Document:

Exhibit 10.2

 

$715,000,000

 

HUNTSMAN LLC

 

CREDIT AGREEMENT

 

with

 

DEUTSCHE BANK TRUST COMPANY AMERICAS,

 

as Administrative Agent,

 

and

 

THE FINANCIAL INSTITUTIONS PARTY HERETO

 

DATED AS OF OCTOBER 14, 2004

 

 

DEUTSCHE BANK SECURITIES INC.,

 

As Sole Book Runner And Sole Arranger

 

 

WINSTON &
STRAWN LLP

35 West Wacker Drive

Chicago, Illinois 60601

 

 

TABLE OF CONTENTS

 

	
  ARTICLE
  I

  	
  DEFINITIONS
  AND ACCOUNTING TERMS

  	
   

  
	
   

  	
  1.1

  	
  Definitions.

  	
   

  
	
   

  	
  1.2

  	
  Accounting
  Terms; Financial Statements.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  	
  AMOUNT
  AND TERMS OF CREDIT

  	
   

  
	
   

  	
  2.1

  	
  The Term B Loans.

  	
   

  
	
   

  	
  2.2

  	
  Term B Notes.

  	
   

  
	
   

  	
  2.3

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

  	
   

  
	
   

  	
  2.4

  	
  Additional Term B Loans.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  INTEREST AND FEES

  	
   

  
	
   

  	
  3.1

  	
  Interest.

  	
   

  
	
   

  	
  3.2

  	
  Fees.

  	
   

  
	
   

  	
  3.3

  	
  Computation of
  Interest and Fees.

  	
   

  
	
   

  	
  3.4

  	
  Compensation For
  Funding Losses.

  	
   

  
	
   

  	
  3.5

  	
  Increased Costs, Illegality, Etc.

  	
   

  
	
   

  	
  3.6

  	
  Replacement of Lenders.

  	
   

  
	
   

  	
  3.7

  	
  Change of Lending Office.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IV

  	
  PAYMENTS
  AND PREPAYMENTS

  	
   

  
	
   

  	
  4.1

  	
  Voluntary Prepayments.

  	
   

  
	
   

  	
  4.2

  	
  Mandatory Prepayments.

  	
   

  
	
   

  	
  4.3

  	
  Application of Prepayments.

  	
   

  
	
   

  	
  4.4

  	
  Method and
  Place of Payment by Borrower.

  	
   

  
	
   

  	
  4.5

  	
  Net Payments.

  	
   

  
	
   

  	
  4.6

  	
  Sharing of Payments.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  V

  	
  CONDITIONS
  OF CREDIT

  	
   

  
	
   

  	
  5.1

  	
  Conditions
  Precedent to the Effectiveness of the Agreement.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
   

  	
  6.1

  	
  Corporate Status.

  	
   

  
	
   

  	
  6.2

  	
  Corporate Power and
  Authority.

  	
   

  
	
   

  	
  6.3

  	
  No Violation.

  	
   

  
	
   

  	
  6.4

  	
  Governmental and Other
  Approvals.

  	
   

  
	
   

  	
  6.5

  	
  Financial
  Statements; Financial Condition; Undisclosed Liabilities; etc.

  	
   

  
	
   

  	
  6.6

  	
  Litigation.

  	
   

  
	
   

  	
  6.7

  	
  True and Complete
  Disclosure.

  	
   

  
	
   

  	
  6.8

  	
  Use of Proceeds;
  Margin Regulations

  	
   

  
	
   

  	
  6.9

  	
  Tax Returns and Payments.

  	
   

  
	
   

  	
  6.10

  	
  Compliance With ERISA.

  	
   

  

 

i

 

	
   

  	
  6.11

  	
  Ownership of Property.

  	
   

  
	
   

  	
  6.12

  	
  Capitalization of Borrower.

  	
   

  
	
   

  	
  6.13

  	
  Subsidiaries.

  	
   

  
	
   

  	
  6.14

  	
  Compliance With Law, etc.

  	
   

  
	
   

  	
  6.15

  	
  Investment Company Act.

  	
   

  
	
   

  	
  6.16

  	
  Public Utility
  Holding Company Act.

  	
   

  
	
   

  	
  6.17

  	
  Environmental Matters.

  	
   

  
	
   

  	
  6.18

  	
  Labor Relations.

  	
   

  
	
   

  	
  6.19

  	
  Intellectual Property.

  	
   

  
	
   

  	
  6.20

  	
  Certain Fees.

  	
   

  
	
   

  	
  6.21

  	
  Security Documents.

  	
   

  
	
   

  	
  6.22

  	
  Asbestos Matters.

  	
   

  
	
   

  	
  6.23

  	
  Anti-Terrorism Law.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
  7.1

  	
  Financial Statements.

  	
   

  
	
   

  	
  7.2

  	
  Certificates; Other
  Information.

  	
   

  
	
   

  	
  7.3

  	
  Notices.

  	
   

  
	
   

  	
  7.4

  	
  Maintenance of Existence.

  	
   

  
	
   

  	
  7.5

  	
  Payment of Obligations.

  	
   

  
	
   

  	
  7.6

  	
  Inspection of Property, Books and
  Records.

  	
   

  
	
   

  	
  7.7

  	
  ERISA.

  	
   

  
	
   

  	
  7.8

  	
  Maintenance of
  Property; Insurance

  	
   

  
	
   

  	
  7.9

  	
  Environmental Laws.

  	
   

  
	
   

  	
  7.10

  	
  Use of Proceeds.

  	
   

  
	
   

  	
  7.11

  	
  Additional
  Security; Further Assurances.

  	
   

  
	
   

  	
  7.12

  	
  End of Fiscal
  Years; Fiscal Quarters.

  	
   

  
	
   

  	
  7.13

  	
  Senior Subordinated Notes.

  	
   

  
	
   

  	
  7.14

  	
  Maintenance of
  Corporation Separateness.

  	
   

  
	
   

  	
  7.15

  	
  Certain Fees Indemnity.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
  8.1

  	
  Liens.

  	
   

  
	
   

  	
  8.2

  	
  Indebtedness.

  	
   

  
	
   

  	
  8.3

  	
  Fundamental Changes.

  	
   

  
	
   

  	
  8.4

  	
  Dividends or Other
  Distributions.

  	
   

  
	
   

  	
  8.5

  	
  Issuance of Stock.

  	
   

  
	
   

  	
  8.6

  	
  Disposition of Assets.

  	
   

  
	
   

  	
  8.7

  	
  Loans and Investments.

  	
   

  
	
   

  	
  8.8

  	
  Transactions with
  Affiliates.

  	
   

  
	
   

  	
  8.9

  	
  Lines of Business.

  	
   

  
	
   

  	
  8.10

  	
  Fiscal Year.

  	
   

  
	
   

  	
  8.11

  	
  Amendments
  to Organizational and Other Documents.

  	
   

  
	
   

  	
  8.12

  	
  Limitation
  on Certain Restrictions on Subsidiaries.

  	
   

  
	
   

  	
  8.13

  	
  Accounting Changes.

  	
   

  
	
   

  	
  8.14

  	
  Restrictions
  on Certain Unrestricted Subsidiaries.

  	
   

  

 

ii

 

	
   

  	
  8.15

  	
  Amendments, Modifications or Supplements to
  Revolving Credit Agreement

  	
   

  
	
   

  	
  8.16

  	
  Borrowings
  Under Revolving Credit Agreement.

  	
   

  
	
   

  	
  8.17

  	
  Amendments
  or Modifications to Senior Secured Notes.

  	
   

  
	
   

  	
  8.18

  	
  Anti-Terrorism
  Law; Anti-Money Laundering.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  	
  FINANCIAL
  COVENANTS

  	
   

  
	
   

  	
  9.1

  	
  Leverage Ratio.

  	
   

  
	
   

  	
  9.2

  	
  Interest Coverage Ratio.

  	
   

  
	
   

  	
  9.3

  	
  Capital Expenditures.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  X

  	
  EVENTS
  OF DEFAULT

  	
   

  
	
   

  	
  10.1

  	
  Events of Default.

  	
   

  
	
   

  	
  10.2

  	
  Rights Not Exclusive.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  XI

  	
  ADMINISTRATIVE
  AGENT

  	
   

  
	
   

  	
  11.1

  	
  Appointment.

  	
   

  
	
   

  	
  11.2

  	
  Nature of Duties

  	
   

  
	
   

  	
  11.3

  	
  Rights,
  Exculpation, Etc.

  	
   

  
	
   

  	
  11.4

  	
  Reliance.

  	
   

  
	
   

  	
  11.5

  	
  Indemnification.

  	
   

  
	
   

  	
  11.6

  	
  Administrative
  Agent in its Individual Capacity.

  	
   

  
	
   

  	
  11.7

  	
  Notice of Defaults.

  	
   

  
	
   

  	
  11.8

  	
  Holders of Obligations.

  	
   

  
	
   

  	
  11.9

  	
  Resignation by
  Administrative Agent.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
  12.1

  	
  No Waiver;
  Modifications in Writing.

  	
   

  
	
   

  	
  12.2

  	
  Further Assurances.

  	
   

  
	
   

  	
  12.3

  	
  Notices

  	
   

  
	
   

  	
  12.4

  	
  Costs,
  Expenses and Taxes.

  	
   

  
	
   

  	
  12.5

  	
  Confirmations.

  	
   

  
	
   

  	
  12.6

  	
  Adjustment.

  	
   

  
	
   

  	
  12.7

  	
  Execution in Counterparts.

  	
   

  
	
   

  	
  12.8

  	
  Binding
  Effect; Assignment; Addition and Substitution of Lenders.

  	
   

  
	
   

  	
  12.9

  	
  CONSENT
  TO JURISDICTION; MUTUAL WAIVER OF JURY TRIAL.

  	
   

  
	
   

  	
  12.10

  	
  GOVERNING LAW.

  	
   

  
	
   

  	
  12.11

  	
  Severability of Provisions.

  	
   

  
	
   

  	
  12.12

  	
  Transfers of Notes.

  	
   

  
	
   

  	
  12.13

  	
  Registry.

  	
   

  
	
   

  	
  12.14

  	
  Headings.

  	
   

  
	
   

  	
  12.15

  	
  Termination of Agreement.

  	
   

  
	
   

  	
  12.16

  	
  Confidentiality.

  	
   

  
	
   

  	
  12.17

  	
  Concerning
  the Collateral and the Loan Documents.

  	
   

  
	
   

  	
  12.18

  	
  Certain Guarantee
  Obligations.

  	
   

  
	
   

  	
  12.19

  	
  Effectiveness.

  	
   

  

 

iii

 

	
  EXHIBITS

  	
   

  	
   

  
	
  Exhibit 2.2

  	
   

  	
  Form of Term B Note for
  Term B Loan

  
	
  Exhibit 2.3(b)

  	
   

  	
  Form of Notice of
  Conversion or Continuation

  
	
  Exhibit 4.5(d)

  	
   

  	
  Lender Certificate

  
	
  Exhibit 5.1(a)(ii)

  	
   

  	
  Form of Security
  Agreement

  
	
  Exhibit 5.1(a)(iii)(A)

  	
   

  	
  Form of Restricted
  Subsidiary Guarantee Agreement

  
	
  Exhibit
  5.1(a)(iii)(B)-1

  	
   

  	
  Form of Headquarters
  Subsidiary Guarantee Agreement

  
	
  Exhibit
  5.1(a)(iii)(B)-2

  	
   

  	
  Form of HSCC Subsidiary
  Guarantee Agreement

  
	
  Exhibit 5.1(a)(v)

  	
   

  	
  Form of Perfection
  Certificates

  
	
  Exhibit 5.1(e)(i)

  	
   

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

  
	
  Exhibit 5.1(e)(ii)-1

  	
   

  	
  Form of Opinion of
  Vinson & Elkins LLP

  
	
  Exhibit 5.1(e)(ii)-2

  	
   

  	
  Form of Opinion of
  Stoel Rivers LLP

  
	
  Exhibit 5.1(e)(iii)

  	
   

  	
  Form of Solvency
  Certificate

  
	
  Exhibit 7.2(b)

  	
   

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

  
	
  Exhibit 12.8(c)

  	
   

  	
  Form of Assignment and
  Assumption Agreement

  

 

	
  SCHEDULES

  	
   

  	
   

  
	
  Schedule 1.1(a)

  	
   

  	
  Term B Commitments

  
	
  Schedule 1.1(b)

  	
   

  	
  Unrestricted
  Subsidiaries

  
	
  Schedule 6.3

  	
   

  	
  Approvals and Consents

  
	
  Schedule 6.4

  	
   

  	
  Governmental Approval

  
	
  Schedule 6.5(a)

  	
   

  	
  Historical Financial
  Statements

  
	
  Schedule 6.5(d)

  	
   

  	
  Indebtedness and Other
  Material Liabilities

  
	
  Schedule 6.5(e)

  	
   

  	
  Pro Forma Balance Sheet

  
	
  Schedule 6.5(f)

  	
   

  	
  Financial Projections

  
	
  Schedule 6.12

  	
   

  	
  Capitalization of
  Borrower

  
	
  Schedule 6.13

  	
   

  	
  Restricted Subsidiaries

  
	
  Schedule 6.21(c)

  	
   

  	
  Real Property

  
	
  Schedule 6.21(d)

  	
   

  	
  Deposit Accounts

  
	
  Schedule 8.1(a)

  	
   

  	
  Existing Liens

  
	
  Schedule 8.7(c)

  	
   

  	
  Investments

  
	
  Schedule 8.14

  	
   

  	
  Restrictions on HSCC
  and HSCHC

  

 

iv

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT is
dated as of October 14, 2004 and is made by and among Huntsman LLC, a Utah
limited liability company (“Borrower”), the financial institutions party
hereto, including Deutsche Bank Trust Company Americas, in their capacities as
lenders hereunder (collectively, the “Lenders,” and each individually, a
“Lender”), and Deutsche Bank Trust Company Americas, as agent (“Administrative
Agent”) for the Lenders.

 

W I T N E S S E T H:

 

WHEREAS, the Company,
Administrative Agent, and various financial institutions are entering into that
certain Revolving Credit Agreement, dated as of the date hereof, providing a
revolving facility of $350 million;

 

WHEREAS, the Company,
Administrative Agent and the other parties signatory thereto entered into that
certain Credit Agreement, dated as of September 30, 2002 (the “Existing Term
Credit Agreement”);

 

WHEREAS, this Agreement
is a refinancing of the Existing Term Credit Agreement;

 

NOW, THEREFORE, in
consideration of the premises and of the mutual covenants herein contained, the
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

1.1          Definitions.

 

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

 

“A Notes” means
the 13.375% Senior Discounted Notes due 2009 issued by HIH and outstanding on
the Closing Date.

 

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

 

“Additional Security
Documents” shall mean all mortgages, pledge agreements, security agreements
and other security documents entered into pursuant to Section 7.11 with
respect to additional Collateral.

 

 

“Additional Term B
Loans” shall have the meaning ascribed to it in Section 2.4(a)
hereof.

 

“Administrative Agent”
shall mean Deutsche Bank Trust Company Americas in its capacity as administrative
agent hereunder, and any successor agents in such capacity.

 

“Affiliate” means,
with respect to any Person, any Person or group acting in concert in respect of
the Person in question that, directly or indirectly, controls (including but
not limited to all directors and officers of such Person) or is controlled by
or is under common control with such Person; provided, that neither DB
nor any Affiliate of DB shall be deemed to be an Affiliate of Borrower.  For the purposes of this definition, “control”
(including, with correlative meanings, the terms “controlled by” and “under
common control with”), as used with respect to any Person or group of Persons,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of management and policies of such Person, whether through
the ownership of voting securities or by contract or otherwise.  A Person shall be deemed to control a
corporation or other entity if such Person possesses, directly or indirectly,
the power to vote 10% or more of the securities having ordinary voting power
for the election of directors of such corporation or other entity.

 

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

 

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

 

“Applicable Base Rate
Margin” means at any date, with respect to Term B Loans, 2.50%; provided,
however, that to the extent that the Threshold QPO Proceeds Prepayment
is made, the Applicable Base Rate Margin for Term B Loans shall be 2.00%
beginning on the first Business Day after such prepayment;

 

“Applicable Eurodollar
Margin” means at any date, with respect to Term B Loans, 3.50%; provided,
however, that to the extent that the Threshold QPO Proceeds Prepayment
is made, the Applicable Eurodollar Margin for Term B Loans shall be 3.00%
beginning on the first Business Day after such prepayment;

 

“Asset Disposition”
means any sale, lease, transfer or other disposition (or series of related
sales, leases, transfers or dispositions) of all or any part of an interest in
shares of Capital Stock of a Restricted Subsidiary of Borrower (other than
directors’ qualifying shares and similar arrangements required by applicable
law with respect to any Foreign Subsidiary), property or other assets (each
referred to for the purposes of this definition as a “disposition” or any
variation thereof) by Borrower or any of its Restricted Subsidiaries; provided,
that (i) any asset sale or series of related asset sales having a fair
market value not in excess of $2,500,000, (ii) any disposition by Borrower or a
Subsidiary to the Borrower or a Wholly-Owned Subsidiary which is not an
Unrestricted Subsidiary and (iii) dispositions permitted by Section 8.4 or

 

2

 

Sections 8.6(c),
(d), (g), (h), (i), (j) or (l) and
dispositions of Investments permitted by Section 8.7(d) shall not
constitute an Asset Disposition for purposes of this definition.

 

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

 

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

 

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

 

“Australian
Consolidated Entities” has the meaning assigned to that term in Section
1.2(b).

 

“Australian Styrenics
Subsidiaries” has the meaning assigned to that term in Section 8.7(h).

 

“Australian
Surfactants Subsidiaries” has the meaning assigned to that term in Section
8.7(h).

 

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

 

“B Notes” means
the Senior Subordinated Reset Discount Notes due 2009 issued by HIH and outstanding
on the Closing Date.

 

“Base Rate” means
the greater of (i) the rate most recently announced by DB at its principal
office as its “prime rate”, which is not necessarily the lowest rate made
available by DB or (ii) the Federal Funds Rate plus 1/2 of 1% per annum.  The “prime rate” announced by DB is evidenced
by the recording thereof after its announcement in such internal publication or
publications as DB may designate.  Any
change in the interest rate resulting from a change in such “prime rate” announced
by DB shall become effective without prior notice to Borrower as of 12:01
A.M.  (New York City time) on the
Business Day on which each change in such “prime rate” is announced by DB.  DB may make commercial or other loans to
others at rates of interest at, above or below its “prime rate”.

 

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

 

3

 

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

 

“Benefited Lender”
has the meaning assigned to that term in Section 4.6.

 

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

 

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

 

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

 

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

 

“Capitalized Lease”
means, with respect to any Person, any lease of any property (whether real,
personal or mixed) by such Person as lessee that, in accordance with GAAP,
would be required to be classified and accounted for as a capitalized lease on
the balance sheet of such Person.

 

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

 

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

 

“Cash Equivalents”
means any Investment in (i) a marketable obligation, maturing within two years
after issuance thereof, issued or guaranteed by the USA or an instrumentality
or agency thereof, (ii) a certificate of deposit or banker’s acceptance,
maturing within one year after issuance thereof, issued by any Lender, or a
national or state bank or trust company or a European, Canadian or Japanese
bank, in each case having capital, surplus and undivided profits of at least
$100,000,000 and whose long-term unsecured debt has a rating of “A” or better
by S&P or “A2” or better by Moody’s or the equivalent rating by any other
nationally recognized rating agency (provided that the aggregate face amount of
all Investments in certificates of deposit or bankers’ acceptances issued by
the principal offices of or branches of

 

4

 

such European or
Japanese banks located outside the USA shall not at any time exceed 33-1/3% of
all Investments described in this definition), (iii) open market commercial
paper, maturing within 270 days after issuance thereof, which has a rating of “A-1”
or better by S&P or “P-1” or better by Moody’s, or the equivalent rating by
any other nationally recognized rating agency, (iv) repurchase agreements and
reverse repurchase agreements with a term not in excess of one year with any
financial institution which has been elected a primary government securities
dealer by the Federal Reserve Board or whose securities are rated “AA-” or
better by S&P or “Aa3” or better by Moody’s or the equivalent rating by any
other nationally recognized rating agency relating to marketable direct
obligations issued or unconditionally guaranteed by the USA or any agency or
instrumentality thereof and backed by the full faith and credit of the USA, (v)
“Money Market” preferred stock maturing within six months after issuance
thereof or municipal bonds issued by a corporation organized under the laws of
any state of the USA, which has a rating of “A” or better by S&P or Moody’s
or the equivalent rating by any other nationally recognized rating agency, (vi)
tax exempt floating rate option tender bonds backed by letters of credit issued
by a national or state bank whose long-term unsecured debt has a rating of “AA”
or better by S&P or “Aa2” or better by Moody’s or the equivalent rating by
any other nationally recognized rating agency, and (vii) shares of any money
market mutual fund rated at least “AAA” or the equivalent thereof by S&P or
at least “Aaa” or the equivalent thereof by Moody’s or any other mutual fund
holding assets consisting (except for de
minimis amounts) of the type specified in clauses of (i) through
(vi) above.

 

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

 

“Change of Control”
means (i) prior to a Qualified Public Offering, (x) the failure by Mr.  Jon M. 
Huntsman, his spouse, direct descendants, an entity controlled by any of
the foregoing and/or by a trust of the type described hereafter, and/or a trust
for the benefit of any of the foregoing (the “Huntsman Group”), collectively
to own and control at least a majority of the outstanding voting Capital Stock
of Borrower, Holdco I and Holdco II, or (y) the failure of Borrower to be a
Wholly-Owned Direct Subsidiary of Holdco II or of Holdco II to be a Subsidiary
of Holdco I or (ii) after a Qualified Public Offering, the occurrence of the
following:  (x) any “person” or “group”
(as such terms are used in Sections 13(d) and 14(d) of the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”)), other than
Matlin Patterson or one or more members of the Huntsman Group, is or becomes
the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, except that a person shall be deemed to have “beneficial ownership” of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 35% or more of the then outstanding voting Capital Stock of
Borrower or Issuer; or (y) Continuing Directors shall cease to constitute at
least a majority of the directors constituting the board of directors of
Borrower or Issuer other than in a transaction having the approval of the board
of directors of Borrower at least a majority of which members are Continuing
Directors.

 

“Closing Date”
means October 14, 2004.

 

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

 

5

 

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

 

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

 

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

 

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

 

“Consolidated Net
Income” and “Consolidated Net Loss” mean, respectively, with respect
to any period, the aggregate of the net income (loss) of Borrower for such
period, determined in accordance with GAAP on a consolidated basis, plus
or minus, to the extent not included therein, the net income (loss) of
any Restricted Subsidiary attributable to a minority interest in such
Restricted Subsidiary, less the amount of cash dividends paid on any preferred
stock of Borrower in such period.

 

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

 

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

 

6

 

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

 

“Continuing Directors”
means, as of any date, the collective reference to (i) all members of the board
of directors of Borrower or Issuer who have held office continuously for at
least twelve months prior to the date of determination, and (ii) all members of
the board of directors of Borrower or Issuer who assumed office after such date
and whose appointment or nomination for election by shareholders of Borrower or
Issuer was approved by a vote of at least 50% of the Continuing Directors in
office immediately prior to such appointment or nomination.

 

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

 

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

 

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

 

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

 

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

 

“Customary Permitted
Liens” means:

 

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

 

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

 

(iii)          Liens
arising in connection with worker’s compensation, unemployment insurance, old
age pensions and social security benefits which are not overdue or are being
contested in good faith by appropriate proceedings diligently pursued, provided

 

7

 

that (A) any proceedings
commenced for the enforcement of such Liens shall have been stayed or suspended
within 30 days of the commencement thereof and (B) provision for the payment of
such Liens has been made on the books of such Person to the extent required by
GAAP;

 

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

 

(v)           Permitted
Real Property Encumbrances;

 

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

 

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

 

(viii)        customary
rights of set-off, revocation, refund or chargeback under deposit agreements or
under the UCC of banks or other financial institutions where Borrower or any of
its Subsidiaries maintain deposit in the ordinary course of business permitted
by this Agreement; and

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Environmental Laws”
means any and all applicable foreign, federal, state or local laws, statutes,
ordinances, codes, rules, regulations, orders, decrees, judgments, directives
or Environmental Permits and cleanup or action standards, levels or objectives
imposing liability or

 

9

 

standards of
conduct for or relating to the protection of health, safety or the environment,
including, but not limited to, the following statutes as now written and
amended, and as amended hereafter:  the
Federal Water Pollution Control Act, as codified in 33 U.S.C.  § 1251 et seq., the Clean Air Act, as
codified in 42 U.S.C.  § 7401 et seq.,
the Toxic Substances Control Act, as codified in 15 U.S.C.  § 2601 et seq., the Solid Waste
Disposal Act, as codified in 42 U.S.C.  §
6901 et seq., the Comprehensive Environmental Response, Compensation and
Liability Act, as codified in 42 U.S.C. 
§ 9601 et seq., the Emergency Planning and Community
Right-to-Know Act of 1986, as codified in 42 U.S.C.  § 11001 et seq., and the Safe Drinking
Water Act, as codified in 42 U.S.C.§ 300f et seq. and any related
regulations, as well as all state and local equivalents.

 

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

 

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

 

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

 

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

 

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

 

“Eurodollar Rate”
means the arithmetic average (rounded upwards, if necessary, to the nearest
1/100 of 1%) of the offered quotation, if any, to first class banks in the New
York interbank market by DB for USA Dollar deposits of amounts in immediately
available funds comparable to the principal amount of the applicable Eurodollar
Loan to be made or continued by DB for which the Eurodollar Rate is being
determined with maturities comparable to the Interest Period for which such
Eurodollar Rate will apply as of approximately 10:00 A.M.  (New York City time) on the applicable
Interest Rate Determination Date.  The
determination of the Eurodollar Rate by Administrative Agent shall be
conclusive and binding on Borrower absent manifest error.

 

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

 

10

 

	
  Eurodollar Rate

  
	
  1.00 -
  Eurodollar Reserve Requirements

  

 

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

 

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

 

“Excess Cash Flow”
means, for any Fiscal Year (commencing with the Fiscal Year ending December 31,
2005), an amount not less than zero calculated by April 30 of such year, equal
to (i) the sum of (x) the average daily Unused Revolver Availability during the
period of February 15 through and including April 15 of such year plus (y) the
average daily balance of cash, Cash Equivalents and the amount of Foreign Cash
Equivalents (calculated using the applicable exchange rate used by the Company
in its internal financial statements), held during such period of such year
(after giving pro forma effect to the amount of the Scheduled Term B Loan
Principal Payments, if any, made during such period as if such payments were
made on February 15), but in any event excluding any cash from time to time
awaiting reinvestment or application in accordance with Section 4.2(b), (d),
(e), (f) or (h), minus (ii) $300,000,000.

 

“Existing Credit Agreements”
shall mean the Existing Revolving Credit Agreement and the Existing Term Loan
Agreement.

 

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

 

“Existing Revolving
Credit Agreement” means that certain Revolving Credit Agreement, dated as
of September 30, 2002 among Borrower, Administrative Agent and the other
parties signatory thereto, as amended.

 

“Existing Term Credit
Agreement” has the meaning ascribed to it in the Recitals of this Agreement

 

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

 

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

 

11

 

“Fee Letter” means
the letter agreement with respect to fees related to this Agreement between
Borrower, DB and Deutsche Bank Securities Inc. dated on or before the Closing
Date.

 

“Fiscal Quarter”
has the meaning assigned to such term in Section 7.12 of this
Agreement.

 

“Fiscal Year” has
the meaning assigned to such term in Section 7.12 of this
Agreement.

 

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

 

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

 

“Foreign Pension Plan”
means any plan, fund (including, without limitation, any super-annuation fund)
or other similar program established or maintained outside of the USA by
Borrower or one or more of its Subsidiaries or their ERISA Affiliates primarily
for the benefit of employees of Borrower or such Subsidiaries or such ERISA
Affiliates residing outside the USA, which plan, fund, or similar program
provides or results in, retirement income or a deferral of income in
contemplation of retirement, and which is not subject to ERISA or the Code.

 

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

 

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

 

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

 

12

 

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

 

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

 

“Headquarters Mortgage
Loan Documents” means a mortgage or deed of trust, assignment of rents and
leases and other customary mortgage loan documents entered into by Huntsman
Headquarters Corporation, a Utah corporation, in connection with the mortgaging
of the building located at 500 Huntsman Way, Salt Lake City, Utah and any
agreements or documents entered into by Huntsman Headquarters Corporation
evidencing the renewal, replacement or refinancing of the Indebtedness governed
thereby in an amount not to exceed the principal amount thereof on the Closing
Date.

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

“Horizon Subordinated
Note” means that certain Amended and Restated Subordinated Promissory Note
dated July 2, 2001 made by Borrower and payable to the order of Horizon
Ventures, L.C., a Utah limited liability company, as amended or modified in
accordance with the terms hereof.

 

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

 

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

 

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

 

“Huntsman Affiliate”
means any Affiliate of Borrower (other than Borrower’s Subsidiaries).

 

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

 

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

 

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

 

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

 

(iii)          all
Capitalized Lease Obligations;

 

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

 

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

 

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

 

14

 

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

 

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

 

(ix)           Guarantee
Obligations of such Person;

 

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

 

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

 

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

 

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

 

“Intercreditor
Agreement” means that certain Second Amended and Restated Intercreditor
Agreement, dated the date hereof, by and among the Collateral Agent,
Administrative Agent, the Revolving Collateral Agent, the Revolving
Administrative Agent, DB as beneficiary of the Mortgages, HSBC Bank USA,
National Association (as successor to HSBC Bank USA), as trustee for the Senior
Secured Notes and Borrower, in the form of Exhibit 1.2 to the Security
Agreement, as amended, modified or supplemented in accordance with the terms
thereof.

 

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

 

15

 

“Interest Expense”
means, for Borrower and its Restricted Subsidiaries with respect to any period,
the sum of (x) total interest expense for Borrower and its Restricted
Subsidiaries to the extent reflected on a consolidated financial statement of
Borrower, determined on a consolidated basis in accordance with GAAP and (y)
total cash dividends paid on any preferred Capital Stock of Borrower and its
Restricted Subsidiaries to a Person other than Borrower or any of its
Restricted Subsidiaries.  As used in this
definition, the term “interest” shall include, without limitation, all interest
and fees payable with respect to the Obligations under this Agreement (other
than fees which may be capitalized as transaction costs in accordance with
GAAP), any discount in respect of sales of accounts receivable and/or related
contract rights and the interest portion of Capitalized Lease Obligations
during such period, all as determined in accordance with GAAP, but shall not
include, to the extent otherwise includable therein, Restructuring Charges of
the type described in clause (a) of the definition thereof.

 

“Interest Payment Date”
means (a) as to any Base Rate Loan, (x) the last Business Day of each March,
June, September and December to occur while such Loan is outstanding and (y)
the date on which all of the Loans hereunder are paid in full, (b) as to any
Eurodollar Loan, the last day of the Interest Period applicable thereto and (c)
as to any Eurodollar Loan having an Interest Period longer than three months,
at the end of each three month anniversary of the first day of the Interest
Period applicable thereto; provided, however, that, in addition
to the foregoing, the date upon which any of the Term B Loans have been paid in
full shall be deemed to be an “Interest Payment Date” with respect to any
interest which is then accrued hereunder for such Loans.

 

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

 

provided that:

 

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

 

(ii)           any
Interest Period pertaining to a Eurodollar Loan that begins on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period shall end on the last Business Day of such calendar month;

 

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

 

16

 

(iv)          the
initial Interest Period for any Eurodollar Loan shall commence on the date of
such Borrowing of such Eurodollar Loan (including the date of any conversion
thereto from a Loan of a different Type) and each Interest Period occurring
thereafter in respect to such Eurodollar Loan shall commence on the last day of
the immediately preceding Interest Period; and

 

(v)           no
Interest Period in respect to any Borrowing of Term B Loans shall be selected
which extends beyond any date upon which a mandatory repayment of such Term B
Loans will be required to be made under Section 4.2(a) if the aggregate
principal amount of Term B Loans which have Interest Periods which will expire
after such date will be in excess of the aggregate principal amount of Term B
Loans then outstanding less the aggregate amount of such required prepayment.

 

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

 

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

 

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

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Mandatory Prepayment
Date” has the meaning assigned to that term in Section 4.3(d).

 

18

 

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

 

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

 

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

 

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

 

“Maturity Date”
means March 31, 2010, or such earlier date as the outstanding Term B Loans
shall have been reduced to $0 pursuant to this Agreement.

 

“Membership Interests”
shall mean the limited liability company interests of Borrower.

 

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

 

“Mortgaged Property”
means, collectively, all of the properties of Borrower and the Subsidiaries of
Borrower defined as “Mortgaged Property” in each of the respective Mortgages
including, without limitation, the properties listed on Schedule 6.21(c)
identified as Mortgaged Property and any other property which becomes Mortgaged
Property pursuant to Section 7.11.

 

“Mortgages” means,
collectively, (i) the mortgage and leasehold mortgages in form and substance
satisfactory to Administrative Agent each dated as of the Closing Date or a
date prior thereto and executed by Borrower or any Restricted Subsidiary of
Borrower, as mortgagor, in favor of the Collateral Agent (or its designee) for
the benefit of the Lenders, as mortgagee, relating to the Mortgaged Property,
and (ii) any other mortgage, deed of trust or

 

19

 

similar agreement
executed by Borrower or a Subsidiary of Borrower pursuant to which such Person
shall have granted a mortgage to Administrative Agent (or its designee) for the
benefit of the Lenders, as each such agreement may at any time be amended,
supplemented, restated or otherwise modified in accordance with the terms
thereof and in effect.

 

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

 

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

 

“Net Offering Proceeds”
means the proceeds received from the issuance of any Capital Stock (other than
(i) Capital Stock issued in connection with the exercise of stock options
granted pursuant to a stock option plan, or (ii) from any contribution to
capital with respect to existing Capital Stock) net of the actual liabilities
for reasonably anticipated cash taxes in connection with such issuance or
incurrence, if any, any underwriting, brokerage and other customary selling
commissions incurred in connection with such issuance or incurrence, and
reasonable legal, advisory and other fees and expenses, including title and
recording tax expenses, if any, incurred in connection with such issuance or
incurrence.

 

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

 

“Non-U.S. Participant”
means any Lender that is not a United States person within the meaning of Code
section 7701(a)(30).

 

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

 

“Notice Office”
means the office of the Administrative Agent located at 90 Hudson Street, 5th
Floor, Jersey City, NJ 07302 or such other office as the Administrative Agent
may designate to Borrower and the Lenders from time to time.

 

20

 

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

 

“Operating Financing
Lease” means a lease of the type described in clause (xi) of the definition
of “Indebtedness”.

 

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

 

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

 

“Payment Office”
means, with respect to Administrative Agent, 60 Wall Street, New York, NY 10005
or such other address as Administrative Agent may from time to time specify in
accordance with Section 12.3 of this Agreement.

 

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

 

“Perfection
Certificates” has the meaning assigned to that term in Section 5.1(a)(v).

 

“Permitted Australian
Proceeds” has the meaning assigned to that term in Section 8.7(h).

 

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

 

“Permitted Real
Property Encumbrances” means (i) those liens, encumbrances and other
matters affecting title to any Mortgaged Property listed in the applicable
title policy in respect thereof (or any update thereto) and found, on the date
of delivery of such title policy to Administrative Agent in accordance with the
terms hereof, reasonably acceptable by Administrative Agent, (ii) as to any
particular real property at any time, such easements, encroachments, covenants,
restrictions, rights of way, minor defects, irregularities or encumbrances on
title which do not, in the reasonable opinion of Administrative Agent,
materially impair such real property for the purpose for which it is held by
the mortgagor or owner, as the case may be, thereof, or the Lien held by
Administrative Agent, (iii) municipal and zoning laws, regulations, codes and
ordinances, which are not violated in any material respect by the existing
improvements and the present use made by the mortgagor or owner, as the case
may be, of such real property, (iv) general real estate taxes and assessments
not yet delinquent, and (v) such other items as Administrative Agent may
consent to.

 

21

 

“Permitted Unsecured
Debt” means unsecured Indebtedness (other than Indebtedness permitted by Section
8.2(d)) on terms and conditions and in form and substance satisfactory to
Administrative Agent; provided, that such terms and conditions shall not
be more restrictive to Borrower than those set forth herein and shall be at or
below a market interest rate for comparable instruments and, in no event shall
any scheduled principal payments be required to be made prior to the Maturity
Date.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Prepayment Option
Notice” has the meaning assigned to that term in Section 4.3(d).

 

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

 

“Qualified Public
Offering” means the initial public offering (and any subsequent public
offering) of the common equity of Holdco II or an entity of which Holdco II is
a Wholly-Owned Subsidiary (Holdco II or such other entity, the “Issuer”)
(including any such sale pursuant to any underwriter’s exercise of any
overallotment options); provided, that the gross proceeds of any such
initial public offering exceed $500,000,000.

 

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

 

22

 

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

 

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

 

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

 

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

 

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

 

“Replaced Lender”
shall have the meaning ascribed to it in Section 3.6 hereof.

 

“Replacement Lender”
shall have the meaning ascribed to it in Section 3.6 hereof.

 

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

 

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

 

23

 

“Required Note Offer
Amount Proceeds” shall mean (i) with respect to any Asset Disposition, the
amount of any Net Sale Proceeds which would be required by the terms of the
Senior Secured Notes Indenture to be applied to offer to purchase Senior
Secured Notes and (ii) with respect to the proceeds of any Recovery Event, the
amount of any such proceeds which would be required by the terms of the Senior
Secured Notes Indenture to offer to purchase Senior Secured Notes; in each case
(x) including amounts which are required under the terms of the Senior Secured
Notes Indenture to be accumulated to make such an offer, (y) assuming no
reinvestment of such proceeds or expenditure of such proceeds to purchase replacement
properties or assets and (z) after giving effect to (1) any prepayment of Loans
(as defined in the Revolving Credit Agreement) required by the terms of the
Revolving Credit Agreement and (2) prepayment of Term B Loans to the maximum
extent permitted by the Senior Secured Notes Indenture without requiring an
offer to repurchase Senior Secured Notes.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Restricted Subsidiary Guarantee Agreement” has the
meaning assigned to that term in Section 5.1(a)(iii)(A).

 

“Restructuring Charges”
means (a) call premiums and call protection payments paid in connection with
prepayments of Indebtedness with proceeds of a Qualified Public

 

24

 

Offering and each
write-off of deferred financing costs due to any early extinguishment of
Indebtedness occurring on or after the date hereof, (b) non-recurring
restructuring charges incurred during the preceding three Fiscal Quarters
ending June 30, 2004, in an aggregate amount not to exceed $25,000,000, and (c)
non-recurring restructuring charges incurred from July 1, 2004 until January 1,
2006, in an aggregate amount not to exceed $50,000,000; provided that
when the charges set forth in clause (c) are added with the charges set forth
in clause (b), the cash portion of such charges shall not exceed $30,000,000.

 

“Revolving
Administrative Agent” means the “Administrative Agent” as such term is
defined in the Revolving Credit Agreement.

 

“Revolving Collateral”
means the “Collateral” as such term is defined in the Revolving Credit
Agreement.

 

“Revolving Collateral
Agent” means the “Collateral Agent” as such term is defined in the
Revolving Credit Agreement.

 

“Revolving Credit
Agreement” means that certain Revolving Credit Agreement entered into on
the Closing Date by and among Borrower, DB, as administrative agent, and the
other financial institutions and other parties thereto, together with any
agreement or agreements from time to time executed by the Borrower to evidence
any refinancings or successive refinancings of all or any part of the Revolving
Loans, together with any amendments, modifications or supplements to, or
restatements of, any of the foregoing providing on the Closing Date for
commitments of the Lenders thereunder to make Revolving Loans in an aggregate
principal amount of not more than $350,000,000.

 

“Revolving Loan
Obligations” means the “Obligations” as that term is defined in the
Revolving Credit Agreement.

 

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

 

“Revolving Security
Documents” means “Security Documents” as such term is defined in the
Revolving Credit Agreement.

 

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

 

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

 

“Scheduled Term B
Loans Principal Payments” means, with respect to the principal payments on
the Term B Loans for each date set forth below, the Dollar amount set

 

25

 

forth opposite
thereto, as reduced from time to time pursuant to Sections 4.1 and 4.2
of this Agreement:

 

	
  Date

  	
   

  	
  Scheduled Term B

  Loans Principal Payment

  	
   

  
	
  December 31,
  2005

  	
   

  	
  $7.15 million

  	
   

  
	
  December 31,
  2006

  	
   

  	
  $7.15 million

  	
   

  
	
  December 31,
  2007

  	
   

  	
  $7.15 million

  	
   

  
	
  December 31,
  2008

  	
   

  	
  $7.15 million

  	
   

  
	
  December 31,
  2009

  	
   

  	
  $7.15 million

  	
   

  
	
  March 31, 2010

  	
   

  	
  $679,250,000, or the
  then remaining principal balance

  	
   

  

 

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

 

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

 

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

 

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

 

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

 

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

 

“Senior Secured Notes”
shall mean those certain 11-5/8% senior secured notes due October 15, 2010
issued by the Borrower pursuant to the terms of the Senior Secured Notes
Indenture, and secured by the Collateral on a pari passu basis with the Obligations.

 

“Senior Secured Notes
Indenture” shall mean that certain Indenture dated as of September 30, 2003
among Borrower, the guarantors named therein and HSBC Bank USA,

 

26

 

National
Association (as successor to HSBC Bank USA), as trustee for the holders of the
Senior Secured Notes (as the same may be amended in compliance with this
Agreement) and any supplemental indenture or additional indenture to be entered
into with respect to the Senior Secured Notes; provided, that (i) the
terms and conditions thereof shall be satisfactory to the Administrative Agent
and, in any event, not be more restrictive to Borrower than those set forth
herein, (ii) the Senior Secured Notes shall, at the date of issuance, be at or
below a market interest rate for comparable instruments and (iii) in no event
shall any scheduled principal payments be required to be made on the Senior
Secured Notes prior to the Maturity Date.

 

“Senior Secured Notes
Obligations” shall mean the obligations incurred by Borrower under the
Senior Secured Notes Indenture, as evidenced by the Senior Secured Notes.

 

“Senior Subordinated
Notes” means those certain 9-1/2% Senior Subordinated Notes of the Borrower
due 2007 and Senior Subordinated Floating Rate Notes of the Borrower due 2007,
each issued pursuant to the applicable Senior Subordinated Notes Indentures.

