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Exhibit 10.1

	  

	 
	HUNTSMAN CORPORATION 
	   
	

VOTING AND STANDSTILL AGREEMENT  

	Dated December 23, 2008 
	  
	  
	

 

	TABLE OF CONTENTS 
	  
	SECTION 1.  	  	Standstill Provisions  	  	2  
	1.1  	  	Acquisition and Transfer of Voting Securities  	  	2  
	1.2  	  	Further Restrictions on Conduct  	  	2  
	1.3  	  	Legends  	  	3  
	  
	SECTION 2.  	  	Voting Provisions  	  	3  
	2.1  	  	Voting of Voting Securities  	  	3  
	2.2  	  	Transfer of Voting Restrictions  	  	4  
	  
	SECTION 3.  	  	Portfolio Companies  	  	4  
	3.1  	  	Portfolio Companies  	  	4  
	  
	SECTION 4.  	  	Representations and Warranties  	  	4  
	4.1  	  	Representations and Warranties of Huntsman  	  	4  
	4.2  	  	Representations and Warranties of Apollo-Related Stockholders  	  	4  
	  
	SECTION 5.  	  	Miscellaneous  	  	5  
	5.1  	  	Term  	  	5  
	5.2  	  	Notices  	  	5  
	5.3  	  	Amendments; No Waivers  	  	6  
	5.4  	  	Successors and Assigns  	  	6  
	5.5  	  	Severability  	  	6  
	5.6  	  	Counterparts  	  	6  
	5.7  	  	Specific Performance  	  	6  
	5.8  	  	Governing Law  	  	6  
	  
	  
	Schedule A  	  	Defined Terms  	  	  
	Schedule B  	  	Current Beneficial Ownership  	  	  

VOTING AND STANDSTILL AGREEMENT

     This Voting and Standstill Agreement, dated as of December 23, 2008 (this “Agreement”), among on the one hand Huntsman Corporation, a Delaware corporation (“Huntsman”); and on the other hand Apollo Investment Fund VI, L.P., a Delaware limited partnership; Apollo Overseas Partners VI, L.P., a Cayman Island exempted limited partnership; Apollo Overseas Partners (Delaware) VI, L.P., a Delaware limited partnership; Apollo Overseas Partners (Delaware 892) VI, L.P., a Delaware limited partnership; Apollo Overseas Partners (Germany) VI, L.P., a Cayman Islands exempted limited partnership; and AAA Guarantor—Co-Invest VI, L.P., a Guernsey limited partnership (collectively, the “Apollo Purchasers”), and Apollo Investment Fund IV, L.P., a Delaware limited partnership; Apollo Overseas Partners IV, L.P., a Cayman Islands exempted limited partnership; Apollo Investment Fund V, L.P., a Delaware limited partnership; Apollo Overseas Partners V, L.P., a Cayman Islands exempted limited partnership; Apollo Netherlands Partners V(A), L.P., a Cayman Islands exempted limited partnership; Apollo Netherlands Partners V(B), L.P., a Cayman Islands exempted limited partnership; Apollo German Partners V GmbH & Co. KG, a German limited partnership; Apollo Advisors IV, L.P., a Delaware limited partnership; Apollo Management IV, L.P., a Delaware limited partnership; Apollo Advisors V, L.P., a Delaware limited partnership; Apollo Management V, L.P., a Delaware limited partnership; Apollo Advisors VI, L.P., a Delaware limited partnership; Apollo Management VI, L.P., a Delaware limited partnership; Apollo Management, L.P., a Delaware limited partnership; Apollo Global Management, LLC, a Delaware limited liability company; Leon D. Black and Joshua J. Harris (collectively, including the Apollo Purchasers, the “Apollo Parties”), and Hexion Specialty Chemicals, Inc., a New Jersey corporation (“Hexion”); Hexion LLC, a Delaware limited liability company; Nimbus Merger Sub Inc., a Delaware corporation; and Craig O. Morrison (collectively, the “Hexion Parties” and, together with the Apollo Parties, the “Apollo-Related Stockholders”). Certain capitalized and other terms used in this Agreement are defined on Schedule A and references to a “Schedule” are, unless otherwise specified, to a Schedule attached to this Agreement.

     WHEREAS, Huntsman, Jon M. Huntsman, Peter R. Huntsman, the Huntsman Family Stockholders (as defined therein) and the Apollo-Related Stockholders have entered into that certain Settlement Agreement and Release dated as of December 14, 2008 (the “Settlement Agreement”) and Huntsman and the Apollo Purchasers are concurrently entering into that certain Note Purchase Agreement (the “Purchase Agreement”) pursuant to which the Apollo Purchasers will purchase from Huntsman $250,000,000 in principal amount of 7% Convertible Senior Notes due 2018 (the “Convertible Notes”) that are convertible into shares of common stock, par value $0.01 per share, of Huntsman (“Common Stock”); and

     WHEREAS, the parties’ entering into this Agreement is a condition to the parties entering into, and done in consideration of the parties’ mutual agreements under, the Settlement Agreement and the Purchase Agreement;

     NOW, THEREFORE, Huntsman and the Apollo-Related Stockholders, intending to be legally bound, hereby agree, effective as of the date hereof (the “Effective Time”), as follows:

SECTION 1. STANDSTILL PROVISIONS

     Section 1.1   Acquisition and Transfer of Voting Securities.

                  (a)   The Apollo-Related Stockholders agree that neither they nor any of their Affiliates, shall hold or acquire Beneficial Ownership of any Voting Securities, or securities exercisable for or convertible into Voting Securities, other than any shares of Common Stock issuable upon conversion of the Convertible Notes or received in payment of interest or principal on the Convertible Notes (the “Underlying Common Shares”) (such Underlying Common Shares, together with the Convertible Notes, the “Settlement Securities”), any Common Stock issued as dividends on or distributed in respect of such Settlement Securities and any shares of Common Stock Beneficially Owned as of the Effective Time and set forth on Schedule B. If at any time the Apollo-Related Stockholders become aware that they or any of their Affiliates are not in compliance with the foregoing, then the Apollo-Related Stockholders shall as promptly as reasonably practicable take all actions necessary, including the divestiture of securities in a commercially reasonable period, to comply with this Section 1.1(a).

                  (b)   Subject to Section 2.2, the Apollo-Related Stockholders agree that, for a period of one year from the date hereof (the “Lock Up Period”), neither they nor any of their Affiliates will, without the prior written consent of Huntsman, Transfer any Settlement Securities to any Person. Notwithstanding the foregoing, the prohibition on transfer set forth in the preceding sentence shall not apply to (i) any shares of Common Stock received in payment of interest on the Convertible Notes, (ii) Transfers to an Affiliate of the Apollo-Related Stockholders (other than Hexion and any of its Subsidiaries or any such Affiliate that is then a Portfolio Company), or (iii) pledges of Voting Securities as a security for borrowings in a bona fide financing from an unaffiliated financial institution provided such financial institution agrees in writing that, upon any foreclosure, it will be bound by the provisions of this Agreement as though it were an Apollo-Related Stockholder.

