INDEMNITY, SUBROGATION and CONTRIBUTION AGREEMENT dated as of
September 30, 1997, among HUNTSMAN PACKAGING CORPORATION, A Utah corporation
(the "Borrower"), each Subsidiary of the Borrower listed on Schedule I hereto
(the "Guarantors") and THE CHASE MANHATTAN BANK, a New York banking
corporation ("Chase"), as collateral agent (in such capacity, the Collateral
Agent") for the Secured Parties (as defined in the Credit Agreement referred
to below).
Reference is made to (a) the Credit Agreement dated as of September
30, 1997 (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), among the Borrower, the Lenders from time to time
party thereto (the "Lenders") and Chase, as administrative agent (in such
capacity, the "Administrative Agent" for the Lenders, and (b) the Guarantee
Agreement dated as of September 30, 1997, between the Guarantors and the
Administrative Agent (the "Guarantee Agreement"). Capitalized terms used
herein and not defined herein shall have the meanings assigned to such terms
in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, and the
Issuing Bank has agreed to issue Letters of Credit for the account of the
Borrower, pursuant to, and upon the terms and subject to the conditions
specified in, the Credit Agreement. The Guarantors have guaranteed such Loans
and the other Obligations (as defined in the Guarantee Agreement) of the
Borrower under the Credit Agreement pursuant to the Guarantee Agreement; the
Borrower and the Guarantors also have granted Liens on and security interests
in certain of their assets to secure such guarantees. The obligations of the
Lenders to make Loans and of the Issuing Bank to issue Letters of Credit are
conditioned on, among other things, the execution and delivery by the Borrower
and the Guarantors of an agreement in the form hereof.
Accordingly, the Borrower, each Guarantor and the Collateral Agent
agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all such rights
of indemnity and subrogation as the Guarantors may have under applicable law
(but subject to Section 3), the Borrower agrees that (a) in the event a
payment shall be made by any Guarantor under the Guaran-
tee Agreement, the Borrower shall indemnify such Guarantor for the full amount
of such payment and such Guarantor shall be subrogated to the rights of the
Person to whom such payment shall have been made to the extent of such payment
and (b) in the event any assets of any Guarantor shall be sold pursuant to any
Security Document to satisfy a claim of any Secured Party, the Borrower shall
indemnify such Guarantor in an amount equal to the greater of the book value
or the fair market value of the assets so sold.
SECTION 2. Contribution and Subrogation. Each Guarantor (a
"Contributing Guarantor") agrees (subject to Section 3) that, in the event a
payment shall be made by any other Guarantor under the Guarantee Agreement or
assets of any other Guarantor shall be sold pursuant to any Security Document
to satisfy a claim of any Secured Party and such other Guarantor (the
"Claiming Guarantor") shall not have been fully indemnified by the Borrower as
provided in Section 1, the Contributing Guarantor shall indemnify the Claiming
Guarantor in an amount equal to the amount of such payment or the greater of
the book value or the fair market value of such assets, as the case may be, in
each case multiplied by a fraction of which the numerator shall be the net
worth of the Contributing Guarantor on the date hereof and the denominator
shall be the aggregate net worth of all the Guarantors on the date hereof (or,
in the case of any Guarantor becoming a party hereto pursuant to Section 12,
the date of the Supplement hereto executed and delivered by such Guarantor).
Any Contributing Guarantor making any payment to a Claiming Guarantor pursuant
to this Section 2 shall be subrogated to the rights of such Claiming Guarantor
under Section 1 to the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors under Sections 1 and 2
and all other rights of indemnity, contribution or subrogation under
applicable law or otherwise shall be fully subordinated to the indefeasible
payment in full in cash of the Obligations. No failure on the part of the
Borrower or any Guarantor to make the payments required by Sections 1 and 2
(or any other payments required under applicable law or otherwise) shall in
any respect limit the obligations and liabilities of any Guarantor with
respect to its obligations hereunder, and each Guarantor shall remain liable
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for the full amount of the obligations of such Guarantor hereunder.
SECTION 4. Termination. This Agreement shall survive and be in full
force and effect so long as any Obligation is outstanding and has not been
indefeasibly paid in full in cash, and so long as the LC Exposure has not been
reduced to zero or any of the commitments under the Credit Agreement have not
been terminated, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by any Secured Party or any Guarantor
upon the bankruptcy or reorganization of the Borrower, any Guarantor or
otherwise.
