to ICI under or relating to the ICI Agreement or (ii) for the
purposes described in the definition of “Reinvestment Mezzanine Proceeds”, so
long as (x) at the time of such Mezzanine Financing ICI shall have released (or
caused to be released) 210 membership units of HIH pledged as collateral for
the obligations of HSCC under the MIOA and such released units shall have been
pledged to the Collateral Agent in accordance with Section 7.10(f) hereof such
that an aggregate of not less than 51% of the equity interests of HIH shall have
been pledged to the Lenders as Collateral and (y) the “Completion Payment” (as
defined in the MIOA) shall have been reduced by the Completion Payment
Deduction (as defined in the ICI Agreement); provided that if the Mezzanine
Financing constitutes Indebtedness, the net proceeds of such Mezzanine
Financing shall not exceed the principal amount of Indebtedness which has been
refinanced, repaid or purchased thereby.

 

“Permitted Polymers Notes Repurchase Amount”
has the meaning assigned to that term in Section 4.2(e).

 

“Permitted Transfer” means from and after the
date that the Term B Loan has been pre-paid in full, the sale or transfer by,
GOF or the Huntsman Group of up to 5% of the Capital Stock of Holdings I held
by such party as of the Closing Date and thereafter, upon the pledge by HSCC of
an additional 30% of Huntsman International Holdings, LLC pursuant to Section
7.10(f) hereof, the sale or transfer by GOF or the Huntsman Group of up to
15% in the aggregate of the Capital Stock of Holdings I held by each such party
as of the Closing Date.

 

“Permitted Turnaround Capital Expenditures”
means capital expenditures incurred on or prior to December 31, 2003 not
exceeding the amount specified on Schedule 1.1 for the specific
turnaround project identified on such Schedule.

 

“Person” means an individual or a corporation,
partnership, limited liability company, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind.

 

“PIK B Note” has the meaning assigned to such
term in Section 3.2(b) of this Agreement.

 

“Plan” means any plan described in Section
4021(a) of ERISA and not excluded pursuant to Section 4021(b) thereof, which is
or has, within the preceding six years, been established or maintained, or to
which contributions are or have, within the preceding six years, been made, by
Borrower or any of its ERISA Affiliates or any Subsidiary of Borrower or any
ERISA Affiliates of such Subsidiary, but not including any Multiemployer Plan.

 

“Plan Administrator” has the meaning assigned
to the term “administrator” in Section 3(16)(A) of ERISA.

 

26

 

“Plan of
Reorganization” means that certain Debtors’ Joint Prepackaged Plan of
Reorganization dated as of July 15, 2002, as modified, supplemented or amended.

 

“Plan Sponsor” has the meaning assigned to the
term “plan sponsor” in Section 3(16)(B) of ERISA.

 

“Pledge Agreement” means, once executed and
delivered, the pledge agreement delivered pursuant to Section 5.1(b)(v).

 

“Pledged Intercompany Notes” means,
collectively, the “Pledged Intercompany Notes” as defined in the Security
Agreement.

 

“Pledged Securities” means, collectively,
“Pledged Securities” as defined in the Security Agreement or any other pledged
securities under any Security Document.

 

“Polymers” means Huntsman Polymers Corporation,
a Delaware corporation, formerly known as Rexene Corporation.

 

“Polymers Senior Notes” means those certain
11.75% Senior Notes due 2004 of Polymers issued pursuant to the Amended and
Restated Polymers Indenture.

 

“Preferred Stock” means preferred Capital Stock
of Borrower which (i) is not convertible or exchangeable into Indebtedness,
(ii) may not, upon the occurrence of any event or circumstance or otherwise by
its terms, be required to be redeemed by Borrower or be redeemable at the
option of the holder thereof, in each case, at any time prior to the first
anniversary of the Term B Loan Maturity Date and (iii) does not contain other
terms (other than customary market terms for preferred stock of similar
companies) which could reasonably be expected to adversely affect the interests
of the Lenders.

 

“Priority Collateral Agent” means the
Collateral Agent (as defined in the Priority Credit Agreement).

 

“Priority Credit Agreement” means that certain
Revolving Credit Agreement entered into on the Closing Date by and among
Borrower, Deutsche Bank Trust Company Americas, as administrative agent, and
the other financial institutions and other parties thereto, together with any
agreement or agreements from time to time executed by the Borrower to evidence
any refinancings or successive refinancings of all or any part of the Priority
Loans, together with any amendments, modifications or supplements to, or
restatements of, any of the foregoing providing on the Closing Date for
commitments of the Lenders thereunder to make Priority Loans in an aggregate
principal amount of not more than $275,000,000 on terms and conditions
substantially as set forth on Exhibit 1.1-a in conformance with the
terms hereof.

 

“Priority Loan Documents” means “Loan
Documents” as that term is defined in the Priority Credit Agreement.

 

“Priority Loans” means the loans and extensions
of credit made or to be made pursuant to the Priority Credit Agreement.

 

27

 

“Pro Rata Share” means, when used with
reference to any Lender and any Facility, and any described aggregate or total
amount, an amount equal to the result obtained by multiplying such described
aggregate or total amount by a fraction the numerator of which shall be such
Lender’s Loans under such Facility and the denominator of which shall be the
aggregate Loans outstanding under such Facility for all Lenders, and when used
with reference to any Lender’s percentage interest, such fraction.

 

“Receivables Facility Attributed Indebtedness”
at any time shall mean the aggregate net outstanding amount theretofore paid in
respect of the accounts receivable sold or transferred as part of a bulk sale
or financing of accounts receivable by it.

 

“Recovery Event” means the receipt by Borrower
(or any of its Restricted Subsidiaries) of any insurance or condemnation
proceeds payable (i) by reason of any theft, physical destruction or damage or
any other similar event with respect to any properties or assets of Borrower or
any of its Restricted Subsidiaries, (ii) by reason of any condemnation, taking,
seizing or similar event with respect to any properties or assets of Borrower
or any of its Restricted Subsidiaries and (iii) under any policy of insurance
required to be maintained under Section 7.8;  provided, however,
that in no event shall payments made under business interruption insurance
constitute a Recovery Event.

 

“Recovery Event Escrow Account” has the meaning
ascribed to such term in Section 4.2(h).

 

“Regulation D” means Regulation D of the Board
as from time to time in effect and any successor to all or a portion thereof
establishing reserve requirements.

 

“Reinvestment Mezzanine
Proceeds” means net cash proceeds of a Mezzanine Financing which (i) are in
a net aggregate amount not in excess of $25 million, (ii) are reinvested by
Holdco I or Holdco II, directly or indirectly into HSCC or Huntsman
International Holdings in a transaction where such investment is pledged to the
Administrative Agent as Collateral for the Lenders in a manner satisfactory to
the Administrative Agent and (iii) on or before the date of receipt by Holdco I
or Holdco II of such Proceeds, Holdco I or Holdco II has received Permitted
Mezzanine proceeds in an amount equal to the Maximum ICI Settlement Amount and
the Obligations of HSCC under the MIOA shall have been terminated.

 

“Related Fund” means, with respect to any
Lender which is a fund, any other fund that invests in bank loans and is
administered or managed by the same investment advisor of such Lender or by an
Affiliate of such investment advisor.

 

“Release” means release, spill, emission,
leaking, pumping, pouring, emptying, dumping, injection, deposit, disposal,
discharge, dispersal, escape, leaching, or migration into the indoor or outdoor
environment or into or out of any property of Borrower or its Subsidiaries, or
at any other location to which Borrower or any Subsidiary has transported or
arranged for the transportation of any Contaminant, including the movement of
Contaminants through or in the air, soil, surface water, groundwater or
property of Borrower or its Subsidiaries or at any other location, including
any location to which Borrower or any Subsidiary has transported or arranged
for the transportation of any Contaminant.

 

28

 

“Remedial Action” means actions required to (i)
clean up, remove, treat or in any other way address Contaminants in the indoor
or outdoor environment; (ii) prevent or minimize the Release or substantial
threat of a material Release of Contaminants so they do not migrate or endanger
or threaten to endanger public health or welfare or the indoor or outdoor
environment; or (iii) perform pre-remedial or post-remedial studies and
investigations and post-remedial monitoring and care.

 

“Reportable Event” means a “reportable event”
described in Section 4043(b) of ERISA or in the regulations thereunder with
respect to a Plan other than a reportable event for which the 30-day notice
requirement to the PBGC has been waived, any event requiring disclosure under
Section 4063(a) or 4062(e) of ERISA, receipt of a notice of withdrawal
liability with respect to a Multiemployer Plan pursuant to Section 4202 of
ERISA or receipt of a notice of reorganization or insolvency with respect to a
Multiemployer Plan pursuant to Section 4242 or 4245 of ERISA.

 

“Required Lenders” means as of any date of
determination thereof Lenders having more than 50% of the sum of the unpaid
principal amount of the Loans at such date.

 

“Requirement of Law” means, as to any Person,
any law (including common law), treaty, rule or regulation or judgment, decree,
determination or award of an arbitrator or a court or other Governmental
Authority, including without limitation, any Environmental Law, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.

 

“Responsible Financial Officer” means the Chief
Financial Officer, principal accounting officer, a financial vice president,
Controller, Treasurer or Assistant Treasurer of Borrower.

 

“Responsible Officer” means any of the Chairman
of the Board of Directors, the President, any Executive Vice President, Senior
Vice President, the Controller, Chief Financial Officer, Chief Restructuring
Officer, any Vice President, the Treasurer, or the Secretary or any other
similar officer or position.

 

“Restricted Domestic Subsidiary” means any
Restricted Subsidiary which is also a Domestic Subsidiary.

 

“Restricted Subsidiary” means any Subsidiary of
Borrower that is not an Unrestricted Subsidiary.

 

“Restricted Subsidiary Adjusted Earnings”
means, for any applicable period, Consolidated Net Income or Consolidated Net
Loss of Borrower and its Restricted Subsidiaries plus, to the extent not
included therein, and to the extent paid out of retained or current earnings
(and not constituting a return of capital), the amount of cash dividends or
distributions paid to Borrower or a Restricted Subsidiary from any Unrestricted
Subsidiary or from any Person which is not a Subsidiary during such period; provided
that in computing Consolidated Net Income or Consolidated Net Loss for purposes
of this definition, extraordinary gains or losses shall be excluded.

 

29

 

“Restructuring Charges” means (a) non-recurring
non-cash restructuring charges pertaining to the Transactions incurred on or
prior to the Closing Date, (b) non-recurring cash restructuring charges
pertaining to the Transactions incurred on or prior to the Closing Date in an
aggregate amount not to exceed $20,000,000, and (c) non-recurring restructuring
charges incurred after the Closing Date pertaining to the contemplated restructurings
described in Schedule 1.1(a) in an aggregate amount not to exceed the
amounts set forth on Schedule 1.1(a) for such restructuring.

 

“S&P” means Standard & Poor’s Rating
Services, a division of The McGraw-Hill Companies, Inc., or any successor to
the rating agency business thereof.

 

“Sale and Leaseback Transaction” means any
arrangement, directly or indirectly, whereby a seller or transferor shall sell
or otherwise transfer any real or personal property and then or thereafter
lease, or repurchase under an extended purchase contract, conditional sales or
other title retention agreement, the same or similar property; provided,
however, that a sale and leaseback by the Borrower or any Restricted
Subsidiary of railcars acquired after the date hereof shall not constitute a
“Sale and Leaseback Transaction” for purposes of this Agreement.

 

“Scheduled Term A Loans Principal Payments”
means, with respect to the principal payments on the Term A Loans for each date
set forth below, the Dollar amount set forth opposite thereto, as reduced from
time to time pursuant to Sections 4.1 and 4.2 of this Agreement:

 

	
  Date

  	
   

  	
  Scheduled Term A

  Loans Principal Payment

  	
   

  
	
  September 30, 2003

  	
   

  	
  $7.5
  million

  	
   

  
	
  December 31, 2003

  	
   

  	
  $7.5
  million

  	
   

  
	
  March 31, 2004

  	
   

  	
  $12.5
  million

  	
   

  
	
  June 30, 2004

  	
   

  	
  $12.5
  million

  	
   

  
	
  September 30, 2004

  	
   

  	
  $15.0
  million

  	
   

  
	
  December 31, 2004

  	
   

  	
  $15.0
  million

  	
   

  
	
  March 31, 2005

  	
   

  	
  $17.5
  million

  	
   

  
	
  June 30, 2005

  	
   

  	
  $17.5
  million

  	
   

  
	
  September 30, 2005

  	
   

  	
  $25.0
  million

  	
   

  
	
  December 31, 2005

  	
   

  	
  $25.0
  million

  	
   

  
	
  March 31, 2006

  	
   

  	
  $37.5
  million

  	
   

  
	
  June 30, 2006

  	
   

  	
  $37.5
  million

  	
   

  
	
  September 30, 2006

  	
   

  	
  $37.5
  million

  	
   

  
	
  December 31, 2006

  	
   

  	
  $37.5
  million

  	
   

  
	
  March 31, 2007

  	
   

  	
  $633,067,490.87,
  or the then remaining principal balance

  	
   

  

 

“Scheduled Term Loan Principal Payments” means
Scheduled Term A Loan Principal Payments.

 

“SEC” means the Securities and Exchange
Commission or any successor thereto.

 

30

 

“Section 4.5(d)(ii) Certificate” has the
meaning ascribed to such term in Section 4.5(d)(ii) of this Agreement.

 

“Secured Party” has the meaning assigned to
that term in the Security Agreement.

 

“Securities” means any stock, shares, voting
trust certificates, bonds, debentures, options, warrants, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as “securities” or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.

 

“Security Agreement” has the meaning assigned
to that term in Section 5.1(b)(ii) of this Agreement.

 

“Security Documents” means, collectively the
Pledged Intercompany Notes, the Security Agreement, the Subsidiary Guarantee
Agreements, the Mortgages and all other agreements, assignments, security
agreements, instruments and documents executed in connection therewith,
including, without limitation, all pledge agreements, charges and other instruments
and documents executed in connection with the granting of a security interest
to the Collateral Agent in the Capital Stock of any Foreign Subsidiary, in each
case as the same may at any time be amended, supplemented, restated or
otherwise modified and in effect.  For
purposes of this Agreement, “Security Documents” shall also include all
guaranties, security agreements, mortgages, pledge agreements, collateral
assignments, subordination agreements and other collateral documents in the
nature of any thereof entered into by Borrower or any Subsidiary of Borrower
after the date of this Agreement in favor of the Collateral Agent for the
benefit of the Lenders in satisfaction of the requirements of this Agreement.

 

“Senior Secured Credit Facilities” means the
Priority Credit Agreement and this Agreement.

 

“Senior Subordinated Notes” means those certain
(i) 9-1/2% Senior Subordinated Notes of the Borrower due 2007 and Senior
Subordinated Floating Rate Notes of the Borrower due 2007, each issued pursuant
to the applicable Amended and Restated Senior Notes Indenture, and (ii) 9-1/2%
Senior Subordinated Notes of the Borrower due 2007 issued pursuant to the
Amended and Restated Senior Notes Indentures, in each case, as outstanding
after giving effect to the Transactions.

 

“Subsidiary” of any Person means any
corporation, partnership (limited or general), limited liability company, trust
or other entity of which a majority of the stock (or equivalent ownership or
controlling interest) having voting power to elect a majority of the board of
directors (if a corporation) or to select the trustee or equivalent controlling
interest shall, at the time such reference becomes operative, be directly or
indirectly owned or controlled by such Person or one or more of the other
subsidiaries of such Person or any combination thereof.  Unless otherwise qualified, all references
to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a
Subsidiary or Subsidiaries of Borrower.

 

“Subsidiary Guarantee Agreements” has the
meaning assigned to that term in Section 5.1(b)(iii) of this Agreement.

 

31

 

“Subsidiary Guarantor” means any Subsidiary of
Borrower that becomes a party to a Subsidiary Guarantee Agreement.

 

“Supermajority Lenders” means as of any date of
determination thereof, Lenders holding 75% or more of the sum of the unpaid
principal amount of the Loans as of such date.

 

“Tax Sharing Agreement” means that certain tax
sharing agreement dated as of the date hereof by and between Borrower and
Holdco II, initially substantially in the form of Exhibit 5.1(g),
as amended or otherwise modified from time to time.

 

“Taxes” has the meaning assigned to that term
in Section 4.5(a)(v) of this Agreement.

 

“Term A Lender” means any Lender which is owed
a Term A Loan (or a portion thereof).

 

“Term A Loan” and “Term A Loans” have
the meanings assigned to those terms in Section 2.1(a) of this
Agreement.

 

“Term A Loan Maturity Date” means March 31,
2007, or such earlier date as the outstanding Term A Loans are required to be
reduced to $0 pursuant to this Agreement.

 

“Term B Lender” means any Lender which is owed
a Term B Loan (or a portion thereof).

 

“Term B Loan” and “Term B Loans” have
the meanings assigned to those terms in Section 2.1(a) of this
Agreement.

 

“Term B Loan Maturity Date” means March 31,
2007, or such earlier date as the outstanding Term B Loans are required to be
reduced to $0 pursuant to this Agreement.

 

“Term B Note” means a note issued in accordance
with Section 2.2 of this Agreement to a Term B Lender, evidencing a
Lender’s Term B Loan and shall include any PIK B Note.

 

“Term Lenders” means those Lenders providing
Term Loans hereunder and shall include any Person which becomes a Term Lender
as contemplated by Section 12.8 of this Agreement.

 

“Term Loans” means a Term A Loan or a Term B
Loan, and “Term Loans” means all of such Term Loans by all Lenders,
collectively.

 

“Term Note” and “Term Notes” have the
meanings assigned to those terms in Section 2.2 of this Agreement.

 

“Tranche” means a group of Loans of a single
Type as in effect on the Closing Date or thereafter converted or continued by
the Lenders on a single date and in the case of Loans other than Base Rate
Loans, as to which a single Interest Period is in effect.

 

32

 

“Transaction” shall mean and include the
transactions contemplated hereby.

 

“Transferee” has the meaning assigned to that
term in Section 12.8(d) of this Agreement.

 

“Type” means as to any Loan its nature as a
Base Rate Loan or a Eurodollar Loan.

 

“UCC” means the Uniform Commercial Code as in
effect from time to time in the relevant jurisdiction.

 

“Unmatured Event of Default” means an event,
act or occurrence which with the giving of notice or the lapse of time (or
both) would become an Event of Default.

 

“Unrestricted Subsidiary” means any Subsidiary
listed on Schedule 1.1(c) of this Agreement and any Subsidiary thereof,
any Subsidiary of Huntsman International Holdings, LLC, or any Subsidiary of Borrower
that at the time of formation shall be designated an Unrestricted Subsidiary in
an officer’s certificate signed by two Responsible Financial Officers of the
Borrower and into which, within ten (10) Business Days after such formation, an
existing Unrestricted Subsidiary is merged or combined; provided, however,
that, for purposes of this Agreement, HCPH Holdings Pty Limited and Huntsman
Chemical Australia Unit Trust shall be deemed to be Unrestricted Subsidiaries
of the Borrower.

 

“Unused Revolver Availability” means (i) the
lesser of (x) the sum of the Commitments (as defined in the Priority Credit
Agreement) and (y) the then current Borrowing Base (as defined in the Priority
Credit Agreement) less (ii) the then outstanding balance of the Loans
(as defined in the Priority Credit Agreement) less (iii) the LC
Obligations (as defined in the Priority Credit Agreement).

 

“USA” means the United States of America.

 

“Weighted Average Life to Maturity” means, when
applied to any Indebtedness at any date, the number of years obtained by
dividing (a) the then outstanding principal amount of such Indebtedness into
(b) the sum of the products obtained by multiplying (x) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments
of principal, including payment at final maturity, in respect thereof by (y)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment.

 

“Wholly-Owned Direct Subsidiary” means with respect
to any Person, any Subsidiary of such Person, all of the outstanding shares of
Capital Stock of which (other than qualifying shares required to be owned by
directors, or similar de minimis issuances of Capital Stock to comply with
Requirements of Law) are at the time owned directly by such Person.

 

“Wholly-Owned Domestic Subsidiary” means any
Wholly-Owned Subsidiary which is also a Domestic Subsidiary.

 

“Wholly-Owned Subsidiary” means, with respect
to any Person, any Subsidiary of such Person, all of the outstanding shares of
Capital Stock of which (other than qualifying shares

 

33

 

required to be owned by directors, or similar de minimis
issuances of Capital Stock to comply with Requirements of Law) are at the time
owned directly or indirectly by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person; provided, however, that for purposes
of this Agreement, Nitroil Vegyipari Termeló-Fejlesztró Résvénytátság and its
Wholly-Owned Subsidiaries shall be deemed to be “Wholly-Owned Subsidiaries” of
Borrower.

 

“Written” or “in writing” means any form
of written communication or a communication by means of telecopier device, or
authenticated telex, telegraph or cable.

 

The foregoing definitions shall be equally applicable
to both the singular and plural forms of the defined terms.  In the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each mean “to but excluding.”  The words “herein,” “hereof” and words of
similar import as used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision in this Agreement.  References to “Articles”, “Sections”,
“paragraphs”, “Exhibits” and “Schedules” in this Agreement shall refer to
Articles, Sections, paragraphs, Exhibits and Schedules of this Agreement unless
otherwise expressly provided; references to Persons include their respective
permitted successors and assigns or, in the case of governmental Persons,
Persons succeeding to the relevant functions of such persons; and all
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations.

 

1.2                               Accounting Terms; Financial
Statements.

 

(a)                                  All accounting terms used herein but not expressly
defined in this Agreement shall have the respective meanings given to them in
accordance with GAAP as applied in effect on the date hereof in the USA.  Except as otherwise expressly provided
herein (including without limitation, any modification to the terms hereof
pursuant to Section 8.14), all computations and determinations for
purposes of determining compliance with the financial requirements of this
Agreement shall be made in accordance with GAAP in effect in the USA on the
date hereof and on a basis consistent with the presentation of the financial
statements delivered pursuant to, or otherwise referred to in, Section 6.5.  Notwithstanding the foregoing sentence, the
financial statements required to be delivered pursuant to Section 7.1
shall be prepared in accordance with GAAP in the USA as in effect on the
respective dates of their preparation. 
For purposes of the financial terms set forth herein, whenever reference
is made to a determination which is required to be made on a consolidated basis
(whether in accordance with GAAP or otherwise) for Borrower and its Restricted
Subsidiaries or for Borrower and its Subsidiaries (other than Unrestricted
Subsidiaries), such determination shall be made as if each Unrestricted
Subsidiary were wholly-owned by a Person not an Affiliate of Borrower.

 

(b)                                  For purposes of computing the ratios in the financial
covenants in Sections 9.2 and 9.3 for any portion of any period prior to
the Closing Date, (i) Cash Interest Expense shall be calculated on a pro forma
basis giving effect to the Transactions occurring on the Closing Date as if
such events occurred on the first day of the applicable four fiscal quarter
period with interest rates in effect as of the Closing Date and (ii)  fourth quarter 2001 EBITDA and Consolidated
Capital Expenditures shall be the respective amounts set forth on or derived

 

34

 

from a
Compliance Certificate delivered under the Original Credit Agreement, giving
effect to the Forbearance Agreements.

 

ARTICLE II

 

AMOUNT AND
TERMS OF CREDIT

 

2.1                               The Term Loans.

 

(a)                                  Term Loan A; Term Loan B.  Each Existing Lender, severally and for
itself alone, hereby agrees, on the terms and subject to the conditions
hereinafter set forth and in reliance upon the representations and warranties
set forth herein and in the other Loan Documents, that, effective on the
Closing Date, its Original Loans are hereby converted into (i) term loans in an
amount equal to such Existing Lender’s Initial Pro-Rata Share of the aggregate
outstanding Term A Loans on the Closing Date (each such loan, a “Term A Loan”
and collectively, the “Term A Loans”) and (ii) term loans in an amount
equal to such Existing Lender’s Initial Pro-Rata Share of the aggregate
outstanding Term B Loans on the Closing Date (each such loan, a “Term B Loan”
and collectively, the “Term B Loans”). 
No amount of a Term Loan which is repaid or prepaid by Borrower may be
reborrowed hereunder.  If this Agreement
has become effective pursuant to Section 12.20(b), obligations that are
currently due under any of the Borrower’s or any Restricted Subsidiary’s
Interest Rate Agreements that have been terminated (and are not reinstated or
otherwise effective) may, at the Borrower’s option, be converted into Term A
Loans and Term B Loans.  For the purpose
of determining the amounts of such Term A Loans and Term B Loans: (a) the
provider(s) of such Interest Rate Agreements shall be treated as Existing Lenders
for purposes of the first sentence of this Section 2.1(a) and as Lenders
hereunder, and (b) the obligations under such Interest Rate Agreements shall be
Original Loans for purposes of the definition of “Initial Pro-Rata Share.”  On or prior to the Closing Date,
Administrative Agent shall advise each Lender of such Lender’s Initial Pro-Rata
Share of the outstanding Term A Loans and Term B Loans.

 

(b)                                  Existing L/C Obligations.  From and after the Effective Date, no Lender
shall have any obligation hereunder with respect to Existing L/C
Obligations,  it being understood that
the Existing L/C Obligations shall be on the Closing Date deemed outstanding
pursuant to, and shall constitute “Letters of Credit” for all purposes of, the
Priority Credit Agreement.

 

(c)                                  Term Loans.  The Term Loans shall initially be Base Rate Loans or Eurodollar
Rate Loans to the extent agreed to by the Administrative Agent and the Lenders
but thereafter may from time to time be (i) Eurodollar Loans, (ii) Base Rate
Loans, or (iii) a combination thereof, as determined by Borrower and notified
to Administrative Agent in accordance with Section 2.3; provided,
however, that (i) at no time shall there be outstanding more than
ten (10) Interest Periods with respect to Tranches of Eurodollar Loans for each
of the Term A Loans and Term B Loans and (ii) an amount of Term Loans
satisfactory to Administrative Agent shall be maintained as Base Rate Loans for
a time period satisfactory to Administrative Agent of up to 10 Business Days
following the Closing Date.

 

35

 

2.2                               Term Notes.  The Loans of each Lender shall, if requested
by such Lender, be evidenced by a promissory note (each, a “Term Note” and,
collectively, the “Term Notes”) duly executed and delivered by Borrower,
substantially in the form of Exhibit 2.2(a) for the Term Note evidencing the
Term A Loan or in the form of Exhibit 2.2(b) for the Term Note evidencing the
Term B Loan,  with appropriate insertions
as to type of Term Loan, payee, date and principal amount, payable to the order
of such Lender.  Each Lender is hereby
authorized to record the initial type and amount of each portion of such Loan,
each continuation thereof, each conversion of all or a portion thereof to
another Type, the date and amount of each payment or prepayment of principal
thereof and, in the case of Eurodollar Loans, the length of each Interest
Period with respect thereto, on the schedule annexed to and constituting a part
of its Term Note (or otherwise on the records of such Lender), and any such
recordation shall (in the absence of manifest error) constitute prima facie
evidence of the accuracy of the information so recorded; provided, however,
that the failure of a Lender to make any such recordation (or any error in such
recordation) on its records or on its Term Note shall not affect the
obligations of Borrower thereunder or under this Agreement.  Each Term Note shall (x) be dated the
Closing Date, (y) be stated to mature on the Maturity Date and (z) provide for
the payment of interest in accordance with Section 3.1 and the payment of
principal on the Maturity Date.

 

2.3                               Conversion and Continuation
Elections for Eurodollar Loans and Base Rate Loans.

 

(a)                                  Borrower may upon notice to Administrative Agent in
accordance with Section 2.3(b):

 

(i)                                    elect to convert on any Business Day, any Base Rate
Loans (or any part thereof in an aggregate amount not less than Ten Million
Dollars ($10,000,000)) into Eurodollar Loans; or

 

(ii)                                elect to convert on a Conversion Date any Eurodollar Loans (or any part
thereof in an aggregate amount not less than Ten Million Dollars ($10,000,000))
into Base Rate Loans; or

 

(iii)                            elect
to continue on a Continuation Date any Eurodollar Loans (or any part thereof in
an aggregate amount not less than Ten Million Dollars ($10,000,000));

 

provided, that any conversion or continuation of Term A Loans
shall be to other Term A Loans and any conversion or continuation of Term B
Loans shall be to other Term B Loans.

 

(b)                                  If Borrower desires to convert or continue any
Eurodollar Loan or Base Rate Loan pursuant to Section 2.3(a), it shall
irrevocably request a conversion or continuation (if by telephone, to be
confirmed promptly in writing) in a Notice of Conversion or Continuation in the
form of Exhibit 2.3(b) (a “Notice of Conversion or Continuation”)
to be received by Administrative Agent not later than 12:00 Noon (New York City
time) at least (i) three Business Days in advance of the Conversion Date or
Continuation Date, if the Loans are to be converted into or continued as
Eurodollar Loans; and (ii) on the same Business Day as the Conversion Date, if
the Loans are to be converted into Base Rate Loans, specifying:

 

36

 

(A)                               the proposed Conversion Date or
Continuation Date;

 

(B)                               the aggregate amount of
Eurodollar Loans or Base Rate Loans to be converted or continued;

 

(C)                               the nature of the proposed
conversion or continuation;

 

(D)                               the duration of the requested
Interest Period, if the Loans are to be converted into or continued as
Eurodollar Loans; and

 

(E)                                 whether
such Loans are a part of the Term A Loans or the Term B Loans.

 

(c)                                  If prior to the time set forth in Section 2.3(b),
(i) Borrower has failed to give a timely Notice of Conversion or Continuation
with respect to a Eurodollar Loan, or (ii) Borrower has failed to select a new
Interest Period to be applicable to a Eurodollar Loan, Borrower shall be deemed
to have elected to continue such loan as a Eurodollar Loan with an Interest
Period of one month.

 

(d)                                  Upon receipt of a Notice of Conversion or
Continuation, Administrative Agent will promptly notify each applicable Lender
thereof, or, if no timely notice is provided, Administrative Agent will
promptly notify each applicable Lender of the details of any automatic
conversion or continuation.  Each
conversion or continuation of Term Loans shall be allocated among Term Loans of
the Term Lenders, in accordance with their Pro Rata Shares.

 

(e)                                  Notwithstanding the foregoing, Borrower shall not be
entitled to specify or elect in any Notice of Borrowing or Notice of Conversion
or Continuation that any Loans shall be or become Eurodollar Loans if an Event
of Default shall have occurred and be continuing unless the Required Lenders
shall have notified Administrative Agent that additional Eurodollar Loans shall
be made available while such Event of Default is continuing.  If an Event of Default shall occur then,
unless Administrative Agent shall receive such notice from the Required Lenders
or all Events of Default have been cured or waived, each outstanding Eurodollar
Loan shall be converted to a Base Rate Loan on the last day of its Interest
Period.  The foregoing is without
prejudice to the other rights and remedies available hereunder upon an Event of
Default.

 

ARTICLE III

 

INTEREST
AND FEES

 

3.1                               Interest.

 

(a)                                  Rate of Interest.  Subject to Section 3.1(e), each Term
Loan shall bear interest on the outstanding principal amount thereof from the
date when made until it becomes due or is prepaid in full at a rate per annum equal
to (i) in the case of Base Rate Loans, the Base Rate plus the Applicable
Base Rate Margin or (ii) in the case of Eurodollar Loans, the Eurodollar Rate plus
the Applicable Eurodollar Margin.

 

(b)                                  Payment of Interest.  Interest on each Loan shall be payable in
arrears on each Interest Payment Date; provided, however, that
interest accruing pursuant to Section 3.1(d)

 

37

 

shall be
payable from time to time on demand. 
Interest shall also be payable on the date of any prepayment of the Term
Loans for the portion of the Loans so prepaid and upon payment (including
prepayment) in full of all of the Loans.

 

(c)                                  Notification of Rate.  Administrative Agent, upon determining the
interest rate for any Tranche of Eurodollar Loans for any Interest Period,
shall promptly notify Borrower and the applicable Lenders thereof.  Such determination shall, absent manifest
error and subject to Section 3.5, be final, conclusive and binding
upon all parties hereto.

 

(d)                                  Default Interest.  Notwithstanding the rates of interest
specified herein, effective on the date 30 days after the occurrence and
continuance during such 30 day period of any Event of Default (other than the
failure to pay Obligations when due) and for so long thereafter as any such
Event of Default shall be continuing, and effective immediately upon any
failure to pay any Obligations or any other amounts due under any of the Loan
Documents when due, whether by acceleration or otherwise, the principal balance
of each Loan then outstanding and, to the extent permitted by applicable law,
any interest payment on each Loan not paid when due or other amounts then due
and payable, shall bear interest payable on demand, after as well as before
judgment, at a rate per annum equal to the Default Rate.

 

(e)                                  Maximum Interest.  If any interest payment or other charge or
fee payable hereunder exceeds the maximum amount then permitted by applicable
law, Borrower shall be obligated to pay the maximum amount then permitted by
applicable law and Borrower shall continue to pay the maximum amount from time
to time permitted by applicable law until all such interest payments and other
charges and fees otherwise due hereunder (in the absence of such restraint
imposed by applicable law) have been paid in full.

 

(f)                                    Waiver of Accrued Default Interest.  Each Lender hereby waives and discharges the
obligation of Borrower to pay to such Lender that portion of interest
representing the Default Rate Margin accrued and payable to such Lender under the
Original Credit Agreement and the Original Term Loan Agreement through and
including the Closing Date.

 

3.2                               Fees

 

(a)                                  Upfront Fees.  In the event that this Agreement becomes effective pursuant to Section
12.20(a), Borrower shall pay to Administrative Agent on the Closing Date
for the account of each Lender a commitment fee equal to 1.0 % of such Lender’s
Term Loans as of the Closing Date.  In
the event that this Agreement becomes effective pursuant to and in accordance
with Section 12.20(b), Borrower shall pay to Administrative Agent on the
Closing Date for the account of each Lender a commitment fee equal to .25% of
such Lender’s Term Loans as of the Closing Date.

 

(b)                                  Term B Loan Supplemental Fee.  If (i) this Agreement becomes effective
pursuant to Section 12.20(a) and the Minimum Term B Prepayment is not
made on or before May 31, 2003 or (ii) this Agreement becomes effective
pursuant to Section 12.20(b) and the Minimum Term B Prepayment is not
made on or before the date which is one year after the Closing Date, then no
later than the first Business Day after May 31, 2003, or the first Business Day
after the date which is one year after the Closing Date, as the case may be
(the

 

38

 

“Supplemental
Fee Payment Date”), the Borrower shall pay to each Term B Lender a fee
equal to two percent (2%) of the principal amount of such Lender’s Term B Loan
on such date by adding such amount to the then outstanding principal balance of
such Lender’s Term B Loan.  On the Supplemental
Fee Payment Date the principal amount of each Term B Lender’s Term B Loan shall
without further action by the Borrower or such Lender increase by two percent
(2%) and thereafter all references hereunder to the Term B Loan of such Lender
shall, unless the context clearly requires otherwise, mean the principal amount
as so adjusted.  At the request of any
Term B Lender, the Borrower will deliver a Term B Note (the “PIK B Note”)
which Note will be identical to the Term B Note attached hereto as Exhibit
2.2(b), except that such Note will be dated the Supplemental Fee Payment
Date.