     Section 1.2   Further Restrictions on Conduct. The Apollo-Related Stockholders agree that:

                  (a)   Neither the Apollo-Related Stockholders nor any of their Affiliates shall seek or propose to influence or control (whether through a 13D Group or otherwise) the management, Board of Directors, policies or affairs of Huntsman or any of its Subsidiaries and shall not initiate or propose any stockholder proposal or action or make any “solicitation” of “proxies” (as such terms are defined in Regulation 14A under the Exchange Act, as in effect on the date hereof) with respect to the voting of or consenting with respect to, any Voting Securities, or become a “participant” in a “solicitation” (as such terms are defined in Regulation 14A under the Exchange Act, as in effect on the date hereof) in any election contest with respect to the election or removal of any director of Huntsman or in opposition to the publicly disclosed recommendation of the majority of the directors of Huntsman with respect to any other matter relating to the management and affairs of Huntsman or make any public statement (or take any

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action which would reasonably be expected to require or result in disclosure publicly of their position) regarding any of the foregoing;

                  (b)   Neither the Apollo-Related Stockholders nor any of their Affiliates shall initiate (or solicit other Persons to initiate) or make any public statement regarding, any tender or exchange offer for Voting Securities or other securities of Huntsman or any of its Subsidiaries, or any Business Combination or recapitalization, restructuring, liquidation or dissolution involving Huntsman or any of its Subsidiaries;

                  (c)   Neither the Apollo-Related Stockholders nor any of their Affiliates shall form, join or participate in any 13D Group (other than among themselves) with respect to acquiring, disposing or voting Voting Securities;

                  (d)   Neither the Apollo-Related Stockholders nor any of their Affiliates shall request Huntsman (or any of its directors, officers, employees or agents), directly or indirectly, to amend or waive any of the provisions of this Agreement (except in a manner that does not require or result in disclosure publicly or to third parties);

                  (e)   Neither the Apollo Related Stockholders nor any of their Affiliates shall engage in any short sales or other derivative or hedging activities with respect to the Convertible Notes or the Common Stock;

                  (f)   The Apollo-Related Stockholders and each of their Affiliates shall not disclose any intention, plan or arrangement inconsistent with any of the foregoing; and

                  (g)   Neither the Apollo-Related Stockholders nor any of their Affiliates shall advise, assist or knowingly encourage any other Persons to do any of the foregoing; provided, however, that this Section 1.2(g) shall not limit or preclude ordinary course of business commercial dealings of any Portfolio Company.

     Section 1.3   Legends. The Apollo-Related Stockholders and their Affiliates agree that stop transfer instructions reflecting the terms of this Agreement will be given to Huntsman’s transfer agent with respect to the Underlying Common Shares and any Common Stock issued as dividends on or distributed in respect of Settlement Securities and that there will be placed on the certificates representing all Settlement Securities an appropriate legend to ensure compliance with the terms of this Agreement. Huntsman agrees to take such steps as are necessary such that such instructions and legends will be removed effective as of the time the restrictions imposed by this Agreement no longer apply.

SECTION 2. VOTING PROVISIONS

     Section 2.1   Voting of Voting Securities. The Apollo-Related Stockholders agree that, in connection with any matter in which the Apollo-Related Stockholders and their Affiliates have voting rights in their capacity as stockholders (and for the avoidance of doubt not as a holder of Convertible Notes), any Voting Securities held by the Apollo-Related Stockholders and each of their Affiliates shall be cast for, against or abstain in respect of any matter submitted to the holders of Voting Securities, at the election of Huntsman, either (a) in the same proportion as the votes cast for, against or abstain by all holders of Voting Securities (other than the Apollo-

3

Related Stockholders) or (b) in the manner recommended by a majority of the Board of Directors. With respect to such voting matters, Huntsman shall provide adequate advance notice of its election hereunder and shall assist the Apollo-Related Stockholders in implementing such election.

     Section 2.2   Transfer of Voting Restrictions. The Apollo-Related Stockholders agree that neither they nor any of their Affiliates will Transfer any Settlement Securities or any shares of Voting Securities to any Person unless and until such transferee has agreed in writing to be bound by the restrictions set forth in Section 2.1, with such transferee being deemed to be an Apollo-Related Stockholder for purposes of Section 2 (provided that this Section 2.2 and the limitations in Section 2.1 shall not apply to Transfers (a) to any Person or 13D Group in a public or private sale which would, immediately after giving effect to such Transfer, Beneficially Own and of record own less than 5% of the outstanding Voting Securities, (b) in an underwritten public offering involving a Distribution or (c) effected in a regular broker transaction pursuant to Rule 144).

SECTION 3. PORTFOLIO COMPANIES

     Section 3.1   Portfolio Companies. For the purposes of the provisions of Sections 1.1(a), 1.2, 2.1 and 2.2 of this Agreement, with respect to Affiliates of the Apollo-Related Stockholders that are Portfolio Companies, the obligations of the Apollo-Related Stockholders and their other Affiliates are limited to (i) not directing or otherwise affirmatively causing or encouraging such Portfolio Company to violate the provisions of Sections 1.1(a), 1.2, 2.1 and 2.2 of this Agreement and (ii) if they become aware of a Portfolio Company acquiring Voting Securities of Huntsman or otherwise violating the provisions of Sections 1.1(a), 1.2, 2.1 and 2.2 of this Agreement, using reasonable efforts to cause such Portfolio Company to sell such Voting Securities or otherwise comply with the provisions of Sections 1.1(a), 1.2, 2.1 and 2.2 of this Agreement.

SECTION 4. REPRESENTATIONS AND WARRANTIES

     Section 4.1   Representations and Warranties of Huntsman. Huntsman represents and warrants to the Apollo-Related Stockholders that (a) Huntsman is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has the corporate power and authority to enter into this Agreement and to carry out its obligations hereunder, (b) the execution and delivery of this Agreement by Huntsman and the consummation by Huntsman of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Huntsman and (c) this Agreement has been duly executed and delivered by Huntsman and constitutes a valid and binding obligation of Huntsman, and is enforceable against Huntsman in accordance with its terms.

     Section 4.2   Representations and Warranties of Apollo-Related Stockholders. Each Apollo-Related Stockholder represents and warrants to Huntsman that (a) with respect to each Apollo-Related Stockholder that is not a natural person, such Apollo-Related Stockholder is a corporation or other entity duly organized, validly existing and in good standing under the laws of its state of incorporation or formation and has the power and authority to enter into this Agreement and to carry out its obligations hereunder, (b) the execution and delivery of this

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Agreement by each of the Apollo-Related Stockholders and the consummation thereby of the transactions contemplated hereby have been duly authorized by all necessary action on its part and no other proceedings on its part are necessary to authorize this Agreement or any of the transactions contemplated hereby and (c) this Agreement has been duly executed and delivered by each of the Apollo-Related Stockholders and constitutes a valid and binding obligation of each of them, and is enforceable against each of them in accordance with its terms.

SECTION 5. MISCELLANEOUS

     Section 5.1   Term. This Agreement, including the obligations and restrictions imposed on the Apollo-Related Stockholders hereunder shall terminate upon the later to occur of (i) 11:59 p.m., New York City time on December 31, 2010 and (ii) the date on which none of the Apollo-Related Stockholders or their Affiliates (including any Portfolio Company so long as such Portfolio Company remains an Affiliate) Beneficially Own or own of record Convertible Notes or any securities issued in respect thereof or otherwise that represent 3% or more of the then-outstanding Common Stock.