SECTION 5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 6. No Waiver; Amendment. (a) No failure on the part of the
Collateral Agent or any Guarantor to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy by the
Collateral Agent or any Guarantor preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided
by law. None of the Collateral Agent and the Guarantors shall be in writing
and signed by such parties.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into
between the Borrower, the Guarantors and the Collateral Agent, with the prior
written consent of the Required Lenders (except as otherwise provided in the
Credit Agreement).
SECTION 7. Notices. All communications and notices hereunder shall be
in writing and given as provided in the Guarantee Agreement and addressed as
specified therein.
SECTION 8. Binding Agreement; Assignments. Whenever in this Agreement
any of the parties hereto is re-
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ferred to, such reference shall be deemed to include the successors and
assigned of such party; and all covenants, promises and agreements by or on
behalf of the parties that are contained in this Agreement shall bind and
inure to the benefit of the respective successors and assigns. Neither the
borrower nor any Guarantor may assign to transfer any of its rights or
obligations hereunder (and any such attempted assignment or transfer shall be
void) without the prior written consent of the Required Lenders.
Notwithstanding the foregoing, at the time any Guarantor is released from its
obligations under the Guarantee Agreement in accordance with such Guarantee
Agreement and the Credit Agreement, such Guarantor will cease to have any
rights or obligations under this Agreement.
SECTION 9. Survival of Agreement; Severability. (a) All covenants and
agreements made by the Borrower and each Guarantor herein and in the
certificates or other instruments prepared or delivered in connection with
this Agreement or the other Loan Documents shall be considered to have been
relied upon by the Collateral Agent, the other Secured Parties and each
Guarantor and shall survive the making by the Lenders of the Loans and the
issuance of the Letters of Credit by the Issuing Bank, and shall continue in
full force and effect as long as the principal of or any accrued interest on
an on any Loans or any other fee or amount payable under the Credit Agreement
or this Agreement or under any of the other Loan Documents is outstanding and
or unpaid or the LC Exposure does not equal zero and as long as the
Commitments have not been terminated.
(b) In case any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, no
party hereto shall be required to comply with such provision for so long as
such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
validity, legality and enforceability of the remaining provisions contained
herein shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
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SECTION 10. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when take together
shall constitute a single contract. This Agreement shall be effective with
respect to any Guarantor when a counterpart bearing the signature of such
Guarantor shall have been delivered to the Collateral Agent. Delivery of an
executed signature page to this Agreement by facsimile transmission shall be
as effective as delivery of a manually signed counterpart of this Agreement.
SECTION 11. Rules of the Interpretation. The rules of the
interpretation specified in Section 1.03 of the Credit Agreement shall be
applicable to this Agreement.
SECTION 12. Additional Guarantors. Pursuant to Section 5.12 of the
Credit Agreement, each Subsidiary Loan Party that was not in existence or not
such a Subsidiary Loan Party on the date of the Credit Agreement is required
to enter into the Guarantee Agreement as a Guarantor upon becoming such a
Subsidiary. Upon execution and delivery, after the date hereof, by the
Collateral Agent and such a Subsidiary of the instrument in the form of Annex
1 hereto, such Subsidiary shall become a Guarantor hereunder with the same
force and effect as if originally named as a Guarantor hereunder. The
execution and delivery of any instrument adding an additional Guarantor as a
party to this Agreement shall not require the consent of any Guarantor
hereunder. The rights and obligations of each Guarantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Guarantor as
a party to this Agreement.
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IN WITNESS WHEREOF, parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first appearing
above.
HUNTSMAN PACKAGING CORPORATION,
by__________________________________
Name:
Title:
EACH OF THE SUBSIDIARIES LISTED ON
SCHEDULE I HERETO, as a Guarantor,
by _______________________________
Name:
Title: Authorized Officer
THE CHASE MANHATTAN BANK, as
Collateral Agent,
by _______________________________
Name:
Title:
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(Contribution Agreement)