 

3.3                               Computation of Interest and Fees.

 

(a)                                  Interest on all Eurodollar Loans and all fees
hereunder shall be computed on the basis of the actual number of days elapsed
over a year of 360 days.  Interest on
all Base Rate Loans shall be computed on the basis of the actual number of days
elapsed over a year of 365 or 366 days, as the case may be.  Each determination of an interest rate by
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on Borrower and the Lenders in the absence of manifest
error.  Administrative Agent shall, at
any time and from time to time upon request of Borrower or any Lender, deliver
to Borrower or any Lender a statement showing the quotations used by
Administrative Agent in determining any interest rate applicable to Loans
pursuant to this Agreement.

 

3.4                               Compensation For Funding Losses.

 

Borrower shall compensate each Lender, upon its
written request (which request shall set forth the basis for requesting such
amounts, showing the calculation thereof in reasonable detail), for all losses,
expenses and liabilities (including, without limitation, any interest paid by
such Lender to lenders of funds borrowed by it to make or carry its Loans to
the extent not recovered by the Lender in connection with the liquidation or
reemployment of such funds and including the compensation payable by such
Lender to a Person to which the Lender has participated all or a portion of
such Loan) and any loss sustained by such Lender in connection with the
liquidation or re-employment of such funds (including, without limitation, a
return on such liquidation or re-employment that would result in such Lender
receiving less than it would have received had such Loan remained outstanding
until the last day of the Interest Period applicable to such Loans) which the
Lender may sustain as a result of:  (i)
for any reason (other than a default by such Lender or Administrative Agent) a
continuation of, or conversion from or into, Eurodollar Loans does not occur on
a date specified therefor in a Notice of Conversion or Continuation (whether or
not withdrawn); (ii) any payment, prepayment or conversion or continuation of
any of its Eurodollar Loans occurring for any reason whatsoever on a date which
is not the last day of an Interest Period applicable thereto; (iii) any
repayment of any of its Eurodollar Loans not being made on the date specified
in a notice of payment given by Borrower; or (iv)(A) any other failure by
Borrower to repay its Eurodollar Loans when required by the terms of this
Agreement or (B) an election made by Borrower pursuant to Section 3.6.  Each Lender shall submit its written request
as to additional amounts owed such Lender under this Section 3.4 to
Borrower and Administrative Agent within ten Business Days of the event

 

39

 

giving rise to such request, which request shall,
absent manifest error, be final, conclusive and binding for all purposes.

 

3.5                               Increased Costs, Illegality, Etc.

 

(a)                                  Generally.  Except as otherwise provided in Section 4.5, in the event
that any Lender shall have determined (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto
but, with respect to clause (i) below, may be made only by Administrative
Agent):

 

(i)                                    on any Interest Rate Determination Date that, by
reason of any changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the
definition of the Eurodollar Rate applicable to such Loan for the applicable
Interest Period, then, the obligation of the Lenders to convert, continue or
maintain Eurodollar Loans hereunder shall be suspended until Administrative
Agent revokes such notice thereof in writing;

 

(ii)                                at any time that any Lender shall incur increased costs or reduction in
the amounts received or receivable hereunder with respect to any Eurodollar
Loan because of any change since the date of this Agreement in any applicable
law or governmental rule, regulation, order, guideline or request (whether or
not having the force of law) or in the interpretation or administration thereof
and including the introduction of any new law or governmental rule, regulation,
order, guideline or request, such as, for example, but not limited to (A) a
change in the basis of taxation of payments to any Lender of the principal of
or interest on the Notes or any other amounts payable hereunder (except for (a)
changes in the rate of tax on, or determined by reference to, the net income or
profits of such Lender imposed by the jurisdiction in which its principal
office or applicable lending office is located and (b) USA withholding taxes,
which shall be governed by the provisions of Section 4.5) or (B) a
change in official reserve requirements (but, in all events, excluding reserves
required under Regulation D to the extent included in the computation of the
Eurodollar Rate) and/or (y) other circumstances since the date of this
Agreement affecting such Lender or the interbank Eurodollar market or the
position of such Lender in such market (excluding, however, differences in a Lender’s
cost of funds from those of Administrative Agent which are solely the result of
credit differences between such Lender and Administrative Agent); or

 

(iii)                            at
any time that continuance of or conversion to any Eurodollar Loan has been made
(x) unlawful by any law or governmental rule, regulation or order, (y)
impossible by compliance by any Lender in good faith with any governmental
request (whether or not having force of law) or (z) impracticable as a result
of a contingency occurring after the date of this Agreement which materially
and adversely affects the interbank Eurodollar market;

 

then, and
in any such event, such Lender (or Administrative Agent in the case of clause
(i) above) shall promptly give notice (by telephone, telefax or telecopier confirmed
in writing) to Borrower and, except in the case of clause (i) above, to
Administrative Agent of such

 

40

 

determination
(which notice Administrative Agent shall promptly transmit to each of the other
Lenders).  Thereafter (A) in the case of
clause (i) above, Eurodollar Loans shall no longer be available until such time
as Administrative Agent notifies Borrower and the Lenders that the
circumstances giving rise to such notice by Administrative Agent no longer
exist, and any Notice of Conversion or Continuation given by Borrower with
respect to Eurodollar Loans (other than with respect to conversions to Base
Rate Loans) which have not yet been incurred (including by way of conversion)
shall be deemed rescinded by Borrower, (B) in the case of clause (ii) above,
Borrower shall pay to such Lender, upon written demand therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Lender in its sole discretion
shall determine) as shall be required to compensate such Lender for such
increased costs or reductions in amounts received or receivable hereunder (a
written notice as to the additional amounts owed to such Lender, showing the basis
for the calculation thereof, submitted to Borrower by such Lender shall, absent
manifest error, be final and conclusive and binding on all the parties hereto;
however the failure to give any such notice shall not release or diminish
Borrower’s obligations to pay additional amounts pursuant to this Section
3.5(a); provided, however, if the respective Lender has
intentionally withheld or delayed such notice, the respective Lender shall not
be entitled to receive additional amounts pursuant to this Section 3.5(a)
for periods occurring prior to the 180th day before the giving of such written
demand) and (C) in the case of clause (iii) above, Borrower shall take one of
the actions specified in Section 3.5(b) as promptly as possible and, in
any event, within the time period required by law.  In determining such additional amounts pursuant to clause (B) of
the immediately preceding sentence, each Lender shall act reasonably and in
good faith and will, to the extent the increased costs or reductions in amounts
receivable relate to such Lender’s loans in general and are not specifically
attributable to a Loan hereunder, use averaging and attribution methods which
are reasonable and which cover all loans similar to the Loans made by such
Lender whether or not the loan documentation for such other loans permits the
Lender to receive increased costs of the type described in this Section
3.5(a).

 

(b)                                  Eurodollar  Loans.  At any time that any Eurodollar Loan is
affected by the circumstances described in Section 3.5(a)(ii) or (iii),
Borrower may (and, in the case of a Eurodollar Loan affected by the
circumstances described in Section 3.5(a)(iii), shall) if any affected
Loan is a Eurodollar Loan then outstanding, upon at least three Business Days’
written notice to Administrative Agent, require the affected Lender to convert
such Eurodollar Loan into a Base Rate Loan, provided that if more than one
Lender is affected at any time, then all affected Lenders must be treated the
same pursuant to this Section 3.5(b).

 

(c)                                  Capital Requirements.  If, at any time after the date hereof, any
Lender determines that the introduction of or any change in any applicable law
or governmental rule, regulation, order, guideline or request (whether or not
having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender based on the existence of such Lender’s Loans hereunder
or its obligations hereunder, then Borrower shall pay to such Lender, upon its
delivery of the written notice hereafter referred to, therefor, such additional
amounts as shall be required to compensate such Lender or such other
corporation for the increased cost to such Lender or such other corporation or
the reduction in the rate of return to such Lender or such other corporation as
a result of such increase of

 

41

 

capital.  In determining such additional amounts, each
Lender will act reasonably and in good faith and will use averaging and
attribution methods which are reasonable and which will, to the extent the
increased costs or reduction in the rate of return relates to such Lender’s
commitments or obligations in general and are not specifically attributable to
the obligations hereunder, cover all commitments and obligations similar to the
obligations of such Lender hereunder whether or not the loan documentation for
such other commitments or obligations permits the Lender to make the
determination specified in this Section 3.5(c), and such Lender’s
determination of compensation owing under this Section 3.5(c) shall, absent
manifest error, be final and conclusive and binding on all the parties
hereto.  Each Lender, upon determining
that any additional amounts will be payable pursuant to this Section 3.5(c)
will give prompt written notice thereof to Borrower, which notice shall show
the basis for calculation of such additional amounts, although the failure to
give any such notice shall not release or diminish any of Borrower’s
obligations to pay additional amounts pursuant to this Section 3.5(c); provided,
however, if the respective Lender has intentionally withheld or delayed
such notice, the respective Lender shall not be entitled to receive additional
amounts pursuant to this Section 3.5(c) for periods occurring prior to
the 180th day before the giving of such notice.

 

(d)                                  Effect of Reserve Requirements.  In the event that any Governmental Authority
shall impose any Eurodollar Reserve Requirements which increase the cost to any
Lender of making or maintaining Eurodollar Loans, then Borrower shall
thereafter pay in respect of the Term Loans of such Lender a rate of interest
based upon the Eurodollar Reserve Rate (rather than upon the Eurodollar
Rate).  From and after the delivery by a
Lender to Borrower of a notice indicating that the cost to any Lender has
increased as a result of such Eurodollar Reserve Requirement, all references
contained in this Agreement to the Eurodollar Rate (other than that in the
definition of Eurodollar Reserve Rate) shall be deemed to be references to the
Eurodollar Reserve Rate with respect to each such affected Lender.

 

3.6                               Replacement of Lenders.

 

If any Lender is owed increased costs under Section
3.5(a)(ii) or (iii) or Section 3.5(c) or Borrower is required
to make any payments under Section 4.5(c) to any Lender materially in
excess of those of the other Lenders or as provided in Section 12.1(b)
in the case of certain refusals by a Lender to consent to certain proposed
amendment, changes, supplements, waivers, discharges or terminations with
respect to this Agreement which have been approved by the Required Lenders,
Borrower shall have the right, if no Default or Event of Default then exists,
to replace such Lender (the “Replaced Lender”) with one or more other
Eligible Assignee or Assignees (collectively, the “Replacement Lender”)
acceptable to Administrative Agent, or, at the option of the Borrower, in the
case of a replacement as provided in Section 12.1(b) where the consent
of the respective Lender is required with respect to less than all of its
Loans, to replace only the affected Loans with identical Loans provided by the
Replacement Lender; provided that (i) at the time of any replacement
pursuant to this Section 3.6, the Replaced Lender and Replacement Lender
shall enter into one or more assignment agreements, in form and substance
satisfactory to such parties and Administrative Agent, pursuant to which the
Replacement Lender shall acquire all or a portion, as the case may be, of the
outstanding Loans of the Replaced Lender and (ii) all obligations of Borrower
owing to the Replaced Lender relating to the Loans so replaced (including,
without limitation, such increased costs and excluding those specifically
described in clause (i) above in respect of which the assignment purchase price
has been, or is

 

42

 

concurrently being paid) shall be paid in full to such
Replaced Lender concurrently with such replacement.  Upon the execution of the respective assignment documentation,
the payment of amounts referred to in clauses (i) and (ii) above and, if so
requested by the Replacement Lender, delivery to the Replacement Lender of the
appropriate Note or Notes executed by Borrower, the Replacement Lender shall
become a Lender hereunder and the Replaced Lender shall cease to be a Lender
hereunder with respect to such replaced Loans, except with respect to
indemnification provisions under this Agreement, which shall survive as to such
Replaced Lender.  The Replaced Lender
shall be required to deliver for cancellation its Notes to be cancelled on the
date of replacement, or if any such Note is lost or unavailable, such other
assurances or indemnification therefor as Borrower may reasonably request.

 

3.7                               Change of Lending Office.

 

Each Lender agrees that upon the occurrence of any
event giving rise to increased costs or other special payments under Sections
3.5(a)(ii) and (iii), Section 3.5(c) or Section 4.5(c)
with respect to such Lender, it will, if requested by Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another Lending Office for any Loans affected by such event, provided
that such designation is made on such terms that, such Lender and its Lending
Office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section.  Nothing in this Section 3.7
shall affect or postpone any of the Obligations of the Borrower or the rights
of any Lender provided in this Agreement.

 

ARTICLE IV

 

PAYMENTS
AND PREPAYMENTS

 

4.1                               Voluntary Prepayments.

 

Borrower shall have the right to prepay any Loan in
whole or in part from time to time on the following terms and conditions: (i)
Borrower shall give an irrevocable written notice (or telephonic notice
promptly confirmed in writing) to Administrative Agent, which such notice shall
state Borrower’s intent to prepay such Loans, the amount of such prepayment and
the Loans to which such prepayment is to be applied, which notice shall be
given by Borrower to Administrative Agent by 12:00 Noon (New York City time) at
least three Business Days prior to the date of such prepayment if a prepayment
of Eurodollar Loans or one Business Day for any other Loans and which notice
shall promptly be transmitted by Administrative Agent to each of the applicable
Lenders; (ii) each partial prepayment of any Borrowing shall be in an aggregate
principal amount of at least $1,000,000; (iii) Eurodollar Loans may only be
prepaid pursuant to this Section 4.1 on the last day of an Interest
Period applicable thereto, or on any other day subject to Section 3.4;
and (iv) a partial prepayment of Eurodollar Loans shall not be made that would
result in the remaining aggregate outstanding principal amount thereof being
less than the minimum principal amount that would be required in respect of a
similar Eurodollar Loans.  Voluntary
prepayments of Term Loans shall be applied first to the Term A Loans, with up
to 50% of such prepayment applied pro rata to the Scheduled Term A Loan Principal
Payments to be made within the twelve-month period following the date of such
prepayment and the remaining portion of such prepayments shall be applied in
inverse order of maturity.  The notice

 

43

 

provisions, the provisions with respect to the minimum
amount of any prepayment and the provisions requiring prepayments in integral
multiples above such minimum amount are for the benefit of Administrative Agent
and may be waived unilaterally by Administrative Agent.

 

4.2                               Mandatory Prepayments.

 

(a)                                  Scheduled
Term Loans Principal Payments.  Borrower shall cause to be paid Scheduled
Term A Loans Principal Payments on the Term A Loans until the Term A Loans are
paid in full in the amounts and at the times specified in the definition of
Scheduled Term A Loans Principal Payments to the extent that prepayments have
not previously been applied to such Scheduled Term A Loans Principal Payments
(and such Scheduled Term A Loans Principal Payments have not otherwise been
reduced) pursuant to the terms hereof.  Borrower shall cause to be paid on the Term B Loan Maturity Date
all outstanding Term B Loans.

 

(b)                                  Mandatory Prepayment Upon Certain Sales.  If Borrower, HSCHC, HSCC or any of
Borrower’s Restricted Subsidiaries receives any Net Sale Proceeds attributable
to any Asset Disposition, then to the extent such Net Sale Proceeds, together
with the Net Sale Proceeds of all other Asset Dispositions occurring in such
Fiscal Year exceed $15,000,000 (“Excess Net Sale Proceeds”), Borrower
shall on such date repay the Term Loans in an aggregate amount equal to 100% of
such Excess Net Sale Proceeds; provided, however, that, in
addition to the foregoing, the Borrower shall be permitted to retain up to
$10,000,000 in the aggregate of the Net Sale Proceeds resulting from one or
more Asset Dispositions described on Schedule 4.2(b).  Notwithstanding the foregoing, for purposes
of this Section 4.2(b), the Net Sale Proceeds attributable to any Asset
Disposition shall not include such proceeds to the extent (i) such proceeds are
directly attributable to the sale or transfer of accounts receivables or
inventory comprising a portion of the “Borrowing Base,” as such term is defined
in the Priority Credit Agreement and (ii) an adjustment to such “Borrowing
Base” is made on the date of such Asset Disposition pursuant to Section 4.5(e)
of the Priority Credit Agreement.  All
prepayments of principal hereunder made by Borrower pursuant to this Section
4.2(b) shall be applied in the manner set forth in Section 4.3.

 

(c)                                  Mandatory Prepayment With Excess Cash Flow.  As soon as practicable, and in any event by
April 30th of each Fiscal Year, (A) Borrower shall calculate the Excess Cash
Flow for such Fiscal Year and (B) Borrower shall make a mandatory prepayment of
the Term Loans in an amount equal to (i) one hundred percent (100%) or (ii)
after the Minimum Term B Prepayment is made, seventy-five percent (75%) of such
Excess Cash Flow (“Total Prepayment Amount”).  All prepayments of principal made hereunder made by Borrower
pursuant to this Section 4.2(c) shall be applied first to the Term A
Loans, with up to 50% of such prepayment applied pro rata to the Scheduled Term
A Loan Principal Payments to be made within the twelve-month period following
the date of such prepayment and the remaining portion of such prepayments shall
be applied in inverse order of maturity.

 

(d)                                  Mandatory Prepayment With Proceeds of Capital Stock.  If Holdco I, Holdco II, Borrower, any of
Borrower’s Restricted Subsidiaries, HSCHC or HSCC receives any Net Offering
Proceeds from any offering of Capital Stock or contribution to capital after
the Closing Date, other than the Permitted Mezzanine Proceeds, Borrower shall
on the date of the receipt by such Person of such proceeds prepay the Term
Loans in an amount equal to such Net

 

44

 

Offering
Proceeds.  All prepayments of principal
hereunder made by Borrower pursuant to this Section 4.2(d) shall be
applied in the manner set forth in Section 4.3.

 

(e)                                  Mandatory Prepayment With Proceeds of Permitted Junior
Debt.  No later than
the Business Day of receipt by Borrower of the cash proceeds (net of
underwriting discounts, similar placement fees and commissions and other
reasonable costs and expenses associated therewith) from the issuance of any
Permitted Junior Debt of Borrower, Borrower shall prepay the Term Loans in an
aggregate amount equal to such net cash proceeds.  All prepayments of principal hereunder made by Borrower pursuant
to this Section 4.2(e) shall be applied in the manner set forth in Section 4.3.  Notwithstanding the foregoing, in the event
that Borrower shall have made the Minimum Term B Prepayment, Borrower may
retain an amount of proceeds of Permitted Junior Debt not greater than the then
current outstanding principal amount of Polymers Senior Notes (the “Permitted
Polymers Notes Repurchase Amount”) solely for the purpose of purchasing
and/or redeeming any outstanding Polymers Senior Notes (the “Purchased
Polymers Notes”) from the holders thereof at a purchase or redemption price
less than or equal to the par value of the Polymers Senior Notes; provided,
however, that (i) pending application of the Permitted Polymers Notes
Repurchase Amount in the manner permitted hereunder, the Permitted Polymers
Notes Repurchase Amount shall be promptly applied by Borrower to reduce the
Loans outstanding under the Priority Credit Agreement or, if there shall be no
Loans outstanding under the Priority Credit Agreement, such funds shall be
promptly deposited into the Borrower’s operating account at DB.  All Purchased Polymers Notes shall, promptly
following their being purchased or redeemed by Borrower hereunder, be cancelled
and extinguished.  In the event that the
aggregate purchase price for such Polymers Senior Notes (whether purchased or
redeemed) is less than the Permitted Polymers Notes Repurchase Amount, Borrower
shall promptly, but in no event later than December 2, 2004 prepay the Term
Loans in an amount equal to such difference.

 

(f)                                    Mandatory Prepayment with Proceeds of Other Debt.  No later than the Business Day following
receipt by Holdco I, Holdco II, Borrower, any of Borrower’s Restricted
Subsidiaries, HSCHC or HSCC of the cash proceeds (net of underwriting
discounts, similar placement fees and commissions, and other reasonable costs
and expenses associated therewith) from the issuance or incurrence of
Indebtedness (other than Permitted Mezzanine Proceeds and the proceeds of
Indebtedness which is expressly permitted under Section 8.2 hereof),
Borrower shall prepay the Term Loans in an amount equal to such net cash
proceeds.  All prepayments of principal
made by Borrower pursuant to this Section 4.2(f) shall be applied in the
manner set forth in Section 4.3.

 

(g)                                 Mandatory Prepayment Upon a Change of Control.  Simultaneously with any Change of Control,
Borrower shall prepay, in full, the outstanding principal amount of any
outstanding Loans, together with all accrued interest, fees and other expenses
incurred by the Administrative Agent or the Lenders as a result of such Change
in Control and prepayment.

 

(h)                                 Mandatory Prepayment Upon Recovery Event.  Within two (2) Business Days following each
date on which Borrower or any of its Restricted Subsidiaries receives any
proceeds from any Recovery Event, an amount equal to 100% of the proceeds of
such Recovery Event (net of taxes and reasonable costs incurred in connection
with such Recovery Event) shall be applied as a mandatory prepayment of
principal of the Term Loans,

 

45

 

applied in the
manner set forth in Section 4.3, provided that (1) so long as no Event
of Default then exists, if the net proceeds from any single or series of
related Recovery Events are less than $5,000,000, then no prepayment shall be
required pursuant to this Section 4.2(h), and (2) so long as no Event of
Default then exists, with respect to any single or series of related Recovery
Events the net proceeds therefrom which are equal to or greater than $5,000,000
but less than 10% of net property, plant or equipment as set forth on the most
recently delivered quarterly financial statements of Borrower (the “Threshold”),
such proceeds shall not be required to be so applied on such date to the extent
that (x) Borrower has delivered a certificate to the Administrative Agent on or
prior to such date stating that such proceeds shall be used to replace or
restore any properties or assets in respect of which such proceeds were paid
within 365 days following the date of the receipt of such proceeds (which
certificate shall set forth the estimates of the proceeds to be so expended)
and (y) such proceeds are deposited in an escrow account with the
Administrative Agent for the benefit of the Secured Parties (the “Recovery
Event Escrow Account”) or, with consent of the Administrative Agent, are
applied to the outstanding Priority Loans with a reserve established for usage
of such amounts in accordance with this Section 4.2(h), from which
escrow account (or revolver reserve) amounts may be withdrawn only to repay the
Loans or to be used for the purposes described in clause (x) above; provided,
further, that

 

(i)                                    if the amount of such proceeds from any single or
series of related Recovery Events exceeds the Threshold, then the entire amount
and not just the portion in excess of the Threshold shall be applied as a
mandatory repayment of Term Loans as provided above in this Section 4.2(h),

 

(ii)                                if all or any portion of such proceeds not required to be applied to
the repayment of Term Loans pursuant to the first proviso of this Section
4.2(h) are not so used (or contractually committed to be used) within 365
days after the day of the receipt of such proceeds, such remaining portion
shall be applied on the last day of such period as a mandatory repayment of
principal of the Term Loan as provided in this Section 4.2(h);

 

(iii)                            if
all or any portion of such proceeds are not required to be applied on the 365th
day referred to in clause (ii) above because such amount is contractually
committed to be used and subsequent to such date such contract is terminated or
expires without such portion being so used, then such remaining portion shall
be applied on the date of such termination or expiration as a mandatory
repayment of principal of outstanding Term Loans as provided in this Section
4.2(h); and

 

(iv)                               Notwithstanding the foregoing, for purposes of this Section 4.2(h),
the proceeds of any Recovery Event shall not include such proceeds to the
extent (i) such proceeds are directly attributable to inventory or any other
component comprising a portion of the “Borrowing Base,” as such term is defined
in the Priority Credit Agreement and (ii) an adjustment to such “Borrowing
Base” is made on the date of the event giving rise to the Recovery Event
pursuant to Section 4.5(g) of the Priority Credit Agreement.

 

(i)                                    Waiver of Certain Mandatory Prepayments by Term
Lenders.  Notwithstanding
anything to the contrary contained in this Section 4.2(i) or elsewhere
in this

 

46

 

Agreement
(including, without limitation, in Section 12.1), Borrower shall have
the option, in its sole discretion, to give the Term Lenders the option to
waive a mandatory prepayment of such Term Loans pursuant to Section 4.2(b),
(c), (d), (e), (f) and (h) (each such
repayment, a “Waivable Mandatory Prepayment”) upon the terms and
provisions set forth in this Section 4.2(i).  If Borrower elects to exercise the option referred to in the
preceding sentence, Borrower shall give to Administrative Agent written notice
of its intention to give the Term Lenders the right to waive a Waivable
Mandatory Prepayment at least five (5) Business Days prior to such repayment
which notice Administrative Agent shall promptly forward to all Term Lenders
(indicating in such notice the amount of such repayment to be applied to each
such Term Lender’s outstanding Term Loans). 
Borrower’s offer to permit the Term Lenders to waive any such Waivable
Mandatory Prepayment may apply to all or part of such repayment; provided, that
any offer to waive part of such repayment must be made ratably to the Term
Lenders on the basis of their outstanding Term Loans.  In the event any such Term Lender desires to waive such Term
Lender’s right to receive any such Waivable Mandatory Prepayment in whole or in
part, such Term Lender shall so advise the Administrative Agent no later than
the close of business two (2) Business Days after the date of such notice from
the Administrative Agent, which notice shall also include the amount such Term
Lender desires to receive in respect of such prepayment.  If any Term Lender does not reply to the
Administrative Agent within the two (2) Business Days after the date of such
notice from the Administrative Agent, it will be deemed not to have waived any
part of such prepayment.  If any Term
Lender does not specify an amount it wishes to receive, it will be deemed to
have accepted 100% of the total payment. 
The aggregate amount waived by the Term Lenders pursuant to the
foregoing provisions shall be applied to the Term A Loans on a pro rata basis
to those Term A Lenders that have not elected to waive such prepayments.

 

(j)                                    Mandatory Prepayment on June 30, 2006.  If, as of
the close of business on June 30, 2006, the outstanding principal amount
of Term B Loans shall exceed $100 million, Borrower shall on the following
Business Day prepay, in full, the outstanding principal amount of any
outstanding Loans, together with all accrued interest, fees and other expenses
incurred by the Administrative Agent or the Lenders as a result of such
prepayment.

 

4.3                               Application of Prepayments.

 

(a)                                  Prepayments.  Except as expressly provided in this Agreement, all prepayments of
principal of the Term Loans made by Borrower pursuant to Section 4.2(b),
(d), (e), (f) and (h) shall, for so long as any
Term B Loans shall be outstanding, first be applied to the payment of the
unpaid principal amount of the Term B Loans in proportional amounts equal to
each Term B Lender’s Pro Rata Share of such prepayment and, after the Term B
Loans have been repaid, applied to the payment of the unpaid principal amount
of the Term A Loans in proportional amounts equal to each Term A Lender’s Pro
Rata Share of such prepayment; provided, however, that in the
case of prepayments made following the payment in full of all Term B Loans, up
to 50% of such prepayment shall be applied pro rata to the Scheduled Term A
Loans Principal Payments to be made within the twelve-month period following
the date of such prepayment and the remaining portion of such prepayment shall
be applied to Scheduled Term A Loans Principal Payments in inverse order of
maturity.  If any prepayment of
Eurodollar Loans shall reduce the outstanding amount of any Tranche of
Eurodollar Loans to an amount less than $10,000,000, such Eurodollar Loans shall
immediately be converted into Base Rate Loans. 
All

 

47

 

prepayments
shall include payment of accrued interest on the principal amount so prepaid,
shall be applied to the payment of interest before application to principal and
shall include amounts payable, if any, under Section 3.4.

 

(b)                                  Payments.  All payments
of principal on the Term Loans shall be applied within the applicable Facility
(i) first to the payment of Base Rate Loans and second to the payment of
Eurodollar Rate Loans and (ii) with respect to Eurodollar Rate Loans, in such
order as Borrower shall request (and in the absence of such request, as
Administrative Agent shall determine). 
All payments shall include payment of accrued interest on the principal
amount so paid, shall be applied to the payment of interest before application
to principal and shall include amounts payable, if any, under Section 3.4.

 

4.4                               Method and Place of Payment by
Borrower.

 

(a)                                  Except as otherwise specifically provided herein, all
payments (including prepayments) to be made by Borrower on account of
principal, interest, fees and other amounts required hereunder shall be made
without setoff or counterclaim and shall, except as otherwise expressly
provided herein, be made to Administrative Agent for the ratable account of the
applicable Lenders in immediately available funds, no later than 1:00 P.M. (New
York City time) on the date specified herein. 
Any such payment shall be made to such account of Administrative Agent
as Administrative Agent shall specify by notice to Borrower provided, that
unless and until otherwise specified, all such payments shall be made to
Administrative Agent at its office at 31 West 52nd Street, New York, NY
10022.  Administrative Agent will promptly
distribute to each Lender its applicable Pro Rata Share of the Term A Loan or
of the Term B Loan (or other applicable share as expressly provided herein), as
the case may be, of such principal, interest, fees or other amounts, in like
funds as received.  Any payment which is
received by Administrative Agent later than 1:00 P.M. (local time in the place
of payment) shall be deemed to have been received on the immediately succeeding
Business Day and any applicable interest or fee shall continue to accrue until
such payment is deemed to have been received.

 

(b)                                  Whenever any payment hereunder shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be, subject to
the provisions set forth in the definition of “Interest Period” herein.

 

(c)                                  Unless Administrative Agent shall have received notice
from Borrower prior to the date on which any payment is due to the Lenders
hereunder that Borrower will not make such payment in full, Administrative
Agent may assume that Borrower has made such payment in full to Administrative
Agent as required hereunder on such date and Administrative Agent may (but
shall not be so required), in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender.  If and to the extent
Borrower shall not have made such payment in full to Administrative Agent, each
Lender shall repay to Administrative Agent on demand such amount distributed to
such Lender, together with interest thereon for each day from the date such
amount was distributed to such Lender until the date such Lender repays such
amount to Administrative Agent at the Federal Funds Rate as in effect for each
such day.

 

48

 

4.5                               Net Payments.

 

(a)                                  All payments made by Borrower hereunder or under any
Loan Document will be made without setoff, counterclaim or other defense.  Except as provided in Section 4.5(d),
all payments hereunder and under any of the Loan Documents (including, without
limitation, payments on account of principal and interest and fees) shall be
made by Borrower free and clear of and without deduction or withholding for or
on account of any present or future tax, duty, levy, impost, assessment or
other charge of whatever nature now or hereafter imposed by any Governmental
Authority, but excluding therefrom:

 

(i)                                    a tax imposed on or measured by the overall net income
(including a franchise tax based on net income) of the Lender or its lending
offices by the USA or jurisdictions or political subdivision or taxing
authority thereof in which such Lender’s principal office or lending offices
are located or are resident or in which such Lender is incorporated;

 

(ii)                                in the case of any Lender organized under the laws of any jurisdiction
other than the USA or any state thereof (including the District of Columbia),
any taxes imposed by the USA by means of withholding at the source unless such
withholding results from a change in applicable law, treaty or regulations or
the interpretation or administration thereof (including, without limitation,
any guideline or policy not having the force of law) by any authority charged
with the administration thereof subsequent to the date such Lender becomes a
Lender with respect to the Loan or portion thereof affected by such change;

 

(iii)                            any
taxes to which the Lender (to the extent of the tax rate then in effect) would
be subject to (as of the Closing Date) if a payment hereunder had been received
by the Lender and, with respect to any Lender that becomes a party hereto after
the date hereof, any taxes to which such Lender (to the extent of the tax rate
then in effect) would be subject as of the date it becomes a party hereto if a
payment had been received by the Lender (other than taxes which each other
Lender is entitled to reimbursement pursuant to this Agreement);

 

(iv)                               taxes to which the Lender becomes subject subsequent to the date
referred to in clause (iii) above as a result of a change in the residence,
place of incorporation, or principal place of business of the Lender, a change
in the branch or lending office of the Lender participating in the transactions
set forth herein or other similar circumstances unless such change or similar
circumstance shall have been made at the request of the Borrower, and

 

(v)                                   taxes as a result of the recognition by the Lender of gain on the sale,
assignment or participation by the Lender of the participating interests in its
creditor positions hereunder (such tax or taxes, other than excluded tax or
taxes, being herein referred to as “Tax” or “Taxes”).  If Borrower is required by law to make any
deduction or withholding of any Taxes from any payment due hereunder or under
any of the Loan Documents, then the amount payable will be increased to such
amount which, after deduction from such increased amount of all such Taxes
required to be withheld or

 

49

 

deducted therefrom, will not be
less than the amount due and payable hereunder had no such deduction or
withholding been required.  A
certificate as to any additional amounts payable to a Lender under this Section
4.5 submitted to Borrower by such Lender shall show in reasonable detail
the amount payable and the calculations used to determine in good faith such
amount and shall, absent manifest error, be final, conclusive and binding upon
all parties hereto.

 

(b)                                  If Borrower makes any payment hereunder or under any
of the Loan Documents in respect of which it is required by law to make any
deduction or withholding of any Taxes, it shall pay the full amount to be
deducted or withheld to the relevant taxation or other authority within the
time allowed for such payment under applicable law and shall deliver to the
Lenders within 30 days after it has made such payment to the applicable
authority a receipt issued by such authority evidencing the payment to such
authority of all amounts so required to be deducted or withheld from such
payment.

 

(c)                                  Without prejudice to the other provisions of this Section
4.5, if any Lender, or Administrative Agent on its behalf, is required by
law to make any payment on account of Taxes on or in relation to any amount received
or receivable hereunder or under any of the Loan Documents by such Lender, or
Administrative Agent on its behalf, or any liability for Tax in respect of any
such payment is imposed, levied or assessed against any Lender or
Administrative Agent on its behalf, Borrower will promptly, following receipt
of the certificate described in the immediately following sentence, indemnify
such person against such Tax payment or liability, together with any interest,
penalties and expenses (including reasonable counsel fees and expenses) payable
or incurred in connection therewith, including any tax of any Lender arising by
virtue of payments under this Section 4.5(c), computed in a manner
consistent with this Section 4.5(c). 
A certificate prepared in good faith as to the amount of such payment by
such Lender, or Administrative Agent on its behalf, showing calculations
thereof in reasonable detail, absent manifest error, shall be final, conclusive
and binding upon all parties hereto for all purposes.

