UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to _______________
Commission file number: 1-9988
HUNTSMAN POLYMERS CORPORATION
(Exact name of Registrant as Specified in its Charter)
Delaware 75-2104131
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 Huntsman Way
Salt Lake City, Utah 84108
(Address of principal executive (Zip Code)
offices)
(801) 532-5200
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
than the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
---- ----
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12,13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. Yes X No
----- -----
At November 14, 1997, 1,000 shares of common stocks, par value $0.01 per
share, of Huntsman Polymers Corporation were outstanding.
HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES
Table of Contents
Form 10-Q for the Quarterly Period
Ended September 30, 1997
PART 1 FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets at September 30, 1997
and December 31, 1996 3
Consolidated Statements of Operations for the month
ended September 30, 1997, two months ended August 31,
1997, three months ended September 30, 1996, eight
months ended August 31, 1997, and nine months ended
September 30, 1996 4
Consolidated Statements of Cash Flows for the month
ended September 30, 1997, eight months ended August
31, 1997 and nine months ended September 30, 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
PART II OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 2. Changes in Securities and Use of Proceeds 19
Item 4. Submission of Matters to a Vote of Security Holders 20
Item 5. Other Information 20
Item 6. Exhibits and Reports on Form 8-K 20
SIGNATURE 22
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (NOTE 1)
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>
Predecessor Company
September 30, 1997 December 31, 1996
------------------ ----------------------
(Unaudited)
(THOUSANDS OF DOLLARS)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 0 $ 462
Accounts and notes receivables 60,716 64,637
Inventories 51,441 52,294
Deferred income taxes 2,973 2,816
Other current assets 1,985 39
Net assets of discontinued operations 123,086
-------- --------
Total current assets 117,115 243,334
-------- --------
Net properties, plant and equipment 694,151 297,334
Intangibles 8,651 15,570
Other assets 32,775 26,525
-------- --------
Total assets $852,692 $582,763
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 33,837 $ 45,498
Accrued liabilities 32,179 17,247
Current income taxes 594
-------- --------
Total current liabilities 66,016 63,339
-------- --------
Long-term debt 397,611 235,000
Deferred income taxes 156,926 52,924
Other long-term liabilities 58,120 62,449
-------- --------
Total liabilities 678,673 413,712
-------- --------
Stockholder's equity:
Common Stock ($0.01 par value:
1,000 shares and 100,000,000
shares authorized, respectively;
1,000 shares and 18,808,034
shares issued and outstanding,
respectively) 188
Additional paid-in capital 173,500 111,553
Translation Adjustment 1,990
Retained earnings 519 55,320
-------- --------
Total stockholder's equity 174,019 169,051
-------- --------
Total liabilities and
stockholder's equity $852,692 $582,763
======== ========
</TABLE>
See accompanying notes to financial statements
HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
PREDECESSOR COMPANY
-----------------------------------------------------
ONE MONTH TWO MONTHS THREE MONTHS EIGHT MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED ENDED
SEPTEMBER AUGUST SEPTEMBER AUGUST SEPTEMBER
30, 1997 31, 1997 30, 1996 31, 1997 30, 1996
---------- ----------- ----------- ------------ -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
REVENUES $ 36,331 $ 71,304 $ 109,901 $ 307,603 $ 322,552
COST OF GOODS SOLD 28,976 64,222 81,474 250,887 244,989
--------- --------- --------- --------- ---------
GROSS PROFIT 7,355 7,082 28,427 56,716 77,563
EXPENSES
SELLING, GENERAL AND
ADMINISTRATIVE 3,554 4,651 9,880 23,076 29,089
REVERSAL OF ENVIRONMENTAL
ACCRUAL (9,000)
--------- --------- --------- --------- ---------
OPERATING INCOME 3,801 2,431 18,547 42,640 48,474
INTEREST EXPENSE, NET 2,580 3,416 3,025 13,890 9,786
DEFENSE AND MERGER COSTS 5,719 532 8,500 532
OTHER EXPENSE 111 13,396 298 13,447 294
--------- --------- --------- --------- ---------
NET INCOME (LOSS) FROM
CONTINUING OPERATIONS
BEFORE INCOME TAXES 1,110 (20,100) 14,692 6,803 37,862
INCOME TAX EXPENSE (BENEFIT) 373 (7,769) 5,613 1,979 14,056
--------- --------- --------- --------- ---------
NET INCOME (LOSS) FROM
CONTINUING OPERATIONS 737 (12,331) 9,079 4,824 23,806
LOSS FROM DISCONTINUED
OPERATIONS (NET OF INCOME
TAX BENEFITS (55), (141),
(97), (673) AND (254),
RESPECTIVELY) 218 566 476 2,692 1,241
--------- --------- --------- --------- ---------
NET INCOME (LOSS) BEFORE
EXTRAORDINARY LOSS 519 (12,897) 8,603 2,132 22,565
EXTRAORDINARY LOSS (NET OF
$425 INCOME TAXES) 694
--------- --------- --------- --------- ---------
NET INCOME (LOSS) $ 519 $ (12,897) $ 8,603 $ 1,438 $ 22,565
========= ========= ========= ========= =========
</TABLE>
See accompanying notes to financial statements
HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
PREDECESSOR COMPANY
-----------------------------
ONE MONTH EIGHT MONTHS NINE MONTHS
ENDED ENDED ENDED
SEPTEMBER AUGUST 31, SEPTEMBER
30, 1997 1997 30, 1996
---------- ------------ ------------
(THOUSANDS OF DOLLARS)
Operating Activities
<S> <C> <C> <C>
Net income (loss) $ 519 $ 1,438 $ 22,565
Reconciliation to net cash provided by
continuing operations:
Loss from discontinued operations 218 2,692 1,241
Depreciation and amortization 3,096 14,808 12,244
Deferred income taxes 187 (2,160) 161
Amortization of debt issuance costs 1,130 852
Extraordinary loss, net of taxes 694
Changes in operating working capital
(net of acquisition):
Deposits held in trust 3,547
Receivables 2,618 1,303 (9,979)
Inventories (1,701) 2,554 (1,401)
Other current assets (1,962) 17 217
Accounts payable (3,777) (7,884) 2,976
Other current liabilities (10,510) 18,583 (25,580)
Deferred charges and other noncurrent
assets (279) (20,795) 2,132
Deferred credits and other noncurrent
liabilities (583) (6,791) (1,158)
--------- --------- ---------
Net cash provided by continuing
operations (12,174) 5,589 7,817
Net cash provided by discontinued
operations 649 (5,565) 4,249
-------- ---------- --------
Net cash provided by operating
activities: (11,525) 24 12,066
INVESTING ACTIVITIES
Acquisition of Rexene (see Note 1) (308,369)
Capital expenditures of continuing
operations (5,736) (72,063) (67,805)
Capital expenditures of
discontinued operations (147) (3,312) (3,626)
Proceeds from sale of discontinued
operations 70,000
Purchase of intangibles (1,271) (1,833)
--------- --------- ---------
Net cash used in investing
activities (244,252) (76,646) (73,264)
FINANCING ACTIVITIES
Intercompany borrowing from parent 252,357
Repayment of long-term debt (100,080)
Repayment of intercompany borrowings
from parent (70,000)
Long term borrowings 83,916 30,000
Debt issuance costs (3,182) (4,598)
Repayment of advance payment from
customer (2,400) (2,700)
Cash dividends paid (2,259) (2,252)
Issuance of common stock to parent 173,500
Repurchase of common stock (166)
Issuance of common stock 251 230
--------- --------- ---------
Net cash provided by financing
activities 255,777 76,160 20,680
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (462) (40,518)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 462 47,258
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ -0- $ -0- $ 6,740
========= ========= =========
</TABLE>
See accompanying notes to financial statements
HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
Effective September 1, 1997 (the "Effective Date") for financial
accounting purposes, pursuant to an Agreement and Plan of Merger (the
"Merger Agreement") by and with Rexene Corporation ("Rexene"), Huntsman
Corporation ("HC") and Huntsman Centennial Corporation ("HCC"), a wholly
owned subsidiary of HC, HCC was merged with and into Rexene, and Rexene
changed its name to Huntsman Polymers Corporation (the "Company").
Pursuant to the merger, stockholders of Rexene received from HCC $16.00
in cash for each outstanding share of common stock of Rexene (the
"Merger"). As a result of the Merger, HC indirectly owns all of the
presently issued common stock of the Company. The accounting treatment of
the cash consideration paid by HCC in connection with the Merger is shown
under "push-down" accounting rules.
To finance the Merger, HCC entered into a loan agreement with an
affiliate, Huntsman Group Holdings Finance Company ("HGHFC"). HCC
borrowed approximately $131.1 million under this loan agreement.
Additionally, HCC received an equity contribution from its parent
company, Huntsman Polymers Holding Corporation ("HPHC"), in the amount of
$173.5 million. After the Merger, the Company entered into a loan
agreement with HGHFC, and borrowed $225.1 million (the "Intercompany
Loan"). The proceeds of this borrowing were used to repay debt of HCC
assumed by the Company in the Merger and bank debt of Rexene.
The Merger closed on August 27, 1997.
The sources and applications of funds required to consummate the Merger
are summarized below in thousands of dollars.
Sources of Funds:
Loan agreement with HGHFC $ 225,067
Equity Contribution 173,500
Rexene Working Capital 3,382
------------
Total $ 401,949
============
Uses of Funds:
Payment of the Merger Consideration $ 301,614
Liquidation of Rexene debt 100,080
Transaction fees and expenses (1) 255
------------
Total $ 401,949
============
---------
(1) Total transaction fees and expenses totaled $6.8 million,
of which $0.3 million was paid on August 27, 1997. The
remainder were paid using funds provided by operations.
The Merger has been accounted for as a purchase transaction, and
accordingly, the consolidated financial statements subsequent to the
Effective Date reflect the purchase price, including transaction costs
and liabilities assumed based on their estimated fair values as of the
Effective Date. Although none of the purchase price has been allocated to
intangible assets, valuation and other studies have not been finalized.
It is not expected that the final allocation of purchase price will
produce materially different results from those presented herein. The
combined financial statements for periods prior to September 1, 1997 have
been prepared on the historical cost basis. The consolidated balance
sheet at September 30, 1997 is not comparable with the historical balance
sheet at December 31, 1996. Operating results subsequent to the Merger
are comparable to the operating results prior to the Merger except for
depreciation expense, amortization of intangible assets and interest
expense. In addition, Rexene's pre-Merger common stock was canceled and
replaced with 1,000 shares of common stock (all of which are owned by
HPHC), rendering the presentation of per share data no longer meaningful.
The allocation of the $308 million Merger consideration (including fees
and expenses) is summarized as follows (in thousands of dollars):
Current assets $ 165,507
Plant and equipment 716,708
Other non-current assets 42,727
Liabilities assumed (616,553)
---------
Total $ 308,389
=========
The following unaudited pro forma data has been prepared assuming that
the Merger and related financing were consummated at the beginning of
each period. Amounts are in millions.
Nine Months Ended September 30,
1997 1996
---- ----
Revenues $343,934 $322,522
Net income (loss) from
continuing operations (4,729) 2,812
Net income (loss) before
extraordinary item (7,639) 1,571
Net income (loss) (8,333) 1,571
The accompanying financial statements of Huntsman Polymers Corporation
and Subsidiaries are unaudited; however, in management's opinion, all
adjustments, consisting only of normal recurring adjustments necessary
for a fair presentation of results of operations, financial position and
cash flows for the periods shown, have been made. Results for interim
periods are not necessarily indicative of those to be expected for the
full year.
2. DISCONTINUED OPERATIONS
On September 30, 1997, the Company completed the sale of substantially
all operating assets of its CT Film division. The assets sold, net of
applicable liabilities, of the discontinued business have been
reclassified as current assets in the 1996 Consolidated Balance Sheet.