     Section 5.2   Notices. All notices and communications provided for hereunder shall be in writing and sent (a) by facsimile if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent:

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

                  (ii) If to any of the Apollo Parties, to Apollo Global Management, LLC at 9 West 57th Street, 43rd Floor, New York, New York 10019 to the attention of the General Counsel, facsimile number: (646) 607-0539 , or at such other address as any of the Apollo Parties shall have specified to the Company in writing.

                  (iii) If to any of the Hexion Parties, to Hexion Specialty Chemicals, Inc., 180 East Broad Street, Columbus, Ohio 43215 to the attention of the General Counsel, facsimile number: (216) 479-8776, or at such other address as any of the Hexion Parties shall have specified to the Company in writing.

                  (iv) If to any subsequent transferee pursuant to Section 2.2 that has agreed in writing to be bound by the restrictions set forth in Section 2.1, to such transferee at such other address as such transferee shall have specified to the Company in writing.

Notices under this Section 5.2 will be deemed given only (x) when actually delivered (or if such delivery is not on a Business Day, on the next Business Day), (y) when facsimile confirmation is received (or if such receipt is not on a Business Day, on the next Business Day) or, (z) if sent by registered or certified mail, three Business Days after the date of mailing.

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Section 5.3 Amendments; No Waivers.

                  (a)   Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by the parties hereto, or in the case of a waiver, by the party against whom the waiver is to be effective.

                  (b)   No failure or delay by any party hereto in the exercise of any right hereunder shall impair such right or be construed as a waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor shall any single or partial exercise of any such right preclude other or further exercise thereof or of any other right. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.

     Section 5.4   Successors and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns whether so expressed or not.

     Section 5.5   Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

     Section 5.6   Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

     Section 5.7   Specific Performance. The parties hereto each acknowledge and agree, and agree not to assert otherwise in any proceeding, that a breach or threatened breach of any of the provisions of this Agreement by a party will cause irreparable injury to the other parties to this Agreement for which remedies at law would be inadequate and, in recognition of that fact, agrees that, in the event of a breach or threatened breach by any of them of the provisions of this Agreement, in addition to any remedies at law, the aggrieved party, without posting any bond and without any showing of irreparable injury, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available. The provisions of this Section 5.7 are without prejudice to any other rights that the parties hereto may have for any breach of this Agreement. The parties further agree not to assert in any proceeding that grounds for any equitable relief are not satisfied.

     Section 5.8   Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Delaware, without regard to the conflict of law principles thereof. Any suit, action or proceeding arising out of or relating to this Agreement shall only be instituted in the Delaware Chancery Court, and if such court should decline jurisdiction, then in the Federal courts within the State of Delaware. Each party agrees to personal jurisdiction in any action brought in any court within

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the State of Delaware having subject matter jurisdiction over the matters arising under this Agreement. Each party waives any objection which it may have now or hereafter to the laying of the venue of such action or proceeding and irrevocably submits to the jurisdiction of any such court in any such suit, action or proceeding. The parties unconditionally waive any right to trial by jury in any such suit, action or proceeding.

* * * * *

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first referred to above.

                                                                                                                                       APOLLO-RELATED STOCKHOLDERS

                                                                                                                                       APOLLO INVESTMENT FUND VI, L.P.

                                                                                                                                       By: Apollo Advisors VI, L.P., 

                                                                                                                                       its general partner

                                                                                                                                       By: Apollo Capital Management VI, LLC,

                                                                                                                                        its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

                                                                                                                                       APOLLO OVERSEAS PARTNERS VI, L.P.

                                                                                                                                       By: Apollo Advisors VI, L.P., 

                                                                                                                                       its managing general partner

                                                                                                                                       By: Apollo Capital Management VI, LLC, 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

                                                                                                                                       APOLLO OVERSEAS PARTNERS 

                                                                                                                                       (DELAWARE) VI, L.P.

                                                                                                                                       By: Apollo Advisors VI, L.P., 

                                                                                                                                       its general partner

                                                                                                                                       By: Apollo Capital Management VI, LLC,

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

[Signature page to Voting and Standstill Agreement]

                                                                                                                                       APOLLO OVERSEAS PARTNERS 

                                                                                                                                       (DELAWARE 892) VI, L.P.

                                                                                                                                       By: Apollo Advisors VI, L.P., 

                                                                                                                                       its general partner

                                                                                                                                       By: Apollo Capital Management VI, LLC, 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

                                                                                                                                       APOLLO OVERSEAS PARTNERS 

                                                                                                                                       (GERMANY) VI, L.P.

                                                                                                                                       By: Apollo Advisors VI, L.P., 

                                                                                                                                       its managing general partner

                                                                                                                                       By: Apollo Capital Management VI, LLC, 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

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

                                                                                                                                       By: AAA MIP Limited, 

                                                                                                                                       its general partner

                                                                                                                                       By: Apollo Alternative Assets, L.P., 

                                                                                                                                       its investment manager

                                                                                                                                       By: Apollo Alternative Assets GP Limited, 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

[Signature page to Voting and Standstill Agreement]

                                                                                                                                       APOLLO INVESTMENT FUND IV, L.P.

                                                                                                                                       By: Apollo Advisors IV, L.P.,

                                                                                                                                       its general partner

                                                                                                                                       By: Apollo Capital Management IV, Inc. 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

                                                                                                                                       APOLLO OVERSEAS PARTNERS IV, L.P.

                                                                                                                                       By: Apollo Advisors IV, L.P., 

                                                                                                                                       its managing partner

                                                                                                                                       By: Apollo Capital Management IV, Inc. 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

                                                                                                                                       APOLLO INVESTMENT FUND V, L.P.

                                                                                                                                       By: Apollo Advisors V, L.P., 

                                                                                                                                       its general partner

                                                                                                                                       By: Apollo Capital Management V, Inc., 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

[Signature page to Voting and Standstill Agreement]

                                                                                                                                       APOLLO OVERSEAS 

                                                                                                                                       PARTNERS V, L.P.

                                                                                                                                       By: Apollo Advisors V, L.P., 

                                                                                                                                       its managing general partner

                                                                                                                                       By: Apollo Capital Management V, Inc., 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

                                                                                                                                       APOLLO NETHERLANDS 

                                                                                                                                       PARTNERS V(A), L.P.

                                                                                                                                       By: Apollo Advisors V, L.P., 

                                                                                                                                       its managing general partner

                                                                                                                                       By: Apollo Capital Management V, Inc., 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

                                                                                                                                       APOLLO NETHERLANDS 

                                                                                                                                       PARTNERS V(B), L.P.

                                                                                                                                       By: Apollo Advisors V, L.P., 

                                                                                                                                       its managing general partner

                                                                                                                                       By: Apollo Capital Management V, Inc., 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

[Signature page to Voting and Standstill Agreement]

                                                                                                                                       APOLLO GERMAN PARTNERS 

                                                                                                                                       V GMBH & CO., KG

                                                                                                                                       By: Apollo Advisors V, L.P., 

                                                                                                                                       its managing limited partner

                                                                                                                                       By: Apollo Capital Management V, Inc., 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

                                                                                                                                       APOLLO ADVISORS IV, L.P.