 

(d)                                  Each Lender that is not a USA person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to Borrower and
Administrative Agent on or prior to the Closing Date, or in the case of a
Lender that is an Assignee of an interest under this Agreement (unless the
respective Lender was already a Lender hereunder immediately prior to such
assignment), on the date of such assignment to such Lender, (i) two accurate
and complete original signed copies of IRS Form W-8BEN, W-8ECI or W-8IMY (or
successor or other applicable forms prescribed by the IRS) certifying to such
Lender’s entitlement to a complete exemption from or reduced rate of USA
withholding tax on interest payments to be made under this Agreement and under
any Note, or (ii) if the Lender is not a “bank” within the meaning of Section
881(c)(3)(A) of the Code and cannot deliver the applicable form pursuant to
clause (i) above, (x) a certificate substantially in the form of Exhibit
4.5(d) (any such certificate, a “Section 4.5(d)(ii) Certificate”)
and (y) two accurate and complete original signed copies of IRS Form W-8 BEN or
W-8EC1 (or successor form) certifying to such Lender’s entitlement to a
complete exemption from USA withholding tax on payments of interest to be made
under this Agreement and under any Note; provided, however, that
no Lender shall be required to deliver a an IRS Form W-8BEN, W-8ECI, W-8IMY, or
Section 4.5(d)(ii) Certificate under this Section 4.5(d) to the extent
that the delivery of such form is not authorized by law; provided  further,
however, that

 

50

 

in the event
that a Lender provides the Borrower or the Administrative Agent with an IRS
Form W-8IMY (or substitute form) indicating that it is a “flow through” entity,
as defined in Treasury Regulations promulgated under Section 1441 of the Code,
or otherwise, not a beneficial owner of interest payments under this Agreement
and under any Note, such Lender agrees, on or prior to the Closing Date, or the
date of assignment to such Lender, as applicable, to take any actions
necessary, and to deliver to Borrower and Administrative Agent all forms
necessary, to establish such Lender’s entitlement to a complete exemption from,
or a reduction in, USA withholding tax on payments of interest to be made under
this Agreement and under any Note, including causing its partners, members,
beneficiaries, beneficial owners, and their beneficial owners, if any, to take
any actions and deliver any forms necessary to establish such exemption.  Notwithstanding the foregoing, (i) a
fiscally transparent entity may provide an IRS Form W-8BEN to claim a treaty
exemption or rate reduction to the extent that such entity is receiving
interest and is not treated as fiscally transparent by its own jurisdiction,  provided the satisfaction of such conditions
entitles the Lender to an exemption or reduction from withholding at the time
such Lender becomes a party to this Agreement and (ii) a withholding foreign
partnership, withholding foreign trust, and qualified intermediary shall only
provide such information as is required by Treasury Regulations promulgated
under Code Section 1441.  For purposes
of this Agreement, the term “Forms” shall include any attachments for to IRS
Forms W-8IMY required to be filed by the Lender.  In addition, each Lender agrees that from time to time after the
Closing Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, such
Lender will deliver to Borrower and Administrative Agent two new accurate and
complete original signed copies of an IRS Form W-8BEN, W-8ECI, or W-8IMY and a
Section 4.5(d)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Lender (or
its partners, members, beneficiaries, or beneficial owners) to a continued
exemption from or reduction in USA withholding Tax on interest payments under
this Agreement and any Note, or it shall immediately notify Borrower and Administrative
Agent of its inability to deliver any such form or certificate; provided,
however, that no Lender shall be required to deliver an IRS Form W-8BEN,
W-8ECI, or W-8IMY under this Section 4.5(d) to the extent that the
delivery of such form is not authorized by law; provided, further,
however, that any Lender which does not deliver the applicable form
pursuant to Section 4.5(d) shall be entitled to additional payment
pursuant to Section 4.5(a) or indemnification under Section 4.5(c)
only if and to the extent (i) such failure results solely from a change in law
or (ii) the Tax to which such additional payment or indemnification relates
would have been imposed regardless of whether such Lender provided such
forms.  Notwithstanding anything to the
contrary contained in Section 4.5 any Lender that has not provided to
Borrower the IRS Forms required to be provided to Borrower pursuant to this Section
4.5(d) shall not be entitled to any payment of additional amounts pursuant
to Section 4.5(a) or indemnification under Section 4.5(c) with
respect to any deduction or withholding which would not have been required if
such Lender had provided such forms.

 

(e)                                  Each Lender that is incorporated or organized under
the laws of the USA or a state thereof shall provide two properly completed and
duly executed copies of IRS Form W-9, or any successor or other applicable
form.  Each Lender shall deliver to
Borrower and Administrative Agent (provided that such Lender remains lawfully
able to do so), two further duly executed forms and statements, properly
completed in all material respects, at or before the time any such form or
statement expires or becomes obsolete, or otherwise as reasonably requested by
Borrower.  Each Lender shall promptly
notify Borrower at any time it determines

 

51

 

that it is no longer in a
position to provide any previously delivered certificate to Borrower (or any
other form or certification adopted by U.S. taxing authorities for such
purpose).

 

(f)                                    Each Lender agrees that, as promptly as practicable
after it becomes aware of the occurrence of any event or the existence of any
condition that would cause Borrower to make a payment in respect of any Taxes
to such Lender pursuant to Section 4.5(a) or a payment in
indemnification for any Taxes pursuant to Section 4.5(c), it will use
reasonable efforts to make, fund or maintain the Loan (or portion thereof) of
such Lender with respect to which the aforementioned payment is or would be
made through another lending office of such Lender or take any other action
reasonably requested by Borrower if as a result thereof the additional amounts
which would otherwise be required to be paid by such Borrower in respect of
such Loans (or portions thereof) pursuant to Section 4.5(a) or Section
4.5(c) would be materially reduced, and if, as determined by such Lender,
in its reasonable discretion, the making, funding or maintaining of such Loans
(or portions thereof) through such other lending office or taking of such other
action would not otherwise materially adversely affect such Loans or such
Lender.  Borrower agrees to pay all
reasonable expenses incurred by any Lender in utilizing another lending office
of such Lender or taking of such other action pursuant to this Section
4.5(f).

 

4.6                               Sharing of Payments; etc.

 

(a)                                  If, other than as expressly set forth elsewhere
herein, any Lender shall obtain on account of the Loans made by it, any payment
(whether voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) in excess of its applicable Pro Rata Share (or other pro rata share
as expressly provided herein) of payments on account of Loans made or
participated in by all the Lenders under any Facility, such Lender shall
forthwith (x) notify Administrative Agent of such fact, and (y) purchase from
the other Lenders in such Facility, such participations in the Term Loans made
by them and then due, as the case may be, as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender, such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the purchase
price paid therefor together with an amount equal to such paying Lender’s
applicable Pro Rata Share (according to the proportion of (i) the amount of
such paying Lender’s required repayment to (ii) the total amount so recovered
from the purchasing Lender), of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered.  Administrative Agent will keep records
(which shall be conclusive and binding in the absence of manifest error), of
participations purchased pursuant to this Section 4.6(a) and will in
each case promptly notify the Lenders and Borrower following any such
purchases.  Any payments received after
the Lenders have taken action pursuant to this Section 4.6(a) shall be
allocated ratably among the Loans.

 

(b)                                  Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 4.6 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of setoff, but subject to Section 12.6) with
respect to such participation as fully as if such Lender were the direct
creditor of Borrower in the amount of such participation.

 

52

 

(c)                                  Nothing herein shall require any Lender to exercise
any right of setoff or similar rights or shall affect the right of any Lender
to exercise, and retain the benefits of exercising, any such right with respect
to any other indebtedness or obligation of Borrower.

 

ARTICLE V

CONDITIONS OF CREDIT

 

5.1                               Conditions Precedent to the
Effectiveness of the Agreement.

 

The effectiveness of the provisions of this Agreement
(other than the provisions of Section 5.2) and the obligation of the
Lenders to restructure the Original Loans under this Agreement into the Term
Loans as contemplated hereby shall be subject to the fulfillment, at or prior
to the time thereof, of each of the following conditions:

 

(a)                                  Effectiveness of Credit Agreement.  The condition to effectiveness of this
Agreement set forth either in Section 12.20(a) or Section 12.20(b)
shall have been satisfied.

 

(b)                                  Credit Documents.

 

(i)                                 Credit Agreement and Notes.  Borrower
shall have duly executed and delivered to Administrative Agent, with a signed
counterpart for each Lender, the Agreement and, to the extent requested by any
Lender, the Note payable to the order of such requesting Lender.

 

(ii)                             Security Documents.  Borrower,
HSCHC and each Restricted Domestic Subsidiary of Borrower (other than IRIC)
shall have duly authorized, executed and delivered an Amended and Restated
Security Agreement in substantially the form of Exhibit 5.1(b)(ii) (as
modified, supplemented or amended from time to time, the “Security Agreement”)
and shall have delivered to the Collateral Agent, all the Pledged Securities
and Pledged Intercompany Notes referred to therein then owned, if any, by
Borrower, (x) endorsed in blank in the case of promissory notes constituting
Pledged Securities and (y) together with executed and undated stock powers, in
the case of Capital Stock constituting Pledged Securities and the other
documents and instruments required to be delivered under the Security
Agreements together with:

 

(A)                                     proper financing statements (Form UCC-1 or such other
financing statements or similar notices as shall be required by local law)
fully executed for filing under the UCC or other appropriate filing offices of
each jurisdiction as may be necessary or, in the opinion of Administrative
Agent, desirable to perfect the security interests purported to be created by
the Security Agreement;

 

(B)                                     copies of Requests for Information or Copies (Form
UCC-1), or equivalent reports, listing all effective financing statements or
similar notices that name Borrower or its Restricted Domestic Subsidiaries (by
its

 

53

 

actual name
or any trade name, fictitious name or similar name), or any division or other
operating unit thereof, as debtor and that are filed in the jurisdictions
referred to in clause (i), together with copies of such other financing
statements (none of which shall cover the Collateral except to the extent
evidencing Permitted Liens or for which Administrative Agent shall have
received satisfactory evidence of release);

 

(C)                                     such amendments, modifications or supplements to the
Pledged Intercompany Notes as may be requested by Administrative Agent, each
such amendment, modification or supplement to be in a form satisfactory to
Administrative Agent; and

 

(D)                                     all other actions as may be necessary or, in the
opinion of Administrative Agent, desirable to perfect (or be in a position to
perfect by the filing of financing statements) the security interests intended
to be created by the Security Agreement.

 

(iii)                            Subsidiary Guarantee Agreements.

 

(A)                                     Amended and Restated Subsidiary Guarantee Agreement.  Each of HSCHC
and each Restricted Domestic Subsidiary of Borrower (other than IRIC) shall
have duly executed and delivered the Amended and Restated Subsidiary Guarantee
Agreement substantially in the form of Exhibit 5.1(b)(iii)(A) (as modified,
supplemented or amended from time to time, the “Amended and Restated
Subsidiary Guarantee Agreement”).

 

(B)                                     Subsidiary Guarantee Agreements.  HSCC shall
have duly executed and delivered the Subsidiary Guarantee Agreement
substantially in the form of Exhibit 5.1(b)(iii)(B) (as modified,
supplemented or amended from time to time, the “HSCC Subsidiary Guarantee
Agreement” and, together with the Amended and Restated Subsidiary Guarantee
Agreement, the “Subsidiary Guarantee Agreements”).

 

(iv)                               Collateral Account Agreements. 
Administrative Agent shall have received a fully executed Collateral
Account Control Agreement in substantially the form of Exhibit 5.1(b)(iv)
attached hereto (each together with such modifications thereto as may be
agreeable to Administrative Agent, a  “Collateral
Account Agreement”) shall have been entered into with respect to each of
the Deposit Accounts referenced in Schedule 6.21(d).

 

(v)                                   Pledge Agreement.                                        HSCC shall have duly executed and delivered the Pledge
Agreement substantially in the form of Exhibit 5.1(b)(v) (as modified,
supplemented or amended from time to time, the “Pledge Agreement”)
pursuant to which HSCC shall have pledged 30% of the membership units of HIH to
the Collateral Agent in a manner satisfactory to Administrative Agent.

 

54

 

(vi)                               Mortgage Supplements; Title
Insurance; Surveys.  Administrative Agent shall have received (A)
fully executed counterparts of mortgages or amendments to mortgages
(collectively, the “Mortgage Supplements”) in each case in form and
substance satisfactory to Administrative Agent, which mortgages shall cover
such of the Real Property owned by Borrower and its Restricted Subsidiaries as
shall be listed as mortgaged property on Schedule 6.21(c), together with
evidence that counterparts of the Mortgage Supplements have been delivered to
the title insurance company for recording in all places to the extent necessary
or desirable, in the judgment of Administrative Agent, to create a valid and enforceable
lien on each Mortgaged Property in favor of the Collateral Agent (or such other
trustee as may be required or desired under local law) for the benefit of the
Lenders and the other secured parties under the Security Agreement, subject
only to Permitted Liens; (B) mortgagee title insurance policies issued by title
insurance companies satisfactory to Administrative Agent (the “Mortgage
Policies”) with respect to the Mortgaged Properties not already subject to
title insurance policies (each, an “Uninsured Mortgaged Property”) in
amounts satisfactory to Administrative Agent assuring Administrative Agent that
the Mortgage Supplements with respect to such Mortgaged Properties are valid
and enforceable mortgage liens on the respective Mortgaged Properties, free and
clear of all defects, encumbrances and other Liens except Permitted Liens, and
the Mortgage Policies shall be in form and substance satisfactory to
Administrative Agent and shall include, as appropriate, any other matter that
Administrative Agent in its discretion may request, shall not include an
exception for mechanics’ liens, and shall provide for affirmative insurance and
such reinsurance as Administrative Agent in its discretion may request; and (C) to the extent requested by Administrative Agent, a
survey, in form and substance satisfactory to Administrative Agent, of each
Uninsured Mortgaged Property dated a recent date acceptable to Administrative
Agent, certified by a licensed professional surveyor satisfactory to
Administrative Agent, provided, however, in the event that any
survey delivered pursuant to this provision is dated on a date which is more
than six (6) months prior to the Closing Date, but less than one (1) year prior
to the Closing Date, such survey shall be acceptable so long as such survey
otherwise complies with the ALTA/ACSM standards required by Administrative
Agent, and the owner and/or lessee of the Mortgaged Property delivers a “no
change survey affidavit” in a form which is acceptable to the title insurance
company issuing the Mortgage Policy, so that the title insurance company will
delete any general survey exception in such Mortgage Policy.

 

(vii)                           Perfection.  Borrower
shall have delivered to Administrative Agent true and correct copies of
Perfection Certificates, each of which shall be in full force and effect and in
form and substance satisfactory to Administrative Agent as of the Closing Date.

 

(viii)                       Holdco Agreement.  Holdco I and
Holdco II shall have executed and delivered an agreement in form and substance
and on terms and conditions satisfactory to the Administrative Agent (the “Holdco
Agreement”).

 

55

 

(ix)                              Horizon Subordination Agreement.  Borrower
shall have on or before the Closing Date, entered into an amended and restated
subordination agreement with Horizon Ventures, LLC in form and substance and on
terms and conditions satisfactory to Administrative Agent (the “Horizon
Subordination Agreement”).

 

(c)                                  Restructuring Documents.

 

(i)                                    Restructuring Agreement.  GOF and
Borrower shall have entered into an Exchange Agreement (the “GOF
Restructuring Agreement”) substantially in the form of Exhibit 5.1(c)(i)
and such agreement shall remain in full force and effect.

 

(ii)                                Holdco Matters.  Holdco I
shall have been formed in the manner contemplated by the Term Sheet attached
hereto as Exhibit 5.1(c)(ii), with such changes as are acceptable to the
Administrative Agent or, if adverse to the interests of the Lenders (as
determined by the Administrative Agent in its sole reasonable discretion after
reasonable advance notice of such proposed change), acceptable to the Required
Lenders, and the Administrative Agent shall be satisfied that such formation
shall have occurred in a manner satisfactory to it, including with respect to
all matters pertaining to the governance and capitalization of Holdco I and
Holdco II.  Following such formation,
each of the following actions shall have been taken, each on terms and
conditions and in form and substance satisfactory to Administrative Agent with
structural changes to any of the following which are not adverse to the
interests of the Lenders:

 

(A)                                     GOF shall have contributed (or caused to be
contributed) to Holdco I and Holdco I shall have, in turn, contributed to
Holdco II the rights and obligations under the ICI Agreement;

 

(B)                                     The GOF Bonds shall have been exchanged for equity of
Holdco I pursuant to the GOF Restructuring Agreement;

 

(C)                                     CPH (or its Affiliate) shall have contributed (or
caused to be contributed) all of its GOF Bonds to Holdco I;

 

(D)                                     Huntsman Family Holdings II Company, LLC shall have
contributed (or caused to be contributed) 19.9% of the Capital Stock of HSCHC
to Holdco I, Holdco I shall have contributed or cause to be contributed such
Capital Stock to Holdco II and Holdco II shall have, in turn, contributed such
Capital Stock to Borrower such that, after giving effect to such contributions,
Borrower will own 100% of the equity of HSCHC on the Closing Date;

 

(E)                                       Huntsman Family Holdings II Company, LLC shall have
contributed (or caused to be contributed) 
all of the Capital Stock of Borrower owned or held by it on the Closing
Date to Holdco I, Holdco I shall have contributed such Capital Stock to Holdco
II;

 

56

 

(F)                                       Huntsman Family Holdings II Company, LLC shall have
contributed (or caused to be contributed) 20% of the Capital Stock of JK
Holdings to Holdco I, Holdco I shall have contributed such Capital Stock to
Holdco II and Holdco II shall have, in turn, contributed or cause to be
contributed such equity to Borrower;

 

(G)                                     Huntsman Family Holdings II Company, LLC shall have
contributed (or caused to be contributed) 
$500,000 of preferred equity in Huntsman Petrochemical to Holdco I,
Holdco I shall have contributed such preferred stock to Holdco II and Holdco II
shall have, in turn, contributed or cause to be contributed such preferred
stock to Borrower; and

 

(H)                                    Huntsman Family Holdings II Company, LLC shall have
contributed (or caused to be contributed) the contractual rights or an entity
solely holding the contractual rights to acquire the Australian Joint Venture
Interests to Holdco I, Holdco I shall have contributed such rights to Holdco II
and Holdco II shall have, in turn, contributed or cause to be contributed such
rights to Borrower.

 

(iii)                         Restructuring.  The legal,
organizational and financial structure of Borrower and its Subsidiaries (after
giving effect to the Restructuring) shall be acceptable to the Administrative
Agent.  In addition, all financial,
legal and tax matters (including any tax legislation pending before Congress or
any committee thereof) relating to the Restructuring or the financing
contemplated hereby shall be satisfactory to the Administrative Agent.

 

(d)                                  Credit Party Documents.  On or before the Closing Date, Borrower
shall deliver or cause to be delivered to the Administrative Agent the
following with respect to each Credit Party:

 

(i)                                    Certified copies of its Certificate or Articles of
Incorporation, together with a good standing certificate from the Secretary of
State of the jurisdiction of its incorporation and each other state in which it
is qualified as a foreign corporation to do business, except where, in the
judgment of Administrative Agent, the failure to be so qualified in a foreign
jurisdiction would not be material and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of each of
such states, each dated a recent date prior to the Closing Date;

 

(ii)                                Copies of its Bylaws, certified as of the Closing Date by its corporate
secretary or an assistant secretary;

 

(iii)                            Resolutions
of its Board of Directors (a) approving and authorizing the execution, delivery
and performance of each of the Loan Documents to which it is a party, and (b)
approving and authorizing the execution, delivery and performance of the other
Loan Documents to which it is a party and all

 

57

 

transactions
related thereto, in each case certified as of the Closing Date by its corporate
secretary or an assistant secretary as being in full force and effect without
modification or amendments; and

 

(iv)                               Signature and incumbency certificates of its officers executing each of
the Loan Documents to which it is a party.

 

(e)                                  Third Party Credit Documents.

 

(i)                                    Priority Credit Agreement.  Borrower
shall have executed and delivered the Priority Credit Agreement providing for
commitments of the lenders thereunder to make Priority Loans in an aggregate
principal amount of not more than $275 million on terms and conditions
substantially as set forth on Exhibit 5.1(e)(i) and all conditions
precedent to the effectiveness thereof shall have been satisfied or waived.

 

(ii)                                Amended and Restated Senior Notes
Indentures.                             On or before the Closing Date, after giving
effect to the Transactions, the Amended and Restated Senior Notes Indentures
shall be in full force and effect.

 

(iii)                            Amended and Restated Polymers
Indenture.   On or before the Closing Date after giving
effect to the Transactions, the Amended and Restated Polymers Indenture shall
be in full force and effect.

 

(f)                                    Certificates and Opinions of Parties’ Counsel.

 

(i)                                    Representations and Warranties;
Default; Officer’s Certificate.  The representations and warranties set forth
in Article VI hereof shall be true and correct and no Event of
Default or Unmatured Event of Default shall have occurred or be continuing
(after giving effect to this Agreement) and Administrative Agent shall have
received, with a signed counterpart for each Lender, a certificate executed by
a Responsible Officer on behalf of Borrower, dated the Closing Date and in the
form of Exhibit 5.1(f)(i) hereto, stating that the representations and
warranties set forth in Article VI hereof are true and correct as of the
date of the certificate, that no Event of Default or Unmatured Event of Default
has occurred and is continuing (after giving effect to this Agreement), and
that the conditions of Section 5.1 hereof have been fully satisfied or
waived.

 

(ii)                                Opinions of Credit Parties’ Counsel.  Lenders and
their respective counsel shall have received (i) originally executed copies of
one or more favorable written opinions of Skadden, Arps, Slate, Meagher &
Flom LLP, counsel for the Credit Parties, in form and substance reasonably
satisfactory to Administrative Agent and its counsel, dated the Closing Date
and setting forth substantially the matters in the opinions designated in Exhibit
5.1(f)(ii)-1 annexed hereto and as to such other matters as Administrative
Agent acting on behalf of Lenders may reasonably request, (ii) originally
executed copies of one or more favorable written opinions of Stoel Rives LLP,
in form and substance reasonably satisfactory to Administrative Agent and its
counsel, dated the Closing Date and

 

58

 

setting
forth substantially the matters in the opinions designated in Exhibit
5.1(f)(ii)-2 annexed hereto and as to such other matters as Administrative
Agent acting on behalf of Lenders may reasonably request, (iii) originally
executed copies of one or more favorable written opinions of such other local
counsel to the Credit Parties as Administrative Agent may request in form and
substance reasonably satisfactory to Administrative Agent and its counsel,
dated the Closing Date and (iv) evidence satisfactory to Administrative Agent
that Borrower has requested such counsel to deliver such opinions to Lenders.

 

(g)                                 Tax Sharing Agreement.         Administrative Agent shall have received a fully
executed Tax Sharing Agreement in substantially the form of Exhibit 5.1(g)
attached hereto (together with such modifications thereto as may be agreeable
to Administrative Agent, the “Tax Sharing Agreement”).

 

(h)                                 Approvals.  All necessary governmental (domestic and
foreign) and third party approvals in connection with the Transactions and the
transactions contemplated by the Loan Documents and otherwise referred to
herein or therein shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being taken by
any competent authority which restrains, prevents or imposes materially adverse
conditions upon the consummation of all or any part of such Transactions or the
other transactions contemplated by the Loan Documents and otherwise referred to
herein or therein.  Additionally, there
shall not exist any judgment, order, injunction or other restraint issued or
filed or a hearing seeking injunctive relief or other restraint pending or
notified prohibiting or imposing materially adverse conditions upon all or any
part of the Transactions, the transactions contemplated by the Loan Documents.

 

(i)                                    Environmental Reports.  Administrative Agent shall have received copies of the
most recent environmental risk assessment reports in the possession of Borrower
or its Subsidiaries or performed at the request of Borrower or its Subsidiaries
for any current and former facilities of Borrower and its Subsidiaries.

 

(j)                                    Litigation.  No litigation by any entity (private or
governmental) shall be pending or, to the best knowledge of Borrower,
threatened (except for litigation that would be rendered moot by, or would not
survive, the consummation of the Plan of Reorganization) with respect to this
Agreement, any other Loan Document or any documentation executed in connection
herewith or the transactions contemplated hereby (including, without
limitation, the Transactions), or which Administrative Agent or the Required
Lenders shall determine could reasonably be expected to have a Material Adverse
Effect.

 

(k)                                Fees.  Borrower shall have paid to Administrative
Agent and the Lenders all costs, fees and expenses (including, without
limitation, legal fees and expenses) payable to Administrative Agent and the
Lenders to the extent then due.

 

(l)                                    Adverse Change.  Since December 31, 2001,
nothing shall have occurred (and the Lenders shall have become aware of no
facts or conditions not previously

 

59

 

known) which
Administrative Agent or the Required Lenders shall reasonably determine has, or
could have, a Material Adverse Effect.

 

(m)                              Insurance.  Administrative Agent shall be satisfied with the insurance
coverage in effect on the Closing Date pertaining to the assets of Borrower and
its Restricted Subsidiaries, and shall have received evidence satisfactory to
it that Administrative Agent shall have been named as a loss payee, mortgagee
and additional insured on all such policies of insurance, as appropriate.

 

(n)                                 Rating.  Borrower shall have received a prospective
senior secured debt rating with respect to the Loans from each of S&P and
Moody’s.

 

(o)                                  Corporate Proceedings.  All corporate and legal proceedings and all
instruments and agreements in connection with the Transaction and the other
transactions contemplated by this Agreement shall be satisfactory in form and
substance to Administrative Agent and, except as otherwise agreed by
Administrative Agent, shall have been consummated without any waiver of any
conditions or other provisions set forth therein and Administrative Agent shall
have received all information and copies of all documents and papers, including
records of corporate proceedings, governmental approvals, good standing
certificates and bring-down telegrams or certificates, if any, which
Administrative Agent or the Required Lenders reasonably may have requested in
connection therewith, such documents and papers where appropriate to be
certified by a Responsible Officer or by proper corporate or Governmental
Authorities.

 

Each Lender
hereby agrees that by its execution and delivery of its signature page hereto,
such Lender approves of and consents to each of the matters set forth in Section
5.1 which must be approved by, or which must be satisfactory to, the
Administrative Agent (in the case of DB), or the Required Lenders or Lenders,
as the case may be; provided that, in the case of any agreement or document
which must be approved by, or which must be satisfactory to, the Lenders,
Administrative Agent or Borrower shall have delivered a copy of such agreement
or document to such Lender if so requested on or prior to the Closing Date.

 

5.2                               Extension of Forbearance and
Interim Maturity.

 

By its execution hereof, each of the Original Lenders
party hereto agrees that if the conditions set forth in Section 5.1 have
not been satisfied or waived but if the Borrower, HSCHC, HSCC, the
Administrative Agent and the holders of at least 662/3% of the
Original Loans have executed and delivered this Agreement or a Forbearance
Extension Agreement, then (a) each Lender party to the Original Credit
Agreement executing this Agreement agrees to be bound by the provisions of the
Original Credit Forbearance Extension Agreement, attached hereto as Exhibit
5.2(a) as if a party thereto including all of the terms, conditions and
provisions therein and (b) each Lender party to the Original Term Loan
executing this Agreement agrees to be bound by the provisions of the Term Loan
Forbearance Extension Agreement, attached hereto as Exhibit 5.2(b) as if
a party thereto including to all of the terms, conditions and provisions
therein.  Each Original Lender party
hereto agrees that upon request, such Lender shall execute and deliver the
signature page to the applicable Forbearance Extension Agreement to the
Administrative Agent.

 

60

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

 

In order to induce the Lenders to enter into this
Agreement and to make the Loans, Borrower makes the following representations
and warranties (both before and after giving effect to the consummation of the
Transactions):

 

6.1                               Corporate Status.

 

Each of Borrower and each of its Subsidiaries (i) is a
duly organized and validly existing corporation, partnership, limited liability
company, trust or other entity in good standing under the laws of the
jurisdiction of its organization (or the equivalent thereof in the case of
Foreign Subsidiaries) except where the failure to be in such good standing
would not have a Material Adverse Effect, (ii) has the corporate or partnership
or other requisite power and authority to own its property and assets and to
transact the business in which it is engaged and presently proposed to engage
in and (iii) is duly qualified and is authorized to do business and is in good
standing in each other jurisdiction where the ownership, leasing or operation
of property or the conduct of its business requires such qualification, except
for such failure to be so qualified which, in the aggregate, would not have a
Material Adverse Effect.

 

6.2                               Corporate Power and Authority.

 

Each Credit Party has the corporate or other
appropriate power and authority to execute, deliver and perform the terms and
provisions of each of the Loan Documents to which it is party and has taken all
necessary corporate or other appropriate action to authorize the execution,
delivery and performance by it of each of such Loan Documents.  Each Credit Party has duly executed and
delivered each of the Loan Documents to which it is party, and each of such
Loan Documents constitutes its legal, valid and binding obligation enforceable
in accordance with its terms, except to the extent that the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws generally affecting creditors’ rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).

 

6.3                               No Violation.

 

The execution, delivery or performance by any Credit
Party of the Loan Documents to which it is a party (including, without
limitation, the granting of Liens pursuant to the Security Documents), nor
compliance by it with the terms and provisions thereof, nor the consummation of
the transactions contemplated therein (i) will contravene any provision of any
Requirement of Law applicable to any Credit Party, (ii) will conflict with or
result in any breach of or constitute a tortious interference with any of the
terms, covenants, conditions or provisions of, or constitute a default under,
or result in the creation or imposition of (or the obligation to create or
impose) any Lien (except pursuant to the Security Documents) upon any of the
property or assets of any Credit Party pursuant to the terms of, any
Contractual Obligation to which any Credit Party is a party or by which it or
any of its property or assets is bound or to which it may be subject, (iii)
will violate any provision of any Organizational Document of any Credit Party
or

 

61

 

(iv) requires any approval of
stockholders or any approval or consent of any Person (other than a
Governmental Authority) except as have been obtained or as set forth on Schedule
6.3.

 

6.4                                  Governmental and Other Approvals.

 

Except as set forth on Schedule 6.4 hereto and
except for the recording of the Mortgage Supplements and the filing of UCC
financing statements, which shall be recorded and filed, respectively, on, or
as soon as practicable after, the date hereof, no order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with or exemption by, any Governmental Authority (except as have been obtained
or made on or prior to the Closing Date), is required to authorize, or is
required in connection with, the execution, delivery and performance of any
Loan Document.

 

6.5                               Financial Statements; Financial
Condition; Undisclosed Liabilities; etc.

 

(a)                                  Financial Statements.  The Historical Financial Statements copies
of which have been furnished to Administrative Agent prior to the date hereof,
have been prepared in accordance with GAAP consistently applied (except as may
be indicated in the notes thereto) subject, in the case of interim statements,
to normal year end adjustments.  Each
Historical Financial Statement presents fairly the financial condition of the
applicable Credit Party as of the date thereof.  The Historical Financial Statements identified on Schedule
6.5(a) as audited financial statements have been examined by Deloitte &
Touche, independent certified public accountants, who delivered an opinion in
respect thereto, and present fairly the financial condition of the applicable
Credit Party at the date of each respective audited balance sheet.  Since December 31, 2001, there has been no
Material Adverse Effect.

 

(b)                                  Solvency.  On
and as of the Closing Date, after giving effect to the Transactions and to all
Indebtedness (including the Loans) being incurred, and to be incurred (and the
use of proceeds thereof), and Liens created, and to be created, by Borrower in
connection with the transactions contemplated hereby, (i) the sum of the
assets, at a fair valuation, of Borrower and each other Material Subsidiary
will exceed its debts; (ii) neither Borrower nor any Material Subsidiary has
incurred and does not intend to, nor believes that it will, incur debts beyond
its ability to pay such debts as such debts mature; and (iii) Borrower and each
other Material Subsidiary will have sufficient capital with which to conduct
its business.  For purposes of this Section
6.5(b) “debt” means any liability on a claim, and “claim” means (y) any
right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured (including all obligations,
if any, under any Plan or the equivalent for unfunded past service liability,
and any other unfunded medical and death benefits) or (z) any right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.  In computing the amount
of contingent or unliquidated liabilities at any time, such liabilities will be
computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

 

62

 

(c)                                  No Undisclosed Liabilities.  Except as fully reflected in the financial
statements and the notes related thereto delivered pursuant to Section
6.5(a) and on Schedule 6.5(d) there were, to the best of Borrower’s
knowledge, as of the Closing Date (and after giving effect to the Transactions
occurring on such date) no liabilities or obligations with respect to Borrower
and its Restricted Subsidiaries of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether or not due) which, either
individually or in aggregate, would be material to Borrower.

 

(d)                                  Indebtedness.  Schedule 6.5(d) sets forth a true and complete list of (i)
all Indebtedness of Borrower, HSCHC and HSCC and its Restricted Subsidiaries
(other than Loans, Intercompany Indebtedness or Priority Loans) that is
outstanding as of the Closing Date and that remains outstanding after giving
effect to the Transactions, to the extent that, in each case, such Indebtedness
is in excess of $1,000,000 (the “Existing Obligations”), in aggregate
principal amount thereof as of a date not more than three Business Days prior
to the Closing Date (and the aggregate amount of any undrawn commitments with
respect thereto as of the date specified therein), and (ii) Interest Rate
Agreements, the notional amount thereof and the name of the respective obligor
and any other entity which directly or indirectly guaranteed such debt.  No Existing Obligation has been incurred in
connection with, or in contemplation of, the Transactions or the other
transactions contemplated hereby. 
Borrower has delivered or caused to be delivered to Administrative Agent
a true and complete copy of the form of each instrument evidencing Indebtedness
for money borrowed listed on Schedule 6.5(d) and of each instrument
pursuant to which such Indebtedness for money borrowed was issued.

 

(e)                                  Pro Forma.  The pro  forma balance sheet of Borrower attached
hereto as Schedule 6.5(e) (the “Pro Forma Balance Sheet”)
presents fairly the financial condition of Borrower at the date of such balance
sheet and presents a good faith estimate of the pro  forma
financial condition of Borrower (after giving effect to the Transactions, and
the other transactions contemplated hereby and thereby) at the date
thereof).  The Pro Forma Balance Sheet
has been prepared using financial statements of Borrower and its Subsidiaries
which were prepared in accordance with GAAP consistently applied (except as may
be indicated in the notes thereto) subject to normal year-end adjustments.

 

(f)                                    Projections.  On and as of the Closing Date, the financial projections,
attached hereto as Schedule 6.5(f) and previously delivered to
Administrative Agent and the Lenders (the “Projections”) and each of the
Projections delivered after the Closing Date pursuant to Section 7.2(f)
are, at the time made, based on good faith estimates and assumptions made by
the management of Borrower, and there are no statements or conclusions in any
of the Projections which, at the time made, are based upon or include information
known to Borrower to be misleading or which fail to take into account material
information regarding the matters reported therein.  On the Closing Date, Borrower believes that the Projections are
reasonable and attainable, it being understood that uncertainty is inherent in
any forecasts or projections and that no assurance can be given that the
results set forth in the Projections will actually be obtained.