None of the CT Film assets or liabilities are reflected on the
Consolidated Balance Sheet as of September 30, 1997. Revenues of the
discontinued operations were $134 million and $114 million for the nine
months ended September 30, 1997 and 1996, respectively. In connection
with the sale, the Company received $70 million in cash, and the buyer
assumed approximately $8 million in current liabilities. No gain or loss
was realized on the sale of the CT Film assets because the value assigned
in the purchase accounting allocation was equal to the selling price, as
adjusted for September's operating results.
3. EXTRAORDINARY LOSS
The Company recorded a non-cash charge of $0.7 million (after tax) in the
second quarter of 1997 to write-off certain deferred debt issuance costs
as a result of a May 8, 1997 amendment to its Credit Agreement.
4. NEW ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued SFAS No.
130, "Reporting Comprehensive Income", which establishes standards for
reporting and display of comprehensive income and its components. SFAS
No. 130 is effective for the Company for fiscal years beginning after
December 15, 1997 and requires classification of financial statements in
earlier periods for comparative purposes. If the Company had calculated
comprehensive income in accordance with SFAS No. 130, Comprehensive
income (loss) for the three months ended September 30, 1997 and 1996
would have been $(12.9) million and $8.7 million, respectively.
Comprehensive income for the nine months ended September 30, 1997 and
1996 would have been $0.9 million and $22.6 million, respectively.
5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
The Company manufactures and markets a wide variety of products which
range from value added products, such as specialty polymers, to commodity
petrochemicals, such as styrene. These products are used in a wide
variety of industrial and consumer-related applications. The Company's
principal products are polyethylene, polypropylene, REXtac(R) amorphous
polyalphaolefins ("REXtac(R) APAO"), REXflex(R) flexible polyolefin
("REXflex(R) FPO") and styrene. The Company also operated a plastic film
business, CT Film, through the end of the third quarter. The Company sold
the CT Film assets to Huntsman Packaging Corporation, an affiliate of the
Company, on September 30, 1997.
Principles of Consolidation
The consolidated financial statements of the Company include its
wholly-owned subsidiaries, intercompany transactions and balances are
eliminated.
Cash Flow Information
Highly liquid investments with an original maturity of three months or
less when purchased are considered to be cash equivalents.
Financial Instruments
The carrying amount reported in the balance sheets for cash and cash
equivalents, accounts receivable, and accounts payable approximates fair
value because of the immediate or short-term maturity of these financial
instruments. The carrying value of the Intercompany Loan approximates
fair value since it bears interest at a floating rate plus an applicable
margin. The fair value of the Company's 11 3/4% Senior Notes due 2004
(the "113/4% Senior Notes") were derived from quoted market prices.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Inventories
Inventories are stated at the lower of cost or market using the first-in,
first-out method.
Plant and Equipment and Depreciation and Amortization
Property, plant and equipment is stated at cost. Depreciation is provided
utilizing the straight line method over the estimated useful lives of the
assets, ranging from 3 to 20 years. Improvements are capitalized as part
of major construction projects. Upon disposal of assets, the cost and
related accumulated depreciation are removed from the accounts and
resulting gain or loss is included in income.
Intangibles
Intangible assets are stated at their fair market values at the time of
the Merger and are amortized using the straight-line method over their
estimated useful lives of five to fifteen years or over the life of the
related agreement and are included in "Other assets."
Reclassifications
Certain amounts in the consolidated financial statements for prior
periods have been reclassified to conform with the current presentation.
Foreign Currency Translation
Operations of the Company's foreign subsidiary use the local currency of
the country of operation as the functional currency. The financial
statements of the foreign subsidiary are translated at the current and
average exchange rates, with any resulting translation adjustments
included in the foreign currency translation adjustment account in
owners' equity.
Environmental Expenditures
Environmental related restoration and remediation costs are recorded as
liabilities and expensed when site restoration and environmental
remediation and clean-up obligations are either known or considered
probable and the related costs can be reasonably estimated. Other
environmental expenditures, which are principally maintenance or
preventative in nature, are recorded when expended and are expensed or
capitalized as appropriate.
Research and Development
Research and development costs are expensed as incurred and are included
in "Selling, general and administrative" expenses in the Company's
statements of income. Research and development expenses were $1.4 million
for the quarter ended September 30, 1997.
Income Taxes
Deferred income taxes are provided for temporary differences between
financial statement income and taxable income using the asset and
liability method in accordance with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes."
6. Income Taxes
Income tax expense (benefit) consists of the following (in thousands):
<TABLE>
<CAPTION>
Predecessor Company
---------------------------------------------------------
One Month Two Months Three Months Nine Months
Ended Ended Ended Eight Months Ended
September August 31, September 30, Ended August September
30, 1997 1997 1996 31, 1997 30, 1996
--------- ---------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Current:
Federal $ 170 $ 530 $ 4,920 $ 3,723 $ 11,996
State 16 (193) 808 417 1,899
Deferred 187 (8,106) (115) (2,161) 161
--------- --------- ------------- ------------ -----------
$ 373 $ (7,769) $ 5,613 $ 1,979 $ 14,056
========= ========= ============= ============ ===========
</TABLE>
7. ACCOUNTS RECEIVABLE
Predecessor Company
September 30, 1997 December 31, 1996
------------------ -------------------
Trade $ 52,892 $ 57,121
Other 9,310 9,542
----------- ----------
62,202 66,663
Less allowances
for doubtful debts (1,486) (2,026)
---------- -----------
Total $ 60,716 $ 64,637
8. Inventories
Inventories consist of the following (in thousands):
Predecessor Company
-------------------
September 30, 1997 December 31, 1996
------------------ -----------------
Raw materials $ 6,919 $ 11,558
Work in progress 7,823 8,134
Finished goods 36,699 32,602
------------ -----------
$ 51,441 $ 52,294
============ ===========
9. Property, Plant and Equipment
The cost and accumulated depreciation of property, plant and equipment
are as follows (in thousands):
Predecessor Company
-------------------
September 30, 1997 December 31, 1996
------------------ -------------------
Property, plant and equipment $716,854 $353,524
Less accumulated depreciation (22,703) (56,190)
----------- ------------
$694,151 $297,334
=========== ============
10. Intangible Assets
The cost and accumulated amortization of intangible assets are as follows
(in thousands):
Predecessor Company
-------------------
September 30, 1997 December 31, 1996
------------------ -------------------
Debt issuance costs $ 7,169 $ 14,333
Less accumulated amortization (1,622) (4,288)
------------ -------------
5,547 10,045
------------ -------------
Reorganization value in excess 4,298
of amounts allocable to
identifiable assets
Less accumulated amortization (1,437)
------------- -------------
2,861
------------- -------------
Other intangible assets 6,957 7,377
Less accumulated amortization (3,853) (4,713)
------------- -------------
3,104 2,664
------------- -------------
$ 8,651 $ 15,570
============= =============
11. LONG-TERM DEBT
Long-term debt consists of the following (in thousands):
Predecessor Company
September 30, 1997 December 31, 1996
------------------ -----------------
Intercompany borrowings $ 172,106
Capital Lease 50,505
Bank borrowings under
Amended Credit Agreement $ 60,000
11 3/4% Senior Notes due 2004 175,000 175,000
--------- ----------
$ 397,611 $ 235,000
Intercompany loans are made pursuant to the Huntsman Polymers
Intercompany Loan Agreement, dated August 27, 1997, between HGHFC and
Huntsman Polymers Corporation. The loans accrue interest at prime rate
plus a margin of 0.75%. To the extent permitted by the indenture
governing the Senior Notes, the intercompany loans are secured by all of
the assets of the Company.
On March 8, 1997, the Company entered into a Capital Lease Agreement with
the Estherwood Corporation to finance the construction of the Company's
REXflex(R) FPO facility in Odessa, Texas. On September 27, 1997, the
agreement was amended and Estherwood Corporation assigned all of its
rights under the agreement to HGHFC. The principal economic terms of the
lease agreement were not altered. The Company is obligated to make
quarterly lease payments through September 30, 2002. The lease is secured
by all of the fixed assets associated with the FPO facility.
The Senior Notes rank pari passu in right of payment with all senior
unsecured borrowings of the company, including a portion of the
borrowings under the intercompany loan agreement. The Senior Notes rank
senior in right of payment to any subordinated indebtedness of the
Company. Interest is payable on the Senior Notes semiannually on June 1
and December 1 at an annual interest rate of 11 3/4%. The Company is not
required to make mandatory redemption or sinking fund payments with
respect to the Senior Notes.
12. CONTINGENCIES
The Company and the industry in which it competes, is subject to
extensive environmental laws and regulations concerning, for example,
emissions to the air, discharges to surface and subsurface waters and the
generation, handling, storage, transportation, treatment and disposal of
waste and other materials. The Company believes that, in light of its
historical expenditures, it will have adequate resources to conduct its
operations in compliance with currently applicable environmental and
health and safety laws and regulations. However, in order to comply with
changing facility permitting and regulatory standards, the Company may be
required to make additional significant site or operational
modifications. Further, the Company has incurred and may in the future
incur liability to investigate and clean up waste or contamination at its
current or former facilities, or which it may have disposed of at
facilities operated by third parties. On the basis of its investigation
and analysis, management believes that the approximately $8.9 million
accrued in the September 30, 1997 balance sheet is adequate for the total
potential environmental liability with respect to contaminated sites.
Extensive environmental investigation of the groundwater, soils and solid
waste management has been conducted at the Odessa facility. Risk
assessments and corrective measures pertaining to groundwater and solid
waste management units continue to be developed and implemented
respectively. Costs associated with these unit closures are included in
the aforementioned environmental accrual figure. The Company received
approval to allow closure of five solid waste management units, which
permitted a reduction in the accrual for potential environmental
liability of $9.0 million in the first quarter of 1997. The Company
currently disposes of wastewater from the Odessa facility through
injection wells operated under permits from the Texas Natural Resources
Conservation Commission ("TNRCC"). Partly because TNRCC stated that it
did not intend to renew the permits after they expire in December 1997,
the Company entered into an agreement with the City of Odessa and the
Gulf Coast Waste Disposal Authority pursuant to which the latter will
acquire, modify and operate a former publicly-owned treatment works
("POTW") to dispose of the Company's and a portion of the City of
Odessa's wastewater. Mechanical construction to modify the existing
municipal facility is almost complete. Hydraulic testing of the plant and
biomass acclimation have been conducted. The plant is currently operating
with streams from the City of Odessa and one industrial user's effluent.
The Company's effluent stream is scheduled to be introduced on a partial
basis into the POTW in mid-November. Additionally, because there is the
possibility that the POTW could have problems during the start-up phase
of its operation, an injection well permit renewal application is under
development. Although there is no assurance that the renewal will be
approved, the Company believes the TNRCC will permit operation of the
existing injection wells until the new POTW becomes a reliable disposal
alternative for its wastewater. If TNRCC does not approve the permit
renewal and the POTW is shut down or not operating, the Odessa facility
would have to discontinue operations. The Company continually reviews its
estimates of potential environmental liabilities. However, no assurance
can be given that all potential liabilities arising out of the Company's
present or past operations have been identified or fully assessed or that
the amounts that might be required to investigate and remediate such
sites will not be significant to the Company.
The Company is a party to various litigation arising in the ordinary
course of business and to certain other litigation which are set forth in
Note 18 to the Consolidated Financial Statements included in the
Company's 1996 Annual Report on Form 10-K. There have been no material
changes to the litigation described in the aforementioned Note 18, except
as described in the Company's Form 10-Q for the quarter ending March 31,
1997 and in Part II below.
Although there can be no assurance of the final resolution of such
litigation, the Company believes that, based upon its current knowledge
of the facts of each case, it has meritorious defenses to the various
claims made and intends to defend each lawsuit vigorously, and the
Company does not believe that the outcome of any of these lawsuits will
have a material adverse effect on the Company's financial position,
results of operations or cash flows.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Discontinued operations consist of the Company's CT Film division. On
September 30, 1997, the Company completed the sale of that division and
all of its net assets. Consequently, management believes that further
description of the results of those operations and financial condition
is not meaningful to an evaluation of the Company's financial condition.