                                                                                                                                       By: Apollo Capital Management IV, Inc., 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

                                                                                                                                       APOLLO MANAGEMENT IV, L.P.

                                                                                                                                       By: Apollo Management, L.P., 

                                                                                                                                       its general partner

                                                                                                                                       By: Apollo Management GP, LLC, 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

                                                                                                                                       APOLLO ADVISORS V, L.P.

                                                                                                                                       By: Apollo Capital Management V, Inc., 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

[Signature page to Voting and Standstill Agreement]

                                                                                                                                       APOLLO MANAGEMENT V, L.P.

                                                                                                                                       By: AIF V Management, LLC, 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

                                                                                                                                       APOLLO ADVISORS VI, L.P.

                                                                                                                                       By: Apollo Capital Management VI, LLC, 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

                                                                                                                                       APOLLO MANAGEMENT VI, L.P.

                                                                                                                                       By: AIF VI Management, LLC, 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

                                                                                                                                       APOLLO MANAGEMENT, L.P.

                                                                                                                                       By: Apollo Management GP, LLC, 

                                                                                                                                       its general partner

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

[Signature page to Voting and Standstill Agreement]

                                                                                                                                       APOLLO GLOBAL MANAGEMENT, LLC

                                                                                                                                       By: AGM Management, LLC, 

                                                                                                                                       its Manager

                                                                                                                                       By: BRH Holdings GP, Ltd., 

                                                                                                                                       its Sole Member

                                                                                                                                       By: /s/ John J. Sydam 

                                                                                                                                       Name: John J. Sydam 

                                                                                                                                       Title: Vice President

                                                                                                                                       /s/ Leon Black 

                                                                                                                                       Leon Black

                                                                                                                                       /s/ Joshua J. Harris 

                                                                                                                                       Joshua J. Harris

                                                                                                                                       HEXION SPECIALTY CHEMICALS, INC.

                                                                                                                                       By: /s/ Craig O. Morrison 

                                                                                                                                       Name: Craig O. Morrison

                                                                                                                                       Title:    President & Chief Executive Officer

                                                                                                                                       HEXION LLC

                                                                                                                                       By: /s/ Craig O. Morrison 

                                                                                                                                       Name: Craig O. Morrison

                                                                                                                                       Title:    President & Chief Executive Officer

                                                                                                                                       NIMBUS MERGER SUB INC.

                                                                                                                                       By: /s/ Craig O. Morrison 

                                                                                                                                       Name: Craig O. Morrison 

                                                                                                                                       Title:    President & Chief Executive Officer

                                                                                                                                       /s/ Craig O. Morrison   

                                                                                                                                       Craig O. Morrison

                                                                                                                                       HUNTSMAN CORPORATION

                                                                                                                                       By: /s/  Samuel D. Scruggs        

                                                                                                                                       Name:  Samuel D. Scruggs

                                                                                                                                       Title:     Executive Vice President

                                                                                                                                                     & Chief Executive Officer

[Signature page to Voting and Standstill Agreement]

Schedule A

DEFINED TERMS

For purposes of this Agreement, the following terms shall have the following meanings:

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

     “Beneficially Own” or “Beneficial Ownership” with respect to any securities shall mean having “beneficial ownership” of such securities (as determined pursuant to Rule 13d-3 under the Exchange Act), including pursuant to any agreement, arrangement or understanding, whether or not in writing. For purposes of this Agreement, a Person shall be deemed to “Beneficially Own” any securities that are the subject of a derivative transaction entered into by such Person, or derivative security acquired by such Person, which gives such Person the economic equivalent of ownership of an amount of such securities due to the fact that the value of the derivative is explicitly determined by reference to the price or value of such securities, without regard to whether (a) such derivative conveys any voting rights in such securities to such Person, (b) the derivative is required to be, or capable of being, settled through delivery of such securities, or (c) such Person may have entered into other transactions that hedge the economic effect of such derivative. In determining the number of Common Shares deemed Beneficially Owned by virtue of the operation of the preceding sentence, the subject Person shall be deemed to “Beneficially Own” (without duplication) the number of shares of Common Stock that are synthetically owned pursuant to such derivative transactions or such derivative securities.

     “Board of Directors” shall mean the board of directors of Huntsman.

     “Business Combination” shall mean any merger, consolidation, share, exchange, or similar business combination transaction or any transfer, assignment, conveyance, lease or other disposition by a referenced Person of all or substantially all of its assets.

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

     “Distribution” shall mean a “distribution” as defined in Rule 100 of Regulation M under the Securities Act.

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

     “Person” shall mean any individual, partnership (limited or general), joint venture, limited liability company, corporation, association, business entity, trust, business trust, unincorporated organization, government or department or agency of a government.

Schedule A

     “Portfolio Company” means a company in which one or more Apollo Parties or their Affiliates own debt or equity securities that (i) is actively engaged in providing goods or services to third-party customers (i.e., is not purely a “captive” business of an Apollo Party), and (ii) has its day-to-day operations managed by individuals who are not employees of any Apollo Party and (iii) that is not substantially engaged in the chemical business; provided, however, that clause (iii) shall not apply to the definition of Portfolio Company for purposes of the second sentence of Section 1.1(b). For the avoidance of doubt, none of Hexion or any of its Subsidiaries will be considered Portfolio Companies under this Agreement.

     “Rule 144” means Rule 144 promulgated under the Securities Act of 1933, as amended, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such rule.

     “SEC” means the Securities and Exchange Commission.

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

     “Subsidiary” shall mean, as to any Person, any Person at least a majority of the shares of stock or other equity interests of which having general voting power under ordinary circumstances to elect a majority of the board of directors (or comparable governing body) thereof (irrespective of whether or not at the time stock or equity of any other class or classes shall have or might have voting power by reason of the happening of any contingency) is, at the time as of which the determination is being made, owned by such Person, or one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries.

     “13D Group” shall mean any group of Persons acquiring, holding, voting or disposing of securities which would be required under Section 13(d) of the Exchange Act and the rules and regulations thereunder (as in effect, and based on legal interpretations thereof existing, on the date hereof) to file a statement on Schedule 13D with the SEC as a “person” within the meaning of Section 13(d)(3) of the Exchange Act if such group beneficially owned securities representing more than 5% of any class of securities then outstanding.

     “Transfer” shall mean any sale, exchange, transfer, pledge, encumbrance or other disposition, and “to Transfer” shall mean to sell, exchange, transfer, pledge, encumber or otherwise dispose of.

     “Voting Securities” shall mean at any time shares of any class of capital stock of Huntsman that are then entitled to vote generally in the election of directors.

Schedule A - 2

Schedule B

CURRENT BENEFICIAL OWNERSHIP

None.

Schedule Bc56108_ex10-1.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

Exhibit 10.1

     THIS EMPLOYMENT AGREEMENT is effective as of the 31st day of December, 2008 (the “Effective Date”) by and between Trans World Entertainment Corporation, a New York corporation (the
"Company"), and Robert J. Higgins ("Higgins").