 

6.6                               Litigation.

 

There are no actions, suits or proceedings pending or,
to the best knowledge of Borrower, threatened (except for litigation that would
be rendered moot by, or would not

 

63

 

survive, the consummation of the
Plan of Reorganization) against Borrower or any of its Subsidiaries (i) with respect
to any Loan Document seeking to enjoin Borrower’s or any Subsidiary’s
performance thereof or (ii) which would reasonably be expected to have a
Material Adverse Effect.

 

6.7                               True and Complete Disclosure.

 

All factual information (taken as a whole) heretofore
or contemporaneously furnished by or on behalf of Borrower or any of its
Subsidiaries in writing (including electronically) to any Lender (other than
the Projections as to which Section 6.5(f) applies) for purposes of or
in connection with this Agreement or any transaction contemplated herein is,
and all other such factual information (taken as a whole) hereafter furnished
by or on behalf of Borrower or any of its Subsidiaries in writing to any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated herein will be, true and accurate in all material respects on the
date as of which such information is dated or certified and not incomplete by
omitting to state any fact necessary to make such information (taken as a whole)
not misleading in any material respect at such time in light of the
circumstances under which such information was provided.  The Lenders acknowledge that they have not
relied on Borrower’s company brochures.

 

6.8                               Margin Regulations.

 

No part of the proceeds of any Loan has been or will
be used to purchase or carry any margin stock (as defined in Regulation U of
the Board), directly or indirectly, or to extend credit for the purpose of
purchasing or carrying any such margin stock for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or carry
any margin security or for any other purpose which might cause any of the loans
or extensions of credit under this Agreement to be considered a “purpose
credit” within the meaning of Regulation T, U or X of the Board.

 

6.9                               Tax Returns and Payments.

 

Each of Borrower and its Subsidiaries have filed or
caused to be filed all tax returns which are required to be filed, except where
failure to file any such returns would not reasonably be expected to have a
Material Adverse Effect, and have paid or caused to be paid all taxes shown to
be due and payable on said returns or on any assessments made against them or
any of their respective material properties and all other material taxes, fees
or other charges imposed on them or any of their respective properties by any
Governmental Authority (other than those the amount or validity of which is
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of Borrower or
its Subsidiaries, as the case may be) except where failure to take any such
action would not reasonably be expected to have a Material Adverse Effect; and
no tax liens have been filed and no claims are being asserted with respect to
any such taxes, fees or other charges (other than such liens or claims, the
amount or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided) which would be reasonably expected to have a Material
Adverse Effect.

 

64

 

6.10                        Compliance With ERISA.

 

Each Plan has been operated and administered in a
manner so as not to result in any material liability of Borrower for failure to
comply with the applicable provisions of ERISA and the Code; no Reportable
Event which could reasonably be expected to result in the termination of any
Plan has occurred with respect to a Plan; to the best knowledge of Borrower, no
Multiemployer Plan is insolvent or in reorganization; as of the Closing Date,
the aggregate present value of the accrued benefits as of the Closing Date
under each Plan does not exceed the aggregate fair market value of the assets
of such Plan, in each case, by more than $3,000,000 using the actuarial funding
assumptions in effect for such Plan as of the most recent valuation date; no
Plan has an accumulated or waived funding deficiency or has applied for an extension
of any amortization period within the meaning of Section 412 of the Code;
neither Borrower nor any of its Subsidiaries nor any ERISA Affiliate has
incurred any material liability to or on account of a Plan pursuant to Section
409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or
Section 4971 or 4975 of the Code; no proceedings have been instituted to
terminate any Plan within the last fiscal year; using actuarial assumptions and
computation methods consistent with subpart 1 of subtitle E of Title IV of
ERISA, to the best knowledge of Borrower, Borrower and its Subsidiaries and its
ERISA Affiliates would not have any material liability to any Plans which are
Multiemployer Plans in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Multiemployer Plan ending
prior to the Closing Date; no Lien imposed under the Code or ERISA on the
assets of Borrower or any of its Subsidiaries or any ERISA Affiliate exists or
is likely to arise on account of any Plan; and Borrower and its Subsidiaries do
not maintain or contribute to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides benefits to retired employees (other than
as required by Section 601 of ERISA) or any employee pension benefit plan (as
defined in Section 3(2) of ERISA) the obligations with respect to either of
which could reasonably be expected to have a Material Adverse Effect.

 

6.11                        Ownership of Property.

 

Each of Borrower and its Restricted Subsidiaries has
good and marketable title in fee simple to, a valid leasehold interest in, or a
valid contractual agreement to use, all its material real property, and good
title to, a valid leasehold interest in, or valid contractual rights to use all
its other material property, and none of such property is subject to any Lien
except for Permitted Liens.  As of the
Closing Date, Borrower and its Restricted Subsidiaries have granted mortgages
to secure the Obligations on all parcels of real estate which have an estimated
fair market value in excess of $1,000,000.

 

6.12                        Capitalization of Borrower.

 

On the Closing Date, the capitalization of Borrower is
as set forth on Schedule 6.12 hereto. 
All shares of Capital Stock of Borrower have been duly authorized and validly
issued and are fully paid and non-assessable. 
Except as set forth on Schedule 6.12, no authorized but unissued
or treasury shares of Capital Stock of Borrower are subject to any option,
warrant, right to call or commitment of any kind or character.  A complete and correct copy of each of the
certificate of incorporation and by-laws of Borrower in effect on the date of
this Agreement has been delivered to Administrative Agent.  Except as set forth on Schedule 6.12,
Borrower does

 

65

 

not have any outstanding stock
or securities convertible into or exchangeable for any shares of its Capital
Stock, or any rights issued to any Person (either preemptive or other) to
subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to any of its Capital
Stock or any stock or securities convertible into or exchangeable for any of
its Capital Stock (other than as set forth in the certificate of incorporation
of Borrower).  Neither Borrower nor any
of its Subsidiaries is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its Capital Stock or
any convertible securities, rights or options of the type described in the
preceding sentence except for agreements the performance of which would not
violate this Agreement.  As of the
Closing Date, all of the issued and outstanding shares of Capital Stock of
Borrower are owned of record by the stockholders as set forth on Schedule
6.12 hereto.

 

6.13                        Subsidiaries.

 

(a)                                  Organization.  Schedule 6.13 hereto sets forth, as of the date hereof, a
true, complete and correct list of each Restricted Subsidiary of Borrower and
indicates for each such Subsidiary (i) its jurisdiction of incorporation and
(ii) its ownership (by holder and percentage interest).  As of the date hereof, Borrower has no
Restricted Subsidiaries except for those Restricted Subsidiaries listed as such
on Schedule 6.13 hereto.

 

(b)                                  Capitalization.  All shares of Capital Stock of each
Restricted Subsidiary of Borrower have been duly authorized and validly issued
and, to the extent applicable in the case of Foreign Subsidiaries, are fully
paid and non-assessable and, to the extent owned by Borrower, are owned by
Borrower free and clear of all Liens except for Permitted Liens.  No authorized but unissued or treasury
shares of Capital Stock of any Restricted Subsidiary of Borrower are subject to
any option, warrant, right to call or commitment of any kind or character.

 

(c)                                  Restrictions on or Relating to Subsidiaries.  There does not exist any consensual
encumbrance or restriction on the ability of (i) any Restricted Subsidiary of
Borrower to pay dividends or make any other distributions on its Capital Stock
or any other interest or participation in its profits owned by Borrower or any
Restricted Subsidiary of Borrower, or to pay any  Indebtedness owed to Borrower or a Restricted Subsidiary of
Borrower, (ii) any Restricted Subsidiary of Borrower to make loans or advances
to Borrower or any of Borrower’s Subsidiaries or (iii) Borrower or any of its
Restricted Subsidiaries to transfer any of its properties or assets to Borrower
or any of its Subsidiaries, except for such encumbrances or restrictions
permitted to exist under Section 8.13.

 

6.14                        Compliance With Law, etc.

 

Neither Borrower nor any of its Subsidiaries is in
default under or in violation of any Requirement of Law or Contractual
Obligation or under its Organizational Documents, as the case may be, in each
case the consequences of which default or violation, either in any one case or
in the aggregate, would have a Material Adverse Effect.

 

66

 

6.15                        Investment Company Act.

 

Neither Borrower nor any of its Subsidiaries is an
“investment company” or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended.

 

6.16                        Public Utility Holding Company Act.

 

Neither Borrower nor any of its Subsidiaries is a
“holding company,” or a “subsidiary company” of a “holding company,” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding
company” within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

 

6.17                        Environmental Matters.

 

Except as disclosed in Schedule 6.17
hereto:  (i) the operations of and the
real property owned or operated by Borrower and each of its Subsidiaries is in
compliance with all applicable Environmental Laws except where the failure to
be in compliance, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect; (ii) Borrower and each of its
Subsidiaries has obtained and will continue to maintain all Environmental
Permits, and all such Environmental Permits are in good standing and Borrower
and its Subsidiaries are in compliance with all terms and conditions of such
Environmental Permits, except where failure to so obtain, maintain or comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect; (iii) neither Borrower nor any of its Subsidiaries nor
any of their present or past properties or operations (whether owned or leased)
is subject to:  (A) any Environmental
Claim or other written claim, request for information, judgment, order, decree
or agreement from or with any Governmental Authority or private party related
to any material violation of or material non-compliance with Environmental Laws
or Environmental Permits to the extent any of the foregoing could reasonably be
expected to have a Material Adverse Effect, (B) any pending or, to the
knowledge of Borrower, threatened judicial or administrative proceeding,
action, suit or investigation related to any Environmental Laws or
Environmental Permits which, if determined adversely to Borrower or any of its
Subsidiaries, could reasonably be expected to have a Material Adverse Effect,
(C) any Remedial Action which if not taken could reasonably be expected to have
a Material Adverse Effect or (D) any liabilities, obligations or costs arising
from the Release or substantial threat of a material Release of a Contaminant
into the environment regardless of whether the Release or substantial threat of
a material Release is occurring on Borrower’s or any Subsidiaries present or
past properties or at any other location, in each case where such Release or
substantial threat of a Material Release could reasonably be expected to have a
Material Adverse Effect; (iv) there is not now, nor to the knowledge of
Borrower has there ever been, on or from any current or former property of
Borrower or on, in or from the current or former property of any of its
Subsidiaries, to the extent any of the following could reasonably be expected
to have a Material Adverse Effect:  (A)
except in compliance with applicable Environmental Laws and Environmental
Permits, any generation, handling, treatment, recycling, storage or off-site
disposal of any hazardous waste as those terms are defined under Environmental
Laws, (B) any on-site disposal of any hazardous waste, substance or material as
those terms are defined under applicable Environmental Laws, (C) except in
compliance with applicable Environmental Laws and Environmental Permits, any 

 

67

 

underground storage tanks or
underground injection wells, (D) any surface impoundments, pits, ponds, lagoons
or landfills, (E) except in compliance with applicable Environmental Laws and
Environmental Permits, any friable asbestos-containing material; or (F) except
in compliance with applicable Environmental Laws and Environmental Permits, any
polychlorinated biphenyls (PCB’s) or other Contaminants; (v) neither Borrower
nor any of its Subsidiaries has received any written notice or claim to the
effect that Borrower or any of its Subsidiaries is or may be liable to any
Person as a result of the Release or substantial threat of a material Release
of a Contaminant into the environment, which notice or claim could reasonably
be expected to result in a Material Adverse Effect; and (vi) no Environmental
Lien has attached to any property (whether owned or leased) of Borrower or of
any of its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect, nor are there any facts or circumstances currently known to
Borrower or any of its Subsidiaries that may reasonably be expected to give
rise to such an Environmental Lien.

 

6.18                        Labor Relations.

 

Neither Borrower nor any of its Restricted
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. 
There is (i) no significant unfair labor practice complaint pending against
Borrower or any of its Restricted Subsidiaries or, to the best knowledge of
Borrower, threatened against any of them before the National Labor Relations
Board, and no significant grievance or significant arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against Borrower or any of its Restricted Subsidiaries or, to the best
knowledge of Borrower, threatened against any of them, (ii) no significant
strike, labor dispute, slowdown or stoppage is pending against Borrower or any
of its Restricted Subsidiaries or, to the best knowledge of Borrower,
threatened against Borrower or any of its Restricted Subsidiaries and (iii) to
the best knowledge of Borrower, no question concerning union representation
exists with respect to the employees of Borrower or any of its Restricted
Subsidiaries, except (with respect to any matter specified in clause (i), (ii)
or (iii) above, either individually or in the aggregate) such as could not
reasonably be expected to have a Material Adverse Effect.

 

6.19                        Intellectual Property.

 

Each of Borrower and its Restricted Subsidiaries owns
or holds licenses or other rights to or under all of the patents, patent
applications, trademarks, service marks, trademark and service mark
registrations and applications therefor, trade secrets, proprietary
information, computer programs, databases, and other proprietary rights
(collectively, “Intellectual Property”) necessary for the present
conduct of its business, without any known conflict with the rights of others,
except such conflicts which could not reasonably be expected to have a Material
Adverse Effect.  Neither Borrower nor
any of its Restricted Subsidiaries has knowledge of any existing or threatened
claim by any Person contesting the validity, enforceability, use or ownership
of the Intellectual Property which could reasonably be expected to have a
Material Adverse Effect.

 

6.20                        Certain Fees.

 

Except as otherwise disclosed to Administrative Agent
in writing prior to the date hereof, no broker’s or finder’s fees or
commissions or any similar fees or commissions will be

 

68

 

payable by Borrower or any
Restricted Subsidiary with respect to the incurrence and maintenance of the
Obligations, any other transaction under the Loan Documents or any services
rendered in connection with such transactions. 
Borrower covenants that it will indemnify Administrative Agent and each
Lender against and hold Administrative Agent and each Lender harmless from any
claim, demand or liability for broker’s or finder’s fees or similar fees or
commissions alleged to have been incurred in connection with any of the
transactions contemplated hereby.

 

6.21                        Security Documents.

 

(a)                                  Security Agreement Collateral.  The provisions of the Security Documents are
effective to create in favor of the Collateral Agent  for the benefit of the secured parties pursuant to the Security
Agreement, a legal, valid and enforceable security interest in all right, title
and interest of the applicable Credit Party in the Collateral owned by such
Credit Party, and the Security Agreement, together with the filings of Form
UCC-1 in all relevant jurisdictions creates a first lien on, and security
interest in, all right, title and interest of Borrower and such Credit Parties
in all of the Collateral described therein, subject to no other Liens other
than Permitted Liens.  Except for titled
vehicles, vessels and other collateral which may not be perfected through the
filing of financing statements under the Uniform Commercial Code of the
appropriate jurisdiction and which have an aggregate fair market value of less
than $5,000,000, all such liens have been or, upon the filing of the financing
statements delivered on the Closing Date, will be fully perfected liens except
for Permitted Liens.  The recordation in
the United States Patent and Trademark Office and in the United States
Copyright Office of assignments for security made pursuant to the Security
Agreement will be effective, under Federal law, to perfect the security
interest granted to the Collateral Agent in the trademarks, patents and
copyrights covered by the Security Agreement. 
The recordation with the United States Surface Transportation Board of
assignments for security made pursuant to the Security Agreement will be
effective under Federal law, to create a valid first lien in favor of the
Collateral Agent the  in the railcars
covered by the Security Agreement. 
Borrower and its Restricted Subsidiaries have good and marketable title
to all Collateral, free and clear of all Liens except Permitted Liens.

 

(b)                                  Pledged Securities.  The security interests created in favor of
the Collateral Agent, as pledgee for the benefit of the Lenders under the
Security Agreement, constitute perfected security interests in the Pledged
Securities and Pledged Intercompany Notes, subject to no security interests of
any other Person other than Permitted Liens. 
Except as set forth in the Security Agreement, no filings, registrations
or recordings which have not been made or will not have been made (or submitted
for recordation) within 10 Business Days after the Closing Date are required in
order to perfect the security interests created in the Pledged Securities or
Pledged Intercompany Notes under the Security Agreement.  Sixty-five percent (65%) of the Capital
Stock of all direct Foreign Subsidiaries with a net book value and a fair
market value in excess of $250,000 are pledged to the Collateral Agent.

 

(c)                                  Real Property Collateral.  The Mortgages create, as security for the
obligations purported to be secured thereby, a valid and enforceable perfected
security interest in and Lien on all of the Mortgaged Property (including,
without limitation, all fixtures and improvements relating to such Mortgaged
Property and affixed or added thereto on or after the Closing Date) in favor of
the Collateral Agent  (or such other
trustee as may be named therein) 

 

69

 

for the benefit of the secured
parties under the Security Agreement, superior to and prior to the rights of
all third Persons (except that the security interest created in the Mortgaged
Property may be subject to the Permitted Liens related thereto) and subject to
no other Liens (other than Liens permitted under Section 8.1).  Schedule 6.21(c) contains a true and
complete list as of the Closing Date of (x) each parcel of real property of
Borrower and its Restricted Subsidiaries with an estimated fair market value in
excess of $1,000,000, (y) the type of interest in such parcel of real property
held by Borrower or such Restricted Subsidiaries and (z) whether or not such
parcel of real property is Mortgaged Property. 
Borrower or such Restricted Subsidiaries have good and marketable title
to all Mortgaged Property free and clear of all Liens except those described in
the first sentence of this Section 6.21(c).

 

(d)                                  Deposit Accounts.  All domestic Deposit Accounts and
disbursement accounts of Borrower and its Restricted Subsidiaries whose
balances exceed $100,000  as of the Closing Date are listed on Schedule
6.21(d).  Neither the Borrower nor
any Subsidiary has granted any interest in any such Deposit Account or
disbursement account to any Person other than pursuant to the Security
Documents or the “Security Documents” as such term is defined in the Priority
Credit Agreement.

 

6.22                        Charitable Contributions.  Since October 31, 2001, neither Borrower nor
any of its Restricted Subsidiaries has made any charitable contributions except
as would have been permitted pursuant to Section 8.17 if it had been in effect
at such time.

 

6.23                        Asbestos Matters.  Neither the
Borrower nor any Subsidiary of the Borrower (a) manufactures, produces or sells
any product containing asbestos; or (b) has manufactured, produced or sold any
product containing asbestos prior to the Effective Date which would reasonably
be expected to have a Material Adverse Effect.

 

ARTICLE VII

 

AFFIRMATIVE COVENANTS

 

Borrower hereby agrees that, so long as any Loan
remains outstanding and unpaid or any other amount is owing to any Lender or
Administrative Agent hereunder, Borrower shall:

 

7.1                               Financial Statements.

 

Furnish, or cause to be furnished, to each Lender:

 

(a)                                  Quarterly Financial Statements. As soon as
available, but in any event not later than 45 days after the end of each of the
first three quarterly periods of each Fiscal Year of Borrower, (i) the
unaudited consolidated balance sheet of Borrower and its consolidated
Subsidiaries as at the end of such quarter setting forth in comparative form
the audited balance sheet of the Borrower and its consolidated Subsidiaries for
the prior Fiscal Year, (ii) the related unaudited consolidated statement of
income of the Borrower and its consolidated Subsidiaries as at the end of such
quarter and for the portion of the Fiscal Year through the end of such quarter
setting forth in comparative form the figures for the related periods in the
prior Fiscal Year and (iii) the related unaudited consolidated statements of
cash flow of Borrower and its consolidated Subsidiaries for the portion of the
Fiscal Year through the end of such quarter, and setting forth

 

70

 

in comparative form figures for
the related period in the prior Fiscal Year, all of which shall be certified by
a Responsible Financial Officer of Borrower, subject to normal year-end audit
adjustments and, if Borrower has established any Unrestricted Subsidiaries,
such consolidated statements shall be accompanied by a balance sheet as of such
date, and a statement of income and cash flows for such period and the prior year
comparative period, reflecting on a combined basis, for Restricted Subsidiaries
and on a combined basis for Unrestricted Subsidiaries, the consolidating
entries for each of such types of Subsidiaries; and

 

(b)                                  Annual Financial Statements.  As soon as available, but in any event
within 90 days after the end of each Fiscal Year of Borrower, a copy of the
consolidating and consolidated balance sheet of Borrower and its consolidated
Subsidiaries as at the end of such year and the related consolidating and consolidated
statements of income and of cash flows for such year, and setting forth in each
case in comparative form the figures for the previous year and such
consolidated statements shall be accompanied by a balance sheet as of such
date, and a statement of income and cash flows for such period, reflecting on a
combined basis, for Restricted Subsidiaries and on a combined basis for
Unrestricted Subsidiaries, the consolidating entries for each of such types of
Subsidiaries; all such financial statements shall be complete and correct in
all material respects and shall be prepared in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior periods
and, in the case of the consolidated financial statements referred to in this Section
7.1(b), accompanied by a report thereon of Deloitte & Touche or such
other independent certified public accountants of recognized national standing,
which report shall contain no 
qualifications with respect to the continuance of Borrower and its
Subsidiaries as going concerns and shall state that such financial statements
present fairly the financial position of Borrower and its Subsidiaries as at
the dates indicated and the results of their operations and cash flow for the
periods indicated in conformity with GAAP.

 

(c)                                  Monthly Financial Statements.  As soon as available, but in any event
within thirty (30) days after the end of each month (other than the last month
of any Fiscal Quarter) of Borrower, unaudited financial statements consisting of
a consolidated balance sheet as at the end of such month and consolidated
statements of income and cash flows of Borrower and its Restricted
Subsidiaries, consolidated and business segment statements of operations for
such month and for the Fiscal Year through such month, setting forth in each
case in comparative form the figures for the comparative month for the previous
Fiscal Year, subject to normal year-end audit adjustments all in reasonable
detail and certified on behalf of Borrower by a Responsible Officer of Borrower
as having been prepared in accordance with GAAP consistently applied.

 

7.2                               Certificates; Other Information.

 

Furnish to each Lender (or, if specified below, to
Administrative Agent):

 

(a)                                  Accountant’s Certificates.  Concurrently with the delivery of the
financial statements referred to in Section 7.1(b), to the extent not
contrary to the then current recommendations of the American Institute of
Certified Public Accountants, a certificate from Deloitte & Touche or other
independent certified public accountants of nationally recognized standing
substantially in the form of Exhibit 7.2(a), stating that, in the course
of their annual

 

71

 

audit of the books and records
of Borrower, no Event of Default or Unmatured Event of Default, insofar as they
relate to accounting and financial matters, has come to their attention which
was continuing at the end of such Fiscal Year or on the date of their
certificate, or if such an Event of Default or Unmatured Event of Default has
come to their attention, the certificate shall indicate the nature of such
Event of Default or Unmatured Event of Default.

 

(b)                                  Officer’s Certificates.  Concurrently with the delivery of the
financial statements referred to in Section 7.1, a certificate of a
Responsible Financial Officer substantially in the form of Exhibit 7.2(b)-1
stating that, to the best of such officer’s knowledge, such financial
statements present fairly, in accordance with GAAP, the financial condition and
results of operations of Borrower and its Subsidiaries for the period referred
to therein (subject to normal year-end audit adjustments) and concurrently with
the delivery of the financial statements referred to Section 7.1(a) and
(b), a Certificate of a Responsible Officer substantially in the form of Exhibit
7.2(b)-2, that no Event of Default or Unmatured Event of Default has
occurred except as specified in such certificate and, if so specified, the
action which Borrower proposes to take with respect thereto, which certificate
shall set forth detailed computations to the extent necessary to establish
Borrower’s compliance with the covenants set forth in Article IX of this
Agreement.

 

(c)                                  Audit Reports and Statements.  Promptly following Borrower’s receipt thereof,
copies of all consolidated financial or other consolidated reports or
statements, if any, submitted to Borrower or any of its Subsidiaries by
independent public accountants relating to any annual or interim audit of the
books of Borrower or any of its Subsidiaries.

 

(d)                                  Public Filings.  Within 10 days after the same become public,
copies of all financial statements and reports which Borrower may make to, or
file with, the SEC.

 

(e)                                  Other Requested Information.  Such other information respecting the respective
properties, business affairs, financial condition and/or operations of Holdco
I, Holdco II or Borrower or any of their Subsidiaries as Administrative Agent
or any Lender (through Administrative Agent) may from time to time reasonably
request.

 

(f)                                    Projections.  As soon as available and in any event within sixty (60) days
following the first day of each Fiscal Year commencing with the Fiscal Year of
Borrower beginning January 1, 2003 projections in form similar to that delivered
on the Closing Date covering the period from the beginning of such Fiscal Year
(on a quarterly basis for the first Fiscal Year and an annual basis thereafter)
through the end of the third Fiscal Year thereafter, prepared in reasonable
detail, with appropriate presentation and discussion of the principal
assumptions upon which such projections are based.

 

7.3                               Notices.

 

Promptly (and in any event within three Business Days
in the case of (a) below, or thirty days in the case of (b)-(c) below) after a
Responsible Officer of Borrower or any Subsidiary obtains knowledge thereof,
give notice to Administrative Agent (which shall promptly provide a copy of
such notice to each Lender) of:

 

72

 

(a)                                  Event of Default or Unmatured Event of Default.  The occurrence of any Event of Default or
Unmatured Event of Default, accompanied by a statement of a Responsible Officer
setting forth details of the occurrence referred to therein and stating what
action Borrower or such Subsidiary proposes to take with respect thereto.

 

(b)                                  Litigation and Related Matters.  The commencement of, or any material
development in, any action, suit, proceeding or investigation affecting
Borrower or any of its Restricted Subsidiaries or any of their respective
properties before any arbitrator or Governmental Authority, (i) in which the
amount of any claim, damage, penalty or fine asserted against Borrower or its
Restricted Subsidiaries that Borrower reasonably determines is not covered by
insurance is $3,000,000 or more, (ii) with respect to any Loan Document or any
material Indebtedness or preferred stock of Borrower or any of its Restricted
Subsidiaries or (iii) which, if determined adversely to Borrower or any of its
Subsidiaries, could reasonably be expected to have a Material Adverse Effect.

 

(c)                                  Environmental Notification.

 

(i)                                    The occurrence of one or more of the following, to the
extent that any of the following, if adversely determined, would have a
material adverse effect on the financial condition, business or properties of
Borrower and its Subsidiaries taken as a whole or, in any event, could
reasonably be expected to result in liability to Borrower or any of its
Restricted Subsidiaries in excess of $3,000,000 or a fine or penalty in excess
of $1,000,000: (A) written notice, claim or request for information to the
effect that Borrower or any of its Subsidiaries is or may be liable in any
material respect to any Person as a result of the presence of or the Release or
substantial threat of a material Release of any Contaminant into the
environment; (B) written notice that Borrower or any of its Subsidiaries is
subject to investigation by any Governmental Authority evaluating whether any
Remedial Action is needed to respond to the presence or to the Release or substantial
threat of a material Release of any Contaminant into the environment; (C)
written notice that any property, whether owned or leased by, or operated on
behalf of, Borrower or its Subsidiaries is subject to a material Environmental
Lien; (D) written notice of violation to Borrower or any of its Subsidiaries of
any Environmental Laws or Environmental Permits; or (E) commencement or written
threat of any judicial or administrative proceeding alleging a violation of any
Environmental Laws or Environmental Permits; provided, however,
that the provisions of this clause (i) shall not require Borrower to violate or
breach any confidentiality covenants to which it is bound.

 

(ii)                                Upon written request by Administrative Agent, Borrower
or any Restricted Subsidiary shall promptly submit to Administrative Agent and
the Lenders a report providing an update of the status of each environmental,
health or safety compliance, hazard or liability issue identified in any notice
or report required pursuant to clause (i) above and any other environmental,
health and safety compliance obligation, remedial obligation or liability that
could reasonably be expected to have a Material Adverse Effect.  All such notices shall describe in reasonable
detail the nature of the claim, investigation, condition, occurrence or removal
or Remedial Action and Borrower’s or such Restricted Subsidiary’s response
thereto.

 

(d)                                  Notices and Other Reports.  Notwithstanding the foregoing, to the extent
not otherwise required to be delivered hereunder, Borrower shall promptly
provide to

 

73

 

Administrative Agent a copy of
all material notices required to be delivered by the Borrower or any of its
affiliates under the Priority Credit Agreement, the ICI Agreement, the GOF
Restructuring Agreement or the MIOA.

 

7.4                               Maintenance of Existence.

 

Preserve, renew and keep in full force and effect its
and each Subsidiary’s existence and take all reasonable action to maintain all
rights, privileges and franchises material to its and those of each of its
Subsidiaries’ businesses except to the extent that failure to take any such
action would not in the aggregate reasonably be expected to have a Material
Adverse Effect, or as otherwise permitted pursuant to Sections 8.3 and 8.7,
and comply and cause each of its Subsidiaries to comply with all Requirements
of Law except to the extent that failure to comply therewith would not in the
aggregate reasonably be expected to have a Material Adverse Effect.

 

7.5                               Payment of Obligations.

 

Pay or discharge or otherwise satisfy at maturity or,
to the extent permitted hereby, prior to maturity or before they become
delinquent, as the case may be, and cause each of its Restricted Subsidiaries
to pay or discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be:

 

(i)                                    all material taxes, assessments and governmental
charges or levies imposed upon any of them or upon any of their income or
profits or any of their respective properties or assets prior to the date on
which penalties attach thereto; and

 

(ii)                                all lawful claims prior to the time they become a Lien (other than
Permitted Liens) upon any of their respective properties or assets;

 

provided, however, that neither Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such material tax,
assessment, charge, levy or claim (A) while the same is being contested by it
in good faith and by appropriate proceedings diligently pursued so long as
Borrower or such Subsidiary, as the case may be, shall have set aside on its
books adequate reserves in accordance with GAAP (segregated to the extent
required by GAAP) with respect thereto and title to any material properties or
assets is not jeopardized in any material respect or (B) which could not
reasonably be expected to have a Material Adverse Effect.

 

7.6                               Inspection of Property, Books and
Records.

 

Keep, or cause to be kept, and cause each of its
Subsidiaries to keep or cause to be kept, adequate records and books of
account, in which complete entries are to be made reflecting its and their
business and financial transactions, such entries to be made in accordance with
sound accounting principles consistently applied and will permit, and cause
each of its Subsidiaries to permit, any Lender or its respective
representatives, at any reasonable time, and from time to time at the
reasonable request of such Lender made to Borrower and upon reasonable notice,
to visit and inspect its and their respective properties, to examine and make copies
of and take abstracts from its and their respective records and books of
account, and to discuss its and their respective affairs, finances and accounts
with its and their respective 

 

74

 

principal officers, directors
and with the written consent of Borrower (which consent shall not be required
if any Event of Default has occurred and is continuing) independent public
accountants, provided that Borrower may attend any such meetings (and by this
provision Borrower authorizes such accountants to discuss with the Lenders and
such representatives the affairs, finances and accounts of Borrower and its
Subsidiaries).

 

7.7                               ERISA.

 

(a)                                  As soon as practicable and in any event within ten
(10) days after Borrower or any of its Subsidiaries or ERISA Affiliates knows
or has reason to know that a Reportable Event has occurred with respect to any
Plan (whether or not the requirement for notice of such Reportable Event has
been waived by the PBGC), deliver, or cause such Subsidiary or ERISA Affiliate
to deliver, to Administrative Agent a certificate of a responsible officer of
Borrower or such Subsidiary or ERISA Affiliate, as the case may be, setting
forth the details of such Reportable Event and the action, if any, which
Borrower or such Subsidiary or ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given;

 

(b)                                  Upon the request of any Lender made from time to time,
deliver, or cause each Subsidiary or ERISA Affiliate to deliver, to each Lender
a copy of the most recent actuarial report and annual report completed with
respect to any Plan;

 

(c)                                  as soon as possible and in any event within ten (10)
days after Borrower or any of its Subsidiaries or ERISA Affiliates knows or has
reason to know that any of the following have occurred with respect to any
Plan:

 

(i)                                    such Plan has been terminated, reorganized, petitioned
or declared insolvent under Title IV of ERISA,

 

(ii)                                the Plan Sponsor intends to terminate such Plan,

 

(iii)                            the
PBGC has instituted or will institute proceedings under Section 515 of
ERISA to collect a delinquent contribution to such Plan or under Section 4042
of ERISA to terminate such Plan,

 

(iv)                               that an accumulated funding deficiency has been incurred or that an
application has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including any required
installment payments) or on extension of any amortization period under Section
412 of the Code,

 

(v)                                   that Borrower or any Subsidiary of Borrower, or any ERISA Affiliate
will be required to make a deficit reduction contribution under Code Section
412(l) to any Plan for any Plan year, or

 

(vi)                               Borrower or any Subsidiary of Borrower has incurred any liability that
would result in a Material Adverse Effect under any employee welfare benefit
plan (within the meaning of Section 3(1) of ERISA) that provides benefits to
retired employees (other than as required by Section 601 of ERISA) or any  employee pension

 

75

 

benefit plans
(as defined in Section 3(2) of ERISA), deliver, or cause such Subsidiary or
ERISA Affiliate to deliver, to Administrative Agent a written notice thereof;
and

 

(d)                                  as soon as possible and in any event within thirty
days after Borrower or any of its Subsidiaries or ERISA Affiliates knows that
any of them has caused a complete withdrawal or partial withdrawal (within the
meaning of Sections 4203 and 4205, respectively, of ERISA) from any
Multiemployer Plan, deliver, or cause such Subsidiary or ERISA Affiliate to
deliver, to Administrative Agent a written notice thereof.

 

For purposes of this Section
7.7, Borrower shall be deemed to have knowledge of all facts known by the
Plan Administrator of any Plan of which Borrower is the Plan Sponsor, and each
Subsidiary and ERISA Affiliate of Borrower shall be deemed to have knowledge of
all facts known by the Plan administrator of any Plan of which such Subsidiary
or ERISA Affiliate, respectively, is a Plan Sponsor.  In addition to its other obligations set forth in this Article
VII, Borrower shall, and shall cause each of its Subsidiaries and ERISA
Affiliates to:

 

(i)                                    at the request of any Lender, deliver to such Lender
(and a copy to Administrative Agent) a complete copy of the most recent annual
report (Form 5500) of each Plan required to be filed with the Internal Revenue
Service; and

 

(ii)                                at the request of any Lender, deliver to such Lender (and a copy to
Administrative Agent) copies of the most recent annual reports and notices (as
requested by such Lender) received by Borrower or any Subsidiary or any ERISA
Affiliate with respect to any Plan no later than ten (10) days after the date
of such request.

 

7.8                               Maintenance of Property; Insurance.

 

(i)                                   Keep and cause each of its Restricted Subsidiaries to
keep, all material property useful and necessary in its business in good
working order and condition, reasonable wear and tear excepted, (ii) maintain
on behalf of its Restricted Subsidiaries or shall cause each of its Restricted
Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to its material properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons.  Such insurance shall be maintained with
financially sound and reputable insurers, except that a portion of such
insurance program (not to exceed that which is customary in the case of
companies engaged in the same or similar business or having similar properties
similarly situated) may be effected through self-insurance, provided adequate
reserves therefor, in accordance with GAAP, are maintained.  All insurance policies or certificates (or
certified copies thereof) with respect to such insurance (A) shall be endorsed
to the Collateral Agent’s reasonable satisfaction for the benefit of the Collateral
Agent for the benefit of the Secured Parties (including, without limitation, by
naming the Collateral Agent as loss payee or additional insured, as
appropriate); and (B) shall state that such insurance policy shall not be
cancelled or revised without thirty days’ prior written notice thereof by the
insurer to the Collateral Agent.