The Company manufactures and sells polyethylene, polypropylene, REXtac(R)
APAO, REXflex(R) FPO and styrene. The polyethylene, polypropylene and
styrene markets in which the Company competes are cyclical markets that
are sensitive to relative changes in supply and demand as well as general
economic conditions. Historically, these products have experienced
alternating periods of tight supply, rising prices and increased profits
followed by periods of large capacity additions resulting in oversupply,
lower selling prices and lower profits. Certain of the Company's
products, including REXtac(R) APAO, are generally less sensitive to
economic cycles. In addition, much of the Company's polyethylene and
polypropylene businesses are geared toward higher value-added, specialty
grades, which are less sensitive to cyclical swings experienced by
commodity grades.
Principal raw materials purchased by the Company consist of ethane and
propane extracted from natural gas liquids ("NGL"), propylene and benzene
(all four of which are referred to as "feedstocks") for the polymer and
styrene businesses. The feedstock supplies available in Odessa, Texas are
currently adequate for the Company's requirements. The percentage of
feedstock costs compared to the Company's total cost of sales decreased
from 30% in 1996 to 27% for the first nine months of 1997. The Company's
inability in 1996 and the first quarter of 1997 to pass on the full
amount of the increases in feedstock costs to customers had a significant
impact on operating results. Lower industry inventory levels of crude
oil, natural gas and NGL feedstocks and unexpected supply disruptions
caused feedstock prices to increase during 1996 and early 1997. Ethane
and propane prices decreased midway in the first quarter of 1997 to
levels comparable to the first quarter of 1996 and are expected to
increase somewhat during the winter of 1997-98.
RECENT DEVELOPMENTS
On August 27, 1997, HCC, a wholly-owned subsidiary of HC, merged with and
into Rexene, and Rexene changed its name to Huntsman Polymers
Corporation. In connection with the Merger, stockholders of the Company
received from HCC $16.00 in cash for each outstanding share of common
stock of the Company. As a result of the Merger, HC indirectly owns all
of the presently issued common stock of the Company.
On September 19, 1997, the Company and Phillips Petroleum Company
("Phillips") entered into a settlement agreement relating to a
crystalline polypropylene license lawsuit filed by Phillips in May 1990.
Pursuant to the terms of the settlement agreement, the Company paid
Phillips $10 million on September 26, 1997 (see Part II, Item 1, "Legal
Proceedings").
On September 30, 1997, the Company sold the assets of the CT Film
division to Huntsman Packaging Corporation, an affiliate of the Company,
for $70 million in cash. In addition, Huntsman Packaging assumed
approximately $8 million in current liabilities.
RESULTS OF OPERATIONS
The consolidated financial statements for periods prior to September 1,
1997 have been prepared on a historical cost basis. The consolidated
balance sheet at September 30, 1997 is not comparable with the historical
balance sheet presented. Operating results subsequent to the Merger are
comparable to the operating results prior to the Merger except for
depreciation expense, amortization of intangible assets and interest
expense. The net impact of depreciation and amortization on operating
profit for the month ended September 30, 1997 was a reduction of
approximately $1.7 million. The following discussion is based on a
comparison of (i) the two months ended August 31, 1997 plus the month
ended September 30, 1997, to the three month period ended September 30,
1996 and (ii) the eight months ended August 31, 1996 plus the month ended
September 30, 1996, to the nine month period ended September 30, 1996.
COMBINED THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1996
Revenues
The Company's revenue decreased by $2.3 million to $107.6 million for the
three months ended September 30, 1997 from $109.9 million for the three
months ended September 30, 1996 primarily due to lower styrene,
polypropylene, and polyethylene sales prices partially offset by an
increased volume of by-product sales.
Gross Profit
The Company's gross profit decreased by $14.0 million to $14.4 million
from $28.4 million for the same period in the prior year. The Company's
gross profit as a percentage of sales, decreased from 26% for the three
months ended September 30, 1996 to 13.1% for the three months ended
September 30, 1997. These decreases were principally due to decreases in
sales prices, increased volume of by-products sold at low margins, and
costs associated with the start-up of the REXflex(R) FPO business.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased $1.7 million, or
21%, from $9.9 million for the three months ended September 30, 1996 to
$8.2 million for the three months ended September 30, 1997 principally
due to the settlement of an insurance claim related to a previously
settled lawsuit.
Defense and Merger Costs
Defense and merger costs totaled $0.5 million and $5.7 million for the
three months ended September 30, 1996 and 1997, respectively. All costs
incurred in 1996 were related to the defense of a potential hostile
takeover of the Company. All costs incurred in the third quarter of 1997
were related to the Merger.
Other Expense
Other Expense increased $13.2 million from $0.3 million for the three
months ended September 30, 1996 to $13.5 million for the three months
ended September 30, 1997 principally due to the settlement of the
Phillips lawsuit (see PART II, Item 1, "Legal Proceedings").
Operating Income
Operating income decreased by $12.3 million to $6.2 million for the three
months ended September 30, 1997 from $18.5 million for the three months
ended September 30, 1996 for the reasons stated above.
COMBINED NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1996
Revenues
The Company's revenue increased by $21.4 million to $343.9 million for
the nine months ended September 30, 1997 from $322.5 million for the nine
months ended September 30, 1996. The increase is partially due to higher
excess feedstock sales, primarily propane sales which increased from $12
million for the nine months ended September 30, 1996 to $25 million
during the same period of 1997. The increase in sales is also due to
higher polyethylene sales prices.
Gross Profit
The Company's gross profit decreased by $13.5 million to $64.1 million
from $77.6 million for the same period in the prior year. The Company's
gross profit as a percentage of sales, decreased from 24% for the nine
months ended September 30, 1996 to 19% for the nine months ended
September 30, 1997. These decreases were principally due to increases in
sales and the lower gross margin received on the increase in excess
feedstock sales.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased $2.5 million from
$29.1 million for the nine months ended September 30, 1996 to $26.6
million for the nine months ended September 30, 1997 principally due to
the settlement of an insurance claim related to a previously settled
lawsuit and insurance reimbursements for previously incurred legal fees.
Reversal of Environmental Accrual
An environmental accrual established in prior years was reduced by $9.0
million as a result of modifications to the Company's remedial action
plans at the Company's Odessa facility that were approved by the TNRCC.
Defense and Merger Costs
Defense and merger costs totaled $0.5 million and $8.5 million for the
nine months ended September 30, 1996 and 1997, respectively. All costs
incurred in 1996 and $2.4 million of the costs incurred in 1997 were
related to the defense of a potential hostile takeover of the Company.
Costs incurred subsequent to June 9, 1997, the date of the Merger
Agreement, of $6.1 million are costs incurred related to the Merger.
Other Expense
Other expense increased $13.3 million from $0.3 million for the nine
months ended September 30, 1996 to $13.6 million for the nine months
ended September 30, 1997, principally due to the settlement of a lawsuit
filed by Phillips (see Part II, Item I, "Legal Proceedings").
Operating Income
Operating income decreased by $2.0 million to $46.4 million for the nine
months ended September 30, 1997 from $48.5 million for the nine months
ended September 30, 1996, for the reasons stated above.
Liquidity and Capital Resources
Net cash used in operating activities for the nine months ended September
30, 1997 was $11.5 million, a decrease of $23.6 million over the same
period in the prior year. This decrease was primarily attributable to the
decline in net income described above as well as a net use of cash at the
Company's discontinued operations.
Net cash used in investing activities for the nine months ended September
30, 1997 was $320.9 million, an increase of $247.6 million over the same
period in 1996. This increase was primarily attributable to the
accounting treatment of the cash consideration paid by HCC in connection
with the Merger under "push-down" accounting rules as well as a higher
level of capital spending on the Company's modernization and expansion
program, partially offset by the cash proceeds from the sale of the CT
Film assets.
Net cash provided by financing activities for the nine months ended
September 30, 1997 was $331.9 million, an increase of $311.3 million over
the same period in the prior year. This increase was primarily
attributable to the net proceeds from the issuance of common stock as
well as the intercompany debt incurred to finance the Merger. Debt was
also used, in part, to finance the Company's modernization and expansion
program.
In connection with the Merger, the Company entered into an intercompany
loan agreement (the "Loan Agreement") with HGHFC, a wholly-owned
subsidiary of Huntsman. As of September 30, 1997, the Company owed $172.1
million under the Loan Agreement. Subject to certain terms and
conditions, the Company may borrow additional amounts under the Loan
Agreement. The Company has guaranteed on a secured basis, subject to the
limitations imposed by the indenture (the "Indenture") governing the
Company's Senior Notes, HC's senior secured borrowings on a pari passu
basis with substantially all of HC's domestic subsidiaries.
Pursuant to the terms of the Indenture, the Company is required to make
an offer to repurchase the Senior Notes at 101% of the principal amount
plus accrued interest within ten days following a change of control. The
Merger resulted in a change of control event. Therefore the Company made
a change of control offer to repurchase the Senior Notes in accordance
with the terms of the Indenture. The last day the holders of the Senior
Notes could accept such change of control offer was September 30, 1997.
Subsequent to September 30, 1997, the Company repurchased Senior Notes
with an aggregate principal amount of $118,000 in connection with the
change of control offer.
On May 8, 1997, the Company entered into a $50 million capital lease
agreement with Estherwood Corporation to finance the facility which
produces REXflex(R) FPO. In connection with the Merger, this lease
agreement was amended and restated with HGHFC becoming the lessor. The
principal economic terms of this lease agreement were not altered.
On September 30, 1997, the Company sold the assets of its CT Film
division to Huntsman Packaging Corporation, an affiliate of the Company
for $70 million in cash. In addition, Huntsman Packaging assumed
approximately $8 million in current liabilities. The proceeds from the CT
Film sale were used to temporarily repay revolving intercompany
indebtedness and will be applied to the Company's modernization and
expansion program as such expenses are incurred.
Capital expenditures for the nine months ended September 30, 1997 were
$81.2 million. The $9.8 million increase in capital expenditures for the
nine months ended September 30, 1997 compared to the same period in 1996 was
due primarily to additional spending in connection with the Company's
modernization and expansion program. The two primary components remaining
in the Company's modernization and expansion program include the
modernization of the Company's olefins facility and the building of a new
linear low density polyethylene facility. The Company expects to complete
these projects in the first quarter of 1999 and expects to incur an
additional $225 million in capital expenditures to $250 million
in capital expenditures in connection with this program.
The Company believes that, based on current levels of operation and
anticipated growth, its cash flow from operations, together with other
available sources of liquidity, will be adequate to make scheduled
payments of interest on the Senior Notes, to permit anticipated capital
expenditures and to fund working capital requirements. However, the
ability of the Company to satisfy these obligations depends on a number
of significant assumptions, including but not limited to, the demand for
the Company's products, raw material costs and other factors.
A number of potential environmental liabilities exist which relate to
certain contaminated property. In addition, a number of potential
environmental costs relate to pending or proposed environmental
regulations. No assurance can be given that all of the potential
liabilities arising out of the Company's present or past operations have
been identified or that the amounts that might be required to investigate
and remediate such sites or comply with pending or proposed environmental
regulations can be accurately estimated. The Company has approximately
$8.9 million accrued in the September 30, 1997 balance sheet as an
estimate of its total potential environmental liability with respect to
investigating and remediating known and assessed site contamination.
Extensive environmental investigation of the groundwater, soils and solid
waste management has been conducted at the Odessa facility. Risk
assessments have been completed for a number of these facilities and
corrective measures have been defined and conducted. If, however,
additional liabilities with respect to environmental contamination are
identified, there is no assurance that additional amounts that might be
required to investigate and remediate such potential sites would not have
a material adverse effect on the financial position, results of
operations or cash flows of the Company. In addition, future regulatory
developments could restrict or possibly prohibit existing methods of
environmental compliance. At this time, the Company is unable to
determine the potential consequences such possible future regulatory
developments would have on its financial condition. Management
continually reviews its estimates of potential environmental liabilities.