Background

     WHEREAS, Higgins and the Company executed an employment agreement effective as of May 1, 2003, which expired on April 30, 2008 (the "2003 Employment Agreement"); and

     WHEREAS, the Company desires to revise and extend the terms of the 2003 Employment Agreement to assure the Company of Higgins' continued services in a leadership capacity and to compensate him
therefor; and

     WHEREAS, Higgins is willing to commit to continue serving the Company on the terms and conditions provided in this Agreement.

     NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and intending to be legally bound hereby, the parties agree as follows:

SECTION 1. CAPACITY AND DUTIES

     1.1 Employment. The Company hereby employs Higgins and Higgins hereby accepts employment by the Company upon the terms and conditions
hereinafter set forth for a term commencing on the date hereof and expiring on the third anniversary of the Effective Date (unless Higgins' service is sooner terminated as set forth below) (the "Contract Period"). The initial three-year term of this
Employment Agreement is subject to automatic one year extensions starting on the second anniversary of the Effective Date and on each subsequent anniversary date, unless, at least 30 days before any such anniversary date, Executive or the Company
cancels the automatic extension by giving written notice to the other party of its election to cancel such extension, in which case the term of Executive’s employment hereunder shall terminate one year following such anniversary date.

     1.2 Capacity and Duties.

          1.2.1 Higgins shall be employed by the Company as its Chief Executive Officer and shall have the executive authority, consistent with such position, as may from time to time be specified by the Board
of Directors of the Company or any duly authorized committee thereof (the "Board").

          1.2.2 Higgins shall devote his full working time, energy, skill and best efforts to the performance of his duties hereunder, in a manner that will faithfully and diligently serve the business and
interest of the Company and its affiliates (as defined below), 

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provided that Higgins may devote such time as is reasonably required for charitable and other personal activities in accordance with the Company's practices and policies.

         1.2.3 For the purposes of this Agreement, an "affiliate" of the Company means any person or entity that controls the Company, is controlled by the Company, or which is under common control with the
Company. For the purposes of this definition of "affiliate", "control" means the power to direct the management and policies of a person or entity, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" shall have correlative meanings; provided that any person or entity who owns beneficially, either directly or though one or more intermediaries, more than 20% of the ownership interests in a specified
entity shall be presumed to control such entity for the purposes of this Agreement.

SECTION 2. COMPENSATION

     2.1 Base Compensation. As compensation for Higgins' services hereunder, the Company shall pay Higgins a base salary at the annual rate of
$1,000,000. This base salary shall be payable in installments in accordance with the Company's regular payroll practices in effect from time to time. The annual base salary of Higgins shall not be decreased at any time during the Contract Period
from the amount then in effect, unless Higgins otherwise agrees in writing. Participation in deferred compensation, discretionary bonus, retirement and other employee benefit plans and in fringe benefits shall not reduce the annual base salary
payable to Higgins under this Section 2.1.

     2.2 Benefits.

          2.2.1 During the Contract Period, Higgins (and his covered dependents, if applicable) shall be entitled to participate in all incentive, savings, retirement, welfare and other employee benefit plans,
practices, policies and programs that the Company may provide for the benefit of its executive employees generally (together with the fringe benefits described below, "Employee Benefits"). Higgins shall also be entitled to participate in any other
fringe benefits which may be or become applicable to the Company's executive employees, including the payment of reasonable expenses for attending annual and periodic meetings of trade associations and any other benefits that are commensurate with
the duties and responsibilities to be performed by Higgins under this Agreement.

          2.2.2 If Higgins becomes a participant in any employee benefit plan, practice or policy of the Company or its affiliates, Higgins shall be given credit under such plan for all service in the employ of
the Company and any predecessors thereto or affiliates thereof prior to the date hereof, for purposes of eligibility and vesting, benefit accrual and for all other purposes for which such service is either taken into account or recognized under the
terms as such plan, practice or policy.

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          2.2.3 The Company shall pay or reimburse Higgins for all reasonable expenses (including expenses of travel and accommodations) incurred or paid by Higgins in connection with the performance of
Higgins' duties hereunder upon receipt of itemized vouchers therefor and such other supporting information as the Company shall reasonably require. 

          2.2.4 During the Contract Period, the Company shall continue to provide Higgins with an automobile for use by Higgins consistent with past practices and shall continue to pay or reimburse Higgins for
expenses he reasonable incurs for the maintenance and operation of such automobile upon receipt of itemized vouchers therefor and such other supporting information as the Company shall reasonably require.

          2.2.5 During the Contract Period, Higgins shall be entitled to paid vacations in a manner commensurate with Higgins' status as the Chief Executive Officer of the Company, which shall not be less than
the annual vacation period which Higgins is presently entitled.

     2.3 Executive Bonus Plan. The Company maintains the Executive Bonus Plan (the "EBP") to provide performance-based incentive compensation to
Higgins and certain other executives of the Company. During the Contract Period, Higgins shall be eligible to earn an annual performance bonus of 0 to 200% of his annual base salary in effect for that year ("incentive compensation"), calculated in
such fashion and based on the achievement of certain performance criteria as are approved by the Board or the Compensation Committee prior to the beginning of such year under the EBP. 

     2.4 Insurance. During each calendar year of the Contract Period (beginning with calendar year 2009), the Company shall pay or advance for
life insurance protection for Higgins’ designated beneficiary, under an arrangement selected by Higgins, an amount equal to $150,000.

     2.5 Additional Compensation. The Board, although under no obligation to do so, may determine from time to time to pay to Higgins compensation
in addition to the annual base salary and incentive compensation required to be paid above. The Board may grant Higgins options to purchase shares of common stock of the Company ("Common Stock"), may issue him restricted Common Stock or may award
him stock appreciation rights. In addition to the foregoing, pursuant to the provisions of the 2005 Long Term Incentive Plan (the “Plan”), upon effectiveness of this Agreement, the Employee will be awarded Restricted Share Units, the
Common Stock subject to which will have a fair market value on the date of grant equal to $1,100,000 (the “Restricted Share Units”), subject to the terms and conditions of the Plan and those set forth in the Restricted Stock Unit
Agreement.

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SECTION 3. TERMINATION OF EMPLOYMENT

     3.1 Death or Disability of Higgins.

          3.1.1 Higgins' employment hereunder shall immediately terminate upon his death, upon which the Company shall pay earned but unpaid base salary through the date of death, reimbursement for expenses
incurred prior to the date of death in accordance with the Company’s expense reimbursement policy, payment for accrued but unused vacation time in accordance with Company policy, and annual bonus for the fiscal year of death in an amount
determined by the Compensation Committee of the Board of Directors based on the achievement of the performance goals under the annual bonus plan applicable to Higgins for the entire fiscal year but prorated based upon the number of days in the
fiscal year through the date of death. The annual bonus amount shall be paid on the date bonuses for the fiscal year are paid to other executives but in all events on a date that is after the end of the fiscal year and within four months after the
end of the fiscal year, and the other amounts payable under this Section 3.1.1 (other than expense reimbursements, which shall be paid in accordance with the applicable Company policy) shall be paid within thirty (30) days after Higgins’ death.