 

76

 

7.9                               Environmental Laws.

 

(a)                                  Environmental Compliance.  Borrower shall, and shall cause each of its
Restricted Subsidiaries, in the exercise of its reasonable business judgment,
to take prompt and appropriate action to respond to any material non-compliance
with applicable Environmental Laws or Environmental Permits or to any material
Release or a substantial threat of a material Release of a Contaminant, and upon
request from Administrative Agent, shall regularly report to Administrative
Agent on such response.  Without
limiting the generality of the foregoing, whenever Administrative Agent or any
Lender has a reasonable basis to believe that Borrower is not in material
compliance with applicable Environmental Laws or Environmental Permits or that
any property of Borrower or its Subsidiaries, or any property to which
Contaminants generated by Borrower or its Subsidiaries have come to be located
(“Offsite Property”) has or may become contaminated or subject to an
order or decree such that any non-compliance, contamination or order or decree
could reasonably be anticipated to have a Material Adverse Effect, then, to the
extent Borrower has the legal right to do so, Borrower agrees to, at
Administrative Agent’s request and Borrower’s expense:  (i) cause an independent environmental
engineer reasonably acceptable to Administrative Agent to conduct such tests of
the site where the alleged or actual non-compliance or contamination has
occurred and prepare and deliver to Administrative Agent, the Lenders and
Borrower a report(s) reasonably acceptable to Administrative Agent setting
forth the results of such tests, Borrower’s proposed plan and schedule for
responding to any environmental problems described therein, and Borrower’s
estimate of the costs thereof; and (ii) provide Administrative Agent, the
Lenders and Borrower a supplemental report(s) of such engineer whenever the
scope of the environmental problems or Borrower’s response thereto or the
estimated costs thereof, shall materially change.  Notwithstanding the above, Borrower shall not be obligated (other
than as required by applicable law) to undertake any tests or remediation at
any Offsite Property that (a) is not owned or operated by Borrower or any of
its Subsidiaries and (b) where Contaminants generated by persons other than
Borrower or any of its Subsidiaries have also come to be located.

 

(b)                                  Environmental Indemnity.  Borrower shall, and shall cause each of its
Restricted Subsidiaries, to defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective employees, agents,
officers and directors, from and against any and all claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise, arising out
of, or in any way relating to the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of Borrower, any of
its Subsidiaries or their respective properties, or any orders, requirements or
demands of Governmental Authorities related thereto, including, without
limitation, reasonable attorney’s and consultant’s fees, investigation and
laboratory fees, response costs, court costs and litigation expenses, except to
the extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor.  The agreements in this Section 7.9(b)
shall survive repayment of the Notes and all other Obligations.

 

7.10                        Additional Security; Further
Assurances.

 

(a)                                  Agreement to Grant Additional Security.  Promptly, and in any event within thirty
(30) days after the acquisition by Borrower or any Restricted Domestic
Subsidiary

 

77

 

of assets or real or personal
property of the type that would have constituted Collateral on the date hereof,
in each case in which the Collateral Agent does not have a perfected security
interest under the Security Documents (other than (t) equipment subject to
Liens permitted under Section 8.1(b) under agreements which prohibit the
creation of additional Liens on such assets, (u) the property subject to the
Headquarters Mortgage Loan Documents, (v) Capital Stock of a Subsidiary (which
is governed by clause (c) below) (w) any parcel of real estate or leasehold
interest acquired after the Closing Date with a fair market value of less than
$1,000,000 or (x) any other asset with a fair market value of less than
$100,000 individually, provided that all such other assets collectively have a
fair market value of less than $5,000,000) or promptly following request by
Administrative Agent or the Collateral Agent with respect to any other collateral
deemed material by Administrative Agent or Required Lenders (the “Additional
Collateral”), Borrower will, and will cause each of its Restricted Domestic
Subsidiaries to, take all necessary action, including (i) the filing of
appropriate financing statements under the provisions of the UCC, applicable
foreign, domestic or local laws, rules or regulations in each of the offices
where such filing is necessary or appropriate and (ii) with respect to real
estate, the execution of a mortgage, the obtaining of title insurance policies,
title surveys and real estate appraisals satisfying the Requirements of Law, to
grant the Collateral Agent for the benefit of the secured parties pursuant to
the Security Agreement a perfected Lien (subject only to Permitted Liens) in
such Collateral pursuant to and to the full extent required by the Security
Documents and this Agreement.

 

(b)                                  Additional Subsidiary Guarantees and Intercompany
Notes.  Borrower
agrees to cause each Restricted Domestic Subsidiary (other than IRIC) to execute
and deliver the Amended and Restated Subsidiary Guarantee Agreement (or a
supplement thereto), the Security Agreement (or a supplement thereto) and to
execute and deliver a Pledged Intercompany Note, if applicable.

 

(c)                                  Pledge of New Subsidiary Stock.  Borrower agrees to pledge (or cause its
Restricted Domestic Subsidiaries to pledge) all of the Capital Stock of each
new Restricted Subsidiary established or created to the Collateral Agent for
the benefit of the secured parties pursuant to the Security Agreement; provided
that the pledge of the Capital Stock of any new Restricted Subsidiary which is
a Foreign Subsidiary, including “loan stock” or other obligations which are
treated as equity under the Code (“Loan Stock”) shall, (i) only be
required to the extent owned by Borrower or its Restricted Domestic
Subsidiaries, (ii) be limited to 65% of the Capital Stock of any Foreign
Subsidiary with a net book value and a fair market value in excess of $250,000
and (iii) any filings or recordations with respect to Foreign Subsidiaries will
be made (or submitted for recordation) within 10 Business Days of the
acquisition thereof or such longer period as the Administrative Agent may
approve.  No Foreign Subsidiary may be or
become a shareholder of a Domestic Subsidiary.

 

(d)                                  Grant of Security by New Subsidiaries.  Subject to the provisions of Sections
7.10(a) and 7.10(c), Borrower will cause each Restricted Domestic
Subsidiary established or created in accordance with Section 8.7 to
grant to the Collateral Agent for the benefit of the secured parties pursuant
to the Security Agreement a first priority Lien (subject to Permitted Liens) on
all property (tangible and intangible) of such Subsidiary by executing and
delivering an agreement substantially in the form of Exhibit A to the
Security Agreement, or on other terms satisfactory in form and substance to the
Collateral Agent and Administrative Agent.

 

78

 

Borrower shall cause each
Restricted Domestic Subsidiary, at its own expense, to execute, acknowledge and
deliver, or cause the execution, acknowledgment and delivery of, and thereafter
register, file or record in any appropriate governmental office, any document
or instrument reasonably deemed by Administrative Agent to be necessary or
desirable for the creation and perfection of the foregoing Liens.  Borrower will cause each of its Restricted
Domestic Subsidiaries to take all actions requested by Administrative Agent or
the Required Lenders (including, without limitation, the filing of UCC-1’s) in
connection with the granting of such security interests.

 

(e)                                  Pledge of Equity in Unrestricted Subsidiaries.  Borrower agrees to pledge (or cause its
Restricted Domestic Subsidiaries to pledge) all of the Capital Stock owned by
Borrower or a Restricted Subsidiary of each new Unrestricted Subsidiary
established or created after the Closing Date to the Collateral Agent for the
benefit of the secured parties pursuant to the Security Agreement other than a
Foreign Subsidiary with Consolidated Total Assets of $1,000,000 or less as long
as the Consolidated Total Assets of all Foreign Subsidiaries owned directly by
Borrower or its Restricted Domestic Subsidiaries the Capital Stock of which is
not pledged hereunder, does not exceed in the aggregate $10,000,000; provided
that the pledge of the Capital Stock or Loan Stock of any new Unrestricted
Subsidiary which is a Foreign Subsidiary shall, (i) only be required to the
extent owned by Borrower or its Restricted Domestic Subsidiaries, (ii) be
limited to 65% of the Capital Stock (or Loan Stock) of such Foreign Subsidiary
and (iii) any filings or recordations with respect to Foreign Subsidiaries will
be made (or submitted for recordation) within 10 Business Days of the
acquisition thereof or such longer period as the Administrative Agent may
approve.  Borrower agrees to pledge, or
cause its Restricted Subsidiaries to pledge, to the Collateral Agent for the
benefit of the secured parties pursuant to the Security Agreement all
instruments evidencing indebtedness owed by any Unrestricted Subsidiary to
Borrower or any Restricted Domestic Subsidiary.

 

(f)                                    Pledge of Additional Huntsman International Holdings
Equity.  Immediately
upon the release from pledge by ICI of any equity in Huntsman International
Holdings LLC, HSCC shall pledge such equity pursuant to the Security Agreement.

 

(g)                                 Documentation for Additional Security.  The security interests required to be
granted pursuant to this Section 7.10 shall be granted pursuant to the
Annexes to the Security Documents or such other security documentation
satisfactory in form and substance to Administrative Agent and the Required
Lenders and shall constitute valid and enforceable perfected security interests
prior to the rights of all third Persons (other than the “Secured Parties” as
such term is defined in the Priority Loan Documents) and subject to no other
Liens except Permitted Liens.  The
Additional Security Documents and other instruments related thereto shall be
duly recorded or filed in such manner and in such places and at such times as
are required by law to establish, perfect, preserve and protect the Liens, in
favor of Administrative Agent for the benefit of the Lenders, required to be
granted pursuant to the Additional Security Document and, all taxes, fees and
other charges payable in connection therewith shall be paid in full by Borrower
or its Subsidiaries.  At the time of the
execution and delivery of the Additional Security Documents, Borrower shall
cause to be delivered to Administrative Agent such agreements, opinions of
counsel, title surveys, real estate appraisals satisfying any Requirements of
Law, and other related documents as may be reasonably requested by
Administrative Agent or the Required Lenders to assure themselves that this Section
7.10 has been complied with.

 

79

 

7.11                        End of Fiscal Years; Fiscal Quarters.

 

Borrower shall cause its annual accounting period to
end December 31 of each year (each a “Fiscal Year”, with quarterly
accounting periods ending on March 31, June 30, September 30 and December 31 of
each Fiscal Year (each a “Fiscal Quarter”)).

 

7.12                        Operating Accounts.  Borrower shall at all times cause its
primary cash operating account to be maintained at Deutsche Bank Trust Company
Americas (or such other institution approved by Administrative Agent).

 

7.13                        Polymers Notes.  On or before the maturity date of the
Polymers Senior Notes, Borrower shall have refinanced the then outstanding
Polymers Senior Notes with proceeds of Permitted Junior Debt permitted by
Section 8.2(i) and/or shall have redeemed or repurchased such Polymers Senior
Notes in accordance with Section 8.7(h).

 

7.14                        Compensation.  Borrower and its Restricted Subsidiaries
agree that the base salary, bonus and other compensation or payments to any
member of the Huntsman Group shall be consistent with past practices of
Borrower and its Restricted Subsidiaries and with industry practices for
comparable publicly held companies. 
Borrower and its Restricted Subsidiaries acknowledge that Mr. Jon M.
Huntsman has retired and therefore will not receive any base salary, bonus or
other similar compensation from Borrower or its Restricted Subsidiaries during
the effectiveness of this Agreement.

 

ARTICLE VIII

NEGATIVE COVENANTS

 

Borrower hereby agrees that, so long as any Loan
remains outstanding and unpaid or any other amount is owing to any Lender or
Administrative Agent hereunder:

 

8.1                               Liens.

 

Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist or agree to create, incur or assume any Lien in, upon or with
respect to any of its properties or assets (including, without limitation, any
securities or debt instruments of any of its Subsidiaries), whether now owned
or hereafter acquired, or assign or otherwise convey any right to receive
income to secure any obligation; except for the following Liens (herein
referred to as “Permitted Liens”):

 

(a)                                  Liens existing on the Closing Date listed on Schedule
8.1(a) hereto and any extension, renewal or replacement thereof but only if
the principal amount of the Indebtedness is not increased and such Liens do not
extend to or cover any other property or assets;

 

(b)                                  (i) Liens (including Liens under Capitalized Leases)
in respect of property or assets acquired or
constructed by Borrower or a Subsidiary after the date hereof, including,
without limitation, liens on rolling stock, which Liens are created at the time
of acquisition or completion of construction of such property or asset or
within 120 days thereafter, to secure

 

80

 

Indebtedness assumed or incurred
to finance all or any part of the purchase price or cost of construction of
such property or asset, (ii) in the case of any Person that hereafter becomes a
Subsidiary or is consolidated with or merged with or into Borrower or a
Subsidiary, Liens existing at the time such Person becomes a Subsidiary or is
so consolidated or merged (and not incurred in anticipation thereof), (iii) in
the case of any property or asset acquired by Borrower or any Subsidiary after
the Closing Date, Liens existing on such property or asset at the time of
acquisition thereof (and not incurred in anticipation thereof), whether or not
the Indebtedness secured thereby is assumed by Borrower or a Subsidiary; provided,
that in any such case:

 

(x)                                   no
such Lien shall extend to or cover any other property or assets of Borrower or
of such Subsidiary, as the case may be, and

 

(y)                                 the
aggregate principal amount of the Indebtedness secured by all such Liens in
respect of any such property or assets shall not exceed 100% of the fair market
value of such property or assets at the time of such acquisition or, in the
case of a Lien in respect of property or assets existing at the time of such
Person becoming a Subsidiary or being so consolidated or merged, the fair
market value of the property or assets acquired at such time and the amount
of  Indebtedness secured on the date of
issuance of such Liens shall not be less than 80% of the fair market value
unless the Collateral Agent shall have a perfected second lien on such
equipment;

 

and any
extension, renewal or replacement thereof but only if the principal amount of
the Indebtedness secured thereby is not increased and, such Liens do not extend
to or cover any other property or assets, provided  further, that
the aggregate principal amount of Indebtedness secured by Liens permitted by
this Section 8.1(b) does not exceed at any one time outstanding
$15,000,000;

 

(c)                                  Customary Permitted Liens;

 

(d)                                  Liens granted pursuant to
the Security Documents;

 

(e)                                  Liens consisting of an agreement to sell, transfer or
dispose of any asset (to the extent such sale, transfer or disposition is
permitted hereunder);

 

(f)                                    Liens on property of Huntsman Headquarters Corporation
incurred pursuant to the Headquarters Mortgage Loan Documents and Liens on
property of Airstar Corporation incurred pursuant to the Airstar Aircraft
Financing Documents;

 

(g)                                 Lien on the assets of Nitroil Vegyipari
Termelo-Fejleszto Resvenytarsag (Nitroil Chemical Engineering and Production
Co., Plc) which secure not more than $2,000,000 of Indebtedness;

 

(h)                                 Liens on property of Foreign Subsidiaries securing
Indebtedness permitted by Section 8.2(j);

 

(i)                                    Liens securing Obligations under the Priority Credit
Agreement to the extent such Indebtedness is permitted by Section 8.2(b);

 

81

 

(j)                                    Liens incurred in connection with the sale and
leaseback by the Borrower or any of its Subsidiaries of railcars acquired after
the date hereof;

 

(k)                                Liens securing Permitted Junior Debt; and

 

(l)                                    Liens (other than Liens securing Indebtedness) with
respect to property with a fair market value not exceeding $5,000,000 in the
aggregate at any one time outstanding.

 

8.2                               Indebtedness.

 

Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to, directly or indirectly, incur, create, assume
directly or indirectly, or suffer to exist any Indebtedness (including without
limitation any Guarantee Obligation in respect of Indebtedness of its
Unrestricted Subsidiaries and any Receivables Facility Attributed Indebtedness)
except for:

 

(a)                                  Indebtedness incurred pursuant to this Agreement and
the other Loan Documents;

 

(b)                                  Indebtedness of Borrower or its Subsidiaries which are
parties to the Subsidiary Guarantee Agreement pursuant to the Priority Credit
Agreement and the Loan Documents (as defined in the Priority Credit Agreement)
in a principal amount outstanding not to exceed $275,000,000 and guarantees
thereof by any Subsidiary Guarantor;

 

(c)                                  Indebtedness with respect to the Senior Subordinated
Notes in an aggregate principal amount not to exceed $60,000,000;

 

(d)                                  Indebtedness with respect to the Polymers Senior Notes
in an aggregate principal amount not to exceed $37,000,000;

 

(e)                                  Indebtedness of Huntsman Headquarters Corporation
incurred pursuant to the Headquarters Mortgage Loan Documents in a principal
amount not in excess of $12,000,000;

 

(f)                                    Indebtedness (other than Intercompany Indebtedness)
outstanding on the Closing Date listed on Schedule 6.5(d) hereto;

 

(g)                                 Indebtedness not to exceed $30,000 under the First
Mortgage Notes and guarantees thereof by Subsidiaries of Huntsman Petrochemical
Corporation;

 

(h)                                 Indebtedness resulting from the extension, renewal or
refinancing or successive refinancing (whether in whole or in part) of any
Indebtedness, permitted under Sections 8.2(c), (d), (e)
and (f); provided, however, that (i) the principal amount
of any such refinancing Indebtedness (as determined as of the date of the
incurrence of such refinancing Indebtedness in accordance with GAAP) does not
exceed the principal amount of the Indebtedness refinanced thereby on such
date, (ii) the Weighted Average Life to Maturity of such Indebtedness is not
decreased, (iii) the covenants, defaults and similar provisions applicable to
such refinancing Indebtedness or obligations are customary market terms
reasonably satisfactory to the Administrative Agent and do not conflict in any
material respect with the provisions of this Agreement and (iv) the terms of
such refinancing Indebtedness shall be

 

82

 

reasonably satisfactory to the
Administrative Agent.  In the case of
any Indebtedness which is subordinated to the Obligations, such refinancing
Indebtedness shall be subordinated to the Obligations on the same terms or on
such other terms as may be approved by the Administrative Agent.

 

(i)                                    Permitted Junior Debt of Borrower and guarantees
thereof by a Restricted Subsidiary consisting of Permitted Junior Debt of such
Restricted Subsidiary; provided, that Borrower shall have complied with
the mandatory prepayment requirements of Section 4.2(e);

 

(j)                                    Indebtedness of any Foreign Subsidiary (or, to the
extent such Indebtedness is incurred with respect to its international
activities, Huntsman International Trading Corporation) and guarantees thereof
by Borrower and/or its Subsidiaries pursuant to over-draft lines or similar
extensions of credit such that the aggregate amount of such Indebtedness under
this clause outstanding at any one time does not exceed $5,000,000 (or the
dollar equivalent thereof determined on a quarterly basis);

 

(k)                                Indebtedness of Nitroil Vegyipari Termeló-Fejlesztró
Résvénytátság in a principal amount not in excess of $2,000,000;

 

(l)                                    Intercompany Indebtedness to the extent permitted by Sections
8.7(c), (e), (f) and (g); provided, however,
that in the event of any subsequent issuance or transfer of any Capital Stock
which results in the holder of such Indebtedness ceasing to be a Restricted
Subsidiary of Borrower or any subsequent transfer of such Indebtedness (other
than to Borrower or any of its Restricted Subsidiaries) such Indebtedness shall
be required to be permitted under another clause of this Section 8.2; provided,
further, however, that (x) such Intercompany Indebtedness arising
after the Closing Date shall be evidenced by a Pledged Intercompany Note and
(y) any loan or advance to Borrower shall be unsecured;

 

(m)                              Indebtedness secured by Liens permitted by Sections
8.1(b) and 8.1(j) and any extension, renewal or replacement thereof
in accordance with the terms of Sections 8.1(b) and 8.1(j);

 

(n)                                 Indebtedness with respect to Hedging Agreements
entered into in the ordinary course of business in order to manage existing or
anticipated interest rate, exchange rate, commodity or other revenue or expense
risk, and not for speculative purposes, in any case;

 

(o)                                  Indebtedness consisting of Guarantee Obligations of
any Subsidiary of Borrower of the Obligations under any Loan Document or
consisting of a guarantee of obligations of a Restricted Subsidiary under any
lease or other agreement entered into in the ordinary course of business not
constituting Indebtedness and for which the liability with respect thereto is
not required to be reflected on a balance sheet prepared in accordance with
GAAP; and

 

(p)                                  Indebtedness consisting of Guarantee Obligations
incurred to satisfy bonding obligations not in excess of $15,000,000 at any one
time which arise in the ordinary course of business.

 

For
purposes of this Section 8.2, any Indebtedness of an entity outstanding
when it becomes a Subsidiary shall be deemed to have been incurred at that
time.

 

83

 

8.3                               Fundamental Changes.

 

Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to, directly or indirectly, (i) consummate any
Acquisition or (ii) enter into any merger, consolidation or amalgamation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution) or convey, sell, assign, lease, transfer or otherwise dispose of
(or agree to do any of the foregoing at any future time) all or substantially
all of its property, business or assets; provided, however, that
so long as prior to or simultaneously with such transactions, Borrower has
complied with, and has caused its Subsidiaries to comply with, the provisions
of Section 7.10:

 

(a)                                  any Subsidiary of Borrower may be merged or consolidated
with or into Borrower so long as Borrower is the surviving corporation or with
or into any one or more Wholly-Owned Subsidiaries of Borrower (other than an
Unrestricted Subsidiary, Airstar Corporation, Huntsman Headquarters
Corporation, Huntsman Polymers Corporation or IRIC); provided, however,
that (i) the Wholly-Owned Subsidiary or Subsidiaries shall be the surviving
corporation and (ii) in the case of any merger or consolidation between
Subsidiaries at least one of which is a Subsidiary Guarantor, the surviving
Person shall be or become a party to the Amended and Restated Subsidiary
Guarantee Agreement);

 

(b)                                  any Subsidiary of Borrower may sell, lease, transfer
or otherwise dispose of any or all of its assets to Borrower or any other
Wholly-Owned Subsidiary of Borrower (other than an Unrestricted Subsidiary);

 

(c)                                  any Subsidiary of Borrower (other than a Finance
Subsidiary or Huntsman Polymers Corporation) may voluntarily liquidate, wind-up
or dissolve;

 

(d)                                  any transaction permitted pursuant to Sections
8.6(d) may be consummated;

 

(e)                                  agreements to conduct the transactions referred to in clauses
(a) through (d) above may be entered into;

 

8.4                               Dividends or Other Distributions.

 

Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to, directly or indirectly, either:  (i) declare or pay any dividend or make any
distribution on or in respect of its Capital Stock or to the direct or indirect
holders of its Capital Stock in respect of such Capital Stock (except dividends
or distributions payable solely in such Capital Stock or in options, warrants
or other rights to purchase such Capital Stock and except dividends or
distributions payable to Borrower or a Wholly-Owned Subsidiary of Borrower),
(ii) purchase, redeem or otherwise acquire or retire for value any of its
Capital Stock (other than Capital Stock held by Borrower or a Wholly-Owned
Subsidiary of Borrower), (iii) make a loan (a “Shareholder Loan”) to any
Holdco Party (as defined in the Holdco Agreement), (iv) pay any Management Fees
or (v) make any principal payment on, purchase, defease, redeem, prepay,
decrease or otherwise acquire or retire for value, prior to any scheduled final
maturity, any Polymers Senior Notes, Permitted Junior Debt or any Indebtedness
that is subordinate or junior in right of payment to the Obligations (any such
non-excepted dividend, distribution, purchase, redemption, repurchase, other
acquisition, retirement or Shareholder Loan or payment being hereinafter

 

84

 

referred to as a “Restricted
Payment”); provided, however, that (w) Borrower may, under
clause (v) above, use the Permitted Polymers Notes Repurchase Amount to redeem
or repurchase then outstanding Polymers Senior Notes in accordance with Section
4.2(e), to the extent that such amount is not otherwise required to be
applied to prepay Loans pursuant to Section 4.2(e), (x) Borrower may
make payments to Holdco II pursuant to the terms of the Tax Sharing Agreement,
(y) the Senior Subordinated Notes may be refinanced with Subordinated
Indebtedness permitted by Section 8.2(h) and (z) Borrower and its
applicable Subsidiaries may consummate the HIH Unit Transfer.

 

8.5                               Issuance of Stock.

 

(a)                                  Borrower will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, issue, sell, assign, pledge
or otherwise encumber or dispose of any shares of Capital Stock of any
Restricted Subsidiary of Borrower, except (i) to Borrower, (ii) to another
Wholly-Owned Subsidiary of Borrower which is a Restricted Subsidiary, (iii) to
qualify directors if required by applicable law or similar de minimis issuances
of Capital Stock to comply with Requirements of Law, or (iv) pledges
constituting Permitted Liens pursuant to Section 8.1(a) or 8.1(d) or
8.1 (j).  Notwithstanding the
foregoing, Borrower or its Subsidiaries shall be permitted to sell the
outstanding stock of a Subsidiary, subject to Sections 8.3 and 8.6.

 

(b)                                  Borrower shall not issue any Capital Stock, except for
(i) issuances of additional units of Membership Interests to Holdco II and (ii)
issuances of Capital Stock, where Administrative Agent and the Required Lenders
have consented to the terms and conditions of such offering.  In the event any Capital Stock of Borrower
is issued pursuant to this Section 8.5(b), Borrower shall apply the Net
Offering Proceeds received in connection with such disposition in accordance
with Section 4.2(d).

 

8.6                               Disposition of Assets.

 

Borrower will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, sell, lease, assign, transfer or
otherwise dispose of any of its assets to any Person, except that:

 

(a)                                  Borrower or any Subsidiary may engage in a transaction
permitted by Section 8.3.  Any
Foreign Subsidiary which is a Wholly-Owned Subsidiary may transfer, sell or
assign any of its assets to another Foreign Subsidiary which is a Wholly-Owned
Subsidiary;

 

(b)                                  Borrower or any Subsidiary may sell, transfer or
otherwise dispose of inventory and Cash Equivalents in the ordinary course of
business;

 

(c)                                  Borrower or any Subsidiary may permit to exist Liens
upon its assets which are permitted by Section 8.1;

 

(d)                                  Borrower or any Subsidiary may sell, assign, transfer
or otherwise dispose of  an Investment
permitted under Sections 8.7(c), 8.7(d) and 8.7(g);

 

(e)                                  Borrower and any Subsidiary may sell, assign, transfer
or otherwise dispose of its assets to Borrower or any Wholly-Owned Domestic
Subsidiary which is a

 

85

 

Restricted Subsidiary (other
than Airstar Corporation, Huntsman Headquarters Corporation or IRIC);

 

(f)                                    Borrower or any Subsidiary may sell, lease or
otherwise dispose of any assets in the ordinary course of business which, in
the reasonable judgment of Borrower, have become uneconomic, obsolete or worn
out and may sell or discount, in each case without recourse and in the ordinary
course of business, overdue accounts receivable arising in the ordinary course
of business, but only in connection with the compromise or collection thereof
consistent with customary industry practice (and not as part of any bulk sale
or financing of receivables not otherwise permitted under clause (i) below);

 

(g)                                 Borrower or any Subsidiary may enter into operating
leases as lessor in the ordinary course of business which are not substantially
equivalent to sales;

 

(h)                                 Borrower or any Subsidiary may enter into assignments
and licenses of intellectual property in the ordinary course of business;

 

(i)                                    Borrower and its Subsidiaries may sell railcars
acquired after the Closing Date in connection with sale and leaseback
transactions;

 

(j)                                    Borrower or any Restricted Subsidiary may dispose of
any of its assets if the aggregate fair market value (at the time of
disposition thereof) of all assets disposed of by Borrower and its Restricted
Subsidiaries subsequent to the Closing Date pursuant to this clause (j) plus
the aggregate fair market value (net, in the case of the real estate owned by
Huntsman Headquarters Corporation, of the debt secured by such real estate) of
all the assets then proposed to be disposed of does not exceed $50,000,000 per
annum and $150,000,000 in the aggregate from and after the Closing Date; and

 

(k)                                Borrower and its applicable Subsidiaries may
consummate the HIH Unit Transfer.

 

8.7                               Loans and Investments.

 

Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to, directly or indirectly, make any or own any
Investments except that Borrower and its Restricted Subsidiaries may:

 

(a)                                  acquire and hold Cash and Cash Equivalents;

 

(b)                                  make or maintain advances to their employees in the
ordinary course of business for travel, relocation and related expenses;

 

(c)                                  hold (i) its existing Investments in Subsidiaries and
(ii) the other Investments identified on Schedule 8.7 (in each case, as
such Investments may be adjusted due to appreciation, repayment of principal,
payment of interest, return of capital and similar circumstances);

 

86

 

(d)                                  acquire and hold Investments (including debt
obligations) received in connection with the bankruptcy or reorganization of
suppliers and customers and other Persons having obligations in favor of
Borrower or a Subsidiary in settlement of delinquent obligations of, and other
disputes with, customers and suppliers and such other Persons arising in the
ordinary course of business;

 

(e)                                  make additional Investments in any Restricted Domestic
Subsidiary; provided that (i) any such additional equity Investments in
Restricted Domestic Subsidiaries after the Closing Date shall not exceed, in
the aggregate $10,000,000 outstanding, and (ii) any such Investment
constituting a loan or advance to a Restricted Domestic Subsidiary shall be
made pursuant to one of the Pledged Intercompany Notes;

 

(f)                                    make any Investment by Borrower or any Restricted
Domestic Subsidiary in any Foreign Subsidiary after the Closing Date in an
aggregate amount for all such Investments from and after the Closing Date in
excess of $15,000,000 or any Investment by a Foreign Subsidiary in any other
Foreign Subsidiary;

 

(g)                                 make any Investment after the Closing Date in
Unrestricted Subsidiaries in an amount not in excess of $10,000,000 in the
aggregate from and after the Closing Date; provided, that the purpose of
any such Investment shall be to fund a current expenditure of such Unrestricted
Subsidiary;

 

(h)                                 purchase Polymers Senior Notes in an aggregate amount
not exceeding the Permitted Polymers Notes Repurchase Amount to the extent such
amount is available and not required to be prepaid pursuant to Section
4.2(e); and

 

(i)                                    make one or more Investments in HSCHC (which may be
reinvested by HSCHC in HSCC) when and as interest payments become due and
payable on the BASF Note, each in an amount not to exceed the interest payment
required to be paid in cash by HSCC on the BASF Note.

 

8.8                               Transactions with Affiliates.

 

Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into any transaction
with any Affiliate of Borrower or any of its Subsidiaries (other than the Borrower
or any Restricted Subsidiary), except for (i) transactions that are on terms no
less favorable to Borrower or such Subsidiary, as applicable, than could be
obtained in a comparable arms-length transaction with a Person not an Affiliate
of Borrower or any of its Subsidiaries and are necessary or desirable for
Borrower or its Subsidiary in the conduct of its business, (ii) the Tax Sharing
Agreement and transactions thereunder in accordance with the terms thereof and
(iii) the HIH Unit Transfer.

 

8.9                               Sale-Leasebacks.

 

Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to, directly or indirectly, lease any property as
lessee in connection with Sale and Leaseback Transactions entered into after
the Closing Date.

 

87

 

8.10                        Lines of Business.

 

Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into or acquire any
line of business which does not consist of the manufacture, distribution,
purchase or sale of chemicals, plastics or finished products made therefrom or
is not otherwise reasonably related to the business engaged in as of the
Closing Date, except to the extent that after any such entry or acquisition,
Borrower and its Restricted Subsidiaries, taken as a whole, remain
substantially engaged in similar lines of business as are conducted by them as
of the Closing Date.  Notwithstanding anything to
the contrary in this Agreement, IRIC shall not engage in any business other
than the business of serving as a captive insurance company for Borrower and
its Subsidiaries and engaging in such necessary activities related thereto as may be permitted to be engaged in by a Vermont captive insurance company
pursuant to applicable Vermont captive insurance company rules and regulations;
provided, that IRIC shall not hold cash or other Investments except in a
manner consistent with Schedule 8.18(a).

 

8.11                        Fiscal Year.  Borrower shall not change its Fiscal Year.

 

8.12                        Amendments to Organizational and
Other Documents.  

 

Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to, directly or indirectly, amend, modify or waive, or
permit any amendment, modification or waiver 
to its Organizational Documents if such amendment, modification or
waiver could reasonably be expected to adversely affect the interests of the
Collateral Agent, Administrative Agent or the Lenders.  Borrower shall not, nor shall it permit any
of its Subsidiaries to waive or release any interest under any Security
Document except as expressly permitted hereby or thereby.  Borrower shall not, and shall not permit any
Subsidiary to, amend, modify or waive or cause to be amended, modified or
waived any provision of (a) the ICI Agreement unless such amendment, modification
or waiver is approved by the Administrative Agent and, if adverse to the
interests of the Lenders (as determined by the Administrative Agent in its sole
reasonable discretion after reasonable advance notice of such proposed change),
by the Required Lenders (b) the BASF Note, unless such amendment, modification
or waiver is approved by the Administrative Agent, (c) the Tax Sharing
Agreement, unless such amendment, modification or waiver is approved by the
Administrative Agent and, if adverse to the interests of the Lenders (as
determined by the Administrative Agent in its sole reasonable discretion after
reasonable advance notice of such proposed change), by the Required Lenders and
(d) the Horizon Subordinated Note, unless such amendment, modification or
waiver is approved by the Administrative Agent and, if adverse to the interests
of the Lenders (as determined by the Administrative Agent in its sole
reasonable discretion after reasonable advance notice of such proposed change),
by the Required Lenders.  Neither
Borrower or any of its Restricted Subsidiaries shall enter into any tax sharing
agreement with Holdco I or Holdco II except as set forth in the Tax Sharing
Agreement.

 

8.13                        Limitation on Certain Restrictions
on Subsidiaries.

 

Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or

 

88

 

restriction on the ability of
any Restricted Subsidiary to (i) pay dividends or make any other distributions
on its Capital Stock or pay any Indebtedness or other Obligations owed to
Borrower or any of its other Subsidiaries, (ii) make any loans or advances to
Borrower or any of its other Subsidiaries, (iii) transfer any of its property
or assets to Borrower or any of its other Subsidiaries or (iv) enter into any
Material Agreement unless such agreement expressly provides that it may be
collaterally assigned to the Collateral Agent and may be further assigned by
the Collateral Agent in any foreclosure, except:

 

(a)                                  any encumbrance or restriction pursuant to the
Priority Credit Agreement or the agreement governing Permitted Junior Debt or
any extension, replacement or refinancing thereof which is not otherwise
prohibited by the terms of this Agreement;

 

(b)                                  any such encumbrance or restriction consisting of
customary non-assignment provisions in Contractual Obligations which are not
Material Agreements and are entered into in the ordinary course of business to
the extent such provisions restrict the transfer or assignment of such
agreement;

 

(c)                                  in the case of clause (iii) above, Permitted Liens or
other restrictions contained in security agreements securing Indebtedness
permitted hereby to the extent such restrictions restrict the transfer of the
assets specifically secured by such security
agreement;

 

(d)                                  any restriction on transfer of an asset pursuant to an agreement to sell such asset to the extent
such sale would be permitted under the terms of this Agreement;

 

(e)                                  restrictions on Airstar Corporation in the Airstar
Aircraft Financing Documents and restrictions on Huntsman Headquarters Corporation in the Headquarters Mortgage Loan Documents;

 

(f)                                    restrictions in Section 4.03 of the Articles of Incorporation of Huntsman Chemical Corporation; and

 

(g)                                 restrictions on Foreign Subsidiaries in Foreign
Overdraft Facilities.