The Company does carry gradual pollution, sudden and accidental
environmental liability insurance subject to a $3.0 million retention to
protect it against such contingencies.
The Company currently disposes of wastewater from the Odessa facility
through injection wells operated under permits from the TNRCC. The
Company has entered into an agreement with the City of Odessa and the
Gulf Coast Waste Disposal Authority pursuant to which the latter will
acquire, modify and operate a "POTW" to dispose of the Company's and a
portion of the City of Odessa's wastewater. Construction to modify a
former municipal facility is almost complete and the plant is in its
initial phases of operation. Although no assurances can be given, the
Company believes that it will be able to use its existing wells until it
develops the reliability in this alternative wastewater disposal system.
However if the Company is forced to cease using its injection wells
before the POTW is operational, such loss of capacity could have a
material adverse effect on the Company's financial condition, results of
operations or cash flows.
Other Matters
The Company is including the following cautionary statement in this Form
10-Q to make applicable and take advantage of the safe harbor provisions
of the Private Securities Litigation Report Act of 1995 for any
forward-looking statements made by, or on behalf of, the Company.
Forward-looking statements included statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements which are other than
statements of historical facts. From time to time, the Company may
publish or otherwise make available forward-looking statements of this
nature. All such subsequent forward-looking statements, whether written
or oral and whether made by or on behalf of the Company, are also
expressly qualified by these cautionary statements. Certain statements
contained herein are forward-looking statements and accordingly involve
risk and uncertainties which could cause actual results or outcomes to
differ materially from those expressed in the forward-looking statements.
The forward-looking statements contained herein are based on various
assumptions, many of which are based, in turn, upon further assumptions.
The Company's expectations, beliefs and projections are expressed in good
faith and are believed by the Company to have a reasonable basis,
including without limitation, management's examination of historical
operating trends, data contained in the Company's records and other data
available from third parties, but there can be no assurance that
management's expectations, beliefs or projections will result or be
achieved or accomplished. In addition to the other factors and matters
discussed elsewhere herein, the following are important factors that, in
the view of the Company, could cause actual results to differ materially
from those discussed in the forward-looking statements:
1. Changes in economic conditions and weather conditions;
2. Changes in the availability and/or price of feedstocks;
3. Changes in management ownership or control of the Company;
4. Inability to obtain new customers or retain existing ones;
5. Significant changes in competitive factors affecting the Company;
6. Environmental/safety requirements;
7. Significant changes from expectations in actual capital
expenditures and operating expenses and unanticipated project delays;
8. Occurrences affecting the Company's ability to obtain funds from
operations, debt or equity to finance needed capital expenditures and
other investments;
9. The cyclical nature of the Company's business;
10. Significant changes in tax rates or policies or in rates of
inflation or interest;
11. Significant changes in the Company's relationship with its
employees and the potential adverse effects if labor disputes or
grievances were to occur;
12. Changes in accounting principles and/or the application of such
principles to the Company.
The Company disclaims any obligation to update any forward-looking
statements to reflect events or circumstances after the date hereof.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
In May 1990, Phillips filed a lawsuit (the "Action") against the Company
relating to alleged infringement by the Company of U.S. Patent No.
4.376.851 (the "'851 Patent") by virtue of the Company's continued
manufacture of crystalline polypropylene after Phillips purportedly
terminated its license agreement (the "Original License Agreement") with
the Company on April 23, 1990. On September 19, 1997, the Company and
Phillips entered into a settlement agreement (the "Settlement
Agreement"), pursuant to which the Company paid a lump sum of $10 million
to Phillips on September 26, 1997, and will pay up to $300,000 for each
subsequent calendar quarter period. Such quarterly payments begin with
the quarter ending December 31, 1997, and must be paid through the
partial quarter ending March 15, 2000, when the '851 Patent expires.
Pursuant to the Settlement Agreement, the Company and Phillips released
and discharged each other from all claims, debts, demands, liabilities,
losses, causes of action, damages, costs and expenses relating to the
subject matter of the Action. In the event the Company fails to make a
timely payment to Phillips when such payment is due pursuant to the
Settlement Agreement, the Company will be obligated to pay Phillips
accrued interest on such payment.
Effective September 5, 1997, Phillips and the Company entered into a new
crystalline polypropylene license agreement (the "New License
Agreement"). Pursuant to the New License Agreement, Phillips granted to
the Company a nonexclusive, royalty-bearing license to manufacture, use
and/or sell any product which is covered by the '851 Patent. The term of
the New License Agreement is for the period from September 5, 1997, until
the expiration of the '851 Patent on March 15, 2000, unless otherwise
terminated under the provisions thereof. The royalty rate under the New
License Agreement is substantially higher than the royalty rate under the
Original License Agreement. In the event the Company fails to make a
timely payment to Phillips when such payment is due pursuant to the New
License Agreement, the Company will be required to pay Phillips accrued
interest on such payment.
Item 2. Changes In Securities and Use of Proceeds
The Merger occurred pursuant to an Agreement and Plan of Merger among HC,
HCC and the Company, dated June 9, 1997 (the "Merger Agreement"). The
stockholders of the Company approved the Merger Agreement at a Special
Meeting held on August 26, 1997.
In the Merger, all of the then outstanding shares of common stock, $.01
par value, of the Company (the "Common Stock") (other than shares held by
Huntsman Corporation, HCC or the Company) were canceled and converted
into the right to receive $16.00 in cash, without interest, per share of
Common Stock (the "Merger Consideration"). As a result of the Merger,
Huntsman Corporation indirectly owns all of the presently issued common
stock of the Company, and the Company is an indirect subsidiary of
Huntsman Corporation. Following the Merger, the Company filed a Form 15
with the Commission regarding the de-registration of the Common Stock.
The Company also requested that the New York Stock Exchange (the
"Exchange") remove the Common Stock from listing on the Exchange
effective August 27. 1997.
The aggregate amount of the Merger Consideration was $301,613,936. HCC
obtained such amount from HC in the form of equity and debt investments
by HC in HCC. HC borrowed the equity portion of its investment under its
credit facilities.
Subject to the limitations of the Indenture and pursuant to certain
contracts, HC's credit facilities require that substantially all of the
assets of the Company be pledged to secure HC's obligations under such
facilities following the Merger and that the Company guarantee such
obligations.
All of the presently outstanding shares of common stock in the Company
have been pledged to the lenders under the HC credit facilities in order
to secure the obligations of Huntsman thereunder. To the knowledge of the
Company, there are no other arrangements, including any pledge by any
person of securities of the Company, the operation of which may at a
subsequent date result in a further change in control of the Company.
The Merger triggered an obligation of the Company under the Indenture to
make a Change In Control Offer (as defined under the Indenture). Pursuant
to Section 4.14 of the Indenture, the Company offered to each holder of
the Senior Notes, an amount in cash equal to 101% of the aggregate
principal amount of such holder's Senior Notes plus accrued and unpaid
interest thereon to the date of purchase. On September 3, 1997, the
Company mailed a notice of the change of Control Offer and related
documentation to each holder of the Senior Notes. As of the last day on
which tenders of Senior Notes pursuant to the Change of Control Offer
could be withdrawn $118,000 principal amount of the Senior Notes had been
tendered and $174,882,000 principal amount of Senior Notes remained
outstanding.
Item 4. Submission of Matters to a Vote of Security Holders.
On July 28, 1997, the Company mailed to its stockholders the Proxy
Statement relating to the terms of the Merger. On August 26, 1997, a
Special Meeting of the Company was held at which the stockholders were
asked to vote upon approval of the terms of the Merger Agreement.
12,572,397 of votes were cast in favor of such approval, 159,925 votes
were cast against such approval and 15,266 votes abstained. See the
Schedule 14A of the Company as filed with the Commission on July 28,
1997.
Item 5. Other Information.
The Company and HC have entered into an arrangement pursuant to which the
Company has agreed to sell to HC various types and grades of products,
including polyethylene products and polypropylene products, for a period
of five years, unless otherwise terminated or extended.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Number Exhibits
3(i) Restated Certificate of Incorporation and the
Certificate of Amendment to the Certificate
of Incorporation
3(ii) By-laws
10.1 Intercompany Loan Agreement, dated as of August
27, 1997, between HGHFC and the Company
27. Financial Data Schedule
(b) Reports Submitted on Form 8-K:
(i) The Registrant filed a current report on Form
8-K, dated August 29, 1997, reporting the change
in control of the Registrant and the change in
its certifying accountant.
(ii) The Registrant filed a current report on Form
8-K, dated September 29, 1997, reporting the
execution of a settlement agreement with Phillips
and the execution of a new license agreement with
Phillips.
(iii) The Registrant filed a current report on Form
8-K, dated October 21, 1997, reporting a
disposition of assets to Huntsman Packaging
Corporation.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HUNTSMAN POLYMERS CORPORATION
Registrant
Date: November 14, 1997 By: /s/ J. Kimo Esplin
_________________________
J. Kimo Esplin
Senior Vice President and
Chief Financial Officer
INDEX TO EXHIBITS
Exhibit
Number Exhibit
3(i) Restated Certificate of Incorporation and the Certificate
of Amendment to the Certificate of Incorporation
3(ii) By-laws
10.1 Intercompany Loan Agreement, dated as of August 27, 1997,
between HGHFC and the Company
27. Financial Data Schedule
EXHIBIT 3(i)
RESTATED CERTIFICATE OF INCORPORATION
OF
REXENE CORPORATION
FIRST: The name of the Corporation is Rexene Corporation
(hereinafter the "Corporation").
SECOND: The address of the registered office of the Corporation
in the State of Delaware is 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at
that address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful
act or activity for which a corporation may be organized under the
General Corporation Law of the State of Delaware as set forth in Title 8
of the Delaware Code (the "GCL").
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is 1000 shares of Common Stock, each having
a par value of one penny ($.01).
FIFTH: The following provisions are inserted for the management
of the business and the conduct of the affairs of the Corporation, and
for further definition, limitation and regulation of the powers of the
Corporation and of its directors and stockholders:
(1) The business and affairs of the Corporation shall be managed
by or under the direction of the Board of Directors.
(2) The directors shall have concurrent power with the
stockholders to make, alter, amend, change, add to or repeal the
By-Laws of the Corporation.
(3) The number of directors of the Corporation shall be as from
time to time fixed by, or in the manner provided in, the By-Laws of
the Corporation. Election of directors need not be by written ballot
unless the By-Laws so provide.
(4) No director shall be personally liable to the Corporation or
any of its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant
to Section 174 of the GCL or (iv) for any transaction from which the
director derived an improper personal benefit. Any repeal or
modification of this Article FIFTH by the stockholders of the
Corporation shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or
modification with respect to acts or omissions occurring prior to
such repeal or modification.
(5) In addition to the powers and authority hereinbefore or by
statute expressly conferred upon them, the directors are hereby
empowered to exercise all such powers and do all such acts and things
as may be exercised or done by the Corporation, subject,
nevertheless, to the provisions of the GCL, this Restated Certificate
of Incorporation, and any By-Laws adopted by the stockholders;
provided, however, that no By-Laws hereafter adopted by the
stockholders shall invalidate any prior act of the directors which
would have been valid if such By-Laws had not been adopted.
SIXTH: Meetings of stockholders may be held within or without the
State of Delaware, as the By-Laws may provide. The books of the
Corporation may be kept (subject to any provision contained in the GCL)
outside the State of Delaware at such place or places as may be
designated from time to time by the Board of Directors or in the By-Laws
of the Corporation.
SEVENTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and
all rights conferred upon stockholders herein are granted subject to this
reservation.