SCHEDULE I
Guarantors
1. Huntsman Deerfield Films Corporation
2. Huntsman United Films Corporation
3. Huntsman Preparatory Inc.
4. Huntsman Container Corporation International
5. Huntsman Packaging Georgia, Inc.
6. Huntsman Film Products of Mexico, Inc.
7. Huntsman Bulk Packaging Corporation
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Annex 1 to
the Indemnity, Subrogation and
Contribution Agreement
SUPPLEMENT NO. dated as of [ ], to the Indemnity,
Subrogation and Contribution Agreement dated as of September 30, 1997 (as the
same may be amended, supplemented or otherwise modified from time to time, the
"Indemnity, Subrogation and Contribution Agreement"), among HUNTSMAN PACKAGING
CORPORATION, A Utah corporation (the "Borrower"), each Subsidiary of the
Borrower listed on Schedule I thereto (the "Guarantors"), and THE CHASE
MANHATTAN BANK, a New York banking corporation ("Chase"), as collateral agent
(the "Collateral Agent") for the Secured Parties (as defined in the Credit
Agreement referred to below).
A. Reference is made to (a) the Credit Agreement dated as of
September 30, 1997 (as amended, supplemented or otherwise modified from time
to time the "Credit Agreement"), among the Borrower, the Lenders from time to
time party thereto (the "Lenders") and Chase, as administrative agent (in such
capacity, the "Administrative Agent") for the Lenders, and (b) the Guarantee
Agreement dated as of September 30, 1997, between the Guarantors and the
Administrative Agent ("the Guarantee Agreement").
B. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Indemnity, Subrogation
and Contribution Agreement and Credit Agreement.
C. The Borrower and the Guarantors have entered into the Indemnity,
Subrogation and Contribution Agreement in order to induce the Lenders to make
Loans and the Issuing Bank to issue Letters of Credit. Pursuant to Section
5.12 of the Credit Agreement, each Subsidiary Loan Party that was not in
existence or not a Subsidiary Loan Party on the date of the Credit Agreement
is required to enter into the Guarantee Agreement as a Guarantor upon becoming
a Subsidiary. Section 12 of the Indemnity, Subrogation and Contribution
Agreement provides that additional Subsidiaries of the Borrower may become
Guarantors under the Indemnity, Subrogation and Contribution Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary of the Borrower (the "New Guarantor" is executing
8
this Supplement in accordance with the requirements of the Credit Agreement to
become a Guarantor under the Indemnity, Subrogation and Contribution Agreement
in order to induce the Lenders to make additional Loans and the Issuing Bank
to issue additional Letters of Credit and as consideration for Loans
previously made and Letters of Credit previously issued.
Accordingly, the Collateral Agent and the New Guarantor agree as follows:
SECTION 1. In accordance with Section 12 of the Indemnity,
Subrogation and Contribution Agreement, the New Guarantor by its signature
below becomes a Guarantor under the Indemnity, Subrogation and Contribution
Agreement with the same force and effect as if originally named therein as a
Guarantor and the New Guarantor hereby agrees to all the terms and provisions
of the Indemnity, Subrogation and Contribution Agreement applicable to it as a
Guarantor thereunder. Each reference to a "Guarantor" in the Indemnity,
Subrogation and Contribution Agreement shall be deemed to include the New
Guarantor. The Indemnity, Subrogation and Contribution Agreement is hereby
incorporated herein by reference.
SECTION 2. The New Guarantor represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute
a single contract. This supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Guarantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of the manually signed
counterpart of this Supplement.
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SECTION 4. Except as expressly supplemented hereby, the Indemnity,
Subrogation and Contribution Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any
respect, neither party hereto shall be required to comply with such provision
for so long as such provision is held to be invalid, illegal or unenforceable,
but the validity, legality and enforceability of the remaining provisions
contained herein and in the Indemnity, Subrogation and Contribution Agreement
shall not in any way be affected or impaired. The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section 7 of the Indemnity, Subrogation and Contribution
Agreement. All communications and notices hereunder to the New Guarantor shall
be given to it at the address set forth under its signature.
IN WITNESS WHEREOF, the New Guarantor and the Collateral Agent have
duly executed this Supplement to the Indemnity, Subrogation and Contribution
Agreement as of the day and year first above written.
[Name of New Guarantor],
by
---------------------
Name:
Title:
Address:
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THE CHASE MANHATTAN BANK, as
Collateral Agent,
by
--------------------------
Name:
Title:
11
SCHEDULE I
to Supplement No. ___ to the Indemnity,
Subrogation and Contribution Agreement
Guarantors
Name Address
12
