Filed pursuant to Rule 424(b)(3)
                                           Registration No. 333-40067



                                  PROSPECTUS 



[LOGO-HUNTSMAN PACKAGING]

    OFFER FOR ALL OUTSTANDING 9 1/8% SENIOR SUBORDINATED NOTES DUE 2007 
          IN EXCHANGE FOR 9 1/8% SENIOR SUBORDINATED NOTES DUE 2007 
         WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 
                                      OF 

                        HUNTSMAN PACKAGING CORPORATION 



       THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, 
  ON APRIL 1, 1998, 30 DAYS FROM THE DATE OF THIS PROSPECTUS, UNLESS EXTENDED 



   Huntsman Packaging Corporation, a Utah corporation ("Huntsman Packaging" 
or the "Company"), hereby offers, upon the terms and subject to the 
conditions set forth in this Prospectus (as the same may be amended or 
supplemented from time to time, the "Prospectus") and the accompanying Letter 
of Transmittal (which together constitute the "Exchange Offer"), to exchange 
an aggregate principal amount of up to $125,000,000 of its 9 1/8% Senior 
Subordinated Notes due 2007 (the "New Notes"), which have been registered 
under the Securities Act of 1933, as amended (the "Securities Act"), for a 
like principal amount of its issued and outstanding 9 1/8% Senior 
Subordinated Notes due 2007 (the "Old Notes" and, together with the New 
Notes, the "Notes") from the holders (the "Holders") thereof. The terms of 
the New Notes are identical in all material respects to the terms of the Old 
Notes, except for certain transfer restrictions and registration rights 
relating to the Old Notes. The Old Notes are, and the New Notes will be, 
redeemable, in whole or in part, at the option of Huntsman Packaging, on or 
after October 1, 2002, at the redemption price set forth herein plus accrued 
interest to the date of redemption. In addition, at any time on or prior to 
October 1, 2000, Huntsman Packaging may, at its option, redeem up to 35% of 
the aggregate principal amount of the Notes originally issued with the net 
cash proceeds of one or more Equity Offerings (as defined), at a redemption 
price equal to 109 1/8% of the principal amount thereof plus accrued interest 
to the date of redemption; provided, however, that after giving effect to any 
such redemption, at least 65% of the aggregate principal amount of the Notes 
originally issued remain outstanding. Upon a Change of Control (as defined), 
each Holder of the Notes will have the right to require Huntsman Packaging to 
repurchase such Holder's Notes at a price equal to 101% of the principal 
amount thereof plus accrued interest to the date of repurchase. In addition, 
Huntsman Packaging will be obligated to offer to repurchase the Notes at 100% 
of the principal amount thereof plus accrued interest to the date of 
repurchase in the event of certain Asset Sales (as defined). See "Description 
of the Notes and Guarantees." 


   The Old Notes are, and the New Notes will be, unsecured senior 
subordinated obligations of Huntsman Packaging and will be subordinated in 
right of payment to all existing and future Senior Debt (as defined) of 
Huntsman Packaging, will be pari passu in right of payment to all senior 
subordinated Indebtedness (as defined) of Huntsman Packaging and will be 
senior in right of payment to all existing and future subordinated 
obligations of Huntsman Packaging. The Old Notes are fully and 
unconditionally guaranteed (the "Old Guarantees"), and the New Notes will be 
fully and unconditionally guaranteed (the "New Guarantees" and, together with 
the Old Guarantees, the "Guarantees") on an unsecured senior subordinated 
basis by certain of Huntsman Packaging's subsidiaries (each, a "Guarantor" 
and collectively, the "Guarantors"). The Guarantees will be unsecured senior 
subordinated obligations of the Guarantors and will be subordinated in right 
of payment to all existing and future Guarantor Senior Debt (as defined), 
will be pari passu in right of payments to all senior subordinated 
Indebtedness of the Guarantors and will be senior in right of payment to all 
existing and future subordinated obligations of the Guarantors. The Notes 
will be effectively subordinated to all obligations of any subsidiary of 
Huntsman Packaging that is not a Guarantor. As of December 31, 1997, Huntsman 
Packaging had approximately $125.5 million of Senior Debt outstanding, all of 
which ranks senior to the Notes, and approximately $250.5 million of total 
Indebtedness outstanding (in each case, excluding unused commitments and 
outstanding letters of credit totalling $93.6 million under the Credit 
Facilities (as defined)), and Restricted Subsidiaries that are not Guarantors 
would have had no Indebtedness outstanding (excluding intercompany loans and 
guarantees of Huntsman Packaging Indebtedness). See "Risk Factors -- 
Substantial Leverage," "--Ability to Service Indebtedness" and "Description 
of the Notes and Guarantees -- Ranking." 


   For each Old Note accepted for exchange, the Holder of such Old Note will 
receive a New Note having a principal amount equal to that of the surrendered 
Old Note. Interest on each New Note will accrue (A) from the later of (i) the 
last interest payment date on which interest was paid on the Old Note 
surrendered in exchange therefor, or (ii) if the Old Note is surrendered for 
exchange on a date in a period which includes the record date for an interest 
payment date to occur on or after the date of such exchange and as to which 
interest will be paid, the date of such interest payment date or (B) if no 
interest has been paid on the Old Notes, from September 30, 1997. 
Accordingly, registered Holders of New Notes on the relevant record date for 
the first interest payment date following the consummation of the Exchange 
Offer will receive interest accruing from the most recent date to which 
interest has been paid or, if no interest has been paid, from September 30, 
1997. Old Notes accepted for exchange will cease to accrue interest from and 
after the date of consummation of the Exchange Offer. Holders of Old Notes 
whose Old Notes are accepted for exchange will not receive any payment in 
respect of accrued interest on such Old Notes. 
                                                 (Continued on following page) 


   SEE "RISK FACTORS," BEGINNING ON PAGE 13 OF THIS PROSPECTUS FOR A 
DISCUSSION OF CERTAIN RISKS TO BE CONSIDERED BY HOLDERS WHO TENDER THEIR OLD 
NOTES IN CONNECTION WITH THIS EXCHANGE OFFER. 

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND 
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES 
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE 
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY 
IS A CRIMINAL OFFENSE. 


                  The date of this Prospectus is March 2, 1998




(Continued from previous page) 


   The New Notes are being offered hereunder in order to satisfy certain 
obligations of Huntsman Packaging contained in the Registration Rights 
Agreement, dated as of September 19, 1997 (the "Registration Rights 
Agreement"), among Huntsman Packaging and the other signatories thereto. 
Under existing interpretations by the staff of the Securities and Exchange 
Commission (the "Commission") contained in several no-action letters issued 
to third parties, Huntsman Packaging believes that the New Notes issued 
pursuant to the Exchange Offer in exchange for the Old Notes may be freely 
transferable by holders thereof (other than any such holder which is an 
"affiliate" of Huntsman Packaging within the meaning of Rule 405 under the 
Securities Act) without further registration under the Securities Act; 
provided, however, that each Holder that wishes to exchange its Old Notes for 
New Notes will be required to represent (i) that any New Notes to be received 
by it will be acquired in the ordinary course of its business, (ii) that at 
the time of the commencement of the Exchange Offer it has no arrangement or 
understanding with any person to participate in the distribution (within the 
meaning of the Securities Act) of the New Notes in violation of the 
Securities Act, (iii) that it is not an "affiliate" (as defined in Rule 405 
promulgated under the Securities Act) of Huntsman Packaging, (iv) if such
Holder is not a broker-dealer, that it is not engaged in, and does not intend to
engage in, the distribution of New Notes and (v) if such Holder is a 
broker-dealer (a "Participating Broker-Dealer") that will receive New 
Notes for its own account in exchange for Old Notes that were acquired 
as a result of market-making or other trading activities, that it will 
deliver a prospectus in connection with any resale of such New Notes and 
that it acquired such Old Notes as a result of market-making activities 
or other trading activities. However, Huntsman Packaging does not 
intend to request the Commission to consider, and the Commission 
has not considered, the Exchange Offer in the context of a no-action 
letter and there can be no assurance that the staff of the Commission 
would make a similar determination with respect to the Exchange 
Offer as in such other circumstances. Huntsman Packaging will agree to make 
available, during the period required by the Securities Act, a prospectus 
meeting the requirements of the Securities Act for use by Participating 
Broker-Dealers and other persons, if any, with similar prospectus delivery 
requirements for use in connection with any resale of New Notes. If any 
Holder is an affiliate of Huntsman Packaging or is engaged in or intends to 
engage in or has any arrangement with any person to participate in the 
distribution of the New Notes to be acquired pursuant to the Exchange Offer, 
such Holder (i) could not rely on the applicable interpretations of the staff 
of the Commission and (ii) must comply with the registration and prospectus 
delivery requirements of the Securities Act in connection with any resale 
transaction, including the delivery of a prospectus which contains the 
information with respect to any selling holder required by the Securities 
Act. Each broker-dealer that receives New Notes for its own account pursuant 
to the Exchange Offer must represent to Huntsman Packaging that it will 
deliver a prospectus in connection with any resale of such New Notes. The 
Letter of Transmittal states that by so representing and by delivering a 
prospectus, a broker-dealer will not be deemed to admit that it is an 
"underwriter" within the meaning of the Securities Act. This Prospectus, as 
it may be amended or supplemented from time to time, may be used by a 
broker-dealer in connection with resales of New Notes received in exchange 
for Old Notes where such Old Notes were acquired by such broker-dealer as a 
result of market-making activities or other trading activities. Huntsman 
Packaging has agreed that, starting on the Expiration Date (as defined 
herein) and ending on the close of business on the 90th day following the 
Expiration Date, it will make this Prospectus available to any broker-dealer 
for use in connection with any such resale. See "Plan of Distribution." 

   Huntsman Packaging will not receive any proceeds from this Exchange Offer. 
Huntsman Packaging has agreed to bear the expenses of this Exchange Offer. 
Tenders of Old Notes pursuant to the Exchange Offer may be withdrawn at any 
time prior to the Expiration Date. This Exchange Offer will remain open for 
thirty (30) days from the date of this Prospectus (unless otherwise extended 
by Huntsman Packaging). The Registration Statement of which this Prospectus 
constitutes a part will remain in effect until the consummation of the 
Exchange Offer which will occur promptly after the Expiration Date. In the 
event Huntsman Packaging terminates the Exchange Offer and does not accept 
for exchange any Old Notes, Huntsman Packaging will promptly return the Old 
Notes to the Holders thereof. See "The Exchange Offer." 


   Prior to the Exchange Offer there has been no established trading market 
for the Old Notes or the New Notes. Although BT Alex. Brown Incorporated and 
Chase Securities Inc. (the "Initial Purchasers") have advised Huntsman 
Packaging that they currently intend to make a market in the New Notes, they 
are not obligated to do so and may discontinue such market-making at any time 
without notice. Accordingly, no assurance can be given as to the future 
development of an active market for the New Notes, or the ability of the 
Holders of New Notes to sell their New Notes or the price that such Holders 
may obtain for their New Notes upon any sale. Huntsman Packaging does not 
intend to apply for listing of the New Notes on any securities exchange or 
for quotation through any automated quotation system. To the extent that a 
market for the New Notes does develop, the New Notes could trade at a 
discount from their principal amount. See "Risk Factors -- Lack of 
Established Market for the Notes." 


                              CAUTIONARY STATEMENTS 

   Certain statements in this Prospectus under the captions "Prospectus 
Summary," "Risk Factors," "Unaudited Pro Forma Financial Data," "Management's 
Discussion and Analysis of Financial Condition and Results of Operations" and 
"Business" and elsewhere constitute "forward-looking statements." When used 
in this Prospectus, the words "anticipate," "believe," "estimate," "expect" 
and similar expressions are generally intended to identify forward-looking 
statements. Such forward-looking statements involve known and unknown risks, 
uncertainties and other important factors that could cause the actual 
results, performance or achievements of Huntsman Packaging, or industry 
results, to differ materially from any future results, performance or 
achievements expressed or implied by such forward-looking statements. Such 
risks, uncertainties and other important factors include, among others: 
general economic and business conditions; industry trends; competition; raw 
material costs and availability; the loss of any significant customer; 
changes in business strategy or development plans; availability, terms and 
deployment of capital; availability of qualified personnel; changes in, or 
the failure or inability to comply with, government regulation, including, 
without limitation, environmental regulations; and other factors referenced 
in this Prospectus. See "Risk Factors." 


                           MARKET AND INDUSTRY DATA 

   MARKET DATA USED THROUGHOUT THIS PROSPECTUS WERE OBTAINED FROM INTERNAL 
COMPANY SURVEYS AND INDUSTRY SURVEYS AND PUBLICATIONS. THE SOURCES FOR THIS 
DATA INCLUDE, WITHOUT LIMITATION, MASTIO & COMPANY AND THE FLEXIBLE PACKAGING 
ASSOCIATION. INDUSTRY SURVEYS AND PUBLICATIONS GENERALLY STATE THAT THE 
INFORMATION CONTAINED THEREIN HAS BEEN OBTAINED FROM SOURCES BELIEVED TO BE 
RELIABLE, BUT THERE CAN BE NO ASSURANCE AS TO THE ACCURACY AND COMPLETENESS 
OF SUCH INFORMATION. THE COMPANY HAS NOT INDEPENDENTLY VERIFIED SUCH MARKET 
DATA. SIMILARLY, INTERNAL COMPANY SURVEYS, WHILE BELIEVED BY THE COMPANY TO 
BE RELIABLE, HAVE NOT BEEN VERIFIED BY ANY INDEPENDENT SOURCES. 