 

8.14                        Accounting Changes.

 

Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to, make or permit to be made any change in accounting
policies affecting the presentation of financial statements or reporting
practices from those employed by it on the Closing Date, unless (i) such change
is required by GAAP, (ii) such change is disclosed to the Lenders through the
Administrative Agent or otherwise and (iii) relevant prior financial statements
that are affected by such change are restated (in form and detail satisfactory
to Administrative Agent) as may be required by GAAP to show comparative
results.  If any changes in GAAP or the
financial statements referred to in Section 6.5(a) hereof occur after
the Closing Date and such changes result in, in the sole judgment of
Administrative Agent, a meaningful change in the calculation of any financial
covenants or restrictions set forth in this Agreement, then the parties hereto
agree to enter into and diligently pursue negotiations to amend the covenants
employing financial calculations herein so as to equitably reflect such
changes, with the desired result that the criteria

 

89

 

for evaluating the financial
condition and results of operations of Borrower and its Subsidiaries shall be
the same after such changes as if such changes had not been made.

 

8.15                        Restrictions on Certain Unrestricted
Subsidiaries.  Borrower will not permit either HSCHC or
HSCC to, and HSCHC and HSCC hereby agree that they will not, except in each
case as described on Schedule 8.15, (i) incur any Indebtedness or other
material obligations of any kind; (ii) directly or indirectly, create, incur,
assume or suffer to exist or agree to create, incur or assume any Lien in, upon
or with respect to any of their properties or assets (including, without
limitation any securities or intercompany Indebtedness in favor of HSCC or
HSCHC), except as may be approved by the Administrative Agent in connection
with any settlement entered into between HSCC and ICI and/or its Affiliates
with respect to certain claims of ICI with respect to the membership interests
in HIH held by ICI; (iii) issue any Capital Stock; (iv) dispose of or transfer
any assets; (v) in the case of HSCHC, engage in any business other than holding
securities of its Subsidiaries; or (vi) in the case of HSCC, engage in any
business other than holding securities of Huntsman International LLC; provided,
that this Section 8.15 shall not prohibit any amendment to the BASF Note to the
extent not prohibited by Section 8.12. 
Neither HSCHC nor HSCC will create any additional direct Subsidiaries
after the Closing Date.

 

8.16                        Amendments, Modifications or
Supplements to Priority Credit Agreement.  Borrower shall not agree to or permit any of
the following terms or provisions of the Priority Credit Agreement to be
amended, modified, waived or supplemented without the prior consent of (i) in
the case of clause (a), Lenders holding at least 80% of all Loans and (ii) in
the case of clauses (b) and (c), the Supermajority Lenders, in each case in
addition to any other vote which may be required under the Priority Credit
Agreement:

 

(a)                                  Permit the amount of Indebtedness permitted to be
outstanding under the Priority Credit Agreement to be increased above
$275,000,000;

 

(b)                                  The definition of the term “Advance Rate” set forth in
the Priority Credit Agreement (as in effect on the Closing Date); and

 

(c)                                  The definitions of the terms “Eligible Receivables”
and “Eligible Inventory” as set forth in the Priority Credit Agreement (as in
effect on the Closing Date) if the changes to such definitions has the effect
of increasing the aggregate amount of available credit under the Priority
Credit Agreement.

 

8.17                        Charitable Contributions.  Borrower shall not, nor shall it permit any
of its Restricted Subsidiaries to, make charitable contributions, except for de minimis civic and community
contributions made in the ordinary course of business.

 

8.18                        Collateral Account Agreements.  Borrower shall not, and shall not permit any
Credit Party or IRIC to, establish or utilize any domestic Deposit Account,
unless a fully executed Collateral Account Agreement shall be in full force and
effect with respect thereto, except with respect to one or more Deposit
Accounts maintained at financial institutions with which no Collateral Account
Agreement shall have previously been entered into with account balances of any
such accounts not to at any time exceed $100,000 and the aggregate of all such
accounts not at any time to exceed $500,000, except in the case of IRIC, with
respect to

 

90

 

insurance proceeds which may be disbursed
and held in accordance with the procedures set forth on Schedule 8.18(a).  Except as set forth on Schedule 8.18(b), at
no time shall the Dollar Equivalent of the aggregate balances in all accounts
maintained by Borrower and its Restricted Subsidiaries outside the USA exceed
$500,000.

 

8.19                        Borrowings Under Priority Credit
Agreement.  In no event shall
Borrower make any borrowing of Priority Loans under the Priority Credit
Agreement if, after giving effect to such borrowing, Borrower would have more
than $50,000,000 of Available Liquidity (but in any event excluding any cash
from time to time in a Recovery Event Escrow Account in accordance with Section
4.2(h)).

 

ARTICLE IX

FINANCIAL COVENANTS

 

Borrower hereby agrees that, so long as any Loan remains
outstanding and unpaid or in any other amount is owing to any Lender or
Administrative Agent hereunder, Borrower shall not directly or indirectly:

 

9.1                               Leverage Ratio.

 

Permit the ratio (the “Leverage Ratio”) of
(a) Consolidated Debt on the last day of any Fiscal Quarter of Borrower
(after giving effect to all payments and prepayments made on such date) to
(b) EBITDA of Borrower for the four Fiscal Quarter periods ending on such
day to exceed the ratio set forth below at the end of any Fiscal Quarter occurring
during the period opposite such ratio:

 

	
  Date

  	
   

  	
  Ratio

  	
   

  
	
  Closing Date - June 30, 2003

  	
   

  	
  8.25 to 1.0

  	
   

  
	
  July 1, 2003 - September 30,
  2003

  	
   

  	
  8.00 to 1.0

  	
   

  
	
  October 1, 2003 - December 31,
  2003

  	
   

  	
  7.25 to 1.0

  	
   

  
	
  January 1, 2004 - March 31,
  2004

  	
   

  	
  6.75 to 1.0

  	
   

  
	
  April 1, 2004 - June 30, 2004

  	
   

  	
  6.00 to 1.0

  	
   

  
	
  July 1, 2004 - September 30,
  2004

  	
   

  	
  5.00 to 1.0

  	
   

  
	
  October 1, 2004 - December 31,
  2004

  	
   

  	
  4.75 to 1.0

  	
   

  
	
  January 1, 2005 - June 30,
  2005

  	
   

  	
  3.75 to 1.0

  	
   

  
	
  July 1, 2005 - and thereafter

  	
   

  	
  3.25 to 1.0

  	
   

  

 

9.2                               Interest Coverage Ratio.

 

Permit the ratio (the “Interest Coverage Ratio”)
of (i) EBITDA for each period of four consecutive Fiscal Quarters ending on the
last day of any Fiscal Quarter of Borrower to (ii) the sum of Cash Interest
Expense of Borrower and its Restricted Subsidiaries for such period to be less
than the ratio opposite the applicable period set forth below:

 

	
  Date

  	
   

  	
  Ratio

  	
   

  
	
  Closing Date - June 30, 2003

  	
   

  	
  1.30 to 1.0

  	
   

  

 

91

 

	
  July 1, 2003 - September 30,
  2003

  	
   

  	
  1.40 to 1.0

  	
   

  
	
  October 1, 2003 - December 31,
  2003

  	
   

  	
  1.50 to 1.0

  	
   

  
	
  January 1, 2004 - March 31,
  2004

  	
   

  	
  1.75 to 1.0

  	
   

  
	
  April 1, 2004 - September 30,
  2004

  	
   

  	
  2.00 to 1.0

  	
   

  
	
  October 1, 2004 - December 31,
  2004

  	
   

  	
  2.25 to 1.0

  	
   

  
	
  January 1, 2005 - June 30,
  2005

  	
   

  	
  2.50 to 1.0

  	
   

  
	
  July 1, 2005 - and thereafter

  	
   

  	
  2.75 to 1.0

  	
   

  

 

9.3                               Fixed Charge
Coverage Ratio.  Permit the
ratio of (i) EBITDA of Borrower for each period of four consecutive Fiscal
Quarters ending on the last day of any Fiscal Quarter to (ii) Consolidated
Fixed Charges for such period to be less the ratio opposite the applicable
period set forth below:

 

	
  Date

  	
   

  	
  Ratio

  	
   

  
	
  Closing Date - June 30, 2003

  	
   

  	
  .85 to 1.0

  	
   

  
	
  July 1, 2003 - December 31,
  2003

  	
   

  	
  .90 to 1.0

  	
   

  
	
  January 1, 2004 - June 30,
  2004

  	
   

  	
  1.00 to 1.0

  	
   

  
	
  July 1, 2004 - and thereafter

  	
   

  	
  1.25 to 1.0

  	
   

  

 

9.4                               Capital Expenditures.

 

Permit, nor permit any of its Restricted Subsidiaries
to, make any Consolidated Capital Expenditures, except that Borrower and its
Restricted Subsidiaries may make such Consolidated Capital Expenditures (i)
during 2002, not in excess of an amount equal to $85,000,000; (ii) during each
Fiscal Year thereafter and until payment in full of all Obligations hereunder,
not in excess of an amount equal to $100,000,000 plus, in each case, Permitted
Turnaround Capital Expenditures; provided, however, that, to the
extent that Borrower consummates the Minimum Term B Prepayment, Borrower and
its Restricted Subsidiaries may make Consolidated Capital Expenditures in each
Fiscal Year commencing on January 1, 2003 in an amount equal to $135,000,000
plus Permitted Turnaround Capital Expenditures; provided, further,
however, to the extent Consolidated Capital Expenditures referred to in clause
(ii) for any Fiscal Year are less than the amount allowable for such Fiscal
Year, the difference thereof may be carried forward to the immediately
following fiscal year in an amount not to exceed $10,000,000.

 

ARTICLE X

EVENTS OF DEFAULT

 

10.1                        Events of Default.

 

Any of the following events, acts, occurrences or
state of facts shall constitute an “Event of Default” for purposes of
this Agreement:

 

(a)                                  Failure to Make Payments When Due.  Borrower (i) shall default in the payment of
principal on any of the Loans; or (ii) shall default in the payment of interest
on any of the Loans or default in the payment of any fee or any other amount
owing hereunder or under

 

92

 

any other Loan Document when due
and such default in payment shall continue for five (5) Business Days; or

 

(b)                                  Representations and Warranties.  Any representation or warranty made by or on
the part of Borrower or any Credit Party, as the case may be, contained in any
Loan Document or any document, instrument or certificate delivered pursuant
hereto or thereto shall have been incorrect or misleading in any material
respect when made or deemed made; or

 

(c)                                  Covenants.  Any Credit Party shall (i) default in the performance or
observance of any term, covenant, condition or agreement on its part to be
performed or observed under Article VIII, Article IX hereof or Sections
7.1, 7.3(a), 7.9, 7.10, 7.11, and 7.13
or any term of the HSCC Agreement or (ii) default in the due performance or
observance by it of any other term, covenant or agreement contained in this
Agreement and such default shall continue unremedied for a period of thirty
(30) days after written notice to Borrower by Administrative Agent or any
Lender; or

 

(d)                                  Default Under Other Loan Documents.  Any Credit Party shall default in the
performance or observance of any term, covenant, condition or agreement on its
part to be performed or observed hereunder or under any Loan Document (and not
constituting an Event of Default under any other clause of this Section 10.1)
and such default shall continue unremedied for a period of thirty (30) days
after written or telephonic (immediately confirmed in writing) notice thereof
has been given to Borrower by Administrative Agent; or

 

(e)                                  Voluntary Insolvency, Etc.  Holdco I, Holdco II, Borrower or any of its
Material Subsidiaries which are Restricted Subsidiaries shall become insolvent
or generally fail to pay, or admit in writing its inability to pay, its debts
as they become due, or shall voluntarily commence any proceeding or file any
petition under any bankruptcy, insolvency or similar law or seeking dissolution
(except as permitted by Section 8.3(c)) or reorganization or the
appointment of a receiver, trustee, custodian or liquidator for it or a
substantial portion of its property, assets or business or to effect a plan or
other arrangement with its creditors, or shall file any answer admitting the
jurisdiction of the court and the material allegations of an involuntary
petition filed against it in any bankruptcy, insolvency or similar proceeding,
or shall be adjudicated bankrupt, or shall make a general assignment for the
benefit of creditors, or shall consent to, or acquiesce in the appointment of,
a receiver, trustee, custodian or liquidator for a substantial portion of its
property, assets or business, shall call a meeting of its creditors with a view
to arranging a composition or adjustment of its debts or shall take any
corporate action authorizing any of the foregoing; or

 

(f)                                    Involuntary Insolvency, Etc.  Involuntary proceedings or an involuntary
petition shall be commenced or filed against Holdco I, Holdco II, Borrower or
any of its Material Subsidiaries which are Restricted Subsidiaries under any
bankruptcy, insolvency or similar law or seeking the dissolution or
reorganization of it or the appointment of a receiver, trustee, custodian or
liquidator for it or of a substantial part of its property, assets or business,
or any similar writ, judgment, warrant of attachment, execution or process
shall be issued or levied against a substantial part of its property, assets or
business, and such proceedings or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process

 

93

 

shall not be released, vacated
or fully bonded, within thirty (30) days after commencement, filing or levy, as
the case may be, or any order for relief shall be entered in any such
proceeding; or

 

(g)                                 Default Under Other Agreements.  (i) Holdco
I, Holdco II, Borrower or any of its Restricted Subsidiaries shall default in
the payment when due, whether at stated maturity or otherwise, of any amount
pursuant to any Indebtedness (other than Indebtedness owed to the Lenders under
the Loan Documents) in excess of $5,000,000 (or, in the case of such a default
under a Hedging Agreement, $2,500,000, measured by reference to the mark to
market termination value of obligations under the respective Hedging
Agreement(s) at the time) in the aggregate beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created, (ii) a default shall occur in the performance or observance of
any agreement under any  Indebtedness
(other than Indebtedness owed to the Lenders under the Loan Documents) in
excess of $5,000,000 or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause, or
to permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause (determined without regard to
whether any notice of acceleration or similar notice is required), any such
Indebtedness to become due or be repaid prior to its stated maturity or
(iii) any  Indebtedness (other than
Indebtedness owed to the Lenders under the Loan Documents) in excess of
$5,000,000 of Holdco I, Holdco II, Borrower or any of its Restricted
Subsidiaries shall be declared to be due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment (other than with
proceeds of the event giving rise to such prepayment), prior to the stated
maturity thereof; or

 

(h)                                 Judgments.  One or more judgments or decrees shall be entered against
Borrower or any of its Restricted Subsidiaries involving, individually or in
the aggregate, a liability (to the extent not paid or covered by a reputable
insurance company which has accepted liability in writing) of $5,000,000 or
more and all such judgments or decrees shall not have been vacated, discharged,
satisfied, stayed or bonded pending appeal within thirty (30) days from the
entry thereof; or

 

(i)                                    ERISA.  Either (i)
any Reportable Event which constitutes grounds for the termination of any Plan
by the PBGC or of any Multiemployer Plan or for the appointment by the
appropriate United States District Court of a trustee to administer or
liquidate any Plan or Multiemployer Plan shall have occurred; (ii) a trustee
shall be appointed by a United States District Court to administer any Plan or
Multiemployer Plan; (iii) the PBGC shall institute proceedings to terminate any
Plan or Multiemployer Plan or to appoint a trustee to administer any Plan; (iv)
Borrower or any of its ERISA Affiliates shall become liable to the PBGC or any
other party under Section 4062, 4063 or 4064 of ERISA with respect to any Plan;
or (v) Borrower or any of its Subsidiaries or any of their ERISA Affiliates
shall become liable to make a current payment with respect to any Multiemployer
Plan under Section 4201 et  seq. of ERISA;  or (vi) Borrower or any Subsidiary of
Borrower, or any ERISA Affiliate shall fail to make a deficit reduction
contribution required under Code Section 412(l) to any Plan by the due date for
such contribution; if as of the date thereof or any subsequent date, the sum of
each of Borrower’s and its Subsidiaries’ and their ERISA Affiliates’ various
liabilities (such liabilities to include, without limitation, any liability to
the PBGC or to any other party under Section 4062, 4063 or 4064  of ERISA with respect to any Plan, or to any
Multiemployer Plan under Section 4201 et

 

94

 

seq. of ERISA) as a
result of such events listed in subclauses (i) through (v) above exceeds
$7,500,000; or

 

(j)                                    Change in Control.  A Change of Control shall occur; or

 

(k)                                Security Documents.  At any time after the execution and delivery
thereof, any of the Security Documents shall cease to be in full force and
effect or shall cease to give the Collateral Agent for the benefit of the
Lenders the Liens, rights, powers and privileges purported to be created
thereby (including, without limitation, a first priority perfected security
interest in, and Lien on, all of the Collateral), in favor of the Collateral
Agent  subject to no other Liens (except
to the extent expressly permitted herein or therein); or

 

(l)                                    Holdco Agreement Breach.  A “Default” (as defined in the Holdco
Agreement) shall occur under the Holdco Agreement.

 

If any of the foregoing Events of Default shall have
occurred and be continuing, Administrative Agent, at the written direction of
the Required Lenders, shall take one or more of the following actions:  (i) by written or oral or telephonic notice
(in the case of oral or telephonic notice confirmed in writing immediately
thereafter) to Borrower declare all sums then owing by Borrower hereunder and
under the Loan Documents to be forthwith due and payable, whereupon all such
sums shall become and be immediately due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived
by Borrower, (ii) enforce, as Administrative Agent (to the extent permitted
under the applicable Loan Documents) or direct the Collateral Agent to enforce,
pursuant to the terms of the applicable Security Document, all of the Liens and
security interests created pursuant to the Security Documents.  In cases of any occurrence of any Event of
Default described in clause (e) or (f) of this Section 10.1, the Loans,
together with accrued interest thereon, shall become due and payable forthwith
without the requirement of any such acceleration or request, and without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived by Borrower, any provision of this Agreement or any other Loan
Document to the contrary notwithstanding, and other amounts payable by Borrower
hereunder shall also become immediately due and payable all without notice of
any kind.

 

Anything in this Section 10.1 to the contrary
notwithstanding, Administrative Agent shall, at the request of the Required
Lenders, rescind and annul any acceleration of the Loans by written instrument
filed with Borrower; provided that at the time such acceleration is so
rescinded and annulled:  (A) all past
due interest and principal (other than principal due solely as a result of such
acceleration), if any, on the Loans and all other sums payable under this
Agreement and the other Loan Documents shall have been duly paid, and (B) no
other Event of Default shall have occurred and be continuing which shall not
have been waived in accordance with the provisions of Section 12.1
hereof.

 

10.2                        Rights Not Exclusive.

 

The rights provided for in this Agreement and the
other Loan Documents are cumulative and are not exclusive of any other rights,
powers, privileges or remedies provided by

 

95

 

law or in equity, or under any
other instrument, document or agreement now existing or hereafter arising.

 

ARTICLE XI

ADMINISTRATIVE AGENT

 

In this Article
XI, the Lenders agree among themselves as follows:

 

11.1                        Appointment.

 

Each Lender hereby irrevocably appoints, designates
and authorizes Administrative Agent (for purposes of this Agreement, the term
Administrative Agent shall include Administrative Agent in its capacity as
Collateral Agent pursuant to the Security Documents) to act as herein
specified.  Each Lender hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, Administrative Agent to take
such action on its behalf under the provisions of the Loan Documents
(including, without limitation, to give notices and take such actions on behalf
of the Required Lenders as are consented to in writing by the Required Lenders
or all Lenders, as the case may be) and any other instruments, documents and
agreements referred to therein and to exercise such powers hereunder and
thereunder as are specifically delegated to Administrative Agent by the terms
hereof and thereof and such other powers as are reasonably incidental
thereto.  Administrative Agent may
perform any of its duties hereunder, or under the Loan Documents, by or through
its officers, directors, agents, employees or affiliates.

 

11.2                        Nature of Duties.

 

Administrative Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement.  The duties of Administrative Agent shall be
mechanical and administrative in nature. 
EACH LENDER HEREBY ACKNOWLEDGES
AND AGREES THAT AGENT SHALL NOT HAVE, BY REASON OF THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, A FIDUCIARY RELATIONSHIP TO OR IN RESPECT OF ANY LENDER.  Nothing in any of the Loan Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of any of the Loan Documents
except as expressly set forth herein or therein.  Each Lender shall make its own independent investigation of the
financial condition and affairs of Borrower in connection with the making and
the continuance of the Loans hereunder and shall make its own appraisal of the
credit worthiness of Borrower, and Administrative Agent shall not have any duty
or responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information with respect thereto, whether
coming into its possession before making of the Loans or at any time or times
thereafter.  Administrative Agent will
promptly notify each Lender at any time that the Required Lenders have instructed
it to act or refrain from acting pursuant to Article X.

 

11.3                        Rights, Exculpation, Etc.

 

Neither Administrative Agent nor any of its officers,
directors, agents, employees or affiliates shall be liable to any Lender for
any action taken or omitted by it hereunder or under

 

96

 

any of the Loan Documents, or in
connection herewith or therewith, unless caused by its or their gross
negligence or willful misconduct. 
Administrative Agent shall not be responsible to any Lender for any
recitals, statements, representations or warranties herein or for the
execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of any of the Loan Documents or any other
document or the financial condition of Borrower.  Administrative Agent shall not be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any of the Loan Documents or any other
document or the financial condition of Borrower, or the existence or possible
existence of any Unmatured Event of Default or Event of Default unless
requested to do so by the Required Lenders. 
Administrative Agent may at any time request instructions from the Lenders
with respect to any actions or approvals (including the failure to act or
approve) which by the terms of any of the Loan Documents Administrative Agent
is permitted or required to take or to grant, and if such instructions are
requested, Administrative Agent shall be absolutely entitled to refrain from
taking any action or to withhold any approval and shall not be under any
liability whatsoever to any Person for refraining from any action or
withholding any approval under any of the Loan Documents until it shall have
received such instructions from the Required Lenders, Supermajority Lenders or
all Lenders, as applicable.  Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against Administrative Agent as a result of either Administrative Agent acting
or refraining from acting or approving under any of the Loan Documents in
accordance with the instructions of the Required Lenders or, to the extent
required by Section 12.1, all of the Lenders.

 

11.4                        Reliance.

 

Administrative Agent shall be entitled to rely, and shall
be fully protected in relying, upon any written notice, statement, certificate,
order or other document or any telephone, telex, teletype, telecopier or
electronic message reasonably believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person, and, with respect to all
matters pertaining herein or to any of the other Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.

 

11.5                        Indemnification.

 

To the extent that Administrative Agent is not
reimbursed and indemnified by Borrower, the Lenders will reimburse and
indemnify Administrative Agent for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against Administrative Agent, acting pursuant
hereto in such capacity, in any way relating to or arising out of any of the
Loan Documents or any action taken or omitted by Administrative Agent under any
of the Loan Documents, in proportion to each Lender’s Aggregate Pro Rata Share;
provided, however, that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, claims, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from
Administrative Agent’s gross negligence or willful misconduct.  The obligations of the Lenders under this Section
11.5 shall survive the payment in full of the Notes and the termination of
this Agreement.  For purposes hereof,
“Aggregate Pro Rata Share” means, when used with reference to any Lender and
any described aggregate or total amount, an amount equal to the result obtained
by multiplying such desired aggregate or total

 

97

 

 

amount by a fraction the
numerator of which shall be the aggregate principal amount of such Lender’s
Term Loans and the denominator of which shall be the aggregate of all of the
Loans outstanding hereunder.

 

11.6                        Administrative Agent in its
Individual Capacity.

 

With respect
to its Loans made by it, the Administrative Agent shall have and may exercise
the same rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender or
holder of Obligations.  The terms
“Lenders”, “holder of Obligations” or “Required Lenders” or any similar terms
shall, unless the context clearly otherwise indicates, include the
Administrative Agent in its individual capacity as a Lender, one of the
Required Lenders or a holder of Obligations. 
The Administrative Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with Borrower
or any Subsidiary of Borrower as if it were not acting as the Administrative
Agent hereunder or under any other Loan Document, including the acceptance of
fees or other consideration for services without having to account for the same
to any of the Lenders.

 

11.7                        Notice of Defaults.  Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Event of Default or Unmatured Event of Default
hereunder unless Administrative Agent has received written notice from a Lender
or Borrower referring to this Agreement describing such Event of Default or
Unmatured Event of Default and stating that such notice is a “notice of
default”.  In the event Administrative
Agent receives such a notice, Administrative Agent shall give prompt notice
thereof to the Lenders.

 

11.8                        Holders of Obligations.  Administrative Agent may deem and treat the
payee of any Obligation as reflected on the books and records of Administrative
Agent as the owner thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof shall have been filed with
Administrative Agent pursuant to Section 12.8(c).  Any request, authority or consent of any Person who, at the time
of making such request or giving such authority or consent, is the holder of
any Obligation shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Obligation or of any Obligation or Obligations
granted in exchange therefor.

 

11.9                        Resignation by Administrative
Agent.

 

(a)                                  Administrative Agent may
resign from the performance of all its functions and duties hereunder at any
time by giving fifteen (15) Business Days’ prior written notice to Borrower and
the Lenders.  Such resignation shall
take effect upon the acceptance by a successor Administrative Agent of
appointment pursuant to clause (b), (c) or (d) below.

 

(b)                                  Upon any such notice of
resignation by Administrative Agent, Required Lenders shall appoint a successor
Administrative Agent who shall be satisfactory to Borrower and shall be an
incorporated bank or trust company.

 

(c)                                  If a successor
Administrative Agent shall not have been so appointed within said 15 Business
Day period, Administrative Agent, with the consent of Borrower, shall then
appoint its successor who shall serve as Administrative Agent, as the case may
be, until

 

98

 

 such time, if any, as the Required Lenders, with the consent of
Borrower, appoint a successor as provided above.

 

(d)                                  If no successor
Administrative Agent has been appointed pursuant to clause (b) or (c), by the
20th Business Day after the date such notice of resignation was given by
Administrative Agent, as the case may be, such resignation shall become
effective and the Required Lenders shall thereafter perform all the duties of Administrative
Agent hereunder until such time, if any, as the Required Lenders, with the
consent of Borrower, appoint a successor Administrative Agent as provided
above.

 

ARTICLE XII

 

MISCELLANEOUS

 

12.1                        No Waiver; Modifications in Writing.

 

(a)                                  No failure or delay on the
part of Administrative Agent or any Lender in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or
remedy.  The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to Administrative Agent or any Lender at law or in equity or
otherwise.  Neither this Agreement nor
any terms hereof may be amended, modified, supplemented, waived,
discharged, terminated or otherwise changed unless such amendment,
modification, supplement, waiver, discharge, termination or other change is in
writing signed by the respective Credit Parties party thereto and the Required
Lenders, provided, that no such amendment, modification, supplement,
waiver, discharge, termination or other change shall:

 

(i)                                    without
the consent of Lenders holding at least 80%  of the principal amount
of the affected Term Loans reduce the amount of or postpone the date of any
Scheduled Term Loan Principal Payments;

 

(ii)                                without
the consent of Lenders holding at least 66-2/3% of all Loans:

 

(A)                               amend,
modify or waive any provision of Section 4.2(b), Section 4.2(c)
(including for purposes hereof the definition of Excess Cash Flow set forth in Section
1.1), Section 4.2(e) or Section 4.2(g), or

 

(B)                               prior to
the Minimum Term B Prepayment, amend, modify or waive any provision of Section
8.1 or Section 8.2;

 

(iii)                            without the
consent of each Lender (with Obligations directly affected thereby in the case
of the following clause (A)):

 

(A)                               extend the
final scheduled maturity of any Loan or Note or reduce the rate or extend the
time of payment of interest or fees thereon, or reduce the principal amount
thereof),

 

99

 

(B)                               other than
as expressly permitted under Section 12.17(b)(i)(A)-(C), effect any
release of assets with a book value aggregating 5% or more of the total
consolidated tangible assets of Borrower (measured as of the end of the most
recently completed Fiscal Quarter for which financial statements have been
delivered to Administrative Agent) during the term of this Agreement,

 

(C)                               amend,
modify or waive any provision of this Section 12.1(a),

 

(D)                               reduce the
percentage specified in the definition of Required Lenders or Supermajority
Lenders (it being understood that, with the consent of the Required Lenders,
the definition of “Required Lenders” or “Supermajority Lenders” shall include
lenders with respect to additional loans pursuant to this Agreement),

 

(E)                                 consent
to the assignment or transfer by Borrower of any of its rights and obligations
under this Agreement,

 

(F)                                 amend
the definition of Pro Rata Share, or

 

(G)                               amend,
modify or waive any provision of Section 4.2(j);

 

(iv)                               without
the consent of Administrative Agent, amend, modify or waive any provision of Article
XI as same applies to Administrative Agent or any other provisions as same
relates to the rights or obligations of Administrative Agent;

 

(v)                                   without
the consent of Administrative Agent, amend, modify or waive any provisions
relating to the rights or obligations of Administrative Agent under the other
Loan Documents;

 

(vi)                               without
the consent of the Majority Lenders of each Facility which is being allocated a
lesser prepayment or repayment, alter the required application of any
prepayments or repayments, as between the various Facilities pursuant to the
first sentence of Section 4.3(a) and the second sentence of Section
4.5(a) (although the Required Lenders may waive in whole or in part, any
such prepayment, repayment or commitment reduction so long as the application,
as amongst the various Facilities, of any such prepayment, repayment or
commitment reduction which is still required to be made is not altered);

 

(vii)                           without the
consent of the Majority Lenders of each Facility amend the definition of
Majority Lenders;

 

(viii)                       without the
consent of Supermajority Lenders:

 

(A)                               amend,
modify or waive Section 8.3 so as to permit any Acquisition involving a
total Investment in an amount in excess of $20 million,

 

100

 

(B)                               amend,
modify or waive any provision of Section 8.4, 8.8, 8.16(b)
or 8.16(c),

 

(C)                               amend,
modify or waive any provision of Section 8.1, 12.17(b), the
Security Documents or the Intercreditor Agreement so as to expressly agree that
any Liens shall be senior to the Liens securing the Obligations, other than
Liens securing the Priority Loans, or

 

(D)                               amend,
modify or waive Section 8.2 to permit any Receivables Facility
Attributed Indebtedness; or

 

(ix)                              without the
consent of Lenders holding at least 80% of all Loans, amend, modify or waive Section
8.16(a).

 

(b)                                  If, in connection with any
proposed change, waiver, discharge or termination of any of the provisions of
this Agreement as contemplated by clauses (a)(i) through (ix), inclusive, of
the proviso to the third sentence of Section 12.1(a), the consent of the
Required Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then Borrower shall have the
right, so long as all non-consenting Lenders whose individual consent is
required are treated as described in either clauses (A) or (B) below to either
(A)  replace each such non-consenting
Lender or Lenders (or, at the option of Borrower if the respective Lender’s
consent is required with respect to less than all Loans, to replace only the
respective Loans of the respective non-consenting Lender which gave rise to the
need to obtain such Lender’s individual consent) with one or more Replacement
Lenders pursuant to Section 3.6 so long as at the time of such
replacement, each such Replacement Lender consents to the proposed amendment,
modification, supplement, waiver, discharge, termination or other change or (B)
repay outstanding Loans of such Lender which gave rise to the need to obtain
such Lender’s consent, in accordance with Section 12.1(a); provided
that, unless Loans repaid pursuant to the preceding clause (B) are immediately
replaced in full at such time through the addition of new Lenders or the
increase of outstanding Loans of existing Lenders (who in each case must
specifically consent thereto), then in the case of any action pursuant to
preceding clause (B) the Required Lenders (determined before giving effect to
the proposed action) shall specifically consent thereto; provided,  further,
that in any event the Borrower shall not have the right to replace a Lender or
repay its Loans solely as a result of the exercise of such Lender’s rights (and
the withholding of any required consent by such Lender) contemplated by the
proviso to this Section 12.1(b).

 

12.2                        Further Assurances.

 

Borrower
agrees to do such further acts and things and to execute and deliver to
Administrative Agent such additional assignments, agreements, powers and
instruments, as Administrative Agent may reasonably require or deem advisable
to carry into effect the purposes of this Agreement or any of the Loan Documents
or to better assure and confirm unto Administrative Agent its rights, powers
and remedies hereunder.

 

101

 

12.3                        Notices,
Etc.

 

Except where
telephonic instructions or notices are authorized herein to be given, all
notices, demands, instructions and other communications required or permitted
to be given to or made upon any party hereto or any other Person shall be in
writing and shall be personally delivered or sent by registered or certified
mail, postage prepaid, return receipt requested, or by a reputable overnight or
courier delivery service, or by telecopier, and shall be deemed to be given for
purposes of this Agreement on the third day after deposit in registered or
certified mail, postage prepaid, and otherwise on the day that such writing is
delivered or sent to the intended recipient thereof, or in the case of notice
delivered by telecopy, upon completion of transmission with a copy of such
notice also being delivered under any of the other methods provided above, all
in accordance with the provisions of this Section 12.3.  Unless otherwise specified in a notice sent
or delivered in accordance with the foregoing provisions of this Section
12.3, notices, demands, instructions and other communications in writing
shall be given to or made upon the respective parties hereto at their
respective addresses (or to their respective telex, TWX or telecopier numbers)
indicated on its signature page to this Agreement or, in the case of any
Assignee, on its signature page to its Assignment and Assumption Agreement and,
in the case of telephonic instructions or notices, by calling the telephone
number or numbers indicated for such party on its signature page to this
Agreement or such Assignment or Assumption Agreement, as the case may be.