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
REXENE CORPORATION
-----------------------------------------
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
-----------------------------------------
Rexene Corporation, a Delaware corporation (hereinafter called
the "Corporation"), does hereby certify as follows:
FIRST: Article FIRST of the Corporation's Certificate of
Incorporation is hereby amended to read in its entirety as set forth
below:
FIRST: The name of the corporation is Huntsman Polymers
Corporation (hereinafter the "Corporation").
SECOND: The foregoing amendment was duly adopted in accordance
with Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate
to be duly executed in its corporate name this 27th day of August, 1997.
REXENE CORPORATION
By:/s/ Martin F. Petersen
Name: Martin F. Petersen
Title: Vice President
EXHIBIT 3(ii)
BY-LAWS
OF
HUNTSMAN CENTENNIAL CORPORATION
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
Corporation shall be in the City of Wilmington, County of New Castle,
State of Delaware.
Section 2. Other Offices. The Corporation may also have offices
at such other places both within and without the State of Delaware as the
Board of Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for
the election of directors or for any other purpose shall be held at such
time and place, either within or without the State of Delaware as shall
be designated from time to time by the Board of Directors and stated in
the notice of the meeting or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The Annual Meetings of Stockholders
shall be held on such date and at such time as shall be designated from
time to time by the Board of Directors and stated in the notice of the
meeting, at which meetings the stockholders shall elect by a plurality
vote a Board of Directors, and transact such other business as may
properly be brought before the meeting. Written notice of the Annual
Meeting stating the place, date and hour of the meeting shall be given to
each stockholder entitled to vote at such meeting not less than ten nor
more than sixty days before the date of the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by law
or by the Certificate of Incorporation, Special Meetings of Stockholders,
for any purpose or purposes, may be called by either (i) the Chairman, if
there be one, or (ii) the President, (iii) any Vice President, if there
be one, (iv) the Secretary or (v) any Assistant Secretary, if there be
one, and shall be called by any such officer at the request in writing of
a majority of the Board of Directors or at the request in writing of
stockholders owning a majority of the capital stock of the Corporation
issued and outstanding and entitled to vote. Such request shall state the
purpose or purposes of the proposed meeting. Written notice of a Special
Meeting stating the place, date and hour of the meeting and the purpose
or purposes for which the meeting is called shall be given not less than
ten nor more than sixty days before the date of the meeting to each
stockholder entitled to vote at such meeting.
Section 4. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority of the capital
stock issued and outstanding and entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum at all meetings
of the stockholders for the transaction of business. If, however, such
quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in
person or represented by proxy, shall have power to adjourn the meeting
from time to time, without notice other than announcement at the meeting,
until a quorum shall be present or represented. At such adjourned meeting
at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder
entitled to vote at the meeting.
Section 5. Voting. Unless otherwise required by law, the
Certificate of Incorporation or these By-Laws, any question brought
before any meeting of stockholders shall be decided by the vote of the
holders of a majority of the stock represented and entitled to vote
thereat. Each stockholder represented at a meeting of stockholders shall
be entitled to cast one vote for each share of the capital stock entitled
to vote thereat held by such stockholder. Such votes may be cast in
person or by proxy but no proxy shall be voted on or after three years
from its date, unless such proxy provides for a longer period. The Board
of Directors, in its discretion, or the officer of the Corporation
presiding at a meeting of stockholders, in his discretion, may require
that any votes cast at such meeting shall be cast by written ballot.
Section 6. Consent of Stockholders in Lieu of Meeting. Unless
otherwise provided in the Certificate of Incorporation, any action
required or permitted to be taken at any Annual or Special Meeting of
Stockholders of the Corporation, may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous
written consent shall be given to those stockholders who have not
consented in writing.
Section 7. List of Stockholders Entitled to Vote. The officer of
the Corporation who has charge of the stock ledger of the Corporation
shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting,
either at a place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall
also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder of the
Corporation who is present.
Section 8. Stock Ledger. The stock ledger of the Corporation
shall be the only evidence as to who are the stockholders entitled to
examine the stock ledger, the list required by Section 7 of this Article
II or the books of the Corporation, or to vote in person or by proxy at
any meeting of stockholders.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The Board of
Directors shall consist of not less than one nor more than fifteen
members, the exact number of which shall initially be fixed by the
Incorporator and thereafter from time to time by the Board of Directors.
Except as provided in Section 2 of this Article, directors shall be
elected by a plurality of the votes cast at Annual Meetings of
Stockholders, and each director so elected shall hold office until the
next Annual Meeting and until his successor is duly elected and
qualified, or until his earlier resignation or removal. Any director may
resign at any time upon notice to the Corporation. Directors need not be
stockholders.
Section 2. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be
filled by a majority of the directors then in office, though less than a
quorum, or by a sole remaining director, and the directors so chosen
shall hold office until the next annual election and until their
successors are duly elected and qualified, or until their earlier
resignation or removal.
Section 3. Duties and Powers. The business of the Corporation
shall be managed by or under the direction of the Board of Directors
which may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by statute or by the Certificate of
Incorporation or by these By-Laws directed or required to be exercised or
done by the stockholders.
Section 4. Meetings. The Board of Directors of the Corporation
may hold meetings, both regular and special, either within or without the
State of Delaware. Regular meetings of the Board of Directors may be held
without notice at such time and at such place as may from time to time be
determined by the Board of Directors. Special meetings of the Board of
Directors may be called by the Chairman, if there be one, the President,
or any directors. Notice thereof stating the place, date and hour of the
meeting shall be given to each director either by mail not less than
forty-eight (48) hours before the date of the meeting, by telephone or
telegram on twenty-four (24) hours' notice, or on such shorter notice as
the person or persons calling such meeting may deem necessary or
appropriate in the circumstances.
Section 5. Quorum. Except as may be otherwise specifically
provided by law, the Certificate of Incorporation or these By-Laws, at
all meetings of the Board of Directors, a majority of the entire Board of
Directors shall constitute a quorum for the transaction of business and
the act of a majority of the directors present at any meeting at which
there is a quorum shall be the act of the Board of Directors. If a quorum
shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum
shall be present.
Section 6. Actions of Board. Unless otherwise provided by the
Certificate of Incorporation or these By-Laws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all the members of
the Board of Directors or committee, as the case may be, consent thereto
in writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.
Section 7. Meetings by Means of Conference Telephone. Unless
otherwise provided by the Certificate of Incorporation or these By-Laws,
members of the Board of Directors of the Corporation, or any committee
designated by the Board of Directors, may participate in a meeting of the
Board of Directors or such committee by means of a conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a
meeting pursuant to this Section 7 shall constitute presence in person at
such meeting.
Section 8. Committees. The Board of Directors may designate one
or more committees, each committee to consist of one or more of the
directors of the Corporation. The Board of Directors may designate one or
more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of any such committee. In
the absence or disqualification of a member of a committee, and in the
absence of a designation by the Board of Directors of an alternate member
to replace the absent or disqualified member, the member or members
thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of
any absent or disqualified member. Any committee, to the extent allowed
by law and provided in the resolution establishing such committee, shall
have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the
Corporation. Each committee shall keep regular minutes and report to the
Board of Directors when required.
Section 9. Compensation. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors
and may be paid a fixed sum for attendance at each meeting of the Board
of Directors or a stated salary as director. No such payment shall
preclude any director from serving the Corporation in any other capacity
and receiving compensation therefor. Members of special or standing
committees may be allowed like compensation for attending committee
meetings.
Section 10. Interested Directors. No contract or transaction
between the Corporation and one or more of its directors or officers, or
between the Corporation and any other corporation, partnership,
association, or other organization in which one or more of its directors
or officers are directors or officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the
director or officer is present at or participates in the meeting of the
Board of Directors or committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for such
purpose if (i) the material facts as to his or their relationship or
interest and as to the contract or transaction are disclosed or are known
to the Board of Directors or the committee, and the Board of Directors or
committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even
though the disinterested directors be less than a quorum; or (ii) the
material facts as to his or their relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (iii) the contract
or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified, by the Board of Directors, a committee
thereof or the stockholders. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the Board
of Directors or of a committee which authorizes the contract or
transaction.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be
chosen by the Board of Directors and shall be a President, a Secretary
and a Treasurer. The Board of Directors, in its discretion, may also
choose a Chairman of the Board of Directors (who must be a director) and
one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers
and other officers. Any number of offices may be held by the same person,
unless otherwise prohibited by law, the Certificate of Incorporation or
these By-Laws. The officers of the Corporation need not be stockholders
of the Corporation nor, except in the case of the Chairman of the Board
of Directors, need such officers be directors of the Corporation.
Section 2. Election. The Board of Directors at its first meeting
held after each Annual Meeting of Stockholders shall elect the officers
of the Corporation who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from
time to time by the Board of Directors; and all officers of the
Corporation shall hold office until their successors are chosen and
qualified, or until their earlier resignation or removal. Any officer
elected by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board of Directors. Any vacancy
occurring in any office of the Corporation shall be filled by the Board
of Directors. The salaries of all officers of the Corporation shall be
fixed by the Board of Directors.
Section 3. Voting Securities Owned by the Corporation. Powers of
attorney, proxies, waivers of notice of meeting, consents and other
instruments relating to securities owned by the Corporation may be
executed in the name of and on behalf of the Corporation by the President
or any Vice President and any such officer may, in the name of and on
behalf of the Corporation, take all such action as any such officer may
deem advisable to vote in person or by proxy at any meeting of security
holders of any corporation in which the Corporation may own securities
and at any such meeting shall possess and may exercise any and all rights
and power incident to the ownership of such securities and which, as the
owner thereof, the Corporation might have exercised and possessed if
present. The Board of Directors may, by resolution, from time to time
confer like powers upon any other person or persons.
Section 4. Chairman of the Board of Directors. The Chairman of
the Board of Directors, if there be one, shall preside at all meetings of
the stockholders and of the Board of Directors. He shall be the Chief
Executive Officer of the Corporation, and except where by law the
signature of the President is required, the Chairman of the Board of
Directors shall possess the same power as the President to sign all
contracts, certificates and other instruments of the Corporation which
may be authorized by the Board of Directors. During the absence or
disability of the President, the Chairman of the Board of Directors shall
exercise all the powers and discharge all the duties of the President.
The Chairman of the Board of Directors shall also perform such other
duties and may exercise such other powers as from time to time may be
assigned to him by these By-Laws or by the Board of Directors.
Section 5. President. The President shall, subject to the control
of the Board of Directors and, if there be one, the Chairman of the Board
of Directors, have general supervision of the business of the Corporation
and shall see that all orders and resolutions of the Board of Directors
are carried into effect. He shall execute all bonds, mortgages, contracts
and other instruments of the Corporation requiring a seal, under the
seal of the Corporation, except where required or permitted by law to be
otherwise signed and executed and except that the other officers of the
Corporation may sign and execute documents when so authorized by these
By-Laws, the Board of Directors or the President. In the absence or
disability of the Chairman of the Board of Directors, or if there be
none, the President shall preside at all meetings of the stockholders and
the Board of Directors. If there be no Chairman of the Board of
Directors, the President shall be the Chief Executive Officer of the
Corporation. The President shall also perform such other duties and may
exercise such other powers as from time to time may be assigned to him by
these By-Laws or by the Board of Directors.
Section 6. Vice Presidents. At the request of the President or in
his absence or in the event of his inability or refusal to act (and if
there be no Chairman of the Board of Directors), the Vice President or
the Vice Presidents if there is more than one (in the order designated by
the Board of Directors) shall perform the duties of the President, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the President. Each Vice President shall perform such
other duties and have such other powers as the Board of Directors from
time to time may prescribe. If there be no Chairman of the Board of
Directors and no Vice President, the Board of Directors shall designate
the officer of the Corporation who, in the absence of the President or in
the event of the inability or refusal of the President to act, shall
perform the duties of the President, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the President.