                            AVAILABLE INFORMATION 


   Huntsman Packaging has filed with the Commission a Registration Statement 
on Form S-4 (the "Registration Statement") under the Securities Act with 
respect to the New Notes offered hereby. As permitted by the rules and 
regulations of the Commission, this Prospectus omits certain information, 
exhibits and undertakings contained in the Registration Statement. For 
further information with respect to Huntsman Packaging and the New Notes 
offered hereby, reference is made to the Registration Statement, including 
the exhibits thereto and the financial statements, notes and schedules filed 
as a part thereof. Any statement contained in this Prospectus as to the 
contents of any contract or document filed as an exhibit to the Registration 
Statement is qualified in all respects by such reference. 


   Huntsman Packaging is not currently subject to the informational 
requirements of the Securities Exchange Act of 1934, as amended (the 
"Exchange Act"). However, upon the effectiveness of the Registration 
Statement, Huntsman Packaging will become subject to such requirements. The 
Registration Statement (and the exhibits and schedules thereto), as well as 
the periodic reports and other information filed by Huntsman Packaging with 
the Commission, may be inspected and copied at the Public Reference Section 
of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., 
Washington, D.C. 20549 and at the regional offices of the Commission located 
at 7 World Trade Center, 15th Floor, Suite 1300, New York, New York 10048 and 
Suite 1400, Northwestern Atrium Center, 500 West Madison Street, Chicago, 
Illinois 60661-2511. Copies of such materials may be obtained from the Public 
Reference Section of the Commission, Room 1024, Judiciary Plaza, 450 Fifth 
Street, N.W., Washington, D.C. 20549, and its public reference facilities in 
New York, New York and Chicago, Illinois at the prescribed rates. Such 
information may also be obtained electronically by accessing the Commission's 
web site on the Internet (http://www.sec.gov). In the event that at any time 
in the future after the effectiveness of the Registration Statement Huntsman 
Packaging is not required to be subject to the reporting requirements of the 
Exchange Act, Huntsman Packaging will be required under the Indenture, dated 
as of September 30, 1997 

                                       i

(the "Indenture"), by and among Huntsman Packaging, the Guarantors and The 
Bank of New York, as Trustee (the "Trustee"), pursuant to which the Old Notes 
have been, and the New Notes will be, issued, to continue to file with the 
Commission and to provide the Holders with such information, documents and 
other reports specified in Sections 13 and 15(d) of the Exchange Act which it 
would have been required to file had it been subject to such reporting 
requirements, including any audited financial statements as would be required 
by the Exchange Act and the rules promulgated thereunder, for so long as any 
Notes are outstanding. 

                                       ii

                              PROSPECTUS SUMMARY 


   The following summary is qualified in its entirety by, and should be read 
in conjunction with, the more detailed information and financial data, 
including the financial statements and notes thereto, appearing elsewhere in 
this Prospectus. Unless otherwise stated in this Prospectus, references to 
(a) "Huntsman Packaging" or the "Company" shall mean Huntsman Packaging 
Corporation and its consolidated subsidiaries, (b) "Huntsman Corporation" 
shall mean Huntsman Corporation and its consolidated subsidiaries and (c) the 
"CT Film Purchase" shall mean the purchase of the assets of the CT Film 
division (including the stock of Rexene Corporation Limited) ("CT Film") of 
Huntsman Polymers Corporation (formerly known as Rexene Corporation) 
("Huntsman Polymers") by Huntsman Packaging. Unless otherwise indicated in 
this Prospectus, each subsidiary of the Company is wholly-owned. Unless 
otherwise stated in this Prospectus, all market share and growth data are 
presented for North America and are based on 1995 and 1996 revenues. "G-Bond" 
and "Winwrap" are trademarks of the Company. All other trademarks, service 
marks or trade names referred to in this Prospectus are the property of their 
respective owners. 


                                 THE COMPANY 

GENERAL 



   Huntsman Packaging Corporation is one of the largest manufacturers of film 
and flexible packaging products in North America. The Company offers one of 
the most diverse product lines in the industry and has attained a leading 
market position in each of its major product lines. Management attributes its 
market leadership primarily to its advanced film extrusion equipment and 
technology, broad and innovative product lines, well-established customer 
relationships and low-cost production capabilities. The Company's product 
lines constitute two business segments, flexible packaging and foam products. 
The flexible packaging segment's product lines are comprised of the 
following: (i) converter films that are sold for additional fabrication and 
resale by other flexible packaging manufacturers for use in a wide range of 
consumer and industrial markets; (ii) barrier films that contain and protect 
food and other products; (iii) printed products that include printed 
rollstock, bags and sheets used to package products in the food and medical 
industries; (iv) stretch films that are used for industrial unitizing and 
containerization; and (v) PVC films that are used by supermarkets, 
institutions and homes to wrap meat, cheese and produce. The foam products 
segment includes meat trays, egg cartons and fast food containers. For the 
year ended December 31, 1997, approximately 91% of the Company's sales were 
derived from flexible packaging and approximately 9% were derived from foam 
products. Further information regarding the Company's operations in different 
business segments appears in Note 12 of the Notes to Huntsman Packaging's 
Consolidated Financial Statements contained herein. 


Flexible Packaging: 

   Converter Films. Converter films are polyethylene films that are sold to 
converters and laminators for final processing into consumer products such as 
bags, pouches and printed products. With the consummation of the CT Film 
Purchase, the Company currently holds North America's number one market 
position in the converter film segment, with a 23% market share. 


   Barrier Films. Barrier films are polyethylene films that are sold to food 
processors and other end users. These films provide specific types of barrier 
protection against moisture, oxygen, light and gases and are puncture 
resistant. The Company is the second largest producer of cookie, cracker and 
cereal box liners in North America, with a 19% market share. The CT Film 
Purchase allowed the Company to gain entry or increase access to other 
growing barrier film markets, including medical, personal care and 
agricultural films. 

   Printed Products. Printed products are manufactured and sold to fresh and 
frozen food processors, bakeries, textile manufacturers and other dry goods 
processors. The Company is North America's leading 

                                       1


supplier of film used in the frozen food segment, with a 31% market share. 
The Company is also the second largest producer in the bakery market, with a 
20% market share, supplying approximately one-fifth of the five billion bread 
bags manufactured in North America each year. Management also anticipates 
growth opportunities in the packaged salad and fresh produce market, which is 
expected to grow approximately 9% annually over the next several years. 


   Stretch Films. Stretch films are used primarily to bundle products and 
wrap pallets. Currently, approximately one-half of all loads shipped in North 
America are unitized with stretch film. Management expects additional growth 
in stretch films as they continue to replace less economical and less 
environmentally-acceptable packaging alternatives, such as steel strapping. 
The Company is North America's fourth largest producer of stretch films, with 
an 11% market share. 


   PVC Films. PVC films are used by supermarkets, institutions and homes to 
wrap meat, cheese and produce. Management believes the Company has North 
America's number two market position in PVC films. Management estimates that 
the Company also has the number one and three market shares in Australia and 
Western Europe with 60% and 16%, respectively. The Company expects PVC film 
export sales to increase in the growing Central and South American markets. 

Foam Products: 


   The Company's polystyrene foam products include meat trays, egg cartons 
and fast food containers, which it manufactures in the U.K. and France. 
Management estimates that the Company is the largest producer of egg cartons 
in France, with a 26% market share, and the third largest producer of 
polystyrene foam food packaging in Western Europe, with an 11% market share. 
The Company expects growth in foam products sales by penetrating emerging 
markets in Eastern Europe and the Middle East. 



   The Company has engaged J.P. Morgan to represent it in soliciting bids for 
a possible sale of its foam products business. A "first round" of bids has 
been received. Potential purchasers have conducted preliminary due diligence, 
and "second round" bids were received February 16, 1998. If the Company 
ultimately accepts one of the bids and determines to sell the foam products 
business, it is contemplated that such a transaction would be concluded in 
March or April of 1998. There can be no assurance that the Company will 
ultimately accept any of the bids or any offer for the sale of the foam 
products business, that the Company will ultimately be successful in 
negotiating any such sale, or that the foam products business will ultimately 
be sold. 


Customers: 

   The Company currently has over 2,000 customers, including General Mills, 
Kraft/General Foods, Campbell Soup, Albertson's, Safeway, American Stores, 
Tyson Foods, Interstate Bakeries (Wonder Bread), Becton-Dickinson, 
Kimberly-Clark, 3M and Johnson & Johnson. With the addition of CT Film, the 
Company has a manufacturing capacity of nearly 800 million pounds of 
polyethylene and PVC films. For the year ended December 31, 1997, the 
Company, on a pro forma basis after giving effect to the CT Film Purchase, 
would have had net sales of $614.6 million, a net loss of $5.6 million and 
EBITDA (as defined under "Prospectus Summary -- Summary Historical and Pro 
Forma Financial Data") of $35.7 million. 


HUNTSMAN PACKAGING 


   Huntsman Packaging was founded in 1992 for the purpose of acquiring 
Goodyear Tire & Rubber Company's Film Products Division. Since its formation, 
Huntsman Packaging has pursued its growth strategy by improving operating 
efficiency and by completing eight strategic acquisitions and receiving a 
capital contribution from Huntsman Corporation, each of which has 
complemented Huntsman Packaging's existing product lines and provided it with 
new products and access to new markets. For example, the October 1996 
acquisition (the "Deerfield Acquisition") of Deerfield Plastics Company, Inc. 
("Deerfield") established Huntsman Packaging as a leading converter film 
producer and nearly doubled 


                                       2

its share in the stretch film market. The July 1996 acquisition (the "United 
Films Acquisition") of United Films Corporation ("United Films") established 
Huntsman Packaging as a premier producer of cookie, cracker and cereal box 
liners. Huntsman Packaging has a successful track record of improving 
capacity utilization, reducing overhead costs and increasing profits of its 
acquired businesses. The Company's recent acquisitions have provided it with 
additional state-of-the-art equipment, which has allowed it to reduce capital 
expenditures and consolidate its manufacturing operations by closing older, 
less efficient operations. Management believes that additional cost savings 
can be achieved as it continues to integrate acquired companies. 


   Prior to September 30, 1997, Huntsman Packaging was a wholly-owned 
subsidiary of Huntsman Corporation. Contemporaneous with the offering of the 
Old Notes (the "Offering"), Huntsman Packaging was separated from Huntsman 
Corporation (the "Split-Off"). As a result of the Split-Off, Jon M. 
Huntsman owns approximately 65% of the total equity of Huntsman Packaging. 
Richard P. Durham and the Christena Karen H. Durham Trust collectively own
approximately 35% of the total equity of Huntsman Packaging. See "Ownwership
of Capital Stock." Mr. Durham is Mr. Huntsman's son-in-law and the President 
and Chief Executive Officer of Huntsman Packaging. Christena Durham is the 
daughter of Mr. Huntsman, the beneficiary of the Christena Karen H. Durham 
Trust and the wife of Mr. Durham. Jon M. Huntsman, Richard P. Durham and 
Christena H. Durham are currently the directors of the Company. 

   The Company intends to sell additional shares of its common stock and to 
issue incentive stock options to certain members of the Company's senior 
management. See "Ownership of Capital Stock." 


CT FILM PURCHASE 

   On August 27, 1997, an indirect subsidiary of Huntsman Corporation was 
merged into Rexene Corporation (the "Rexene Acquisition"). The surviving 
corporation was renamed Huntsman Polymers Corporation. On September 30, 1997, 
Huntsman Packaging acquired CT Film, including Rexene Corporation Limited, 
from Huntsman Polymers Corporation for $70 million in cash. 


   Management believes that the CT Film Purchase strengthened the Company's 
position as a market leader in the film and flexible packaging industry by 
enhancing its existing product lines and provided new growth opportunities. 
The CT Film Purchase provided the Company with new customers, including 
Becton-Dickinson, Kimberly-Clark and Johnson & Johnson, and provided access 
to the growing medical, personal care and agricultural film markets. In 
addition, CT Film increased the Company's share of the North American 
converter film market from 11% to a leading 23% share. 


   With the CT Film Purchase, management expects to generate significant cost 
savings, primarily from three sources: (i) approximately $4.0 million in 
annual savings from raw material cost reductions; (ii) approximately $6.6 
million in annual savings from the elimination of duplicative management and 
operating personnel; and (iii) approximately $5.7 million in annual savings 
through the consolidation of less efficient facilities and the related 
elimination of personnel and fixed costs. 


   Because the former CT Film assets were operating at approximately 67% of 
capacity prior to the acquisition of CT Film, management believes that CT 
Film's available capacity can be used to: (i) relocate manufacturing to 
facilities closer to customers, thereby reducing transportation costs and 
increasing logistical flexibility in product delivery; (ii) reduce production 
lead times; and (iii) reduce capital expenditures. 