 

“Senior Subordinated
Notes Indentures” means these certain indentures as amended by those
certain amendments, dated as of June 14, 2002 by and between Borrower, as
Issuer, each of the Guarantors named therein and Wilmington Trust Company, as
Trustee.

 

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

 

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

 

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

 

“Tax Sharing Agreement”
means that certain tax sharing agreement dated as of September 30, 2002 by and
between Borrower and Holdco II, initially substantially in the form of Exhibit
5.1(f), as amended or otherwise modified (including any replacement thereof
following a Qualified Public Offering with an agreement with the Issuer) from
time to time in accordance with Section 8.11.

 

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

 

“Term B Commitment”
means, with respect to any Lender, the principal amount set forth opposite such
Lender’s name on Schedule 1.1(a) hereto or in any Assignment and
Assumption Agreement under the caption “Amount of Term B Commitment”, as such
commitment may be adjusted from time to time pursuant to this Agreement, and “Term
B

 

27

 

Commitments” means
such commitments collectively, which commitments equal $715,000,000 in the
aggregate as of the date hereof.

 

“Term B Lenders”
means those Lenders providing Term B Loans hereunder and shall include any
Person which becomes a Term B Lender as contemplated by Section 2.4 or Section
12.8 of this Agreement.

 

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

 

“Term B Loan Maturity
Date” means March 31, 2010, or such earlier date as the outstanding Term B
Loans are required to be reduced to $0 pursuant to this Agreement.

 

“Term B Loan Ratable
Share” shall mean, as of any date of determination, a fraction, the
numerator of which is the total outstanding principal amount of Term B Loans as
of such date and the denominator of which is an amount equal to the sum of (i)
the total principal amount of Term B Loans outstanding as of such date and (ii)
the total principal amount of Senior Secured Notes outstanding as of such date.

 

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

 

“Threshold QPO
Proceeds Prepayment” means one or more prepayments of the principal amount
of Indebtedness for money borrowed of Borrower, its Restricted Subsidiaries or
HSCC from proceeds of a Qualified Public Offering which individually or in the
aggregate permanently reduce such Indebtedness by at least $200 million, with
not less than $150 million of such principal reduction permanently reducing
Loans hereunder and/or the Senior Secured Notes.

 

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

 

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

 

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

 

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

 

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

 

“Unrestricted
Subsidiary” means any Subsidiary listed on Schedule 1.1(b) of this
Agreement and any Subsidiary thereof or any Subsidiary of Borrower that at the
time of formation shall be designated an Unrestricted Subsidiary in an officer’s
certificate signed by two Responsible Financial Officers of the Borrower and
promptly delivered to Administrative Agent.

 

28

 

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

 

“USA” means the
United States of America.

 

“Waivable Prepayment”
has the meaning assigned to that term in Section 4.3(d).

 

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

 

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

 

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

 

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

 

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

 

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

 

29

 

related
regulations shall include any amendments of same and any successor statutes and
regulations.

 

1.2          Accounting Terms; Financial
Statements.

 

(a)           All
accounting terms used herein but not expressly defined in this Agreement shall
have the respective meanings given to them in accordance with GAAP as applied
in effect on the date hereof in the USA. 
Except as otherwise expressly provided herein (including without
limitation, any modification to the terms hereof pursuant to Section 8.13),
all computations and determinations for purposes of determining compliance with
the financial requirements of this Agreement shall be made in accordance with
GAAP in effect in the USA on the date hereof and on a basis consistent with the
presentation of the financial statements delivered pursuant to, or otherwise
referred to in, Section 6.5. 
Notwithstanding the foregoing sentence, the financial statements
required to be delivered pursuant to Section 7.1 shall be prepared in
accordance with GAAP in the USA as in effect on the respective dates of their
preparation.  For purposes of the
financial terms set forth herein, whenever reference is made to a determination
which is required to be made on a consolidated basis (whether in accordance
with GAAP or otherwise) for Borrower and its Restricted Subsidiaries or for
Borrower and its Subsidiaries (other than Unrestricted Subsidiaries), such
determination shall be made as if each Unrestricted Subsidiary were
wholly-owned by a Person not an Affiliate of Borrower.

 

(b)           Solely
for purposes of delivery of the financial statements required by Sections
7.1(a), (b) and (c), HF II Australia Holdings Company LLC,
Huntsman Australia Holdings Corp., HCPH Holdings Pty Limited, Huntsman Chemical
Australia Unit Trust and their Subsidiaries (collectively, the “Australian
Consolidated Entities”), Huntsman Verwaltungs GmbH and HSCC and HSCHC shall
be deemed to be Restricted Subsidiaries; provided, however,
concurrently with the delivery of the officer’s certificate required by Section
7.2(b), for purposes of calculating compliance with the financial covenants
hereof, Borrower shall also deliver to Administrative Agent statements
excluding the Unrestricted Subsidiaries, and, upon request of Administrative
Agent, reflecting the consolidating entries pertaining to the Unrestricted
Subsidiaries existing on the Closing Date, in each case in form and substance
satisfactory to the Administrative Agent.”

 

ARTICLE II

 

AMOUNT AND TERMS OF CREDIT

 

2.1          The Term B Loans.

 

Each Term B Lender,
severally and for itself alone, hereby agrees, on the terms and subject to the
conditions hereinafter set forth and in reliance upon the representations and
warranties set forth herein and in the other Loan Documents, to make a loan
(each such loan, a “Term B Loan” and collectively, the “Term B Loans”)
to Borrower on the Closing Date in an aggregate principal amount equal to the
Term B Commitment of such Term B Lender. 
The Term B Loans (i) shall be incurred by Borrower pursuant to a single
drawing, which shall be on the Closing Date, (ii) shall be denominated in
Dollars, (iii) shall be made as Eurodollar Loans with an Interest Period
acceptable to Administrative Agent not in excess of seven days and,

 

30

 

except as
hereinafter provided, may, at the option of Borrower, be maintained as and/or
converted into Base Rate Loans or Eurodollar Loans, provided, that all
Term B Loans made by the Term B Lenders pursuant to the same Borrowing shall,
unless otherwise specifically provided herein, consist entirely of Term B Loans
of the same Type and (iv) shall not exceed for any Lender at the time of
incurrence thereof on the Closing Date that aggregate principal amount which
equals the Term B Commitment of such Lender at such time.  Each Term B Lender’s Term B Commitment shall
expire immediately and without further action on the Closing Date if the Term B
Loans are not made on the Closing Date. 
No amount of a Term B Loan which is repaid or prepaid by Borrower may be
reborrowed hereunder.

 

2.2          Term B Notes.

 

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

 

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

 

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

 

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

 

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

 

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

 

31

 

provided, that at no time shall
there be outstanding more than ten (10) Interest Periods with respect to
Eurodollar Loans for Term B Loans.

 

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

 

(A)          the proposed
Conversion Date or Continuation Date;

 

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

 

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

 

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

 

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

 

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

 

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

 

2.4          Additional Term B Loans.

 

(a)           Borrower
shall have the right at any time, so long as no Unmatured Event of Default or
Event of Default then exists, and from time to time, to incur from one or more

 

32

 

existing Lenders and/or other Persons that are Eligible
Assignees and which, in each case, agree to make such loans to Borrower, loans
and commitments to make loans in an aggregate principal amount not to exceed
$25,000,000 less the amount of Senior Secured Notes issued after the Closing
Date, which loans shall constitute Term B Loans hereunder (the “Additional
Term B Loans”); provided, that the terms and conditions of any
Additional Term B Loans shall be the same as those applicable to the existing
Term B Loan.

 

(b)           In
the event that Borrower desires to incur Additional Term B Loans, Borrower will
enter into an amendment with the lenders (who shall by execution thereof become
Lenders hereunder if not theretofore Lenders) to provide for such Additional
Term B Loans, which amendment shall be in form and substance reasonably
acceptable to Administrative Agent and consistent with the terms of this Section
2.4 and of the other provisions of this Agreement.  No consent of any Lender (other than any
Lender making Additional Term B Loans) is required to permit the Additional
Term B Loans contemplated by this Section 2.4(b) or the aforesaid
amendment to effectuate the Additional Term B Loans.  This section shall supercede any provisions
contained in this Agreement, including, without limitation, Section 12.1,
to the contrary.

 

ARTICLE III

 

INTEREST AND FEES

 

3.1          Interest.

 

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

 

(b)           Payment of Interest.  Interest
on each Loan shall be payable in arrears on each Interest Payment Date; provided,
however, that interest accruing pursuant to Section 3.1(d) shall
be payable from time to time on demand. 
Interest shall also be payable on the date of any payment of principal of
the Term B Loans for the portion of the Loans so repaid and upon payment
(including prepayment) in full of all of the Loans.

 

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

 

(d)           Default Interest.  Notwithstanding
the rates of interest specified herein, effective on the date 30 days after the
occurrence and continuance during such 30 day period of any Event of Default
(other than the failure to pay Obligations when due) and for so long thereafter
as any such Event of Default shall be continuing, and effective immediately
upon any failure to pay any Obligations or any other amounts due under any of
the Loan Documents when due, whether by acceleration or otherwise, the
principal balance of each Loan then outstanding

 

33

 

and, to the extent permitted by applicable law, any
interest payment on each Loan not paid when due or other amounts then due and
payable, shall bear interest payable on demand, after as well as before
judgment, at a rate per annum equal to the Default Rate.

 

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

 

3.2          Fees.

 

(a)           Arranger Fees.  Borrower shall pay to Administrative Agent on
the Closing Date the fees set forth in the Fee Letter.

 

(b)           Agency Fees.  Company shall
pay to Administrative Agent for its own account, agency and other loan fees in
the amount and at the times set forth in the Fee Letter.

 

3.3          Computation of Interest and Fees.

 

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

 

3.4          Compensation For Funding Losses.

 

Borrower shall compensate
each Lender, upon its written request (which request shall set forth the basis
for requesting such amounts, showing the calculation thereof in reasonable
detail), for all losses, expenses and liabilities (including, without
limitation, any interest paid by such Lender to lenders of funds borrowed by it
to make or carry its Loans to the extent not recovered by the Lender in
connection with the liquidation or reemployment of such funds and including the
compensation payable by such Lender to a Participant) and any loss sustained by
such Lender in connection with the liquidation or re-employment of such funds
(including, without limitation, a return on such liquidation or re-employment
that would result in such Lender receiving less than it would have received had
such Loan remained outstanding until the last day of the Interest Period
applicable to such Loans) which such Lender may sustain as a result of:  (i) for any reason (other than a default by
such Lender or Administrative Agent) a continuation of, or conversion from or
into, Eurodollar Loans does not occur on a date specified therefor in a Notice
of Conversion or Continuation (whether or not withdrawn); (ii) any payment,
prepayment or conversion or continuation of any of its Eurodollar Loans
occurring for any reason whatsoever on a date which is not the last day of an
Interest Period applicable thereto;

 

34

 

(iii) any
repayment of any of its Eurodollar Loans not being made on the date specified
in a notice of payment given by Borrower; or (iv)(A) any other failure by
Borrower to repay its Eurodollar Loans when required by the terms of this
Agreement or (B) an election made by Borrower pursuant to Section 3.6.  Each Lender shall submit its written request
as to additional amounts owed such Lender under this Section 3.4 to
Borrower and Administrative Agent within ten Business Days of the event giving
rise to such request, which request shall, absent manifest error, be final,
conclusive and binding for all purposes. 
Calculation of all amounts payable to a Lender under this Section 3.4
shall be made as though that Lender had actually funded its relevant Eurodollar
Loan through the purchase of a Eurodollar deposit bearing interest at the
Eurodollar Rate in an amount equal to the amount of that Loan, having a
maturity comparable to the relevant Interest Period and through the transfer of
such Eurodollar deposit from an offshore office of that Lender to a domestic
office of that Lender in the United States of America; provided, however,
that each Lender may fund each of its Eurodollar Loans in any manner it sees
fit and the foregoing assumption shall be utilized only for the calculation of
amounts payable under this Section 3.4.

 

3.5          Increased Costs, Illegality, Etc.

 

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

 

(i)            on any
Interest Rate Determination Date that, by reason of any changes arising after
the date of this Agreement affecting the interbank Eurodollar market, adequate
and fair means do not exist for ascertaining the applicable interest rate on
the basis provided for in the definition of the Eurodollar Rate applicable to
such Loan for the applicable Interest Period;

 

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

 

35

 

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

 

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

 

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

 

36

 

(c)           Capital Requirements.  If,
at any time after the date of this Agreement, any Lender determines that the
introduction of or any change in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the force of
law) concerning capital adequacy, or any change in interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency, will have the effect of increasing the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender based on the existence of such Lender’s Loans hereunder
or its obligations hereunder, then Borrower shall pay to such Lender, upon its
delivery of the written notice hereafter referred to, therefor, such additional
amounts as shall be required to compensate such Lender or such other
corporation for the increased cost to such Lender or such other corporation or
the reduction in the rate of return to such Lender or such other corporation as
a result of such increase of capital.  In
determining such additional amounts, each Lender will act reasonably and in
good faith and will use averaging and attribution methods which are reasonable
and which will, to the extent the increased costs or reduction in the rate of
return relates to such Lender’s commitments or obligations in general and are
not specifically attributable to the obligations hereunder, cover all
commitments and obligations similar to the obligations of such Lender hereunder
whether or not the loan documentation for such other commitments or obligations
permits the Lender to make the determination specified in this Section 3.5(c),
and such Lender’s determination of compensation owing under this Section
3.5(c) shall, absent manifest error, be final and conclusive and binding on
all the parties hereto.  Each Lender,
upon determining that any additional amounts will be payable pursuant to this Section
3.5(c) will give prompt written notice thereof to Borrower, which notice
shall show the basis for calculation of such additional amounts, although the
failure to give any such notice shall not release or diminish any of Borrower’s
obligations to pay additional amounts pursuant to this Section 3.5(c); provided,
however, if the respective Lender has intentionally withheld or delayed
such notice, the respective Lender shall not be entitled to receive additional
amounts pursuant to this Section 3.5(c) for periods occurring prior to
the 180th day before the giving of such notice.

 

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

 

3.6          Replacement
of Lenders.

 

If any Lender is owed
increased costs under Section 3.5(a)(ii) or (iii) or Section
3.5(c) or Borrower is required to make any payments under Section 4.5(c)
to any Lender materially in excess of those of the other Lenders or as provided
in Section 12.1(b) in the case of certain refusals by a Lender to
consent to certain proposed amendments, changes, supplements, waivers,
discharges or terminations with respect to this Agreement or the other Loan
Documents which have been approved by the Required Lenders, Borrower shall have
the right, if no Event of Default or Unmatured Event of Default then exists, to
replace such Lender (the “Replaced

 

37

 

Lender”)
with one or more other Eligible Assignee or Assignees (collectively, the “Replacement
Lender”) acceptable to Administrative Agent; provided that (i) at
the time of any replacement pursuant to this Section 3.6, the Replaced
Lender and Replacement Lender shall enter into one or more assignment
agreements, in form and substance satisfactory to such parties and
Administrative Agent, pursuant to which the Replacement Lender shall acquire
all or a portion, as the case may be, of the outstanding Loans of the Replaced
Lender and (ii) all obligations of Borrower owing to the Replaced Lender
hereunder (including, without limitation, such increased costs and excluding
those specifically described in clause (i) above in respect of which the
assignment purchase price has been, or is concurrently being paid) shall be
paid in full to such Replaced Lender concurrently with such replacement.  Upon the execution of the respective
assignment documentation, the payment of amounts referred to in clauses (i) and
(ii) above and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate Note or Notes executed by Borrower, the
Replacement Lender shall become a Lender hereunder and the Replaced Lender
shall cease to be a Lender hereunder, except with respect to indemnification
provisions under this Agreement, which shall survive as to such Replaced
Lender.  The Replaced Lender shall be
required to deliver for cancellation its Notes to be cancelled on the date of
replacement, or if any such Note is lost or unavailable, such other assurances
or indemnification therefor as Borrower may reasonably request.

 

3.7          Change of Lending Office.

 

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

 

ARTICLE IV

 

PAYMENTS AND PREPAYMENTS

 

4.1          Voluntary
Prepayments.

 

Borrower shall have the
right to prepay any Loan in whole or in part from time to time on the following
terms and conditions:  (i) Borrower shall
give an irrevocable written notice (or telephonic notice promptly confirmed in
writing) to Administrative Agent, which such notice shall state Borrower’s
intent to prepay such Loans, the amount of such prepayment and the Loans to
which such prepayment is to be applied, which notice shall be given by Borrower
to Administrative Agent by 12:00 Noon (New York City time) at least three
Business Days prior to the date of such prepayment if a prepayment of
Eurodollar Loans or one Business Day for any other Loans and which notice shall
promptly be transmitted by Administrative Agent to each of the applicable
Lenders; (ii) each partial prepayment of any Borrowing shall be in an aggregate
principal amount of at least $1,000,000; (iii) Eurodollar Loans may only be
prepaid pursuant to

 

38

 

this Section
4.1 on the last day of an Interest Period applicable thereto, or on any
other day subject to Section 3.4; and (iv) a partial prepayment of
Eurodollar Loans shall not be made that would result in the remaining aggregate
outstanding principal amount thereof being less than the minimum principal
amount that would be required in respect of a similar Eurodollar Loans.  Each voluntary prepayment of Term B Loans
shall be applied first to the Scheduled Term B Loan Principal Payments due
within the twelve-month period following the date of such prepayment in direct
order of maturity and, thereafter, shall be applied pro rata to the Scheduled
Term B Principal Payments (after giving effect to the prepayments made to the
Scheduled Term B Loan Principal Payments due within such twelve-month period as
specified above).  The notice provisions,
the provisions with respect to the minimum amount of any prepayment and the
provisions requiring prepayments in integral multiples above such minimum
amount are for the benefit of Administrative Agent and may be waived
unilaterally by Administrative Agent.

 

4.2          Mandatory Prepayments.

 

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

 

(b)           Mandatory Prepayment Upon Certain Sales.  If
Borrower, HSCHC, HSCC or any of Borrower’s Restricted Subsidiaries receives any
Net Sale Proceeds attributable to any Asset Disposition, then (1) Borrower
shall on such date repay the Term B Loans in an aggregate amount equal to the
greater of (i) the Term B Loan Ratable Share of such Net Sale Proceeds and (ii)
100% of such Net Sale Proceeds less the applicable Required Note Offer
Amount Proceeds, provided, that with respect to no more than $40,000,000
in the aggregate of such Net Sale Proceeds in any Fiscal Year of Borrower, the
Net Sale Proceeds therefrom shall not be required to be so applied on such date
to the extent that no Event of Default or Unmatured Event of Default then
exists and Borrower delivers a certificate to the Administrative Agent on or
prior to such date stating that such Net Sale Proceeds shall be used to
purchase assets used or to be used in the businesses referred to in Section
8.9 within 180 days following the date of such Asset Disposition (which
certificate shall set forth the estimates of the proceeds to be so expended), provided,
further, that (i) pending such application Borrower shall promptly apply
such Net Sale Proceeds to reduce the loans outstanding under the Revolving
Credit Agreement, (ii) if all or any portion of such Net Sale Proceeds not so
applied to the repayment of Term B Loans are not so used (or contractually
committed to be used prior to the date, if any, on which such proceeds would
otherwise be required to be applied to make an offer to purchase Senior Secured
Notes) within such 180 day period, such remaining portion shall be applied on
the last day of the respective period as a mandatory repayment of principal of
outstanding Loans as provided above in this Section 4.2(b) and (iii) if
all or any portion of such Net Sale Proceeds are not required to be applied on
the 180th day referred to in clause (ii) above because such amount is
contractually committed to be used and subsequent to such date such contract is
terminated or expires without such portion being so used, then such remaining
portion shall be applied on the date of such termination or expiration as a
mandatory repayment of principal of outstanding Loans as provided in this Section
4.2(b); and, (2) with respect to any Required Note Offer

 

39

 

Amount Proceeds, Borrower shall apply such amounts in
accordance with the Senior Secured Notes Indenture; provided, however,
that, to the extent the Senior Secured Notes Indenture requires that an offer
to purchase Senior Secured Notes be made, Borrower shall, on the Business Day
following the last day for acceptance of such offer, apply the amount, if any,
of such offer which is not accepted by the holders of the Senior Secured Notes
to prepay Term B Loans.  Notwithstanding
the foregoing, for purposes of this Section 4.2(b), the Net Sale
Proceeds attributable to any Asset Disposition shall not include such proceeds
to the extent (i) such proceeds are directly attributable to the sale or
transfer of accounts receivables or inventory comprising a portion of the “Borrowing
Base,” as such term is defined in the Revolving Credit Agreement and (ii) an
adjustment to such “Borrowing Base” is made on the date of such Asset
Disposition pursuant to Section 4.5(e) of the Revolving Credit Agreement.  All prepayments of principal hereunder made
by Borrower pursuant to this Section 4.2(b) shall be applied in the
manner set forth in Section 4.3.

 

(c)           Mandatory Prepayment With Excess Cash Flow.  As
soon as practicable, and in any event by April 30th of each Fiscal Year, (A)
Borrower shall calculate the Excess Cash Flow for such Fiscal Year and (B)
Borrower shall make a mandatory prepayment of the Term B Loans in an amount
equal to seventy-five percent (75%) of such Excess Cash Flow; provided,
that so long as no Event of Default or Unmatured Event of Default then exists,
if the Leverage Ratio as of the last day of such recently completed Fiscal Year
is less than 4.0:1.0, then, instead of 75%, such percentage shall equal to 50%
of Excess Cash Flow (“Total Prepayment Amount”).  All prepayments of principal made hereunder
made by Borrower pursuant to this Section 4.2(c) shall be applied in the
manner set forth in Section 4.3.

 

(d)           Mandatory Prepayment With Proceeds of Capital
Stock.  If Borrower, any of Borrower’s Restricted
Subsidiaries, HSCHC or HSCC receives any Net Offering Proceeds from any
offering of Capital Stock or contribution to capital after the Closing Date
from a Person other than Borrower or its Subsidiaries, Borrower shall, subject
to Section 4.3(d), on the date of the receipt by such Person of such
proceeds prepay the Term B Loans in an amount equal to fifty percent (50%) of
such Net Offering Proceeds; provided, that Net Offering Proceeds from a
Qualified Public Offering shall not be required to be so applied on such date
to the extent that no Event of Default or Unmatured Event of Default then
exists and Borrower delivers a certificate to the Administrative Agent on or
prior to such date stating that such Net Offering Proceeds shall be used to
permanently repay Indebtedness for money borrowed of the Borrower or its
Subsidiaries within 14 days following the date of such Qualified Public
Offering (or within 35 days if the Indebtedness intended to be repaid requires
a notice of prepayment be given by Borrower and such notice is given within one
(1) Business Day after the date of such Qualified Public Offering (which
certificate shall set forth the estimates of the proceeds to be so expended), provided,
further, that (i) pending such application Borrower shall promptly apply
such Net Offering Proceeds to reduce the loans outstanding under the Revolving
Credit Agreement and (ii) if all or any portion of such Net Offering Proceeds
not so applied to the repayment of Term B Loans are not so used within such 14
or 31 day period, as applicable, such remaining portion shall be applied on the
day following the last day of the respective period as a mandatory repayment of
principal of outstanding Loans as provided above in this Section 4.2(d).  All prepayments of principal hereunder made
by Borrower pursuant to this Section 4.2(d) shall be applied in the
manner set forth in Section 4.3.

 

40

 

(e)           Mandatory Prepayment With Proceeds of
Permitted Unsecured Debt.  No later than the
Business Day of receipt by Borrower or any of Borrower’s Restricted
Subsidiaries of the cash proceeds (net of underwriting discounts, similar placement
fees and commissions and other reasonable costs and expenses associated
therewith) from the issuance of any Permitted Unsecured Debt of Borrower or any
of Borrower’s Restricted Subsidiaries, Borrower shall prepay the Term B Loans
in an aggregate amount equal to such net cash proceeds, provided, that
with respect to no more than $25,000,000 in the aggregate of such net cash
proceeds after the Closing Date, the net cash proceeds therefrom shall not be
required to be so applied on such date to the extent that no Event of Default
or Unmatured Event of Default then exists; provided  further, that
with respect to net cash proceeds in excess thereof, such net cash proceeds
shall also not be required to be so applied on such date to the extent that
Borrower delivers a certificate to the Administrative Agent on or prior to such
date stating that such net cash proceeds shall be used to permanently repay
Indebtedness for money borrowed of the Borrower or its Subsidiaries within 14
days following the date of incurrence of such Permitted Unsecured Debt (or
within 35 days if the Indebtedness intended to be repaid requires that a notice
of prepayment be given by Borrower and such notice is given within one (1)
Business Day after the date of such issuance of Permitted Unsecured Debt)
(which certificate shall set forth the estimates of the proceeds to be so
expended), provided, further, however, that (i) pending
such application Borrower shall promptly apply such net cash proceeds to reduce
the loans outstanding under the Revolving Credit Agreement and (ii) if all or
any portion of such net cash proceeds not so applied to the repayment of Term B
Loans are not so used within such 14 or 31 day period, as applicable, such
remaining portion shall be applied on the day following the last day of the
respective period as a mandatory repayment of principal of outstanding Loans as
provided above in this Section 4.2(e). 
All prepayments of principal hereunder made by Borrower pursuant to this
Section 4.2(e) shall be applied in the manner set forth in Section
4.3.

 

(f)            Mandatory Prepayment with Proceeds of Other
Debt.  No later than the Business
Day following receipt by Borrower, any of Borrower’s Restricted Subsidiaries,
HSCHC or HSCC of the cash proceeds (net of underwriting discounts, similar
placement fees and commissions, and other reasonable costs and expenses
associated therewith) (i) from the issuance or incurrence of Indebtedness
(other than the proceeds of Indebtedness which is expressly permitted under Section
8.2 hereof) or (ii) from the issuance of Senior Secured Notes (to the
extent the amount of Senior Secured Notes issued after the Closing Date, when
added to the Additional Term B Loans incurred pursuant to Section 2.4,
exceeds $25,000,000), Borrower shall prepay the Term B Loans in an amount equal
to such net cash proceeds.  All
prepayments of principal made by Borrower pursuant to this Section 4.2(f)
shall be applied in the manner set forth in Section 4.3.

 

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

 

(h)           Mandatory Prepayment Upon Recovery Event.  Within two (2) Business Days following each
date on which Borrower or any of its Restricted Subsidiaries receives any
proceeds from any Recovery Event, Borrower shall apply a portion of such

 

41

 

proceeds of such Recovery Event (net of taxes and
reasonable costs incurred in connection with such Recovery Event) as a
mandatory prepayment of principal of the Term B Loans, applied in the manner
set forth in Section 4.3, in an amount equal to the greater of (i) the
Term B Loan Ratable Share of such proceeds and (ii) 100% of such proceeds less
the amount of the applicable Required Note Offer Amount Proceeds relating to
such Recovery Event and, with respect to any Required Note Offer Amount
Proceeds, Borrower shall apply such amounts in accordance with the Senior
Secured Notes Indenture; provided, further, however, that,
to the extent the Senior Secured Notes Indenture requires that an offer to
purchase Senior Secured Notes be made, Borrower shall, on the Business Day
following the last day for acceptance of such offer, apply the amount, if any,
of such offer which is not accepted by the holders of the Senior Secured Notes
to prepay Term B Loans; provided that (1) so long as no Event of Default then
exists, if the net proceeds from any single or series of related Recovery
Events are less than $5,000,000, then no prepayment shall be required pursuant
to this Section 4.2(h), and (2) so long as no Event of Default then
exists, with respect to any single or series of related Recovery Events the net
proceeds therefrom which are equal to or greater than $5,000,000 but less than
10% of net property, plant or equipment as set forth on the most recently
delivered quarterly financial statements of Borrower (the “Threshold”),
such proceeds shall not be required to be so applied on such date to the extent
that (x) Borrower has delivered a certificate to the Administrative Agent on or
prior to such date stating that such proceeds shall be used to replace or
restore any properties or assets in respect of which such proceeds were paid
within 365 days following the date of the receipt of such proceeds (which
certificate shall set forth the estimates of the proceeds to be so expended); provided,
further, that

 

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

 

(ii)           pending such
application Borrower shall promptly apply such proceeds to reduce the loans
outstanding under the Revolving Credit Agreement,

 

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

 

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

 

42

 

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

 

4.3          Application of Prepayments.

 

(a)           Prepayments.  Except as
expressly provided in this Agreement, all prepayments of principal of the Term
B Loans made by Borrower pursuant to Section 4.2 shall be applied to the
payment of the unpaid principal amount of the Term B Loans in proportional
amounts equal to each Term B Lender’s Pro Rata Share of such prepayment; provided,
however, such prepayment shall be applied first to the Scheduled Term B
Loan Principal Payments due within the twelve-month period following the date
of such prepayment in direct order of maturity and, thereafter, shall be
applied pro rata to Scheduled Term B Loan Principal Payments (after giving
effect to the prepayments made to the Scheduled Term B Loan Principal Payments
due within such twelve-month period as specified above).  If any prepayment of Eurodollar Loans shall
reduce the outstanding amount of any Tranche of Eurodollar Loans to an amount
less than $10,000,000, such Eurodollar Loans shall immediately be converted
into Base Rate Loans.  All prepayments
shall include payment of accrued interest on the principal amount so prepaid,
shall be applied to the payment of interest before application to principal and
shall include amounts payable, if any, under Section 3.4.

 

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

 

(c)           Call Protection.  In the event that prior to the first
anniversary of the Closing Date, Borrower desires, or is required by the terms
hereof, to repay or prepay in whole or in part the Term B Loans with the
proceeds of a Qualified Public Offering or refinances all or part of the Term B
Loans with the proceeds of Indebtedness that, on the date of such refinancing,
bears interest at a rate less than the corresponding rate provided in Section
3.1(a) hereof, Borrower shall pay a prepayment fee to the Administrative
Agent for the benefit of the Term B Lenders equal to 1% of the principal amount
of the Term B Loans so repaid, prepaid or refinanced.  Solely for the purposes of this Section
4.3(c), any amendment, restatement or other modification to this Agreement
prior to the first anniversary of the Closing Date that reduces the rate of
interest applicable to the Term B Loans shall be treated as if the Loans
subject to such reduction were prepaid in full.

 

(d)                      Waiver of Certain
Prepayments by Lenders. 
Notwithstanding anything to the contrary contained in this Section
4.3 or elsewhere in this Agreement, to the

 

43

 

extent that Borrower has not fully utilized the
optional redemption provision of Section 5(b) of the Senior Secured Notes which
permits Borrower to redeem up to 35% of the aggregate principal amount of
Senior Secured Notes originally issued (including the original principal amount
of any additional notes issued under the Senior Secured Notes Indenture), with respect
to any requirement or election to prepay outstanding Term B Loans pursuant to Section
4.2(d) with the Net Offering Proceeds of a Qualified Public Offering
occurring prior to the first anniversary of the Closing Date (such amounts, the
“Waivable Prepayment”), Borrower shall, not less than 5 nor more than 20
Business Days prior to the earliest date specified in Section 4.2(d) for
such prepayment (the “Mandatory Prepayment Date”), provide to each Term
B Lender a written notice (each, a “Prepayment Option Notice”), which
shall refer to this Section 4.3(d) and shall (i) advise each Lender that
such prepayment may be waived and, to the extent practicable, specify the
aggregate estimated amount of such Waivable Prepayment, (ii) specify that any
Lender wishing to waive such prepayment must do so in whole and not in part and
in writing delivered to the Administration Agent no later than 3 Business Days
prior to the Mandatory Prepayment Date (or such later date acceptable to
Administrative Agent) and (iii) inform each Lender that failure to deliver such
written waiver notice shall be deemed an acceptance of the prepayment otherwise
required by Section 4.2(d).  Both
the Prepayment Option Notice and any waiver notice shall be given by telecopy,
confirmed by hand delivery or overnight courier service, in each case addressed
as provided in Section 12.3; provided that if directed by the
Administrative Agent, the waiver notice may be delivered by any other method
specified by the Administrative Agent On the date required under Section
4.2(d), Borrower shall pay to the Administrative Agent for the account of
each Lender which has not waived such prepayment, the aggregate amount of the
Waivable Prepayment which has not been waived in accordance with this Section
4.3(d) and soon as practicable thereafter (but in no event later than 35
days thereafter) shall apply the aggregate amount of the Waivable Prepayment
which has been waived in accordance with this Section 4.3(d) to reduce
the Indebtedness outstanding under the Senior Secured Notes.

 

4.4          Method and Place of Payment by
Borrower.

 

(a)           Except
as otherwise specifically provided herein, all payments under this Agreement
shall be made to Administrative Agent for the ratable account of the Lenders in
immediately available funds, no later than 1:00 P.M.  (New York City time) on the date when
due.  Any such payment shall be made to
such account of Administrative Agent as Administrative Agent shall specify by
notice to Borrower provided, that unless and until otherwise specified, all
such payments shall be made to Administrative Agent at its office at 90 Hudson
Street, Jersey City, NJ 07302. 
Administrative Agent will promptly distribute to each Lender its
applicable Pro Rata Share of the Term B Loan (or other applicable share as
expressly provided herein), of such principal, interest, fees or other amounts,
in like funds as received.  If and to the
extent that any such distribution shall not be so made by Administrative Agent
in full on the same day (if payment was actually received by Administrative
Agent prior to 1:00 p.m. (New York City time) on such day), Administrative
Agent shall pay to each Lender its ratable amount thereof and each such Lender
shall be entitled to receive from Administrative Agent, upon demand, interest on
such amount at the overnight Federal Funds Rate for each day from the date such
amount is paid to Administrative Agent until the date Administrative Agent pays
such amount to such Lender.  Any payment
which is received by Administrative Agent later than 1:00 P.M.  (New York City time) shall be deemed to have
been received on the immediately

 

44

 

succeeding Business Day and any applicable interest or
fee shall continue to accrue until such payment is deemed to have been
received.

 

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

 

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

 

4.5          Net Payments.

 

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

 

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

 

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

 

45

 

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

 

(iv)          taxes to
which the Lender becomes subject subsequent to the date referred to in clause
(iii) above as a result of a change in the residence, place of incorporation,
or principal place of business of the Lender, a change in the branch or lending
office of the Lender participating in the transactions set forth herein or
other similar circumstances or a result of the recognition by the Lender of
gain on the sale, assignment or participation by the Lender of the
participating interests in its creditor positions hereunder (such tax or taxes,
other than the tax or taxes described in Sections 4.5(a)(i) through (iv),
being herein referred to as “Tax” or “Taxes”).  If Borrower is required by law to make any
deduction or withholding of any Taxes from any payment due hereunder or under
any of the Loan Documents, then the amount payable will be increased to such
amount which, after deduction from such increased amount of all such Taxes
required to be withheld or deducted therefrom, will not be less than the amount
due and payable hereunder had no such deduction or withholding been
required.  A certificate as to any
additional amounts payable to a Lender under this Section 4.5 submitted
to Borrower by such Lender shall show in reasonable detail the amount payable
and the calculations used to determine in good faith such amount and shall,
absent manifest error, be final, conclusive and binding upon all parties
hereto.

 

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

 

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

 

46

 

reasonable detail, absent manifest error, shall be
final, conclusive and binding upon all parties hereto for all purposes.

 

(d)           (i)            To the extent permitted by
applicable law, each Lender that is a Non-U.S. Participant shall deliver to
Borrower and Administrative Agent on or prior to the Closing Date, or in the
case of a Lender that is an Assignee, on the date of such assignment to such
Lender, two accurate and complete original signed copies of IRS Form W-8BEN,
W-8ECI or W-8IMY (or any successor or other applicable form prescribed by the
IRS) certifying to such Lender’s entitlement to a complete exemption from, or a
reduced rate in, USA withholding tax on interest payments to be made under this
Agreement or any Note.  If a Lender that
is a Non-U.S. Participant is claiming a complete exemption from withholding on
interest pursuant to Section 881(c) of the Code, the Lender shall deliver
(along with two accurate and complete original signed copies of IRS Form
W-8BEN) a certificate substantially in the form of Exhibit 4.5(d) (any
such certificate, a “Section 4.5(d) Certificate”).  In addition, each Lender that is a Non-U.S.
Participant agrees that from time to time after the Closing Date (or, in the
case of a Lender that is an Assignee, after the date of assignment to such
Lender), when a lapse in time or change in circumstances renders the prior
certificates hereunder obsolete or inaccurate in any material respect, such
Lender shall, to the extent permitted under applicable law, deliver to Borrower
and Administrative Agent two new and accurate and complete original signed
copies of an IRS Form W-8BEN, W-8ECI, or W-8IMY (or any successor or other
applicable forms prescribed by the IRS), and if applicable, a new Section
4.5(d)(i) Certificate, to confirm or establish the entitlement to such
Lender or Agent to an exemption from, or reduction in, USA withholding tax on
interest payments to be made under this Agreement or any Note.

 

(ii)           Each Lender
that is not a Non-U.S. Participant (other than any such Lender which is taxed
as a corporation for USA federal income tax purposes) shall provide two
properly completed and duly executed copies of IRS Form W-9 (or any successor
or other applicable form) to Borrower and Administrative Agent certifying to
such Lender or Agent is exempt from USA backup withholding tax.  To the extent that a form provided pursuant
to this Section 4.5(d)(ii) is rendered obsolete or inaccurate in any
material respects as a result of change in circumstances with respect to the
status of a Lender, such Lender or Agent shall, to the extent permitted by
applicable law, deliver to Borrower and Administrative Agent revised forms
necessary to confirm or establish the entitlement to such Lender’s exemption
from USA backup withholding tax.

 

(e)           Each
Lender agrees that, as promptly as practicable after it becomes aware of the
occurrence of any event or the existence of any condition that would cause
Borrower to make a payment in respect of any Taxes to such Lender pursuant to Section
4.5(a) or a payment in indemnification for any Taxes pursuant to Section
4.5(c), it will use reasonable efforts to make, fund or maintain the Loan
(or portion thereof) of such Lender with respect to which the aforementioned
payment is or would be made through another lending office of such Lender if as
a result thereof the additional amounts which would otherwise be required to be
paid by such Borrower in respect of such Loans (or portions thereof) pursuant
to Section 4.5(a) or Section 4.5(c) would be materially reduced,
and if, as determined by such Lender, in its reasonable discretion, the making,
funding or maintaining of such Loans (or portions thereof) through such

 

47

 

other lending office would not otherwise materially
adversely affect such Loans or such Lender. 
Borrower agrees to pay all reasonable expenses incurred by any Lender in
utilizing another lending office of such Lender pursuant to this Section
4.5(e).

 

4.6          Sharing of Payments.

 

If any lender (a “Benefited
Lender”) shall at any time receive any payment of all or part of its Loans,
or interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by setoff, pursuant to events or proceedings of
the nature referred to in Section 10.1(e) or Section 10.1(f) hereof,
or otherwise) in excess of its applicable Pro Rata Share (or other pro rata
share as expressly provided herein) such Benefited Lender shall purchase for
cash from the other Lenders such portion of each such other Lender’s Loans, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such Benefited Lender to
share the excess payment or benefits of such collateral or proceeds ratably
with each Lender except to the extent expressly provided hereby; provided,
however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest unless the Benefited Lender from which such
excess payment is recovered is required by court order to pay interest thereon,
in which case each Lender returning funds to such Benefited Lender shall pay
its pro rata share of such interest. 
Borrower agrees that each Lender so purchasing a portion of another
Lender’s Loans may exercise all rights of payment (including, without
limitation, rights of setoff) with respect to such portion as fully as if such
Lender were the direct holder of such portion.

 

ARTICLE V

 

CONDITIONS OF CREDIT

 

5.1          Conditions Precedent to the
Effectiveness of the Agreement.

 

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

 

(a)           Credit
Documents.

 

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

 

(ii)           Security Documents.  Borrower, HSCC, HSCHC and each Restricted
Domestic Subsidiary of Borrower (other than IRIC) shall have duly authorized,
executed and delivered a Security Agreement in substantially the form of Exhibit
5.1(a)(ii) (as modified, supplemented or amended from time to time, the “Security
Agreement”) and shall have delivered to the Collateral Agent, all the
Pledged Securities and Pledged Intercompany Notes referred to therein then
owned, if any, by Borrower, (x) endorsed in blank in the case of promissory
notes

 

48

 

constituting Pledged Securities and (y)
together with executed and undated stock powers, in the case of Capital Stock
constituting Pledged Securities and the other documents and instruments
required to be delivered under the Security Agreement together with:

 

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

 

(B)          copies of
Requests for Information or Copies (Form UCC-1), or equivalent reports, listing
all effective financing statements or similar notices that name Borrower or its
Restricted Domestic Subsidiaries (by its actual name or any trade name,
fictitious name or similar name), or any division or other operating unit
thereof, as debtor and that are filed in the jurisdictions referred to in
clause (A), together with copies of such other financing statements (none of
which shall cover the Collateral except to the extent evidencing Permitted
Liens or for which Administrative Agent shall have received satisfactory evidence
of release);

 

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

 

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

 

(iii)         Subsidiary Guarantee Agreements.

 

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

 

(B)          Other Subsidiary Guarantee Agreements.  Huntsman Headquarters Corporation shall
have duly executed and delivered an Amended and Restated Subsidiary Guarantee
Agreement substantially in the form of Exhibit 5.1(b)(iii)(B)-(1) (as modified,
supplemented or amended from time to time, the “Headquarters Subsidiary
Guarantee Agreement”) and HSCC shall have duly executed and delivered the

 

49

 

Subsidiary Guarantee Agreement substantially
in the form of Exhibit 5.1(a)(iii)(B)-(2) (as modified, supplemented or
amended from time to time, the “HSCC Subsidiary Guarantee Agreement”
and, together with the Restricted Subsidiary Guarantee Agreement and the
Headquarters Subsidiary Guarantee Agreement, the “Subsidiary Guarantee
Agreements”).

 

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

 

(v)            Perfection.  Borrower shall have delivered to
Administrative Agent true and correct copies of Perfection Certificates in the
form of Exhibit 5.1(a)(v) (the “Perfection Certificates”), each
of which shall be in full force and

 

50

 

effect and in form and substance satisfactory
to Administrative Agent as of the Closing Date.

 

(vi)          Termination of Existing Credit Facilities.  On the Closing Date, the total commitments
under each of the Existing Credit Agreements shall have been terminated, all
loans thereunder shall have been repaid in full, together with interest
thereon, and all other amounts owing pursuant to such agreements shall have
been repaid in full and such agreements shall have been terminated on terms and
conditions satisfactory to Administrative Agent and the Required Lenders and be
of no further force or effect and the creditors thereunder shall have
terminated, released or modified all security interests and Liens on the assets
owned by Borrower and its Subsidiaries in a manner satisfactory to
Administrative Agent.