 

12.4                        Costs,
Expenses and Taxes.

 

(a)                                  Generally.  Borrower agrees without duplication to pay
promptly upon request by Administrative Agent all reasonable costs and expenses
incurred by or on behalf of the Administrative Agent in connection with the
negotiation, preparation, printing, typing, reproduction, execution and
delivery of this Agreement and the other Loan Documents and the documents and
instruments referred to herein and therein and any amendment, waiver, consent
relating hereto or thereto or other modifications of (or supplements to) any of
the foregoing and any and all other documents and instruments furnished
pursuant hereto or thereto or in connection herewith or therewith, including
without limitation, the reasonable fees and out-of-pocket expenses of Winston
& Strawn, special counsel to Administrative Agent, and any local counsel
retained by Administrative Agent relative thereto, other Attorney Costs,
independent public accountants and other outside experts retained by Administrative
Agent in connection with the administration of this Agreement and the other
Loan Documents, and all search fees, appraisal fees and expenses, title
insurance policy fees, costs and expenses and filing and recording fees and all
costs and expenses (including, without limitation, Attorney Costs), if any, in
connection with the enforcement of this Agreement, any of the Loan Documents or
any other agreement furnished pursuant hereto or thereto or in connection
herewith or therewith.  In addition, Borrower
shall pay any and all present and future stamp, transfer, excise and other
similar taxes payable or determined to be payable in connection with the
execution and delivery of this Agreement, any Loan Document, or the making of
any Loan, and agrees to save and hold Administrative Agent and each Lender
harmless from and against any and all liabilities with respect to or resulting
from any delay by Borrower in paying, or omission by Borrower to pay, such
taxes.  Any portion of the foregoing
fees, costs and expenses which remains unpaid more than thirty (30) days
following Administrative Agent’s or any Lender’s statement and request for

 

102

 

payment thereof shall bear
interest from the date of such statement and request to the date of payment at
the Default Rate.

 

(b)                                  Indemnification.  Borrower will indemnify and hold harmless
Administrative Agent and each Lender and each director, officer, employee,
agent, attorney, trustee, advisor and Affiliate of Administrative Agent and
each Lender (each such Person an “Indemnified Person” and collectively,
the “Indemnified Persons”) from and against all losses, claims, damages,
obligations (including removal or remedial actions), expenses or liabilities
(not including Taxes as to which Borrower is not required to make any payment
of additional amounts pursuant to Section 4.7(c) hereof) to which such
Indemnified Person may become subject, insofar as such losses, claims, damages,
penalties, obligations (including removal or remedial actions), expenses or
liabilities (or actions, suits or proceedings including any inquiry or
investigation or claims in respect thereof (whether or not  Administrative Agent or any Lender is a
party thereto)) arise out of, in any way relate to, or result from the
transactions contemplated by this Agreement or any of the other Loan Documents
and to reimburse each Indemnified Person upon their demand, for any Attorney
Costs or other expenses incurred in connection with investigating, preparing to
defend or defending any such loss, claim, damage, liability, action or claim; provided,
however,

 

(i)                                    that
no Indemnified Person shall have the right to be so indemnified hereunder for
any loss, claim, damage, penalties, obligations, expense or liability to the
extent it arises or results from the gross negligence or willful misconduct or
bad faith of such Indemnified Person as finally determined by a court of
competent jurisdiction and

 

(ii)                                that
nothing contained herein shall affect the obligations and liabilities of the
Lenders to Borrower contained herein.

 

(iii)                            If any
action, suit or proceeding arising from any of the foregoing is brought against
Administrative Agent, any Lender or any other Person indemnified or intended to
be indemnified pursuant to this Section 12.4, Borrower will, if
requested by Administrative Agent, any Lender or any such Indemnified Person,
resist and defend such action, suit or proceeding or cause the same to be
resisted and defended by counsel reasonably satisfactory to the Person or
Persons indemnified or intended to be indemnified.  Each Indemnified Person shall, unless Administrative Agent,
a Lender or other Indemnified Person has made the request described in the
preceding sentence and such request has been complied with, have the right to
employ its own counsel (or (but not as well as) staff counsel) to investigate
and control the defense of any matter covered by such indemnity and the
reasonable fees and expenses of such counsel shall be at the expense of the
indemnifying party.  Excluding any
liability to the extent arising out of the gross negligence or willful
misconduct of any Indemnified Person as determined by a court of competent
jurisdiction in a final non-appealable judgment, Borrower further agrees to
indemnify and hold each Indemnified Person harmless from all loss, cost
(including Attorney Costs), liability and damage whatsoever incurred by any
Indemnified Person by reason of any violation of any Environmental Laws or
Environmental Permits or for the Release or Threatened Release of any
Contaminants into the environment for which Borrower or any of its Subsidiaries
has any liability or which occurs upon the 

 

103

 

Mortgaged
Property or which is related to any property currently or formerly owned,
leased or operated by or on behalf of Borrower or any of its Subsidiaries, or
by reason of the imposition of any Environmental Lien or which occurs by a
breach of any of the representations, warranties or covenants relating to environmental
matters contained herein, including, without limitation, by reason of any
matters disclosed in Schedule 6.17, provided that, with respect to
any liabilities arising from acts or failure to act for which Borrower or any
of its Subsidiaries is strictly liable under any Environmental Law or
Environmental Permit, Borrower’s obligation to each Indemnified
Person under this indemnity shall likewise be without regard to fault on
the part of Borrower or any such Subsidiary. 
If Borrower shall fail to do any act or thing which it has covenanted to
do hereunder or any representation or warranty on the part of Borrower or any
Subsidiary contained herein or in any other Loan Document shall be breached,
Administrative Agent may (but shall not be obligated to) do the same or cause
it to be done or remedy any such breach, and may expend its funds for such
purpose, and will use its best efforts to give prompt written notice to
Borrower that it proposes to take such action. 
Any and all amounts so expended by Administrative Agent shall be repaid
to it by Borrower promptly upon Administrative Agent’s demand therefor, with
interest at the Default Rate in effect from time to time during the period
including the date so expended by Administrative Agent to the date of
repayment.  To the extent that the
undertaking to indemnify, pay or hold harmless Administrative Agent or any
Lender as set forth in this Section 12.4 may be unenforceable
because it is violative of any law or public policy, Borrower shall make the
maximum contribution to the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law.  The obligations of Borrower under this Section
12.4 shall survive the termination of this Agreement and the discharge of
Borrower’s other Obligations hereunder.

 

12.5                        Confirmations.

 

Each of
Borrower and each holder of any portion of the Obligations agrees from time to
time, upon written request received by it from the other, to confirm to the
other in writing (with a copy of each such confirmation to Administrative
Agent) the aggregate unpaid principal amount of the Loan or Loans and other
Obligations then outstanding.

 

12.6                        Adjustment.

 

(a)                                  In addition to any rights
and remedies of the Lenders provided by law, each Lender shall have the right,
without prior notice to Borrower, any such notice being expressly waived by
Borrower, upon the occurrence and during the continuance of an Event of
Default, to setoff and apply against any Obligations, whether matured or
unmatured, of Borrower to such Lender, any amount owing from such Lender to
Borrower, at or at any time after, the happening of any of the above-mentioned
events, and the aforesaid right of setoff may be exercised by such Lender
against Borrower or against any trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receivers, or execution, judgment or
attachment creditor of Borrower, or against anyone else claiming through or
against, Borrower or such trustee in bankruptcy, debtor in possession, assignee
for the benefit of creditors, receivers, or execution, judgment or attachment
creditor, notwithstanding the fact that such right of setoff shall not have
been exercised by such Lender prior to the making, filing or issuance, or
service

 

104

 

 upon such Lender of, or of notice of, any such petition,
assignment for the benefit of creditors, appointment or application for the
appointment of a receiver, or issuance of execution, subpoena, order or
warrant.  Each Lender agrees promptly to
notify Borrower, Administrative Agent after any such setoff and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of such setoff and application.

 

(b)                                  Borrower expressly agrees
that to the extent Borrower makes a payment or payments and such payment or
payments, or any part thereof, are subsequently invalidated, declared to be
fraudulent or preferential, set aside or are required to be repaid to a
trustee, receiver, or any other party under any bankruptcy act, state or
federal law, common law or equitable cause, then to the extent of such payment
or repayment, the Indebtedness to the Lenders or part thereof intended to be
satisfied shall be revived and continued in full force and effect as if said
payment or payments had not been made.

 

12.7                        Execution in Counterparts.

 

This Agreement
may be executed in any number of counterparts and by different parties hereto
on separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.

 

12.8                        Binding Effect; Assignment; Addition
and Substitution of Lenders.

 

(a)                                  This Agreement shall be
binding upon, and inure to the benefit of, Borrower, Administrative Agent, the
Lenders, all future holders of the Notes and their respective successors and
assigns; provided, however, that Borrower may not assign its
rights or obligations hereunder or in connection herewith or any interest
herein (voluntarily, by operation of law or otherwise) without the prior
written consent of Administrative Agent and all of the Lenders.

 

(b)                                  Each Lender may at any time
sell to one or more banks or other entities (“Participants”)
participating interests in all or any portion of its Loans or any other
interest of such Lender hereunder (in respect of any Lender, its “Credit
Exposure”).  In the event of any
such sale by a Lender of participating interests to a Participant, such
Lender’s obligations under this Agreement shall remain unchanged, such Lender
shall remain solely responsible for the performance thereof, and Borrower and
Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement.  Each Lender shall from time
to time upon request of Borrower notify Borrower of the identity of any
Participants with respect to its Credit Exposure hereunder, provided, however,
that failure to provide such notice will not affect the validity of such
participation.  Borrower agrees that if
amounts outstanding under this Agreement or any of the Loan Documents are due
or unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall be deemed to have
the right of setoff in respect of its participating interest in amounts owing
under this Agreement and the Loan Documents to the same extent as if the amount
of its participating interest were owing directly to it as a Lender under this
Agreement or any other Loan Document, provided that such right of setoff shall
be subject to the obligation of such Participant to share with the Lenders, and
the Lenders agree to share with such Participant, as provided in Section 4.6.  Borrower also agrees 

 

105

 

that each Participant shall be
entitled to the benefits of Sections 3.4, 3.5 and 4.5 with
respect to its participation in the Loans outstanding from time to time as if
it were a Lender, provided that such Participant’s benefits under Sections
3.4, 3.5 and 4.5 shall be limited to the benefits that the
primary Lender would be entitled to thereunder.  Each Lender agrees that any agreement between such Lender and any
such Participant in respect of such participating interest shall not restrict
such Lender’s right to approve or agree to any amendment, restatement,
supplement or other modification to, waiver of, or consent under this Agreement
or any of the Loan Documents except to the extent that any of the foregoing
would (i) extend the final scheduled maturity of any Loan or Note in which such
Participant is participating (it being understood that amending the definitions
of Scheduled Term A Loans Principal Payments (other than the Term A Loan
Maturity Date) shall not constitute an extension of the final scheduled
maturity of any Loan or Note), or reduce the rate or extend the time of payment
of interest or fees on any such Loan or Note (except in connection with a
waiver of applicability of any post-default increase in interest rates) or
reduce the principal amount thereof, or increase the amount of the
Participant’s participation over the amount thereof then in effect (it being
understood that waivers or modifications of conditions precedent, covenants,
Events of Default or Unmatured Events of Default shall not constitute a change
in the terms of such participation, and that an increase in any Loan shall be
permitted without the consent of any Participant if the Participant’s
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by Borrower of any of its rights and obligations under
this Agreement or (iii) release all or substantially all of the Collateral
under all of the Security Documents (except as expressly provided in the Loan
Documents) supporting the Loans hereunder in which such Participant is
participating.

 

(c)                                  Any Lender may at any time
assign to one or more Eligible Assignees, including an Affiliate thereof
(treating any fund that invests in bank loans, any other fund that invests in
bank loans and is managed by the same investment advisor of such Lender or by
an affiliate of such investment manager as a single Eligible Assignee) (each an
“Assignee”), all or any part of its Loans pursuant to an Assignment and
Assumption Agreement attached hereto as Exhibit 12.8(c); provided
that (i) it assigns its Credit Exposure in an amount not less than $1,000,000
(except in the case of an assignment to another Lender) and (ii) any assignment
of all or any portion of any Lender’s Loans to an Assignee other than an
Affiliate of such Lender or another Lender, or in the case of a Lender that is
a fund that invests in senior loans, any Related Fund of any Lender, shall
require the prior written consent of Administrative Agent (such consent not to
be unreasonably withheld or delayed), provided  further, that
notwithstanding the foregoing limitations, any Lender may at any time assign
all or any part of its Loans to any Affiliate of such Lender or to any other
Lender (or in the case of a Lender which is a Related Fund, to any Related Fund
of any Lender).  Upon execution of an
Assignment and Assumption Agreement and the payment of a nonrefundable
assignment fee of $3,500 (provided that no such fee shall be payable upon
assignments by any Lender which is a fund to one or more Related Fund) in
immediately available funds to Administrative Agent at its Payment Office in
connection with each such assignment ($2,500 with respect to assignments to any
Lender or an Affiliate of such Lender), written notice thereof by such
transferor Lender to Administrative Agent and the recording by Administrative
Agent in the Register of such assignment and the resulting effect upon the applicable
Loans of the assigning Lender and the Assignee, the Assignee shall have, to the
extent of such assignment, the same rights and benefits as it would have if it
were a Lender hereunder and the holder of the Obligations (provided that
Borrower and 

 

106

 

Administrative Agent shall be
entitled to continue to deal solely and directly with the assignor Lender in
connection with the interests so assigned to the Assignee until written notice
of such assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to Borrower and
Administrative Agent by the assignor Lender and the Assignee) and, if the
Assignee has expressly assumed, for the benefit of Borrower, some or all of the
transferor Lender’s obligations hereunder, such transferor Lender shall be
relieved of its obligations hereunder to the extent of such assignment and
assumption, and except as described above, no further consent or action by
Borrower, the Lenders or Administrative Agent shall be required.  At the time of each assignment pursuant to
this Section 12.8(c) to a Person which is not already a Lender
hereunder and which is not a USA person (as such term is defined in Section
7701(a)(30) of the Code) for United States Federal income tax purposes, the
respective Assignee shall provide to Borrower and Administrative Agent the
appropriate IRS Forms (and, if applicable a Section 4.5(d)(ii) Certificate)
described in Section 4.5(d). 
Each Assignee shall take such Credit Exposure subject to the provisions
of this Agreement and to any request made, waiver or consent given or other
action taken hereunder, prior to the receipt by Administrative Agent and
Borrower of written notice of such transfer, by each previous holder of such
Credit Exposure.  Such Assignment and
Assumption Agreement shall be deemed to amend this Agreement, to the extent,
and only to the extent, necessary to reflect the addition of such Assignee as a
Lender and the resulting adjustment of all or a portion of the rights and
obligations of such transferor Lender under this Agreement, the determination
of its Pro Rata Share of the applicable Facility (in each case, rounded to
twelve decimal places), the Loans and any new Notes to be issued, at Borrower’s
expense, to such Assignee, and no further consent or action by Borrower or the
Lenders shall be required to effect such amendments.

 

(d)                                  Borrower authorizes each
Lender to disclose to any Participant or Assignee or its investment advisor
(each, a “Transferee”) and any prospective Transferee any and all
financial information in such Lender’s possession concerning Borrower and any
Subsidiary of Borrower which has been delivered to such Lender by Borrower
pursuant to this Agreement or which has been delivered to such Lender by
Borrower in connection with such Lender’s credit evaluation of Borrower prior
to entering into this Agreement.  Any
Transferee or any prospective Transferee to whom such financial information is
disclosed shall be required to maintain the confidentiality of such information
pursuant to Section 12.17 as if they were parties to this Agreement

 

(e)                                  Notwithstanding any other
provision set forth in this Agreement, any Lender may at any time pledge or
assign a security interest in all or any portion of its rights under this
Agreement and the other Loan Documents (including, without limitation, the
Notes held by it) to secure obligations of such Lender, including without
limitation any pledge or assignment to secure obligations to any Federal
Reserve Bank in accordance with Regulation A of the Federal Reserve Board
without notice to, or the consent of, Borrower; provided that no such pledge or
assignment of a security interest under this Section 12.8(e) shall release
a Lender from any obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto. 
Any Lender which is a fund may pledge all or any portion of its Notes or
Loans to its trustee in support of its obligations to its trustee.  No such pledge or assignment shall release
the transferor Lender from its obligations hereunder.

 

107

 

12.9                        CONSENT TO JURISDICTION; MUTUAL WAIVER
OF JURY TRIAL.

 

(A)                               ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH CREDIT PARTY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS.  EACH CREDIT PARTY
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH CREDIT PARTY,
AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME
EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. 
NOTHING HEREIN SHALL AFFECT THE RIGHT OF AGENT UNDER THIS AGREEMENT, ANY
LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH
CREDIT PARTY IN ANY OTHER JURISDICTION.

 

(B)                               EACH
CREDIT PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (A) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.

 

(C)                               EACH
OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE TO TRIAL BY JURY IN ANY COURT OR JURISDICTION, INCLUDING WITHOUT
LIMITATION THOSE REFERRED TO IN CLAUSE (A) ABOVE, IN RESPECT TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

108

 

12.10                 GOVERNING
LAW.  THIS AGREEMENT AND EACH
NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW
YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS AND DECISIONS OF SAID STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.

 

12.11                 Severability of Provisions.  Any provision of this Agreement which 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 or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

12.12                 Transfers of Notes.  In the event that the holder of any Note (including any Lender)
shall transfer such Note, it shall immediately advise Administrative Agent and
Borrower of such transfer, and Administrative Agent and Borrower shall be
entitled conclusively to assume that no transfer of any Note has been made by
any holder (including any Lender) unless and until Administrative Agent and
Borrower shall have received written notice to the contrary.  Except as otherwise provided in this
Agreement or as otherwise expressly agreed in writing by all of the other
parties hereto, no Lender shall, by reason of the transfer of a Note or
otherwise, be relieved of any of its obligations hereunder.  Each transferee of any Note shall take such
Note subject to the provisions of this Agreement and to any request made,
waiver or consent given or other action taken hereunder, prior to the receipt
by Administrative Agent and Borrower of written notice of such transfer, by
each previous holder of such Note, and, except as expressly otherwise provided
in such transfer, Administrative Agent and Borrower shall be entitled
conclusively to assume that the transferee named in such notice shall hereafter
be vested with all rights and powers under this Agreement with respect to the
Pro Rata Share of Term A Loans or Term B Loans, as the case may be, of the
Loans of the Lender named as the payee of the Note which is the subject of such
transfer.

 

12.13                 Registry. 
Borrower hereby designates Administrative Agent to serve as Borrower’s
agent, solely for purposes of this Section 12.13 to maintain a register (the
“Register”) on which it will record the Loans made by each of the Lenders and
each repayment in respect of the principal amount of the Loans of each
Lender.  Failure to make any such
recordation, or any error in such recordation shall not affect Borrower’s
obligations in respect of such Loans. 
With respect to any Lender, the transfer of the rights to the principal
of, and interest on, any Loan shall not be effective until such transfer is
recorded on the Register maintained by Administrative Agent with respect to
ownership of such Loans and prior to such recordation all amounts owing to the
transferor with respect to such Loans shall remain owing to the
transferor.  The registration of
assignment or transfer of all or part of any Loans shall be recorded by
Administrative Agent on the Register only upon the acceptance by Administrative
Agent of a properly executed and delivered Assignment and Assumption Agreement
pursuant to Section 12.8(c).  Coincident
with the delivery of such an Assignment and Assumption Agreement to
Administrative Agent for acceptance and registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning
or transferor Lender shall surrender the Note (if any) evidencing such Loan,
and thereupon one or more new Notes in the same aggregate principal amount then
owing to such assignor or transferor Lender shall be issued to the assigning or
transferor Lender and/or the new Lender. 
Borrower agrees to indemnify Administrative Agent from and against any
and all losses, claims, damages and liabilities of whatsoever nature which 

 

109

 

may be imposed on, asserted
against or incurred by Administrative Agent (other than those arising from the
gross negligence or willful negligence of the Administrative Agent) in
performing its duties under this Section 12.13.

 

12.14                 Headings.  The Table of Contents and Article and Section headings used in
this Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.

 

12.15                 Termination of Agreement.  This Agreement shall terminate when all
outstanding Obligations and Loans have been paid in full; provided, however,
that the rights and remedies of Administrative Agent and each Lender
with respect to any representation and warranty made by Borrower pursuant to
this Agreement or any other Loan Document, and the indemnification provisions
contained in this Agreement and any other Loan Document, shall be continuing
and shall survive any termination of this Agreement or any other Loan Document.

 

12.16                 Confidentiality.  Each of the
Lenders severally agrees to keep confidential all non-public information
pertaining to Borrower and its Subsidiaries or Affiliates which is provided to
it by any such parties in accordance with such Lender’s customary procedures
for handling confidential information of this nature and in a prudent fashion,
and shall not disclose such information to any Person except:

 

(i)                                    to
the extent such information is public when received by such Lender or becomes
public thereafter due to the act or omission of any party other than a Lender,

 

(ii)                                to the
extent such information is independently obtained from a source other than
Borrower or its Subsidiaries and such information from such source is not, to
such Lender’s knowledge, subject to an obligation of confidentiality or, if
such information is subject to an obligation of confidentiality, that
disclosure of such information is permitted,

 

(iii)                            to an
Affiliate of such Lender, counsel, auditors, examiners of any regulatory
authority having or reasonably asserting jurisdiction over such Lender,
accountants and other consultants retained by Administrative Agent or any
Lender or to any Affiliate of a Lender which is a direct or indirect
contractual counterparty in swap agreements with the Borrower or a Subsidiary
of the Borrower or such contractual counterparty’s professional advisor (so
long as such contractual counterparty or professional advisor to such
contractual counterparty agrees to be bound by the provisions of this Section
12.16) or to the National Association of Insurance Commissioners or any
similar organization or any nationally recognized rating agency that requires
access to information about a Lender’s investment portfolio in connection with
rating issued with respect to such Lender,

 

(iv)                               in
connection with any litigation or the enforcement of the rights of any Lender
or Administrative Agent under this Agreement or any other Loan Document,

 

(v)                                   to the
extent (x) required by any applicable statute, rule or regulation or court
order (including, without limitation, by way of subpoena) or pursuant 

 

110

 

to the request
of any Governmental Authority having or reasonably asserting jurisdiction over
any Lender or Administrative Agent; provided, however, that in
such event, if the Lender(s) are able to do so, the Lender shall provide
Borrower with prompt notice of such requested disclosure so that Borrower may
seek a protective order or other appropriate remedy, and, in any event, the
Lenders will endeavor in good faith to provide only that portion of such
information which, in the reasonable judgment of the Lender(s), is relevant and
legally required to be provided, (y) requested by any nationally recognized
rating agency that requires access to information about a Lender’s investment
portfolio in connection with rating issued with respect to such Lender or
(z)  requested by an Affiliate of a
Lender which is a direct or indirect contractual counterparty in swap
agreements with the Borrower or a Subsidiary of the Borrower or such
contractual counterparty’s professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty agrees to
be bound by the provisions of this Section 12.16) or to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender’s investment portfolio in connection with rating issued with respect to
such Lender,

 

(vi)                               to the
extent disclosure to other entities is appropriate in connection with any
proposed or actual assignment or grant of a participation by any of the Lenders
of interests in this Agreement and/or any of the other Loan Documents to such
other entities (who will in turn be required to maintain confidentiality as if
they were Lenders parties to this Agreement). 
In no event shall Administrative Agent or any Lender be obligated or
required to return any such information or other materials furnished by
Borrower.

 

12.17                 Concerning the Collateral and the
Loan Documents.

 

(a)                                  Authority.  Each Lender authorizes and directs DB to act
as Collateral Agent and to enter into the Loan Documents relating to the
Collateral for the benefit of the Lenders and the other secured parties.  Each Lender agrees that any action taken by
the Administrative Agent or the Required Lenders (or, where required by the
express terms, hereof, a different proportion of the Lenders) in accordance
with the provisions hereof or of the other Loan Documents, and the exercise by
the Administrative Agent, the Collateral Agent or the Required Lenders (or,
where so required, such different proportion) of the powers set forth herein or
therein, together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Lenders.  Without limiting the generality of the
foregoing, the Administrative Agent or the Collateral Agent as the case may be,
shall have the sole and exclusive right and authority to (i) act as the
disbursing and collecting agent for the Lenders with respect to all payments
and collections arising in connection herewith and with the Loan Documents
relating to the Collateral; (ii) execute and deliver each Loan Document
relating to the Collateral and accept delivery of each such agreement delivered
by Borrower or any of its Subsidiaries; (iii) act as the Collateral Agent for
the Lenders for purposes stated therein to the extent such action is provided
for under the Loan Documents, provided, however, the
Administrative Agent hereby appoints, authorizes and directs each Lender to act
as collateral sub-agent for the Administrative Agent and the Lenders for
purposes of the perfection of all security interests and Liens with respect to
Borrower’s and its Subsidiaries’ respective deposit

 

111

 

 accounts maintained with, and cash and Cash Equivalents held by,
such Lender; (iv) manage, supervise and otherwise deal with the Collateral; (v)
take such action as is necessary or desirable to maintain the perfection and
priority of the security interests and liens created or purported to be created
by the Loan Documents; and (vi) except as may be otherwise specifically
restricted by the terms hereof or of any other Loan Document, exercise all
remedies given to the Administrative Agent or the Lenders with respect to the
Collateral under the Loan Documents relating thereto, applicable law or
otherwise.

 

(b)                                  Release of Collateral.

 

(i)                                    The
Administrative Agent and the Lenders hereby direct the Administrative Agent and
the Collateral Agent, as the case may be, to release, in accordance with the
terms hereof, any Lien held by the Administrative Agent or the Collateral Agent
, as the case may be, under the Security Documents (and, in the case of clause
(B) below, release the affected Subsidiary from its guaranty):

 

(A)                              against all
of the Collateral, upon final and indefeasible payment in full of the Loans and
Obligations and termination hereof;

 

(B)                              against any
part of the Collateral sold or disposed of by Borrower or any of its
Subsidiaries (other than sales permitted under Section 8.6(e) but
including, without limitation, in the case of a sale or disposition of all of
the Capital Stock of a Subsidiary owned by Borrower and its Subsidiaries or the
redesignation of a Restricted Subsidiary as an Unrestricted Subsidiary pursuant
to an amendment hereto with the approval of the Required Lenders, all assets of
such Subsidiary and its Subsidiaries and all Pledged Intercompany Notes issued
by such Subsidiary and its Subsidiaries) to the extent such sale or disposition
is permitted hereby (or permitted pursuant to a waiver or consent of a
transaction otherwise prohibited hereby);

 

(C)                              against any
Collateral acquired by Borrower or any of its Subsidiaries after the Closing
Date and at least 80% of the purchase price therefor is within 120 days of the
acquisition thereof financed with Indebtedness secured by a Lien permitted by Section 8.1(b)(i);
and

 

(D)                              against a
part of the Collateral which release does not require the consent of all of the
Lenders as set forth in Section 12.1(a)(iii)(B), if such release is
consented to by the Required Lenders;

 

provided, however,
that (y) the Administrative Agent or the Collateral Agent, as the case may be
shall not be required to execute any such document on terms which, in its
opinion, would expose it to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty,
and (z) such release shall not in any manner discharge, affect or impair the
Obligations or any Liens upon (or obligations of Borrower or any of its
Subsidiaries in respect of) all interests retained by Borrower and/or any of
its Subsidiaries, including (without limitation) the proceeds of any sale, all
of which shall continue to constitute part of the Collateral.

 

112

 

(ii)                                Each of
the Lenders hereby directs the Administrative Agent to execute and deliver or
file such termination and partial release statements and such other things as
are necessary to release Liens to be released pursuant to this Section 12.17
promptly upon the effectiveness of any such release or enter into intercreditor
agreements contemplated or permitted herein.

 

(c)                                  No Obligation.  Neither the Administrative Agent nor the
Collateral Agent shall have any obligation whatsoever to any Lender or to any
other Person to assure that the Collateral exists or is owned by Borrower or
any of its Subsidiaries or is cared for, protected or insured or has been
encumbered or that the Liens granted to the Administrative Agent or the
Collateral Agent herein or pursuant to the Loan Documents have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
the Administrative Agent or the Collateral Agent in any of the Loan Documents,
it being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Administrative Agent and the Collateral
Agent may act in any manner it may deem appropriate, in its sole discretion,
given the Administrative Agent’s own interests in the Collateral as one of the
Lenders and that neither the Administrative Agent nor the Collateral Agent
shall have any duty or liability whatsoever to any Lender, provided, that,
notwithstanding the foregoing, the Administrative Agent and the Collateral
Agent shall be responsible for their grossly negligent actions or actions
constituting intentional misconduct.

 

(d)                                  Priority Credit Agreement
Lien Subordination.  Each Lender
hereby instructs the Administrative Agent and the Collateral Agent to enter
into the Security Agreement and the Intercreditor Agreement and such amendments
or modifications thereto and to the other Security Documents consistent
herewith and as the Administrative Agent or the Collateral Agent reasonably
determines to be necessary to subordinate the Liens granted by Borrower and the
Restricted Subsidiaries in favor of the Administrative Agent and Lenders to
secure the Obligations to the Liens granted pursuant to the Priority Loan
Documents.  Each Lender agrees that,
notwithstanding the time, order or method of attachment or perfection of Liens
granted in favor of the Collateral Agent and/or the Priority Collateral Agent,
to secure the Obligations and/or the Obligations (as defined in the Priority
Credit Agreement) or the filing or recording of financing statements or other
Security Documents and/or Security Documents (as defined in the Priority Credit
Agreement); the validity or enforceability of the security interests and Liens
granted in favor of the Priority Collateral Agent or the Collateral Agent; any
provisions of the UCC or any applicable law or decision; any provision set
forth in any Security Document and/or any Security Document (as defined in the
Priority Credit Agreement) in the possession or control by the Priority
Collateral Agent or the Collateral Agent of all or any part of any Collateral
as of the date hereof or otherwise, the Liens granted under the Security
Documents (as defined in the Priority Credit Agreement) shall be a first and
prior security interest for all purposes and the Liens granted under the
Security Documents to secure the Obligations shall be second and subordinated
to the liens granted under the Security Documents (as defined in the Priority
Credit Agreement).   Each Lender agrees
that it shall not challenge or question in any proceeding the validity or
enforceability of this Section 12.17(d) or any corresponding provisions
with respect to lien subordination in the Security Agreement or the
Intercreditor Agreement.  Each Lender
agrees that it shall not challenge or question in any proceeding the priority
or validity of the liens 

 

113

 

granted to the Administrative
Agent, Lenders or the Collateral Agent to secure the Obligations (as defined in
the Priority Credit Agreement).

 

(e)                                  Transfer Restriction
Agreement.           The Administrative Agent and
the Required Lenders (as defined in the Original Credit Agreement) and the
Required Lenders (as defined in the Original Term Loan Agreement) hereby permit
the contribution of the Capital Stock which is subject to the Transfer
Restriction Agreement dated as of December 20, 2001, by and among the Borrower,
Jon M. Huntsman and DB, to the Borrower on or before the Closing Date, without
the payment of any cash consideration, 
pursuant to Section 5.1(c)(ii).

 

12.18                 Certain Guarantee Obligations.  The Borrower hereby guarantees all
obligations of each of its Subsidiaries (for so long as such Subsidiary remains
a Subsidiary) under all Hedging Agreements entered into by such Subsidiary with
any Lender or any Affiliate of a Lender (even if such Person subsequently
ceases to be a Lender hereunder for any reason), which obligations are pursuant
to the terms of such Hedging Agreements expressly secured by the security
interests granted under the Security Agreement.  The provisions of Sections 4 through 9 of the Amended and
Restated Subsidiary Guarantee Agreement are hereby incorporated herein by
reference mutatis mutandis as if all
references to “Guarantor” and “Guaranteed Obligations” were references to
Borrower and the obligations guaranteed by this Section 12.18, respectively.

 

12.19                 Steering Committee.  No member
of the Steering Committee (as defined in the Second Amendment to the Amended
and Restated Term Loan Agreement) or any of such member’s officers, directors,
employees or agents shall be liable to the Borrower, any Lender, the
Administrative Agent or any other Person for any action taken or omitted by it
hereunder or under any of the Loan Documents, or in connection herewith or
therewith, unless caused by its or their gross negligence or willful
misconduct.  The Borrower shall, and to
the extent that any member of the Steering Committee is not reimbursed and
indemnified by Borrower, the Lenders shall reimburse and indemnify such member
of the Steering Committee for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against such member of the Steering Committee (or
against such member’s officers, directors, employees or agents), acting in such
capacity, in any way relating to or arising out of any of the Loan Documents or
any action taken or omitted by the Steering Committee or such member of the
Steering Committee under any of the Loan Documents, or in connection herewith
or therewith, in proportion to each Lender’s Aggregate Pro Rata Share;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such member of the
Steering Committee’s gross negligence or willful misconduct.

 

12.20                 Effectiveness.  This Agreement shall become effective on the date (the “Effective
Date”) on which (a) Borrower, Administrative Agent and each of the Existing
Lenders shall have signed a counterpart of this Agreement (whether the same or
different counterparts) and shall have delivered the same to the Administrative
Agent at the Notice Office (or to Administrative Agent’s counsel as directed by
such counsel) or, in the case of the Existing Lenders, shall have given to
Administrative Agent telephonic (confirmed in writing), written, telex or facsimile
notice (actually received) at such office or the office of Administrative
Agent’s 

 

114

 

counsel that the same has been
signed and mailed to it or (b) upon the occurrence of the Effective Date as defined
in the Plan of Reorganization and approved by a court of competent
jurisdiction.  Administrative Agent will
give Borrower and each Existing Lender prompt written notice of the occurrence
of the Effective Date.

 

12.21                 Effect of Amendment and Restatement.  Borrower, Administrative Agent and the
Lenders acknowledge and agree that (i) this Agreement and the documents
executed and delivered in connection herewith do not constitute a novation,
payment and reborrowing, or termination of the Obligations (as such terms are
defined in the Original Credit Agreement and the Original Term Loan Agreement,
each as in effect prior to the Closing Date (prior to giving effect to the
Transactions)) or a novation, payment and reborrowing of the Loans (as such
terms are defined in the Original Credit Agreement and the Original Term Loan
Agreement, each as in effect prior to the Closing Date (prior to giving effect
to the Transactions)) and (ii) the liens and security interests of the Existing
Lenders securing payment of the Obligations (as such term is defined in the
Original Credit Agreement and the Original Term Loan Agreement) are in all
respects continuing and in full force and effect with respect to the
Obligations hereunder.  The security
interest in, lien upon and/or conditional assignment of rights and interest of
the Borrower and the Subsidiary Guarantors granted to the Collateral Agent
pursuant to the Security Agreement are hereby ratified and shall continue from
and after the date hereof and as such, shall remain in full force and effect
pursuant to the Security Agreement from and after the date hereof.

 

[signature
pages follow]

 

115

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective officers thereunto duly authorized, as of the date first above
written.