                                       3

                                THE EXCHANGE OFFER 

The Exchange Offer ............  Huntsman Packaging is offering to exchange 
                                 up to $125,000,000 aggregate principal 
                                 amount of its 9 1/8% Senior Subordinated 
                                 Notes due 2007 (the "New Notes") for a like 
                                 principal amount of its 9 1/8% Senior 
                                 Subordinated Notes due 2007 (the "Old Notes" 
                                 and, collectively with the New Notes, the 
                                 "Notes") that are properly tendered and 
                                 accepted. The terms of the New Notes and the 
                                 Old Notes are identical in all material 
                                 respects, except for certain transfer 
                                 restrictions and registration rights 
                                 relating to the Old Notes described below 
                                 under "--Summary Description of the New 
                                 Notes and Guarantees." 



Tenders; Expiration Date; 
 Withdrawal ...................  The Exchange Offer will expire at 5:00 p.m., 
                                 New York City time, on April 1, 1998, or 
                                 such later date and time to which it is 
                                 extended (the "Expiration Date"). The tender 
                                 of Old Notes pursuant to the Exchange Offer 
                                 may be withdrawn at any time prior to the 
                                 Expiration Date. Any Old Note not accepted 
                                 for exchange for any reason will be returned 
                                 without expense to the tendering Holder 
                                 thereof as promptly as practicable after the 
                                 expiration or termination of the Exchange 
                                 Offer. See "The Exchange Offer -- Terms of 
                                 the Exchange Offer; Period for Tendering Old 
                                 Notes," and "--Withdrawal of Tenders." 



Procedure for Tendering Old 
 Notes ........................  Certain brokers, dealers, commercial banks, 
                                 trust companies and other nominees who hold 
                                 Old Notes through the Depository Trust 
                                 Company (the "Book-Entry Transfer Facility") 
                                 must effect tenders by book-entry through 
                                 the Book-Entry Transfer Facility's automated 
                                 tender offer program ("ATOP"). Tendering 
                                 Holders of Old Notes wishing to accept the 
                                 Exchange Offer must complete, sign and date 
                                 the Letter of Transmittal, or a facsimile 
                                 thereof, in accordance with the instructions 
                                 contained therein, and mail or otherwise 
                                 deliver such Letter of Transmittal, or such 
                                 facsimile together with either certificates 
                                 for such Old Notes or, if tendering through 
                                 ATOP, a Book-Entry Confirmation (as defined 
                                 herein) of such Old Notes into the 
                                 Book-Entry Transfer Facility, if such 
                                 procedure is available, and any other 
                                 required documentation to the exchange agent 
                                 (the "Exchange Agent") at the address set 
                                 forth herein. Tendering Holders of Old Notes 
                                 that use ATOP will, by so doing, represent 
                                 that they are bound by the terms of the 
                                 Letter of Transmittal. See "The Exchange 
                                 Offer -- Book-Entry Transfer." By executing 
                                 the Letter of Transmittal, each Holder will 
                                 represent to Huntsman Packaging, among other 
                                 things, that (i) the New Notes acquired 
                                 pursuant to the Exchange Offer by the Holder 
                                 and any other person are being obtained in 
                                 the ordinary course of business of the 
                                 person receiving such New Notes, (ii) 
                                 neither the Holder nor such other person is 
                                 participating in, intends to participate in 
                                 or has an arrangement or understanding with 
                                 any person to participate in the 
                                 distribution of such New Notes and (iii) 
                                 neither the Holder nor such other person is 

                                       4

                                 an "affiliate," as defined under Rule 405 of 
                                 the Securities Act, of Huntsman Packaging. 
                                 Each broker-dealer that receives New Notes 
                                 for its own account in exchange for Old 
                                 Notes, where such Old Notes were acquired by 
                                 such broker or dealer as a result of 
                                 market-making activities or other trading 
                                 activities, must represent that it will 
                                 deliver a prospectus in connection with any 
                                 resale of such New Notes. The Letter of 
                                 Transmittal states that by so representing 
                                 and by delivering a prospectus, a broker or 
                                 dealer will not be deemed to admit that it 
                                 is an "underwriter" within the meaning of 
                                 the Securities Act. See "The Exchange Offer 
                                 -- Procedures for Tendering Old Notes" and 
                                 "Plan of Distribution." 

Special Procedures for 
 Beneficial Owners ............  Any beneficial owner whose Old Notes are 
                                 registered in the name of a broker, dealer, 
                                 commercial bank, trust company or other 
                                 nominee and who wishes to tender should 
                                 contact such registered Holder promptly and 
                                 instruct such registered Holder to tender on 
                                 such beneficial owner's behalf. If such 
                                 beneficial owner wishes to tender on such 
                                 owner's behalf, such owner must, prior to 
                                 completing and executing the Letter of 
                                 Transmittal and delivering its Old Notes, 
                                 either make appropriate arrangements to 
                                 register ownership of the Old Notes in such 
                                 owner's name or obtain a properly completed 
                                 bond power from the registered Holder. The 
                                 transfer of registered ownership may take 
                                 considerable time. See "The Exchange Offer 
                                 -- Procedures for Tendering Old Notes." 

Guaranteed Delivery Procedures   Holders of Old Notes who wish to tender 
                                 their Old Notes and whose Old Notes are not 
                                 immediately available or who cannot deliver 
                                 their Old Notes or any other documents 
                                 required by the Letter of Transmittal to the 
                                 Exchange Agent must tender their Old Notes 
                                 according to the guaranteed delivery 
                                 procedures set forth in "The Exchange Offer 
                                 -- Guaranteed Delivery Procedures." 

Federal Income Tax Consequences  The exchange pursuant to the Exchange Offer 
                                 should not result in any income, gain or 
                                 loss to the Holders or Huntsman Packaging 
                                 for federal income tax purposes. See 
                                 "Certain United States Federal Income Tax 
                                 Considerations." 

Use of Proceeds ...............  Huntsman Packaging will not receive any 
                                 proceeds from this Exchange Offer. See "Use 
                                 of Proceeds." 

Exchange Agent ................  The Bank of New York is serving as the 
                                 exchange agent (the "Exchange Agent") in 
                                 connection with the Exchange Offer. 

                                       5

         CONSEQUENCES OF EXCHANGING OR FAILURE TO EXCHANGE OLD NOTES 


   Holders of Old Notes who do not exchange their Old Notes for New Notes 
pursuant to the Exchange Offer will continue to be subject to the provisions 
in the Indenture regarding transfer and exchange of the Old Notes and the 
restrictions on transfer of such Old Notes as set forth in the legend thereon 
as a consequence of the issuance of the Old Notes pursuant to exemptions 
from, or in transactions not subject to, the registration requirements of the 
Securities Act and applicable state securities laws. In general, the Old 
Notes may not be offered or sold, unless registered under the Securities Act, 
except pursuant to an exemption from, or in a transaction not subject to, the 
Securities Act and applicable state securities laws. Huntsman Packaging does 
not currently anticipate that it will register Old Notes under the Securities 
Act. See "Description of the Notes and Guarantees -- Registration Rights." 
Under existing interpretations by the staff of the Commission contained in 
several no-action letters issued to third parties, Huntsman Packaging 
believes that the New Notes issued pursuant to the Exchange Offer in exchange 
for the Old Notes may be freely transferable by holders thereof (other than 
any such holder which is an "affiliate" of Huntsman Packaging within the 
meaning of Rule 405 under the Securities Act) without further registration 
under the Securities Act; provided, however, that each Holder that wishes to 
exchange its Old Notes for New Notes will be required to represent (i) that 
any New Notes to be received by it will be acquired in the ordinary course of 
its business, (ii) that at the time of the commencement of the Exchange Offer 
it has no arrangement or understanding with any person to participate in the 
distribution (within the meaning of the Securities Act) of the New Notes in 
violation of the Securities Act, (iii) that it is not an "affiliate" (as 
defined in Rule 405 promulgated under the Securities Act) of Huntsman 
Packaging, (iv) that it is not engaged in, and does not intend to engage in, 
the distribution of New Notes and (v) if such Holder is a broker-dealer (a 
"Participating Broker-Dealer") that will receive New Notes for its own 
account in exchange for Old Notes that were acquired as a result of 
market-making or other trading activities, that it will deliver a prospectus 
in connection with any resale of such New Notes and that it acquired such Old 
Notes as a result of market-making activities or other trading activities. 
However, Huntsman Packaging does not intend to request the Commission to 
consider, and the Commission has not considered, the Exchange Offer in the 
context of a no-action letter and there can be no assurance that the staff of 
the Commission would make a similar determination with respect to the 
Exchange Offer as in such other circumstances. Huntsman Packaging will agree 
to make available, during the period required by the Securities Act, a 
prospectus meeting the requirements of the Securities Act for use by 
Participating Broker-Dealers and other persons, if any, with similar 
prospectus delivery requirements for use in connection with any resale of New 
Notes. If any Holder is an affiliate of Huntsman Packaging or is engaged in 
or intends to engage in or has any arrangement with any person to participate 
in the distribution of the New Notes to be acquired pursuant to the Exchange 
Offer, such Holder (i) could not rely on the applicable interpretations of 
the staff of the Commission and (ii) must comply with the registration and 
prospectus delivery requirements of the Securities Act in connection with any 
resale transaction, including the delivery of a prospectus which contains the 
information with respect to any selling holder required by the Securities 
Act. Each broker-dealer that receives New Notes for its own account pursuant 
to the Exchange Offer must represent to Huntsman Packaging that it will 
deliver a prospectus in connection with any resale of such New Notes. The 
Letter of Transmittal states that by so representing and by delivering a 
prospectus, a broker-dealer will not be deemed to admit that it is an 
"underwriter" within the meaning of the Securities Act. This Prospectus, as 
it may be amended or supplemented from time to time, may be used by a 
broker-dealer in connection with resales of New Notes received in exchange 
for Old Notes where such Old Notes were acquired by such broker-dealer as a 
result of market-making activities or other trading activities. Huntsman 
Packaging has agreed that, starting on the Expiration Date and ending on the 
close of business on the 90th day following the Expiration Date, it will make 
this Prospectus available to any broker-dealer for use in connection with any 
such resale. See "Plan of Distribution." However, to comply with the 
securities laws of certain jurisdictions, if applicable, the New Notes may 
not be offered or sold unless they have been registered or qualified for sale 
in such jurisdictions or an exemption from registration or qualification is 
available and is complied with. Huntsman Packaging does not currently intend 
to register or qualify the sale of the New Notes in any such jurisdictions. 
See "The Exchange Offer -- Consequences of Exchanging or Failing to Exchange 
Old Notes." 


                                       6


               SUMMARY DESCRIPTION OF THE NOTES AND GUARANTEES 


   The terms of the New Notes and the Old Notes are identical in all material 
respects, except for certain transfer restrictions and registration rights 
relating to the Old Notes. Interest on each New Note will accrue (A) from the 
later of (i) the last interest payment date on which interest was paid on the 
Old Note surrendered in exchange therefor, or (ii) if the Old Note is 
surrendered for exchange on a date in a period which includes the record date 
for an interest payment date to occur on or after the date of such exchange 
and as to which interest will be paid, the date of such interest payment date 
or (B) if no interest has been paid on the Old Notes, from September 30, 
1997. Accordingly, registered Holders of New Notes on the relevant record 
date for the first interest payment date following the consummation of the 
Exchange Offer will receive interest accruing from the most recent date to 
which interest has been paid or, if no interest has been paid, from September 
30, 1997. Old Notes accepted for exchange will cease to accrue interest from 
and after the date of consummation of the Exchange Offer. Holders of Old 
Notes whose Old Notes are accepted for exchange will not receive any payment 
in respect of interest on such Old Notes otherwise payable on any interest 
payment date the record date for which occurs on or after consummation of the 
Exchange Offer. In the event of a registration default under the Registration 
Rights Agreement, Huntsman Packaging will pay additional interest 
("Additional Interest") to each Holder of Transfer Restricted Securities (as 
defined herein). See "Description of the Notes and Guarantees -- Additional 
Interest." 

Securities Offered ............  $125,000,000 aggregate principal amount of 9 
                                 1/8% Senior Subordinated Notes due 2007. 

Issuer ........................  Huntsman Packaging Corporation, a Utah 
                                 corporation. 

Maturity Date .................  October 1, 2007. 

Interest Payment Dates ........  Interest on the New Notes will be payable 
                                 semi-annually in arrears on each April 1 and 
                                 October 1, commencing April 1, 1998. 