 

(vii)         Intercreditor Agreement.  Administrative Agent shall have received
a fully executed copy of the Intercreditor Agreement.

 

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

 

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

 

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

 

(ii)           Copies of
its bylaws or operating agreement, as the case may be, certified as of the Closing
Date by its corporate secretary or an assistant secretary;

 

(iii)         Resolutions of
its board of directors or equivalent governing body (a) approving and
authorizing the execution, delivery and performance of each of the Loan
Documents to which it is a party, and (b) approving and authorizing the
execution, delivery and performance of the other Loan Documents to which it is
a party and all transactions related thereto, in each case certified as of the
Closing Date by its corporate secretary or an assistant secretary as being in
full force and effect without modification or amendments; and

 

51

 

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

 

(c)           Revolving Credit Agreement.  Borrower
shall have executed and delivered the Revolving Credit Agreement providing for
commitments of the lenders thereunder to make Revolving Loans in an aggregate
principal amount of not more than $350 million or less than $275 million and
all conditions precedent to the effectiveness thereof shall have been satisfied
or waived.

 

(d)           Financial
Statements. 
Administrative Agent shall have received and reviewed, and be satisfied
with, (i) audited consolidated balance sheets and related statements of income,
stockholders’ equity and cash flows of Borrower prepared in accordance with
GAAP for each of the last two fiscal years ending more than 90 days prior to
the Closing Date, (ii) unaudited consolidated balance sheets and related
statements of income, stockholders’ equity and cash flows of Borrower prepared
in accordance with GAAP for each fiscal quarter ending after the last fiscal
year (other than the year-end fiscal quarter) covered by the Historical
Financial Statements and prior to 30 days prior to the Closing Date and for the
comparable periods of the preceding fiscal year (with respect to which the
independent auditors shall have performed a SAS 71 or SAS 100 review, as
applicable), (iii) forecasts of the financial performance of Borrower and its
subsidiaries and (iv) such other financial information as Administrative Agent
may request.

 

(e)           Certificates
and Opinions of Parties’ Counsel.

 

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

 

(ii)           Opinions of Credit Parties’ Counsel.  Lenders and their respective counsel
shall have received (A) originally executed copies of one or more favorable
written opinions of Vinson & Elkins L.L.P., counsel for the Credit Parties,
in form and substance reasonably satisfactory to Administrative Agent and its
counsel, dated the Closing Date and setting forth substantially the matters in
the opinions designated in Exhibit 5.1(e)(ii)-1 annexed hereto and such
other matters as Administrative Agent acting on behalf of Lenders may reasonably
request, (B) originally executed copies of one or more favorable written
opinions of Stoel Rives LLP, in form and substance reasonably satisfactory to
Administrative Agent and its counsel, dated the Closing Date and setting forth
substantially the matters in the opinions designated in Exhibit 5.1(e)(ii)-2
annexed

 

52

 

hereto and as such other matters as
Administrative Agent acting on behalf of Lenders may reasonably request, (C)
originally executed copies of one or more favorable written opinions of such
other local counsel to the Credit Parties as Administrative Agent may request
in form and substance reasonably satisfactory to Administrative Agent and its
counsel, dated the Closing Date and (D) evidence satisfactory to Administrative
Agent that Borrower has requested such counsel to deliver such opinions to
Lenders.

 

(iii)         Solvency
Certificate.  Administrative Agent
shall have received a certificate executed by a Responsible Officer on behalf
of each Credit Party dated the Closing Date and in the form of Exhibit
5.1(e)(iii) hereto.

 

(f)            Tax Sharing Agreement.  Administrative Agent shall have received a
certified copy of the fully executed Tax Sharing Agreement.

 

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

 

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

 

(i)            Litigation.  No litigation
by any entity (private or governmental) shall be pending or, to the best
knowledge of Borrower, threatened with respect to this Agreement, any other
Loan Document or any documentation executed in connection herewith or the
transactions contemplated hereby, or which Administrative Agent or the Required
Lenders shall determine could reasonably be expected to have a Material Adverse
Effect.

 

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

 

(k)           Adverse Change.  Since
December 31, 2003, nothing shall have occurred (and the Lenders shall have
become aware of no facts or conditions not previously known) which
Administrative Agent or the Required Lenders shall reasonably determine has, or
could have, a Material Adverse Effect.

 

(l)            Insurance.  Administrative
Agent shall be satisfied with the insurance coverage in effect on the Closing
Date pertaining to the assets of Borrower and its Restricted

 

53

 

Subsidiaries, and shall have received evidence
satisfactory to it that Administrative Agent shall have been named as a loss
payee, mortgagee and additional insured on all such policies of insurance, as
appropriate.

 

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

 

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

 

(o)           Structure.  The legal,
organizational and financial structure of Borrower and its Subsidiaries and the
financial, legal, accounting and tax matters relating to this Agreement and the
Revolving Credit Agreement shall be satisfactory to Administrative Agent.

 

(p)           Compliance with Law.  Borrower and each of its subsidiaries shall
be in compliance, in all material respects, with all applicable foreign and USA
federal, state and local laws and regulations, including all applicable
environmental laws and regulations.

 

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

 

ARTICLE VI

 

REPRESENTATIONS AND WARRANTIES

 

In order to induce the
Lenders to enter into this Agreement and to make the Loans, Borrower makes the
following representations and warranties:

 

6.1          Corporate Status.

 

Each of Borrower and each
of its Subsidiaries (i) is a duly organized and validly existing corporation,
partnership, limited liability company, trust or other entity in good standing
under the laws of the jurisdiction of its organization (or the equivalent
thereof in the case of Foreign Subsidiaries) except where the failure to be in
such good standing would not have a Material Adverse Effect, (ii) has the
corporate or partnership or other requisite power and

 

54

 

authority to own
its property and assets and to transact the business in which it is engaged and
presently proposed to engage in and (iii) is duly qualified and is authorized
to do business and is in good standing in each other jurisdiction where the
ownership, leasing or operation of property or the conduct of its business
requires such qualification, authorization or good standing, except for such
failure to be so qualified, authorized or in good standing, which, in the
aggregate, would not have a Material Adverse Effect.

 

6.2          Corporate Power and Authority.

 

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

 

6.3          No Violation.

 

Neither the execution,
delivery or performance by any Credit Party of the Loan Documents to which it
is a party (including, without limitation, the granting of Liens pursuant to
the Security Documents), nor compliance by it with the terms and provisions
thereof, nor the consummation of the transactions contemplated therein (i) will
contravene any provision of any Requirement of Law applicable to any Credit
Party, (ii) will conflict with or result in any breach of or constitute a
tortious interference with any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except pursuant
to the Security Documents) upon any of the property or assets of any Credit
Party pursuant to the terms of, any material Contractual Obligation to which
any Credit Party is a party or by which it or any of its property or assets is
bound or to which it may be subject, (iii) will violate any provision of any
Organizational Document of any Credit Party or (iv) will require any approval
of stockholders or any approval or consent of any Person (other than a
Governmental Authority) except as have been obtained on or prior to the Closing
Date or as set forth on Schedule 6.3.

 

6.4          Governmental and Other Approvals.

 

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

 

55

 

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

 

(a)           Financial Statements.  The
Historical Financial Statements copies of which have been furnished to
Administrative Agent prior to the date hereof, present fairly the financial
condition of the applicable Credit Party as of the date thereof.  The Historical Financial Statements
identified on Schedule 6.5(a) as audited financial statements for the
Fiscal Year ended December 31, 2003 have been examined by Deloitte &
Touche, independent certified public accountants, who delivered a report and
opinion that is not subject to any “going concern” or like qualification or
exception or any qualification or exception as to the scope of such audit.

 

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

 

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

 

(d)           Indebtedness.  Schedule
6.5(d) sets forth a true and complete list of (i) all Indebtedness of
Borrower, HSCHC and HSCC and its Restricted Subsidiaries (other than Loans,
Intercompany Indebtedness or Revolving Loans) that is outstanding as of the
Closing Date, to the extent that, in each case, such Indebtedness is in excess
of $1,000,000 (the “Existing Obligations”), in aggregate principal
amount thereof as of a date not more than three Business Days prior to the
Closing Date (and the aggregate amount of any undrawn commitments with respect
thereto as of the date specified therein), and (ii) Interest Rate Agreements,
the notional amount thereof and the name of the respective obligor and any
other entity which directly or indirectly guaranteed such debt.  No Existing Obligation has been incurred in
connection with, or

 

56

 

in contemplation of, the transactions contemplated
hereby.  Borrower has delivered or caused
to be delivered to Administrative Agent a true and complete copy of the form of
each instrument evidencing Indebtedness for money borrowed listed on Schedule
6.5(d) and of each instrument pursuant to which such Indebtedness for money
borrowed was issued.

 

(e)           Pro Forma.  The pro
forma balance sheet of Borrower attached hereto as Schedule 6.5(e)
(the “Pro Forma Balance Sheet”) presents fairly the financial condition
of Borrower at the date of such balance sheet and presents a good faith
estimate of the pro forma financial condition of Borrower and its Subsidiaries
on a consolidated basis (after giving effect to the transactions contemplated
hereby) at June 30, 2004.  The Pro Forma
Balance Sheet has been prepared using financial statements of Borrower and its
Subsidiaries which were prepared in accordance with GAAP consistently applied
(except as may be indicated in the notes thereto) subject to normal year-end
adjustments.

 

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

 

(g)           No Material Adverse Change.  As of the Closing Date and at any time
thereafter, there has been no material adverse change in the business,
condition (financial or otherwise), assets, liabilities or operations of
Borrower and its Restricted Subsidiaries taken as a whole since December 31,
2003 based on the financial statements delivered pursuant to Section 6.5(a).

 

6.6          Litigation.

 

There are no actions,
suits or proceedings pending or, to the best knowledge of Borrower, threatened
in writing against Borrower or any of its Subsidiaries (i) with respect to any
Loan Document seeking to enjoin Borrower’s or any Subsidiary’s performance
thereof or (ii) which would reasonably be expected to have a Material Adverse
Effect.

 

6.7          True and Complete Disclosure.

 

All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
Borrower or any of its Subsidiaries in writing (including electronically) to
any Lender (other than the Projections as to which Section 6.5(f)
applies) for purposes of or in connection with this Agreement or any
transaction contemplated herein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of Borrower or any of
its Subsidiaries in writing to any Lender for purposes of or in connection with
this Agreement or any transaction contemplated herein will be, true and
accurate in all

 

57

 

material respects
on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
(taken as a whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided.

 

6.8          Use of Proceeds; Margin Regulations

 

(a)           All
proceeds of the Term B Loans incurred on the Closing Date shall be used by
Borrower to (i) refinance the obligations under the Existing Term Credit
Agreement, (ii) repay the Existing Revolving Credit Agreement, and (iii) to pay
fees and expenses in connection with the issuance of the Term B Loans.

 

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

 

6.9          Tax Returns and Payments.

 

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

 

6.10        Compliance With ERISA.

 

(a)           Each
Plan has been operated and administered in a manner so as not to result in any
material liability of Borrower, its Subsidiaries and their ERISA Affiliates for
failure to comply with the applicable provisions of ERISA and the Code; no
Reportable Event which could reasonably be expected to result in the
termination of any Plan has occurred with respect to a Plan; to the best
knowledge of Borrower, no Multiemployer Plan is insolvent or in reorganization;
no Plan has an accumulated or waived funding deficiency or has applied for an
extension of any amortization period within the meaning of Section 412 of the
Code; neither Borrower nor any of its Subsidiaries nor any ERISA Affiliate has
incurred any material liability

 

58

 

to or on account of a Plan pursuant to Section 409,
502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section
4971 or 4975 of the Code; no proceedings have been instituted to terminate any
Plan using actuarial assumptions and computation methods consistent with
subpart 1 of Subtitle E of Title IV of ERISA, Borrower, its Subsidiaries and
their ERISA Affiliates would not have any material liability to any Plans which
are Multiemployer Plans in the event of a complete withdrawal therefrom, as of
the close of the most recent Fiscal Year of each such Multiemployer Plan; no
Lien imposed under the Code or ERISA on the assets of Borrower or any of its
Subsidiaries or any ERISA Affiliate exists or is likely to arise on account of
any Plan; and Borrower and its Subsidiaries do not maintain or contribute to
any employee welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides benefits to retired employees (other than as required by Section 601
of ERISA) or any employee pension benefit plan (as defined in Section 3(2) of
ERISA) the ongoing annual obligations with respect to either of which could
reasonably be expected to have a Material Adverse Effect.

 

(b)           (i)
Each Foreign Pension Plan is in compliance and in good standing (to the extent
such concept exists in the relevant jurisdiction) in all material respects with
all laws, regulations and rules applicable thereto, including all funding
requirements, and the respective requirements of the governing documents for
such Foreign Pension Plan; (ii) with respect to each Foreign Pension Plan
maintained or contributed to by Borrower or any of its Subsidiaries, (x) that
is required by applicable law to be funded in a trust or other funding vehicle
is in material compliance with applicable law regarding funding requirements,
and (y) that is not required by applicable law to be funded in a trust or other
funding vehicle, reasonable reserves have been established in accordance with
prudent business practice or where required by ordinary accounting practices in
the jurisdiction in which such Foreign Pension Plan is maintained; (iii) all
material contributions required to have been made by Borrower or any of its
Subsidiaries to any Foreign Pension Plan have been made within the time
required by law or by the terms of such Foreign Pension Plan; and (iv) to the
knowledge of Borrower or any of its Subsidiaries, no actions or proceedings
have been taken or instituted to terminate or wind-up a Foreign Pension Plan
with respect to which Borrower or any of its Subsidiaries or any of their ERISA
Affiliates could have any material liability.

 

6.11        Ownership of Property.

 

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

 

6.12        Capitalization of Borrower.

 

On the Closing Date, the
capitalization of Borrower is as set forth on Schedule 6.12 hereto.  All shares of Capital Stock of Borrower have
been duly authorized and validly issued and are fully paid and
non-assessable.  Except as set forth on Schedule
6.12, no authorized but unissued or treasury shares of Capital Stock of
Borrower are subject to any option, warrant,

 

59

 

right to call or
commitment of any kind or character.  A
complete and correct copy of each of the certificate of formation and the
operating agreement of Borrower in effect on the Closing Date has been
delivered to Administrative Agent. 
Except as set forth on Schedule 6.12, Borrower does not have any
outstanding stock or securities convertible into or exchangeable for any shares
of its Capital Stock, or any rights issued to any Person (either preemptive or
other) to subscribe for or to purchase, or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to any of its Capital
Stock or any stock or securities convertible into or exchangeable for any of
its Capital Stock (other than as set forth in the Organizational Documents of
Borrower).  Neither Borrower nor any of
its Subsidiaries is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its Capital Stock or
any convertible securities, rights or options of the type described in the
preceding sentence except for agreements the performance of which would not
violate this Agreement.  As of the Closing
Date, all of the issued and outstanding shares of Capital Stock of Borrower are
owned of record by the stockholders as set forth on Schedule 6.12
hereto.

 

6.13        Subsidiaries.

 

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

 

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

 

(c)           Restrictions on or Relating to Subsidiaries.  There
does not exist any consensual encumbrance or restriction on the ability of (i)
any Restricted Subsidiary of Borrower to pay dividends or make any other
distributions on its Capital Stock or any other interest or participation in
its profits owned by Borrower or any Restricted Subsidiary of Borrower, or to
pay any Indebtedness owed to Borrower or a Restricted Subsidiary of Borrower,
(ii) any Restricted Subsidiary of Borrower to make loans or advances to
Borrower or any of Borrower’s Restricted Subsidiaries or (iii) Borrower or any
of its Restricted Subsidiaries to transfer any of its properties or assets to
Borrower or any of its Restricted Subsidiaries, except, in each case, for such
encumbrances or restrictions permitted to exist under Section 8.12.

 

6.14        Compliance With Law, etc.

 

Neither Borrower nor any
of its Subsidiaries is in default under or in violation of any Requirement of
Law or material Contractual Obligation or under its Organizational

 

60

 

Documents, as the
case may be, in each case the consequences of which default or violation,
either in any one case or in the aggregate, would have a Material Adverse
Effect.

 

6.15        Investment Company Act.

 

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

 

6.16        Public Utility Holding Company Act.

 

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

 

6.17        Environmental Matters.

 

(i) The operations of and
the real property owned or operated by Borrower and each of its Subsidiaries is
in compliance with all applicable Environmental Laws except where the failure
to be in compliance, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect; (ii) Borrower and each of its
Subsidiaries has obtained and will continue to maintain all Environmental
Permits, and all such Environmental Permits are in good standing and Borrower
and its Subsidiaries are in compliance with all terms and conditions of such
Environmental Permits, except where failure to so obtain, maintain or comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect; (iii) neither Borrower nor any of its Subsidiaries nor
any of their present or past properties or operations (whether owned or leased)
is subject to: (A) any Environmental Claim or other written claim, request for
information, judgment, order, decree or agreement from or with any Governmental
Authority or private party related to any material violation of or material
non-compliance with Environmental Laws or Environmental Permits to the extent
any of the foregoing could reasonably be expected to have a Material Adverse
Effect, (B) any pending or, to the knowledge of Borrower, threatened judicial or
administrative proceeding, action, suit or investigation related to any
Environmental Laws or Environmental Permits which, if determined adversely to
Borrower or any of its Subsidiaries, could reasonably be expected to have a
Material Adverse Effect, (C) any Remedial Action which if not taken could
reasonably be expected to have a Material Adverse Effect or (D) any
liabilities, obligations or costs arising from the Release or substantial
threat of a material Release of a Contaminant into the environment regardless
of whether the Release or substantial threat of a material Release is occurring
on Borrower’s or any Subsidiaries present or past properties or at any other
location, in each case where such Release or substantial threat of a Material
Release could reasonably be expected to have a Material Adverse Effect; (iv)
neither Borrower nor any of its Subsidiaries has received any written notice or
claim to the effect that Borrower or any of its Subsidiaries is or may be
liable to any Person as a result of the Release or substantial threat of a
material Release of a Contaminant into the environment, which notice or claim
could reasonably be expected to result in a Material Adverse Effect; and (v) no
Environmental Lien has attached to any property (whether owned or leased) of
Borrower or of any of its Subsidiaries which could reasonably be

 

61

 

expected to have a
Material Adverse Effect, nor are there any facts or circumstances currently
known to Borrower or any of its Subsidiaries that may reasonably be expected to
give rise to such an Environmental Lien.

 

6.18        Labor Relations.

 

Neither Borrower nor any
of its Restricted Subsidiaries is engaged in any unfair labor practice that
could reasonably be expected to have a Material Adverse Effect.  There is (i) no significant unfair labor
practice complaint pending against Borrower or any of its Restricted
Subsidiaries or, to the best knowledge of Borrower, threatened against any of
them before the National Labor Relations Board or appropriate national court or
other forum, and no significant grievance or significant arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against Borrower or any of its Restricted Subsidiaries or, to the best
knowledge of Borrower, threatened against any of them or (ii) no significant
strike, labor dispute, slowdown or stoppage is pending against Borrower or any
of its Restricted Subsidiaries or, to the best knowledge of Borrower,
threatened against Borrower or any of its Restricted Subsidiaries, in each
case, except such as could not reasonably be expected to have a Material
Adverse Effect.

 

6.19        Intellectual Property.

 

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

 

6.20        Certain Fees.

 

No broker’s or finder’s
fees or commissions or any similar fees or commissions will be payable by
Borrower or any Restricted Subsidiary with respect to the incurrence and
maintenance of the Obligations, any other transaction under the Loan Documents
or any services rendered in connection with such transactions.

 

6.21        Security Documents.

 

(a)           Security Agreement Collateral.  The
provisions of the Security Documents are effective to create in favor of the
Collateral Agent for the benefit of the secured parties pursuant to the
Security Agreement, a legal, valid and enforceable security interest in all
right, title and interest of the applicable Credit Party in the Collateral
owned by such Credit Party, and the Security Agreement, together with the
Intercreditor Agreement, the filings of Form UCC-1 in all relevant
jurisdictions, and the other Security Documents creates a valid lien (with a
first lien on property, plant, equipment and other “Term and Note First
Priority Collateral”, as defined in the Intercreditor Agreement and a second
lien on receivables,

 

62

 

inventory, general intangibles and other “Revolver
First Priority Collateral”, as defined in the Intercreditor Agreement) on, and
security interest in, all right, title and interest of Borrower and such Credit
Parties in all of the Collateral described therein, subject to no other Liens
other than Permitted Liens.  Except for
titled vehicles, vessels and other collateral which may not be perfected
through the filing of financing statements under the Uniform Commercial Code of
the appropriate jurisdiction and which have an aggregate fair market value of
less than $5,000,000, all such liens have been or, upon the filing of the
financing statements delivered on the Closing Date, will be fully perfected
liens except for Permitted Liens.  The
recordation in the United States Patent and Trademark Office and in the United
States Copyright Office of assignments for security made pursuant to the Security
Agreement will be effective, under Federal law, to perfect the security
interest granted to the Collateral Agent in the trademarks, patents and
copyrights covered by the Security Agreement. 
The recordation with the United States Surface Transportation Board of
assignments for security made pursuant to the Security Agreement will be
effective under Federal law, to create a valid first lien in favor of the
Collateral Agent in the railcars covered by the Security Agreement.  Borrower and its Restricted Subsidiaries have
good and marketable title to all Collateral, free and clear of all Liens except
Permitted Liens.

 

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

 

(c)           Real Property Collateral.  The
Mortgages create, as security for the obligations purported to be secured
thereby, a valid and enforceable perfected security interest in and Lien on all
of the Mortgaged Property (including, without limitation, all fixtures and improvements
relating to such Mortgaged Property and affixed or added thereto on or after
the Closing Date) in favor of the Collateral Agent (or such other trustee as
may be named therein) for the benefit of the secured parties under the Security
Agreement, superior to and prior to the rights of all third Persons (except
that the security interest created in the Mortgaged Property may be subject to
the Permitted Liens related thereto) and subject to no other Liens (other than
Liens permitted under Section 8.1). 
Schedule 6.21(c) contains a true and complete list as of the
Closing Date of (x) each parcel of real property of Borrower and its Restricted
Subsidiaries with an estimated fair market value in excess of $1,000,000, (y)
the type of interest in such parcel of real property held by Borrower or such
Restricted Subsidiaries and (z) whether or not such parcel of real property is
Mortgaged Property.  Borrower or such
Restricted Subsidiaries have good and marketable title to all Mortgaged
Property free and clear of all Liens except those described in the first
sentence of this Section 6.21(c).

 

63

 

6.22        Asbestos Matters.

 

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

 

6.23        Anti-Terrorism
Law.

 

(a)           Neither
Borrower nor, to the knowledge of Borrower, any of its Affiliates is in
violation of any laws relating to terrorism or money laundering (“Anti-Terrorism
Laws”), including Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001 (the “Executive Order”), and the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, Public Law 107-56.

 

(b)           Neither
Borrower nor, to the knowledge of Borrower, any Affiliate or broker or other
agent of Borrower is, acting or benefiting in any capacity in connection with
any Loans hereunder is any of the following:

 

(i)            a person
that is listed in the annex to, or is otherwise subject to the provisions of,
the Executive Order;

 

(ii)           a person
owned or controlled by, or acting for or on behalf of, any person that is
listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order;

 

(iii)         a person with
which any Lender is prohibited from dealing or otherwise engaging in any
transaction by any Anti-Terrorism Law;

 

(iv)          a person that
commits, threatens or conspires to commit or supports “terrorism” as defined in
the Executive Order; or

 

(v)            a person
that is named as a “specially designated national and blocked person” on the
most current list published by the USA Treasury Department Office of Foreign
Assets Control (“OFAC”) at its official website or any replacement website or
other replacement official publication of such list.

 

(c)           Neither
Borrower nor, to the knowledge of Borrower, any broker or other agent of
Borrower, is acting in any capacity in connection with any Loans hereunder (i)
conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any person described in paragraph
(b) above, (ii) deals in, or otherwise engages in any transaction relating to,
any property or interests in property blocked pursuant to the Executive Order,
or (iii) engages in or conspires to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in any Anti-Terrorism Law.

 

64

 

ARTICLE VII

 

AFFIRMATIVE COVENANTS

 

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

 

7.1          Financial Statements.

 

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

 

(a)           Quarterly Financial Statements.  As
soon as available, but in any event not later than 45 days after the end of
each of the first three quarterly periods of each Fiscal Year of Borrower (or
in the event that a request for an extension of the required filing date for
Borrower’s Form 10-Q with the SEC has been timely filed, the last day of such
requested extension period, but in no event later than 55 days), (i) the
unaudited consolidated balance sheet of Borrower and its consolidated
Subsidiaries as at the end of such quarter setting forth in comparative form
the audited balance sheet of the Borrower and its consolidated Subsidiaries for
the prior Fiscal Year, (ii) the related unaudited consolidated statement of
income of the Borrower and its consolidated Subsidiaries as at the end of such
quarter and for the portion of the Fiscal Year through the end of such quarter
setting forth in comparative form the figures for the related periods in the
prior Fiscal Year and (iii) the related unaudited consolidated statements of
cash flow of Borrower and its consolidated Subsidiaries for the portion of the
Fiscal Year through the end of such quarter, and setting forth in comparative
form figures for the related period in the prior Fiscal Year, all of which
shall be certified by a Responsible Financial Officer of Borrower, subject to
normal year-end audit adjustments and, if Borrower has established any
Unrestricted Subsidiaries, such consolidated statements shall be accompanied by
a balance sheet as of such date, and a statement of income and cash flows for
such period and the prior year comparative period, reflecting on a combined
basis, for Restricted Subsidiaries and on a combined basis for Unrestricted
Subsidiaries, the consolidating entries for each of such types of Subsidiaries;
and

 

(b)           Annual Financial Statements.  As
soon as available, but in any event within 90 days after the end of each Fiscal
Year of Borrower (or in the event that a request for an extension of the
required filing date for Borrower’s Form 10-K with the SEC has been timely
filed, the last day of such requested extension period, but in no event later
than 105 days), a copy of the consolidating and consolidated balance sheet of
Borrower and its consolidated Subsidiaries as at the end of such year and the
related consolidating and consolidated statements of income and of cash flows
for such year, and setting forth in each case in comparative form the figures
for the previous year and such consolidated statements shall be accompanied by
a balance sheet as of such date, and a statement of income and cash flows for
such period, reflecting on a combined basis, for Restricted Subsidiaries and on
a combined basis for Unrestricted Subsidiaries, the consolidating entries for
each of such types of Subsidiaries; all such financial statements shall be complete
and correct in all material respects and shall be prepared in accordance with
GAAP applied consistently throughout the periods reflected therein and with
prior periods (except as approved by the accountants preparing such statements
or the Responsible Financial Officer, as the case may be, and disclosed
therein) and, in the case of the consolidated financial statements referred to
in this Section 7.1(b), accompanied by a report

 

65

 

thereon of Deloitte & Touche or such other
independent certified public accountants of recognized national standing, which
report shall contain no “going concern” or like qualification or exception or
any qualification or exception as to the scope of such audit and shall state that
such financial statements present fairly the financial position of Borrower and
its Subsidiaries as at the dates indicated and the results of their operations
and cash flow for the periods indicated in conformity with GAAP.

 

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

 

7.2          Certificates; Other Information.

 

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

 

(a)           Accountant’s Certificates.  Concurrently
with the delivery of the financial statements referred to in Section 7.1(b),
to the extent not contrary to the then current recommendations of the American
Institute of Certified Public Accountants, a certificate from Deloitte &
Touche or other independent certified public accountants of nationally
recognized standing stating that, in the course of their annual audit of the
books and records of Borrower, no Event of Default or Unmatured Event of
Default with respect to Articles VII, VIII and IX, insofar
as they relate to accounting and financial matters, has come to their attention
which was continuing at the end of such Fiscal Year or on the date of their
certificate, or if such an Event of Default or Unmatured Event of Default has
come to their attention, the certificate shall indicate the nature of such Event
of Default or Unmatured Event of Default.

 

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

 

(c)           Audit Reports and Statements.  Promptly
following Borrower’s receipt thereof, copies of all consolidated financial or
other consolidated reports or statements, if any,

 

66

 

submitted to Borrower or any of its Subsidiaries by
independent public accountants relating to any annual or interim audit of the
books of Borrower or any of its Subsidiaries.

 

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

 

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

 

(f)            Projections.  As soon as
available and in any event within sixty (60) days following the first day of
each Fiscal Year commencing with the Fiscal Year of Borrower beginning January
1, 2005 projections in form similar to that delivered on the Closing Date
covering the period from the beginning of such Fiscal Year (on a quarterly
basis for the first Fiscal Year and an annual basis thereafter) through the end
of the third Fiscal Year thereafter, prepared in reasonable detail, with
appropriate presentation and discussion of the principal assumptions upon which
such projections are based, which shall be accompanied by the statement of the
chief executive officer or Responsible Financial Officer of the Borrower to the
effect that, to the best of his knowledge, such projections are a reasonable
estimate for the periods respectively covered thereby.

 

(g)           Insurance.  (i) Prior to
the Closing Date, Borrower shall have delivered to Administrative Agent
evidence of insurance complying with the requirements of Section 7.8 for
the business and properties of Borrower and its Subsidiaries, in form
reasonably satisfactory to Administrative Agent and the Required Lenders and
naming Administrative Agent as an additional insured, mortgagee and/or loss
payee as its interests may appear, and stating that such insurance shall not be
canceled or revised without 30 days’ prior written notice by the insurer to
Administrative Agent and (ii) Borrower shall deliver to Administrative Agent
information concerning insurance at the times and in the manner specified in Section
7.8.

 

(h)           Management Letters.  Promptly after receipt thereof, a copy of any
“management letter” received by Borrower or any of its Subsidiaries from its
certified public accountants.

 

7.3          Notices.

 

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

 

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

 

67

 

(b)           Litigation and Related Matters.  The
commencement of, or any material development in, any action, suit, proceeding
or investigation affecting Borrower or any of its Restricted Subsidiaries or
any of their respective properties before any arbitrator or Governmental
Authority, (i) in which the amount involved that Borrower reasonably determines
is not covered by insurance or other indemnity is $10,000,000 or more, (ii)
with respect to any Loan Document or any material Indebtedness or preferred
stock of Borrower or any of its Restricted Subsidiaries or (iii) which, if
determined adversely to Borrower or any of its Subsidiaries, could reasonably
be expected to have a Material Adverse Effect.

 

(c)           Environmental
Notification.

 

(i)            The
occurrence of one or more of the following, to the extent that any of the
following, if adversely determined, would have a material adverse effect on the
financial condition, business or properties of Borrower and its Subsidiaries
taken as a whole or, in any event, could reasonably be expected to result in
liability to Borrower or any of its Restricted Subsidiaries in excess of
$5,000,000 or a fine or penalty in excess of $3,000,000:  (A) written notice, claim or request for
information to the effect that Borrower or any of its Subsidiaries is or may be
liable in any material respect to any Person as a result of the presence of or
the Release or substantial threat of a material Release of any Contaminant into
the environment; (B) written notice that Borrower or any of its Subsidiaries is
subject to investigation by any Governmental Authority evaluating whether any
Remedial Action is needed to respond to the presence or to the Release or
substantial threat of a material Release of any Contaminant into the
environment; (C) written notice that any property, whether owned or leased by,
or operated on behalf of, Borrower or its Subsidiaries is subject to a material
Environmental Lien; (D) written notice of violation to Borrower or any of its
Subsidiaries of any Environmental Laws or Environmental Permits; or (E)
commencement or written threat of any judicial or administrative proceeding
alleging a violation of any Environmental Laws or Environmental Permits; provided,
however, that the provisions of this clause (i) shall not require
Borrower to violate or breach any confidentiality covenants to which it is
bound.

 

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

 

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

 

68

 

Administrative Agent a copy of all material notices
required to be delivered by the Borrower or any of its affiliates under the
Revolving Credit Agreement.

 

(e)           Notice of Change of Control.  Each occasion that any Change of Control
shall occur and such notice shall set forth in reasonable detail the
particulars of such occasion.

 

7.4          Maintenance of Existence.

 

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

 

7.5          Payment of Obligations.

 

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

 

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

 

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

 

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

 

7.6          Inspection of Property, Books and Records.

 

Keep, or cause to be
kept, and cause each of its Subsidiaries to keep or cause to be kept, adequate
records and books of account, in which complete entries are to be made
reflecting its and their business and financial transactions, such entries to
be made in accordance with sound accounting principles consistently applied and
will permit, and cause each of its Subsidiaries to permit, any Lender or its
respective representatives, at any reasonable time, and from time to time at
the reasonable request of such Lender made to Borrower and upon

 

69

 

reasonable notice,
to visit and inspect its and their respective properties, to examine and make
copies of and take abstracts from its and their respective records and books of
account, and to discuss its and their respective affairs, finances and accounts
with its and their respective principal officers, directors and with the
written consent of Borrower (which consent shall not be required if any Event
of Default has occurred and is continuing) independent public accountants,
provided that Borrower may attend any such meetings (and by this provision
Borrower authorizes such accountants to discuss with the Lenders and such
representatives the affairs, finances and accounts of Borrower and its
Subsidiaries).

 

7.7          ERISA.

 

(a)           (i)
As soon as practicable and in any event within ten (10) days after Borrower or
any of its Subsidiaries or ERISA Affiliates knows or has reason to know that a
Reportable Event has occurred with respect to any Plan, deliver, or cause such
Subsidiary or ERISA Affiliate to deliver, to Administrative Agent a certificate
of a Responsible Officer of Borrower or such Subsidiary or ERISA Affiliate, as
the case may be, setting forth the details of such Reportable Event and the
action, if any, which Borrower or such Subsidiary or ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given; (ii) upon the request of any Lender made from time to time, deliver,
or cause each Subsidiary or ERISA Affiliate to deliver, to each Lender a copy
of the most recent actuarial report and annual report completed with respect to
any Plan; (iii) as soon as possible and in any event within ten (10) days after
Borrower or any of its Subsidiaries or ERISA Affiliates knows or has reason to
know that any of the following have occurred or is reasonably likely to occur
with respect to any Plan:  (A) such Plan
has been terminated, reorganized, petitioned or declared insolvent under Title
IV of ERISA, (B) the Plan Sponsor intends to terminate such Plan, (C) the PBGC
has instituted or will institute proceedings under Section 515 of ERISA to
collect a delinquent contribution to such Plan or under Section 4042 of ERISA
to terminate such Plan pursuant to Section 4041(c) of ERISA, (D) that an accumulated
funding deficiency has been incurred or that an application has been made to
the Secretary of the Treasury for a waiver or modification of the minimum
funding standard (including any required installment payments) or an extension
of any amortization period under Section 412 of the Code, or (E) that Borrower,
or any Subsidiary of Borrower or any of their ERISA Affiliates will incur any
material liability under Section 401(a)(29), 4971 or 4975 of the Code or
Section 409 or 502(1) of ERISA, deliver, or cause such Subsidiary or ERISA
Affiliate to deliver, to Administrative Agent a written notice thereof; and
(iv) as soon as possible and in any event within thirty days after Borrower or
any of its Subsidiaries or ERISA Affiliates knows or has reason to know that
any of them has caused a complete withdrawal or partial withdrawal (within the
meaning of Sections 4203 and 4205, respectively, of ERISA) from any
Multiemployer Plan, deliver, or cause such Subsidiary or ERISA Affiliate to
deliver, to Administrative Agent a written notice thereof.  For purposes of this Section 7.7, Borrower
shall be deemed to have knowledge of all facts known by the Plan Administrator
of any Plan of which Borrower is the Plan Sponsor, and each Subsidiary and
ERISA Affiliate of Borrower shall be deemed to have knowledge of all facts
known by the Plan Administrator of any Plan of which such Subsidiary or ERISA
Affiliate, respectively, is a Plan Sponsor. 
In addition to its other obligations set forth in this Article VII,
Borrower shall, and shall cause each of its Subsidiaries and ERISA Affiliates
to:

 

70

 

(A)          provide
Administrative Agent with prompt written notice, with respect to any Plan, of
any failure to satisfy the minimum funding standard requirements of Section 412
of the Code,

 

(B)          furnish to
Administrative Agent, promptly after delivery of the same to the PBGC, a copy
of any delinquency notice pursuant to Section 412(n)(4) of the Code,

 

(C)          correct any
such failure to satisfy funding requirements or delinquency referred to in the
foregoing clauses (A) and (B) within ninety (90) days after the occurrence
thereof, except where the failure to so satisfy would not reasonably be
expected to have a Material Adverse Effect;

 

(D)          comply in good
faith in all material respects with the requirements set forth in Section 4980B
of the Code and with Sections 601(a) and 606 of ERISA;

 

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

 

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

 

(b)           Borrower
shall, and shall cause each of its Subsidiaries to, establish, maintain and
operate all Foreign Pension Plans in compliance in all material respects with
all laws, regulations and rules applicable thereto and the respective
requirements of the governing documents for such Plans.

 

7.8          Maintenance
of Property; Insurance.  (i) Keep and cause each of its Restricted
Subsidiaries to keep, all material property (including, but not limited to,
equipment) useful and necessary in its business in good working order and
condition, normal wear and tear and damage by casualty excepted, (ii) maintain
on behalf of its Restricted Subsidiaries or shall cause each of its Restricted
Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to its material properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons.  Such insurance shall be maintained with
financially sound and reputable insurers, except that a portion of such
insurance program (not to exceed that which is customary in the case of
companies engaged in the same or similar business or having similar properties
similarly situated) may be effected through self-insurance, provided adequate
reserves therefor, in accordance with GAAP, are maintained.  All insurance policies or certificates (or
certified copies

 

71

 

thereof) with respect to such insurance (A) shall be
endorsed to the Collateral Agent’s reasonable satisfaction for the benefit of
the Collateral Agent for the benefit of the Secured Parties (including, without
limitation, by naming the Collateral Agent as loss payee or additional insured,
as appropriate); and (B) shall state that such insurance policy shall not be
cancelled or revised without thirty days’ prior written notice thereof by the
insurer to Administrative Agent and (iii) furnish to Administrative Agent, on
the Closing Date and on the date of delivery of each annual financial
statement, full information as to the insurance carried.  At any time that insurance at levels
described in Schedule 7.8 is not being maintained by or on behalf of
Borrower or any of its Subsidiaries, Borrower will notify the Lenders in
writing within two Business Days thereof and, if thereafter notified by
Administrative Agent or the Required Lenders to do so, Borrower or any such
Subsidiary, as the case may be, shall use commercially reasonable efforts to
obtain insurance at such levels at least equal to those set forth on Schedule
7.8.

 

7.9          Environmental Laws.

 

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

 

(b)           Environmental Indemnity.  Defend,
indemnify and hold harmless the Administrative Agent and the Lenders, and their
respective employees, agents, officers and directors, from and against any and
all claims, demands, penalties, fines, liabilities, settlements, damages, costs
and expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising out of, or in any way relating to the violation of,
noncompliance with or

 

72

 

liability under, any Environmental Law applicable to
the operations of Borrower, any of its Subsidiaries or their respective
properties, or any orders, requirements or demands of Governmental Authorities
related thereto, including, without limitation, reasonable attorney’s and
consultant’s fees, investigation and laboratory fees, response costs, court
costs and litigation expenses, except to the extent that any of the foregoing
arise out of the gross negligence or willful misconduct of the party seeking
indemnification therefor.  The agreements
in this Section 7.9(b) shall survive repayment of the Notes and all
other Obligations.

 

7.10        Use of Proceeds.

 

Use of all proceeds of
the Loans as provided in Section 6.8.

 

7.11        Additional Security; Further
Assurances.

 

(a)           Agreement to Grant Additional Security.  Promptly,
and in any event within thirty (30) days after the acquisition by Borrower or
any Restricted Domestic Subsidiary of assets or real or personal property of
the type that would have constituted Collateral on the date hereof, in each
case in which the Collateral Agent does not have a perfected security interest
under the Security Documents (other than (t) equipment subject to Liens
permitted under Section 8.1(b) under agreements which prohibit the
creation of additional Liens on such assets, (u) the property subject to the
Headquarters Mortgage Loan Documents, (v) Capital Stock of a Subsidiary (which
is governed by clause (c) below) (w) any parcel of real estate or leasehold
interest acquired after the Closing Date with a fair market value of less than
$1,000,000 or (x) any other asset with a fair market value of less than
$100,000 individually, provided that all such other assets collectively have a
fair market value of less than $5,000,000) or promptly following request by
Administrative Agent or the Collateral Agent with respect to any other
collateral deemed material by Administrative Agent or Required Lenders (the “Additional
Collateral”), Borrower will, and will cause each of its Restricted Domestic
Subsidiaries to, take all necessary action, including (i) the filing of
appropriate financing statements under the provisions of the UCC, applicable
foreign, domestic or local laws, rules or regulations in each of the offices
where such filing is necessary or appropriate and (ii) with respect to real
estate, the execution of a mortgage, the obtaining of title insurance policies,
title surveys and real estate appraisals satisfying the Requirements of Law, to
grant the Collateral Agent for the benefit of the secured parties pursuant to
the Security Agreement a perfected Lien (subject only to Permitted Liens) in
such Collateral pursuant to and to the full extent required by the Security
Documents and this Agreement.

 

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

 

(c)           Pledge of New Subsidiary Stock.  Borrower
agrees to pledge (or cause its Restricted Domestic Subsidiaries to pledge) all
of the Capital Stock of each new Restricted Subsidiary established or created
to the Collateral Agent for the benefit of the secured parties pursuant to the
Security Agreement and the other Security Documents; provided that the
pledge

 

73

 

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

 

(d)           Grant of Security by New Subsidiaries.  Subject
to the provisions of Sections 7.11(a) and 7.11(c), Borrower will
cause each Restricted Domestic Subsidiary established or created in accordance
with Section 8.7 to grant to the Collateral Agent for the benefit of the
secured parties pursuant to the Security Agreement a first or second priority
Lien in the manner set forth in the Security Documents (subject to Permitted
Liens) on all property (tangible and intangible) of such Subsidiary by
executing and delivering an agreement substantially in the form of Exhibit A
to the Security Agreement, or on other terms satisfactory in form and substance
to the Collateral Agent and Administrative Agent.