Section 7. Secretary. The Secretary shall attend all meetings of
the Board of Directors and all meetings of stockholders and record all
the proceedings thereat in a book or books to be kept for that purpose;
the Secretary shall also perform like duties for the standing committees
when required. The Secretary shall give, or cause to be given, notice of
all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by
the Board of Directors or President, under whose supervision he shall be.
If the Secretary shall be unable or shall refuse to cause to be given
notice of all meetings of the stockholders and special meetings of the
Board of Directors, and if there be no Assistant Secretary, then either
the Board of Directors or the President may choose another officer to
cause such notice to be given. The Secretary shall have custody of the
seal of the Corporation and the Secretary or any Assistant Secretary, if
there be one, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by the signature of
the Secretary or by the signature of any such Assistant Secretary. The
Board of Directors may give general authority to any other officer to
affix the seal of the Corporation and to attest the affixing by his
signature. The Secretary shall see that all books, reports, statements,
certificates and other documents and records required by law to be kept
or filed are properly kept or filed, as the case may be.
Section 8. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the Corporation and
shall deposit all moneys and other valuable effects in the name and to
the credit of the Corporation in such depositories as may be designated
by the Board of Directors. The Treasurer shall disburse the funds of
the Corporation as may be ordered by the Board of Directors, taking
proper vouchers for such disbursements, and shall render to the President
and the Board of Directors, at its regular meetings, or when the Board of
Directors so requires, an account of all his transactions as Treasurer
and of the financial condition of the Corporation. If required by the
Board of Directors, the Treasurer shall give the Corporation a bond in
such sum and with such surety or sureties as shall be satisfactory to the
Board of Directors for the faithful performance of the duties of his
office and for the restoration to the Corporation, in case of his death,
resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or
under his control belonging to the Corporation.
Section 9. Assistant Secretaries. Except as may be otherwise
provided in these By-Laws, Assistant Secretaries, if there be any, shall
perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Vice
President, if there be one, or the Secretary, and in the absence of the
Secretary or in the event of his disability or refusal to act, shall
perform the duties of the Secretary, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Secretary.
Section 10. Assistant Treasurers. Assistant Treasurers, if there
be any, shall perform such duties and have such powers as from time to
time may be assigned to them by the Board of Directors, the President,
any Vice President, if there be one, or the Treasurer, and in the absence
of the Treasurer or in the event of his disability or refusal to act,
shall perform the duties of the Treasurer, and when so acting, shall have
all the powers of and be subject to all the restrictions upon the
Treasurer. If required by the Board of Directors, an Assistant Treasurer
shall give the Corporation a bond in such sum and with such surety or
sureties as shall be satisfactory to the Board of Directors for the
faithful performance of the duties of his office and for the restoration
to the Corporation, in case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other
property of whatever kind in his possession or under his control
belonging to the Corporation.
Section 11. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as
from time to time may be assigned to them by the Board of Directors. The
Board of Directors may delegate to any other officer of the Corporation
the power to choose such other officers and to prescribe their respective
duties and powers.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name
of the Corporation (i) by the Chairman of the Board of Directors, the
President or a Vice President and (ii) by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the Corporation,
certifying the number of shares owned by him in the Corporation.
Section 2. Signatures. Any or all of the signatures on a
certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer, transfer
agent or registrar at the date of issue.
Section 3. Lost Certificates. The Board of Directors may direct a
new certificate to be issued in place of any certificate theretofore
issued by the Corporation alleged to have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost, stolen or destroyed. When authorizing
such issue of a new certificate, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require
the owner of such lost, stolen or destroyed certificate, or his legal
representative, to advertise the same in such manner as the Board of
Directors shall require and/or to give the Corporation a bond in such
sum as it may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
Section 4. Transfers. Stock of the Corporation shall be
transferable in the manner prescribed by law and in these By-Laws.
Transfers of stock shall be made on the books of the Corporation only by
the person named in the certificate or by his attorney lawfully
constituted in writing and upon the surrender of the certificate
therefor, which shall be cancelled before a new certificate shall be
issued.
Section 5. Record Date. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or entitled to
express consent to corporate action in writing without a meeting, or
entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record
date, which shall not be more than sixty days nor less than ten days
before the date of such meeting, nor more than sixty days prior to any
other action. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
Section 6. Beneficial Owners. The Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends, and to vote as such owner, and
to hold liable for calls and assessments a person registered on its books
as the owner of shares, and shall not be bound to recognize any equitable
or other claim to or interest in such share or shares on the part of any
other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by law.
ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required by law,
the Certificate of Incorporation or these By-Laws, to be given to any
director, member of a committee or stockholder, such notice may be given
by mail, addressed to such director, member of a committee or
stockholder, at his address as it appears on the records of the
Corporation, with postage thereon prepaid, and such notice shall be
deemed to be given at the time when the same shall be deposited in the
United States mail. Written notice may also be given personally or by
telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is required by
law, the Certificate of Incorporation or these By-Laws, to be given to
any director, member of a committee or stockholder, a waiver thereof in
writing, signed, by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board of Directors at any
regular or special meeting, and may be paid in cash, in property, or in
shares of the capital stock. Before payment of any dividend, there may be
set aside out of any funds of the Corporation available for dividends
such sum or sums as the Board of Directors from time to time, in its
absolute discretion, deems proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for any proper purpose,
and the Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and
notes of the Corporation shall be signed by such officer or officers or
such other person or persons as the Board of Directors may from time to
time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall
be fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its
organization and the words "Corporate Seal, Delaware". The seal may be
used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
ARTICLE VIII
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or Proceedings
other Than Those by or in the Right of the Corporation. Subject to
Section 3 of this Article VIII, the Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by
or in the right of the Corporation) by reason of the fact that he is or
was a director or officer of the Corporation, or is or was a director or
officer of the Corporation serving at the request of the Corporation as a
director or officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
him in connection with such action, suit or proceeding if he acted in
good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 2. Power to Indemnify in Actions, Suits or Proceedings by
or in the Right of the Corporation. Subject to Section 3 of this Article
VIII, the Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director
or officer of the Corporation, or is or was a director or officer of the
Corporation serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit
if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
Corporation unless and only to the extent that the Court of Chancery or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
Section 3. Authorization of Indemnification. Any indemnification
under this Article VIII (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination
that indemnification of the director or officer is proper in the
circumstances because he has met the applicable standard of conduct set
forth in Section 1 or Section 2 of this Article VIII, as the case may be.
Such determination shall be made (i) by a majority vote of the directors
who are not parties to such action, suit or proceeding, even though less
than a quorum, or (ii) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion,
or (iii) by the stockholders. To the extent, however, that a director or
officer of the Corporation has been successful on the merits or otherwise
in defense of any action, suit or proceeding described above, or in
defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith, without the necessity of
authorization in the specific case.
Section 4. Good Faith Defined. For purposes of any determination
under Section 3 of this Article VIII, a person shall be deemed to have
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Corporation, or, with respect to
any criminal action or proceeding, to have had no reasonable cause to
believe his conduct was unlawful, if his action is based on the records
or books of account of the Corporation or another enterprise, or on
information supplied to him by the officers of the Corporation or another
enterprise in the course of their duties, or on the advice of legal
counsel for the Corporation or another enterprise or on information or
records given or reports made to the Corporation or another enterprise by
an independent certified public accountant or by an appraiser or other
expert selected with reasonable care by the Corporation or another
enterprise. The term "another enterprise" as used in this Section 4 shall
mean any other corporation or any partnership, joint venture, trust,
employee benefit plan or other enterprise of which such person is or was
serving at the request of the Corporation as a director, officer,
employee or agent. The provisions of this Section 4 shall not be deemed
to be exclusive or to limit in any way the circumstances in which a
person may be deemed to have met the applicable standard of conduct set
forth in Sections 1 or 2 of this Article VIII, as the case may be.
Section 5. Indemnification by a Court. Notwithstanding any
contrary determination in the specific case under Section 3 of this
Article VIII, and notwithstanding the absence of any determination
thereunder, any director or officer may apply to any court of competent
jurisdiction in the State of Delaware for indemnification to the extent
otherwise permissible under Sections 1 and 2 of this Article VIII. The
basis of such indemnification by a court shall be a determination by such
court that indemnification of the director or officer is proper in the
circumstances because he has met the applicable standards of conduct set
forth in Sections 1 or 2 of this Article VIII, as the case may be.
Neither a contrary determination in the specific case under Section 3 of
this Article VIII nor the absence of any determination thereunder shall
be a defense to such application or create a presumption that the
director or officer seeking indemnification has not met any applicable
standard of conduct. Notice of any application for indemnification
pursuant to this Section 5 shall be given to the Corporation promptly
upon the filing of such application. If successful, in whole or in part,
the director or officer seeking indemnification shall also be entitled to
be paid the expense of prosecuting such application.
Section 6. Expenses Payable in Advance. Expenses incurred by a
director or officer in defending or investigating a threatened or pending
action, suit or proceeding shall be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Corporation as authorized in this Article VIII.
Section 7. Nonexclusivity of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by or
granted pursuant to this Article VIII shall not be deemed exclusive of
any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any By-Law, agreement, contract, vote of
stockholders or disinterested directors or pursuant to the direction
(howsoever embodied) of any court of competent jurisdiction or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office, it being the policy of the
Corporation that indemnification of the persons specified in Sections 1
and 2 of this Article VIII shall be made to the fullest extent permitted
by law. The provisions of this Article VIII shall not be deemed to
preclude the indemnification of any person who is not specified in
Sections 1 or 2 of this Article VIII but whom the Corporation has the
power or obligation to indemnify under the provisions of the General
Corporation Law of the State of Delaware, or otherwise.
Section 8. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director or officer of
the Corporation, or is or was a director or officer of the Corporation
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising
out of his status as such, whether or not the Corporation would have the
power or the obligation to indemnify him against such liability under the
provisions of this Article VIII.
Section 9. Certain Definitions. For purposes of this Article
VIII, references to "the Corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger
which, if its separate existence had continued, would have had power and
authority to indemnify its directors or officers, so that any person who
is or was a director or officer of such constituent corporation, or is or
was a director or officer of such constituent corporation serving at the
request of such constituent corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, shall stand in the same
position under the provisions of this Article VIII with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued. For
purposes of this Article VIII, references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit
plan; and references to "serving at the request of the Corporation" shall
include any service as a director, officer, employee or agent of the
Corporation which imposes duties on, or involves services by, such
director or officer with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and
in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of
the Corporation" as referred to in this Article VIII.
Section 10. Survival of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article VIII shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be
a director or officer and shall inure to the benefit of the heirs,
executors and administrators of such a person.
Section 11. Limitation on Indemnification. Notwithstanding
anything contained in this Article VIII to the contrary, except for
proceedings to enforce rights to indemnification (which shall be governed
by Section 5 hereof), the Corporation shall not be obligated to indemnify
any director or officer in connection with a proceeding (or part thereof)
initiated by such person unless such proceeding (or part thereof) was
authorized or consented to by the Board of Directors of the Corporation.
Section 12. Indemnification of Employees and Agents. The
Corporation may, to the extent authorized from time to time by the Board
of Directors, provide rights to indemnification and to the advancement of
expenses to employees and agents of the Corporation similar to those
conferred in this Article VIII to directors and officers of the
Corporation.
ARTICLE IX
AMENDMENTS
Section 1. Amendments. These By-Laws may be altered, amended or
repealed, in whole or in part, or new By-Laws may be adopted by the
stockholders or by the Board of Directors, provided, however, that notice
of such alteration, amendment, repeal or adoption of new By-Laws be
contained in the notice of such meeting of stockholders or Board of
Directors as the case may be. All such amendments must be approved by
either the holders of a majority of the outstanding capital stock
entitled to vote thereon or by a majority of the entire Board of
Directors then in office.