Ranking .......................  The New Notes will be unsecured senior 
                                 subordinated obligations of Huntsman 
                                 Packaging and, as such, will be subordinated 
                                 in right of payment to all existing and 
                                 future Senior Debt (as defined) of Huntsman 
                                 Packaging and will be effectively 
                                 subordinated to all obligations of any 
                                 subsidiary of Huntsman Packaging that is not 
                                 a Guarantor. The New Notes will rank pari 
                                 passu in right of payment to all senior 
                                 subordinated Indebtedness of Huntsman 
                                 Packaging and will be senior in right of 
                                 payment to all existing and future 
                                 subordinated obligations of Huntsman 
                                 Packaging. As of December 31, 1997, Huntsman 
                                 Packaging had approximately $125.5 million 
                                 of Senior Debt outstanding, all of which 
                                 ranks senior to the Notes, and approximately 
                                 $250.5 million of total Indebtedness 
                                 outstanding (in each case, excluding unused 
                                 commitments and outstanding letters of 
                                 credit totalling $93.6 million under the 
                                 Credit Facilities), and Restricted 
                                 Subsidiaries that are not Guarantors would 
                                 have had no Indebtedness outstanding 
                                 (excluding intercompany loans and guarantees 
                                 of Huntsman Packaging Indebtedness). 


                                       7

Guarantees ....................  The New Notes will be fully and 
                                 unconditionally guaranteed on a senior 
                                 subordinated basis by each subsidiary, 
                                 including any future domestic subsidiary, of 
                                 Huntsman Packaging that guarantees the 
                                 Credit Facilities. The New Guarantees will 
                                 be guaranteed on a joint and several basis 
                                 by the Guarantors. The New Guarantees will 
                                 be unsecured senior subordinated obligations 
                                 of the Guarantors, and will be subordinated 
                                 in right of payment to all existing and 
                                 future Guarantor Senior Debt (as defined) 
                                 and will rank pari passu to any senior 
                                 subordinated Indebtedness of the Guarantors 
                                 and senior in right of payment to all 
                                 subordinated obligations of the Guarantors. 

Optional Redemption ...........  The New Notes will be redeemable, in whole 
                                 or in part, at the option of Huntsman 
                                 Packaging, on or after October 1, 2002. In 
                                 addition, at any time on or prior to October 
                                 1, 2000, Huntsman Packaging may, at its 
                                 option, redeem up to 35% of the aggregate 
                                 principal amount of the New Notes originally 
                                 issued with the net cash proceeds of one or 
                                 more Equity Offerings (as defined), at a 
                                 redemption price equal to 109 1/8% of the 
                                 principal amount thereof plus accrued 
                                 interest to the date of redemption; 
                                 provided, however, that, after giving effect 
                                 to any such redemption, at least 65% of the 
                                 aggregate principal amount of the New Notes 
                                 originally issued remain outstanding. 

Change of Control .............  Upon a Change of Control (as defined), each 
                                 Holder will have the right to require 
                                 Huntsman Packaging to repurchase such 
                                 Holder's Notes at a price equal to 101% of 
                                 the principal amount thereof plus accrued 
                                 interest to the date of repurchase. 

Certain Covenants .............  The Indenture contains certain covenants 
                                 that limit the ability of Huntsman Packaging 
                                 to, among other things, incur additional 
                                 indebtedness, pay dividends or make certain 
                                 other restricted payments, consummate 
                                 certain asset sales, enter into certain 
                                 transactions with affiliates, incur liens, 
                                 impose restrictions on the ability of a 
                                 subsidiary to pay dividends or make certain 
                                 payments to Huntsman Packaging and its 
                                 subsidiaries, merge or consolidate with any 
                                 other person or sell, assign, transfer, 
                                 lease, convey or otherwise dispose of all or 
                                 substantially all the assets of Huntsman 
                                 Packaging. In addition, under certain 
                                 circumstances, Huntsman Packaging will be 
                                 required to offer to purchase the Notes, in 
                                 whole or in part, at a purchase price equal 
                                 to 100% of the principal amount thereof plus 
                                 accrued interest to the date of repurchase 
                                 with the proceeds of certain Asset Sales (as 
                                 defined). 

For additional information regarding the Notes and Guarantees, see 
"Description of the Notes and Guarantees." 

                                       8

                    EXCHANGE OFFER AND REGISTRATION RIGHTS 

   Holders of New Notes other than as set forth below are not entitled to any 
registration rights with respect to the New Notes. Pursuant to the 
Registration Rights Agreement, Huntsman Packaging agreed, for the benefit of 
the Holders of Old Notes, to use its best efforts to file an Exchange Offer 
Registration Statement (as defined). The Registration Statement of which this 
Prospectus is a part constitutes the Exchange Offer Registration Statement. 
Under certain circumstances, certain Holders of Notes (including Holders who 
may not participate in the Exchange Offer or who may not freely resell New 
Notes received in the Exchange Offer) may require Huntsman Packaging to use 
its best efforts to file, and cause to become effective, a shelf registration 
statement under the Securities Act, which would cover resales of Notes by 
such Holders. See "Description of the Notes and Guarantees --Registration 
Rights." 

                                 USE OF PROCEEDS 

   Huntsman Packaging will not receive any proceeds from this Exchange Offer. 
The net proceeds to Huntsman Packaging from the Offering, after deducting 
discounts and expenses, were approximately $121 million. Huntsman Packaging 
used the net proceeds of the Offering, together with borrowings under the 
Credit Facilities, to finance repayment of all outstanding long-term 
indebtedness to Huntsman Corporation (a portion of which was incurred to 
finance the Deerfield Acquisition, the United Films Acquisition and capital 
expenditures), fund the CT Film Purchase and provide funds for ongoing 
working capital and general corporate purposes. See "Use of Proceeds" and 
"Management's Discussion and Analysis of Financial Condition and Results of 
Operations -- Liquidity and Capital Resources." 

                                 RISK FACTORS 


   Holders of Old Notes should consider carefully the information set forth 
in this Prospectus and, in particular, should evaluate the specific factors 
set forth under "Risk Factors" relating to the consequences of exchanging or 
failing to exchange Old Notes, the Company's substantial leverage, its 
ability to service indebtedness, the subordination of the Notes and 
Guarantees, the unsecured status of the Notes and Guarantees, the 
Restrictions under the Company's credit facilities, the Company's exposure to 
fluctuations in resin prices and dependence on resin supplies, competition to 
the Company, customer relationships, the integration of the CT Film Purchase, 
fraudulent transfer considerations, the lack of an established market for the 
Notes, and the Exchange Offer procedures before making a decision to tender 
their Old Notes in connection with this Exchange Offer. See "Risk Factors." 


   Huntsman Packaging's executive offices are located at 500 Huntsman Way, 
Salt Lake City, Utah 84108. Huntsman Packaging's telephone number is (801) 
532-5200. 

                                       9

               SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA 


   The summary financial data set forth below present the historical 
financial data of Huntsman Packaging. The summary financial data as of 
December 31, 1994, 1995, 1996 and 1997 and for the years then ended have been 
derived from the audited financial statements of Huntsman Packaging. The 
summary financial data as of December 31, 1993 and for the year then ended 
has been derived from the unaudited financial statements of Huntsman 
Packaging. 

   The summary pro forma financial data of Huntsman Packaging set forth below 
give effect to: (i) the Offering; (ii) the Split-Off; (iii) the CT Film 
Purchase; (iv) the execution of the Credit Facilities (items (i)-(iv) are 
collectively referred to as the "Pro Forma Transactions"). The unaudited pro 
forma condensed statement of operations and other financial data for the year 
ended December 31, 1997 give effect to the Pro Forma Transactions as if they 
had occurred on January 1, 1997. The summary pro forma financial data do not 
purport to be indicative of the financial position or results of operations 
of future periods or indicative of results that would have occurred had the 
transactions referred to above been consummated on the dates indicated. The 
summary pro forma financial data should be read in conjunction with 
"Unaudited Pro Forma Financial Data," "Management's Discussion and Analysis 
of Financial Condition and Results of Operations," Huntsman Packaging's 
Consolidated Financial Statements and the Notes thereto and the Combined 
Financial Statements of CT Film and Rexene Corporation Limited and the Notes 
thereto contained herein. Since 1992, Huntsman Packaging has completed eight 
acquisitions, including acquisitions in 1996 of Deerfield and United Films 
and in 1997 of CT Film. In addition, in 1996, Huntsman Packaging received a 
capital contribution from Huntsman Corporation of the capital stock of 
Huntsman Container Corporation International, which indirectly owns certain 
foam packaging operations in Europe (such operations hereinafter referred to 
as "European Foam"). During the past several years, Huntsman Packaging's net 
sales have increased significantly from year to year primarily as a result of 
the aforementioned acquisitions and capital contribution. 


                                       10





                                                                                    HUNTSMAN PACKAGING PRO FORMA 
                                        HUNTSMAN PACKAGING HISTORICAL (1)                       (2) 
                                ------------------------------------------------- ------------------------------ 
                                                                                             YEAR ENDED 
                                             YEAR ENDED DECEMBER 31,                     DECEMBER 31, 1997 
                                ------------------------------------------------- ------------------------------ 
                                  1993      1994     1995       1996       1997 
                                -------- --------  -------- ----------  --------- 
                                              (DOLLARS IN MILLIONS)                    (DOLLARS IN MILLIONS) 
                                                                
STATEMENT OF OPERATIONS: 
Net sales .....................  $236.3    $294.7   $325.0     $339.1     $491.1               $614.6 
Costs of goods sold ...........   195.2     242.4    273.5      288.9      424.8                539.5 
                                -------- --------  -------- ----------  --------- ------------------------------ 
 Gross profit .................    41.1      52.3     51.5       50.2       66.3                 75.1 
Total operating expenses  .....    31.1      37.1     36.5       42.2       49.2                 59.2 
                                -------- --------  -------- ----------  --------- ------------------------------ 
 Income from operations  ......    10.0      15.2     15.0        8.0       17.1                 15.9 
Interest expense--net .........    (6.5)     (7.5)    (8.7)     (11.6)     (16.4)               (22.6) 
Other income (expense) ........     0.5      (0.3)    (2.3)      (3.8)       0.5                  0.5 
                                -------- --------  -------- ----------  --------- ------------------------------ 
Income (loss) before income 
 taxes and extraordinary item .     4.0       7.4      4.0       (7.4)       1.2                 (6.2) 
Provision for (benefit from) 
 income taxes .................     1.4       3.0      1.7       (4.2)       0.8                 (0.6) 
                                -------- --------  -------- ----------  --------- ------------------------------ 
Income (loss) before 
 extraordinary item ...........     2.6       4.4      2.3       (3.2)       0.4                 (5.6) 
                                                                                  ------------------------------ 
Extraordinary item.............      --        --       --       (1.3)(3)     --                   -- 
                                -------- --------  -------- ----------  --------- ------------------------------ 
 Net income (loss).............  $  2.6    $  4.4   $  2.3     $ (4.5)    $  0.4               $ (5.6) 
                                ======== ========  ======== ==========  ========= ============================== 
OTHER FINANCIAL DATA: 
Depreciation and amortization    $  9.0    $  9.5   $ 11.6     $ 14.0     $ 16.4               $ 19.3 
EBITDA (4) ....................    19.5      24.4     24.3       18.2 (5)   34.0 (6)             35.7 (6)(7) 
Cash flows from operating 
 activities....................    18.9       1.0     12.8       20.1       28.6                 27.3 
Cash flows from investing 
 activities....................   (42.8)     (8.2)   (20.5)     (88.9)     (87.2)               (89.6) 
Cash flows from financing 
 activities....................     4.5       9.9      6.7       68.6       63.2                 67.3 
Net cash interest expense .....     6.0       7.0      8.3       11.6       16.2                 22.4 
Capital expenditures ..........     7.2       8.4     19.5       12.8       17.9                 20.4 
Ratio of earnings to fixed 
 charges (8) ..................     1.6x      1.9x     1.4x       0.4x       1.1x                 0.7x 
BALANCE SHEET DATA (AT PERIOD END): 
Working capital................  $ 34.1    $ 46.8   $ 54.8     $ 74.6     $ 94.1 
Total assets ..................   181.3     196.1    231.7      329.1      409.6 
Long-term debt ................    78.1      88.7    103.0      187.2      250.5 
Total liabilities .............   123.6     136.1    160.7      262.1      346.6 
Stockholders' equity...........    57.7      60.0     71.0       67.0       63.0 



- ------------ 
(1)     Since 1992, Huntsman Packaging has completed eight acquisitions, 
        including acquisitions in 1996 of Deerfield and United Films and in 
        1997 of CT Film, and in 1996 received a capital contribution from 
        Huntsman Corporation of European Foam. During the past several years, 
        Huntsman Packaging's net sales have increased significantly from year 
        to year primarily as a result of the aforementioned acquisitions and 
        capital contribution. For additional discussion of such acquisitions 
        and capital contribution by the Company, see "Management's Discussion 
        and Analysis of Financial Condition and Results of Operations" and 
        Huntsman Packaging's Consolidated Financial Statements and the Notes 
        thereto contained herein. 
(2)     The summary pro forma financial data should be read in conjunction 
        with "Unaudited Pro Forma Financial Data," "Management's Discussion 
        and Analysis of Financial Condition and Results of Operations," 
        Huntsman Packaging's Consolidated Financial Statements and the Notes 
        thereto and the Combined Financial Statements of CT Film and Rexene 
        Corporation Limited and the Notes thereto contained herein. 
(3)     In 1996, the Company refinanced most of its long-term debt and 
        recorded an extraordinary item for the write-off of previously 
        deferred loan costs. See Note 5 of the Notes to Huntsman Packaging's 
        Consolidated Financial Statements contained herein for further 
        information. 
(4)     EBITDA is defined as net income before interest expense, taxes, 
        depreciation and amortization and extraordinary items. Huntsman 
        Packaging's management believes EBITDA information enhances an 
        investor's understanding of a company's ability to satisfy principal 
        and interest obligations with respect to its indebtedness and to 
        utilize cash for other purposes. However, there may be contractual, 
        legal, economic or other reasons which may prevent the Company from 
        satisfying its principal and interest obligations with respect to its 
        indebtedness and may require the Company to allocate funds for other 
        purposes. EBITDA does not represent and should not be considered as 
        an alternative to net income or cash flows from operations as 
        determined by generally accepted accounting principles ("GAAP") and 
        may not be comparable to other similarly titled measures of other 
        companies. 