 

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

 

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

 

(f)            Documentation for Additional Security.  The
security interests required to be granted pursuant to this Section 7.11
shall be granted pursuant to the Annexes to the

 

74

 

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

 

7.12        End
of Fiscal Years; Fiscal Quarters.

 

(a)           Cause each of its annual accounting
periods to end December 31 of each year (each a “Fiscal Year”, with
quarterly accounting periods ending on March 31, June 30, September 30 and
December 31 of each Fiscal Year (each a “Fiscal Quarter”)), and (b)
cause each of its Subsidiaries’ Fiscal Years to end on December 31 of each year
with Fiscal Quarters ending on March 31, June 30, September 30 and December 31
of each Fiscal Year, unless, in each case, otherwise required by applicable
law.

 

7.13        Senior
Subordinated Notes.

 

On or before the maturity
date of the Senior Subordinated Notes, Borrower shall have refinanced the then
outstanding Senior Subordinated Notes with proceeds of Permitted Unsecured Debt
permitted by Section 8.2(e) and/or shall have redeemed or repurchased
such Senior Subordinated Notes with the proceeds of a Qualified Public Offering
in accordance Section 4.2(d) or otherwise as permitted by this
Agreement.

 

7.14        Maintenance of Corporation Separateness.

 

Cause and cause each of
its Subsidiaries to, satisfy customary corporate (or other similar)
formalities, including the maintenance of corporate (or other similar)
records.  Neither Borrower nor any
Subsidiary of Borrower shall make any payment to a creditor of any Huntsman
Affiliate in respect of any liability of any of the foregoing, and no bank
account of Borrower shall be commingled with any bank account of any Huntsman
Affiliate.  Any financial statements
distributed to any creditors of Borrower shall, to the extent permitted by
GAAP, clearly establish the corporate separateness of the Huntsman Affiliates
from Borrower and each of Borrower’s Subsidiaries.  Finally, neither Borrower nor any of its
Subsidiaries shall take any action, or conduct its affairs in a manner, which
is likely to result in the corporate existence of any Huntsman Affiliate on the
one hand and of Borrower or any Subsidiary of

 

75

 

Borrower on the
other hand being ignored, or in the assets and liabilities of Borrower or any
Subsidiary of Borrower being substantively consolidated with those of any
Huntsman Affiliate in a bankruptcy, reorganization or other insolvency
proceeding.

 

7.15        Certain
Fees Indemnity.

 

Indemnify Administrative
Agent and each Lender against and hold Administrative Agent and each Lender harmless
from any claim, demand or liability for broker’s or finder’s fees or similar
fees or commissions alleged to have been incurred in connection with any of the
transactions contemplated hereby.

 

ARTICLE VIII

 

NEGATIVE COVENANTS

 

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

 

8.1          Liens.

 

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

 

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

 

(b)           (i)
Liens (including Liens under Capitalized Leases) in respect of property or
assets acquired or constructed by Borrower or a Subsidiary after the date
hereof, including, without limitation, liens on rolling stock, which Liens are
created at the time of acquisition or completion of construction of such
property or asset or within 120 days thereafter, to secure Indebtedness assumed
or incurred to finance all or any part of the purchase price or cost of
construction of such property or asset, (ii) in the case of any Person that
hereafter becomes a Subsidiary or is consolidated with or merged with or into
Borrower or a Subsidiary, Liens existing at the time such Person becomes a
Subsidiary or is so consolidated or merged (and not incurred in anticipation
thereof), (iii) in the case of any property or asset acquired by Borrower or
any Subsidiary after the Closing Date, Liens existing on such property or asset
at the time of acquisition thereof (and not incurred in anticipation thereof),
whether or not the Indebtedness secured thereby is assumed by Borrower or a
Subsidiary; provided, that in any such case:

 

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

 

76

 

(y)           the
aggregate principal amount of the Indebtedness secured by all such Liens in
respect of any such property or assets shall not exceed 100% of the fair market
value of such property or assets at the time of such acquisition or, in the
case of a Lien in respect of property or assets existing at the time of such
Person becoming a Subsidiary or being so consolidated or merged, the fair
market value of the property or assets acquired at such time and the amount of
Indebtedness secured on the date of issuance of such Liens shall not be less
than 70% of the fair market value unless the Collateral Agent shall have a
perfected second lien on such equipment; and

 

(z)            the
Indebtedness secured thereby is permitted to be incurred pursuant to Section
8.2(h);

 

(c)           Customary
Permitted Liens;

 

(d)           Liens
granted pursuant to the Security Documents;

 

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

 

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

 

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

 

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

 

(i)            Liens
securing Revolving Loan Obligations to the extent such Indebtedness is
permitted by Section 8.2(b) and the Intercreditor Agreement is in full
force and effect;

 

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

 

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

 

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

 

77

 

(m)          Liens
securing the Senior Secured Notes Obligations on a pari passu basis with the
Obligations, but only to the extent that such Indebtedness is permitted by Section
8.2(l).

 

8.2          Indebtedness.

 

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

 

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

 

(b)           Indebtedness
of Borrower or its Subsidiaries which are parties to the Subsidiary Guarantee
Agreement (as defined in the Revolving Credit Agreement) pursuant to the
Revolving Credit Agreement and the Loan Documents in a principal amount
outstanding not to exceed $350,000,000 and guarantees thereof by any Subsidiary
Guarantor;

 

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

 

(d)           Indebtedness
resulting from the extension, renewal or refinancing or successive refinancing
(whether in whole or in part) of any Indebtedness, permitted under Section
8.2(c); provided, however, that (i) the principal amount of
any such refinancing Indebtedness (as determined as of the date of the
incurrence of such refinancing Indebtedness in accordance with GAAP) does not
exceed the principal amount of the Indebtedness refinanced thereby on such date
plus the amount of accrued and unpaid interest and fees (including call
premiums) and expenses incurred in connection with such refinancing, (ii) the
Weighted Average Life to Maturity of such Indebtedness is not decreased, (iii)
the covenants, defaults and similar provisions applicable to such refinancing
Indebtedness or obligations are customary market terms reasonably satisfactory
to the Administrative Agent and do not conflict in any material respect with
the provisions of this Agreement and (iv) the terms of such refinancing
Indebtedness shall be reasonably satisfactory to the Administrative Agent.  In the case of any Indebtedness which is
subordinated to the Obligations, such refinancing Indebtedness shall be
subordinated to the Obligations on the same terms or on such other terms as may
be approved by the Administrative Agent.

 

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

 

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

 

78

 

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

 

(h)           Indebtedness
secured by Liens permitted by Section 8.1(b) or 8.1(j) or
constituting Capitalized Lease Obligations or Indebtedness under Operating
Financing Leases provided, that (x) all such Capitalized Lease
Obligations are permitted under Section 9.3 and (y) the sum, without
duplication, of (i) the aggregate outstanding Capitalized Lease Obligations plus
(ii) the aggregate outstanding Indebtedness under Operating Financing Leases plus
(iii) the aggregate outstanding principal amount of such Indebtedness secured
by Liens permitted by Section 8.1(b) at any time shall not exceed
$20,000,000 and any extension, renewal or replacement thereof provided such
Indebtedness is not increased and is not secured by any additional property or
assets;

 

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

 

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

 

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

 

(l)            Indebtedness
incurred pursuant to the Senior Secured Notes Indenture not to exceed
$455,400,000 outstanding on the Closing Date and evidenced by the Senior
Secured Notes and additional Senior Secured Notes issued after the Closing Date
and evidenced by the Senior Secured Notes Indenture, but only to the extent
that the aggregate principal amount of such additional Senior Secured Notes is
not greater than (i) $25,000,000 minus (ii) the amount of Additional
Term B Loans incurred pursuant to Section 2.4; and guarantees thereof by
any Subsidiary Guarantor.

 

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

 

8.3          Fundamental Changes.

 

Borrower shall not, nor
shall it permit any of its Restricted Subsidiaries to, directly or indirectly,
(i) consummate any Acquisition or (ii) enter into any merger, consolidation

 

79

 

or amalgamation,
or liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution) or convey, sell, assign, lease, transfer or otherwise dispose of
(or agree to do any of the foregoing at any future time) all or substantially
all of its property, business or assets; provided, however, that
so long as prior to or simultaneously with such transactions, Borrower has
complied with, and has caused its Subsidiaries to comply with, the provisions
of Section 7.11:

 

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

 

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

 

(c)           any
Subsidiary of Borrower may voluntarily liquidate, wind-up or dissolve;

 

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

 

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

 

8.4          Dividends or Other Distributions.

 

Borrower shall not, nor
shall it permit any of its Restricted Subsidiaries to, directly or indirectly,
either:  (i) declare or pay any dividend
or make any distribution on or in respect of its Capital Stock or to the direct
or indirect holders of its Capital Stock in respect of such Capital Stock
(except dividends or distributions payable solely in such Capital Stock or in
options, warrants or other rights to purchase such Capital Stock and except
dividends or distributions payable to Borrower or a Wholly-Owned Subsidiary of
Borrower), (ii) purchase, redeem or otherwise acquire or retire for value any
of its Capital Stock (other than Capital Stock held by Borrower or a
Wholly-Owned Subsidiary of Borrower), (iii) make a loan (a “Shareholder Loan”)
to any direct or indirect owner of its Capital Stock, (iv) pay any Management
Fees or (v) make any principal payment on, purchase, defease, redeem, prepay,
decrease or otherwise acquire or retire for value, prior to any scheduled final
maturity, any Permitted Unsecured Debt or any Indebtedness that is subordinate
or junior in right of payment to the Obligations (any such non-excepted
dividend, distribution, purchase, redemption, repurchase, other acquisition,
retirement or Shareholder Loan or payment being hereinafter referred to as a “Restricted
Payment”); provided, however, that (w) Borrower may make
payments described under clause (v) above with proceeds of Permitted Unsecured
Debt, Senior Secured Notes or Additional Term B Loans, in each case, to the
extent such Indebtedness is permitted to be incurred hereunder and is not
otherwise required to be applied to prepay Loans pursuant to Section 4.2(e)
or Section

 

80

 

4.2(f);
provided, further, however, that proceeds of Senior
Secured Notes and Additional Term B Loans may not be used to make such payments
with respect to Indebtedness that is subordinate or junior in right of payment
to the Obligations, (x) Borrower may make payments described under clause (v)
above with proceeds of a Qualified Public Offering to the extent such proceeds
are not otherwise required to be applied to prepay Loans pursuant to Section
4.2(d), and (y) Borrower may make payments pursuant to the terms of the Tax
Sharing Agreement.

 

8.5          Issuance of Stock.

 

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

 

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

 

8.6          Disposition of Assets.

 

Borrower will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, sell,
lease, assign, transfer or otherwise dispose of any of its assets to any
Person, including, without limitation, pursuant to a Sale and Leaseback
Transaction, except that:

 

(a)           Borrower
or any Subsidiary may engage in a transaction permitted by Section 8.3.

 

(b)           Any
Foreign Subsidiary which is a Wholly-Owned Subsidiary may transfer, sell or
assign any of its assets to another Foreign Subsidiary which is a Wholly-Owned
Subsidiary;

 

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

 

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

 

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

 

81

 

(f)            Borrower
and any Subsidiary may sell, assign, transfer or otherwise dispose of its
assets to Borrower or any Wholly-Owned Domestic Subsidiary which is a
Restricted Subsidiary (other than Airstar Corporation, Huntsman Headquarters
Corporation or IRIC);

 

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

 

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

 

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

 

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

 

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

 

(l)            the
Borrower and its Subsidiaries may sell, transfer or otherwise dispose of any
asset in connection with any Sale and Leaseback Transaction involving
Indebtedness, Capitalized Lease Obligations or an Operating Financing Lease
otherwise permitted hereunder so long as, in the case of a transaction
involving operating assets, such transaction occurs within 120 days of the
acquisition by the Borrower or any Subsidiary of the asset sold, transferred or
otherwise disposed of;

 

8.7          Loans and Investments.

 

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

 

(a)           acquire
and hold Cash and Cash Equivalents;

 

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

 

82

 

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

 

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

 

(e)           make
additional Investments in any Restricted Domestic Subsidiary; provided
that any such Investment constituting a loan or advance to a Restricted
Domestic Subsidiary shall be made pursuant to one of the Pledged Intercompany
Notes;

 

(f)            make
(i) any Investment by Borrower or any Restricted Subsidiary in any Foreign
Subsidiary or joint venture after the Closing Date in an aggregate amount for
all such Investments from and after the Closing Date in excess of $25,000,000
or (ii) any Investment by a Foreign Subsidiary in any other Foreign Subsidiary;

 

(g)           make
any Investment after the Closing Date in Unrestricted Subsidiaries in an amount
not in excess of $15,000,000 in the aggregate from and after the Closing Date;

 

(h)           to
the extent not required to be applied to prepay the Obligations pursuant to Section
4.2(e) of the Credit Agreement, use net cash proceeds of Permitted
Unsecured Debt to make Investments on or after the Closing Date in any
Australian Consolidated Entity in an aggregate amount not to exceed $60,000,000
(“Permitted Australian Proceeds”); provided that the Permitted
Australian Proceeds shall be used to make an Investment (which, to the extent
permitted under local law and not resulting in adverse tax consequences, shall
be in the form of an intercompany loan) to permanently prepay Indebtedness (and
in the case of revolving loans permanently reduce the commitments thereunder); provided,
further, that on the date that the aggregate amount of Investments made
with Permitted Australian Proceeds in HF II Australia Holdings Company LLC or
Huntsman Australia Holdings Corporation, or subsidiaries thereof (collectively
the “Australian Surfactants Subsidiaries”) exceeds $20,000,000, then the
Australian Surfactants Subsidiaries shall cease to be Unrestricted Subsidiaries
for purposes of this Agreement and all Indebtedness of such entities shall be
deemed to have been incurred on such date, and on the date that the aggregate
amount of Investments made with Permitted Australian Proceeds in HCPH Holdings
Pty Limited or Huntsman Chemical Australia Unit Trust, or subsidiaries thereof
(collectively the “Australian Styrenics Subsidiaries”) exceeds
$15,000,000, then the Australian Styrenics Subsidiaries shall cease to be
Unrestricted Subsidiaries for purposes of this Agreement and all Indebtedness
of such entities shall be deemed to have been incurred on such date;

 

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

 

83

 

provided that such Investment pursuant to this clause
(ii) may be made only with proceeds from a Qualified Public Offering or from
the issuance of Permitted Unsecured Indebtedness; and

 

(j)            acquire
for the purposes of retirement Senior Secured Notes with proceeds of a
Qualified Public Offering to the extent contemplated by Sections 4.2(d)
and 4.3(d).

 

8.8          Transactions with Affiliates.

 

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

 

8.9          Lines of Business.

 

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

 

8.10        Fiscal Year.

 

Borrower shall not change
its Fiscal Year.

 

8.11        Amendments to Organizational and
Other Documents.

 

Borrower shall not, nor
shall it permit any of its Restricted Subsidiaries to, directly or indirectly,
amend, modify or waive, or permit any amendment, modification or waiver to its
Organizational Documents if such amendment, modification or waiver could
reasonably be expected to adversely affect the interests of the Collateral
Agent, Administrative Agent or the Lenders. 
Borrower shall not, nor shall it permit any of its Subsidiaries to waive
or release any interest under any Security Document except as expressly
permitted hereby or thereby.  Borrower
shall not, and shall not permit any Subsidiary to, amend, modify or waive or
cause to be amended, modified or waived any provision of (a) the BASF Note,
unless such amendment, modification or waiver is approved by the Administrative
Agent, (b) the Tax Sharing Agreement,

 

84

 

unless such
amendment, modification or waiver is approved by the Administrative Agent and,
if adverse to the interests of the Lenders (as determined by the Administrative
Agent in its sole reasonable discretion after reasonable advance notice of such
proposed change), by the Required Lenders or (c) the Horizon Subordinated Note,
unless such amendment, modification or waiver is approved by the Administrative
Agent and, if adverse to the interests of the Lenders (as determined by the Administrative
Agent in its sole reasonable discretion after reasonable advance notice of such
proposed change), by the Required Lenders. 
Neither Borrower or any of its Restricted Subsidiaries shall enter into
any tax sharing agreement with Holdco I or Holdco II except as set forth in the
Tax Sharing Agreement.

 

8.12        Limitation on Certain Restrictions
on Subsidiaries.

 

Borrower shall not, nor
shall it permit any of its Restricted Subsidiaries to, create or otherwise
cause or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to (i) pay dividends or
make any other distributions on its Capital Stock or pay any Indebtedness or
other Obligations owed to Borrower or any of its other Subsidiaries, (ii) make
any loans or advances to Borrower or any of its other Subsidiaries, (iii)
transfer any of its property or assets to Borrower or any of its other
Subsidiaries or (iv) enter into any Material Agreement unless such agreement
expressly provides that it may be collaterally assigned to the Collateral Agent
and may be further assigned by the Collateral Agent in any foreclosure, except:

 

(a)           any
encumbrance or restriction pursuant to the Revolving Credit Agreement, the
Senior Secured Notes Indenture or the agreement governing Permitted Unsecured
Debt or any extension, replacement or refinancing thereof which is not
otherwise prohibited by the terms of this Agreement;

 

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

 

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

 

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

 

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

 

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

 

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

 

85

 

8.13        Accounting Changes.

 

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

 

8.14        Restrictions on Certain Unrestricted Subsidiaries.

 

(a)           Borrower
will not permit either HSCHC or HSCC to, and HSCHC and HSCC hereby agree that
they will not, except in each case as described on Schedule 8.14, (i)
incur any Indebtedness or other material obligations of any kind; (ii) directly
or indirectly, create, incur, assume or suffer to exist or agree to create,
incur or assume any Lien in, upon or with respect to any of their properties or
assets (including, without limitation any securities or intercompany
Indebtedness in favor of HSCC or HSCHC); (iii) issue any Capital Stock; (iv)
dispose of or transfer any assets; (v) in the case of HSCHC, engage in any
business other than holding securities of its Subsidiaries; or (vi) in the case
of HSCC, engage in any business other than holding securities of HIH; provided,
(a) that this Section 8.14 shall not prohibit any amendment to the BASF
Note to the extent not prohibited by Section 8.11 and (b) HSCHC and HSCC
may incur (x) Liens securing the Senior Secured Notes on a pari passu basis
with the Obligations and (y) Indebtedness consisting of guarantees of
Indebtedness incurred pursuant to Section 8.2(h).  Neither HSCHC nor HSCC will create any
additional direct Subsidiaries after the Closing Date.

 

(b)           Borrower
will not permit HIH to, and HIH hereby agrees that it will not, issue any
Capital Stock except Capital Stock with the same economic, voting and other
rights as the Capital Stock of HIH held indirectly on the Closing Date by
Borrower in exchange for a capital contribution the proceeds of which are used
to repay, or in exchange for or in repayment of any indebtedness of HIH or
Huntsman International LLC; provided, that the A Notes shall be repaid
in full prior to the exchange or repayment of any other such indebtedness other
than the B Notes as long as (i) such issuance is made contemporaneously with a
Qualified Public Offering and (ii) the Capital Stock is issued at a valuation
comparable to the value of the Capital Stock issued in the Qualified Public
Offering or at such valuation as set forth in a fairness opinion obtained by
HIH and satisfactory to Administrative Agent.

 

(c)           Neither
Borrower nor HSCC will permit Huntsman International LLC to issue any Capital
Stock to any Person other than HIH.

 

86

 

8.15        Amendments, Modifications or Supplements to Revolving
Credit Agreement.  Borrower shall not agree to or permit the
amount of Indebtedness permitted to be outstanding under the Revolving Credit
Agreement to be increased above $350,000,000.

 

8.16        Borrowings Under Revolving Credit Agreement.

 

In no event shall
Borrower make any borrowing of Revolving Loans under the Revolving Credit
Agreement if, after giving effect to such borrowing, Borrower would have more
than $50,000,000 of Available Liquidity (but in any event excluding any cash
awaiting reinvestment in accordance with Section 4.2(b) or 4.2(d),
4.2(e), 4.2(f), or 4.2(h)).

 

8.17        Amendments or Modifications to Senior Secured Notes.

 

Borrower shall not, nor
shall it permit any of its Subsidiaries to, directly or indirectly, either:

 

(a)           Amend,
modify, waive or supplement, or cause to be amended, modified, waived or
supplemented, any provision of the Senior Secured Notes Indenture or the terms
of the Senior Secured Notes, unless such amendment, modification, waiver or
supplement is approved by the Administrative Agent and, if adverse to the
interests of the Lenders (as determined by the Administrative Agent in its sole
reasonable discretion after reasonable advance notice of such proposed change),
by the Required Lenders; or

 

(b)           Make
any principal payment on, purchase, defease, redeem, prepay, decrease or
otherwise acquire or retire for value, prior to any scheduled final maturity,
any Senior Secured Notes, except as required by the Senior Secured Notes
Indenture.

 

8.18        Anti-Terrorism Law; Anti-Money Laundering.

 

Borrower shall not
directly or indirectly: (a) (i) knowingly conduct any business or engage in
making or receiving any contribution of funds, goods or services to or for the
benefit of any person described in Section 6.23(b), (ii) knowingly deal
in, or otherwise engage in any transaction relating to, any property or interests
in property blocked pursuant to the Executive Order or any other Anti-Terrorism
Law, or (iii) knowingly engage in or conspire to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law (and
Borrower shall deliver to the Lenders any certification or other evidence
requested from time to time by any Lender in its reasonable discretion,
confirming Borrower’s compliance with this Section 8.18) or (b) cause or
permit any of the funds of Borrower or any Credit Party that are used to repay
the Loan to be derived from any unlawful activity with the result that the
making of the Loans would be in violation of law.

 

87

 

ARTICLE IX

 

FINANCIAL COVENANTS

 

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

 

9.1          Leverage Ratio.

 

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

 

	
  Date

  	
   

  	
  Ratio

  	
   

  
	
  Fiscal Quarter
  ending September 30, 2004

  	
   

  	
  8.25 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2004

  	
   

  	
  8.00 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending March 31, 2005

  	
   

  	
  7.50 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending June 30, 2005

  	
   

  	
  6.50 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending September 30, 2005

  	
   

  	
  5.75 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2005

  	
   

  	
  5.00 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending March 31, 2006

  	
   

  	
  4.50 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending June 30, 2006

  	
   

  	
  4.50 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending September 30, 2006

  	
   

  	
  4.00 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2006

  	
   

  	
  4.00 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending March 31, 2007 and each Fiscal Quarter thereafter

  	
   

  	
  3.50 to 1.0

  	
   

  

 

9.2          Interest Coverage Ratio.

 

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

 

	
  Date

  	
   

  	
  Ratio

  	
   

  
	
  Fiscal Quarter
  ending September 30, 2004

  	
   

  	
  1.30 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2004

  	
   

  	
  1.30 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending March 31, 2005

  	
   

  	
  1.35 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending June 30, 2005

  	
   

  	
  1.45 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending September 30, 2005

  	
   

  	
  1.60 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2005

  	
   

  	
  1.75 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending March 31, 2006

  	
   

  	
  1.85 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending June 30, 2006

  	
   

  	
  1.90 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending September 30, 2006

  	
   

  	
  2.00 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2006

  	
   

  	
  2.00 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending March 31, 2007

  	
   

  	
  2.25 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending June 30, 2007

  	
   

  	
  2.25 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending September 30, 2007

  	
   

  	
  2.25 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2007

  	
   

  	
  2.25 to 1.0

  	
   

  
	
  Fiscal Quarter
  ending March 31, 2008 and each Fiscal Quarter thereafter

  	
   

  	
  2.50 to 1.0

  	
   

  

 

88

 

9.3          Capital
Expenditures.

 

Permit, nor permit any of
its Restricted Subsidiaries to, make any Consolidated Capital Expenditures,
except that Borrower and its Restricted Subsidiaries may make such Consolidated
Capital Expenditures during any Fiscal Year and until payment in full of all
Obligations hereunder, not in excess of an amount equal to $135,000,000; provided,
further, however, to the extent Consolidated Capital Expenditures
for any Fiscal Year are less than $135,000,000, the difference thereof may be
carried forward to the immediately following fiscal year in an amount not to
exceed $20,000,000.

 

ARTICLE X

 

EVENTS OF DEFAULT

 

10.1        Events of
Default.

 

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

 

(a)           Failure to Make Payments When Due.  Borrower
(i) shall default in the payment of principal on any of the Loans; or (ii)
shall default in the payment of interest on any of the Loans or default in the
payment of any fee or any other amount owing hereunder or under any other Loan
Document when due and such default in payment shall continue for five (5)
Business Days; or

 

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

 

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

 

89

 

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

 

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

 

(f)            Involuntary Insolvency, Etc.  Involuntary
proceedings or an involuntary petition shall be commenced or filed against
Holdco I, Holdco II, Borrower or any of its Material Subsidiaries which are
Restricted Subsidiaries under any bankruptcy, insolvency or similar law or
seeking the dissolution or reorganization of it or the appointment of a
receiver, trustee, administrator, custodian or liquidator for it or of a
substantial part of its property, assets or business, or any similar writ,
judgment, warrant of attachment, execution or process shall be issued or levied
against a substantial part of its property, assets or business, and (other than
a petition for administration) such proceedings or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded, within thirty (30) days
(or in the case of a petition for administration five (5) days) after
commencement, filing or levy, as the case may be, or any order for relief shall
be entered in any such proceeding; or

 

(g)           Default Under Other Agreements.  (i)
Holdco I, Holdco II, Borrower or any of its Restricted Subsidiaries shall
default in the payment when due, whether at stated maturity or otherwise, of
any amount pursuant to any Indebtedness (other than Indebtedness owed to the
Lenders under the Loan Documents) in excess of $10,000,000 (or, in the case of
such a default under a Hedging Agreement, $2,500,000, measured by reference to
the mark to market termination value of obligations under the respective
Hedging Agreement(s) at the time) in the aggregate beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness
was created, (ii) a default shall occur in the performance or observance of any
agreement under any such Indebtedness in excess of $10,000,000 or contained in
any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such holder

 

90

 

or holders) to cause (determined without regard to
whether any notice of acceleration or similar notice is required), any such
Indebtedness to become due or be repaid prior to its stated maturity or (iii)
any Indebtedness in excess of $10,000,000 of Holdco I, Holdco II, Borrower or
any of its Restricted Subsidiaries shall be declared to be due and payable, or
required to be prepaid other than by a regularly scheduled required prepayment
(other than with proceeds of the event giving rise to such prepayment), prior
to the stated maturity thereof; or

 

(h)           Judgments.  One or more
judgments or decrees shall be entered against Borrower or any of its Restricted
Subsidiaries involving, individually or in the aggregate, a liability (to the
extent not paid or covered by a reputable insurance company which has accepted
liability in writing) of $10,000,000 or more and all such judgments or decrees
shall not have been vacated, discharged, satisfied, stayed or bonded pending
appeal within thirty (30) days from the entry thereof; or

 

(i)            ERISA.  (i) Either (a)
any Reportable Event which constitutes grounds for the termination of any Plan
by the PBGC or of any Multiemployer Plan or for the appointment by the
appropriate United States District Court of a trustee to administer or
liquidate any Plan or Multiemployer Plan shall have occurred; (b) a trustee
shall be appointed by a United States District Court to administer any Plan or
Multiemployer Plan; (c) the PBGC shall institute proceedings to terminate any
Plan or Multiemployer Plan or to appoint a trustee to administer any Plan; (d)
Borrower or any of its ERISA Affiliates shall become liable to the PBGC or any
other party under Section 4062, 4063 or 4064 of ERISA with respect to any Plan;
or (e) Borrower or any of its Subsidiaries or any of their ERISA Affiliates
shall become liable to make a current payment with respect to any Multiemployer
Plan under Section 4201 et seq. of ERISA; if as of the date thereof or
any subsequent date, the sum of each of Borrower’s and its Subsidiaries’ and
their ERISA Affiliates’ various liabilities (such liabilities to include,
without limitation, any liability to the PBGC or to any other party under
Section 4062, 4063 or 4064 of ERISA with respect to any Plan, or to any
Multiemployer Plan under Section 4201 et seq, of ERISA) as a result of such
events listed in subclauses (a) through (e) above exceeds $10,000,000; or (ii)
either (a) a foreign governmental authority has instituted proceedings to
terminate a Foreign Pension Plan or a foreign governmental authority has
appointed a trustee to administer any Foreign Pension Plan in place of the
existing administrator, in each case by reason of a distress termination within
the meaning of Section 4041(c) of ERISA, treating such Foreign Pension Plan as
if it were subject to ERISA; or (b) any Foreign Pension Plan that is required
by applicable law to be funded in a trust or other funding vehicle has failed
to comply with such funding requirements; if, as of the date thereof or as of
any subsequent date, the sum of each of Borrower’s and its Subsidiaries’
various liabilities to any Foreign Pension Plan solely as a result of such
events listed in subclauses (a) and (b) of this clause (ii) exceeds the Dollar
Equivalent of $10,000,000; or

 

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

 

(k)           Security Documents; Guarantees.  (i)
At any time after the execution and delivery thereof, any of the Security
Documents shall cease to be in full force and effect (other than as a result of
the actions taken by the Collateral Agent) or shall cease to give the
Collateral Agent for the benefit of the Lenders the Liens, rights, powers and
privileges purported to be created thereby (including, without limitation, a
first priority perfected security interest in,

 

91

 

and Lien on, all of the Collateral), in favor of the
Collateral Agent for the benefit of the Secured Parties subject to no other
Liens (except to the extent expressly permitted herein or therein); or (ii) any
Guaranty or any provision thereof shall (other than as a result of the actions
taken by Administrative Agent or the Lenders to release such Guaranty) cease to
be in full force and effect in accordance with its terms, or any Credit Party
or any Person acting by or on behalf of such Guarantor shall deny or disaffirm
such Credit Party’s obligations under any Guaranty.

 

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

 

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

 

10.2        Rights Not Exclusive.

 

The rights provided for
in this Agreement and the other Loan Documents are cumulative and are not exclusive
of any other rights, powers, privileges or remedies provided by law or in
equity, or under any other instrument, document or agreement now existing or
hereafter arising.

 

ARTICLE XI

 

ADMINISTRATIVE AGENT

 

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

 

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11.1        Appointment.

 

Each Lender hereby
irrevocably appoints, designates and authorizes Administrative Agent (for
purposes of this Article XI, the term “Administrative Agent”
shall, except for purposes of Section 11.9, include Administrative Agent
in its capacity as Collateral Agent pursuant to the Security Documents) to act
as specified herein and in the other Loan Documents.  Each Lender hereby irrevocably authorizes,
and each holder of any Note by the acceptance of such Note shall be deemed
irrevocably to authorize, Administrative Agent to take such action on its
behalf under the provisions hereof, the other Loan Documents (including,
without limitation, to give notices and take such actions on behalf of the
Required Lenders as are consented to in writing by the Required Lenders or all
Lenders, as the case may be) and any other instruments, documents and
agreements referred to herein or therein and to exercise such powers hereunder
and thereunder as are specifically delegated to Administrative Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto.  Administrative Agent may
perform any of its duties hereunder and under the other Loan Documents, by or
through its officers, directors, agents, employees or affiliates.

 

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

 

11.3        Rights, Exculpation, Etc.

 

Neither Administrative
Agent nor any of its officers, directors, agents, employees or affiliates shall
be liable to any Lender for any action taken or omitted by it hereunder or
under any of the Loan Documents, or in connection herewith or therewith, unless
caused by its or their gross negligence or willful misconduct.  Administrative Agent shall not be responsible
to any Lender for any recitals, statements, representations or warranties herein
or for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of any of the Loan Documents or any other
document or the financial condition of Borrower.  Administrative

 

93

 

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

 

11.4        Reliance.

 

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

 

11.5        Indemnification.

 

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

 

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11.6        Administrative Agent in its
Individual Capacity.

 

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

 

11.7        Notice of
Defaults.

 

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

 

11.8        Holders of
Obligations.

 

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

 

11.9        Resignation by Administrative Agent.

 

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

 

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

 

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

 

95

 

may be, until such time, if any, as the Required
Lenders, with the consent of Borrower, appoint a successor Administrative Agent
as provided above.

 

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

 

ARTICLE XII

 

MISCELLANEOUS

 

12.1        No Waiver; Modifications in Writing.

 

(a)           No
failure or delay on the part of Administrative Agent or any Lender in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.  The remedies
provided for herein are cumulative and are not exclusive of any remedies that
may be available to Administrative Agent or any Lender at law or in equity or
otherwise.  Neither this Agreement nor
any terms hereof may be amended, modified, supplemented, waived, discharged,
terminated or otherwise changed unless such amendment, modification,
supplement, waiver, discharge, termination or other change is in writing signed
by the respective Credit Parties party thereto and the Required Lenders, provided,
that no such amendment, modification, supplement, waiver, discharge,
termination or other change shall, without the consent of each Lender (with
Obligations directly affected thereby in the case of the following clause (i)):

 

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

 

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

 

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

 

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

 

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

 

96

 

(vi)          amend
the definition of Pro Rata Share;

 

provided further that no
such amendment, modification, supplement, waiver discharge, termination or
other change shall, without the consent of Administrative Agent, (i) amend,
modify or waive any provision of Article XI as same applies to Administrative
Agent or any other provisions as same relates to the rights or obligations of
Administrative Agent; or (ii) amend, modify or waive any provisions relating to
the rights or obligations of Administrative Agent under the other Loan
Documents;

 

(b)           If,
in connection with any proposed change, waiver, discharge or termination of any
of the provisions of this Agreement as contemplated by clauses (a)(i) through
(vi), inclusive, of the proviso to the third sentence of Section 12.1(a),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, then Borrower
shall have the right, to replace each such non-consenting Lender or Lenders with
one or more Replacement Lenders pursuant to Section 3.6 so long as at
the time of such replacement, each such Replacement Lender consents to the
proposed amendment, modification, supplement, waiver, discharge, termination or
other change.

 

(c)           In
addition, notwithstanding the foregoing, this Agreement may be amended with the
written consent of Administrative Agent, Borrower and the Lenders providing the
relevant Replacement Term Loans (as defined below) to permit the refinancing or
modification of all outstanding Term B Loans (“Refinanced Term Loans”)
with one or more replacement or modified term loan facilities hereunder (“Replacement
Term Loans”), provided that (a) any Lender that does not consent to the
amendment and that holds Refinanced Term Loans receives payment in full of the
principal amount of and interest accrued on each Refinanced Term Loan made by
it and any other obligations owed to it or is replaced as provided in Section
3.6, (b) the aggregate principal amount of such Replacement Term Loans shall
not exceed the aggregate principal amount of such Refinanced Term Loans unless
the Required Lenders (treating the Refinanced Loans of any Lender that does not
provide Replacement Term Loans as having been paid in full immediately prior to
the amendment) shall approve such increase, (c) the Applicable Margin for
Eurodollar Loans and the Applicable Margin for Base Rate Loans for the
Replacement Term Loans shall not be higher than such applicable margins for the
Refinanced Term Loans unless the Required Lenders (treating the Refinanced
Loans of any Lender that does not provide Replacement Term Loans as having been
paid in full immediately prior to the amendment) shall approve such increase,
(d) the Weighted Average Life to Maturity of such Replacement Term Loans shall
not be shorter than the Weighted Average Life to Maturity of the Refinanced
Term Loans at the time of such amendment and (e) all other terms applicable to
such Replacement Term Loans shall be substantially identical to, or less
favorable to the Lenders providing such Replacement Term Loans than those
applicable to such Refinanced Term Loans except to the extent necessary to
provide for covenants and other terms applicable to any period after the latest
final maturity of Term B Loans in effect immediately prior to such amendment
unless the Required Lenders (treating the Refinanced Loans of any Lender that
does not provide Replacement Term Loans as having been paid in full immediately
prior to the amendment) shall approve such terms.

 

97

 

(d)           Notwithstanding
the foregoing, upon the execution and delivery of all documentation required by
Administrative Agent to be delivered pursuant to Section 2.4 in
connection with Additional Term B Loans, this Agreement shall be deemed amended
without further action by any Lender to reflect, as applicable, the new Lenders
and the terms of such Additional Term B Loans.

 

12.2        Further Assurances.

 

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

 

12.3        Notices. Etc.

 

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

 

(b)           Notices
and other communications to or by Administrative Agent and the Lenders
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by
Administrative Agent, provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by Administrative Agent and the
applicable Lender.  Administrative Agent
or Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.

 

(c)           Unless
Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of
an acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such

 

98

 

notice or other communication is sent after 5:00 p.m.
(New York City time), such notice or communication shall be deemed to have been
sent at the opening of business on the next Business Day for the recipient, and
(ii) notices or communications posted to an Internet or intranet website shall
be deemed received upon the deemed receipt by the intended recipient at its
e-mail address as described in the foregoing clause (i) of notification that
such notice or communication is available and identifying the website address
therefor.

 

12.4        Costs, Expenses and Taxes.

 

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

 

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

 

99

 

Person upon their demand, for any Attorney Costs or
other expenses incurred in connection with investigating, preparing to defend
or defending any such loss, claim, damage, liability, action or claim; provided,
however,

 

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

 

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

 

(iii)         If
any action, suit or proceeding arising from any of the foregoing is brought
against Administrative Agent, any Lender or any other Person indemnified or
intended to be indemnified pursuant to this Section 12.4, Borrower will,
if requested by Administrative Agent, any Lender or any such Indemnified
Person, resist and defend such action, suit or proceeding or cause the same to
be resisted and defended by counsel reasonably satisfactory to the Person or
Persons indemnified or intended to be indemnified.  Each Indemnified Person shall, unless
Administrative Agent, a Lender or other Indemnified Person has made the request
described in the preceding sentence and such request has been complied with,
have the right to employ its own counsel (or (but not as well as) staff
counsel) to investigate and control the defense of any matter covered by such
indemnity and the reasonable fees and expenses of such counsel shall be at the
expense of the indemnifying party. 
Excluding any liability to the extent arising out of the gross
negligence or willful misconduct of any Indemnified Person as determined by a
court of competent jurisdiction in a final non-appealable judgment, Borrower
further agrees to indemnify and hold each Indemnified Person harmless from all
loss, cost (including Attorney Costs), liability and damage whatsoever incurred
by any Indemnified Person by reason of any violation of any Environmental Laws
or Environmental Permits or for the Release or threatened Release of any
Contaminants into the environment for which Borrower or any of its Subsidiaries
has any liability or which occurs upon the Mortgaged Property or which is
related to any property currently or formerly owned, leased or operated by or
on behalf of Borrower or any of its Subsidiaries, or by reason of the
imposition of any Environmental Lien or which occurs by a breach of any of the
representations, warranties or covenants relating to environmental matters
contained herein, provided that, with respect to any liabilities arising
from acts or failure to act for which Borrower or any of its Subsidiaries is
strictly liable under any Environmental Law or Environmental Permit, Borrower’s
obligation to each Indemnified Person under this indemnity shall likewise be
without regard to fault on the part of Borrower or any such Subsidiary.  If Borrower shall fail to do any act or thing
which it has covenanted to do hereunder or any representation or warranty on
the part of Borrower or any Subsidiary contained herein or in any other Loan
Document shall be breached, Administrative Agent may (but shall not be
obligated to) do the same or cause it to be done or remedy any such breach,

 

100

 

and may expend its funds
for such purpose, and will use its best efforts to give prompt written notice
to Borrower that it proposes to take such action.  Any and all amounts so expended by
Administrative Agent shall be repaid to it by Borrower promptly upon
Administrative Agent’s demand therefor, with interest at the Default Rate in
effect from time to time during the period including the date so expended by
Administrative Agent to the date of repayment. 
To the extent that the undertaking to indemnify, pay or hold harmless
Administrative Agent or any Lender as set forth in this Section 12.4 may
be unenforceable because it is violative of any law or public policy, Borrower
shall make the maximum contribution to the payment and satisfaction of each of
the indemnified liabilities which is permissible under applicable law.  The obligations of Borrower under this Section
12.4 shall survive the termination of this Agreement and the discharge of
Borrower’s other Obligations hereunder.

 

12.5        Confirmations.

 

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

 

12.6        Adjustment.

 

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

 

(b)           Borrower
expressly agrees that to the extent Borrower makes a payment or payments and
such payment or payments, or any part thereof, are subsequently invalidated,
declared to be fraudulent or preferential, set aside or are required to be
repaid to a trustee, receiver, or any other party under any bankruptcy act,
state or federal law, common law or equitable cause, then to the extent of such
payment or repayment, the Indebtedness to the

 

101

 

Lenders or part thereof intended to be satisfied shall
be revived and continued in full force and effect as if said payment or
payments had not been made.

 

12.7        Execution in Counterparts.

 

This Agreement may be executed
in any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together,
shall constitute but one and the same Agreement.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of
a manually executed counterpart of this Agreement.

 

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

 

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

 

(b)           Each
Lender may at any time sell to one or more banks or other entities (“Participants”)
participating interests in all or any portion of its Loans or any other
interest of such Lender hereunder (in respect of any Lender, its “Credit
Exposure”).  In the event of any such
sale by a Lender of participating interests to a Participant, such Lender’s
obligations under this Agreement shall remain unchanged, such Lender shall
remain solely responsible for the performance thereof, and Borrower and
Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement.  Each Lender shall from time
to time upon request of Borrower notify Borrower of the identity of any
Participants with respect to its Credit Exposure hereunder, provided, however,
that failure to provide such notice will not affect the validity of such
participation.  Borrower agrees that if
amounts outstanding under this Agreement or any of the Loan Documents are due
or unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of setoff in respect of its participating interest in amounts
owing under this Agreement and the Loan Documents to the same extent as if the
amount of its participating interest were owing directly to it as a Lender
under this Agreement or any other Loan Document, provided that such right of
setoff shall be subject to the obligation of such Participant to share with the
Lenders, and the Lenders agree to share with such Participant, as provided in Section
4.6.  Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 3.4, 3.5
and 4.5 with respect to its participation in the Loans outstanding from
time to time as if it were a Lender, provided that such Participant’s benefits
under Sections 3.4, 3.5 and 4.5 shall be limited to the
benefits that the primary Lender would be entitled to thereunder.  Each Lender agrees that any agreement between
such Lender and any such Participant in respect of such participating interest
shall not restrict such Lender’s right to approve or agree to any amendment,
restatement, supplement or other modification to, waiver of, or consent under
this Agreement or any of the Loan Documents except to the extent that any of
the foregoing would (i) extend the final scheduled maturity of any Loan or Note
in which such Participant is participating (it being understood that amending

 

102

 

the definitions of Scheduled Term B Loans Principal
Payments (other than the Term B Loan Maturity Date) shall not constitute an
extension of the final scheduled maturity of any Loan or Note), or reduce the
rate or extend the time of payment of interest or fees on any such Loan or Note
(except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof, or increase
the amount of the Participant’s participation over the amount thereof then in
effect (it being understood that waivers or modifications of conditions
precedent, covenants, Events of Default or Unmatured Events of Default shall
not constitute a change in the terms of such participation, and that an
increase in any Loan shall be permitted without the consent of any Participant
if the Participant’s participation is not increased as a result thereof), (ii)
consent to the assignment or transfer by Borrower of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Security Documents (except as expressly
provided in the Loan Documents) supporting the Loans hereunder in which such
Participant is participating.