          3.1.2 If Higgins, in the reasonable opinion of the Company, is Disabled (as defined below), the Company shall have the right to terminate Higgins' employment upon 30 days prior written notice to
Higgins at any time after the expiration of the 180 day period referred to below, in which event the Company shall pay Higgins (v) earned but unpaid base salary through the date of termination in accordance with normal payroll practices, (w)
reimbursement for expenses incurred prior to the date of termination in accordance with the Company’s expense reimbursement policy, (x) payment for accrued but unused vacation time in accordance with Company policy, such payment to be made
within thirty (30) days after Higgins’ termination of employment, (y) annual bonus for the fiscal year of termination in an amount determined by the Compensation Committee of the Board of Directors based on the achievement of the performance
goals under the annual bonus plan applicable to Higgins for the entire fiscal year but prorated based upon the number of days in the fiscal year through the date of termination, and (z) an amount equal to two (2) times his base salary for the period
from the date of termination until six months following the date of such termination (half of which represents his bonus for such period at target), such aggregate amount to be paid, subject to Section 5.1.1 below, in equal installments over such
period in accordance with the regular payroll practices of the Company. The annual bonus amount set forth in clause (y) above shall be paid on the date bonuses for the fiscal year are paid to other executives but in all events on a date that is
after the end of the fiscal year and within four months after the end of the fiscal year. As used in this Agreement, the term "Disabled" or "Disability" shall mean the inability of Higgins to perform substantially Higgins' duties and
responsibilities to the Company by reason of a physical or mental disability or infirmity for a continuous period of at least 180 days. The date of Disability shall be on the last day of such 180 day period. The determination of whether the
Disability has occurred shall be made by a licensed physician chosen by the Board.

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     3.2 [RESERVED] 

     3.3 Date of Termination. 

          3.3.1 Except as otherwise provided in this Agreement, the employment of Higgins hereunder shall terminate upon the earliest to occur of the dates specified below:

          3.3.1.1
the end of the Contract Period;

          3.3.1.2
the close of business on the date of Higgins' death;

          3.3.1.3
the close of business on the date on which the Company delivers to Higgins a
written notice of the Company's election to terminate Higgins' employment for "Cause" (as
defined below);

          3.3.1.4
the close of business on the date which is 30 days after the date on which the
Company delivers to Higgins a written notice of the Company's election to terminate
Higgins' employment because  of Disability;

          3.3.1.5
the close of business on the date on which Higgins delivers to the Company a
notice of his election to terminate his employment for "Good Reason" (as defined
below), which may not occur prior  to the expiration of the Company’s cure
period set forth below; or 

          3.3.1.6
the close of business on the date on which the Company delivers to Higgins a
written notice that the Board has adopted a resolution terminating the Higgins'
employment and such termination is  not for death, Cause or Disability.

          3.3.2 Any purported termination by the Company or by Higgins shall be communicated by written Notice of Termination to the other. For the purposes of this Agreement, a "Notice of Termination" shall
mean a notice which indicates the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Higgins' employment under the provision
so indicated. No such purported termination shall be effective without delivery of such Notice of Termination. Termination of employment will not cause a termination of this Agreement, the terms of which shall survive any termination of employment
in accordance with the express terms hereof.

     3.4 Termination for Cause.

          3.4.1 In the event Higgins' employment is terminated (i) by the Company for Cause, or (ii) by Higgins for any reason other than Good Reason, the Company's remaining obligations under this Agreement
shall terminate as of the date provided in Section 3.3.

          3.4.2 For the purposes of this Agreement, the term "Cause" shall mean:

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          3.4.2.1
fraud, theft, misappropriation or embezzlement of the Company's funds;

          3.4.2.2
conviction of (i) any felony, or any crime involving fraud or misrepresentation,
or (ii) of any other crime (whether or not connected with his employment) the
effect of which is likely to  adversely affect the Company, except, in the case
of clause (ii) only, if Higgins' actions which result in such a conviction were
taken in good faith and in a manner Higgins reasonably believed not to be adverse
to the interests of the  Company;

          3.4.2.3
after a written demand for substantial performance to Higgins from the Board
(mailing of such written demand having been authorized by a least 60% of the
independent (within the meaning of the  NASDAQ Stock Market Rules) directors
then in office) which specifically identifies the manner in which the Board believes
that Higgins has intentionally materially breached Higgins' duties and provides
Higgins with a 30 day period in which to cure  such breach, the willful and continuing
intentional material breach by Higgins and failure substantially to perform Higgins'
duties with the Company (other than any such failure resulting from Disability);
or

          3.4.2.4
abuse of alcohol or other drugs which interferes with the performance by Higgins
of his duties, provided that Higgins has been given 30 days notice by the Company
of its intent to terminate  Higgins pursuant to this provision during which time
Higgins has not demonstrated the cessation of such abuse to the reasonable satisfaction
of the Board.

Notwithstanding the foregoing or any other provision hereof, Higgins shall not be deemed to have been terminated for Cause unless there shall have been delivered to Higgins a copy of a resolution duly adopted by the affirmative
vote of not less than 60% of the independent (within the meaning of the NASDAQ Stock Market Rules) members of the Board.

          3.4.3 For the purposes of this Agreement, the term "Good Reason" shall mean the occurrence of any of the events or conditions described in the following subparagraphs without Higgins' express written
consent:

          3.4.3.1
a material diminution of Higgins' status, title, position, scope of authority
or responsibilities (including reporting responsibilities), the assignment to
Higgins of any duties or  responsibilities which are inconsistent with such status,
title, position, authorities or responsibilities, Higgins ceasing to be Chairman
of the Board of Directors, or any removal of Higgins from or failure to reappoint
or reelect Higgins to any of  such positions, except in connection with the termination
of Higgins' employment for Disability, Cause, as a result of Higgins' death or
by Higgins other than for Good Reason;

          3.4.3.2
a material reduction by the Company in Higgins' base salary, bonus opportunity
and benefits in the aggregate as provided for in this Agreement;

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          3.4.3.3 the relocation of the Company's principal executive offices to a location outside a 25-mile radius of Albany, New York or the Company's requiring Higgins to be based at any place other than
Albany, New York, except for reasonable required travel on the Company's business;

          3.4.3.4 any material breach by the Company of any material provision of this Agreement; or

          3.4.3.5 the failure of the Company to obtain a satisfactory agreement from any purchaser of the Company or successor or permitted assignee of the Company to assume and agree to perform this
Agreement;

provided, however, that, it shall be a condition precedent to Higgins’ right to terminate employment for Good Reason that (i) he
shall first have given the Company written notice that an event or condition constituting Good Reason has occurred within ninety (90) days after such occurrence, and (ii) a period of thirty (30) days from and after the giving of such written notice
shall have elapsed without the Company having effectively cured or remedied such occurrence during such 30-day period. 