                                       11


(5)     Includes aggregate nonrecurring charges of $12.1 million resulting 
        from the closing of certain facilities in the year ended December 31, 
        1996. Had these facilities been closed on January 1, 1996, the 
        Company estimates overhead savings of $2.9 million would have been 
        realized in the year ended December 31, 1996. 
(6)     Includes aggregate nonrecurring charges of $9.3 million resulting 
        from the closing of a certain facility in the year ended December 31, 
        1997. Had this facility been closed January 1, 1997, the Company 
        estimates overhead savings of $3.0 million would have been realized 
        in the year ended December 31, 1997. 
(7)     The pro forma income statement for the year ended December 31, 1997 
        does not include certain cost savings the Company expects to achieve 
        due to the combination of Huntsman Packaging and CT Film. Management 
        believes these savings will be fully realized by the end of 1998. Had 
        these cost savings been in place January 1, 1997, management believes 
        the following portion of estimated annual cost savings of $16.3 
        million would have been achieved during 1997: 



                                                                                
Net reduction in raw material costs under the Company's existing contractual 
 arrangements compared to CT Film's historical raw material costs.................  $ 3.0 
Plant headcount reductions........................................................    0.9 
Administrative headcount reductions...............................................    4.1 
Cost savings from the elimination of corporate allocations from Rexene 
 Corporation recorded by CT Film which will not recur.............................    1.8 
Savings from United States plant closure .........................................    4.1 
Savings from United Kingdom plant closure.........................................    1.6 
                                                                                   ------ 
Total estimated recurring net cost savings........................................  $15.5 
                                                                                   ====== 


(8)     For purposes of this computation, earnings are defined as income 
        before income taxes plus fixed charges. Fixed charges consist of 
        interest (including amortization of deferred financing costs) and 
        that portion of rental expense that is representative of interest 
        (deemed to be one-third of operating lease rental expense). For the 
        year ended December 31, 1996, earnings were insufficient to cover 
        fixed charges by $7.4 million, due primarily to a $10.9 million plant 
        closing charge. For the year ended December 31, 1997, on a pro forma 
        basis, earnings were insufficient to cover fixed charges by $6.2 
        million, due primarily to additional interest expense. 

                                       12

                                 RISK FACTORS 

   Holders of Old Notes should consider carefully the following risk factors 
as well as the other information contained in this Prospectus before making a 
decision to tender their Old Notes in this Exchange Offer, although the risk 
factors set forth below (other than "--Consequences of Exchanging or Failing 
to Exchange Old Notes") are generally applicable to the Old Notes as well as 
the New Notes. 

CONSEQUENCES OF EXCHANGING OR FAILING TO EXCHANGE OLD NOTES 

 Transfer Restrictions of Old Notes 

   Holders of Old Notes who do not exchange their Old Notes for New Notes 
pursuant to the Exchange Offer will continue to be subject to the 
restrictions on transfer of such Old Notes as set forth in the legend thereon 
as a consequence of the issuance of the Old Notes pursuant to exemptions 
from, or in transactions not subject to, the registration requirements of the 
Securities Act and applicable state securities laws. In general, the Old 
Notes may not be offered or sold, unless registered under the Securities Act, 
except pursuant to an exemption from, or in a transaction not subject to, the 
Securities Act and applicable state securities laws. Huntsman Packaging does 
not currently anticipate that it will register Old Notes under the Securities 
Act. See "Description of the Notes and Guarantees -- Registration Rights." 

 Representations for Exchange of Old Notes 


   Under existing interpretations by the staff of the Commission contained in 
several no-action letters issued to third parties, Huntsman Packaging 
believes that the New Notes issued pursuant to the Exchange Offer in exchange 
for the Old Notes may be freely transferable by holders thereof (other than 
any such holder which is an "affiliate" of Huntsman Packaging within the 
meaning of Rule 405 under the Securities Act) without further registration 
under the Securities Act; provided, however, that each Holder that wishes to 
exchange its Old Notes for New Notes will be required to represent (i) that 
any New Notes to be received by it will be acquired in the ordinary course of 
its business, (ii) that at the time of the commencement of the Exchange Offer 
it has no arrangement or understanding with any person to participate in the 
distribution (within the meaning of the Securities Act) of the New Notes in 
violation of the Securities Act, (iii) that it is not an "affiliate" (as 
defined in Rule 405 promulgated under the Securities Act) of Huntsman 
Packaging, (iv) if such Holder is not a broker-dealer, that it is not engaged 
in, and does not intend to engage in, the distribution of New Notes and (v) if 
such Holder is a broker-dealer (a "Participating Broker-Dealer") that will 
receive New Notes for its own account in exchange for Old Notes that were 
acquired as a result of market-making or other trading activities, that it 
will deliver a prospectus in connection with any resale of such New Notes 
and that it acquired such Old Notes as a result of market-making activities 
or other trading activities . However, Huntsman Packaging does not intend to 
request the Commission to consider, and the Commission has not considered, 
the Exchange Offer in the context of a no-action letter and there can be no 
assurance that the staff of the Commission would make a similar determination 
with respect to the Exchange Offer as in such other circumstances. 


 Requirements for Brokers-Dealers 

   Huntsman Packaging will agree to make available, during the period 
required by the Securities Act, a prospectus meeting the requirements of the 
Securities Act for use by Participating Broker-Dealers and other persons, if 
any, with similar prospectus delivery requirements for use in connection with 
any resale of New Notes. If any Holder is an affiliate of Huntsman Packaging 
or is engaged in or intends to engage in or has any arrangement with any 
person to participate in the distribution of the New Notes to be acquired 
pursuant to the Exchange Offer, such Holder (i) could not rely on the 
applicable interpretations of the staff of the Commission and (ii) must 
comply with the registration and prospectus delivery requirements of the 
Securities Act in connection with any resale transaction, including the 
delivery of a prospectus which contains the information with respect to any 
selling holder required by the Securities Act. Each broker-dealer that 
receives New Notes for its own account pursuant to the Exchange Offer must 
represent to Huntsman Packaging that it will deliver a prospectus in 
connection with any resale of such New Notes. The Letter of Transmittal 
states that by so representing and by delivering a prospectus, 

                                       13

a broker-dealer will not be deemed to admit that it is an "underwriter" 
within the meaning of the Securities Act. This Prospectus, as it may be 
amended or supplemented from time to time, may be used by a broker-dealer in 
connection with resales of New Notes received in exchange for Old Notes where 
such Old Notes were acquired by such broker-dealer as a result of 
market-making activities or other trading activities. Huntsman Packaging has 
agreed that, starting on the Expiration Date (as defined herein) and ending 
on the close of business on the 90th day following the Expiration Date, it 
will make this Prospectus available to any broker-dealer for use in 
connection with any such resale. See "Plan of Distribution." 

 State Securities Laws 

   To comply with the securities laws of certain jurisdictions, if 
applicable, the New Notes may not be offered or sold unless they have been 
registered or qualified for sale in such jurisdictions or an exemption from 
registration or qualification is available and is complied with. Huntsman 
Packaging does not currently intend to register or qualify the sale of the 
New Notes in any such jurisdiction. See "The Exchange Offer -- Consequences 
of Exchanging or Failing to Exchange Old Notes." 

SUBSTANTIAL LEVERAGE 


   As of December 31, 1997, Huntsman Packaging had outstanding long-term debt 
of approximately $250.2 million or approximately 80% of its total 
capitalization, stockholders' equity of $63.0 million and $93.6 million in 
letters of credit and unused commitments. For the year ended December 31, 
1997, on a pro forma basis after giving effect to the Pro Forma Transactions, 
the ratio of earnings to fixed charges would have been 0.7x. On a pro forma 
basis, earnings would have been insufficient to cover fixed charges by $6.2 
million. See "Capitalization," "Unaudited Pro Forma Financial Data" and 
"Selected Historical Financial Data." 


   Huntsman Packaging's high degree of leverage could have important 
consequences to Holders, including, but not limited to, the following: (i) 
Huntsman Packaging's ability to obtain additional financing in the future for 
working capital, capital expenditures, product development, debt service 
requirements, acquisitions, general corporate or other purposes may be 
materially limited or impaired; (ii) a substantial portion of Huntsman 
Packaging's cash flow from operations must be dedicated to the payment of 
principal and interest on its indebtedness, thereby reducing the funds 
available to Huntsman Packaging for other purposes, including its operations 
and future business opportunities; (iii) certain of Huntsman Packaging's 
borrowings, including borrowings under the Credit Facilities, are at variable 
rates of interest, exposing Huntsman Packaging to the risk of increased 
interest rates; (iv) the indebtedness outstanding under the Credit Facilities 
is secured by a lien on substantially all the assets of Huntsman Packaging 
and its domestic subsidiaries and will mature prior to the maturity of the 
Notes; (v) Huntsman Packaging's flexibility to adjust to changing market 
conditions and ability to withstand competitive pressures could be limited by 
its leveraged position and the covenants contained in its debt instruments, 
thus putting Huntsman Packaging at a competitive disadvantage; and (vi) 
Huntsman Packaging may be vulnerable in a downturn in general economic 
conditions or in its business or be unable to carry out capital spending that 
is important to its growth and productivity improvement programs. 

ABILITY TO SERVICE INDEBTEDNESS 


 Cash Flow Limitations, Including Repatriation Risks 


   Huntsman Packaging is required to make scheduled principal payments under 
the Credit Facilities commencing in 2001. Huntsman Packaging's ability to 
make scheduled payments or to refinance its obligations with respect to its 
indebtedness, including the Notes, will depend on its financial and operating 
performance, which is subject to prevailing economic and competitive 
conditions and to certain financial, business and other factors beyond its 
control, including interest rates, unscheduled plant shutdowns, increased 
operating costs, raw material and product prices, regulatory developments and 
the ability of the Company to repatriate cash generated outside of the United 
States without incurring a substantial tax liability. See "Management's 
Discussion and Analysis of Financial Condition and Results of Operations 

                                       14

- --Liquidity." There can be no assurance that Huntsman Packaging will maintain 
a level of cash flow from operations sufficient to permit it to pay the 
principal, premium, if any, and interest on its indebtedness, including the 
Notes. 

   If Huntsman Packaging's cash flow and capital resources are insufficient 
to fund its debt service obligations, Huntsman Packaging may be forced to 
reduce or delay capital expenditures, sell assets, seek additional capital or 
restructure or refinance its indebtedness, including the Notes. There can be 
no assurance that any such alternative measures would be successful or would 
permit Huntsman Packaging to meet its scheduled debt service obligations. In 
the absence of such operating results and resources, Huntsman Packaging could 
face substantial liquidity problems and might be required to dispose of 
material assets or operations to meet its debt service and other obligations. 
The agreement governing the Credit Facilities (the "Credit Agreement") and 
the Indenture (as defined) will restrict Huntsman Packaging's ability to sell 
assets and use the proceeds therefrom. See "Description of the Notes and 
Guarantees." There can be no assurance as to the ability of Huntsman 
Packaging to consummate such sales or to obtain the proceeds which Huntsman 
Packaging could realize therefrom or that such proceeds would be adequate to 
meet the obligations then due. 

 Default Under Agreements Governing Indebtedness 

   In the event that Huntsman Packaging is unable to generate sufficient cash 
flow and Huntsman Packaging is otherwise unable to obtain funds necessary to 
meet required payments of principal, premium, if any, and interest on its 
indebtedness, or if Huntsman Packaging otherwise fails to comply with the 
various covenants in the instruments governing such indebtedness (including 
covenants in the Indenture and the Credit Agreement), Huntsman Packaging 
could be in default under the terms of the agreements governing such 
indebtedness, including the Credit Agreement and the Indenture. In the event 
of such default, the holders of such indebtedness could elect to declare all 
the funds borrowed thereunder to be due and payable together with accrued and 
unpaid interest, the lenders under the Credit Facilities could elect to 
terminate their commitments thereunder and Huntsman Packaging could be forced 
into bankruptcy or liquidation. Any default under the agreements governing 
the indebtedness of Huntsman Packaging could have a significant adverse 
effect on Huntsman Packaging's ability to pay principal, premium, if any, and 
interest on the Notes and on the market value of the Notes. See "Use of 
Proceeds" and "Description of the Notes and Guarantees." 