 

(c)           Any
Lender may at any time assign to one or more Eligible Assignees, including an
Affiliate thereof (treating any fund that invests in bank loans, any other fund
that invests in bank loans and is managed by the same investment advisor of
such Lender or by an affiliate of such investment manager as a single Eligible
Assignee) (each an “Assignee”), all or any part of its Loans pursuant to an
Assignment and Assumption Agreement; provided that (i) it assigns its
Credit Exposure in an amount not less than $1,000,000 (except in the case of an
assignment to another Lender) and (ii) any assignment of all or any portion of
any Lender’s Loans to an Assignee other than an Affiliate of such Lender or
another Lender or its Affiliates, or in the case of a Lender that is a fund
that invests in senior loans, any Related Fund of any Lender, shall require the
prior written consent of Administrative Agent (such consent not to be
unreasonably withheld or delayed), provided  further, that
notwithstanding the foregoing limitations, any Lender may at any time assign
all or any part of its Loans to any Affiliate of such Lender or to any other
Lender or any Affiliate of any other Lender (or in the case of a Lender which
is a Related Fund, to any Related Fund of any Lender).  Upon execution of an Assignment and
Assumption Agreement and the payment of a nonrefundable assignment fee of
$3,500 (provided that no such fee shall be payable upon assignments by any
Lender which is a fund to one or more Related Fund) in immediately available
funds to Administrative Agent at its Payment Office in connection with each
such assignment, written notice thereof by such transferor Lender to
Administrative Agent and the recording by Administrative Agent in the Register
of such assignment and the resulting effect upon the applicable Loans of the
assigning Lender and the Assignee, the Assignee shall have, to the extent of
such assignment, the same rights and benefits as it would have if it were a
Lender hereunder and the holder of the Obligations (provided that Borrower and
Administrative Agent shall be entitled to continue to deal solely and directly
with the assignor Lender in connection with the interests so assigned to the
Assignee until written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee,
shall have been given to Borrower and Administrative Agent by the assignor
Lender and the Assignee) and, if the Assignee has expressly assumed, for the
benefit of Borrower, some or all of the transferor Lender’s obligations hereunder,
such transferor Lender shall be relieved of its obligations hereunder to the
extent of such assignment and assumption, and except as described above, no
further consent or action by Borrower, the Lenders or Administrative Agent
shall be required.  At the time of each
assignment pursuant to this Section 12.8(c) to a Person which is not
already a

 

103

 

Lender hereunder and which is not a “United States
person” (as such term is defined in Section 7701(a)(30) of the Code) for United
States Federal income tax purposes, the respective Assignee shall provide to
Borrower and Administrative Agent the appropriate IRS Forms (and, if applicable
a Section 4.5(d) Certificate) described in Section 4.5(d).  Each Assignee shall take such Credit Exposure
subject to the provisions of this Agreement and to any request made, waiver or
consent given or other action taken hereunder, prior to the receipt by
Administrative Agent and Borrower of written notice of such transfer, by each
previous holder of such Credit Exposure. 
Such Assignment and Assumption Agreement shall be deemed to amend this
Agreement, to the extent, and only to the extent, necessary to reflect the
addition of such Assignee as a Lender and the resulting adjustment of all or a
portion of the rights and obligations of such transferor Lender under this
Agreement, the determination of its Pro Rata Share of the applicable Facility
(in each case, rounded to twelve decimal places), the Loans and any new Notes
to be issued, at Borrower’s expense, to such Assignee, and no further consent
or action by Borrower or the Lenders shall be required to effect such
amendments.

 

(d)           Borrower
authorizes each Lender to disclose to any Participant or Assignee (each, a “Transferee”)
and any prospective Transferee any and all financial information in such Lender’s
possession concerning Borrower and any Subsidiary of Borrower which has been
delivered to such Lender by Borrower pursuant to this Agreement or which has
been delivered to such Lender by Borrower in connection with such Lender’s
credit evaluation of Borrower prior to entering into this Agreement, provided
that, such Transferee or any prospective Transferee agrees to treat such
financial information which is not public in accordance with the terms of Section
12.16 hereof.

 

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

 

12.9        CONSENT TO JURISDICTION; MUTUAL
WAIVER OF JURY TRIAL.

 

(A)          BORROWER,
ADMINISTRATIVE AGENT, AND EACH LENDER HEREBY IRREVOCABLY SUBMIT TO THE
NONEXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT
SITTING IN THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND HEREBY IRREVOCABLY
AGREE THAT ALL CLAIMS IN RESPECT TO

 

104

 

SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH UNITED STATES
FEDERAL OR NEW YORK STATE COURT AND THE BORROWER, THE ADMINISTRATIVE AGENT,
HOLDINGS AND EACH LENDER IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR ANY OBJECTION BASED ON THE
GROUNDS OF FORUM NON CONVENIENS WHICH ANY OF THEM MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.

 

(B)          AS
A METHOD OF SERVICE, BORROWER, ADMINISTRATIVE AGENT, AND EACH LENDER
IRREVOCABLY CONSENT TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING, BROUGHT IN ANY SUCH UNITED STATES FEDERAL OR NEW YORK STATE COURT
BY THE DELIVERY OF COPIES OF SUCH PROCESS TO THE BORROWER, THE ADMINISTRATIVE
AGENT, HOLDINGS OR EACH RESPECTIVE LENDER, AS THE CASE MAY BE, AT THE ADDRESSES
SPECIFIED ON THEIR RESPECTIVE SIGNATURE PAGES TO THIS AGREEMENT OR BY CERTIFIED
MAIL DIRECT TO SUCH RESPECTIVE ADDRESSES.

 

(C)          BORROWER,
ADMINISTRATIVE AGENT AND EACH LENDER HEREBY EXPRESSLY WAIVE ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT, POWER
OR REMEDY UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT.  THE TERMS AND THE PROVISIONS
OF THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT TO LENDERS ENTERING INTO THIS
AGREEMENT.

 

12.10      GOVERNING LAW.

 

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

 

12.11      Severability
of Provisions.

 

Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or

 

105

 

unenforceability
without invalidating the remaining provisions hereof or affecting the validity
or enforceability of such provision in any other jurisdiction.

 

12.12      Transfers of
Notes.

 

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

 

12.13      Registry.

 

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

 

106

 

12.14      Headings.

 

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

 

12.15      Termination
of Agreement.

 

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

 

12.16      Confidentiality.

 

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

 

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

 

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

 

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

 

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

 

107

 

(v)            to
the extent (x) required by any applicable statute, rule or regulation or court
order (including, without limitation, by way of subpoena) or pursuant to the
request of any Governmental Authority having or reasonably asserting
jurisdiction over any Lender or Administrative Agent; provided, however,
that in such event, if the Lender(s) are able to do so, the Lender shall
provide Borrower with prompt notice of such requested disclosure so that
Borrower may seek a protective order or other appropriate remedy, and, in any
event, the Lenders will endeavor in good faith to provide only that portion of
such information which, in the reasonable judgment of the Lender(s), is relevant
and legally required to be provided, (y) requested by any nationally recognized
rating agency that requires access to information about a Lender’s investment
portfolio in connection with rating issued with respect to such Lender or (z)
requested by a direct or indirect contractual counterparty in swap agreements
with a Lender or a Person that such Lender is a direct or indirect counterparty
in a swap agreement or such contractual counterparty’s professional advisor (so
long as such contractual counterparty or professional advisor to such
contractual counterparty agrees to be bound by the provisions of this Section
12.16),

 

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

 

12.17      Concerning the Collateral and the
Loan Documents.

 

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

 

108

 

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

 

(b)           Release
of Collateral.

 

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

 

(A)          against
all of the Collateral, upon termination hereof as provided in Section 12.15;

 

(B)          against any
part of the Collateral sold or disposed of by Borrower or any of its
Subsidiaries to the extent such sale or disposition is permitted hereby (or
permitted pursuant to an amendment hereto, a waiver hereof or a consent to a
transaction otherwise prohibited hereby);

 

(C)          against any
Collateral acquired by Borrower or any of its Subsidiaries after the Closing
Date financed with Indebtedness secured by a Lien permitted by Section
8.1(b)(i);

 

(D)          so long as no
Default or Event of Default has occurred and is continuing, in the sole
discretion of Administrative Agent upon the request of Borrower, against any
part of the Collateral with a fair market value of less than $10,000,000 in the
aggregate during the term of this Agreement as such fair market value may be
certified to Administrative Agent by Borrower in an officer’s certificate
acceptable in form and substance to Administrative Agent; and

 

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

 

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

 

109

 

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

 

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

 

(d)           Revolving Credit Agreement Liens.  Each
Lender hereby instructs Administrative Agent and the Collateral Agent to enter
into the Security Agreement and the Intercreditor Agreement and such amendments
or modifications thereto and to the other Security Documents consistent
herewith and as Administrative Agent or the Collateral Agent reasonably
determines to be necessary to cause the Liens on the Term and Note First
Priority Collateral (as defined in the Intercreditor Agreement) securing the
Obligations to be senior to the Liens on the Term and Note First Priority
Collateral securing the Revolving Loan Obligations and to cause the Liens on
the Revolver First Priority Collateral (as defined in the Intercreditor
Agreement) securing the Obligations to be subordinated to the Liens on the
Revolver First Priority Collateral securing the Revolving Loan Obligations, in
each case, to the extent set forth in the Intercreditor Agreement.  Each Lender agrees that, notwithstanding the
time, order or method of attachment or perfection of Liens granted in favor of
the Collateral Agent and/or the Revolving Collateral Agent, to secure the
Obligations and/or the Revolving Loan Obligations or the filing or recording of
financing statements or other Security Documents and/or Revolving Security
Documents; the validity or enforceability of the security interests and Liens
granted in favor of the Revolving Collateral Agent or the Collateral Agent; any
provisions of the UCC or any applicable law or decision; any provision set
forth in any Security Document and/or any Revolving Security Document in the
possession or control by the Revolving Collateral Agent or the Collateral Agent
of all or any part of any Collateral or Revolving Collateral as of the date
hereof or otherwise, the Liens granted under the Revolving Security Documents
and the Liens granted under the Security Documents shall have the priority set
forth above as more fully set forth in the Intercreditor Agreement.  Each Lender agrees that it shall not
challenge or question in any proceeding the validity or enforceability of this Section
12.17(d) or any corresponding provisions with respect to lien subordination
in the Security Agreement or the Intercreditor Agreement.  Each Lender

 

110

 

agrees that it shall not challenge or question in any
proceeding the priority or validity of the liens granted to Administrative
Agent, “Lenders” (as defined in Revolving Credit Agreement), Revolving
Administrative Agent, Collateral Agent or the Revolving Collateral Agent to
secure the Revolving Obligations.

 

(e)           Refinancing.  Notwithstanding the first
priority liens granted to the Collateral Agent for the benefit of the Term
Lenders, the parties hereto agree that, for purposes of the Senior Secured
Notes Indenture, this Agreement constitutes a refinancing and replacement of
the Second Priority Credit Facility and the Indebtedness incurred pursuant to
this Agreement shall continue to constitute Second Priority Senior Secured
Indebtedness as such term is used in the Senior Secured Notes Indenture; that
Administrative Agent and Collateral Agent have been appointed to such roles as
successors to the Bank Agent and Second Priority Collateral Agent,
respectively; that Administrative Agent, as Bank Agent, shall continue to be
the Second Priority Representative; that the Security Agreement constitutes a
replacement of the existing Second Priority Security Agreement and therefore is
the new Second Priority Security Agreement; and that the Secured Parties
constitute Second Priority Senior Secured Parties.  Capitalized terms used in this Section
12.17(e) but not defined in this Agreement shall have the meanings assigned
to such terms in the Senior Secured Notes Indenture.

 

12.18      Certain
Guarantee Obligations.

 

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

 

12.19      Effectiveness.

 

This Agreement shall
become effective on the date (the “Effective Date”) on which Borrower,
Administrative Agent and each of the Lenders shall have signed a counterpart of
this Agreement (whether the same or different counterparts) and shall have
delivered the same to the Administrative Agent at the Notice Office (or to
Administrative Agent’s counsel as directed by such counsel).

 

[signature
pages follow]

 

111

 

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

 

	
   

  	
  HUNTSMAN LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sean Douglas

  	
   

  
	
   

  	
  Name:

  	
  Sean Douglas

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Huntsman LLC

  
	
   

  	
  500 Huntsman Way

  
	
   

  	
  Salt Lake City, Utah 84108

  
	
   

  	
  Attn: General Counsel

  
	
   

  	
  Tel. No.: (801) 584-5700

  
	
   

  	
  Telecopier No.: (801) 584-5781

  
					

 

Solely for purposes of Section 8.14 of this
Agreement:

 

	
  HUNTSMAN
  SPECIALTY CHEMICALS

  
	
  CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Sean Douglas

  	
   

  
	
   

  
	
  Name:

  	
  Sean Douglas

  
	
   

  
	
  Title:

  	
  Vice President

  
	
   

  
	
  Solely for purposes of Section 8.14 of this
  Agreement:

  
	
   

  
	
  HUNTSMAN
  SPECIALTY CHEMICALS

  
	
  HOLDINGS
  CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Sean Douglas

  	
   

  
	
   

  
	
  Name:

  	
  Sean Douglas

  
	
   

  
	
  Title:

  	
  Vice President

  
				

 

 

 

	
   

  	
  DEUTSCHE BANK TRUST COMPANY

  AMERICAS (f/k/a BANKERS
  TRUST

  COMPANY in its individual capacity as a Lender

  and Administrative Agent)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank Fazio

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Frank Fazio

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Deutsche Bank Trust Company

  
	
   

  	
  Americas 31 West 52nd Street

  
	
   

  	
  New York, NY 10022

  
	
   

  	
  Attn: John Anos

  
	
   

  	
  Tel. No.: (212) 469-2750

  
	
   

  	
  Telex No.: 62922

  
	
   

  	
  (Answerback: BTA9-UAW)

  
	
   

  	
  Telecopier No.: (212) 469-3632Exhibit
10.3

 

SECURITY AGREEMENT

 

among

 

HUNTSMAN LLC

 

CERTAIN
SUBSIDIARIES OF HUNTSMAN LLC,

 

and

 

DEUTSCHE BANK
TRUST COMPANY AMERICAS,

as Collateral
Agent

 

 

Dated as of
October 14, 2004

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE I

  	
  SECURITY INTERESTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 1.1.   GRANT
  OF SECURITY INTERESTS

  	
   

  
	
   

  	
  SECTION
  1.2.   ACKNOWLEDGEMENT OF SUBORDINATED
  LIEN POSITION

  	
   

  
	
   

  	
  SECTION 1.3.   POWER OF ATTORNEY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  GENERAL REPRESENTATIONS, WARRANTIES
  AND COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION
  2.1.   GENERAL REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
  SECTION 2.2.   NECESSARY FILINGS

  	
   

  
	
   

  	
  SECTION 2.3.   NO LIENS

  	
   

  
	
   

  	
  SECTION 2.4.   OTHER FINANCING STATEMENTS

  	
   

  
	
   

  	
  SECTION
  2.5.   CHIEF EXECUTIVE OFFICE; RECORDS

  	
   

  
	
   

  	
  SECTION 2.6.   AIRCRAFT, VEHICLES, VESSELS AND RAILCARS

  	
   

  
	
   

  	
  SECTION
  2.7.   LOCATION OF INVENTORY AND
  EQUIPMENT

  	
   

  
	
   

  	
  SECTION 2.8.   RECOURSE

  	
   

  
	
   

  	
  SECTION
  2.9.   ORGANIZATIONAL NAMES;
  JURISDICTIONS OF ORGANIZATION

  	
   

  
	
   

  	
  SECTION 2.10.   JURISDICTION
  OF FORMATION

  	
   

  
	
   

  	
  SECTION 2.11.  COMMERCIAL TORT CLAIMS

  	
   

  
	
   

  	
  SECTION
  2.12.  BRING-DOWN OF REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  III

  	
  SPECIAL
  PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION
  3.1.   ADDITIONAL REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
  SECTION 3.2.   MAINTENANCE OF RECORDS

  	
   

  
	
   

  	
  SECTION
  3.3.   DISPOSITION OR COLLECTION OF
  RECEIVABLES

  	
   

  
	
   

  	
  SECTION 3.4.   INSTRUMENTS

  	
   

  
	
   

  	
  SECTION
  3.5.   DIRECTION TO ACCOUNT DEBTORS;
  CONTRACTING PARTIES, ETC

  	
   

  
	
   

  	
  SECTION 3.6.   FURTHER ACTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV

  	
  SPECIAL
  PROVISIONS CONCERNING MARKS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION
  4.1.   ADDITIONAL REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
  SECTION 4.2.   DIVESTITURES

  	
   

  
	
   

  	
  SECTION 4.3.   INFRINGEMENTS

  	
   

  
	
   

  	
  SECTION 4.4.   PRESERVATION OF MARKS

  	
   

  
	
   

  	
  SECTION 4.5.   MAINTENANCE OF REGISTRATION

  	
   

  
	
   

  	
  SECTION 4.6.   FUTURE REGISTERED MARKS

  	
   

  
	
   

  	
  SECTION 4.7.   REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V

  	
  SPECIAL
  PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION
  5.1.   ADDITIONAL REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
  SECTION 5.2.   LICENSES AND ASSIGNMENTS

  	
   

  
	
   

  	
  SECTION 5.3.   INFRINGEMENTS

  	
   

  
	
   

  	
  SECTION 5.4.   MAINTENANCE OF PATENTS

  	
   

  
	
   

  	
  SECTION
  5.5.   PROSECUTION OF PATENT
  APPLICATIONS

  	
   

  
	
   

  	
  SECTION 5.6.
    OTHER PATENTS AND COPYRIGHTS

  	
   

  
	
   

  	
  SECTION 5.7.   REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  	
  PROVISIONS
  CONCERNING PLEDGED SECURITIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION
  6.1.   PLEDGE OF NOTES AND ADDITIONAL
  STOCK

  	
   

  
	
   

  	
  SECTION
  6.2.   TITLE; SECURITY INTEREST AND
  LIEN

  	
   

  
	
   

  	
  SECTION
  6.3.   ADDITIONAL DOCUMENTATION;
  FURTHER ASSURANCES

  	
   

  
	
   

  	
  SECTION 6.4.   PLEDGED STOCK

  	
   

  

 

i

 

	
  ARTICLE
  VII

  	
  PROVISIONS
  CONCERNING ALL COLLATERAL

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.1.   PROTECTION OF COLLATERAL AGENT’S SECURITY

  	
   

  
	
   

  	
  SECTION 7.2.   WAREHOUSE RECEIPTS NON-NEGOTIABLE; THIRD
  PARTY ACKNOWLEDGEMENT

  	
   

  
	
   

  	
  SECTION 7.3.   RIGHT TO INITIATE JUDICIAL PROCEEDINGS, ETC

  	
   

  
	
   

  	
  SECTION 7.4.   APPOINTMENT OF A RECEIVER

  	
   

  
	
   

  	
  SECTION 7.5.   FURTHER ACTIONS

  	
   

  
	
   

  	
  SECTION 7.6.   FINANCING STATEMENTS

  	
   

  
	
   

  	
  SECTION 7.7.   CONTROL

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  	
  REMEDIES
  UPON OCCURRENCE OF EVENT OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.1.   REMEDIES; OBTAINING THE COLLATERAL UPON
  DEFAULT

  	
   

  
	
   

  	
  SECTION 8.2.   REMEDIES; DISPOSITION OF THE COLLATERAL

  	
   

  
	
   

  	
  SECTION 8.3.   WAIVER OF CLAIMS

  	
   

  
	
   

  	
  SECTION 8.4.   APPLICATION OF PROCEEDS

  	
   

  
	
   

  	
  SECTION 8.5.   REMEDIES CUMULATIVE

  	
   

  
	
   

  	
  SECTION 8.6.   DISCONTINUANCE OF PROCEEDINGS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  INDEMNITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1.   INDEMNITY

  	
   

  
	
   

  	
  SECTION 9.2.   INDEMNITY OBLIGATIONS SECURED BY
  COLLATERAL; SURVIVAL

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X

  	
  OTHER
  AGREEMENTS WITH COLLATERAL AGENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 10.1.   RECORD KEEPING AND REPORTING

  	
   

  
	
   

  	
  SECTION 10.2.   COMPENSATION AND EXPENSES

  	
   

  
	
   

  	
  SECTION 10.3.   STAMP AND OTHER TAXES

  	
   

  
	
   

  	
  SECTION 10.4.   FILING FEES, EXCISE TAXES, ETC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  THE COLLATERAL AGENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 11.1.   EXCULPATORY PROVISIONS

  	
   

  
	
   

  	
  SECTION 11.2.   DELEGATION OF DUTIES

  	
   

  
	
   

  	
  SECTION 11.3.   RELIANCE BY COLLATERAL AGENT

  	
   

  
	
   

  	
  SECTION 11.4.   LIMITATIONS ON DUTIES OF THE COLLATERAL
  AGENT

  	
   

  
	
   

  	
  SECTION 11.5.   COLLATERAL TO BE HELD FOR BENEFIT OF
  SECURED PARTIES

  	
   

  
	
   

  	
  SECTION 11.6.   RESIGNATION AND REMOVAL OF THE COLLATERAL
  AGENT

  	
   

  
	
   

  	
  SECTION 11.7.   STATUS OF SUCCESSORS TO THE COLLATERAL
  AGENT

  	
   

  
	
   

  	
  SECTION 11.8.   MERGER OF THE COLLATERAL AGENT

  	
   

  
	
   

  	
  SECTION 11.9.   ADDITIONAL CO-AGENTS; SEPARATE AGENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  TERMINATION;
  REINSTATEMENT; RELEASES OF COLLATERAL UPON SATISFACTION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 12.1.   RELEASE OF CERTAIN SECURITY

  	
   

  
	
   

  	
  SECTION 12.2.   TERMINATION UPON SATISFACTION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  XIII

  	
  PROOFS
  OF CLAIM; RIGHTS OF SECURED PARTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 13.1.   FILING OF CLAIMS

  	
   

  
	
   

  	
  SECTION 13.2.   COLLECTION OF CLAIMS

  	
   

  
	
   

  	
  SECTION 13.3.   LIMITATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
  SECTION 14.1.   NOTICES

  	
   

  
	
   

  	
  SECTION 14.2.   WAIVER; AMENDMENT

  	
   

  
	
   

  	
  SECTION 14.3.   OBLIGATIONS ABSOLUTE

  	
   

  
	
   

  	
  SECTION 14.4.   SUCCESSORS AND ASSIGNS

  	
   

  
	
   

  	
  SECTION 14.5.   HEADINGS DESCRIPTIVE

  	
   

  
	
   

  	
  SECTION 14.6.   SEVERABILITY

  	
   

  

 

ii

 

	
   

  	
  SECTION 14.7.   GOVERNING LAW

  	
   

  
	
   

  	
  SECTION 14.8.   CONSENT TO JURISDICTION AND SERVICE OF
  PROCESS; WAIVER OF JURY TRIAL

  	
   

  
	
   

  	
  SECTION 14.9.   ASSIGNOR’S DUTIES

  	
   

  
	
   

  	
  SECTION 14.10.   NO ACTION BY SECURED PARTIES

  	
   

  
	
   

  	
  SECTION 14.11.   COUNTERPARTS

  	
   

  
	
   

  	
  SECTION 14.12.   DEFINITIONS; INTERPRETATION

  	
   

  
	
   

  	
  SECTION 14.13.   CONFLICTS WITH THE CREDIT AGREEMENT

  	
   

  
	
   

  	
  SECTION 14.14.   REPLACEMENT

  	
   

  

 

iii

 

	
  Schedule A

  	
  Existing Hedging Agreements

  	
   

  
	
  Schedule B

  	
  Pledged Intercompany Notes

  	
   

  
	
  Schedule C

  	
  Pledged Stock

  	
   

  
	
  Schedule 2.5

  	
  Record Locations

  	
   

  
	
  Schedule 2.6

  	
  Aircraft, Vehicles, Vessels, Barges,
  Railcars and Rolling Stock

  	
   

  
	
  Schedule 2.7

  	
  Inventory and Equipment Locations

  	
   

  
	
  Schedule 2.9

  	
  Trade, Fictitious and Other Names

  	
   

  
	
  Schedule 2.10

  	
  Jurisdiction of Formation

  	
   

  
	
  Schedule 2.11

  	
  Commercial Tort Claims

  	
   

  
	
  Schedule 4.1

  	
  Trademarks

  	
   

  
	
  Schedule 5.1(A)

  	
  Patents and Applications

  	
   

  
	
  Schedule 5.1(B)

  	
  Copyrights and Applications

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ANNEX A

  	
  Definitions

  	
   

  
	
  ANNEX B

  	
  Assignment of Security Interest in U.S.
  Trademarks and Patents

  	
   

  
	
  ANNEX C

  	
  Assignment of Security Interest in U.S.
  Copyrights

  	
   

  
	
  ANNEX D

  	
  Form of Supplement Regarding Addition of New
  Assignor

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 1.2

  	
  Form of Second Amended
  and Restated Intercreditor Agreement

  	
   

  

 

iv

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT
(the “Agreement”), dated as of October 14, 2004, is by and among each of
the undersigned (each, an “Assignor” and, together with any other entity
that becomes a party hereto pursuant to Section 14.2 hereof,
collectively, the “Assignors”) and DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Collateral Agent (the “Collateral Agent”) for the benefit of (i) the
Lenders and the Administrative Agent under the Credit Agreement hereinafter
referred to; (ii) the Senior Secured Notes Trustee, for the benefit of itself
and the holders of the Senior Secured Notes; (iii) if one or more Lenders (or
any Affiliate thereof) has heretofore entered into or hereafter enters into one
or more (A) interest rate protection agreements (including, without limitation,
interest rate swaps, caps, floors, collars and similar agreements),
(B) foreign exchange contracts, currency swap agreements or other similar
agreements or arrangements designed to protect against the fluctuations in
currency values and/or (C) other types of hedging agreements
(collectively, the “Hedging Agreements”) with, or guaranteed by, an
Assignor, any such Lender or Lenders or any Affiliate of such Lender or Lenders
(even if the respective Lender subsequently ceases to be a Lender under the
Credit Agreement for any reason) so long as any such Lender or Affiliate
participates in the extension of such Hedging Agreements and their subsequent
assigns, if any; and (iv) one or more financial institutions from time to time
party to a Foreign Overdraft Facility Agreement with, or guaranteed by, an
Assignor (collectively the “Secured Parties” or the “Secured Party”).  Except as otherwise defined herein, terms
used herein and defined in the Credit Agreement shall be used herein as so
defined.

 

W I T N E S S E T H :

 

WHEREAS, Huntsman LLC, a
Utah limited liability company (the “Borrower”), the financial
institutions (the “Lenders”) from time to time party thereto and
Deutsche Bank Trust Company Americas, as administrative agent (together with
any successor agent, the “Administrative Agent”), are contemporaneously
herewith entering into a Credit Agreement dated as of the date hereof (the “Credit
Agreement”, as the same may hereafter be amended, modified, extended,
renewed, replaced, restated, waived or supplemented from time to time, and
including any agreement extending the maturity of or restructuring of all or
any portion of the Indebtedness under such agreement or any successor
agreements);

 

WHEREAS, Borrower, the
other borrowers parties thereto, Deutsche Bank Trust Company Americas, as
administrative agent and collateral agent, and the financial institutions
parties thereto are also contemporaneously herewith entering into a Revolving
Credit Agreement dated as of the date hereof providing for the making of
revolving loans as contemplated therein;

 

WHEREAS, Borrower
has issued $455.4 million in aggregate principal amount of Senior Secured Notes
due 2010 (together with any additional notes issued under the Senior Secured
Notes Indenture (as hereinafter defined) which are permitted to be issued under
the Credit Agreement, the “Senior Secured Notes”) under an Indenture,
dated as of September 30, 2003, among Borrower, the Assignors parties thereto
as guarantors, and HSBC Bank USA, as trustee thereunder (such trustee, the “Senior
Secured Notes Trustee”, and such indenture, as 

 

 

amended, restated,
supplemented, refinanced, replaced or otherwise modified from time to time, the
“Senior Secured Notes Indenture”);

 

WHEREAS, the
Assignors party to the Senior Secured Notes Indenture have guaranteed the
obligations of Borrower under the Senior Secured Notes Indenture;

 

WHEREAS, the Assignors
may have from time to time before the date hereof, entered into, or guaranteed,
one or more Hedging Agreements each as described on Schedule A hereto
(collectively, the “Existing Hedging Agreements”);

 

WHEREAS, the Assignors
may at any time and from time to time enter into, or guarantee, one or more
Hedging Agreements;

 

WHEREAS, the Assignors
may at any time and from time to time enter into, or guarantee, one or more
loan agreements evidencing the Foreign Overdraft Facility (the “Foreign
Overdraft Facility Agreements”);

 

WHEREAS, pursuant to the
Subsidiary Guarantee Agreement, each Assignor (other than the Borrower) has
jointly and severally guaranteed to the Secured Parties (other than the Senior
Secured Notes Trustee and the holders of the Senior Secured Notes) the payment
when due of all obligations of Borrower under or with respect to the Loan
Documents, the Hedging Agreements and the Foreign Overdraft Facility
Agreements;

 

WHEREAS, HSCC has
guaranteed to the Secured Parties (other than the Senior Secured Notes Trustee
and the holders of the Senior Secured Notes) the payment when due of all
obligations of Borrower under or with respect to the Loan Documents, the
Hedging Agreements and the Foreign Overdraft Facility Agreements; and

 

WHEREAS, each Assignor
desires to execute this Agreement in order to satisfy the conditions under the
Credit Agreement and the Senior Secured Notes Indenture.

 

NOW, THEREFORE, in
consideration of the extensions of credit to be made to each Assignor and other
benefits accruing to each Assignor, the receipt and sufficiency of which are
hereby acknowledged, each Assignor hereby makes the following representations
and warranties to the Collateral Agent for the benefit of the Secured Parties
and hereby covenants and agrees with the Collateral Agent for the benefit of
the Secured Parties as follows:

 

ARTICLE I

SECURITY INTERESTS

 

Section
1.1.           Grant of Security Interests.

 

(a)           As
collateral security for the prompt and complete payment and performance when
due by each Assignor of all of such Assignor’s Obligations, and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
make the Loans and provide the other financial accommodations to Borrower
contemplated therein, each such Assignor does hereby grant, pledge, assign and
transfer unto the Collateral Agent, and does hereby grant to the Collateral
Agent, in its capacity as Collateral Agent hereunder, subject to

 

2

 

Section 1.2, a continuing security
interest in all of the right, title and interest of such Assignor in, to and
under all of the following, whether now existing or hereafter from time to time
acquired or created: (i) all cash, accounts, Deposit Accounts, Investment
Property, securities accounts, deposits, securities and insurance policies now
or at any time hereafter in the possession or under control of such Assignor or
its respective bailees and any interest therein, (ii) each and every
Receivable, (iii) all Contracts, together with all Contract Rights arising
thereunder, and all equity and debt securities and other interests in any and
all Unrestricted Subsidiaries, (iv) all Inventory, (v) any cash collateral
account established with respect to such Assignor and all monies, securities
and instruments deposited or required to be deposited in such cash collateral
account, (vi) all Equipment, (vii) all Marks, together with the registrations and
right to all renewals thereof, and the goodwill of the business of such
Assignor symbolized by the Marks, (viii) all Patents and Copyrights, and all
reissues, renewals or extensions thereof, (ix) all computer programs and all
intellectual property rights therein and all other proprietary information,
including, but not limited to, Trade Secrets, (x) all vehicles, aircraft,
vessels, barges, railcars, rolling stock and fixtures, together with accessions
thereto and replacement parts therefor, (xi) (A) all Intercompany Notes
described in Schedule B (as it may, from time to time, be supplemented
in accordance with the terms hereof), all other Intercompany Notes and all
other promissory notes which are pledged to the Collateral Agent or otherwise
become a part of the Collateral; (B) all shares of capital stock described in Schedule
C (as it may, from time to time, be supplemented in accordance with the
terms hereof) and all other shares of capital stock or other equity interests;
and (C) all Stock Rights, (xii) all books and records, customer lists, ledger
cards, credit files, print-outs, and other materials and records
pertaining to any of the foregoing, whether now owned or hereafter acquired,
(xiii) all other Goods, General Intangibles, Chattel Paper, Documents and
Instruments, (xiv) all Letter-of-Credit Rights, (xv) any existing Commercial
Tort Claims, (xvi) all other personal property of such Assignor, whether now
owned or hereafter acquired, (xvii) all documents of title evidencing or issued
with respect to any of the foregoing, and (xviii) all Proceeds and products of
any and all of the foregoing (including, without limitation, all insurance and
claims for insurance effected or held for the benefit of such Assignor in
respect thereof) (all of the above, as limited below, collectively, the “Collateral”);
provided,  however, that the security interests granted hereunder
shall not cover any Assignor’s right, title and interest in any (1) Contract,
lease, license or other agreement which by its terms expressly prohibits in a
legally valid manner the granting of a security interest therein, (2) any asset
described in clauses (t) or (u) of Section 7.11(a) of the Credit Agreement
(except, in the case of any asset described in clause (u) of Section 7.11(a) of
the Credit Agreement, to the extent that the Lender (as defined in that certain
Loan Agreement by and among Huntsman Headquarters Corporation, Huntsman
Petrochemical Corporation, Huntsman Chemical Corporation, Huntsman Packaging
Corporation and U.S. Bank of Utah dated as of December 17, 1996 (the “Headquarters
Loan Agreement”)) has consented to the grant by Huntsman Headquarters
Corporation of a security interest in any Collateral (as defined in the
Headquarters Loan Agreement) hereunder); and (3) capital stock not required to
be pledged hereunder pursuant to Section 7.11(c) or 7.11(e) of the Credit
Agreement.

 

(b)           The
Pledged Intercompany Notes listed on Schedule B and the certificates
representing the Pledged Stock listed on Schedule C (other than the
shares of capital stock of Foreign Subsidiaries which are not certificated)
shall have been delivered to the Collateral Agent together with appropriate
undated note powers and stock powers duly executed in blank on or before the
date hereof.  Neither the Collateral Agent
nor any Secured Party shall be obligated to 

 

3

 

preserve or protect any rights with respect to the
Pledged Intercompany Notes or the Pledged Stock or to receive or give any
notice with respect thereto whether or not the Collateral Agent or any Secured
Party is deemed to have knowledge of such matters.

 

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

 

(d)           The
security interests of the Collateral Agent under this Agreement extend to all
Collateral of the kind which is the subject of this Agreement which any
Assignor may acquire at any time during the continuation of this Agreement.

 

Section 1.2.           Acknowledgement of Subordinated Lien Position.  It is acknowledged and agreed that, as
between the holders of the Revolving Credit Agreement Obligations and the
Obligations, the Liens granted hereby and by the other Security Documents on
the Collateral referenced on Annex I to the Intercreditor Agreement (the
“Revolving Credit Agreement First Lien Collateral”) are intended to be
junior and subject in all respects to the Liens on the Revolving Credit
Agreement First Lien Collateral created pursuant to the Security Documents (as
defined in the Revolving Credit Agreement). 
Each of the Secured Parties agrees that all the rights hereunder are
subject to the terms of the Second Amended and Restated Intercreditor
Agreement, a copy of which is attached as Exhibit 1.2 hereto (as
amended, modified, supplemented, replaced or restated, the “Intercreditor
Agreement”).

 

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

 

ARTICLE II

GENERAL
REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Section 2.1.           General Representations and
Warranties.  In addition to and not in limitation of any
of the representations and warranties of any Assignor made to the Collateral
Agent or any Secured Party, each Assignor represents, warrants and
covenants, which 

 

4

 

representations, warranties and covenants shall
survive execution and delivery of this Agreement, as follows:

 

(a)           such
Assignor has good and marketable title in fee simple to, or a valid leasehold
interest in, or a valid contractual agreement to use, all its material real
property, and good title to, or a valid leasehold interest in, or a valid
contractual agreement to use, all its other material property, and none of such
property is subject to any Lien except for Permitted Liens;

 

(b)           this
Agreement (together, with respect to the shares of capital stock of Foreign
Subsidiaries, such other necessary or advisable pledge agreements or other
security agreements or instruments properly executed, delivered, recorded and
registered by the holder of such shares under all applicable foreign laws)
creates security interests which are enforceable against such Assignor in all
Collateral now owned and hereafter acquired by such Assignor and which are,
upon filing of all appropriate financing statements, intellectual property
filings, railcar filings and, with respect to shares of capital stock in
Foreign Subsidiaries, any necessary filings in foreign jurisdictions
contemplated hereby and the delivery of the Pledged Securities to the
Collateral Agent in accordance with the terms hereof (other than with respect
to the shares of capital stock of Foreign Subsidiaries which are not
certificated), perfected security interests (other than in the Excluded Foreign
or Transportation Assets);

 

(c)           such
Assignor is the direct and sole legal and equitable owner of any and all
Pledged Debt and Pledged Intercompany Notes indicated on Schedule B as
being owned by it.  Such Assignor has
good and marketable title to such Pledged Debt and has all requisite rights,
power, and authority to pledge and deliver such Pledged Debt to the Collateral
Agent pursuant hereto.  Such Pledged Debt
is free and clear of all Liens, other than Permitted Liens.  Such Assignor has not amended any term of or
waived any rights under the Pledged Intercompany Notes held by it.  The pledge, assignment and delivery of the
Pledged Intercompany Notes to or on behalf of the Collateral Agent pursuant to
this Agreement creates a valid, continuing, perfected Lien on such Pledged
Intercompany Notes in favor of the Collateral Agent, for the benefit of the
Collateral Agent and the Secured Parties, subject only to Section 1.2;
and

 

(d)           such
Assignor is the record and beneficial owner of each share of the Pledged Stock
indicated on Schedule C as being owned by it and such Pledged Stock
represents the percentage (on a fully diluted basis) of the issued and
outstanding capital stock of its issuer as set forth on Schedule C.  All of such shares of the Pledged Stock are
duly authorized, validly issued, fully paid and non-assessable (or, with
respect to the Foreign Subsidiaries, to the extent such concepts are applicable
under the laws under which such Subsidiaries are organized).  Such Assignor has good and marketable title
to such Pledged Stock and has all requisite rights, power, and authority to
pledge and deliver such Pledged Stock to the Collateral Agent pursuant hereto
(or, with respect to the shares of capital stock of any Foreign Subsidiaries
that are not certificated, to execute, deliver, record and register any and all
pledges or charges on such shares which are necessary or advisable to create a
first priority perfected security interest in such shares).  Such Pledged Stock is free and clear of all
Liens, options, warrants, puts, calls, or other rights of third persons, other
than Permitted Liens.  The pledge,
assignment and delivery of such Pledged Stock to or on behalf of the Collateral
Agent pursuant to this Agreement creates valid, continuing, perfected Liens on
such Pledged Stock in favor of the Collateral Agent, for the benefit of the
Collateral Agent and the Secured Parties, subject only to Section 1.2.  Each 

 

5

 

Assignor indicated on Schedule C as owning
shares in a Foreign Subsidiary has executed and delivered and will promptly
following the date hereof record and register, any and all pledges, charges and
other instruments necessary to create valid, continuing, perfected Liens (or
the equivalent rights under the applicable laws of the relevant foreign
jurisdictions) on such Pledged Stock in favor of the Collateral Agent, for the
benefit of the Collateral Agent and the Secured Parties, subject to Section
1.2.

 

Section
2.2.           Necessary Filings.  All documents and instruments for all
filings, registrations and recordings necessary or appropriate to create,
preserve, protect and perfect the security interests granted by the Assignors
to the Collateral Agent hereby in respect of the Collateral have been delivered
by the Assignors to the Collateral Agent, and, upon the Collateral Agent’s
accomplishing of all such filings, registrations and recordings, the security
interests granted to the Collateral Agent pursuant to this Agreement in and to
the Collateral constitute or shall constitute perfected security interests
therein prior to the rights of all other Persons therein and subject to no
other Liens except for Permitted Liens and is or shall be entitled to all the
rights, priorities and benefits afforded by the Code or other relevant law as
enacted in any relevant jurisdiction to perfected security interests; provided,
however, that the parties agree that no Assignor shall have any obligation
hereunder to take any actions to perfect the security interests granted by such
Assignor to the Collateral Agent hereunder in any Excluded Foreign or
Transportation Assets.

 

Section
2.3.           No Liens.  Each Assignor is, and as to
Collateral acquired by it from time to time after the date hereof, will be, the
owner of or otherwise has the right to use all Collateral free from any Lien,
security interest, encumbrance or other right, title or interest of any Person
(other than Liens created hereby and Permitted Liens), and such Assignor shall
defend the Collateral against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to the Collateral Agent.

 

Section 2.4.           Other Financing Statements.  As of the
date hereof, there is no financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) on file or of
record in any relevant jurisdiction covering or purporting to cover any
interest of any kind in the Collateral, except for (i) those evidencing
Permitted Liens and (ii) financing statements for which valid termination
statements have been previously filed or delivered to the Collateral Agent on
the date hereof and, so long as any of the Obligations are in effect, no
Assignor will execute or authorize to be filed in any public office any
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) or statements relating to the Collateral, except
financing statements filed or to be filed in respect of and covering the
security interests granted hereby by such Assignor or for those evidencing
Permitted Liens.