     3.5 Termination Without Cause or for Good Reason.

          3.5.1 In the event Higgins' employment is terminated (i) by the Company for any reason other than Cause, or the death or Disability of Higgins, or (ii) by Higgins for Good Reason, the Company shall
(w) immediately pay Higgins his earned but unpaid base salary through the date of termination and accrued but unused vacation time in accordance with Company policy, (x) reimburse Higgins’ expenses incurred prior to the date of termination in
accordance with the Company’s expense reimbursement policy, and (y) pay Higgins an amount equal to two (2) times his base salary for the period from the date of termination until the latest of (A) the third anniversary of the Effective Date,
(B) the end of the Contract Period, or (C) one year after the date of termination (half of which represents his bonus for such period at target), such aggregate amount to be paid, subject to Section 5.1.1 below, in equal installments over such
period in accordance with the regular payroll practices of the Company. In addition, Higgins (and his covered dependents) will be entitled to continue participation in the Company’s medical, dental and vision care plans (the “Health
Benefit Plans”) until the latest of (A) the third anniversary of the Effective Date, (B) the end of the Contract Period, or (C) one year after the date of termination; provided, however, that Higgins’ (and his covered dependents’) participation in the Company’s Health Benefit Plans shall cease on any earlier date that he becomes eligible for substantially similar benefits from a subsequent employer.
Higgins’ participation in the Health Benefit Plans will be on the same terms and conditions (including, without limitation, any contributions that would have been required from him) that would have applied had he continued to be employed by the
Company. 

          3.5.2 There shall be no requirement on the part of Higgins to seek other employment or otherwise mitigate damages in order to be entitled to the full amount of 

7

any payments or benefits to be made pursuant to this Agreement or any other agreement between Higgins and the Company or any of its affiliates. Except as set forth in Section 3.5.1 in the case of Health Benefit Plans, no payment
or benefit under any portion of this Agreement shall be subject to offset.

SECTION 4. RESTRICTIVE COVENANTS

     4.1 Confidentiality. Higgins acknowledges a duty of confidentiality owed to the Company and shall not, directly or indirectly, at any time
during or after his employment by the Company divulge, furnish, or make accessible to anyone, without the express authorization of the Board, any trade secret, private or confidential or proprietary information or know-how of the Company or any of
its affiliates obtained or acquired by him while so employed. All computer software and books paid for by the Company, and all records and files generated or acquired while an employee of the Company are acknowledged to be the property of and shall
not be removed from the Company's possession or made use of other than in pursuit of the Company's business and, upon termination of employment for any reason, Higgins shall deliver to the Company, without further demand, all copies thereof which
are then in his possession or under his control. The provisions of this Section 4.1 shall not apply to information which (i) is or becomes generally available to the public other than as a result of a disclosure by Higgins, (ii) was available to
Higgins on a non-confidential basis prior to its disclosure to Higgins, (iii) becomes available to Higgins on a non-confidential basis from a source other than the Company, (iv) must be disclosed by law or by order of a court or governmental
authority, or (v) is used to enforce Higgins's rights with the Company.

     4.2 Noncompetition.

          4.2.1 At any time while employed hereunder and, except as provided in the last sentence of this Section 4.2.1, for a period of one year following termination of Higgins' employment for any reason,
Higgins shall not, directly or indirectly: (i) engage, anywhere in the Territory (as defined in Section 4.2.2 below), in the retail sale of music, video or related products; (ii) be or become a stockholder, partner, owner, officer, director or
employee or agent of, or a consultant to, or give financial or other assistance to, any person or entity engaging in any such activities; (iii) seek in competition with the business of the Company to procure orders from or do business with any
customer of the Company; or (iv) solicit or contact with a view to the engagement or employment by any person or entity of any person who is or was an employee of the Company during the one year preceding termination of Higgins’ employment,
provided this will not preclude hiring any person who contacts Higgins for employment and who has not been employed by the Company at any time during the preceding 6 months. Nothing herein shall prohibit Higgins without the written consent of the
Board from owning, as a passive investor, in the aggregate not more than 5% of the outstanding publicly traded stock of any corporation so engaged. The duration of Higgins' covenants set forth in this Section shall be extended by a period of time
equal to the number of days, if any, during which Higgins is in violation of the provisions hereof. Higgins shall not be bound by this 

8

Section 4.2.1 following the termination of his employment (a) by the Company without Cause, or (b) by Higgins for Good Reason.

          4.2.2 For the purposes of this Agreement, "Territory" means the United States.

          4.2.3 If either party hereto learns of any breach or potential breach of this Agreement such party shall immediately notify the other party hereto of such event, specifying the basis therefore in
reasonable detail. The Company may, in its sole discretion, afford Higgins an opportunity to remedy or otherwise cure such breach or potential breach before seeking legal redress, provided that Higgins is actively seeking to cure or remedy such
breach or potential breach; but such opportunity to remedy shall be without prejudice to the right of the Company to seek and obtain injunctive or other relief.

     4.3 Injunctive and Other Relief. Higgins acknowledges and agrees that the covenants contained in Section 4.1 and 4.2 above are fair and
reasonable in light of the consideration paid hereunder, and that damages alone shall not be an adequate remedy for any breach by Higgins of his covenants contained herein and accordingly expressly agrees that, in addition to any other remedies
which the Company may have, the Company shall be entitled to injunctive relief in any court of competent jurisdiction for any breach or threatened breach of any such covenants by Higgins. Nothing contained herein shall prevent or delay the Company
from seeking, in any court of competent jurisdiction, specific performance or other equitable remedies in the event of any breach or intended breach by Higgins of any of his obligations hereunder. In the event the Company prevails in an action to
enforce its rights under Section 4.1 and 4.2 it shall be entitled to be reimbursed for its costs and reasonable attorneys' fees associated with so enforcing its rights.

SECTION 5. MISCELLANEOUS

     5.1 Reimbursement of Counsel Fees: Arbitration. The Company shall pay all reasonable legal fees, accounting fees and related expenses
incurred by Higgins in connection with the preparation, negotiation and execution of this Agreement. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in New York, New York in
accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction. The prevailing party, shall be entitled to recover from the
other party all of its legal fees, accounting fees and related expenses incurred in any such arbitration including without limitation, all expenses of arbitration, court costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenditures of the types customarily incurred in connection with prosecuting, defending or investigating any
arbitration, action or suit.

9

     5.2 Severability. The invalidity or unenforceability of any particular provision or part of any provision of this Agreement shall not affect
the other provisions or parts hereof. If any provision hereof is determined to be invalid or unenforceable by a court of competent jurisdiction, Higgins shall negotiate in good faith to provide the Company with protection as nearly equivalent to
that found to be invalid or unenforceable and if any such provision shall be so determined to be invalid or unenforceable by reason of the duration or geographical scope of the covenants contained therein, such duration or geographical scope to the
extent necessary to cure such invalidity.

     5.3 Assignment. Neither this Agreement nor any right or interest hereunder shall be assignable by Higgins, Higgins' beneficiaries, or legal
representatives without the Company's prior written consent; provided, however, that nothing herein shall preclude (i) Higgins from designating a beneficiary to receive any benefit payable hereunder upon Higgins' death, or (ii) the executors,
administrators, or other legal representatives of Higgins or Higgins' estate form assigning any rights hereunder to devisees, legatees, beneficiaries, testamentary trustee or other legal heirs of Higgins (each a "Distributee"). If Higgins should die
while any amounts would still be payable to Higgins if Higgins had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Higgins' Distributee or, if there is no such
Distributee, to Higgins' estate.