 Change of Control and Ability to Repurchase Notes 


   The Indenture provides that upon a Change in Control (as defined) of the 
Company, the Company will be required to offer to repurchase all of the 
outstanding Notes at 101% of the principal amount thereof plus accrued 
interest to the date of repurchase. This provision will not necessarily 
provide protection to Holders in the event of a highly leveraged transaction 
or certain other transactions involving the Company or its subsidiaries. In 
addition, the Company's ability to repurchase the Notes may be limited by the 
Company's then existing financial resources. There can be no assurance that 
in the event of a Change of Control, the Company will have, or will have 
access to, sufficient funds or will be contractually permitted under the 
terms of its outstanding indebtedness to purchase all Notes tendered by 
holders upon a Change of Control. See "Description of the Credit Facilities" 
and "Description of the Notes and Guarantees -- Change of Control." 


SUBORDINATION OF THE NOTES AND GUARANTEES; UNSECURED STATUS OF THE NOTES AND 
GUARANTEES 


   The payment of principal, premium, if any, and interest on, and any other 
amounts owing in respect of, the Notes is subordinated in right of payment to 
the prior payment in full of all existing and future Senior Debt (as defined 
in the Indenture) of Huntsman Packaging, including all amounts owing under 
the Credit Facilities. As of December 31, 1997, the aggregate principal 
amount of such Senior Debt of Huntsman Packaging was $125.5 million 
(excluding unused commitments and outstanding letters of credit totalling 
$93.6 million under the Credit Facilities). Therefore, in the event of a 
bankruptcy, liquidation, dissolution, reorganization or similar proceeding 
with respect to Huntsman Packaging, the assets of Huntsman Packaging will be 
available to pay obligations on the Notes only after all Senior Debt of 


                                       15

Huntsman Packaging has been paid in full, and there can be no assurance that 
there will be sufficient assets remaining to pay amounts due on all or any of 
the Notes. The Guarantees will be unsecured senior subordinated obligations 
of the Guarantors and will be subordinated in right of payment to all 
existing and future Guarantor Senior Debt (as defined in the Indenture), 
including all amounts owing under the Credit Facilities. In addition, the 
Notes are effectively subordinated to all obligations of any subsidiary of 
Huntsman Packaging that is not a Guarantor, including trade payables of such 
subsidiaries, whether or not such liabilities constitute Guarantor Senior 
Debt. 

   The Indenture permits Huntsman Packaging to incur certain secured 
indebtedness, including indebtedness under the Credit Facilities, which is 
secured by a lien on substantially all the assets of Huntsman Packaging and 
its domestic subsidiaries. The Notes are unsecured and therefore do not have 
the benefit of such collateral. Accordingly, if an event of default occurs 
under the Credit Agreement, the lenders under the Credit Facilities will have 
a prior right to the assets of Huntsman Packaging, and may foreclose upon 
such collateral. In either such event, such assets would first be used to 
repay in full amounts outstanding under the Credit Facilities, resulting in 
all or a portion of Huntsman Packaging's assets being unavailable to satisfy 
the claims of the Holders and other unsecured indebtedness. 

RESTRICTIONS UNDER CREDIT FACILITIES 

   Huntsman Packaging will be subject to certain restrictive covenants under 
the Credit Agreement, including financial and operating covenants. Failure to 
comply with any such covenants would permit the lenders under the Credit 
Agreement to cease making any further loans and to accelerate the maturity of 
the indebtedness under the Credit Facilities and institute foreclosure 
proceedings as to Huntsman Packaging's assets and could result in the 
acceleration of other indebtedness of Huntsman Packaging, including the 
Notes. Such actions would adversely affect Huntsman Packaging's ability to 
pay the principal, premium, if any, or interest on the Notes. 

EXPOSURE TO FLUCTUATIONS IN RESIN PRICES AND DEPENDENCE ON RESIN SUPPLIES 


   Huntsman Packaging uses large quantities of resin in manufacturing its 
products. For the year ended December 31, 1997, resin costs comprised 
approximately 80% of raw materials costs and approximately 43% of net sales. 
Significant increases in the price of resin could adversely affect Huntsman 
Packaging's operating margins. There can be no assurance that a significant 
increase in resin prices, would not have an adverse effect on Huntsman 
Packaging's business, results of operations and debt service capabilities. In 
addition, Huntsman Packaging has relied on certain key suppliers of resin for 
most of its resin supply, some of which resin has characteristics proprietary 
to the supplier. Although Huntsman Packaging believes that its key suppliers 
will continue to supply Huntsman Packaging with adequate amounts of resin on 
a timely basis and that alternatives are available for resin with proprietary 
characteristics, the loss of a key source of supply, the inability to obtain 
resin with desired proprietary characteristics or a delay in shipments could 
have an adverse effect on Huntsman Packaging's business. Huntsman Packaging 
also obtains resin on favorable terms under certain contracts with suppliers. 
Should any of Huntsman Packaging's resin suppliers fail to deliver resin or 
should any such contract be canceled, Huntsman Packaging would be forced to 
purchase resin in the open market and no assurances can be given that it 
would be able to make such purchases at prices that would allow it to remain 
competitive. See "Management's Discussion and Analysis of Financial Condition 
and Results of Operations" and "Business -- Raw Materials." 


COMPETITION 

   The markets in which Huntsman Packaging operates are highly competitive on 
the basis of price, service, quality and innovation in product structures. In 
addition to many smaller competitors, Huntsman Packaging faces strong 
competition from various large flexible packaging companies, including Bemis, 
American National Can, Printpack, Cryovac (a division of W.R. Grace), 
Tenneco, AEP and Exxon. Some of Huntsman Packaging competitors are 
substantially larger, more diversified and have greater financial, personnel 
and marketing resources than Huntsman Packaging and therefore may have 
certain competitive advantages vis-a-vis Huntsman Packaging. Although 
Huntsman Packaging has broad product lines 

                                       16

and is continually developing its product structures and graphics, from time 
to time customers may determine to use alternative product structures and 
graphics not offered by Huntsman Packaging, with a corresponding reduction in 
existing and potential revenues from these customers. See "Business." 

CUSTOMER RELATIONSHIPS 


   Huntsman Packaging is dependent upon a limited number of large customers 
with substantial purchasing power for a majority of its sales, many of which 
are reducing their number of suppliers. The top ten customers accounted for 
approximately 20% of Huntsman Packaging's total sales in 1996 and 1997. The 
loss of one or more major customers, or a material reduction in the sales to 
such customers would have a material adverse effect on Huntsman Packaging's 
results of operations and on its ability to services its Indebtedness. See 
"Management's Discussion and Analysis of Financial Condition and Results of 
Operations" and "Business." 


RISKS RELATING TO THE INTEGRATION OF THE CT FILM PURCHASE 


   With the consummation of the CT Film Purchase, the sales efforts of 
Huntsman Packaging and CT Film, the consolidation of less efficient 
facilities and the elimination of duplicative management and operating 
personnel must be completed successfully in order to capture the benefit of 
the expected efficiencies and cost reductions. This process will require 
substantial attention from Huntsman Packaging's management team. The 
diversion of management attention, as well as any other difficulties that may 
be encountered in the transition and integration process, could have a 
material adverse effect on Huntsman Packaging's financial condition, results 
of operations or cash flows. There can be no assurance that Huntsman 
Packaging will be able to integrate the operations of Huntsman Packaging and 
CT Film successfully. In addition, CT Film's sales volume and operating 
results for 1996 were adversely affected by technological changes in the 
disposable diaper market, resulting in a significant reduction in sales 
volume to CT Film's largest customer. Although the Company is currently 
developing various strategies to increase the sales and profits of CT Film, 
there can be no assurance as to its ability to achieve such results. 


FRAUDULENT TRANSFER CONSIDERATIONS 

   If, under relevant federal and state fraudulent transfer and conveyance 
statutes, in a bankruptcy, reorganization or liquidation case or similar 
proceeding or a lawsuit by or on behalf of unpaid creditors of Huntsman 
Packaging or a Guarantor, a court were to find that, at the time the Notes 
were issued by Huntsman Packaging, (a) Huntsman Packaging issued the Notes 
with the intent of hindering, delaying or defrauding current or future 
creditors or (b)(i) Huntsman Packaging or such Guarantor received less than 
reasonably equivalent value or fair consideration for issuing the Notes or a 
Guarantee, respectively, and (ii) after applying the proceeds, Huntsman 
Packaging or such Guarantor (A) was insolvent or was rendered insolvent by 
reason of such transactions, (B) was engaged, or about to engage, in a 
business or transaction for which its assets constituted unreasonably small 
capital to carry on its business, or (C) intended to incur, or believed or 
reasonably should have believed that it would incur, debts beyond its ability 
to pay as such debts matured or became due (as all of the foregoing terms are 
defined in or interpreted under the relevant fraudulent transfer or 
conveyance statutes), such court could avoid the obligations under the Notes 
or such Guarantee or further subordinate the Notes or such Guarantee to 
presently existing and future indebtedness of Huntsman Packaging or such 
Guarantor or take other action detrimental to the Holders, including, under 
certain circumstances, invalidating the Notes or such Guarantee. In that 
event, there can be no assurance that any repayment on the Notes would ever 
be received by Holders. The avoidance of such Notes could result in an event 
of default with respect to other debt of Huntsman Packaging and its 
subsidiaries, which could result in acceleration of such debt. 

   The measure of insolvency for purposes of the foregoing considerations 
will vary depending upon the law of the jurisdiction that is be applied. 
Generally, however, a company would be considered insolvent if, at the time 
it incurred indebtedness, either (i) it is unable to pay its debts as they 
become due in the usual course of its business, (ii) the sum of its debts, 
including contingent liabilities, was greater than all its assets at a fair 
valuation or (iii) the present fair saleable value of its assets is less than 
the amount required to pay the probable liability on its total existing debts 
and liabilities (including contingent 

                                       17

liabilities), as they become absolute and matured. There can be no assurance 
as to what standards a court would use to determine whether Huntsman 
Packaging or a Guarantor was solvent at the relevant time, or whether, 
whatever standard was used, the Notes or the Guarantees would be avoided on 
another of the grounds set forth above. 

   The Holders of the Notes will have the benefit of the full and 
unconditional Guarantees of the Guarantors. However, the Guarantees will be 
limited to the maximum amount which the Guarantors are permitted to guarantee 
under applicable law. As a result, a Guarantor's liability under its 
Guarantee could be reduced to zero, depending upon the amount of other 
obligations of the Guarantors. Notwithstanding such provision, such Guarantee 
may be subject to review by a court under relevant federal and state 
fraudulent conveyance and transfer statutes and, if a court makes certain 
findings, it could take certain actions detrimental to the Holders of the 
Notes. The Guarantees may also be released under certain circumstances. See 
"Description of the Notes and Guarantees -- Guarantees." 

LACK OF ESTABLISHED MARKET FOR THE NOTES 

   The New Notes are being offered to the Holders of the Old Notes. The Old 
Notes were issued on September 30, 1997 to a small number of institutional 
investors and are eligible for trading in the Private Offerings, Resales and 
Trading through Automated Linkages (PORTAL) Market, the National Association 
of Securities Dealers' screen-based, automated market for trading of 
securities eligible for resale under Rule 144A of the Securities Act. The New 
Notes will constitute a new issue of securities for which there is no 
established trading market, and there can be no assurance that an active 
trading market for the New Notes will develop in the PORTAL Market or 
elsewhere. Although the Initial Purchasers have advised the Company that they 
currently intend to make a market in the New Notes, they are not obligated to 
do so and may discontinue such market-making at any time without notice. 
Accordingly, no assurance can be given as to (i) the likelihood that an 
active market for the New Notes will develop, (ii) the liquidity of any such 
market, (iii) the ability of the Holders to sell their New Notes or (iv) the 
prices that Holders may obtain for their New Notes upon any sale. In 
addition, such market-making activity will be subject to the limits imposed 
by the Securities Act and Securities Exchange Act of 1934, as amended (the 
"Exchange Act"), and may be limited during the Exchange Offer. See 
"Description of the Notes and Guarantees" and "The Exchange Offer." The 
Company does not intend to apply for listing of the New Notes or Old Notes on 
any securities exchange or for quotation through the National Association of 
Securities Dealers Automated Quotation System. Historically, the market for 
non-investment grade debt has been subject to disruptions that have caused 
substantial volatility in the prices of securities similar to the Notes. 
There can be no assurance that the market for the Notes will not be subject 
to similar disruptions. Any such disruptions may have an adverse effect on 
the Holders. 

EXCHANGE OFFER PROCEDURES 

   Subject to the conditions set forth under "The Exchange Offer -- 
Conditions to the Exchange Offer," issuance of the New Notes in exchange for 
Old Notes pursuant to the Exchange Offer will be made only after a timely 
receipt by Huntsman Packaging of (i) a book-entry confirmation (as defined 
below) evidencing the tender of such Old Notes through ATOP or (ii) 
certificates representing such Old Notes, a properly completed and duly 
executed Letter of Transmittal, with any required signature guarantees, and 
all other required documents. See "The Exchange Offer -- Acceptance of Old 
Notes for Exchange; Delivery of New Notes and Guarantees" and "--Procedures 
for Tendering Old Notes." Therefore, Holders of the Old Notes desiring to 
tender such Old Notes in exchange for New Notes should allow sufficient time 
to ensure timely delivery. Huntsman Packaging is under no duty to give 
notification of defects or irregularities with respect to the tenders of Old 
Notes for exchange. 