 

Section 2.5.           Chief Executive Office; Records.  The chief executive office of each Assignor
is located at the address indicated on Schedule 2.5 hereto for such
Assignor.  No Assignor will move its
chief executive office except to such new location as such Assignor may
establish in accordance with the last sentence of this Section 2.5.  The originals of all documents evidencing all
Receivables, Contract Rights and Trade Secrets of each Assignor and the only
original books of account and records of such Assignor relating thereto are,
and will continue to be, kept at such chief executive office, at such other
locations shown on Schedule 2.5 hereto or at 

 

6

 

such new locations as such Assignor may establish in
accordance with the last sentence of this Section 2.5.  All Receivables and Contract Rights of such
Assignor are, and will continue to be, maintained at, and controlled and
directed (including, without limitation, for general accounting purposes) from,
the office locations described above.  No
Assignor shall establish new locations for such offices until (i) it shall
have given to the Collateral Agent not less than 30 days’ (or such shorter
period as may be acceptable to the Collateral Agent) prior written notice of
its intention to do so, clearly describing such new location and providing such
other information in connection therewith as the Collateral Agent may
reasonably request, (ii) with respect to such new location, it shall have
taken all action, reasonably satisfactory to the Collateral Agent, to maintain
the security interests of the Collateral Agent in the Collateral intended to be
granted and perfected hereby at all times fully perfected and in full force and
effect, (iii) at the reasonable request of the Collateral Agent, it shall have
furnished an opinion of counsel acceptable to the Collateral Agent to the effect
that all financing or continuation statements and amendments or supplements
thereto have been filed in the appropriate filing office or offices, and all
other actions (including, without limitation, the payment of all filing fees
and taxes, if any, payable in connection with such filings) have been taken, in
order to perfect (and maintain the perfection and priority of) the security
interests granted hereby and (iv) the Collateral Agent shall have received
evidence that all other actions (including, without limitation, the payment of
all filing fees and taxes, if any, payable in connection with such filings)
have been taken, in order to perfect (and maintain the perfection and priority
of) the security interests granted hereby.

 

Section
2.6.           Aircraft, Vehicles, Vessels and Railcars. 
All aircraft, vehicles, vessels, barges, railcars and rolling stock
owned by each Assignor (other than the Excluded Transportation Assets) are
identified under such Assignor’s name on Schedule 2.6.  Each Assignor agrees that in the event it
acquires or otherwise holds title to any aircraft, vessels, barges, railcars or
rolling stock (other than the Excluded Transportation Assets) not otherwise
identified on Schedule 2.6, such Assignor shall (A) give the Collateral
Agent prompt written notice thereof, clearly describing such new aircraft,
vessel, barges, railcars or rolling stock, and shall provide such other
information in connection therewith as the Collateral Agent may request, and
(B) take all actions reasonably satisfactory to the Collateral Agent to cause
the security interests in the Collateral granted by it hereby to be, and
continue at all times to be, fully perfected and in full force and effect.  The Collateral Agent hereby agrees, on behalf
of the Secured Parties, that the Assignors shall not be obligated to perfect
the Collateral Agent’s security interests in Excluded Transportation Assets;
provided, however, that each Assignor agrees, within ten (10) days of its
receipt of a written request from the Collateral Agent after the occurrence and
during the continuance of an Event of Default, to take any and all actions
necessary or reasonably requested by the Collateral Agent, including the
execution and delivery of all documents and instruments necessary or reasonably
requested by the Collateral Agent, to perfect the Collateral Agent’s security
interests in any or all Excluded Transportation Assets owned by such Assignor.

 

Section 2.7.           Location of Inventory and Equipment.  All Inventory and Equipment held on the date
hereof by each Assignor is located at one of the locations shown on Schedule
2.7 hereto.  Each Assignor agrees
that all Inventory and Equipment (other than Inventory in transit in the
ordinary course of business) now held or subsequently acquired by it shall be
kept at (or shall be in transport to) any one of the locations shown on Schedule
2.7 hereto or such new location as such Assignor may establish in
accordance with the last sentence 

 

7

 

of this Section 2.7.  Any Assignor may establish a new location for
Inventory and Equipment only if (i) it shall have given to the Collateral Agent
not less than 15 days (or such shorter period as may be acceptable to the
Collateral Agent) prior written notice of its intention so to do, clearly
describing such new location and providing such other information in connection
therewith as the Collateral Agent may request, (ii) with respect to such
new location, it shall have taken all action reasonably satisfactory to the
Collateral Agent to maintain the security interests of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and
in full force and effect, (iii) at the reasonable request of the Collateral
Agent, it shall have furnished an opinion of counsel reasonably acceptable to the Collateral Agent to the effect that all
financing or continuation statements and amendments or supplements thereto have
been filed in the appropriate filing office or offices, and (iv) the Collateral
Agent shall have received reasonable evidence that
all other actions (including, without limitation, the payment of all filing
fees and taxes, if any, payable in connection with such filings) have been
taken, in order to perfect (and maintain the perfection and priority of) the
security interests granted hereby.

 

Section
2.8.           Recourse.  This
Agreement is made with full recourse to each Assignor and pursuant to and upon
all the warranties, representations, covenants and agreements on the part of
such Assignor contained herein, in the other Loan Documents, the Senior Secured
Notes Indenture, the Senior Secured Notes and, as applicable, the Hedging
Agreements, the Foreign Overdraft Facility Agreements and otherwise in
connection herewith or therewith.

 

Section 2.9.           Organizational Names; Jurisdictions of
Organization.  No Assignor has or operates in any
jurisdiction under, or in the preceding 12 months has had or has operated in
any jurisdiction under, any trade names, fictitious names or other names
(including, without limitation, any names of divisions or operations) except
its legal name and such other trade, fictitious or other names as are listed on
Schedule 2.9 hereto.  The true and
correct corporation identification number or other applicable formation identification
number of each Assignor, the exact legal name as it appears in official filings
in the state of its incorporation or organization and the jurisdiction of
incorporation or organization of each Assignor is set forth on Schedule 2.9
hereto.  No Assignor shall change its
legal name or assume or operate in any jurisdiction under any new trade,
fictitious or other name in any manner which might make any financing statement
or continuation statement filed in connection therewith seriously misleading
within the meaning of Article 9 of the UCC until (i) it shall have given to the
Collateral Agent not less than 30 days’ prior written notice of its intention
so to do, clearly describing such new name and the jurisdictions in which such
new name shall be used and providing such other information in connection
therewith as the Collateral Agent may reasonably request, (ii) with respect to
such new name, it shall have taken all action to maintain the security
interests of the Collateral Agent in the Collateral intended to be granted
hereby at all times fully perfected and in full force and effect, (iii) at the
request of the Collateral Agent, it shall have furnished an opinion of counsel
reasonably acceptable to the Collateral Agent to
the effect that all financing or continuation statements and amendments or
supplements thereto have been filed in the appropriate filing office or
offices, and (iv) the Collateral Agent shall have received evidence that all
other actions (including, without limitation, the payment of all filing fees
and taxes, if any, payable in connection with such filings) have been taken, in
order to perfect (and maintain the perfection and priority of) the security
interests granted hereby.

 

8

 

Section 2.10.        Jurisdiction of Formation.  The state
of incorporation or formation of each Assignor as of the date hereof is listed
on Schedule 2.10.  Without
limiting the prohibitions on mergers involving the Assignors contained in the
Credit Agreement, no Assignor shall reincorporate or reorganize itself under
the laws of any jurisdiction other than the jurisdiction in which it is
incorporated or organized as of the date hereof unless (i) it shall have given
to the Collateral Agent not less than 30 days’ (or such shorter period as may
be acceptable to the Collateral Agent) prior written notice of its intention to
do so, clearly describing such reincorporation or reorganization, as the case
may be, and providing such other information in connection therewith as the Collateral
Agent may reasonably request, (ii) with respect to such new jurisdiction, it
shall have taken all action, reasonably satisfactory to the Collateral Agent,
to maintain the security interests of the Collateral Agent in the Collateral
intended to be granted and perfected hereby at all times fully perfected and in
full force and effect, (iii) at the reasonable request of the Collateral Agent,
it shall have furnished an opinion of counsel acceptable to the Collateral
Agent to the effect that all financing or continuation statements and
amendments or supplements thereto have been filed in the appropriate filing
office or offices, and all other actions (including, without limitation, the
payment of all filing fees and taxes, if any, payable in connection with such
filings) have been taken, in order to perfect (and maintain the perfection and
priority of) the security interests granted hereby and (iv) the Collateral
Agent shall have received evidence that all other actions (including, without
limitation, the payment of all filing fees and taxes, if any, payable in
connection with such filings) have been taken, in order to perfect (and
maintain the perfection and priority of) the security interests granted hereby.

 

Section 2.11.        Commercial Tort Claims.  Except for matters disclosed on Schedule
2.11 hereto, as of the date hereof no Assignor has any material Commercial
Tort Claims.  To the extent any material
Commercial Tort Claim has been instituted and has not previously been disclosed
on Schedule 2.11 hereto, the Assignors shall promptly deliver to the
Collateral Agent an amended Schedule 2.11 which contains a written
description of the nature of the case, the parties and the case number if one
has been assigned by the applicable court, and such amended Schedule 2.11
shall be deemed to be a part hereof from and after such delivery without any
action required on the part of the Collateral Agent.

 

Section 2.12.        Bring-Down of Representations and Warranties.  Except to the extent a representation or
warranty is expressly made only as of a particular time, all representations
and warranties made herein by each Assignor shall be deemed to have been made
by such Assignor on the date of each Credit Event (as defined in the Revolving
Credit Agreement) under the Revolving Credit Agreement on and as of the date of
such Credit Event.

 

ARTICLE III

SPECIAL PROVISIONS CONCERNING RECEIVABLES; 

CONTRACT RIGHTS; INSTRUMENTS

 

Section 3.1.           Additional Representations and Warranties.  The Assignors hereby agree with respect to
the Receivables that as of the time when each Receivable arises, each Assignor
shall be deemed to have represented and warranted to the Collateral Agent that
such Receivable, and all records, papers and documents relating thereto (if
any) are genuine and in all respects what they purport to be, and that all
papers and documents (if any) relating thereto (i) will, to the best of such
Assignor’s knowledge, represent the genuine, legal, valid and binding 

 

9

 

obligation of the account debtor evidencing
indebtedness unpaid and owed by the respective account debtor arising out of
the performance of labor or services or the sale or lease and delivery of the
merchandise listed therein, or both; (ii) will be the only original writings
evidencing and embodying such obligation of the account debtor named therein
(other than copies created for general accounting purposes); (iii) will, to the
best of such Assignor’s knowledge, evidence true and valid obligations,
enforceable in accordance with their respective terms; and (iv) will be in
compliance and will conform in all material respects with all Requirements of
Law.

 

Section 3.2.           Maintenance of Records.  Each Assignor will keep and maintain at its
own cost and expense satisfactory and complete records of its Receivables and
Contracts (other than Contracts that do not constitute Collateral), including,
but not limited to, the originals (where available) of all documentation
(including each Contract, other than Contracts that do not constitute
Collateral) with respect thereto, records of all payments received, all credits
granted thereon, all merchandise returned and all other dealings therewith, and
that such Assignor will make the same available on such Assignor’s premises to
the Collateral Agent for inspection, at such Assignor’s own cost and expense,
at any and all reasonable times upon demand. 
Upon the occurrence and during the continuance of an Event of Default
and at the request of the Collateral Agent, each Assignor shall, at its own
cost and expense, deliver all tangible evidence of its Receivables and Contract
Rights (including, without limitation, all documents evidencing the Receivables
and all Contracts, other than Contracts that do not constitute Collateral) and
such books and records to the Collateral Agent or to its representatives
(copies of which evidence and books and records may be retained by such
Assignor).  Upon the Collateral Agent’s
reasonable request, each Assignor shall legend, in form and manner reasonably satisfactory
to the Collateral Agent, the Receivables and the Contracts, as well as books,
records and documents of such Assignor evidencing or pertaining to Receivables
and Contracts with an appropriate reference to the fact that such Receivables
and Contracts have been assigned to the Collateral Agent and that the
Collateral Agent has security interests therein.

 

Section 3.3.           Disposition
or Collection of Receivables.  No Assignor shall sell any material
Receivable or Contract, or interest therein, owned by it without the prior
written consent of the Collateral Agent, except as permitted by Section 8.6 of
the Credit Agreement.  Each Assignor will
duly fulfill all obligations on its part to be fulfilled under or in connection
with its Receivables and Contracts and no Assignor will do anything to impair
the rights of the Collateral Agent in the Receivables or Contracts.

 

Section
3.4.           Instruments.  If any
Assignor owns or acquires any Instrument constituting Collateral, such Assignor
will within ten (10) days notify the Collateral Agent thereof, and upon request
by the Collateral Agent will promptly deliver such Instrument to the Revolving
Credit Agreement Collateral Agent (or, if the Revolving Credit Agreement
Obligations shall have been Fully Paid, to the Collateral Agent) appropriately
endorsed to the order of the applicable Collateral Agent as further security
hereunder.

 

Section 3.5.           Direction to Account Debtors; Contracting
Parties, etc.  Upon
the occurrence and during the continuance of an Event of Default, if the
Collateral Agent so directs any Assignor, such Assignor agrees that the
Collateral Agent may enforce collection of any such Receivables and Contracts
and may adjust, settle or compromise the amount of 

 

10

 

payment thereof, in the same manner and to the same
extent that such Assignor might have done, and, without notice to or assent by
such Assignor, the Collateral Agent may apply any or all amounts then in, or
thereafter deposited in, any cash collateral so paid to the Collateral Agent or
account in the manner provided in Section 10.1. 
The costs and expenses (including reasonable attorneys’ fees) of
collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the applicable Assignor.

 

Section
3.6.           Further Actions.  Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts, Instruments, Investment Property
and other property or rights covered by the security interests hereby granted,
as the Collateral Agent may reasonably require.

 

ARTICLE IV

SPECIAL PROVISIONS CONCERNING MARKS

 

Section 4.1.           Additional Representations and Warranties.  Each Assignor represents and warrants as of
the date hereof (or, in the case of an Assignor made party hereto pursuant to
its execution of a supplement hereto in accordance with Section 14.2(d),
as of the date of such supplement) that it is the true and lawful exclusive
owner of the registrations and pending applications for Marks listed under its
name in Schedule 4.1 and that said listed registrations and pending
applications for Marks include all the registrations or pending applications in
the United States Patent and Trademark Office that such Assignor now owns in
connection with its business.  Each
Assignor represents and warrants that, to its knowledge, it owns or is licensed
to use all Marks that it uses.  Each
Assignor further warrants that, except as indicated on Schedule 4.1, it
is aware of no third party claim that any aspect of such Assignor’s present or
contemplated business operations infringes or will infringe any Mark in any
manner that is reasonably likely to cause a Material Adverse Effect.  Each Assignor further represents and warrants
as of the date hereof (or a supplement hereto in accordance with Section
14.2(d), as of the date of such supplement) that the Marks listed under its
name in Schedule 4.1 are valid, subsisting, have not been canceled,
except with respect to any such Marks that are not necessary or material to the
operation or financial condition of Assignor’s business.  Each Assignor represents and warrants that it
owns or is licensed to use all United States trademark registrations and
applications that it uses (other than any trademark registrations or
applications that are not necessary or material to the operation or financial
condition of Assignor’s business).  Each
Assignor hereby grants to the Collateral Agent an absolute power of attorney to
sign, upon the occurrence and during the continuance of an Event of Default,
any document which may be required by the United States Patent and Trademark
Office in order to effect an absolute assignment of all right, title and
interest in each Mark and associated goodwill, and record the same.  Each Assignor agrees to update Schedule
4.1 from time to time at the request of the Collateral Agent (but no less
frequently than annually) to reflect any new information required to be
indicated thereon and will provide such supplement to the Collateral Agent in
the form required by the Collateral Agent.

 

11

 

Section
4.2.           Divestitures.  Each Assignor hereby agrees not to divest
itself of any material right under any Mark that is necessary or material to
the operation or financial condition of such Assignor’s business absent prior
written approval of the Collateral Agent, except in accordance with Section 8.6
of the Credit Agreement.

 

Section
4.3.           Infringements.  Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect
to, any party who may be infringing or otherwise violating any of such Assignor’s
rights in and to any Significant Mark, or with respect to any party claiming
that such Assignor’s use of any Significant Mark violates any property right of
that party, in each case to the extent that such Assignor reasonably believes
that, with respect to such infringement, if determined adversely to such
Assignor, it could reasonably be expected to have a Material Adverse Effect.

 

Section
4.4.           Preservation of Marks.  Each Assignor shall have the duty to: (a)
prosecute diligently any trademark application or service mark application that
is a part of the Marks pending as of the date hereof or hereafter which are
necessary or material to the operation or financial condition of such Assignor’s
business; (b) make application for trademarks or service marks which are
necessary or material to the operation or financial condition of such Assignor’s
business; and (c) use its best efforts to maintain in full force and effect the
Marks and the licenses therefor that are or shall be necessary or material to
the operation or financial condition of such Assignor’s business.

 

Section 4.5.           Maintenance of Registration.  Each Assignor shall, at its own expense,
diligently process all documents required by the Trademark Act of 1946, 15
U.S.C. §§ 1051 et  seq. to maintain trademark registrations,
including but not limited to affidavits of use and applications for renewals of
registration in the United States Patent and Trademark Office for all of its
Significant Marks pursuant to 15 U.S.C. §§ 1058(a), 1059 and 1065, and
shall pay all fees and disbursements in connection therewith and shall not
abandon any such filing of affidavit of use or any such application of renewal
prior to the exhaustion of all reasonable administrative and judicial remedies
without prior written consent of the Collateral Agent, except as otherwise
permitted under Section 4.4 herein.

 

Section 4.6.           Future Registered Marks.  Each Assignor shall, on a quarterly basis,
deliver to the Collateral Agent (a) a copy of each Mark registration issued
after the date hereof to such Assignor as a result of any application now or
hereafter pending before the United States Patent and Trademark Office, and (b)
a grant of security in such Mark to the Collateral Agent, confirming the grant
thereof hereunder, the form of such grant to be substantially the same as the
form hereof.

 

Section
4.7.           Remedies.  If an
Event of Default shall occur and be continuing, the Collateral Agent may, by
written notice to the relevant Assignor, take any or all of the following
actions:  (i) declare the entire right,
title and interest of such Assignor in and to each of its Marks together with
the goodwill of the business associated therewith, together with all trademark
rights and rights of protection to the same, vested in the Collateral Agent for
the benefit of the Secured Parties, in which event such rights, title and
interest shall immediately vest, in the Collateral Agent for the benefit of the
Secured Parties, in which case the Collateral 

 

12

 

Agent shall be entitled to exercise the power of
attorney referred to in Section 4.1 to execute, cause to be acknowledged
and notarized and record said absolute assignment with the applicable agency;
(ii) take and use or sell the Marks together with the goodwill of such Assignor’s
business symbolized by the Marks and the right to carry on the business and use
the assets of such Assignor in connection with which the Marks have been used;
and (iii) direct such Assignor to refrain, in which event such Assignor
shall refrain, from using the Marks in any manner whatsoever, directly or
indirectly, and execute such other and further documents that the Collateral
Agent may request to further confirm this and to transfer ownership of the
Marks and registrations and any pending trademark application in the United
States Patent and Trademark Office or any equivalent government agency or
office in any foreign jurisdiction to the Collateral Agent.

 

ARTICLE V

SPECIAL PROVISIONS CONCERNING

PATENTS, COPYRIGHTS AND TRADE SECRETS

 

Section 5.1.           Additional Representations and Warranties.  Each Assignor represents and warrants as of
the date hereof (or, for any Assignor made a party hereto pursuant to its
execution of a supplement hereto in accordance with Section 14.2(d), as
of the date of such supplement) that it is the true and lawful exclusive owner
of or otherwise has the right to use (i) all material Trade Secrets necessary
to operate the business of such Assignor, (ii) the Patents listed in Schedule
5.1(A) hereto for such Assignor and (iii) the Copyrights listed in Schedule
5.1(B) hereto for such Assignor, as such Schedule 5.1 may be updated
from time to time, for such Assignor, that said Patents constitute all the
United States patents and applications for United States patents that such Assignor
as of the date hereof owns or otherwise has the right to use.  Each Assignor represents and warrants that,
to its knowledge, it owns or is licensed to practice under all Patents and
Copyrights that it now uses or practices under, except where the failure to own
or be licensed under such Patents and Copyrights would not reasonably be
expected to have a material and adverse effect on the operations or financial
condition of such Assignor.  Each
Assignor further warrants that, except as indicated on Schedule 5.1, it
is aware of no third party claim that any aspect of such Assignor’s present or
contemplated business operations infringes or will infringe any patent or any
copyright or such Assignor has misappropriated any Trade Secrets or proprietary
information which could reasonably be expected to have a Material Adverse
Effect.  Each Assignor represents and
warrants that upon the recordation of each Grant of Security Interest in United
States Trademarks and Patents in the form of Annex A hereto in the United
States Patent and Trademark Office and the recordation of a Grant of Security
Interest in United States Copyrights in the form of Annex B hereto in
the United States Copyright Office, together with filings of appropriate UCC
financing statements pursuant to this Agreement, all filings, registrations and
recordings necessary or appropriate to perfect the security interests granted
to the Collateral Agent in the United States Patents and United States
Copyrights covered by this Agreement under federal law will have been
accomplished to the extent such perfection may be obtained under federal
law.  Each Assignor agrees to execute
such a Grant of Security Interest in United States Trademarks and Patents
covering all right, title and interest in each United States Patent of such
Assignor and to record the same, and to execute such a Grant of Security
Interest in United States Copyrights covering all right, title and interest in
each United States Copyright of such Assignor and to record the same.  Each
Assignor hereby grants to the Collateral Agent an absolute power of attorney to

 

13

 

sign, upon the occurrence and during the continuance
of an Event of Default, any document which may be required by the United States
Patent and Trademark Office or the United States Copyright Office in order to
effect an absolute assignment of all right, title and interest in each Patent
and Copyright owned by such Assignor, and record the same.  Each Assignor agrees to update Schedule
5.1 from time to time at the request of Collateral Agent (but no less
frequently than annually) to reflect any new information required to be
indicated thereon and will provide such supplement to the Collateral Agent in
the form required by the Collateral Agent.

 

Section 5.2.           Licenses and Assignments.  Each Assignor hereby agrees not to divest
itself of any material right under any Patent or Copyright that is necessary or
material to the operation or financial condition of such Assignor’s business
absent prior written approval of the Collateral Agent, except in accordance
with Section 8.6 of the Credit Agreement.

 

Section
5.3.           Infringements.  Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement or
other violation by any third party of such Assignor’s rights in and to any
Significant Patent or Significant Copyright, or with respect to any claim that
practice of any Significant Patent or Significant Copyright by such Assignor
violates any property right of that party, or with respect to any
misappropriation of any Trade Secret or any claim that such Assignor’s practice
of any Trade Secret violates any property right of a third party, in each case,
to the extent that such Assignor reasonably believes that such infringement or
violation, if determined adversely to such Assignor, could reasonably be
expected to have a Material Adverse Effect. 
Each Assignor further agrees, consistent with good business practice, to
diligently prosecute any Person infringing any Significant Patent or
Significant Copyright or any Person misappropriating any of such Assignor’s
Trade Secrets to the extent that such Assignor reasonably believes that such
infringement or misappropriation is material to its business.

 

Section 5.4.           Maintenance of Patents.  Each Assignor shall have the duty to: (a)
prosecute diligently any Patent or Copyright application that is pending as of
the date hereof or hereafter which is necessary or material to the operation or
financial condition of such Assignor’s business; (b) make application for
Patents and Copyrights which are necessary or material to the operation or
financial condition of such Assignor’s business; and (c) use its best efforts
to maintain in full force and effect the Patents, the Copyrights and the
licenses therefor that are or shall be necessary or material to the operation
or financial condition of such Assignor’s business.  At its own expense, each Assignor shall make
timely payment of all post-issuance fees required pursuant to 35 U.S.C.
§ 41 to maintain in force rights under each Significant Patent.

 

Section 5.5.           Prosecution of Patent Applications.  At its own expense, each Assignor shall
diligently prosecute all applications for United States Patents listed under
its name in Schedule 5.1(A), other than those that are not necessary or
material to the operation or financial condition of such Assignor’s business.

 

Section 5.6.           Other Patents and Copyrights.  Each Assignor shall, on a quarterly basis,
deliver to the Collateral Agent (a) a copy of the first page of each Patent or
Copyright issued after the date hereof and (b) a grant of security in such
Patent or Copyright, or 

 

14

 

application thereof as the case may be, to the
Collateral Agent, confirming the grant thereof hereunder, the form of such
grant to be substantially the same as the form hereof.

 

Section
5.7.           Remedies.  If an
Event of Default shall occur and be continuing, the Collateral Agent may by
written notice to any Assignor, acting at the direction of the Instructing
Group, take any or all of the following actions:  (i) declare the entire right, title, and interest
of each relevant Assignor in each of the Patents and Copyrights vested in the
Collateral Agent for the benefit of the Secured Parties, in which event such
right, title, and interest shall immediately vest in the Collateral Agent for
the benefit of the Secured Parties, in which case the Collateral Agent shall be
entitled to exercise the power of attorney referred to in Section 5.1
hereof to execute, cause to be acknowledged and notarized and record said
absolute assignment with the applicable agency; (ii) take, practice, use or
sell the Patents and Copyrights; and (iii) direct such Assignor to refrain, in
which event such Assignor shall refrain, from practicing its Patents and using
its Copyrights directly or indirectly, and such Assignor shall execute such
other and further documents as the Collateral Agent may request further to
confirm this and to transfer ownership of the Patents and Copyrights to the
Collateral Agent for the benefit of the Secured Parties.

 

ARTICLE VI

PROVISIONS CONCERNING PLEDGED SECURITIES

 

From the date hereof and
continuing thereafter until this Agreement is terminated pursuant to Section
12.2, each Assignor covenants and agrees with the Collateral Agent and the
Secured Parties as follows:

 

Section 6.1.           Pledge of Notes and
Additional Stock.  If any Assignor shall acquire in any manner
any additional Intercompany Notes, such Assignor shall forthwith (and without
the necessity for any request or demand by Collateral Agent or any Secured
Party) deliver such Intercompany Notes to or for the benefit of the Collateral
Agent in the same manner as described in Section 1.1(b), together with a
supplement to Schedule B reflecting the addition of such additional
Intercompany Notes, whereupon such additional Intercompany Notes shall be
deemed to be Pledged Intercompany Notes for all purposes hereunder.  To the extent required by Section 7.11(c) or
(e) of the Credit Agreement, if any Assignor shall at any time acquire any
additional shares of the capital stock of any class of Pledged Stock, whether
such acquisition shall be by purchase, exchange, reclassification, dividend, or
otherwise, or acquire any new shares of capital stock of any newly formed or
acquired Subsidiary (as defined under and to the extent permitted by the Credit
Agreement), such Assignor shall forthwith (and without the necessity for any
request or demand by Collateral Agent or any Secured Party) (a) unless such
shares are uncertificated shares of a Foreign Subsidiary, deliver such shares
(or, with respect to any Foreign Subsidiary, such percentage of the shares as may
be required by Section 7.11(c) or (e) of the Credit Agreement or the
corresponding provision of the Revolving Credit Agreement) to or for the
benefit of the Collateral Agent in the same manner as described in Section
1.1(b), or (b) if such shares are uncertificated shares of capital stock of
a Foreign Subsidiary, take all actions necessary to grant to the Collateral
Agent, subject to Section 1.2, a perfected security interest in such
shares (including the execution, delivery, recording and registering of a
pledge or charge on shares with any and all appropriate company or governmental
offices), together with, in either case a supplement to Schedule C
reflecting the addition of such additional shares of 

 

15

 

stock, whereupon such
additional shares of stock shall be deemed to be Pledged Stock for all purposes
hereunder.  Each Assignor will hold in
trust for Collateral Agent and the Secured Parties upon receipt and immediately
thereafter deliver to or for the benefit of Collateral Agent, as the case may
be, any instrument evidencing or constituting Collateral (except, so long as no
Event of Default has occurred and is continuing, ordinary cash dividends, if
any, paid with respect to the Pledged Stock and the Stock Rights and payments
in respect of the Pledged Intercompany Notes, in each case as permitted by the
Credit Agreement).

 

Section 6.2.           Title; Security Interest
and Lien.  Each Assignor (a) shall preserve, warrant,
and defend title to and ownership of its Pledged Intercompany Notes and Pledged
Stock and the Lien therein created hereby against the claims of all Persons
whomsoever; (b) except as may be otherwise permitted by the Credit Agreement,
shall not at any time sell, assign, transfer, or otherwise dispose of its
right, title and interest in and to any of the Collateral; (c) other than
actions permitted under the Credit Agreement, will not do or suffer any matter
or thing whereby the Liens created by this Agreement in and to the Collateral
are impaired; and (d) shall not at any time, directly or indirectly, create,
assume, or suffer to exist any Lien, warrant, put, option, or other rights of
third Persons and restrictions in and to the Pledged Securities or any part
thereof, other than (i) Permitted Liens and (ii) restrictions on
transferability imposed by applicable state and federal securities laws, rules
and regulations.

 

Section
6.3.           Additional Documentation; Further Assurances.  Each
Assignor, at its own expense, shall from time to time execute and deliver to
the Collateral Agent all such other assignments, certificates, supplemental
documents and financing statements, and do all other acts or things as
Collateral Agent may reasonably request in order to more fully create,
evidence, perfect, continue and preserve the perfection and priority of the
Liens created hereby.

 

Section
6.4.           Pledged Stock.

 

(a)           Changes in Capital Structure of Issuers.  Subject to mandatory requirements of
applicable law then in effect, no Assignor will (i) permit or suffer any issuer
of its Pledged Stock to dissolve, liquidate or merge or consolidate with any
other entity, except as permitted by Section 8.3 of the Credit Agreement, or
(ii) vote any of the Pledged Stock in favor of any of the foregoing.

 

(b)           Issuance of Additional Stock. 
Except as permitted by Sections 8.5 and 8.14 of the Credit Agreement, no
Assignor will cause or, to the extent controlled by it, permit the issuer of
any of its Pledged Stock to issue any stock, any right to receive stock or any
right to receive earnings, except to an Assignor or in a manner that does not
dilute Assignor’s ownership interest or rights in such issuer.

 

(c)           Registration of Pledged Stock.  At
any time after the occurrence and during the continuance of an Event of
Default, each Assignor will, to the extent permitted by the Requirements of
Law, permit any registerable Pledged Stock to be registered in the name of the
Collateral Agent or its nominee at the option of the Collateral Agent.

 

16

 

(d)           Exercise
of Rights in Pledged Stock.  Subject to Article VIII,
each Assignor will permit the Collateral Agent or its nominee at any time after
the occurrence and during the continuance of an Event of Default, without
notice, to exercise all voting and corporate rights relating to the Pledged
Stock, including, without limitation, exchange, subscription or any other
rights, privileges, or options pertaining to any shares of the Pledged Stock
and the Stock Rights as if it were the absolute owner thereof.

 

ARTICLE VII

PROVISIONS CONCERNING ALL COLLATERAL

 

Section
7.1.           Protection
of Collateral Agent’s Security.  Each Assignor
covenants that it will do nothing to impair the rights of the Collateral Agent
in the Collateral.  If any Assignor shall
fail to insure any Inventory and Equipment constituting Collateral in
accordance with the terms of Section 7.8 of the Credit Agreement, the
Collateral Agent shall have the right (but shall be under no obligation) to
procure such commercially reasonable insurance and such Assignor agrees to
reimburse the Collateral Agent for all costs and expenses of procuring such
commercially reasonable insurance, and the Collateral Agent may apply any
proceeds of such insurance in accordance with Section 8.4.  Each Assignor assumes all liability and
responsibility in connection with the Collateral acquired by it and the
liability of such Assignor to satisfy its Obligations shall in no way be
affected or diminished by reason of the fact that such Collateral may be lost,
destroyed, stolen, damaged or for any reason whatsoever unavailable to such
Assignor, except due to the gross negligence or willful misconduct of the
Collateral Agent.

 

Section
7.2.           Warehouse
Receipts Non-Negotiable; Third Party Acknowledgement. 
Each Assignor agrees that if any warehouse receipt or receipt in the
nature of a warehouse receipt is issued with respect to any of its Inventory,
such warehouse receipt or receipt in the nature thereof shall either
(a) not be “negotiable” (as such term is used in Section 7-104 of the
Code as in effect in any relevant jurisdiction or under other relevant law), or
(b) if negotiable, the security interests of the Collateral Agent in such
warehouse receipt shall be perfected to the reasonable satisfaction of the
Collateral Agent.  In no event will
Collateral with a fair market value greater than $5,000,000 be located at any
such third-party that has not so acknowledged that such assets constitute
Collateral herewith.  Each Assignor will
use commercially reasonable efforts to obtain an acknowledgement from such
third-party that it is holding the Collateral for the benefit of the Collateral
Agent.

 

Section
7.3.           Right to Initiate Judicial Proceedings, etc.  The Collateral Agent shall have the right,
obligation and power to institute and maintain, and it shall institute and
maintain, such suits and proceedings as it may be directed by the Instructing
Group pursuant to this Agreement to protect and enforce the rights vested in it
by this Agreement for the benefit of the Secured Parties.

 

Section
7.4.           Appointment of a Receiver. 
After the occurrence and during the continuance of an Event of Default,
the Collateral Agent may be appointed as a receiver of any or all of the
Collateral in a judicial proceeding. 
Notwithstanding the appointment of a receiver, the Collateral Agent
shall be entitled to retain possession and control of all cash held by or 

 

17

 

deposited with it or its agents or co-agents pursuant
to any provision of this Agreement or any Mortgage.

 

Section
7.5.           Further Actions.  Subject to the last
sentence of Section 2.6, each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interests hereby granted by such Assignor, which the
Collateral Agent deems reasonably appropriate or advisable to perfect, preserve
or protect its security interests in the Collateral within seven days after any
request by the Collateral Agent or such earlier date as may be required by law
or necessary to preserve or protect the security interests in the Collateral
granted by such Assignor pursuant to this Agreement.

 

Section
7.6.           Financing Statements.  Each Assignor agrees
to authorize, execute and deliver to the Collateral Agent such financing
statements, in form acceptable to the Collateral Agent, as the Collateral Agent
may from time to time request as are necessary or desirable in the opinion of
the Collateral Agent to establish and maintain valid, enforceable, perfected
security interests, subject to Section 1.2, in its Collateral (except
that no Assignor shall be required to perfect the security interests granted by
it hereunder in any Excluded Foreign or Transportation Assets) as provided
herein and the other rights and security contemplated hereby all in accordance
with the Uniform Commercial Code as enacted in any and all relevant
jurisdictions or any other relevant. 
Each Assignor will pay any applicable filing fees, recordation taxes and
expenses related to its Collateral.  Each
Assignor authorizes the Collateral Agent to file and deliver any such financing
statements without the signature of such Assignor where permitted by law.  The Assignors authorize the filing of any
financing statement that the Collateral Agent deems necessary or advisable and
such financing statements may include super-generic descriptions of collateral.

 

Section
7.7.           Control.  To the extent
required under Section 9-313 of the Uniform Commercial Code, where any
Collateral with a fair market value of greater than $1,000,000 is in the
possession of a third party, each Assignor will join with the Collateral Agent
in notifying the third party of the Collateral Agent’s security interests and
will use its commercially reasonable efforts to obtain an acknowledgement from
the third party that it is holding the Collateral for the benefit of the
Collateral Agent.  Upon request of the
Collateral Agent, each Assignor will cooperate with the Collateral Agent in
obtaining control with respect to Collateral consisting of:  (i) Investment Property (to the extent “control”
within the meaning of Sections 8-106 and 9-106 of the UCC can be obtained with
respect to such Investment Property); (ii) Letter-of-Credit Rights; and (iii)
Electronic Chattel Paper.  In the event
any Assignor is the beneficiary of any individual letter of credit in excess of
$100,000 (or letters of credit in excess of $250,000 in the aggregate), such
Assignor shall enter into a tri-party agreement with the Collateral Agent and
the issuer or confirmation bank for such letter of credit with respect to Letter-of-Credit
Rights related to such letter of credit assigning such Letter-of-Credit Rights
to the Collateral Agent and directing all payments thereunder to the Collateral
Account, all in form and substance reasonably satisfactory to the Collateral
Agent.

 

18

 

ARTICLE VIII

REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT

 

Section
8.1.           Remedies;
Obtaining the Collateral Upon Default.  Each Assignor agrees that, if any Event of
Default shall have occurred and be continuing, then and in every such case,
subject to any mandatory requirements of applicable law then in effect, the
Collateral Agent, acting at the direction of the Instructing Group, shall have,
in addition to any rights now or hereafter existing under applicable law, all
rights as a secured creditor under the Uniform Commercial Code in all relevant
jurisdictions and may:

 

(a)           personally,
or by agents or attorneys, immediately take or retake, as the case may be,
possession of the Collateral or any part thereof, from such Assignor or any
other Person who then has possession of any part thereof with or without notice
or process of law, and for that purpose may enter upon such Assignor’s premises
where any of the Collateral is located and remove the same and use in
connection with such removal any and all services, supplies, aids and other
facilities of such Assignor; and

 

(b)           in
addition to any rights the Collateral Agent may have under Section 3.2,
instruct the obligor or obligors on any agreement, instrument or other
obligation (including, without limitation, the Receivables and the Contracts)
constituting the Collateral to make any payment required by the terms of such
agreement, instrument or other obligation directly to the Collateral Agent and
may exercise any and all remedies of such Assignor in respect of such
Collateral; and

 

(c)           withdraw
all monies, securities and instruments in any cash collateral account for
application to the Obligations in accordance with Section 8.4 hereof;
and

 

(d)           sell,
assign or otherwise liquidate, or direct such Assignor to sell, assign or
otherwise liquidate, any or all of the Collateral or any part thereof, and take
possession of the proceeds of any such sale or liquidation; and

 

(e)           take
possession of the Collateral or any part thereof, by directing the relevant
Assignor in writing to deliver the same to the Collateral Agent at any place or
places designated by the Collateral Agent, in which event such Assignor shall
at its own expense:

 

(i)            forthwith cause the same to be moved
to the place or places so designated by the Collateral Agent and there
delivered to the Collateral Agent, and

 

(ii)           store and keep any Collateral so
delivered to the Collateral Agent at such place or places pending further
action by the Collateral Agent as provided in Section 8.2 hereof, and

 

(iii)          while the Collateral shall be so
stored and kept, provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain them in good
condition; and

 

(f)            license
or sublicense (to the extent not in violation of the license), whether on an
exclusive or nonexclusive basis, any Marks (together with associated goodwill),
Patents or

 

19

 

Copyrights included in
the Collateral for such term and on such conditions and in such manner as the
Collateral Agent shall in its sole judgment determine;

 

it being understood that each Assignor’s obligation so
to deliver the Collateral is of the essence of this Agreement and that,
accordingly, upon application to a court of equity having jurisdiction, the
Collateral Agent shall be entitled to a decree requiring specific performance
by such Assignor of said obligation.

 

Section
8.2.           Remedies;
Disposition of the Collateral.  Any Collateral repossessed by the Collateral
Agent under or pursuant to Section 8.1 hereof and any other Collateral
whether or not so repossessed by the Collateral Agent, may be sold, assigned,
leased or otherwise disposed of under one or more contracts or as an entirety,
and without the necessity of gathering at the place of sale the property to be
sold, and in general in such manner, at such time or times, at such place or
places and on such terms as the Collateral Agent may, in compliance with any
mandatory requirements of applicable law, determine to be commercially
reasonable.  Any of the Collateral may be
sold, leased or otherwise disposed of, in the condition in which the same
existed when taken by the Collateral Agent or after any overhaul or repair at
the expense of the relevant Assignor which the Collateral Agent shall determine
to be commercially reasonable.  Any such
disposition which shall be a private sale or other private proceedings
permitted by such requirements shall be made upon not less than 10 days’ written
notice to the relevant Assignor specifying the time at which such disposition
is to be made and the intended sale price or other consideration therefor, and
shall be subject, for the 10 days after the giving of such notice, to the right
of the relevant Assignor or any nominee of such Assignor to acquire the
Collateral involved at a price or for such other consideration at least equal
to the intended sale price or other consideration so specified.  Any such disposition which shall be a public
sale permitted by such requirements shall be made upon not less than 10 days’
written notice to the relevant Assignor specifying the time and place of such
sale and, in the absence of applicable requirements of law, shall be by public
auction (which may, at the Collateral Agent’s option, be subject to reserve),
after publication of notice of such auction not less than 10 days prior thereto
in two newspapers in general circulation in Salt Lake City, Utah, The City of
New York and in such other locations as may be necessary in order for the sale
to be “commercially reasonable” (as such term is used in Article 9 of the
Uniform Commercial Code).  To the extent
not prohibited by any such Requirement of Law, the Collateral Agent or any
Secured Party may bid for and become the purchaser of the Collateral or any
item thereof, offered for sale in accordance with this Section 8.2
without accountability to the relevant Assignor.  If, under mandatory requirements of
applicable law, the Collateral Agent shall be required to make disposition of
the Collateral within a period of time which does not permit the giving of
notice to the relevant Assignor as hereinabove specified, the Collateral Agent
need give such Assignor only such notice of disposition as shall be reasonably
practicable in view of such mandatory requirements of applicable law.  Each Assignor agrees to do or cause to be
done all such other acts and things as may be reasonably necessary to make such
sale or sales of all or any portion of the Collateral valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such Assignor’s expense.

 

20

 

Section
8.3.           Waiver
of Claims.  Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT’S
TAKING POSSESSION OR THE COLLATERAL AGENT’S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby further
waives, to the extent permitted by law:

 

(a)           all
damages occasioned by such taking of possession except any damages which are
the direct result of the Collateral Agent’s gross negligence or willful
misconduct;

 

(b)           all
other requirements as to the time, place and terms of sale or other
requirements with respect to the enforcement of the Collateral Agent’s rights
hereunder; and

 

(c)           all
rights of redemption, appraisement, valuation, stay, extension or moratorium
now or hereafter in force under any applicable law in order to prevent or delay
the enforcement of this Agreement or the absolute sale of the Collateral or any
portion thereof, and each Assignor, for itself and all who may claim under it,
insofar as it or they now or hereafter lawfully may, hereby waives the benefit
of all such laws.

 

Any sale of, or the grant of options to purchase, or
any other realization upon, any Collateral shall operate to divest all right,
title, interest, claim and demand, either at law or in equity, of the relevant
Assignor therein and thereto, and shall be a perpetual bar both at law and in
equity against such Assignor and against any and all Persons claiming or
attempting to claim the Collateral so sold, optioned or realized upon, or any
part thereof, from, through and under such Assignor.

 

Section
8.4.           Application of Proceeds.