 

 

	
   

  	
  HUNTSMAN COMPANY LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Samuel D. Scruggs

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Samuel D. Scruggs

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Huntsman Company LLC

  
	
   

  	
  500 Huntsman Way

  
	
   

  	
  Salt Lake City, Utah 84108

  
	
   

  	
  Attn: General Counsel

  
	
   

  	
  Tel. No.: (801) 532-5200

  
	
   

  	
  Telecopier No.: (801) 584-5781

  
	
   

  	
   

  
	
  Solely for purposes of Section
  8.15 of this Agreement:

  	
   

  
	
   

  	
   

  
	
  HUNTSMAN SPECIALTY
  CHEMICALS

  	
   

  
	
  CORPORATION

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/ Samuel D. Scruggs

  	
   

  	
   

  
	
   

  	
   

  
	
  Name: 

  	
  Samuel D. Scruggs

  	
   

  	
   

  
	
   

  	
   

  
	
  Title: 

  	
  Vice President and Treasurer

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Solely for purposes of Section
  8.15 of this Agreement:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  HUNTSMAN SPECIALTY
  CHEMICALS

  	
   

  
	
  HOLDINGS CORPORATION

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Samuel D. Scruggs

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   Samuel D. Scruggs

  	
   

  	
   

  
	
   

  	
   

  
	
  Title: 

  	
  Vice President and Treasurer

  	
   

  	
   

  
	
   

  	
   

  
											

 

Amended
and Restated Credit Agreement

 

 

	
   

  	
  DEUTSCHE BANK TRUST COMPANY

  AMERICAS (f/k/a BANKERS TRUST

  COMPANY in its individual capacity as a
 Lender and Administrative Agent)

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Marco Orlando

  	
   

  
	
   

  	
   

  
	
   

  	
  Name: 

  	
  Marco Orlando

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: 

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Deutsche Bank Trust Company
  Americas

  
	
   

  	
  31 West 52nd Street

  
	
   

  	
  New York, NY 10022

  
	
   

  	
  Attn: John Anos

  
	
   

  	
  Tel. No.: (212) 469-2750

  
	
   

  	
  Telex No.: 62922

  
	
   

  	
  (Answerback: BTA9-UAW)

  
	
   

  	
  Telecopier No.: (212) 469-3632Exhibit 10.22

 

FIRST AMENDMENT

TO AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT (this “Agreement”), dated as of April 25, 2003, is made by and
among Huntsman LLC, a Utah limited liability company formerly known as Huntsman
Company LLC (“Borrower”), Deutsche Bank Trust Company Americas (“Deutsche
Bank”), as Administrative Agent for the Lenders (as such term is
hereinafter defined) (“Administrative Agent”), and the undersigned
financial institutions, including Deutsche Bank, in their capacities as
Lenders.

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the Administrative Agent and
certain financial institutions parties thereto (each, a “Lender”;
collectively, the “Lenders”) are parties to that certain Amended and
Restated Credit Agreement dated as of September 30, 2002 (the “Credit
Agreement”).

 

WHEREAS, Holdco II is contemplating entering into a
Mezzanine Financing, and the investors in such Mezzanine Financing have
required as a condition to closing the Mezzanine Financing that certain
financial covenants in the Credit Agreement be amended.

 

WHEREAS, the undersigned desire to (a) amend certain
financial covenants found in the Credit Agreement, (b) designate HF II
Australia Holdings Company LLC as an Unrestricted Subsidiary, (c) amend the
prepayment provisions relating to issuances of Capital Stock in connection with
the acquisition of Vantico Group S.A. and its subsidiaries (“Vantico”,
and such acquisition, the “Vantico Transaction”) and the establishment
of an equity plan for Holdco I, Holdco II and/or [Newco] management, (d) amend
certain provisions of the Holdco Agreement in order to permit the acquisition
of Vantico by Huntsman Holdings LLC, to provide for a tax sharing arrangement
between Holdco II and [Newco], to permit the pledge of Capital Stock of the
Borrower in connection with a Mezzanine Financing, and to permit the
establishment of an equity plan for Holdco I, Holdco II and/or [Newco]
management, and (e) permit certain Liens as security for the repayment of
insurance premiums paid by third parties on behalf of the Borrower and its
Restricted Subsidiaries.

 

NOW, THEREFORE, in consideration of the recitals
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

SECTION 1.                  DEFINITIONS

 

1.1.                                      Defined
Terms.  Unless otherwise specified herein,
capitalized terms used in this Agreement shall have the meanings ascribed to
them by the Credit Agreement.

 

A-1

 

SECTION 2.                  AMENDMENTS
TO CREDIT AGREEMENT

 

2.1.                                      Amendments
to Credit Agreement.  The Credit Agreement is hereby amended,
effective as of April 25, 2003, as follows:

 

(a)                                  Section 1.1.                                The definition of
“Indebtedness” is hereby amended by deleting the entire proviso at the end of
such definition and replacing it with the following:

 

provided,
however, notwithstanding the foregoing, “Indebtedness” shall not include
deferred taxes or indebtedness of Borrower and/or its Restricted Subsidiaries
(which indebtedness may not be secured except as permitted by Section 8.1(m))
incurred to finance insurance premiums in a principal amount not in excess of
the casualty and other insurance premiums to be paid by Borrower and/or its
Restricted Subsidiaries for a one year period beginning on the date of any
incurrence of such indebtedness.

 

(b)                                  Section 1.1.                                The definitions of
“Applicable Base Rate Margin” and “Applicable Eurodollar Margin” are hereby
amended by deleting such definitions in their entirety and inserting the
following in their place:

 

“Applicable
Base Rate Margin” means at any date (i) with respect to Term A Loans,
3.75%; provided, however, that to the extent that a Minimum Term
B Prepayment is made on or prior to December 31, 2004, the Applicable Base Rate
Margin applicable to Term A Loans shall be 3.00% beginning on the first
Business Day after such prepayment; provided, further, however,
that during any period when Borrower’s senior secured debt is rated at or above
Ba3 by Moody’s and BB- by S&P, the Applicable Base Rate Margin then
applicable to Term A Loans shall be reduced by 0.25%, and (ii) with respect to
Term B Loans, 5.75% and shall without further action increase (A) by 0.50% on
the first Business Day after the 9-month anniversary of the Closing Date and on
each 3-month anniversary thereafter through December 31, 2003, and (B) by 0.75%
on each 3 month anniversary thereafter, up to a maximum of 8.75%.

 

“Applicable Eurodollar Margin” means at any date (i) with respect
to Term A Loans, 4.75%; provided, however, that to the extent
that a Minimum Term B Prepayment is made on or prior to December 31, 2004, the
Applicable Eurodollar Margin applicable to Term A Loans shall be 4.00%
beginning on the first Business Day after such prepayment; provided, further,
however, that during any period when Borrower’s senior secured debt is
rated at or above Ba3 by Moody’s and BB- by S&P, the Applicable Base Rate
Margin then applicable to Term A Loans shall be reduced by 0.25%, and (ii) with
respect to Term B Loans, 6.75% and shall without further action increase (A) by
0.50% on the first Business Day after the 9-month anniversary of the Closing
Date and on each 3-month anniversary through December 31, 2003, and (B) by 0.75%
on each 3 month anniversary thereafter, up to a maximum of 9.75%.

 

 

(c)                                  Section 1.1.                                The following definition is
hereby inserted alphabetically into Section 1.1 of the Credit Agreement:

 

“Vantico” means Vantico Group S.A. and its subsidiaries.

 

(d)                                  Section 1.1.                                The following definitions are
hereby inserted alphabetically into Section 1.1 of the Credit Agreement:

 

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

 

“Mezzanine Closing Date” means the date on which each of the
following has occurred:  (i) the “Alta
Interest Purchase Price” (as such term is defined in the ICI Agreement) and the
“B Note Completion Payment” (as such term is defined in the ICI Agreement) has
been paid to ICI pursuant to the terms of the ICI Agreement, (ii) HSCC has
pledged 300 membership units of HIH to the Collateral Agent and (iii) Borrower
has delivered to the Administrative Agent executed copies of all documents
executed in connection with the related Mezzanine Financing.

 

“Minimum Excess Availability” means the amount by which (a) the
lesser of (i) the Borrowing Base (as defined in the Priority Credit
Agreement) and (ii) the Commitments (as defined in the Priority Credit
Agreement) exceeds (b) the aggregate outstanding amount of all Loans (as defined
in the Priority Credit Agreement).

 

(e)                                  Section 1.1.                                The definition of “Net
Offering Proceeds” is hereby amended by deleting the parenthetical found in
such definition and replacing it with the following parenthetical:

 

(other than
(i) Capital Stock issued in connection with the exercise of stock options
granted pursuant to the stock option plan described in Schedule 6.12
hereof, (ii) Capital Stock of Holdco I, Holdco II or [Newco] issued to
management in connection with a management incentive program of Holdco I,
Holdco II and/or [Newco] as permitted by Section 4.8 of the Holdco
Agreement,  (iii) Capital Stock of
Holdco I or Holdco II issued in connection with an exchange for HIH Minority
Interests (as such term is defined in the Holdco Agreement) or (iv) Capital
Stock issued by one or more Holdco Parties in connection with the acquisition
of Vantico, the consideration for which is debt or equity securities of
Vantico.)

 

(f)                                    Section 8.1.                                Section 8.1 of the Credit
Agreement is hereby amended by (i) deleting the word “and” at the end of clause
(k) of such section, (ii) deleting the period at the

 

 

end of clause (l) of such section and replacing it with “;
and” and (iii) inserting the following new clause (m) at the end of such
section:

 

(m)                               Liens on unearned insurance
premiums securing Indebtedness incurred by Borrower and/or its Restricted
Subsidiaries to finance such insurance premiums in a principal amount not to
exceed at any time the amount of such insurance premiums to be paid by Borrower
and/or its Restricted Subsidiaries for a one year period.

 

(g)                                 Section 8.20.                         The following is hereby added to
the Credit Agreement as Section 8.20:

 

8.20                        Minimum Excess Availability.                               Borrower shall not permit
Minimum Excess Availability to be less than $70,000,000 at any time during the
period beginning on the Mezzanine Closing Date and ending on the date when
Borrower delivers to Administrative Agent the certificate in the form of Exhibit
7.2(b)-2 of the Credit Agreement for the period ending March 31, 2004.

 

(h)                                 Section 9.1.                                The chart found in Section
9.1 of the Credit Agreement is hereby deleted in its entirety and the following
chart is inserted in its place:

 

	
  Date

  	
   

  	
  Ratio

  	
   

  
	
  Closing Date - March 31, 2003

  	
   

  	
  8.25

  	
   

  
	
  April 1, 2003 - June 30, 2003

  	
   

  	
  n/a

  	
   

  
	
  July 1, 2003 - September 30, 2003

  	
   

  	
  n/a

  	
   

  
	
  October 1, 2003 - December 31, 2003

  	
   

  	
  n/a

  	
   

  
	
  January 1, 2004 - March 31, 2004

  	
   

  	
  8.50 to 1.0

  	
   

  
	
  April 1, 2004 - June 30, 2004

  	
   

  	
  7.50 to 1.0

  	
   

  
	
  July 1, 2004 - September 30, 2004

  	
   

  	
  6.00 to 1.0

  	
   

  
	
  October 1, 2004 - December 31, 2004

  	
   

  	
  4.75 to 1.0

  	
   

  
	
  January 1, 2005 - June 30, 2005

  	
   

  	
  3.75 to 1.0

  	
   

  
	
  July 1, 2005 - and thereafter

  	
   

  	
  3.25 to 1.0

  	
   

  

 

(i)                                    Section 9.2.                                The chart found in Section 9.2
of the Credit Agreement is hereby deleted in its entirety and the following
chart is inserted in its place:

 

	
  Date

  	
   

  	
  Ratio

  	
   

  
	
  Closing Date - March 31, 2003

  	
   

  	
  1.30 to 1.0

  	
   

  
	
  April 1, 2003 -  June 30, 2003

  	
   

  	
  1.10 to 1.0

  	
   

  
	
  July 1, 2003 - September 30, 2003

  	
   

  	
  1.00 to 1.0

  	
   

  
	
  October 1, 2003 - December 31, 2003

  	
   

  	
  1.25 to 1.0

  	
   

  
	
  January 1, 2004 - March 31, 2004

  	
   

  	
  1.40 to 1.0

  	
   

  
	
  April 1, 2004 - June 30, 2004

  	
   

  	
  1.60 to 1.0

  	
   

  
	
  July 1, 2004 - September 30, 2004

  	
   

  	
  1.80 to 1.0

  	
   

  
	
  October 1, 2004 - December 31, 2004

  	
   

  	
  2.25 to 1.0

  	
   

  

 

 

	
  January 1, 2005 - June 30, 2005

  	
   

  	
  2.50 to 1.0

  	
   

  
	
  July 1, 2005 - and thereafter

  	
   

  	
  2.75 to 1.0

  	
   

  

 

(j)                                    Section 9.3.                                The chart found in Section 9.3
of the Credit Agreement is hereby deleted in its entirety and the following
chart is inserted in its place:

 

	
  Date

  	
   

  	
  Ratio

  	
   

  
	
  Closing Date - March 31, 2003

  	
   

  	
  0.85 to 1.0

  	
   

  
	
  April 1, 2003 -  June 30, 2003

  	
   

  	
  n/a

  	
   

  
	
  July 1, 2003 - September 30, 2003

  	
   

  	
  n/a

  	
   

  
	
  October 1, 2003 - December 31, 2003

  	
   

  	
  n/a

  	
   

  
	
  January 1, 2004 - March 31, 2004

  	
   

  	
  0.75 to 1.0

  	
   

  
	
  April 1, 2004 - June 30, 2004

  	
   

  	
  0.80 to 1.0

  	
   

  
	
  July 1, 2004 - September 30, 2004

  	
   

  	
  0.90 to 1.0

  	
   

  
	
  October 1, 2004 - December 31, 2004

  	
   

  	
  1.00 to 1.0

  	
   

  
	
  January 1, 2005 - and thereafter

  	
   

  	
  1.25 to 1.0

  	
   

  

 

(k)                                Section 9.4.                              Section 9.4 of the Credit
Agreement is hereby amended by deleting such section in its entirety and
replacing it with the following:

 

9.4                               Capital Expenditures.                            Permit, nor permit any of its
Restricted Subsidiaries to, make any Consolidated Capital Expenditures, except
that Borrower and its Restricted Subsidiaries may make such Consolidated
Capital Expenditures (i) during 2002, not in excess of an amount equal to
$85,000,000; (ii) during 2003, not in excess of an amount equal to $100,000,000
plus Permitted Turnaround Capital Expenditures, provided, however,
that prior to June 30, 2003, Consolidated Capital Expenditures for 2003 may not
exceed $60,000,000 plus Permitted Turnaround Capital Expenditures; (iii) during
each Fiscal Year thereafter and until payment in full of all Obligations
hereunder, not in excess of an amount equal to $100,000,000 plus Permitted
Turnaround Capital Expenditures; provided, however, that, to the
extent that Borrower consummates the Minimum Term B Prepayment, Borrower and
its Restricted Subsidiaries may make Consolidated Capital Expenditures in each
Fiscal Year commencing on January 1, 2004 in an amount equal to $135,000,000
plus Permitted Turnaround Capital Expenditures; provided, further,
however, to the extent Consolidated Capital Expenditures referred to in clause
(ii) and clause (iii) for any Fiscal Year are less than the amount
allowable for such Fiscal Year, the difference thereof may be carried forward
to the immediately following fiscal year in an amount not to exceed
$10,000,000.

 

(l)                                    Schedule 1.1(c)            Schedule 1.1(c) of the Credit Agreement is hereby
amended by adding HF II Australia Holdings Company LLC to the list of entities
found on such schedule.

 

 

SECTION 3.                  CONSENT

 

The undersigned Lenders, constituting
the Required Lenders, hereby (a) consent to and authorize the Administrative
Agent to enter into an amendment of the Holdco Agreement in order to (i) add
[Newco] as a Holdco Party, (ii) permit the Holdco Parties to take actions
necessary to effect the Vantico Transaction, (iii) permit any Holdco Party to
enter into a tax sharing agreement related to the structural changes arising
out of the Vantico Transaction and approved by the Administrative Agent, (iv)
permit Holdco I, Holdco II and/or [Newco] to establish a management incentive
program, (v) permit Holdco II to grant a security interest in the Capital Stock
of the Borrower to secure the Mezzanine Financing and (vi) make such other
changes to the Holdco Agreement as are necessary to effect the foregoing, and
(b) acknowledge that upon HF II Australia Holdings Company LLC’s redesignation
as an Unrestricted Subsidiary, the Administrative Agent, acting pursuant to
Section 12.17(b)(i)(B) of the Credit Agreement, shall release the Lien on the
assets of HF II Australia Holdings Company LLC held by the Administrative Agent
under the Security Documents and shall release HF II Australia Holdings Company
LLC from its obligations under the Subsidiary Guarantee Agreement to which it
is a party.

 

SECTION 4.                  REPRESENTATIONS
AND WARRANTIES

 

4.1.                                      Representations
and Warranties.  In order to induce the Administrative Agent
and the Lenders to enter into this Agreement, the Borrower hereby represents
and warrants to the Administrative Agent and the Lenders, in each case after
giving effect to this Agreement, as follows:

 

(a)                                  LLC
Power and Authority.  The Borrower has the power and authority to
execute, deliver and perform this Agreement and, in the case of each Credit
Party, all agreements, documents and instruments executed and delivered
pursuant to this Agreement and each of the Borrower, and each Credit Party has
taken all necessary action to authorize the execution, delivery and performance
by it of this Agreement and all agreements, documents and instruments executed
and delivered by it pursuant to this Agreement, as the case may be.

 

(b)                                  Binding
Obligation.  This Agreement has been duly executed and
delivered by the Borrower and the Acknowledgement and Consent (as hereinafter
defined) has been duly executed by each Subsidiary Guarantor, and such
documents are the legal, valid and binding obligation of each such entity a
party thereto, enforceable against such entity in accordance with its terms,
except as the enforcement thereof may be subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally and general principles of equity
(regardless of whether enforcement is sought in equity or at law).

 

(c)                                  Incorporation
of Representations and Warranties from the Credit Agreement.  After giving effect to this Agreement, the representations and
warranties contained in the Credit Agreement and the other Loan Documents are
true and correct in all material respects at and as of the Effective Date, with
the same effect as though made on such date, except to the extent specifically
made with regard to a particular date, in which case such representation and
warranty is true and correct as of such date.

 

 

(d)                                  No
Violation or Conflict.  Neither execution, delivery and performance
of this Agreement or the First Amendment to the Priority Credit Agreement of
even date herewith by any Credit Party nor the transactions contemplated hereby
will (i) contravene any provision of any Requirement of Law applicable to any
Credit Party or (ii) conflict with or result in a breach by any Credit Party of
any Organizational Document of any of them or any term of any Material
Agreement.

 

(e)                                  No
Additional Consents Required.  No authorization or approval or other action
by, and no notice to or filing or registration with, any Governmental Authority
or other Person is required in connection with the execution, delivery and
performance of this Agreement and all agreements, documents and instruments
executed and delivered pursuant to this Agreement other than those obtained and
in full force and effect.

 

(f)                                    Absence
of Default.  No Event of Default or Unmatured Event of
Default will exist or be continuing.

 

(g)                                 Good
Standing.  On the Effective Date, each Credit Party is
a duly organized and validly existing entity in good standing in its
jurisdiction of incorporation.

 

(h)                                 No
Amendment to Bylaws.  A true and complete copy of the bylaws of
each Credit Party has been delivered to the Administrative Agent prior to or on
the date of this Agreement.

 

SECTION 5.                  CONDITIONS
PRECEDENT

 

5.1.                                      Conditions
to Effectiveness of Amendment.  This Agreement shall become effective upon
satisfaction of the following conditions precedent (the “Effective Date”):

 

(a)                                  Execution
and Delivery of Agreement.  The Borrower, the Administrative Agent and
the Required Lenders shall have executed and delivered this Agreement, except
for the purposes of Section 2.1(a) and 2.1(e) of this Agreement,
which require Lenders holding at least 66 2/3% of all Loans.

 

(b)                                  Execution
and Delivery of Priority Credit Agreement Amendment.  The Borrower, the administrative agent under
the Priority Credit Agreement, and the “Required Lenders” (as such term is
defined in the Priority Credit Agreement) shall have executed and delivered
that certain First Amendment to the Priority Credit Agreement.

 

(c)                                  Execution
and Delivery of First Amendment to Holdco Agreement.  The Holdco Parties,
HSCC, the Administrative Agent and the administrative agent under the Priority
Credit Agreement shall have executed and delivered that certain First Amendment
to the Holdco Agreement.

 

(d)                                  Other
Documents and Actions.  The Administrative Agent shall have received
each of the following documents and/or confirmed the occurrence of the
following specified actions, as the case may be, each of which shall be
satisfactory in form and substance to the Administrative Agent and its counsel:

 

 

(1)                                 Officer’s
Certificate.  A bringdown certificate of an officer of the
Borrower in the form of Exhibit A attached hereto;

 

(2)                                 Acknowledgement
and Consent.  An Acknowledgement
and Consent in the form of Exhibit B attached hereto (the “Acknowledgement
and Consent”), duly executed and delivered by each Subsidiary Guarantor;

 

(3)                                 Approvals.  All necessary governmental (domestic and
foreign) and third party approvals in connection with this Agreement and the
transactions contemplated hereby (other than the proposed Vantico Transaction
and the proposed Mezzanine Financing) and by the other Loan Documents and
otherwise referred to herein or therein shall have been obtained and remain in
effect, and all applicable waiting periods shall have expired without any
action being taken by any competent authority which restrains, prevents or
imposes materially adverse conditions upon the consummation of all or any part
of this Agreement or the other transactions contemplated by the Loan Documents
and otherwise referred to herein or therein. 
Additionally, there shall not exist any judgment, order, injunction or
other restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon all or any part of this Agreement, the transactions
contemplated hereunder or by the Loan Documents;

 

(4)                                 Litigation.  No litigation by any entity (private or
governmental) shall be pending or, to the best knowledge of the Borrower,
threatened with respect to this Agreement, any other Loan Document or any
documentation executed in connection herewith or the transactions contemplated
hereby, or which the Administrative Agent or the Required Lenders shall
determine could reasonably be expected to have a Material Adverse Effect;

 

(5)                                 Adverse
Change.  Since December 31,
2002, nothing shall have occurred (and the Lenders shall have become aware of
no facts or conditions not previously known) which the Administrative Agent or
the Required Lenders shall reasonably determine has, or could have, a Material
Adverse Effect;

 

(6)                                 Corporate
Proceedings.  All corporate and
legal proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be satisfactory in form and substance to the Administrative Agent and the
Administrative Agent shall have received all information and copies of all
documents and papers, including records of corporate proceedings, governmental
approvals, good standing certificates and bring-down telegrams or certificates,
if any, which the Administrative Agent or the Required Lenders reasonably may
have requested in connection therewith, such documents and papers where
appropriate to be certified by proper corporate or Governmental Authorities;
and

 

(7)                                 Other Matters.  Such other instruments, documents,
certificates and opinions in respect of such matters as the Administrative
Agent may reasonably request.

 

 

(e)                                  No
Defaults.  After giving effect to this Agreement, no
Event of Default or Unmatured Event of Default under the Credit Agreement shall
have occurred and be continuing.

 

(f)                                    Representations
and Warranties.  After giving effect to this Agreement, the
representations and warranties of the Borrower and the other Credit Parties
contained in this Agreement, the Credit Agreement and the other Loan Documents
shall be true and correct in all material respects as of the Effective Date,
with the same effect as though made on such date, except to the extent
specifically made with regard to a particular date, in which case such
representation and warranty is true and correct as of such date.

 

(g)                                 Fees. 
Borrower shall have paid to Administrative Agent and the Lenders all
costs, fees and expenses (including, without limitation, reasonable legal fees
and expenses) payable to Administrative Agent and the Lenders to the extent
then due, including, without limitation, pursuant to Section 6.1(a) of
this Amendment.

 

(h)                                 Other
Matters.  The Administrative Agent shall have received
such other instruments and documents as the Administrative Agent or the
Required Lenders may reasonably request in connection with the execution of
this Agreement, and all such instruments and documents shall be reasonably
satisfactory in form and substance to the Administrative Agent.

 

5.2.                            Additional Conditions to Effectiveness of
Certain Sections.                    Sections 2.1(b),  2.1(d),
2.1(g), 2.1(h), 2.1(i), 2.1(j) and 2.1(k)
shall become effective upon (a) satisfaction of the conditions precedent set
forth in Section 5.1 hereof, (b) the occurrence of the Mezzanine Closing
Date, which date shall occur no later than June 30, 2003, and (c) payment by
the Borrower of the Second Amendment Fee described in Section 6.1(a) of
this Agreement.

 

SECTION 6.                  MISCELLANEOUS

 

6.1.                                      Miscellaneous. 
The parties hereto hereby further agree as follows:

 

(a)                                  Fees,
Costs, Expenses and Taxes.  The Borrower agrees to pay to the
Administrative Agent on behalf of each Lender which has executed and delivered
this Amendment on or prior to 3:00 p.m. E.D.T. on April 25, 2003, an amendment
fee (the “First Amendment Fee”) of 0.10% of the aggregate outstanding
principal amount of the Loans, which First Amendment Fee shall be paid on or
prior to the Effective Date.  The
Borrower shall pay to the Administrative Agent on behalf of each Lender which
has executed and delivered this Amendment on or prior to 3:00 p.m. E.D.T. on
April 25, 2003, a second amendment fee (the “Second Amendment Fee”) of
0.15% of the aggregate outstanding principal amount of the Loans, which Second
Amendment Fee shall be paid on or prior to the Mezzanine Closing Date.  The First Amendment Fee shall be fully
earned as of the date of this Agreement, and the Second Amendment Fee shall be
fully earned as of the Mezzanine Closing Date. 
The Borrower further agrees to pay all reasonable fees, costs and
expenses of the Administrative Agent incurred in connection with the
negotiation, preparation and execution of this Agreement and the transactions
contemplated hereby, including, without limitation, the reasonable fees and
expenses of Winston & Strawn, counsel to the Administrative Agent.

 

 

(b)                                  Counterparts. 
This Agreement may be executed in one or more counterparts, each of
which, when executed and delivered, shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
document with the same force and effect as if the signatures of all of the
parties were on a single counterpart, and it shall not be necessary in making
proof of this Agreement to produce more than one (1) such counterpart.

 

(c)                                  Headings. 
Headings used in this Agreement are for convenience of reference only
and shall not affect the construction of this Agreement.

 

(d)                                  Integration. 
This Agreement, the other agreements and documents executed and
delivered pursuant to this Agreement and the Credit Agreement constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof.

 

(e)                                  Governing
Law.  THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF SAID
STATE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

 

(f)                                    Binding
Effect.  This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the Borrower, the Administrative
Agent and the Lenders and their respective successors and assigns.  Except as expressly set forth to the
contrary herein, this Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the Borrower, the Administrative
Agent and the Lenders and their respective successors and permitted assigns.

 

(g)                                 Limitations. 
Except as expressly provided herein, the execution and delivery of this
Agreement shall not: (a) constitute an extension, modification, or waiver of
any aspect of the Credit Agreement or the other Loan Documents; (b) extend the
terms of the Credit Agreement or the due date of any of the Obligations; (c)
give rise to any obligation on the part of the Administrative Agent and the
Lenders to extend, modify or waive any term or condition of the Credit
Agreement or any of the other Loan Documents; or (d) give rise to any defenses
or counterclaims to the right of the Administrative Agent and the Lenders to
compel payment of the Obligations or to otherwise enforce its rights and
remedies under the Credit Agreement and the other Loan Documents.

 

(h)                                 Reference
to and Effect on the Credit Agreement.  The parties hereto
agree and acknowledge that nothing contained in this Agreement in any manner or
respect limits or terminates any of the provisions of the Credit Agreement or
any of the other Loan Documents other than as expressly set forth herein and
further agree and acknowledge that the Credit Agreement (as amended hereby) and
each of the other Loan Documents remain and continue in full force and effect
and are hereby ratified and confirmed. 
Except to the extent expressly set forth herein, the execution, delivery
and effectiveness of this Agreement shall not operate as an amendment of any
rights, power or remedy of the Lenders or the Administrative Agent under the
Credit Agreement or any other Loan Document, nor constitute an amendment of any
provision of the Credit Agreement or any other Loan Document.  No delay on the part of

 

 

any Lender or the Administrative Agent in exercising any of
their respective rights, remedies, powers and privileges under the Credit
Agreement or any of the Loan Documents or partial or single exercise thereof,
shall constitute an amendment thereof. 
On and after the Effective Date each reference in the Credit Agreement
to “this Agreement,” “hereunder,” “hereof,” “herein”
or words of like import, and each reference to the Credit Agreement in the Loan
Documents and all other documents delivered in connection with the Credit
Agreement shall mean and be a reference to the Credit Agreement as amended
hereby.  The Borrower acknowledges and
agrees that this Agreement constitutes a “Loan Document” for purposes of
the Credit Agreement.  None of the terms
and conditions of this Agreement may be changed, waived, modified or varied in
any manner, whatsoever, except in accordance with Section 12.1 of the
Credit Agreement.

 

[signature
pages follow]

 

 

IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first written above.

 

 

	
   

  	
  DEUTSCHE BANK TRUST COMPANY

  
	
   

  	
  AMERICAS,

  
	
   

  	
  Individually as a Lender and
  as

  
	
   

  	
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Mary Jo Jolley

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HUNTSMAN LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Sean Douglas

  	
   

  
	
   

  	
  Name:

  	
   Sean Douglas

  	
   

  
	
   

  	
  Title:

  	
   Vice President and Treasurer

  	
   

  
					

 

First
Amendment to Amended

and
Restated Credit Agreement

 

 

EXHIBIT
A

FORM
OF

OFFICER’S CERTIFICATE

 

I,
                       ,
a duly qualified and acting officer of Huntsman LLC, a Utah limited liability
company formerly known as Huntsman Company LLC (the “Borrower”), hereby
certify that I am a Responsible Officer of the Borrower and further certify on
behalf of the Borrower that:

 

1.                                       This Certificate is furnished pursuant to Section
5.1(d)(1) of the First Amendment to Amended and Restated Credit Agreement,
dated as of April 25, 2003 (the “Amendment”), among the Borrower,
Deutsche Bank Trust Company Americas, as Administrative Agent and the financial
institutions party thereto.  Unless
otherwise defined herein, any capitalized terms used herein have the meanings
set forth in the Amendment.

 

2.                                       After giving effect to the Amendment, the
representations and warranties of the Borrower and the other Credit Parties
contained in the Amendment, the Credit Agreement and the other Loan Documents
shall be true and correct in all material respects as of the Effective Date,
with the same effect as though made on such date, except to the extent
specifically made with regard to a particular date, in which case such
representation and warranty is true and correct as of such date.

 

3.                                       After giving effect to the Amendment, no Event of
Default or Unmatured Event of Default will exist or be continuing.

 

4.                                       The conditions set forth in Section 5 of the Amendment
have been fully satisfied or waived.

 

IN WITNESS WHEREOF, I have hereunto signed my name
this 25th day of April, 2003.

 

	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  

 

 

EXHIBIT B

 

FORM OF

ACKNOWLEDGMENT AND CONSENT

 

The undersigned entities, constituting Subsidiaries of
the Borrower (each, a “Subsidiary Guarantor”), hereby acknowledge that
they have reviewed the terms and provisions of the Amended and Restated Credit
Agreement dated as of September 30, 2002, by and among Huntsman LLC (formerly
known as Huntsman Company LLC), as borrower, Deutsche Bank Trust Company
Americas, as administrative agent, and the lenders parties thereto (as
heretofore amended, modified or supplemented, the “Agreement”;
capitalized terms used herein without definition have the meanings ascribed
thereto in the Agreement) and this First Amendment to Amended and Restated
Credit Agreement (the “Amendment”) and consent to the amendment of the
Agreement pursuant to this Amendment and the other matters contemplated under
the Amendment.

 

Each Subsidiary Guarantor hereby acknowledges and
agrees that any of the Loan Documents to which it is a party or otherwise bound
shall continue in full force and effect and that all of its obligations
thereunder shall be valid and enforceable and shall not be impaired or affected
by the execution or effectiveness of this Amendment.  Each Subsidiary Guarantor represents and warrants that all
representations and warranties applicable to it contained in the Agreement as
amended by this Amendment and the Loan Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Effective Date, to the same extent as though made on and as of that
date (except to the extent that such representations and warranties
specifically relate to an earlier date, in which case they are true and correct
in all material respects as of such earlier date).

 

Each Subsidiary Guarantor acknowledges and agrees that
(i) notwithstanding the conditions to effectiveness set forth in this
Amendment, each Subsidiary Guarantor is not required by the terms of the
Agreement or any other Loan Document to consent to the amendment of the
Agreement effected pursuant to this Amendment and (ii) nothing in the Agreement
or this Amendment or any other Loan Document shall be deemed to require the
consent of each Subsidiary Guarantor to any future amendment of the Agreement
or any other Loan Document.

 

IN WITNESS WHEREOF, each of the Subsidiary Guarantors
has caused this Acknowledgement and Consent to the First Amendment to Amended
and Restated Credit Agreement to be duly executed and delivered by its proper
and duly authorized officer as of the day and year first above written.

 

[signature page
follows]

 

B-1

 

HUNTSMAN CHEMICAL
PURCHASING CORPORATION

HUNTSMAN
INTERNATIONAL CHEMICALS CORPORATION

HUNTSMAN
INTERNATIONAL TRADING CORPORATION

HUNTSMAN
PETROCHEMICAL PURCHASING CORPORATION

POLYMER MATERIALS
INC.

AIRSTAR CORPORATION

HUNTSMAN
PROCUREMENT CORPORATION

JK HOLDINGS CORPORATION

HUNTSMAN SPECIALTY CHEMICALS HOLDING CORPORATION

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

HUNTSMAN AUSTRALIA
INC.

HUNTSMAN CHEMICAL
FINANCE CORPORATION

HUNTSMAN
ENTERPRISES INC.

HUNTSMAN FAMILY
CORPORATION

HUNTSMAN GROUP
HOLDINGS FINANCE CORPORATION

HUNTSMAN GROUP
INTELLECTUAL PROPERTY HOLDINGS CORPORATION

HUNTSMAN
INTERNATIONAL SERVICES CORPORATION

HUNTSMAN MA
INVESTMENT CORPORATION

HUNTSMAN MA
SERVICES CORPORATION

HUNTSMAN
PETROCHEMICAL FINANCE CORPORATION

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

HUNTSMAN EXPANDABLE POLYMERS
COMPANY, LC

 

By:  Huntsman Chemical Company LLC, its Manager

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

HUNTSMAN PETROCHEMICAL CANADA HOLDINGS CORPORATION

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

HUNTSMAN POLYMERS HOLDINGS CORPORATION

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

HUNTSMAN CHEMICAL
COMPANY LLC

HUNTSMAN
PETROCHEMICAL CORPORATION

HUNTSMAN POLYMERS
CORPORATION

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

HUNTSMAN FUELS, L.P.

PETROSTAR FUELS LLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

HUNTSMAN PURCHASING, LTD.

 

	
  By:

  	
    Huntsman Procurement Corporation, its General Partner

  	
   

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
					

 

 

PETROSTAR INDUSTRIES LLC

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}]]