1089748--2/22/2008--HUNTSMAN_INTERNATIONAL

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Risks Related to the Merger Any failure to complete the Merger could materially adversely impact the market price of our common stock as well as our business, financial condition and results of operations. If the banks that have provided commitment letters for the funds to complete the Merger are not required or refuse to fund, Hexion will have to seek other financing to complete the Merger, which financing may not be available. Necessary consents and approvals from government entities may delay or prevent the closing of the Merger. The period of time expected before completing the Merger may increase the risk that we inadvertently fail to comply with our covenants, including those that restrict our conduct of business or that a material adverse effect occurs in our business which would permit Hexion to refuse to consummate the Merger. We could incur substantial merger-related costs in connection with the Merger. The pendency of the Merger could materially adversely affect our business and operations. Uncertainties associated with the Merger may cause a loss of employees and may otherwise materially adversely affect our business and operations. In certain circumstances, the Merger Agreement requires us to pay Hexion a termination fee of $225 million plus an amount equal to $100 million (the "Reimbursement Amount"), representing the portion of the $200 million termination fee paid to Basell that was funded by Hexion, and, any such payment could have material and adverse consequences to our financial condition and operations. The Merger Agreement contains restrictive covenants that may limit our ability to respond to changes in market conditions or pursue business opportunities. Rating agencies could downgrade their corporate debt ratings for us before the effective time of the Merger. Such downgrades could have a material adverse effect on the ongoing cost of financing our business. Risks Related to the Ownership of Our Common Stock Our stock price has been and may continue to be subject to large fluctuations. Shares available for future sale may cause our common stock price to decline, which may negatively impact your investment. If the Merger Agreement is terminated, or with the consent of Hexion, we have the ability to issue additional equity securities, which would lead to further dilution of our issued and outstanding common stock. In addition to provisions of the Merger Agreement, certain provisions contained in our certificate of incorporation and bylaws could discourage a takeover attempt, which may reduce or eliminate the likelihood of a change of control transaction other than the Merger and, therefore, your ability to sell your shares at a price higher than contemplated by the Merger. Existing or future litigation or legislative initiatives restricting the use of MTBE in gasoline may subject us or our products to environmental liability, materially reduce our sales and/or materially increase our costs. Significant price volatility or interruptions in supply of our raw materials may result in increased costs that we may be unable to pass on to our customers, which could reduce our profitability. We are subject to the risk of loss resulting from nonpayment and/or nonperformance by our customers. Natural or other disasters could disrupt our business and result in loss of revenue or in higher expenses. We have a history of losses and may incur losses in the future. Our results of operations may be adversely affected by fluctuations in currency exchange rates and international business risks. Demand for many of our products is cyclical, and we may experience depressed market conditions for such products. The industries in which we compete are highly competitive, and we may not be able to compete effectively with our competitors that have greater financial resources, which could have a material adverse effect on our business, results of operations and financial condition. Our operations involve risks that may increase our operating costs, which could reduce our profitability. We are subject to many environmental and safety regulations that may result in unanticipated costs or liabilities, which could reduce our profitability. Our available cash and access to additional capital may be limited by our significant leverage, which could restrict our ability to grow our businesses. If our subsidiaries do not make sufficient distributions to us, then we will not be able to make payment on our debts. A downgrade in the ratings of the securities of our Company or our subsidiaries could result in increased interest and other financial expenses related to future borrowings of our Company or our subsidiaries and could restrict our access to additional capital or trade credit. Future acquisitions, partnerships and joint ventures may require significant resources and/or result in unanticipated adverse consequences that could have a material adverse effect on our business, results of operations and financial condition. Our business is dependent on our intellectual property. If our patents are declared invalid or our trade secrets become known to our competitors, our ability to compete may be adversely affected. Loss of key members of our management could disrupt our business. Terrorist attacks, such as the attacks that occurred on September 11, 2001, the continuing military action in Iraq, general instability in various OPEC member and other energy-producing nations, the threat of other attacks or acts of war in the U.S. and abroad and increased security regulations related to our industry could adversely affect our business. Jon M. Huntsman and the Huntsman family, through HMP Equity Trust, may be deemed to control approximately 22% of our outstanding common stock, and their interests may conflict with those of other stockholders or our Company.

Full 10-K form ▸

1089748--2/22/2008--HUNTSMAN_INTERNATIONAL_LLC