 

(a)           Subject
to Section 1.2, all moneys collected by the Collateral Agent (or, to the
extent this Agreement or any Mortgage to which any Assignor is a party requires
proceeds of Collateral under such agreement to be applied in accordance with
the provisions of this Agreement, or Mortgagee under such other agreement) upon
any sale or other disposition of the Collateral, together with all other moneys
received by the Collateral Agent hereunder, shall be applied as follows:

 

(i)            first,
to the payment of all amounts owing to the Collateral Agent or the
Administrative Agent of the type described in clauses (iv) and (v) of the
definition of “Obligations” set forth in Annex A hereto;

 

(ii)           second,
to the extent proceeds remain after the application pursuant to the preceding
clause (i), an amount equal to the outstanding Primary Obligations shall be
paid to the Secured Parties as provided in Section 8.4(d) hereof, with
each Secured Party receiving an amount equal to such outstanding Primary
Obligations or, if the proceeds are insufficient to pay in full all such
Primary Obligations, its Pro Rata Share of the amount remaining to be
distributed;

 

21

 

(iii)          third,
to the extent proceeds remain after the application pursuant to the preceding
clauses (i) and (ii), an amount equal to the outstanding Secondary Obligations
shall be paid to the Secured Parties as provided in Section 8.4(d), with
each Secured Party receiving an amount equal to its outstanding Secondary
Obligations or, if the proceeds are insufficient to pay in full all such
Secondary Obligations, its Pro Rata Share of the amount remaining to be
distributed;

 

(iv)          fourth,
to the extent proceeds remain after the application pursuant to the preceding
clauses (i) through (iii) and any Term and Note Secured Obligation (as defined
in the Intercreditor Agreement) remain outstanding, to the Term and Note
Collateral Agent (as defined in the Intercreditor Agreement) to be applied in
accordance with Section 8.4 of the Term and Note Security Agreement (as defined
in the Intercreditor Agreement); and

 

(v)           fifth,
to the extent proceeds remain after the application pursuant to the preceding
clauses (i) through (iv), inclusive, and following the termination of this
Agreement pursuant to Section 12.2, to the relevant Assignor or to
whomever may be lawfully entitled to receive such surplus, or as a court of
competent jurisdiction may direct.

 

(b)           For
purposes of this Agreement (i) “Pro Rata Share” shall mean, when
calculating a Secured Party’s portion of any distribution or amount, that
amount (expressed as a percentage) equal to a fraction, the numerator of which
is the then unpaid amount of such Secured Party’s Primary Obligations or
Secondary Obligations, as the case may be, and the denominator of which is the
then outstanding amount of all Primary Obligations or Secondary Obligations, as
the case may be, (ii) “Primary Obligations” shall mean (A) in the case
of the Credit Agreement Obligations, all principal of, and interest on, all
Loans (together with all interest accrued thereon) under the Credit Agreement,
and all fees, (B) in the case of the Senior Secured Notes Obligations, all
principal of, and interest on, all Senior Secured Notes (together with all
interest accrued thereon), and (C) in the case of the Other Obligations, all
amounts due under the Hedging Agreements and Foreign Overdraft Facility
Agreements (other than indemnities, fees (including, without limitation, attorneys’
fees) and similar obligations and liabilities) and (iii) “Secondary
Obligations” shall mean all Obligations other than Primary Obligations.

 

(c)           If
any payment to any Secured Party of any distribution would result in
overpayment to such Secured Party, such excess amount shall instead be
distributed in respect of the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of the other Secured Parties, with each
Secured Party whose Primary Obligations or Secondary Obligations, as the case
may be, have not been paid in full to receive an amount equal to such excess
amount multiplied by a fraction the numerator of which is the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of such Secured Party
and the denominator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of all Secured Parties entitled to such
distribution.

 

22

 

(d)           All
payments required to be made hereunder shall be made (i) if to the Lenders or
the Administrative Agent, to the Administrative Agent under the Credit
Agreement for the account of the Lenders or the Administrative Agent, as the
case may be, (ii) if to the holders of the Senior Secured Notes or the Senior
Secured Notes Trustee, to the Senior Secured Notes Trustee, and (iii) if to any
other Secured Party, to the trustee, paying agent or other similar
representative (each a “Representative”) for such other Secured Party
or, in the absence of such a Representative, such applicable Secured Party.

 

(e)           For
purposes of applying payments received in accordance with this Section 8.4,
the Collateral Agent shall be entitled to rely upon (i) the Administrative
Agent under the Credit Agreement, (ii) the Senior Secured Notes Trustee and
(iii) the other applicable Secured Parties for a determination (which the
Administrative Agent, and the other Secured Parties agree (or shall agree) to
provide upon request of the Collateral Agent) of the outstanding Primary
Obligations and Secondary Obligations owed to the Administrative Agent,
Lenders, holders of the Senior Secured Notes, Senior Secured Notes Trustee or
the other applicable Representatives or Secured Parties, as the case may
be.  Unless it has actual knowledge
(including by way of written notice from a Secured Party to the contrary), the
Administrative Agent, the Senior Secured Notes Trustee and each other
applicable Representative or Secured Party, in furnishing information pursuant
to the preceding sentence, and the Collateral Agent, in acting hereunder, shall
be entitled to assume that no Secondary Obligations are outstanding.

 

(f)            Each
Secured Party hereby agrees that, notwithstanding the order of filing of the
financing statements evidencing the granting of security interests hereunder or
any other priority to which such Secured Party may otherwise be entitled, (x)
the proceeds of the Collateral shall be distributed in accordance with the
provisions of Section 1.2, (y) the Collateral Agent shall have
discretion to apply proceeds of Collateral in such a manner as is necessary to
give effect to Section 8.4(a), and (z) any proceeds of the Collateral
received by it other than from the Collateral Agent shall be held in trust and
immediately turned over to the Collateral Agent for application in accordance
with the provisions of Section 1.2 or, if the Revolving Credit
Obligations shall have been Fully Paid, in accordance with this Section 8.4.

 

(g)           It
is understood and agreed that the Assignors shall remain liable to the extent
of any deficiency between the amount of the proceeds of the Collateral
hereunder and the aggregate amount of the sums referred to in clauses (i)
through (iii), inclusive, of Section 8.4(a).

 

Section
8.5.           Remedies
Cumulative.  Each and every right, power and remedy hereby
specifically given to the Collateral Agent shall be in addition to every other
right, power and remedy specifically given under this Agreement, the Hedging
Agreements, the other Loan Documents, the Senior Secured Notes Indenture or now
or hereafter existing at law or in equity, or by statute and each and every
right, power and remedy whether specifically herein given or otherwise existing
may be exercised from time to time or simultaneously and as often and in such
order as may be deemed expedient by the Collateral Agent.  All such rights, powers and remedies shall be
cumulative and the exercise or the beginning of the exercise of one shall not
be deemed a waiver of the right to exercise any other or others.  No delay or omission of the Collateral Agent
in the exercise of any such right, power or remedy and no renewal or extension
of any of the Obligations and no course of dealing between the relevant
Assignor and the Collateral Agent or any holder of any of the Obligations shall
impair any such right, power or

 

23

 

remedy or shall be construed to be a waiver of any
Event of Default or an acquiescence therein. 
No notice to or demand on any Assignor in any case shall entitle it to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of any of the rights of the Collateral Agent to any other
or further action in any circumstances without notice or demand.  In the event that the Collateral Agent shall
bring any suit to enforce any of its rights hereunder and shall be entitled to
judgment, then in such suit the Collateral Agent may recover expenses,
including attorneys’ fees, and the amounts thereof shall be included in such
judgment.

 

Section
8.6.           Discontinuance
of Proceedings.  In case the Collateral Agent shall have
instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then and in every such case the
relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder with
respect to the Collateral subject to the security interests created under this
Agreement, and all rights, remedies and powers of the Collateral Agent shall
continue as if no such proceeding had been instituted.

 

ARTICLE IX

INDEMNITY

 

Section
9.1.           Indemnity. 
(a) Each Assignor, jointly
and severally, agrees to pay, indemnify, reimburse and hold the Collateral
Agent, each Secured Party and each Secured Party’s respective successors,
assigns, employees, agents and servants (hereinafter in this Section 9.1
referred to individually as “Indemnitee,” and collectively as “Indemnitees”)
harmless from and against any and all liabilities, obligations, losses,
damages, injuries, penalties, claims, demands, actions, suits, judgments and
any and all costs, expenses or disbursements (including reasonable attorneys’
fees and expenses) (for the purposes of this Section 9.1 the foregoing
are collectively called “expenses”) of whatsoever kind and nature
imposed on, asserted against or incurred by any of the Indemnitees in any way
relating to or arising out of this Agreement, any other Loan Document, the
Senior Secured Notes Indenture, the Senior Secured Notes or any other document
executed in connection herewith or therewith or in any other way connected with
the administration of the transactions contemplated hereby or thereby or the
enforcement of any of the terms of, or the preservation of any rights thereof,
or in any way relating to or arising out of the manufacture, ownership,
ordering, purchase, delivery, control, acceptance, lease, financing,
possession, operation, condition, sale, return or other disposition, or use of
the Collateral (including, without limitation, latent or other defects, whether
or not discoverable), any contract claim or, to the maximum extent permitted
under applicable law, the violation of the laws of any country, state or other
governmental body or unit, or any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage); provided that no Indemnitee shall be indemnified pursuant to this Section
9.1(a) for any expense to the extent it arises or results from the bad
faith, gross negligence or willful misconduct of such Indemnitee as determined
by a court of competent jurisdiction. 
Each Assignor agrees that upon written notice by any Indemnitee of the
assertion of such a liability, obligation, damage, injury, penalty, claim,
demand, action, suit or judgment, the relevant Assignor shall assume full
responsibility for the defense thereof. 
Each Indemnitee agrees to use its best efforts to promptly notify the
relevant Assignor of any such assertion of which such Indemnitee has knowledge.

 

24

 

(b)           In
any suit, proceeding or action brought by the Collateral Agent under or with
respect to the Collateral for any sum owing thereunder, or to enforce any
provisions hereof or of any Loan Document, each Assignor will save, indemnify
and keep the Collateral Agent and each Secured Party harmless from and against
all expense, loss or damage suffered by reason of any defense, set off,
counterclaim, recoupment or reduction of liability whatsoever of the obligee
thereunder, arising out of any other agreement, indebtedness or liability at
any time owing to or in favor of such obligee or its successors from such
Assignor except to the extent that any such expense, loss or damage arises out
of such obligee’s gross negligence or willful misconduct, and all such
obligations of such Assignor shall be and remain enforceable against such
Assignor and shall not be enforceable against the Collateral Agent or any
Secured Party.

 

(c)           If
the Collateral Agent has been requested or instructed pursuant to this
Agreement or any Loan Document to take, or to refrain from taking, any action
pursuant to this Agreement or any Loan Document, (i) each Assignor agrees to,
and (ii) the Secured Parties ratably in accordance with the amount of the
Secured Obligations owing to them and with respect to which they have a
security interest, if the Instructing Group has made such request or given such
instruction, agree to, and hereby do indemnify and hold harmless the Collateral
Agent to the fullest extent permitted by applicable law, from and against any
and all liability, loss, costs, damages, attorneys’ fees, fines, claims,
judgments, amounts paid in settlement in connection with any threatened,
pending or completed claim, action, suit, proceeding or investigation, whether
criminal, civil or administrative, and expenses of whatever kind or nature
which the Collateral Agent may sustain or incur by reason of or in connection
with the Collateral Agent’s acting or refraining to act in accordance with such
request or instruction other than sustained or incurred by reason of the
Collateral Agent’s gross negligence or willful misconduct; provided that
the obligations of the Secured Parties under this Section 9.1(c) shall
become enforceable against them if and only if and to the extent that (x) the
Assignors fail to pay the obligations arising under this Section 9.1(c)
in accordance with the terms hereof and of the Mortgages and (y) the
unallocated Proceeds from the Collateral are insufficient to pay the
obligations arising under this Section 9.1(c).

 

(d)           Without
limiting the application of Section 9.1(a), (b), or (c)
hereof, each Assignor agrees, jointly and severally, to pay, or reimburse the
Collateral Agent for any and all reasonable fees, costs and expenses of whatever
kind or nature incurred in connection with the creation, preservation or
protection of the Collateral Agent’s Liens on, and security interests in, the
Collateral, including, without limitation, all reasonable fees and taxes in
connection with the recording or filing of instruments and documents in public
offices, payment or discharge of any taxes or Liens upon or in respect of the
Collateral, premiums for insurance with respect to the Collateral and all other
reasonable fees, costs and expenses in connection with protecting, maintaining
or preserving the Collateral and the Collateral Agent’s interests therein,
whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions, suits or proceedings arising out of or relating to the
Collateral.

 

(e)           Without
limiting the application of Section 9.1(a) or (b) hereof, each
Assignor agrees, jointly and severally, to pay, indemnify and hold each
Indemnitee harmless from and against any loss, costs, damages and expenses
which such Indemnitee may suffer, expend or incur in consequence of or growing
out of any misrepresentation by any Assignor in this Agreement, any other Loan
Document, any Hedging Agreement or any Foreign Overdraft

 

25

 

Facility Agreement or in any writing contemplated by
or made or delivered pursuant to or in connection with this Agreement, any
other Loan Document, the Senior Secured Notes Indenture, the Senior Secured
Notes, any Hedging Agreement or any Foreign Overdraft Facility.

 

(f)            If
and to the extent that the obligations of any Assignor under this Section
9.1 are unenforceable for any reason, such Assignor hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law.

 

Section
9.2.           Indemnity
Obligations Secured by Collateral; Survival.  Any amounts paid by
any Indemnitee as to which such Indemnitee has the right to reimbursement shall
constitute Obligations secured by the Collateral prior to the release of the
Collateral pursuant to the terms hereof. 
The indemnity obligations of each Assignor contained in this Article
IX shall continue in full force and effect notwithstanding the full payment
of all the Loans under the Credit Agreement, the full payment of the Senior
Secured Notes, the termination of all Hedging Agreements, the termination and
payment in full of the Foreign Overdraft Facility and the payment of all other
Obligations and notwithstanding the discharge thereof or any other termination
of this Agreement and the Mortgages, including pursuant to Section 12.2,
and, as to any Collateral Agent, the resignation or removal thereof.

 

ARTICLE X

OTHER AGREEMENTS WITH COLLATERAL AGENT

 

Section
10.1.        Record Keeping and Reporting.

 

(a)           Each
Assignor agrees that it shall keep, or cause to be kept, adequate records and
books of account (including, without limitation, with respect to any
Intercompany Notes issued by or to it), in which complete entries are to be
made in accordance with sound accounting principles consistently applied, and
will permit the Collateral Agent or its representatives, at any reasonable
time, and from time to time at the reasonable request of the Collateral Agent
and upon reasonable notice, to visit and inspect its properties, to examine and
make copies of and take abstracts from its respective records and books of
account, and to discuss its affairs, finances and accounts with its principal
officers, directors and, with the written consent of such Assignor (which
consent shall not be required if any Event of Default has occurred and is
continuing), independent public accountants, provided that such Assignor may
attend such meetings (and by this provision such Assignor authorizes such
accountants to discuss with the Collateral Agent and such representatives the
affairs, finances and accounts of such Assignor).

 

(b)           Each
Assignor agrees that it shall deliver to the Collateral Agent (and the
Collateral Agent may rely upon) as soon as available but in any event not more
than ninety (90) days after the close of each calendar year, and from time to
time upon request of the Collateral Agent, a statement setting forth the
outstanding amount of each Intercompany Note of such Assignor.

 

26

 

Section
10.2.        Compensation and Expenses.

 

(a)           The
Assignors, jointly and severally, hereby agree to pay to the Collateral Agent,
upon acceptance by the Collateral Agent of the obligations created by this
Agreement and thereafter until all Proceeds are distributed and this Agreement
is terminated, from time to time, upon demand, all of the reasonable costs and
expenses of the Collateral Agent (including the reasonable fees and
disbursements of its counsel and such special counsel as the Collateral Agent
reasonably elects to retain) (i) arising in connection with the preparation,
execution, delivery, modification, restatement, amendment or termination of
this Agreement, each Mortgage and each Security Document or the enforcement
(whether in the context of a civil action, adversary proceeding, bankruptcy,
workout or otherwise) of any of the provisions hereof or thereof or (ii)
incurred or required to be advanced in connection with the preservation,
protection or defense of the Collateral, the Mortgaged Property and all
collateral under any and all other Security Documents (collectively, the “Collateral
Agent Costs”).  The Collateral Agent’s
compensation shall not be limited by any law relating to compensation of a
collateral agent.  The obligations of the
Assignors under this Section 10.2 shall survive the termination of other
provisions of this Agreement and the Mortgages.

 

(b)           When
the Collateral Agent incurs expenses or renders services after an order for
relief with respect to any Assignor shall have been entered under any
applicable bankruptcy, insolvency or other similar law, the expense and the
compensation for the Collateral Agent’s services are intended to constitute
expenses of administration under any bankruptcy law.

 

Section
10.3.        Stamp and Other Taxes.  Each Assignor agrees to indemnify and hold
harmless the Collateral Agent and each Secured Party from and against any
present or future claim for liability for any stamp or other similar tax and
any penalties or interest with respect thereto which may be assessed, levied or
collected by any jurisdiction in connection with this Agreement, the Mortgages
and all other Security Documents, or the attachment or perfection of the
security interests granted to the Collateral Agent by such Assignor in the
Collateral, the Mortgaged Property and all collateral under any and all other
Security Documents.  The obligations of
the Assignors under this Section 10.3 shall survive the termination of
the other provisions of this Agreement, the Mortgages and the other Security
Documents.

 

Section
10.4.        Filing Fees, Excise Taxes, Etc.  Each Assignor agrees to pay or to reimburse
the Collateral Agent and each Secured Party for any and all amounts in respect
of all search, filing, recording and registration fees, taxes (other than
income taxes), excise taxes, sales taxes and other similar imposts which may be
payable or determined to be payable in respect of the execution, delivery,
performance and enforcement of this Agreement, each Mortgage and the other
Security Documents and agrees to save the Collateral Agent and each Secured
Person harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees.  The obligations of the Assignors under this Section
10.4 shall survive the termination of the other provisions of this
Agreement, the Mortgages and the other Security Documents.

 

27

 

ARTICLE XI

THE COLLATERAL AGENT

 

Section
11.1.        Exculpatory Provisions.

 

(a)           The
Collateral Agent shall not be responsible in any manner whatsoever for the
correctness of any recitals, statements, representations or warranties
contained herein, in the Mortgages or in any other Security Document.  The Collateral Agent makes no representations
as to the value or condition of the Collateral or any part thereof, or as to
the title of the respective Assignors thereto or as to the security afforded by
the Mortgages or this Agreement, or as to the validity, execution (except its
own execution), enforceability, legality or sufficiency of this Agreement, any
Mortgage or of the Obligations, and the Collateral Agent shall incur no
liability or responsibility in respect of any such matters.  The Collateral Agent shall not be responsible
for insuring the Collateral or for the payment of taxes, charges, assessments
or liens upon the Collateral or otherwise as to the maintenance of the
Collateral, except that (i) in the event the Collateral Agent enters into
possession of a part or all of the Collateral, the Collateral Agent shall
preserve the part in its possession and (ii) the Collateral Agent will
promptly, and at its own expense, take such action as may be necessary to duly
remove and discharge (by bonding or otherwise) any lien on any part of the Collateral
resulting from claims against it (whether individually or as Collateral Agent,
as the case may be) not related to the administration of the Collateral or (if
so related) resulting from negligence or willful misconduct on its part.

 

(b)           The
Collateral Agent shall not be required to ascertain or inquire as to the
performance by any Assignor of any of the covenants or agreements contained
herein, in any Mortgage or in any Loan Document.  Whenever it is necessary, or in the opinion
of the Collateral Agent advisable, for the Collateral Agent to ascertain the
amount of, or whether the term “Fully Paid” applies to, any Obligations, the
Collateral Agent may rely on a certificate of the respective Secured Party or
Representative with respect thereto. 
Each Secured Party and each Representative agrees to provide any such
certificate so requested by the Collateral Agent, to the extent such
information is contained on the books and records of the party requested to
deliver such certificate, and to notify the Collateral Agent when those
Obligations owed to it are Fully Paid.

 

(c)           Beyond
its duties set forth in this Agreement and as may be required by law as to the
custody of the Collateral and the accounting to each Assignor and the Secured
Parties for moneys received by it hereunder, the Collateral Agent shall not
have any duty to any Assignor or to the Secured Parties as to any of the
Collateral in its possession or control or in the possession or control of any
agent or nominee of it or any income thereof or as to the preservation of
rights against prior parties or any other rights pertaining thereto, except as
required by Requirements of Law.  To the
extent, however, that the Collateral Agent or an agent or nominee of the
Collateral Agent maintains possession or control of any of the Collateral at
any office of any Assignor, the Collateral Agent shall or shall instruct such
agent or nominee to, grant such Assignor access to (but not possession of) such
Collateral that such Assignor requires for the normal conduct of its business,
which right of access may be revoked by the Collateral Agent at any time an
Event of Default has occurred and is continuing.

 

Section
11.2.        Delegation of Duties.  The Collateral Agent may execute any of the
powers hereof and perform any duty hereunder either directly or by or through
agents, nominees or attorneys-in-fact.  The Collateral Agent shall be entitled to
advice of counsel concerning all matters pertaining to such powers and
duties.  The Collateral Agent shall not
be

 

28

 

responsible for the negligence or misconduct of any
agents, nominees or attorneys-in-fact selected by it without gross
negligence or willful misconduct.

 

Section
11.3.        Reliance by Collateral Agent.

 

(a)           Whenever
in the administration of this Agreement or the Collateral of or security
provided by this Agreement, the Collateral Agent shall deem it necessary or
desirable that a matter be proved or established with respect to any Assignor
in connection with the taking, suffering or omitting of any action hereunder by
the Collateral Agent, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively provided or
established by a certificate of a Responsible Officer of such Assignor.

 

(b)           The
Collateral Agent may rely, and shall be fully protected in acting, upon any
resolution, statement, certificate, instrument, opinion, report, notice,
request, consent, order, bond or other paper or document which it believes in
good faith to be genuine and to have been signed or presented by the proper
party or parties or, in the case of telecopies, to have been sent by the proper
party or parties.  In the absence of its
gross negligence or willful misconduct, the Collateral Agent may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Collateral Agent and conforming to the requirements of this Agreement, any
Mortgage or any other Security Document, or as set forth on such Person’s books
and records.

 

(c)           If
the Collateral Agent has been requested to take any action pursuant to this
Agreement, any Mortgage or any other Security Document, the Collateral Agent
shall not be under any obligation to exercise any of the rights or powers
vested in the Collateral Agent by this Agreement or any Mortgage unless the
Collateral Agent shall have been provided, by the party making such request,
adequate security against the costs, expenses and liabilities which may be
incurred by it in compliance with such request or direction, including such
reasonable advances as may be requested by the Collateral Agent.

 

Section
11.4.        Limitations on Duties of the Collateral Agent.

 

(a)           The
Collateral Agent shall be obliged to perform such duties and only such duties
as are specifically set forth in this Agreement, in any Mortgage or any other
Security Document.  The Collateral Agent
shall not be required to give any consent or take any discretionary action
hereunder or under any Mortgage unless the Collateral Agent has received
written instructions from the Instructing Group, and no implied covenants or
obligations shall be read into this Agreement or any Mortgage against the
Collateral Agent.

 

(b)           The
Collateral Agent shall furnish to the Secured Parties promptly upon receipt
thereof a copy of each material certificate or other paper furnished to the
Collateral Agent by any Assignor under, in respect of or pursuant to this
Agreement, any Mortgage or any of the Collateral, unless by the terms hereof or
of any Mortgage or other Security Document, a copy of the same is required to
be furnished by some other Person directly to the Secured Parties or the
Collateral Agent shall have determined that the same has already been so
furnished.  The Collateral Agent agrees
to hold in strict confidence all non-public information obtained from any
Assignor, pursuant to this Section 11.4, except to the extent that
disclosure is permitted

 

29

 

hereunder, may be permitted under the Mortgage, the
Security Documents or is required by law or by any Governmental Authority (in
which event the Collateral Agent will promptly provide the applicable Assignor
with notice of such disclosure unless prohibited from doing so by such
Governmental Authority).

 

Section
11.5.        Collateral to Be Held for Benefit of Secured Parties.  All Collateral received by the Collateral
Agent under or pursuant to any provision of this Agreement or any Mortgage shall
be held for the benefit of the Secured Parties for the purposes for which they
were paid or are held, but Collateral, including Proceeds, need not be
segregated from other property held by the Collateral Agent except to the
extent required by law or as necessary to preserve the Liens with respect to
the Collateral.  The Collateral Agent
shall have no liability for interest on any money received by the Collateral
Agent hereunder except to the extent actually received by it from time to time
from investments made in accordance with the provisions hereof, the Mortgages
or any other Security Document.

 

Section
11.6.        Resignation and Removal of the Collateral Agent.

 

(a)           The
Collateral Agent may at any time, by giving thirty (30) days’ prior written
notice, resign and be discharged of the responsibilities hereby created, such
resignation to become effective upon the appointment of a successor agent or
agents and the acceptance of such appointment by such successor agent or
agents.  The appointment of a successor agent
or agents shall be within the discretion of the Instructing Group.  The Collateral Agent may be removed at any
time and a successor agent appointed by the Instructing Group; provided
that the Collateral Agent shall be entitled to its fees and expenses to the
date of removal.  If no agent or agents
shall be appointed and approved within thirty (30) days from the date of the
giving of the aforesaid notice of resignation or within (30) days from the date
of such removal, the Collateral Agent shall, or the Instructing Group may,
apply to any court of competent jurisdiction to appoint a successor agent or
agents to act until such time, if any, as a successor agent or agents shall
have been appointed as above provided. 
Any successor agent or agents so appointed by such court shall
immediately and without further act be superseded by any successor agent or
agents appointed by the Instructing Group as above provided.

 

(b)           If
at any time the Collateral Agent shall become incapable of acting, or if at any
time a vacancy shall occur in the office of the Collateral Agent for any other
cause, a successor agent or agents may be appointed by the Instructing Group,
and the powers, duties, authority and title of the predecessor agent or agents
terminated and canceled without procuring the resignation of such predecessor
agent or agents, and without any formality (except as may be required by
applicable law) other than the appointment and designation of a successor agent
or agents in writing, duly acknowledged, delivered to the predecessor agent or
agents, and filed for record in each public office, if any, in which this
Agreement is required to be filed.  If no
agent or agents shall be appointed and approved within thirty (30) days from
the date the Collateral Agent becomes incapable of acting or a vacancy shall
occur in the office of Collateral Agent, any Assignor or any Secured Party may
apply to any court of competent jurisdiction to appoint a successor agent or
agents to act until such time, if any, as a successor agent or agents shall
have been appointed as above provided. 
Any successor agent or agents so appointed by such court shall
immediately and without further act be superseded by any successor agent or
agents approved by the Instructing Group as above provided.

 

30

 

(c)           The
appointment and designation referred to in Section 11.6(a) or 11.6(b)
shall, after any required filing, be full evidence of the right and authority
to make the same and of all the facts therein recited, and this Agreement shall
vest in such successor agent or agents, without any further act, deed or
conveyance, all of the estate and title of its predecessor or their
predecessors, and upon such filing for record the successor agent or agents shall
become fully vested with all the estates, properties, rights, powers, trusts,
duties, authority and title of its predecessor or their predecessors; but such
predecessor or predecessors shall, nevertheless, on the written request of the
Instructing Group, or its or their successor agent or agents, execute and
deliver an instrument transferring to such successor or successors all the
estates, properties, rights, powers, trusts, duties, authority and title of
such predecessor or predecessors hereunder and shall deliver all securities and
moneys held by it or them to such successor agent or agents.  Should any deed, conveyance or other
instrument in writing from any Assignor or from the Secured Parties, as
applicable, be required by any successor agent or agents for more fully and
certainly vesting in such successor agent or agents the estates, properties,
rights, powers, trusts, duties, authority and title vested or intended to be
vested in the predecessor agent or agents, any and all such deeds, conveyances and
other instruments in writing shall, on request of such successor agent or
agents, be executed, acknowledged and delivered by such Assignor and the
Secured Parties, as applicable.

 

(d)           Any
required filing for record of the instrument appointing a successor agent or
agents as hereinabove provided shall be at the joint and several expense of the
Assignors.  The resignation of any agent
or agents and the instrument or instruments removing any agent or agents,
together with all other instruments, deeds and conveyances provided for in this
Article XI shall, if required by law, be forthwith recorded, registered
and filed by and at the joint and several expense of the Assignors, wherever
this Agreement is recorded, registered and filed.

 

(e)           The
Collateral Agent’s obligations hereunder are limited to the extent set forth in
Section 12.17(c) of the Credit Agreement.

 

Section
11.7.        Status of Successors to the Collateral Agent.  Every successor to the Collateral Agent
appointed pursuant to Section 11.6 and every co-agent appointed
pursuant to Section 11.9 shall be a bank or trust company in good
standing and having power so to act, incorporated under the laws of the United
States or any state thereof or the District of Columbia, and having its
principal corporate trust office within the forty-eight (48) contiguous
states or the District of Columbia and shall also have capital, surplus and
undivided profits of not less than FOUR HUNDRED MILLION DOLLARS ($400,000,000).

 

Section
11.8.        Merger of the Collateral Agent.  Any corporation into which the Collateral
Agent shall be merged, or with which it shall be consolidated, or any
corporation resulting from any merger or consolidation to which the Collateral
Agent shall be a party, shall be the Collateral Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
the parties hereto.

 

31

 

Section
11.9.        Additional Co-Agents; Separate Agents.

 

(a)           If
at any time or times it shall be necessary or prudent in order to conform to
any law of any jurisdiction in which any of the Collateral shall be located, or
the Collateral Agent shall be advised by counsel, satisfactory to it, that it
is so necessary or prudent in the interest of the Secured Parties or the
Instructing Group shall in writing so request, or the Collateral Agent shall
deem it desirable for its own protection in the performance of its duties
hereunder, the Collateral Agent, each Assignor shall execute and deliver all
instruments and agreements necessary or proper to constitute another bank or
trust company, or one or more Persons approved by the Collateral Agent and the
Instructing Group either to act as co-agent or co-agents of all or
any of the Collateral, jointly with the Collateral Agent originally named
herein or any successor or successors, or to act as separate agent or agents of
any such property.

 

(b)           Every
separate agent and every co-agent, other than any agent which may be
appointed as successor to the Collateral Agent, shall, to the extent permitted
by law, be appointed and act and be such, subject to the following provisions
and conditions, namely:

 

(i)            all
rights, powers, duties and obligations conferred upon the Collateral Agent in
respect of the custody, control and management of moneys, papers or securities
shall be exercised solely by the Collateral Agent, or its successors as the
Collateral Agent hereunder;

 

(ii)           all
rights, powers, duties and obligations conferred or imposed upon the Collateral
Agent hereunder shall be conferred or imposed and exercised or performed by the
Collateral Agent and such separate agent or separate agents or co-agent
or co-agents, except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed the Collateral Agent
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such separate agent or separate agents or co-agent or co-agents;

 

(iii)          notwithstanding
anything to the contrary contained herein, no power given or provided hereby to
any such co-agent or co-agents or separate agents may be exercised
by it or them, except jointly with, or with the consent in writing of, the
Collateral Agent;

 

(iv)          no
agent hereunder shall be personally liable by reason of any act or omission of
any other agent hereunder; and

 

(v)           the
Collateral Agent, at any time by an instrument in writing, executed by the
Collateral Agent, may accept for itself and on behalf of the Secured Parties
the resignation of or remove any such separate agent or co-agent, and in that
case, by an instrument in writing executed by the Collateral Agent, may appoint
a successor to such separate agent or co-agent, as the case may be, anything
herein contained to the contrary notwithstanding.  The Secured Parties hereby irrevocably
appoint the Collateral Agent, their agent and attorney to act for them in
respect of such separate agent or co-agent or separate agents or co-agents
as above provided.

 

32

 

ARTICLE XII

TERMINATION; REINSTATEMENT;

RELEASES OF COLLATERAL UPON SATISFACTION

 

Section
12.1.        Release of Certain Security.  Subject to the provisions of Section 12.17 of
the Credit Agreement, upon receipt by the Collateral Agent from time to time of
a request from an Assignor for the release of any specific portion of the
Collateral or the Liens in any Collateral granted by such Assignor pursuant to
any of the documents included in or pertaining to the Collateral (including,
without limitation, Liens on Collateral being sold in accordance with Section
8.6 of the Credit Agreement), together with a certificate of a Responsible
Officer of such Assignor certifying, with appropriate calculations where necessary,
compliance with Section 12.17 of the Credit Agreement, all right, title and
interest of the Collateral Agent in, to and under such Collateral and the Liens
of the Collateral Agent therein shall automatically terminate and shall revert
to the applicable Assignor.  Following
such termination or release, the Collateral Agent shall, upon the written
request of such Assignor, or upon the written request or instructions of the
Instructing Group, execute such instruments and take such other actions as are
necessary or desirable to terminate such Liens and otherwise effectuate and
evidence the release of the specified portions of the Collateral (including,
without limitation, delivering to the respective Assignor all Collateral in the
possession of the Collateral Agent).  Any
such delivery shall be without warranty of, or recourse to, Collateral Agent,
other than a representation that there are no Liens on such property
attributable to the Collateral Agent. 
Such termination and release shall be without prejudice to the rights of
the Collateral Agent to charge and be reimbursed for any expenditure which it
may thereafter incur in connection therewith. 
Any cash dividends received by any Assignor in accordance with the terms
of Section 6.1 shall be deemed released from the Liens of this Agreement
and shall be held by such Assignor (or any transferee of such Assignor) free
and clear of the Lien created by this Agreement.

 

Section
12.2.        Termination Upon Satisfaction.  Upon receipt by the Collateral Agent of evidence
satisfactory to it that all Credit Agreement Obligations are Fully Paid and
either (a) all Senior Secured Notes Obligations are Fully Paid or (b) both (i)
no Default or Event of Default (as defined in the Senior Secured Notes
Indenture) has occurred and is continuing (and has not been waived) under the
Senior Secured Notes Indenture and (ii) the Revolving Credit Agreement
Obligations have been Fully Paid and the liens in connection therewith have
been released, this Agreement shall (except with respect to any provisions
which expressly survive such termination) terminate and all right, title and
interest of the Collateral Agent in, to and under the Collateral and the Liens
of the Collateral Agent therein (including without limitation any Liens on Collateral
securing the Senior Secured Notes Obligations) shall automatically be released
and terminated and shall revert to the respective Assignors and the Collateral
Agent shall have no further obligations hereunder.  In such event, the Collateral Agent, at the
request and expense of the Assignors, will execute and deliver to the
Assignors, a proper instrument or instruments acknowledging the satisfaction
and termination of this Agreement, and will duly assign, transfer and deliver
to the respective Assignors all of the Collateral held by the Collateral Agent
hereunder.  Such termination and release
shall be without prejudice to the right of the Collateral Agent to charge and
be reimbursed for any expenditure which it might thereafter incur in connection
therewith.  As used in this Agreement,
the term

 

33

 

“Termination Date” shall mean the date upon
which this Agreement shall have terminated in accordance with the first
sentence of this Section 12.2.

 

ARTICLE XIII

PROOFS OF CLAIM; RIGHTS OF SECURED PARTIES

 

Section
13.1.        Filing of Claims.  Upon the written request of all or any of the
Secured Parties, the Collateral Agent may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Secured Parties making such request allowed in any judicial
proceedings relating to any Assignor, its creditors or its property.  However, nothing herein contained shall
prevent any Secured Party from filing such proofs of claim and other papers or
documents as may be determined by the Secured Party in order to have the claims
of such Secured Party allowed in any judicial proceedings relating to any
Assignor.  The Collateral Agent may file
such proofs of claims and other papers or documents as may be necessary or
advisable in order to have the claims of the Collateral Agent, its agents and
counsel allowed in any judicial proceedings relating to any Assignor (or any
other obligor under the Obligations), its creditors or its property; provided
that the rights described in this sentence shall relate only to claims relating
to the Collateral Agent Costs and the fees and expenses of the Collateral Agent’s
agents and counsel in their respective individual capacities under this Agreement
and the Mortgagees.

 

Section
13.2.        Collection of Claims.  The Collateral Agent shall be entitled and
empowered to collect and receive any monies or other property payable or
deliverable on any such claims filed by the Collateral Agent pursuant to Section
13.1 and to distribute the same, and any custodian in any such judicial
proceedings is hereby authorized by each Secured Party to make such payments to
the Collateral Agent and, in the event that the Collateral Agent shall consent
to the making of such payments directly to the Secured Parties, to pay to the
Collateral Agent any amount due to it for the Collateral Agent Costs, and the
fees and expenses of the Collateral Agent’s agents and counsel, and any other
amounts due the Collateral Agent under this Agreement.

 

Section
13.3.        Limitations.  Nothing herein contained shall be deemed to
authorize the Collateral Agent to authorize or consent to or accept or adopt on
behalf of any Secured Party (other than any Secured Party that is an Affiliate
of the Company) any plan of reorganization or arrangement, adjustment or
composition affecting the Obligations or the rights of any holder thereof, or
to authorize the Collateral Agent to vote in respect of the claim of any
Secured Party in any such proceeding.

 

ARTICLE XIV

MISCELLANEOUS

 

Section
14.1.        Notices. 
Except where telephonic instructions or notices are authorized herein to
be given, all notices, demands, instructions and other communications required
or permitted to be given to or made upon any party hereto or any other Person
shall be in writing and shall be personally delivered or sent by registered or
certified mail, postage prepaid, return receipt requested, or by a reputable
overnight or courier delivery service, or by telecopier, and shall be deemed to
be given for purposes of this Agreement on the third day after

 

34

 

deposit in registered or certified mail, postage
prepaid, and otherwise on the day that such writing is delivered or sent to the
intended recipient thereof, or in the case of notice delivered by telecopy,
upon completion of transmission with a copy of such notice also being delivered
under any of the methods provided above, all in accordance with the provisions
of this Section 14.1.  All notices,
requests, demands or other communications shall be in writing and addressed as
follows:

 

(a)                                  if to any Assignor:

 

c/o
Huntsman LLC

500
Huntsman Way

Salt
Lake City, Utah 84108

Attention:
General Counsel

Telephone:
(801) 584-5700

Telecopy:
(801) 758-9031

 

with a copy to:

 

Vinson & Elkins,
L.L.P.

2300 First City Tower,
1001 Fannin

Houston, Texas 77002-6760

Attention:  Vincent Moreland

Telephone:  (713) 758-2630

Telecopy:  (713) 615-5962

 

(b)           if to the Collateral Agent:

 

Deutsche Bank Trust
Company Americas

60 Wall Street

New York, New York 10005

Attention:  John Anos

Telephone: (212) 469-2750

Telecopy: (212) 469-3632

 

with a copy to:

 

Winston & Strawn LLP

35 West Wacker Drive

Chicago, Illinois 60601

Attention:  Charles B. Boehrer

Telephone: (312) 558-5989

Telecopy: (312) 558-5700

 

(c)           if to the Administrative Agent, any
Lender or the Senior Secured Notes Trustee, either (A) to the Administrative
Agent, at the address of the Administrative Agent specified in the Credit
Agreement, (B) at such address as such Lender shall have specified in the
Credit Agreement, or (C) to the Senior Secured Notes Trustee, at the

 

35

 

address of the Senior
Secured Notes Trustee specified in the Senior Secured Notes Indenture;

 

(d)           if to any other Secured Party,
directly to such Secured Party at such address as such Secured Party shall have
specified in writing to the Assignors and the Collateral Agent;

 

or at such other address as shall have been furnished
in writing by any Person described above to the party required to give notice
hereunder.

 

Section 14.2.        Waiver; Amendment.

 

(a)           None
of the terms and conditions of this Agreement may be changed, waived, modified
or varied in any manner whatsoever unless in writing duly signed by each
Assignor directly affected thereby (acting in compliance with the terms of the
Credit Agreement) and the Collateral Agent (with the written consent of (i) the
Required Lenders, or to the extent required by Section 12.1 of the Credit
Agreement, all the Lenders and (ii) the Senior Secured Notes Trustee if (x) the
change, waiver, modification or variance would materially adversely affect the
rights and benefits of the holders of the Senior Secured Notes in a different
manner than the other Secured Parties or (y) the Credit Agreement Obligations
and Revolving Credit Agreement Obligations have been Fully Paid.  Notwithstanding the foregoing, any change,
waiver, modification or variance materially adversely affecting the rights and
benefits of a class of Secured Party (and not all classes of Secured Parties in
a like or similar manner) shall require the written consent of all holders of
obligations in such class of Secured Party (or, in the case of the Senior
Secured Notes, only the Senior Secured Notes Trustee).

 

(b)           The
Assignors and the Collateral Agent, at any time and from time to time, may
enter into additional security documents or one or more agreements supplemental
hereto or to any Mortgage for the purpose of subjecting additional property to
a lien in favor of the Collateral Agent for the benefit of any or all of the
Secured Parties.

 

(c)           Notwithstanding
the provisions of Section 14.2(a) hereof, and without the consent of any
Person, the Collateral Agent and the Assignors may, from time to time, enter
into written agreements supplemental hereto or to the Mortgages for the purpose
of (w) supplementing the information set forth in any Schedule hereto, (x)
making any ministerial or clarifying modification to this Agreement or any
Mortgage, including, but not limited to, clarifying or correcting clerical or
typographical errors in this Agreement or any Mortgage; (y) permitting the
release of the Collateral Agent’s Liens in or on any Asset (“Release
(Correction)”) that was never owned by the applicable Assignor or that was
never intended by the parties hereto to have been pledged or given as security
pursuant hereto or the Mortgages or (z) releasing Collateral from the security
interests of this Agreement pursuant to the terms hereof.  At least thirty (30) days (in such shorter
period as may be acceptable to the Collateral Agent) prior to executing any
supplemental agreement pursuant to the terms of this Section 14.2(c),
the effect of which agreement is to permit a Release (Correction), the
Collateral Agent and the Secured Parties shall be entitled to receive a
certificate (upon which the Collateral Agent may conclusively rely) from a
Responsible Officer of the respective Assignor certifying (i) that such
property was never owned by such Assignor or (ii) that such property was never
intended to have

 

36

 

been pledged or given as security pursuant hereto or
the Mortgages.  Any such supplemental
agreement shall be binding upon each Assignor, the Secured Parties, the Collateral
Agent and their respective successors and assigns.

 

(d)           Notwithstanding
the foregoing, any Person who hereafter becomes a Restricted Domestic
Subsidiary of the Company shall, in accordance with Section 7.11(d) of the
Credit Agreement become a party to this Agreement by execution of a supplement
to this Agreement in the form of Annex D (with only such changes thereto
as are agreed to by the Collateral Agent), whereupon such Person shall be
deemed an Assignor for all purposes hereunder.