     5.4 Notices. All notices hereunder shall be in writing and shall be sufficiently given if hand-delivered, sent by documented overnight
delivery service or registered or certified mail, postage prepaid, return receipt requested or by telegram, fax or telecopy (confirmed by U.S. mail), receipt acknowledged, addressed as set forth below or to such other person and/or a such other
address as may be furnished in writing by either party hereto to the other. Any such notice shall be deemed to have been given as of the date received, in the case of personal delivery, or on the date shown on the receipt or confirmation therefore,
in all other cases. Any and all service of process and any other notice in any such action, suit or proceeding shall be effective against a party if given as provided in this Agreement; provided that nothing herein shall be deemed to affect the
right of a party to serve process in any other manner permitted by law.

If to the Company:

Presiding Director 

Trans World Entertainment Corporation

38 Corporate Circle 

Albany, N.Y. 12203

with a copy to the Company’s Chief Financial Officer

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If to Higgins:

Mr. Robert J. Higgins

6 Sage Estates 

Menands, N.Y. 12204

     5.5 Entire Agreement and Modification. This Agreement (and any Employee Benefit plan or agreement contemplated hereby) constitutes the entire
agreement between the parties hereto with respect to the matters contemplated herein and supersedes all prior agreements and understandings with respect thereto. Any amendment, modification, or waiver of this Agreement shall not be effective unless
in writing. Neither the failure nor any delay on the part of any party to exercise any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege
preclude any other or further exercise of the same or of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of any right, remedy, power, or privilege with respect to any other occurrence.

     5.6 Governing Law. This Agreement is made pursuant to, and shall be construed and enforced in accordance with, the internal laws of the State
of New York (and United States federal law, to the extent applicable), without giving effect to otherwise applicable principles of conflicts of law.

     5.7 Headings; Counterparts. The headings of sections in this Agreement are for convenience only and shall not affect its interpretation. This
Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which, when taken together, shall be deemed to constitute but one and the same Agreement.

     5.8 Further Assurances. Each of the parties hereto shall execute such further instruments and take such other actions as any other party
shall reasonably request in order to effectuate the purposes of this Agreement.

     5.9 Indemnification. Throughout the Contract Period and for a period of five years thereafter, the Company shall indemnify and defend Higgins
against all claims arising out of Higgins' activities as an officer, director or employee of the Company to the fullest extent permitted under the law of the applicable state of incorporation. In addition to the foregoing, Higgins shall, upon
reasonable notice, furnish such information and proper assistance to the Company in connection with any litigation in which it is, or may become, a party.

     5.10 Excise Tax Gross-Up. In the event it shall be determined that any payment, award, benefit or distribution (including, without
limitation, the acceleration of any payment, award, distribution or benefit), by the Company or any of its affiliates to or for the benefit of the Executive (whether pursuant to the terms of this Agreement or otherwise, but determined without regard
to any additional payments required under this Section 5.10) (a “Payment”) would be subject to the excise tax imposed by Section 4999 

11

of the Internal Revenue Code of 1986, as amended (the “Code”) or any corresponding provisions of state or local tax law, or any interest or penalties are incurred by Higgins with respect to such excise tax (such excise
tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then Higgins shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by Higgins of all taxes (including any Excise Tax, income tax or employment tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, Higgins retains from the Gross-Up Payment an amount
equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 5.10, if it shall be determined that Higgins is entitled to a Gross-Up Payment, but that the portion of the Payments that would be treated as
“parachute payments” under Section 280G of the Code does not exceed by more than $100,000 the greatest amount (the “Safe Harbor Amount”) that could be paid to Higgins such that the receipt of Payments would not give rise to
any Excise Tax, then no Gross-up Payment shall be made to Higgins and the amount payable under clause (z) of Section 3.5.1 of this Agreement shall be reduced so that the Payments, in the aggregate, are reduced to the Safe Harbor Amount. For purposes
of reducing the payments to the Safe Harbor Amount, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable under this Agreement would not result in a reduction of the Payments to
the Safe Harbor Amount, no amounts payable under this Agreement shall be reduced pursuant to this Section 5.10.

     5.11 Section 409A.

          5.11.1 It is intended that this Agreement will comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and any regulations and guidelines promulgated
thereunder (collectively, “Section 409A”), to the extent the Agreement is subject thereto, and the Agreement shall be interpreted on a basis consistent with such intent. If an amendment of the Agreement is necessary in order for it to
comply with Section 409A, the parties hereto will negotiate in good faith to amend the Agreement in a manner that preserves the original intent of the parties to the extent reasonably possible. No action or failure to act pursuant to this Section
5.11 shall subject the Company to any claim, liability, or expense, and the Company shall not have any obligation to indemnify or otherwise protect Higgins from the obligation to pay any taxes, interest or penalties pursuant to Section
409A.

          5.11.2 Notwithstanding any provision to the contrary in this Agreement, if Higgins is deemed on the date of his “separation from service” (within the meaning of Treas. Reg. Section 1.409A
-1(h)) with the Company to be a “specified employee” (within the meaning of Treas. Reg. Section 1.409A -1(i)), then with regard to any payment or benefit that is considered deferred compensation under Section 409A payable on account of a
“separation from service” that is required to be delayed pursuant to Section 409A(a)(2)(B) of the Code (after taking into account any applicable exceptions to such requirement), such payment or benefit shall be made or provided on the date
that is the earlier of (i) the expiration of the six (6)-month period measured from the date of Higgins’ “separation from service,” or (ii) the date of Higgins’ death (the “Delay 

12

Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 5.11.2 (whether they would have otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to Higgins in a lump sum and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein. Notwithstanding any
provision of this Agreement to the contrary, for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment, references to Higgins’ “termination of
employment” (and corollary terms) with the Company shall be construed to refer to Higgins’ “separation from service” (within the meaning of Treas. Reg. Section 1.409A -1(h)) with the Company.

          5.11.3 With respect to any reimbursement or in-kind benefit arrangements of the Company and its subsidiaries that constitute deferred compensation for purposes of Section 409A, except as otherwise
permitted by Section 409A, the following conditions shall be applicable: (i) the amount eligible for reimbursement, or in-kind benefits provided, under any such arrangement in one calendar year may not affect the amount eligible for reimbursement,
or in-kind benefits to be provided, under such arrangement in any other calendar year (except that the health and dental plans may impose a limit on the amount that may be reimbursed or paid), (ii) any reimbursement must be made on or before the
last day of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit. Whenever a payment under this
Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days after termination of employment”), the actual date of
payment within the specified period shall be within the sole discretion of the Company. Whenever payments under this Agreement are to be made in installments, each such installment shall be deemed to be a separate payment for purposes of Section
409A. 

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     IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below.

				
	   	 	
    TRANS WORLD ENTERTAINMENT  
	   	 	
    CORPORATION  
	 	 	 	 
	
December 24, 2008  	 	By: 	
/s/ John J. Sullivan  
	   	 	   	Name: John J. Sullivan  
	   	 	   	Title: Executive Vice President, Chief  
	   	 	   	Financial Officer & Secretary  
	 	 	 	 
	   	 	   	/s/ Robert J. Higgins  
	
December 26, 2008  	 	   	ROBERT J. HIGGINS  

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