Section 2. Entire Board of Directors. As used in this Article IX
and in these By-Laws generally, the term "entire Board of Directors"
means the total number of directors which the Corporation would have if
there were no vacancies.
Exhibit 10.1
INTERCOMPANY LOAN AGREEMENT
between
HUNTSMAN POLYMERS CORPORATION,
as Borrower
and
HUNTSMAN GROUP HOLDINGS FINANCE CORPORATION,
as Lender
Dated as of August 27, 1997
INTERCOMPANY LOAN AGREEMENT, dated as of August 27, 1997, between
Huntsman Polymers Corporation, a Delaware corporation (formerly named
Rexene Corporation, the "Borrower"), and Huntsman Group Holdings Finance
Corporation, a Utah corporation (the "Lender").
SECTION 1. DEFINITIONS.
Section 1.1 Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise
requires. Defined terms in this Agreement shall include in the singular
number the plural and in the plural number the singular.
"Agreement" shall mean this Intercompany Loan Agreement as the
same may from time to time hereafter be modified, supplemented or
amended.
"Base Rate" shall mean, at any particular date, the rate of
interest publicly announced by Bankers Trust Company in New York City as
its "prime rate".
"Borrower" shall have the meaning provided in the first paragraph
of this Agreement.
"Borrowing Base" shall have the meaning provided for such term in
the Rexene Indenture.
"Capex Loans" shall have the meaning provided in Section 2.1(a).
"Capex Notes" shall have the meaning provided in Section 2.4(a).
"Closing Date" shall mean the date of this Agreement.
"Collateral Trust Agreement" shall mean the Collateral Trust and
Intercreditor Agreement dated as of January 29, 1996 by and among
Huntsman Corporation, certain of its subsidiaries and Bankers Trust
Company as Agent and as Additional Credit Agreement Agent and as
Collateral Trustee, as amended by Amendment No. 1 dated February 23, 1996
and Amendment No. 2 dated October 23, 1996, as the same may be hereafter
amended.
"Collateral Trust Amendment" shall mean Amendment No. 3 to the
Collateral Trust Agreement.
"Credit Agreement" shall mean the Amended and Restated Credit
Agreement, dated as of January 29, 1996 and as amended and restated as of
February 23, 1996 and as subsequently amended to the date hereof, among
Huntsman Corporation, the financial institutions party thereto and
Bankers Trust Company, as administrative agent; as amended, modified,
supplemented or restated from time to time.
"HCC" shall mean Huntsman Centennial Corporation, a Delaware
corporation.
"Huntsman Corporation" shall mean Huntsman Corporation, a Utah
corporation.
"Initial Capex Loan" shall mean the meaning provided in Section
2.1(a).
"Intercompany Note" shall mean a promissory note of the Borrower
in favor of the Lender in the form of an "Intercompany Note" (as defined
in the Collateral Trust Agreement).
"Loans" shall mean and include the Capex Loans and the Revolving
Loans.
"Maturity Date" shall mean June 20, 2006.
"Maximum Amount" shall mean at any time the maximum amount of
debt that can be incurred pursuant to Section 4.09 of the Rexene
Indenture.
"Merger Agreement" shall mean that certain Agreement and Plan of
Merger, dated June 9, 1997, by and among, Huntsman Corporation, HCC and
the Borrower.
"Net Sale Proceeds" shall mean all cash proceeds of each sale or
other disposition by the Borrower or one of its Subsidiaries of assets
purchased with the proceeds of any Capex Loan, if such proceeds exceed
$100,000 in respect of any transaction or series of related transactions,
in each case net of (i) reasonable expenses incurred or reasonably
expected to be incurred in connection with such sale or disposition, and
(ii) any income, franchise, transfer or other tax payable by the Borrower
or one of its Subsidiaries in connection with such sale or disposition;
provided, that any disposition or sale of assets by the Borrower to any
of its Subsidiaries, or by any of its Subsidiaries to any other of its
Subsidiaries shall not constitute a disposition or sale of assets for
purposes of this definition.
"Notes" shall mean and include each Revolving Note and each Capex
Note.
"Revolving A Loans" shall have the meaning provided in Section
2.2.
"Revolving B Loans" shall have the meaning provided in Section
2.3.
"Revolving A Note" shall have the meaning provided in Section
2.4(a).
"Revolving B Note" shall have the meaning provided in Section
2.4(a).
"Revolving Loans" means, collectively, the Revolving A Loans and
the Revolving B Loans.
"Revolving Notes" means, collectively, the Revolving A Note and
the Revolving B Note.
"Rexene Merger" shall mean the merger of the Borrower with and
into HCC pursuant to the Merger Agreement.
"Rexene Indenture" shall mean that certain Indenture dated as of
November 29, 1994 between the Borrower and Bank One, Texas N.A., as
trustee, as the same may be amended, modified, supplemented or restated
from time to time.
"Senior Agent" shall mean Bankers Trust Company, as agent for the
lenders under the Senior Bank Credit Agreements.
"Senior Bank Credit Agreements" shall mean, collectively, the
Credit Agreement and the Term Loan Agreement.
"Subsidiary" of any Person shall mean and include (i) any
corporation 50% or more of whose stock of any class or classes having by
the terms thereof ordinary voting power to elect a majority of the
directors of such corporation is at the time owned by such Person
directly or indirectly through Subsidiaries and (ii) any partnership,
association, joint venture or other entity in which such Person, directly
or indirectly through Subsidiaries, is either a general partner or has a
50% or more equity interest at the time.
"Term Loan Agreement" shall mean the Term Loan Agreement, dated
as of October 23, 1996, between Huntsman Corporation, certain financial
institutions, and Bankers Trust Company, as agent for the financial
institutions party thereto, as the same may be amended, modified,
supplemented or restated from time to time.
SECTION 2. AMOUNT AND TERMS OF CREDIT FACILITIES.
Section 2.1 Capex Loans. (a) The Lender agrees to make (i) a loan
to the Borrower on the Closing Date in a principal amount of $0 (the
"Initial Capex Loan") and (ii) loans to the Borrower from time to time
after the Closing Date and prior to the Maturity Date each in an amount
and subject to the conditions specified in Section 2.1(b) below (each
denominated by the date of drawdown; e.g. the "December 1, 1997 Capex
Loan", and collectively with the Initial Capex Loan, the "Capex Loans").
Once repaid, Capex Loans may not be reborrowed.
(b) Each Capex Loan made after the Closing Date (i) shall be
incurred within 90 days of the purchase of the assets being financed with
the proceeds of such Capex Loan, (ii) shall be in an amount not in excess
of 95% of the purchase cost of such assets being financed and (iii) shall
not exceed in principal amount at the time of incurrence thereof the
Maximum Amount. In addition, the purchase cost of such assets being
financed with the proceeds of Capex Loans made after the Closing Date
should be included in "additions to property, plant and equipment" on the
consolidated balance sheet of the Borrower in accordance with GAAP. No
assets purchased with the proceeds of a Capex Loan after the Closing Date
shall be part of an acquisition of any Person by the Borrower or any of
its Subsidiaries.
(c) The Borrower agrees that any Loan permitted to be made under
this Agreement that can qualify as a Capex Loan will be borrowed as a
Capex Loan.
Section 2.2 Revolving Loan Facility A. (a) The Lender agrees, at
any time and from time to time on and after the Closing Date and prior to
the Maturity Date, to make revolving loans (collectively, "Revolving A
Loans") to the Borrower.
(b) Revolving A Loans shall not exceed in aggregate principal
amount at the time of borrowing thereof the Borrowing Base, and shall be
made only to the extent that such loans can not be incurred as Capex
Loans.
(c) Revolving A Loans may be voluntarily prepaid pursuant to
Section 2.6, and any amounts so prepaid may be reborrowed.
Section 2.3 Revolving Loan Facility B. (a) The Lender agrees to
make revolving loans (collectively, "Revolving B Loans") to the Borrower
at any time that the outstanding principal amount of Revolving A Loans is
equal to the Borrowing Base.
(b) Revolving B Loans shall not exceed in aggregate principal
amount at any time the Maximum Amount, and shall be made only to the
extent that such loans can not be incurred as Capex Loans.
(c) Revolving B Loans may be voluntarily prepaid pursuant to
Section 2.6, and any amounts so prepaid may be reborrowed.
Section 2.4 Notes. (a) The Borrower's obligation to pay the
principal of, and interest on, the Loans shall be evidenced by, in the
case of (i) Capex Loans, a promissory note (a "Capex Note") duly
executed and delivered by the Borrower substantially in the form of
Exhibit A hereto, (ii) Revolving A Loans, a promissory note (a "Re-
volving A Note") duly executed and delivered by the Borrower
substantially in the form of Exhibit B hereto and (iii) Revolving B
Loans, a promissory note (a "Revolving B Note") duly executed and
delivered by the Borrower substantially in the form of Exhibit C hereto.
(b) The Lender, at its option, may either (i) endorse on the
schedule attached to the Notes (or on a continuation of such schedule
attached to such Notes and made a part thereof) appropriate notations
with respect to each Loan evidenced thereby, or (ii) record such Loans
and such payments in its books and records. Such schedule or such books
and records, as the case may be, shall constitute prima facie evidence of
the accuracy of the information contained therein.
Section 2.5 Interest. The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Loan from the date of the
making of such Loan until such Loan shall be paid in full at a rate per
annum equal to the Base Rate plus 0.75%. Interest shall be computed on a
daily basis using a year of 365 or 366 days, as the case may be, and
assessed for the actual number of days elapsed. Interest shall be payable
in arrears with such frequency as agreed by the Borrower and the Lender
from time to time, but in no event less frequently than quarterly, on the
last day of each such period as so agreed by the Borrower and the Lender
and otherwise on demand.
Section 2.6 Voluntary Prepayments. (a) The Borrower shall have
the right to prepay the Loans in whole or in part at any time without
premium or penalty.
(b) All voluntary prepayments of the Loans shall be applied
first, to repay Revolving B Loans until such Loans shall have been repaid
in full; second, to repay Revolving A Loans until such Loans shall have
been repaid in full; and third, to repay the Capex Loans until such Loans
have been repaid in full.
Section 2.7 Mandatory Prepayments. (a) On each date after the
Closing Date on which the Borrower or any of its Subsidiaries receives
any Net Sale Proceeds, the Borrower shall prepay the applicable
outstanding Capex Loan in an amount equal to 100% of the amount of such
Net Sale Proceeds.
(b) On each date after the Closing Date on which the outstanding
principal balance of Revolving A Loans shall be less than the Borrowing
Base, an advance in the amount of such shortfall shall be deemed to be
made as a Revolving A Loan with the proceeds thereof deemed to be applied
as a prepayment of an equal amount of outstanding Revolving B Loans.
Section 2.8 Mandatory Conversion. On the date that all notes of
the Borrower outstanding under the Rexene Indenture have been paid in
full, this Intercompany Loan Agreement shall be terminated and an
Intercompany Note shall be issued in replacement of, and in substitu-
tion for, all Notes outstanding hereunder, which Notes shall be marked
"cancelled" and returned to the Borrower.
(a) The proceeds of all Capex Loans after the Closing Date shall
be used to purchase assets being financed with the proceeds of such Capex
Loan.
(b) The proceeds of all Revolving Loans made on the Closing Date
shall be used to (i) refinance the intercompany loans made by the Lender
to HCC immediately prior to the Rexene Merger and (ii) pay other costs
and expenses of the Rexene Merger, including the refinancing of existing
Rexene bank indebtedness, pursuant to and as required by the terms of the
Merger Agreement.
(c) The proceeds of all Revolving Loans made after the Closing
Date shall be used for general corporate purposes of the Borrower and its
Subsidiaries.
Section 2.10 Maturity. All Loans are due and payable on the
Maturity Date.