                                       18

                               USE OF PROCEEDS 

   Huntsman Packaging will not receive any proceeds from the issuance of the 
New Notes offered pursuant to the Exchange Offer. In consideration for 
issuing the New Notes as contemplated in this Prospectus, Huntsman Packaging 
will receive in exchange Old Notes in like principal amount, the terms of 
which are identical in all material respects to the New Notes except for 
certain transfer restrictions and registration rights. The Old Notes 
surrendered in exchange for New Notes will be retired and cancelled and 
cannot be reissued. Accordingly, issuance of the New Notes will not result in 
any increase in the indebtedness of Huntsman Packaging. 

   The net proceeds to Huntsman Packaging from the Offering, after deducting 
discounts and expenses, were approximately $121 million. Huntsman Packaging 
used the net proceeds of the Offering, together with borrowings under the 
Credit Facilities, to finance the repayment of all outstanding long-term 
indebtedness owed to Huntsman Corporation (a portion of which was incurred to 
finance the Deerfield Acquisition, the United Films Acquisition and capital 
expenditures), fund the CT Film Purchase and provide funds for ongoing 
working capital and general corporate purposes. The indebtedness repaid bore 
interest at a variable rate of interest equal to LIBOR plus 2.00% and was 
payable on demand. 

                                       19

                              THE EXCHANGE OFFER 

TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD NOTES 


   The Old Notes were sold by Huntsman Packaging on September 30, 1997 (the 
"Closing Date") to BT Alex. Brown Incorporated and Chase Securities Inc., the 
Initial Purchasers, pursuant to a Purchase Agreement, dated September 19, 
1997, entered into by and among Huntsman Packaging, the Initial Purchasers 
and the Guarantors named therein (the "Purchase Agreement"). Upon the terms 
and subject to the conditions set forth in this Prospectus and in the 
accompanying Letter of Transmittal (which together constitute the Exchange 
Offer), Huntsman Packaging will accept for exchange Old Notes which are 
properly tendered on or prior to the Expiration Date and not withdrawn as 
permitted below. As used herein, the term "Expiration Date" means 5:00 p.m., 
New York City time on April 1, 1998; provided, however, that if Huntsman 
Packaging, in its sole discretion, has extended the period of time for which 
the Exchange Offer is open, the term "Expiration Date" means the latest time 
and date to which the Exchange Offer is extended. 

   As of the date of this Prospectus, $125,000,000 aggregate principal amount 
of the Old Notes is outstanding. This Prospectus, together with the Letter of 
Transmittal, is first being sent on or about March 2, 1998, to all Holders of 
Old Notes known to Huntsman Packaging. Huntsman Packaging's obligation to 
accept Old Notes for exchange pursuant to the Exchange Offer is subject to 
certain conditions as set forth under "--Conditions to the Exchange Offer" 
below. 


   Huntsman Packaging expressly reserves the right, at any time or from time 
to time, to extend the period of time during which the Exchange Offer is 
open, and thereby delay acceptance for exchange of any Old Notes, by giving 
oral or written notice of such extension to the Holders thereof as described 
below. During any such extension, all Old Notes previously tendered will 
remain subject to the Exchange Offer and may be accepted for exchange by 
Huntsman Packaging. Any Old Notes not accepted for exchange for any reason 
will be returned without expense to the tendering Holder thereof as promptly 
as practicable after the expiration or termination of the Exchange Offer. 

   Old Notes tendered in the Exchange Offer must be in denominations of 
principal amount of $1,000 or any integral multiple thereof. 

   Huntsman Packaging expressly reserves the right to amend or terminate the 
Exchange Offer, and not to accept for exchange any Old Notes not theretofore 
accepted for exchange, upon the occurrence of any of the conditions of the 
Exchange Offer specified below under "--Conditions to the Exchange Offer." 
Huntsman Packaging will give oral or written notice of any extension, 
amendment, non-acceptance or termination to the Holders of the Old Notes as 
promptly as practicable, such notice in the case of any extension to be 
issued by means of a press release or other public announcement no later than 
9:00 a.m., New York City time, on the next business day after the previously 
scheduled Expiration Date. 

PROCEDURES FOR TENDERING OLD NOTES 

   The tender to Huntsman Packaging of Old Notes by a Holder thereof as set 
forth below and the acceptance thereof by Huntsman Packaging will constitute 
a binding agreement between the tendering Holder and Huntsman Packaging upon 
the terms and subject to the conditions set forth in this Prospectus and in 
the accompanying Letter of Transmittal. Except as set forth below, a Holder 
who wishes to tender Old Notes for exchange pursuant to the Exchange Offer 
must transmit a properly completed and duly executed Letter of Transmittal, 
including all other documents required by such Letter of Transmittal, to The 
Bank of New York (the "Exchange Agent") at one of the addresses set forth 
below under "--Exchange Agent" for receipt on or prior to the Expiration 
Date. In addition, either (i) certificates for such Old Notes must be 
received by the Exchange Agent along with the Letter of Transmittal or (ii) 
if using ATOP, a timely confirmation of a book-entry transfer (a "Book-Entry 
Confirmation") of such Old Notes, if such procedure is available, into the 
Exchange Agent's account at The Depository Trust Company (the "Book-Entry 
Transfer Facility") pursuant to the procedure for book-entry transfer 
described below, must be received by the Exchange Agent prior to the 
Expiration Date or (iii) the Holder must comply with the guaranteed delivery 
procedures described below. 

                                       20

   THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL 
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF 
THE HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED 
MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, 
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTER OF 
TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO HUNTSMAN PACKAGING. 

   Any beneficial owner whose Old Notes are registered in the name of a 
broker, dealer, commercial bank, trust company or other nominee and who 
wishes to tender should contact the registered Holder promptly and instruct 
such registered Holder to tender on such beneficial owner's behalf. If such 
beneficial owner wishes to tender on such owner's own behalf, such owner 
must, prior to completing and executing the Letter of Transmittal and 
delivering such owner's Old Notes, either make appropriate arrangements to 
register ownership of the Old Notes in such owner's name or obtain a properly 
completed bond power from the registered Holder. The transfer of registered 
ownership may take considerable time. 

   Signatures on a Letter of Transmittal or a notice of withdrawal described 
below (see "--Withdrawal of Tenders"), as the case may be, must be guaranteed 
as described below (see "--Guaranteed Delivery Procedures") unless the Old 
Notes tendered pursuant thereto are tendered (i) by a registered Holder who 
has not completed the box entitled "Special Issuance Instructions" or 
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the 
account of an Eligible Institution (as defined below). In the event that 
signatures of a Letter of Transmittal or a notice of withdrawal, as the case 
may be, are required to be guaranteed, such guarantee must be made by a firm 
which is a member of a registered national securities exchange or a member of 
the National Association of Securities Dealers, Inc. or by a commercial bank 
or trust company having an office or correspondent in the United States 
(collectively, "Eligible Institutions"). If Old Notes are registered in the 
name of a person other than a signer of the Letter of Transmittal, the Old 
Notes surrendered for exchange must be endorsed by, or be accompanied by a 
written instrument or instruments of transfer or exchange, in satisfactory 
form as determined by Huntsman Packaging, duly executed by the registered 
Holder with the signature thereon guaranteed by an Eligible Institution. 

   All questions as to the validity, form, eligibility (including time of 
receipt) and acceptance of tendered Old Notes will be determined by Huntsman 
Packaging in its sole discretion, which determination will be final and 
binding. Huntsman Packaging reserves the absolute right to reject any and all 
tenders of any particular Old Notes not properly tendered or to not accept 
any particular Old Note if acceptance would, in the judgment of Huntsman 
Packaging or its counsel, be unlawful. Huntsman Packaging also reserves the 
absolute right to waive any defects, irregularities or conditions of the 
Exchange Offer as to any particular Old Notes either before or after the 
Expiration Date (including the right to waive the ineligibility of any Holder 
who seeks to tender Old Notes in the Exchange Offer). The interpretation of 
the terms and conditions of the Exchange Offer as to any particular Old Note 
either before or after the Expiration Date (including the Letter of 
Transmittal and the instructions thereto) by Huntsman Packaging will be final 
and binding on all parties. Unless waived, any defects or irregularities in 
connection with tenders of Old Notes for exchange must be cured within such 
reasonable period of time as Huntsman Packaging may determine. Neither 
Huntsman Packaging, the Exchange Agent or any other person will be under any 
duty to give notification of any defect or irregularity with respect to any 
tender of Old Notes for exchange, nor will any of them incur any liability 
for failure to give such notification. 

   If the Letter of Transmittal is signed by a person or persons other than 
the registered Holder or Holders of Old Notes, such Old Notes must be 
endorsed or accompanied by appropriate powers of attorney, in either case 
signed exactly as the name or names of the registered Holder or Holders that 
appear on the Old Notes. 

   If the Letter of Transmittal or any Old Note or powers of attorney are 
signed by trustees, executors, administrators, guardians, attorneys-in-fact, 
officers of corporations or others acting in a fiduciary or representative 
capacity, such persons should so indicate when signing, and, unless waived by 
Huntsman Packaging, proper evidence satisfactory to Huntsman Packaging of 
their authority to so act must be submitted with the Letter of Transmittal. 

                                       21


   By tendering, each Holder will be required to represent (i) that any New 
Notes to be received by it will be acquired in the ordinary course of its 
business, (ii) that at the time of the commencement of the Exchange Offer it 
has no arrangement or understanding with any person to participate in the 
distribution (within the meaning of the Securities Act) of the New Notes in 
violation of the Securities Act, (iii) that it is not an "affiliate" (as 
defined in Rule 405 promulgated under the Securities Act) of Huntsman Packaging,
(iv) if such Holder is not a broker-dealer, that it is not engaged in, and does 
not intend to engage in, the distribution of New Notes and (v) if such Holder is
a Participating Broker-Dealer that will receive New Notes for its own account in
exchange for Old Notes that were acquired as a result of market-making or other 
trading activities, that it will deliver a prospectus in connection with any 
resale of such New Notes. Huntsman Packaging will agree to make available, 
during the period required by the Securities Act, a prospectus meeting the 
requirements of the Securities Act for use by Participating Broker-Dealers 
and other persons, if any, with similar prospectus delivery requirements for 
use in connection with any resale of New Notes. If any Holder is an affiliate 
of Huntsman Packaging, is engaged in or intends to engage in or has any 
arrangement with any person to participate in the distribution of the New 
Notes to be acquired pursuant to the Exchange Offer, such Holder (i) could 
not rely on the applicable interpretations of the staff of the Commission and 
(ii) must comply with the registration and prospectus delivery requirements 
of the Securities Act in connection with any resale transaction, including 
the delivery of a prospectus which contains the information with respect to 
any selling holder required by the Securities Act. Each broker-dealer that 
receives New Notes for its own account in exchange for Old Notes, where such 
Old Notes were acquired by such broker-dealer as a result of market-making 
activities or other trading activities, must represent to Huntsman Packaging 
that it will deliver a prospectus in connection with any resale of such New 
Notes. See "Plan of Distribution." The Letter of Transmittal states that by 
so representing and by delivering a prospectus, a broker-dealer will not be 
deemed to admit that it is an "underwriter" within the meaning of the 
Securities Act. 


ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES 

   Upon satisfaction or waiver of all of the conditions to the Exchange 
Offer, Huntsman Packaging will accept, promptly after the Expiration Date, 
all Old Notes properly tendered and will issue the New Notes promptly after 
acceptance of the Old Notes. See "--Conditions to the Exchange Offer" below. 
For purposes of the Exchange Offer, Huntsman Packaging will be deemed to have 
accepted properly tendered Old Notes for exchange, when, as and if Huntsman 
Packaging has given oral or written notice thereof to the Exchange Agent. 

   For each Old Note accepted for exchange, the Holder of such Old Note will 
receive a New Note having a principal amount equal to that of the surrendered 
Old Note. Accordingly, registered Holders of New Notes on the relevant record 
date for the first interest payment date following the consummation of the 
Exchange Offer will receive interest accruing from the most recent date to 
which interest has been paid or, if no interest has been paid, from September 
30, 1997. Old Notes accepted for exchange will cease to accrue interest from 
and after the date of consummation of the Exchange Offer. Holders of Old 
Notes whose Old Notes are accepted for exchange will not receive any payment 
in respect of accrued interest on such Old Notes otherwise payable on any 
interest payment date the record date for which occurs on or after 
consummation of the Exchange Offer. In the event of a registration default 
under the Registration Rights Agreement, Huntsman Packaging will pay 
Additional Interest to each Holder of Transfer Restricted Securities (as 
defined herein). See "Description of the Notes and Guarantees -- Additional 
Interest." 