 

(e)           Assignors may amend and supplement the Schedules hereto
to reflect changes resulting from transactions to the extent permitted by the
Credit Agreement (and the other Loan Documents) provided that (i) notice and
copies of any such amendments and supplements are provided to the Collateral Agent
and the Administrative Agent and (ii) no such amendment or supplement shall be
prohibited by the Senior Secured Notes Indenture.

 

Section
14.3.        Obligations
Absolute.  The obligations of each Assignor hereunder
shall remain in full force and effect without regard to, and shall not be
impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, any other Loan Document, the
Senior Secured Notes Indenture, the Senior Secured Notes or any Hedging
Agreement except as specifically set forth in a waiver granted pursuant to Section 14.2
hereof; or (c) any amendment to or modification of any Loan Document, the
Senior Secured Notes Indenture, the Senior Secured Notes or any Hedging
Agreement or any security for any of the Obligations, whether or not any
Assignor shall have notice or knowledge of any of the foregoing.

 

Section
14.4.        Successors
and Assigns.  This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of the Collateral Agent, each Secured Party and each Assignor and
their respective successors and assigns, provided that no Assignor may transfer
or assign any or all of its rights or obligations hereunder without the written
consent of the Instructing Group.  All
agreements, statements, representations and warranties made by each Assignor
herein or in any certificate or other instrument delivered by such Assignor or
on its behalf under this Agreement shall be considered to have been relied upon
by the Secured Parties and shall survive the execution and delivery of this
Agreement, the other Loan Documents, the Senior Secured Notes Indenture, the
Senior Secured Notes, the Hedging Agreements and the Foreign Overdraft Facility
Agreements regardless of any investigation made by the Secured Parties or on
their behalf.

 

Section
14.5.        Headings
Descriptive.  The headings of the several sections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.

 

Section
14.6.        Severability. 
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions

 

37

 

hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.

 

Section 14.7.                         GOVERNING LAW. 
THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF
THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS AND DECISIONS OF SAID STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW (EXCEPT SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW).

 

Section 14.8.                         Consent to Jurisdiction and
Service of Process; Waiver of Jury Trial.

 

(a)                                  EACH
ASSIGNOR, THE COLLATERAL AGENT AND EACH SECURED PARTY BY ITS ACCEPTANCE OF THE
BENEFITS HEREOF HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION IN
NEW YORK CITY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT TO SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
ANY SUCH UNITED STATES FEDERAL OR NEW YORK STATE COURT AND EACH ASSIGNOR, THE
COLLATERAL AGENT AND EACH SECURED PARTY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM  NON  CONVENIENS WHICH ANY OF THEM MAY
NOW OR THEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH
RESPECTIVE JURISDICTIONS.

 

(b)                                  AS
A METHOD OF SERVICE, EACH ASSIGNOR, THE COLLATERAL AGENT AND EACH SECURED PARTY
BY ITS ACCEPTANCE OF THE BENEFITS HEREOF CONSENTS TO THE SERVICE OF ANY AND ALL
PROCESS IN ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY COURT IN OR OF THE
STATE OF NEW YORK BY THE DELIVERY OF COPIES OF SUCH PROCESS  TO EACH ASSIGNOR, THE COLLATERAL AGENT AND
EACH SECURED PARTY, AS THE CASE MAY BE, AT THEIR ADDRESSES AS SPECIFIED ON
THEIR RESPECTIVE SIGNATURE PAGES TO THIS AGREEMENT OR BY CERTIFIED MAIL DIRECT
TO SUCH RESPECTIVE ADDRESSES.

 

(c)                                  EACH
ASSIGNOR, THE COLLATERAL AGENT AND EACH SECURED PARTY BY ITS ACCEPTANCE OF THE
BENEFITS HEREOF HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT, POWER OR REMEDY UNDER OR
IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.  THE TERMS AND PROVISIONS OF THIS SECTION CONSTITUTE
A MATERIAL INDUCEMENT TO THE SECURED PARTIES ENTERING INTO THE DOCUMENTS
EVIDENCING THEIR RESPECTIVE OBLIGATIONS.

 

38

 

Section 14.9.                         Assignor’s Duties. 
It is expressly agreed, anything herein contained to the contrary
notwithstanding, that each Assignor shall remain liable to perform all of the
obligations, if any, assumed by it with respect to the Collateral and the
Collateral Agent shall not have any obligations or liabilities with respect to
any Collateral by reason of or arising out of this Agreement, nor shall the
Collateral Agent be required or obligated in any manner to perform or fulfill
any of the obligations of any Assignor under or with respect to any Collateral.

 

Section 14.10.                  No Action by Secured Parties.  The Secured Parties agree not to take any
action whatsoever to enforce any term or provision hereof, of any Mortgage or
of any other Security Document or to enforce any rights in respect of the
Collateral, except through the Collateral Agent and in accordance with this
Agreement.

 

Section 14.11.                  Counterparts. 
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.

 

Section 14.12.                  Definitions;
Interpretation.

 

(a)                                  Unless
otherwise defined herein, capitalized terms used herein shall have the
respective meanings ascribed thereto in Annex A or, if not defined
herein or in Annex A, as defined in the Credit Agreement.

 

(b)                                  The
definitions set forth in Annex A shall be equally applicable to both the
singular and plural forms of the defined terms. 
The words “herein”, “hereof”, “hereto” and words of similar import as
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision in this Agreement. 
References to “Articles”, “Sections”, “Subsections”, “paragraphs”,
“Exhibits”, “Schedules” and “Annexes” in this Agreement shall refer to
Articles, Sections, Subsections, paragraphs, Exhibits, Schedules and Annexes of
this Agreement unless otherwise expressly provided; references to Persons
include their respective permitted successors and assigns or, in the case of
governmental Persons, Persons succeeding to the relevant functions of such
Persons; and all references to statutes and related regulations shall include
any amendments of same and any successor statutes and regulations.

 

Section 14.13.                  Conflicts with the Credit Agreement. 
To the extent of any conflict between any provision of this Agreement
and any provision of the Credit Agreement, the Credit Agreement shall govern to
the extent of such inconsistency.

 

Section 14.14.                  Replacement. 
Notwithstanding the first priority liens granted to the Collateral Agent
for the benefit of the Secured Parties, the parties hereto agree that, for
purposes of the Senior Secured Notes Indenture, this Agreement constitutes a
replacement of the existing Second Priority Security Agreement and therefore is
the new Second Priority Security Agreement; that Collateral Agent has been
appointed to such role as successor to the Second Priority Collateral Agent;
that Administrative Agent, as Bank Agent, shall continue to be the Second
Priority Representative; and that the Secured Parties constitute Second
Priority Senior Secured Parties. 
Capitalized terms used in this Section 14.14 but not defined
in this Agreement shall have the meanings assigned to such terms in the Senior
Secured Notes Indenture.

 

39

 

[signature page
follows]

 

40

 

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

 

	
   

  	
  HUNTSMAN LLC,

  	 

	
   

  	
  as an Assignor

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Sean Douglas

  	
   

  	 

	
   

  	
  Name:

  	
  Sean Douglas

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK TRUST
  COMPANY 

  
	
   

  	
  AMERICAS, as Collateral
  Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank Fazio

  	
   

  
	
   

  	
  Name:

  	
  Frank Fazio

  
	
   

  	
  Title:

  	
  Director

  
								

 

 

HUNTSMAN CHEMICAL PURCHASING CORPORATION

HUNTSMAN HEADQUARTERS CORPORATION

HUNTSMAN INTERNATIONAL CHEMICALS CORPORATION

HUNTSMAN INTERNATIONAL TRADING CORPORATION

HUNTSMAN PETROCHEMICAL PURCHASING CORPORATION

POLYMER MATERIALS INC.

AIRSTAR CORPORATION

HUNTSMAN PROCUREMENT CORPORATION

JK HOLDINGS CORPORATION

HUNTSMAN SPECIALTY
CHEMICALS HOLDINGS CORPORATION

HUNTSMAN AUSTRALIA INC.

HUNTSMAN CHEMICAL FINANCE CORPORATION

HUNTSMAN ENTERPRISES, INC.

HUNTSMAN FAMILY CORPORATION

HUNTSMAN GROUP HOLDINGS FINANCE CORPORATION

HUNTSMAN GROUP INTELLECTUAL PROPERTY HOLDINGS
CORPORATION

HUNTSMAN INTERNATIONAL SERVICES CORPORATION

HUNTSMAN MA INVESTMENT CORPORATION

HUNTSMAN MA SERVICES CORPORATION

HUNTSMAN PETROCHEMICAL FINANCE CORPORATION

HUNTSMAN PETROCHEMICAL CANADA HOLDINGS CORPORATION

HUNTSMAN CHEMICAL COMPANY LLC

HUNTSMAN PETROCHEMICAL CORPORATION

HUNTSMAN POLYMERS CORPORATION

HUNSTMAN SPECIALTY CHEMICALS CORPORATION

PETROSTAR INDUSTRIES LLC

HUNTSMAN POLYMERS
HOLDINGS CORPORATION

 

	
  By:

  	
  /s/ Sean Douglas

  	
   

  
	
   

  	
  Name:

  	
  Sean Douglas

  
	
   

  	
  Title:

  	
  Vice President

  
				

 

HUNTSMAN EXPANDABLE
POLYMERS COMPANY, LC

 

	
  By:

  	
  Huntsman International Chemicals Corporation, its
  Manager

  
	
  By:

  	
  /s/ Sean Douglas

  	
   

  
	
   

  	
  Name:

  	
  Sean Douglas

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

 

	
  HUNTSMAN FUELS, L.P.

  
	
  By: Petrostar Fuels,
  LLC, its General Partner

  
	
  PETROSTAR FUELS LLC

  
	
  By:

  	
  /s/ Samuel D. Scruggs

  	
   

  
	
   

  	
  Name:

  	
  Samuel D. Scruggs

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  HUNTSMAN PURCHASING,
  LTD.

  
	
   

  
	
  By: Huntsman
  Procurement Corporation, its General Partner

  
	
  By:

  	
  /s/ Sean Douglas

  	
   

  
	
   

  	
  Name:

  	
  Sean Douglas

  
	
   

  	
  Title:

  	
  Vice President

  
				

 

 

Schedule A

to

Agreement

 

EXISTING HEDGING
AGREEMENTS

 

 

Schedule B

to

Agreement

 

PLEDGED
INTERCOMPANY NOTES

 

 

Schedule C

to

Agreement

 

PLEDGED STOCK

 

 

Schedule 2.5

to

Agreement

 

RECORD LOCATIONS

 

 

Schedule 2.6

to

Agreement

 

 

AIRCRAFT,
VEHICLES, VESSELS AND RAILCARS

 

 

Schedule 2.7

to

Agreement

 

INVENTORY AND
EQUIPMENT LOCATIONS

 

 

Schedule 2.9

to

Agreement

 

SCHEDULE OF
NAME, TRADE, FICTITIOUS AND OTHER NAMES; 

CORPORATE
IDENTIFICATION NUMBERS

 

	
  Exact
  Legal Name of Each

  Assignor

  	
   

  	
  Jurisdiction of

  Incorporation

  	
   

  	
  FEIN

  	
   

  	
  Delaware

  Organization

  Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Schedule 2.10

to

Agreement

 

JURISDICTION OF
FORMATION

 

	
  Assignor

  	
   

  	
  Jurisdiction

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

Schedule 2.11

to

Agreement

 

COMMERCIAL TORT
CLAIMS

 

 

Schedule 4.1

to

Agreement

 

I.  SCHEDULE OF U.S. TRADEMARK
REGISTRATIONS

 

	
  Registered Mark

  	
   

  	
  Registration No.

  	
   

  	
  Registration Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

II.  SCHEDULE OF PENDING APPLICATIONS FOR
U.S. TRADEMARK

REGISTRATIONS ON THE BASIS OF USE IN COMMERCE

UNDER 17 USC §1051(a)

 

	
  Mark

  	
   

  	
  Serial

  	
   

  	
  Filing Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

III.  SCHEDULE OF PENDING APPLICATIONS FOR
U.S. TRADEMARK

REGISTRATION ON THE BASIS OF INTENT TO USE THE

MARK IN COMMERCE UNDER 17 USC §1051(b)

 

	
  Mark

  	
   

  	
  Serial

  	
   

  	
  Filing Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Schedule 4.2

to

Agreement

 

SCHEDULE OF
LICENSE AGREEMENTS AND ASSIGNMENTS

 

 

Schedule 5.1

to

Agreement

 

A.  SCHEDULE OF PATENTS AND APPLICATIONS

 

 

Schedule 5.1

to

Agreement

 

B.  SCHEDULE OF
UNITED STATES COPYRIGHTS

 

 

Annex A

to

Agreement

 

DEFINITIONS

 

The following terms shall
have the meanings herein specified.  Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.

 

“Administrative Agent”
shall have the meaning provided in the recitals to this Agreement.

 

“Agreement” shall
mean this Security Agreement, as the same may be modified, supplemented,
extended, renewed, replaced, restated or amended from time to time in
accordance with its terms.

 

“Assignor” shall
have the meaning provided in the first paragraph of this Agreement.

 

“Bankruptcy Code”
means Title II of the United States Bankruptcy Code, 11 U.S.C. § et.
seq., as amended from time to time.

 

“Borrower” shall
have the meaning provided in the recitals to this Agreement.

 

“Chattel Paper”
shall have the meaning provided in Article 9 of the Uniform Commercial
Code.

 

“Collateral” shall
have the meaning provided in Section 1.1(a) of this Agreement.

 

“Collateral Agent”
means Deutsche Bank Trust Company Americas, in its capacity as collateral agent
under the Agreement for each of the Secured Parties, until one or more
successors are appointed pursuant to Article XI of the Agreement and
thereafter shall mean such successor or successors and all successors thereto.

 

“Collateral Agent
Costs” shall have the meaning provided in Section 10.2 of this
Agreement.

 

“Commercial Tort Claim”
shall have the meaning provided in Article 9 of the Uniform Commercial
Code, and shall include any such claim that is listed on Schedule 2.11
(as such Schedule may be amended from time to time in accordance with Section 2.11
or otherwise).

 

“Contracts” shall
mean all contracts between any Assignor and one or more additional parties
(including, without limitation, (i) each partnership agreement to which such
Assignor is a party, (ii) any Hedging Agreements and (iii) any Foreign
Overdraft Facility Agreements).

 

 

“Contract Rights”
shall mean all rights of any Assignor (including, without limitation, all
rights to payment) under each Contract.

 

“Copyrights” shall
mean any registrations of any Copyrights in the United States Copyright Office
which any Assignor now owns or hereafter acquires, as well as any application
for a United States copyright registration now or hereafter made with the
United States Copyright Office by any Assignor.

 

“Credit Agreement”
shall have the meaning provided in the recitals to this Agreement.

 

“Credit Agreement
Obligations” shall have the meaning provided in the definition of
“Obligations” in this Annex A.

 

“Default” shall
mean any event which, with notice or lapse of time, or both, would constitute
an Event of Default.

 

“Deposit Accounts”
shall mean, with respect to any Assignor, any “deposit account” of such
Assignor, as such term is defined in Article 9 of the Uniform Commercial
Code, whether now owned or existing or hereafter acquired or arising, and, in
any event, shall include any demand, time, savings, passbook or like account
maintained with a bank, savings and loan association, credit union or like
organization.

 

“Documents” shall
have the meaning provided in Article 9 of the Uniform Commercial Code.

 

“Electronic Chattel
Paper” shall have the meaning provided in Article 9 of the Uniform
Commercial Code.

 

“Equipment” shall
mean any “equipment,” as such term is defined in Article 9 of the Uniform
Commercial Code, now or hereafter owned by any Assignor and, in any event,
shall include, but shall not be limited to, all machinery, equipment,
furnishings and fixtures, including movable trade fixtures now or hereafter
owned by any Assignor and any and all additions, substitutions and replacements
of any of the foregoing, wherever located, together with all attachments,
components, parts, equipment and accessories installed thereon or affixed thereto.

 

“Event of Default”
shall mean any Event of Default under, and as defined in, the Credit Agreement
or the Senior Secured Notes Indenture and shall in any event, without
limitation, include any payment default on any of the Obligations after the
expiration of any applicable grace period.

 

“Excluded Foreign or
Transportation Assets” means the following Collateral, collectively:

 

(i)                                     all
property of the Assignors located at its cement manufacturing facility in
Armenia, to the extent that a security interest therein granted by the Company
may be perfected only by actions taken under the laws of jurisdictions other
than the United States or any state or subdivision thereof;

 

 

(ii)                                  Inventory
located outside of the United States and having an aggregate book value for all
Assignors together of less than $20,000,000; and

 

(iii)                               Excluded
Transportation Assets.

 

“Excluded
Transportation Assets” means, titled vehicles, vessels and other assets and
properties owned by Assignors in which a security interest may not be perfected
through the filing of financing statements under the UCC and which have an
aggregate fair market value from time to time of less than $5,000,000 for all
Assignors together.

 

“Existing Hedging
Agreements” shall have the meaning provided in the recitals to this
Agreement.

 

“Foreign Overdraft
Facility Agreements” shall have the meaning provided in the recitals to
this Agreement.

 

“Fully Paid” means
with respect to any Obligations, that the respective obligee of such Obligation
(which obligee shall be, in the case of the Credit Agreement Obligations, the
Administrative Agent, and in the case of the Senior Secured Notes Obligations,
the Senior Secured Notes Trustee) shall have certified to the Collateral Agent
that such Obligation has terminated and that there remain no obligations of any
kind whatsoever of the Borrower with respect thereto (other than contingent
indemnification obligations as to which no claims shall have accrued or be
pending).

 

“General Intangibles”
shall have the meaning provided in Article 9 of the Uniform Commercial
Code and shall in any event include all of any Assignor’s claims, rights,
powers, privileges, authority, options, security interests, liens and remedies
under any partnership agreement to which such Assignor is a party or with
respect to any partnership of which such Assignor is a partner.

 

“Goods” shall have
the meaning provided in Article 9 of the Uniform Commercial Code.

 

“Hedging Agreements”
shall have the meaning provided in the first paragraph of this Agreement.

 

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

 

“HSCC Pledge Agreement”
means that certain Pledge Agreement dated as of the date hereof by and between
HSCC, as pledgor, and Deutsche Bank Trust Company Americas, as bank collateral
agent, as amended, modified or supplemented from time to time.

 

“Indemnitee” shall
have the meaning provided in Section 9.1 of this Agreement.

 

“Instructing
Group” means (i) unless and until the Credit Agreement Obligations
have been Fully Paid, as of any date of determination thereof, the
Administrative Agent or Required Lenders (or, to the extent required by Section 12.1
of the Credit Agreement, all the

 

 

Lenders) and (ii) after
the date on which the Credit Agreement Obligations have been Fully Paid, (x)
the Administrative Agent (as defined in the Revolving Credit Agreement) or
Required Lenders (as defined in the Revolving Credit Agreement) (or, to the
extent required by Section 13.1 of the Revolving Credit Agreement, all the
Lenders (as defined in the Revolving Credit Agreement)); or (y) if both the
Credit Agreement Obligations and the Revolving Credit Agreement Obligations
shall have been Fully Paid, the Senior Secured Notes Trustee.

 

“Instrument” shall
have the meaning provided in Article 9 of the Uniform Commercial Code.

 

“Intercompany Notes”
means a promissory note evidencing indebtedness of Borrower or any of
Borrower’s Restricted Subsidiaries which, in the case of Borrower, is owing to
any Restricted Subsidiary of Borrower and which, in the case of any Restricted
Subsidiary of Borrower, is owing to Borrower or any of its other Restricted
Subsidiary, in any case, in a form reasonably satisfactory to the Collateral
Agent).

 

“Intercreditor
Agreement” shall have the meaning provided in Section 1.2 to
this Agreement.

 

“Inventory” shall
mean all “inventory” as such term is defined in Article 9 of the Uniform
Commercial Code, now owned or hereafter acquired by any Assignor and, in any
event, shall include, but shall not be limited to, all merchandise, inventory
and goods, and all additions, substitutions and replacements thereof, wherever
located, together with all goods, supplies, incidentals, packaging materials,
labels, materials and any other items used or usable in manufacturing,
processing, packaging or shipping same; in all stages of production — from raw
materials through work-in-process to finished goods — and all products and
proceeds of whatever sort and wherever located and any portion thereof which
may be returned, rejected, reclaimed or repossessed by the Collateral Agent
from any Assignor’s customers.

 

“Investment Property”
shall have the meaning provided in Article 9 of the Uniform
Commercial Code and shall include, without limitation (i) all securities,
whether certificated or uncertificated, including, without limitation, stocks,
bonds, interests in limited liability companies, partnership interests,
treasury securities, certificates of deposit, and mutual fund shares; (ii) all
securities entitlements of any Assignor, including without limitation, the
rights of any Assignor to any securities account and the financial assets held
by a securities intermediary in such securities account and any free credit
balance or other money owing by any securities intermediary with respect to
that account; (iii) all securities accounts held by any Assignor; (iv) all
commodity contracts held by any Assignor; and (v) all commodity accounts held
by any Assignor.

 

“Lenders” shall
have the meaning provided in the recitals to this Agreement.

 

“Letter-of-Credit Rights”
shall have the meaning as provided in Article 9 of the Uniform Commercial
Code.

 

“Marks” shall mean
all right, title and interest in and to any trademarks and service marks and
trade names now held or hereafter acquired by any Assignor, which are registered
in the United States Patent and Trademark Office or in any similar office or
agency of

 

 

the United States or any
state thereof or any political subdivision thereof and any application for such
trademarks and service marks, as well as any unregistered marks used by any
Assignor in the United States and trade dress including logos, designs, trade
names, company names, business names, fictitious business names and other
business identifiers in connection with which any of these registered or unregistered
marks are used in the United States.

 

“Obligations”
shall mean (i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including, without
limitation, all “Obligations” as such term is defined in the Credit Agreement
and all obligations which, but for the automatic stay under Section 362(a)
of the Bankruptcy Code, would become due) and liabilities of each Assignor now
existing or hereafter incurred under, arising out of or in connection with the
Credit Agreement or any other Loan Document to which such Assignor is a party
and the due performance and compliance by each Assignor with all of the terms,
conditions and agreements contained in each such Loan Document (all such
obligations and liabilities being herein collectively called the “Credit
Agreement Obligations”); (ii) the full and prompt payment when due (whether
at the stated maturity, by acceleration or otherwise) of all obligations
(including all obligations which, but for the automatic stay under Section 362(a)
of the Bankruptcy Code, would become due) and liabilities of each Assignor now
existing or hereafter incurred under, arising out of or in connection with the
Senior Secured Notes Indenture and the Senior Secured Notes, including without
limitation the guarantees in respect of the Senior Secured Notes, and the due
performance and compliance by each Assignor with all of the terms, conditions
and agreements contained in each such documents (all such obligations and
liabilities being herein collectively called the “Senior Secured Notes
Obligations”), (iii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities of each Assignor now
existing or hereafter incurred under, arising out of or in connection with any
Hedging Agreement or the Foreign Overdraft Facility (including, in the case of
Assignors other than the Borrower, all obligations of such Assignor under its
Guarantee in respect of Hedging Agreements and the Foreign Overdraft Facility),
and the due performance and compliance by each Assignor with all of the terms,
conditions and agreements contained therein (all such obligations and
liabilities described in this clause (iii) being herein collectively called the
“Other Obligations”); (iv) any and all sums advanced by the
Collateral Agent in order to preserve the Collateral or preserve its security
interests in the Collateral; (v) in the event of any proceeding for the
collection or enforcement of any indebtedness, obligations, or liabilities of
any Assignor referred to in clauses (i), (ii) and (ii), after an Event of
Default shall have occurred and be continuing, the reasonable expenses of
taking, holding, preparing for sale or lease, selling or otherwise disposing of
or realizing on the Collateral, or of any exercise by the Collateral Agent of
its rights hereunder, together with reasonable attorneys’ fees and court costs;
and (vi) all amounts paid by any Indemnitee as to which such Indemnitee has the
right to reimbursement under Section 9.1 of this Agreement.  It is acknowledged and agreed that the
“Obligations” shall include extensions of credit of the types described above,
whether outstanding on the date of this Agreement or extended from time to time
after the date of this Agreement.

 

“Other Obligations”
shall have the meaning provided in the definition of “Obligations” in this Annex
A.

 

 

“Patents” shall
mean any United States patent now or hereafter owned by any Assignor, as well
as any application for a United States patent now or hereafter owned by any
Assignor.

 

“Permitted Liens”
shall have the meaning provided in the Credit Agreement.

 

“Pledged
Debt” means the indebtedness as evidenced by the Pledged
Intercompany Notes.

 

“Pledged Intercompany
Notes” means the Intercompany Notes described on Schedule B
hereto, as it may, from time to time, be supplemented in accordance with the terms
of  this Agreement.

 

“Pledged Securities”
means, collectively, the Pledged Stock, any pledged promissory notes and the
Pledged Intercompany Notes, if any.

 

“Pledged Stock”
means the shares of capital stock described in Schedule C hereto,
as it may, from time to time, be supplemented in accordance with the terms of
the Agreement, and any other shares of capital stock pledged to the Collateral
Agent hereunder or which otherwise become a part of the Collateral.

 

“Post-Petition
Interest” shall mean interest accruing in respect of Obligations after the
commencement of any bankruptcy, insolvency, receivership or similar proceedings
by or against the Borrower, at the rate applicable to such Obligations pursuant
to the applicable Loan Documents, whether or not such interest is allowed as a
claim enforceable against the Borrower in a bankruptcy case under the
Bankruptcy Code, and any other interest that would have accrued but for the
commencement of such proceedings.

 

“Primary Obligations”
shall have the meaning provided in Section 8.4(b) of this
Agreement.

 

“Proceeds” shall
have the meaning provided in Article 9 of the Uniform Commercial Code or
under other relevant law and, in any event, shall include, but not be limited
to, (i) any and all proceeds of any insurance, indemnity, warranty or Guarantee
payable to the Collateral Agent or any Assignor from time to time with respect
to any of the Collateral, (ii) any and all payments (in any form whatsoever)
made or due and payable to any Assignor from time to time in connection with
any requisition, confiscation, condemnation, seizure or forfeiture of all or
any part of the Collateral by any governmental authority (or any person acting
under color of governmental authority) and (iii) any and all other amounts from
time to time paid or payable under or in connection with any of the Collateral.

 

“Pro Rata Share”
shall have the meaning provided in Section 8.4(b) of this
Agreement.

 

“Receivables”
shall mean any “account” as such term is defined in Article 9 of the
Uniform Commercial Code, now or hereafter owned by any Assignor and, in any
event, shall include, but shall not be limited to, all of such Assignor’s
rights to payment of a monetary obligation, whether or not earned by
performance, (i) for property that has been or is to be sold,

 

 

leased, licensed,
assigned or otherwise disposed of, (ii) for services rendered or to be
rendered, (iii) for a policy of insurance issued or to be issued, including
health-care insurance receivables (as such term is defined in the Uniform
Commercial Code), (iv) for a secondary obligation incurred or to be incurred,
(v) for energy provided or to be provided, (vi) for the use or hire of a vessel
under a charter or other contract, (vii) arising out of the use of a credit or
charge card or information contained on or for use with the card, or (viii) as
winnings in a lottery or other game of chance operated or sponsored by a state,
governmental unit of a state, or person licensed or authorized to operate the
game by a state or governmental unit of a state, whether now in existence or
arising from time to time hereafter, including, without limitation, rights
evidenced by an account, note, contract, security agreement, chattel paper, or
other evidence of indebtedness or security, together with (i) all security
pledged, assigned, hypothecated or granted to or held by such Assignor to
secure the foregoing, (ii) all of such Assignor’s right, title and interest in
and to any goods, the sale of which gave rise thereto, (iii) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing, (iv) all
powers of attorney for the execution of any evidence of indebtedness or
security or other writing in connection therewith, (v) all books, records,
ledger cards, and invoices relating thereto, (vi) all evidences of the filing
of financing statements and other statements and the registration of other
instruments in connection therewith and amendments thereto, notices to other
creditors or secured parties, and certificates from filing or other registration
officers, (vii) all credit information, reports and memoranda relating thereto,
and (viii) all other writings related in any way to the foregoing.

 

“Representative”
shall have the meaning provided in Section 8.4(d) of this
Agreement.

 

“Revolving Credit
Agreement” shall mean that certain Revolving Credit Agreement, dated as of
the date hereof, by and among Borrower, the other borrowers parties thereto,
Deutsche Bank Trust Company Americas, as administrative agent and collateral
agent, and the lenders parties thereto, together with any agreement or
agreements from time to time executed by Borrower to evidence any refinancings
or successive refinancings of all or any part of the Revolving Credit Agreement
Obligations, together with any amendments, modifications, extensions,
supplements to, or restatements of any of the foregoing permitted by the Credit
Agreement.

 

“Revolving Credit
Agreement Collateral Agent” shall mean the Collateral Agent (as such term
is defined in the Revolving Credit Agreement).

 

“Revolving Credit
Agreement First Lien Collateral” shall have the meaning provided in Section 1.2
of this Agreement.

 

“Revolving Credit
Agreement Loan Documents” shall mean the Loan Documents (as defined in the
Revolving Credit Agreement) and all other documents, instruments and agreements
now or hereafter evidencing or securing the whole or any part of the Revolving
Credit Agreement Obligations (including, without limitation, each of the loan
documents as defined in any principal agreement evidencing Revolving Credit
Agreement Obligations, including any documents evidencing or securing any
complete, partial or successive refunding, refinancing or replacement of the
Revolving Credit Agreement Obligations and any amendments, modifications,
renewals or extensions of any of the foregoing).

 

 

“Revolving Credit
Agreement Obligations” shall mean Obligations under and as defined in the
Revolving Credit Agreement.

 

“Secondary Obligations”
shall have the meaning provided in Section 8.4(b) of this
Agreement.

 

“Secured Party”
shall have the meaning provided in the first paragraph of this Agreement.

 

 “Senior Secured Notes” shall have the
meaning provided in the Recitals of this Agreement.

 

“Senior Secured Notes
Indenture” shall have the meaning provided in the Recitals of this
Agreement.

 

“Senior Secured Notes
Obligations” shall have the meaning provided in the definition of
“Obligations” in this Annex A.

 

“Senior Secured Notes
Trustee” shall have the meaning provided in the Recitals of this Agreement.

 

 “Significant Copyrights” shall mean, at
any time, those Copyrights which the relevant Assignor believes in its
reasonable judgment to be material to its business at such time.

 

“Significant Marks”
shall mean, at any time, those Marks which the relevant Assignor believes in
its reasonable judgment to be material to its business at such time.

 

“Significant Patents”
shall mean, at any time, those Patents which the relevant Assignor believes in
its judgment to be material to its business at such time.

 

“Software” shall
have the meaning provided in Article 9 of the Uniform Commercial Code.

 

“Stock Rights”
means any stock, any dividend or other distribution and any other right or
property which an Assignor shall receive or shall become entitled to receive
for any reason whatsoever with respect to, in substitution for or in exchange
for any shares of Pledged Stock and any stock, any right to receive stock and
any right to receive earnings, in which an Assignor now has or hereafter
acquires any right, issued by an issuer of the Pledged Stock.

 

“Termination Date”
shall have the meaning provided in Section 12.2 of this Agreement.

 

“Trade Secrets”
shall mean any know-how, technology, product formulations, procedures and
product and manufacturing specifications or standards now or hereafter utilized
in the relevant Assignor’s business.

 

“Uniform Commercial
Code” or “UCC” shall mean the Uniform Commercial Code as now or
hereafter in effect from time to time in the State of New York; provided,

 

 

however,
that if by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of, or remedies with respect to, the Collateral Agent’s
security interests in any Collateral is governed by the Uniform Commercial Code
as enacted and in effect in any other jurisdiction, the term “Uniform
Commercial Code” or “UCC” shall mean the Uniform Commercial Code as enacted and
in effect in such other jurisdiction solely for purposes of the provisions
thereof relating to such attachment, perfection, priority or remedies.

 

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

 

 

Annex B

to

Agreement

 

GRANT OF SECURITY
INTEREST IN

UNITED STATES TRADEMARKS AND PATENTS

 

FOR GOOD AND VALUABLE
CONSIDERATION, receipt and sufficiency of which are hereby acknowledged, [NAME OF GRANTOR], a
                  
corporation (the “Grantor”) with principal offices at
                                                       ,
hereby grants to Deutsche Bank Trust Company Americas, as Collateral Agent,
with principal offices at 60 Wall Street, New York, New York 10005 (the “Grantee”),
a security interest in (i) all of the Grantor’s right, title and interest in
and to the United States trademarks, trademark registrations and trademark
applications (the “Marks”) set forth on Schedule B attached
hereto, (ii) all of the Grantor’s right, title and interest in and to the
United States patents (the “Patents”) set forth on Schedule C
attached hereto, in each case together with (iii) all Proceeds (as such term is
defined in the Security Agreement referred to below) of the Marks and Patents,
(iv) the goodwill of the businesses symbolized by the Marks and (v) all causes
of action arising prior to or after the date hereof for infringement of any of
the Marks and Patents or unfair competition regarding the same.

 

THIS GRANT is made to
secure the full and prompt performance and payment of all the Obligations of
the Grantor, as such term is defined in the Security Agreement between the
Grantor, the other assignors party thereto and the Grantee, dated as of October 14,
2004 (as amended, restated, supplemented or otherwise modified from time to
time, the “Security Agreement”). 
Upon the occurrence of the Termination Date (as defined in the Security
Agreement), the Grantee shall, upon such satisfaction, execute, acknowledge,
and deliver to the Grantor an instrument in writing releasing the security
interest in and re-assigning the Marks and Patents acquired under this Grant to
the Grantor.

 

This Grant has been
granted in conjunction with the security interest granted to the Grantee under
the Security Agreement.  The rights and
remedies of the Grantee with respect to the security interest granted herein
are more fully set forth in the Security Agreement, all terms and provisions of
which are incorporated herein by reference. 
In the event that any provisions of this Grant are deemed to conflict
with the Security Agreement, the provisions of the Security Agreement shall
govern.

 

[signature
page follows]

 

 

IN WITNESS WHEREOF, the
undersigned have executed this Grant of Security Interest as of the
     day of
               ,
       .

 

	
   

  	
  [NAME
  OF GRANTOR],

  as Grantor

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DEUTSCHE BANK TRUST
  COMPANY

  AMERICAS, as Grantee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
						

 

 

	
  STATE OF 

  	
  )

  
	
   

  	
   

  
	
  ) ss.:

  	
   

  
	
   

  	
   

  
	
  COUNTY OF 

  	
  )

  

 

On this
    day of
                ,
       before me personally came
                       ,
who being duly sworn, did depose and say that he is
                                  
of [Name of Grantor], that he is
authorized to execute the foregoing Grant of Security Interest on behalf of said
corporation and that he did so by authority of the Board of Directors of said
Corporation.

 

	
   

  	
   

  
	
  Notary Public

  	
   

  

 

 

	
  STATE OF 

  	
  )

  
	
   

  	
   

  
	
  ) ss.:

  	
   

  
	
   

  	
   

  
	
  COUNTY OF 

  	
  )

  

 

On this
     day of
                  ,
       before me personally came
                          
who, being by me duly sworn, did state as follows: that s/he is
                          
of Deutsche Bank Trust Company Americas, that s/he is authorized to execute the
foregoing Grant of Security Interest on behalf of said corporation and that
s/he did so by authority of the Board of Directors of said corporation.

 

 

	
   

  	
   

  
	
  Notary Public

  	
   

  

 

 

Schedule B

 

U.S. Trademark
Registration

 

	
  Registered Mark

  	
   

  	
  Registration No.

  	
   

  	
  Registration Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Schedule C

 

All patents are
encumbered with security interests.

 

	
  Patent Number

  	
   

  	
  Date Issued

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Annex C

to

Agreement

 

GRANT OF SECURITY
INTEREST

IN UNITED STATES COPYRIGHTS

 

WHEREAS, [NAME OF
GRANTOR], a
              
corporation (the “Grantor”), having its chief executive office at
                                     ,
is the owner of all right, title and interest in and to the United States
copyrights and associated United States copyright registrations and
applications for registration set forth in Schedule B attached
hereto;

 

WHEREAS, DEUTSCHE BANK TRUST COMPANY AMERICAS, as
Collateral Agent, having its principal offices at 60 Wall Street, New York, New
York 10005 (the “Grantee”), desires to acquire a security interest in,
and lien on, all of Grantor’s right, title and interest in and to Grantor’s
copyrights and copyright registrations and applications therefor described
above; and

 

WHEREAS, the Grantor is willing to assign to the
Grantee, and to grant to the Grantee a security interest in and lien upon the
copyrights and copyright registrations and applications therefor described
above;

 

NOW, THEREFORE, for good and valuable consideration,
the receipt of which is hereby acknowledged, and subject to the terms and
conditions of the Security Agreement, dated as of October 14, 2004,
between the Grantor, the other assignors from time to time party thereto and
the Grantee (as amended, restated, supplemented or otherwise modified from time
to time, the “Security Agreement”), the Grantor hereby grants to the
Grantee a security interest in and a lien upon, all of Grantor’s right, title
and interest in and to Grantor’s copyrights and copyright registrations and
applications more particularly set forth on Schedule B attached
hereto, (the

 

 

“Copyrights”)
together with (i) all Proceeds (as such term is defined in the Security
Agreement referred to below) of the Copyrights, and (ii) all causes of action
arising prior to or after the date hereof for infringement of any Copyright.

 

This GRANT OF SECURITY INTEREST is made to secure the
satisfactory performance and payment of all the Obligations (as such term is
defined in the Security Agreement) of the Grantor and shall be effective as of
the date of the Security Agreement.  Upon
the occurrence of the Termination Date (as defined in the Security Agreement),
the Grantee shall, upon such satisfaction, execute, acknowledge, and deliver to
Grantor an instrument in writing releasing the security interest in the
Copyrights acquired under this Grant of Security Interest.

 

This Grant of Security Interest has been granted in
conjunction with the security interest granted to Grantee under the Security
Agreement.  The rights and remedies of
the Grantee with respect to the security interest granted herein are more fully
set forth in the Security Agreement, all terms and provisions of which are
incorporated herein by reference.  In the
event that any provisions of this Grant of Security Interest are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.

 

[Signature
Page Follows]

 

2

 

IN WITNESS WHEREOF, the undersigned have executed this
Grant as of the       day of
                     ,
      .

 

 

	
   

  	
  [NAME
  OF GRANTOR],

  as Grantor

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DEUTSCHE BANK TRUST
  COMPANY

  AMERICAS, as Collateral Agent Grantee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
						

 

 

	
  STATE OF 

  	
  )

  
	
   

  	
  ) ss.:

  
	
  COUNTY OF 

  	
  )

  

 

On this     day of
                ,
        , before me personally came
                                
who, being by me duly sworn, did state as follows:  that he is
                                
of [Name of Grantor], that he is
authorized to execute the foregoing Grant of Security Interest on behalf of
said corporation and that he did so by authority of the Board of Directors of
said corporation.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary
  Public

  	
   

  

 

 

	
  STATE OF 

  	
  )

  
	
   

  	
  ) ss.:

  
	
  COUNTY OF 

  	
  )

  

 

On this      day of
                  ,
      , before me personally came
                            
who, being by me duly sworn, did state as follows:  that s/he is
                                  of
Deutsche Bank Trust Company Americas, that s/he is authorized to execute the
foregoing Grant of Security Interest on behalf of said corporation and that he
did so by authority of the Board of Directors of said corporation.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary
  Public

  	
   

  

 

 

Schedule B

 

UNITED STATES COPYRIGHTS

 

 

Annex D

to

Agreement

 

ADDITION OF NEW
ASSIGNOR

TO SECURITY AGREEMENT

 

ADDITION OF NEW ASSIGNOR
TO SECOND AMENDED AND RESTATED SECURITY AGREEMENT (this “Instrument”),
dated as of           ,          ,
amending that certain         Security
Agreement, dated as of October 14, 2004 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the “Agreement”)
by and among the Assignors (the “Assignors”) party thereto and Deutsche
Bank Trust Company Americas, as Collateral Agent (the “Collateral Agent”)
for the Secured Parties.

 

Reference is made to the
Credit Agreement dated as of October 14, 2004 (as may be amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Huntsman LLC, a Utah limited liability company (“Borrower”),
the financial institutions (the “Lenders”) from time to time party
thereto and Deutsche Bank Trust Company Americas, as administrative agent
(together with any successor agent, the “Agent”).

 

Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Agreement and the Credit Agreement.

 

The Assignors have entered
into the Agreement in order to induce the Lenders to extend credit pursuant to
the Credit Agreement and to induce the other Secured Parties to extend Hedging
Agreements and Foreign Overdraft Facility Agreements, as the case may be.  Pursuant to Section 7.11 of the Credit
Agreement, the undersigned is required to enter into the Agreement as an
Assignor.  Section 14.2(d) of the
Agreement provides that additional parties may become an Assignor under the
Agreement by execution and delivery of an instrument in the form of this
Instrument.  The undersigned (the “New
Party”) is executing this Instrument in accordance with the requirements of
the Credit Agreement to become an Assignor under the Agreement in order to
induce the Lenders to extend and continue the extension of credit pursuant to
the Credit Agreement.

 

Accordingly, the New
Party agrees as follows:

 

SECTION 1.                                In accordance with the Agreement, the New
Party by its signature below becomes a party to the Agreement with the same
force and effect as if originally named therein as a party and the New Party
hereby (a) agrees to all the terms and warrants that the representations and
warranties made by it as a party thereunder are true and correct in all
material respects on and as of the date hereof after giving effect to the
disclosures attached hereto as Annex I. 
Each reference to an “Assignor” in the Agreement shall be deemed to
include the New Party.  The Agreement is
hereby incorporated herein by reference.

 

SECTION 2.                                The New Party represents and warrants to
the Collateral Agent and the Secured Parties that this Instrument has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its

 

 

terms, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws generally affecting
creditors’ rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law).

 

SECTION 3.                                This Instrument may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.  This Instrument shall become effective when
the Collateral Agent shall have received a counterpart of this Instrument that
bears the signatures of the New Party.

 

SECTION 4.                                Except as expressly supplemented hereby,
the Agreement shall remain in full force and effect.

 

SECTION 5.                            THIS INSTRUMENT SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL
PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS
OF SAID STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAW.

 

SECTION 6.                                All communications and notices hereunder
shall be in writing and given as provided in the Agreement.  All communications and notices hereunder to
the New Party shall be given to it at the address set forth under its signature
below.

 

IN WITNESS WHEREOF, the
New Party has duly executed this Addition of New Assignor to the Security
Agreement as of the day and year first above written.

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [NAME
  OF NEW PARTY],

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
											

 

2

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