SECTION 3. COLLATERAL SECURITY
The Borrower hereby expressly acknowledges and agrees that the
Lender may, pursuant to the terms of the Collateral Trust Amendment,
pledge all of its rights, title and interest hereunder and under the
Notes to the Collateral Trustee (as defined in the Collateral Trust
Amendment) for the benefit of the Secured Parties identified in the
Collateral Trust Amendment. The Borrower's obligations hereunder and
under the Notes shall be secured as set forth in the Collateral Trust
Amendment.
SECTION 4. ACCELERATION
Immediately upon any acceleration of amounts owing by Huntsman
Corporation under the Senior Bank Credit Agreements (whether as the
result of a declaration by the Senior Agent or the occurrence of any
event of default thereunder) all principal, interest and other amounts
owing hereunder shall become due and payable without the requirement of
any acceleration or request, and without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrower.
SECTION 5. MISCELLANEOUS
Section 5.1 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Borrower, the Lender and all
future holders of the Notes and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of the
Lender.
Section 5.2 Amendments and Waivers. Neither this Agreement, any
Note nor any terms hereof or thereof may be amended, supplemented,
modified or waived except in accordance with the provisions of this
Section 5.2. The Lender and the Borrower may, from time to time, enter
into written amendments, supplements, modifications or waivers for the
purpose of adding, deleting, changing or waiving any provisions to this
Agreement or the Notes; provided, that, so long as any indebtedness under
the Senior Bank Credit Agreements is outstanding no such amendment,
supplement, modification or waiver to any provisions hereunder related to
prepayment or use of proceeds shall be made without the written consent
of the Senior Agent.
Section 5.3 Governing Law; Submission to Jurisdiction. THIS
AGREEMENT AND THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO
THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW).
Section 5.4 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 5.5 Headings Descriptive. The headings of the several
Sections and subsections 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 5.6 Severability. In case any provision in or obligation
under this Agreement or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way
be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date
first above written.
HUNTSMAN POLYMERS CORPORATION
By: /s/Martin F. Peterson
Title: Vice President and Treasurer
Notice Address:
5005 LBJ Freeway
Dallas, Texas 75244
Attention: General Counsel
HUNTSMAN GROUP HOLDINGS
FINANCE CORPORATION
By: /s/Martin F. Peterman
Title: Vice President and Treasurer
Notice Address:
500 Huntsman Way
Salt Lake City, Utah 84108
Attention: General Counsel
Exhibit A
FORM OF
CAPEX NOTE
New York, New York
August 27, 1997
FOR VALUE RECEIVED, the undersigned, HUNTSMAN POLYMERS
CORPORATION, a Delaware Corporation ("Borrower"), hereby unconditionally
promises to pay to HUNTSMAN GROUP HOLDINGS FINANCE CORPORATION, a Utah
corporation ("Lender") at the office of Lender, in lawful money of the
United States of America and in immediately available funds, the
aggregate principal amount of all Capex Loans (as defined in the
Intercompany Loan Agreement referred to below) made by the Lender to the
Borrower pursuant to the terms of the Intercompany Loan Agreement. The
principal amount of the Capex Loans evidenced hereby shall be payable in
the amounts and at the times set forth in the Intercompany Loan
Agreement. Borrower further agrees to pay interest in like money at such
office on the unpaid principal amount hereof from time to time
outstanding at the applicable interest rate per annum determined as
provided in, and payable as specified in, the Intercompany Loan
Agreement.
The holder of this Capex Note is authorized to record the date
and amount of the Capex Loan made by the Lender pursuant to Section 2.1
of the Intercompany Loan Agreement and the interest rate applicable from
time to time with respect thereto on the Schedule annexed hereto and made
a part hereof (or on any other record customarily maintained by the
Lender with respect to this Capex Note) or otherwise on the records of
the Lender, and any such recordation shall (in the absence of manifest
error) constitute prima facie evidence of the accuracy of the information
endorsed; provided, however, that the failure to make any such
endorsement shall not affect the obligations of Borrower in respect of
the Capex Loan.
This Capex Note is the Capex Note referred to in the Intercompany
Loan Agreement, dated as of August 27, 1997 (as amended, supplemented or
otherwise modified from time to time, the "Intercompany Loan Agreement"),
between the Borrower and the Lender, and is subject to optional and
mandatory prepayment in whole or in part as provided therein. Terms
defined in the Intercompany Loan Agreement are used herein with their
defined meanings unless otherwise defined herein.
Upon the occurrence of any event of acceleration specified in the
Intercompany Loan Agreement, all amounts then remaining unpaid on this
Capex Note may become, or may be declared to be, immediately due and
payable, all as provided therein.
All parties now and hereafter liable with respect to this Capex
Note, whether maker, principal, surety, guarantor, endorser or otherwise,
hereby waive presentment, demand, protest and all other notices of any
kind.
THIS CAPEX NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
HUNTSMAN POLYMERS CORPORATION
By:______________________
Name: ___________________
Title: __________________
Schedule A to
Capex Note
REPAYMENT OF CAPEX LOANS
<TABLE>
<CAPTION>
Aggregate
Unpaid
Amount of Principal
Amount of Principal Balance of Notation
Date Capex Loan Repaid Capex Loans Interest Rate Made By
- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
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</TABLE>
Exhibit B
FORM OF
REVOLVING A LOAN NOTE
New York, New York
August 27, 1997
FOR VALUE RECEIVED, the undersigned, HUNTSMAN POLYMERS
CORPORATION, a Delaware Corporation ("Borrower"), hereby unconditionally
promises to pay to HUNTSMAN GROUP HOLDINGS FINANCE CORPORATION, a Utah
corporation ("Lender") at the office of Lender, in lawful money of the
United States of America and in immediately available funds, the
aggregate principal amount of all Revolving A Loans (as defined in the
Intercompany Loan Agreement referred to below) made by the Lender to the
Borrower pursuant to the terms of the Intercompany Loan Agreement. The
principal amount of the Revolving A Loans evidenced hereby shall be
payable in the amounts and at the times set forth in the Intercompany
Loan Agreement. Borrower further agrees to pay interest in like money at
such office on the unpaid principal amount hereof from time to time
outstanding at the applicable interest rate per annum determined as
provided in, and payable as specified in, the Intercompany Loan
Agreement.
The holder of this Revolving A Loan Note is authorized to record
the date and amount of the Revolving A Loan made by the Lender pursuant
to Section 2.2 of the Intercompany Loan Agreement and the interest rate
applicable from time to time with respect thereto on the Schedule annexed
hereto and made a part hereof (or on any other record customarily
maintained by the Lender with respect to this Revolving A Loan Note) or
otherwise on the records of the Lender, and any such recordation shall
(in the absence of manifest error) constitute prima facie evidence of the
accuracy of the information endorsed; provided, however, that the failure
to make any such endorsement shall not affect the obligations of
Borrower in respect of the Revolving A Loan.
This Revolving A Loan Note is the Revolving A Loan Note referred
to in the Intercompany Loan Agreement, dated as of August 27, 1997 (as
amended, supplemented or otherwise modified from time to time, the
"Intercompany Loan Agreement"), between the Borrower and the Lender, and
is subject to optional and mandatory prepayment in whole or in part as
provided therein. Terms defined in the Intercompany Loan Agreement are
used herein with their defined meanings unless otherwise defined herein.
Upon the occurrence of any event of acceleration specified in the
Intercompany Loan Agreement, all amounts then remaining unpaid on this
Revolving A Loan Note may become, or may be declared to be, immediately
due and payable, all as provided therein.
All parties now and hereafter liable with respect to this
Revolving A Loan Note, whether maker, principal, surety, guarantor,
endorser or otherwise, hereby waive presentment, demand, protest and all
other notices of any kind.
THIS REVOLVING A LOAN NOTE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
HUNTSMAN POLYMERS CORPORATION
By: ______________________
Name: ____________________
Title: ___________________
Schedule A to
Revolving A Loan Note
REPAYMENT OF REVOLVING A LOANS
<TABLE>
<CAPTION>
Aggregate
Unpaid
Principal
Amount of Amount of Balance of
Revolving A Principal Revolving A Notation
Date Loan Repaid Loans Interest Rate Made By
- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
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</TABLE>
Exhibit C
FORM OF
REVOLVING B LOAN NOTE
New York, New York
August 27, 1997
FOR VALUE RECEIVED, the undersigned, HUNTSMAN POLYMERS
CORPORATION, a Delaware Corporation ("Borrower"), hereby unconditionally
promises to pay to HUNTSMAN GROUP HOLDINGS FINANCE CORPORATION, a Utah
corporation ("Lender") at the office of Lender, in lawful money of the
United States of America and in immediately available funds, the
aggregate principal amount of all Revolving B Loans (as defined in the
Intercompany Loan Agreement) made by the Lender to the Borrower pursuant
to the terms of the Intercompany Loan Agreement. The principal amount of
the Revolving B Loans evidenced hereby shall be payable in the amounts
and at the times set forth in the Intercompany Loan Agreement. Borrower
further agrees to pay interest in like money at such office on the unpaid
principal amount hereof from time to time outstanding at the applicable
interest rate per annum determined as provided in, and payable as
specified in, the Intercompany Loan Agreement.
The holder of this Revolving B Loan Note is authorized to record
the date and amount of the Revolving B Loan Note made by the Lender
pursuant to Section 2.3 of the Intercompany Loan Agreement and the
interest rate applicable from time to time with respect thereto on the
Schedules annexed hereto and made a part hereof (or on any other record
customarily maintained by the Lender with respect to this Revolving B
Loan Note) or otherwise on the records of the Lender, and any such
recordation shall (in the absence of manifest error) constitute prima
facie evidence of the accuracy of the information endorsed; provided,
however, that the failure to make any such endorsement shall not affect
the obligations of Borrower in respect of the Revolving B Loan.
This Revolving B Loan Note is the Revolving B Loan Note referred
to in the Intercompany Loan Agreement, dated as of August 27, 1997 (as
amended, supplemented or otherwise modified from time to time, the
"Intercompany Loan Agreement"), between the Borrower and the Lender, and
is subject to optional and mandatory prepayment in whole or in part as
provided therein. Terms defined in the Intercompany Loan Agreement are
used herein with their defined meanings unless otherwise defined herein.
Upon the occurrence of any event of acceleration specified in the
Intercompany Loan Agreement, all amounts then remaining unpaid on this
Revolving B Loan Note may become, or may be declared to be, immediately
due and payable, all as provided therein.
All parties now and hereafter liable with respect to this
Revolving B Loan Note, whether maker, principal, surety, guarantor,
endorser or otherwise, hereby waive presentment, demand, protest and all
other notices of any kind.
THIS REVOLVING B LOAN NOTE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
HUNTSMAN POLYMERS CORPORATION
By: ______________________
Name: ____________________
Title: ___________________
Schedule A to
Revolving B Loan Note
REPAYMENT OF REVOLVING B LOANS
<TABLE>
<CAPTION>
Aggregate
Unpaid
Principal
Amount of Amount of Balance of
Revolving B Principal Revolving B Notation
Date Loan Repaid Loans Interest Rate Made By
- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the third quarter 10-Q and is qualified in its entirety by reference
to such 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jul-01-1997)
<PERIOD-END> Sep-30-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 62,202
<ALLOWANCES> (1,486)
<INVENTORY> 51,441
<CURRENT-ASSETS> 117,115
<PP&E> 716,854
<DEPRECIATION> (22,703)
<TOTAL-ASSETS> 852,692
<CURRENT-LIABILITIES> 66,016
<BONDS> 175,000
<COMMON> 0
0
0
<OTHER-SE> 174,019
<TOTAL-LIABILITY-AND-EQUITY> 852,692
<SALES> 107,635
<TOTAL-REVENUES> 107,635
<CGS> 93,198
<TOTAL-COSTS> 8,205
<OTHER-EXPENSES> 19,226
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,996
<INCOME-PRETAX> (18,990)
<INCOME-TAX> (7,396)
<INCOME-CONTINUING> (11,594)
<DISCONTINUED> (784)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,378)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