   In all cases, issuance of New Notes for Old Notes that are accepted for 
exchange pursuant to the Exchange Offer will be made only after timely 
receipt by the Exchange Agent of certificates for such Old Notes or, if using 
ATOP, a timely Book-Entry Confirmation of such Old Notes into the Exchange 
Agent's account at the Book-Entry Facility, a properly completed and duly 
executed Letter of Transmittal and all other required documents or, in the 
case of a Book-Entry confirmation, an Agent's Message in lieu thereof. If any 
tendered Old Notes are not accepted for any reason set forth in the terms and 
conditions of the Exchange Offer or if Old Notes are submitted for a greater 
principal amount than the Holder desires to exchange, such unaccepted or 
non-exchanged Old Notes will be returned without expense to the tendering 
Holder thereof (or, in the case of Old Notes tendered by book-entry transfer 
into the 

                                       22

Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the 
book-entry procedures described below, such non-exchanged Old Notes will be 
credited to an account maintained with such Book-Entry Transfer Facility) as 
promptly as practicable after the expiration or termination of the Exchange 
Offer. 

BOOK-ENTRY TRANSFER 

   The Exchange Agent will make a request to establish an account with 
respect to the Old Notes at the Book-Entry Transfer Facility for purposes of 
the Exchange Offer within two business days after the date of this 
Prospectus, and any tendering financial institution that is a participant in 
the Book-Entry Transfer Facility's systems must make book-entry delivery of 
Old Notes by causing the Book-Entry Transfer Facility to transfer such Old 
Notes into the Exchange Agent's account at the Book-Entry Transfer Facility 
in accordance with the Book-Entry Transfer Facility's ATOP procedures for 
transfer. Such holder of Old Notes using ATOP should transmit its acceptance 
to the Book-Entry Transfer Facility on or prior to the Expiration Date (or 
comply with the guaranteed delivery procedures set forth below). The 
Book-Entry Transfer Facility will verify such acceptance, execute a 
book-entry transfer of the tendered Old Notes into the Exchange Agent's 
account at the Book-Entry Transfer Facility and then send to the Exchange 
Agent confirmation of such book-entry transfer, including an Agent's Message 
confirming that the Book-Entry Transfer Facility has received an express 
acknowledgment from such holder that such holder has received and agrees to 
be bound by this Letter of Transmittal and that Huntsman Packaging may 
enforce this Letter of Transmittal against such Holder (a "Book-Entry 
Confirmation"). 

GUARANTEED DELIVERY PROCEDURES 

   If a registered Holder of the Old Notes desires to tender such Old Notes 
and the Old Notes are not immediately available, or time will not permit such 
Holder's Old Notes or other required documents to reach the Exchange Agent 
before the Expiration Date, or the procedure for book-entry transfer cannot 
be completed on a timely basis, a tender may be effected if (i) the tender is 
made through an Eligible Institution, (ii) prior to the Expiration Date, the 
Exchange Agent receives from such Eligible Institution a properly completed 
and duly executed Letter of Transmittal (or a facsimile thereof) and Notice 
of Guaranteed Delivery, substantially in the form provided by Huntsman 
Packaging (by telegram, telex, facsimile transmission, mail or hand 
delivery), setting forth the name and address of the Holder of Old Notes and 
the principal amount of Old Notes tendered, stating that the tender is being 
made thereby and guaranteeing that, within three New York Stock Exchange, 
Inc. ("NYSE") trading days after the date of execution of the Notice of 
Guaranteed Delivery, the certificates for all physically tendered Old Notes, 
in proper form for transfer, or a Book-Entry Confirmation, as the case may 
be, and any other documents required by the Letter of Transmittal will be 
deposited by the Eligible Institution with the Exchange Agent, and (iii) the 
certificates for all physically tendered Old Notes, in proper form for 
transfer, or a Book-Entry Confirmation, as the case may be, and all other 
documents required by the Letter of Transmittal, are received by the Exchange 
Agent within three NYSE trading days after the date of execution of the 
Notice of Guaranteed Delivery. 

WITHDRAWAL OF TENDERS 

   Tenders of Old Notes may be withdrawn at any time prior to the Expiration 
Date. 

   For a withdrawal to be effective, a written notice of withdrawal must be 
received by the Exchange Agent at one of its addresses set forth below under 
"--Exchange Agent" prior to the Expiration Date. Any such notice of 
withdrawal must (i) specify the name of the person having deposited the Old 
Notes to be withdrawn (the "Depositor"), (ii) identify the Old Notes to be 
withdrawn (including the principal amount of such Old Notes) and (iii) (where 
certificates for Old Notes have been transmitted) specify the name in which 
such Old Notes are registered, if different from that of the withdrawing 
Holder. If certificates for Old Notes have been delivered or otherwise 
identified to the Exchange Agent, then, prior to the release of such 
certificates the withdrawing Holder must also submit the serial numbers of 
the particular certificates to be withdrawn and a signed notice of withdrawal 
with signatures guaranteed by an Eligible Institution unless such Holder is 
an Eligible Institution. If Old Notes have been tendered 

                                       23

pursuant to the procedure for book-entry transfer described above, any notice 
of withdrawal must specify the name and number of the account at the 
Book-Entry Transfer Facility to be credited with the withdrawn Old Notes and 
otherwise comply with the procedures of such facility. All questions as to 
the validity, form and eligibility (including time of receipt) of such 
notices will be determined by Huntsman Packaging, whose determination shall 
be final and binding on all parties. Any Old Note so withdrawn will be deemed 
not to have been validly tendered for exchange for purposes of the Exchange 
Offer. Any Old Note which has been tendered for exchange but which is not 
exchanged for any reason will be returned to the Holder thereof without cost 
to such Holder (or, in the case of Old Notes tendered by book-entry transfer 
procedures described above, such Old Notes will be credited to an account 
maintained with such Book-Entry Transfer Facility for the Old Notes) as soon 
as practicable after withdrawal, rejection of tender or termination of the 
Exchange Offer. Properly withdrawn Old Notes may be retendered by following 
one of the procedures described under "--Procedures for Tendering Old Notes" 
above at any time on or prior to the Expiration Date. 

CONDITIONS TO THE EXCHANGE OFFER 

   Notwithstanding any other provision of the Exchange Offer, Huntsman 
Packaging will not be required to accept for exchange, or issue New Notes in 
exchange for, any Old Notes and may terminate or amend the Exchange Offer if 
at any time before the acceptance of such Old Notes for exchange or the 
exchange of the New Notes for such Old Notes, any of the following events 
occur: 

     (a) there shall be threatened, instituted or pending any action or 
    proceeding before, or any injunction, order or decree shall have been 
    issued by, any court or governmental agency or other governmental 
    regulatory or administrative agency or commission, (i) seeking to restrain 
    or prohibit the making or consummation of the Exchange Offer or any other 
    transaction contemplated by the Exchange Offer, or assessing or seeking 
    any damages as a result thereof, or (ii) resulting in a material delay in 
    the ability of Huntsman Packaging to accept for exchange or exchange some 
    or all of the Old Notes pursuant to the Exchange Offer, or any statute, 
    rule, regulation, order or injunction shall be sought, proposed, 
    introduced, enacted, promulgated or deemed applicable to the Exchange 
    Offer or any of the transactions contemplated by the Exchange Offer by any 
    government or governmental authority, domestic or foreign, or any action 
    shall have been taken, proposed or threatened, by any government or 
    governmental authority, agency or court, domestic or foreign, that in the 
    reasonable judgment of Huntsman Packaging might directly or indirectly 
    result in any of the consequences referred to in clauses (i) or (ii) above 
    or, in the reasonable judgment of Huntsman Packaging, might result in the 
    Holders of New Notes having obligations with respect to resales and 
    transfers of New Notes which are greater than those described in the 
    interpretation of the Commission referred to on the cover page of this 
    Prospectus, or would otherwise make it inadvisable to proceed with the 
    Exchange Offer; or 

     (b) there shall have occurred (i) any general suspension of or general 
    limitation on prices for, or trading in, securities on any national 
    securities exchange or in the over-the-counter market, (ii) any limitation 
    by any governmental agency or authority which may adversely affect the 
    ability of Huntsman Packaging to complete the transactions contemplated by 
    the Exchange Offer, (iii) a declaration of a banking moratorium or any 
    suspension of payments in respect of banks in the United States or any 
    limitation by any governmental agency or authority which adversely affects 
    the extension of credit or (iv) a commencement of a war, armed hostilities 
    or other similar international calamity directly or indirectly involving 
    the United States, or, in the case of any of the foregoing existing at the 
    time of the commencement of the Exchange Offer, a material acceleration or 
    worsening thereof; or 

     (c) any change (or any development involving a prospective change) shall 
    have occurred or be threatened in the business, properties, assets, 
    liabilities, financial condition, operations, results of operations or 
    prospects of Huntsman Packaging and its subsidiaries taken as a whole 
    that, in the reasonable judgment of Huntsman Packaging, is or may be 
    adverse to Huntsman Packaging, or Huntsman Packaging shall have become 
    aware of facts that, in the reasonable judgment of Huntsman Packaging, 
    have or may have adverse significance with respect to the value of the Old 
    Notes or the New Notes; 

                                       24

which, in the reasonable judgment of Huntsman Packaging in any case, and 
regardless of the circumstances (including any action by Huntsman Packaging) 
giving rise to any such condition, makes it inadvisable to proceed with the 
Exchange Offer and/or with such acceptance for exchange or with such 
exchange. 

   The foregoing conditions are for the sole benefit of Huntsman Packaging 
and may be asserted by Huntsman Packaging regardless of the circumstances 
giving rise to any such condition or may be waived by Huntsman Packaging in 
whole or in part at any time and from time to time in its sole discretion. 
The failure by Huntsman Packaging at any time to exercise any of the 
foregoing rights shall not be deemed a waiver of any such right and each such 
right shall be deemed an ongoing right which may be asserted at any time and 
from time to time. 

   In addition, Huntsman Packaging will not accept for exchange any Old Note 
tendered, and no New Notes will be issued in exchange for any such Old Note, 
if at such time any stop order shall be threatened or in effect with respect 
to the Registration Statement of which this Prospectus constitutes a part or 
the qualification of the Indenture under the Trust Indenture Act of 1939. 

EXCHANGE AGENT 

   The Bank of New York has been appointed as the Exchange Agent of the 
Exchange Offer. All executed Letters of Transmittal should be directed to the 
Exchange Agent at one of the addresses set forth below. Questions and 
requests for assistance, requests for additional copies of this Prospectus or 
of the Letter of Transmittal and requests for Notice of Guaranteed Delivery 
should be directed to the Exchange Agent addressed as follows: 



                                    
   By Registered or Certified Mail:          ByHandorOvernightDelivery: 
         The Bank of New York                  The Bank of New York
101 Barclay Street, Floor 7E                    101 Barclay Street
New York, New York 10286                    Corporate Trust Services Window 
Attention: Reorganization Section                  Ground Floor 
                                             New York, New York 10286 
                                          Attention: Reorganization Section 

                                By Facsimile: 
                         (Eligible Institutions Only) 
                                (212) 815-6339 

                            Confirm by Telephone: 
                                (212) 815-5789 




   DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET 
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET 
FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF 
TRANSMITTAL. 

FEES AND EXPENSES 

   Huntsman Packaging will not make any payment to brokers, dealers or others 
soliciting acceptances of the Exchange Offer. 


   The estimated cash expenses to be incurred in connection with the Exchange 
Offer will be paid by Huntsman Packaging and are estimated in the aggregate 
to be $500,000. 


TRANSFER TAXES 

   Holders who tender their Old Notes for exchange will not be obligated to 
pay any transfer tax in connection therewith, except that Holders who 
instruct Huntsman Packaging to register New Notes in the name of, or request 
that Old Notes not tendered or not accepted in the Exchange Offer be returned 
to, a person other than the registered tendering Holder will be responsible 
for the payment of any applicable transfer tax thereon. 

                                       25

CONSEQUENCES OF EXCHANGING OR FAILING TO EXCHANGE OLD NOTES 


   Holders of Old Notes who do not exchange their Old Notes for New Notes 
pursuant to the Exchange Offer will continue to be subject to the provisions 
in the Indenture regarding transfer and exchange of the Old Notes and the 
restrictions on transfer of such Old Notes as set forth in the legend thereon 
as a consequence of the issuance of the Old Notes pursuant to exemptions 
from, or in transactions not subject to, the registration requirements of the 
Securities Act and applicable state securities laws. In general, the Old 
Notes may not be offered or sold, unless registered under the Securities Act, 
except pursuant to an exemption from, or in a transaction not subject to, the 
Securities Act and applicable state securities laws. Huntsman Packaging does 
not currently anticipate that it will register Old Notes under the Securities 
Act. See "Description of the Notes and Guarantees -- Registration Rights." 
Under existing interpretations by the staff of the Commission contained in 
several no-action letters issued to third parties, Huntsman Packaging 
believes the New Notes issued pursuant to the Exchange Offer in exchange for 
the Old Notes may be freely transferable by holders thereof (other than any 
such holder which is an "affiliate" of Huntsman Packaging within the meaning 
of Rule 405 under the Securities Act) without further registration under the 
Securities Act; provided, however, that each Holder that wishes to exchange 
its Old Notes for New Notes will be required to represent (i) that any New 
Notes to be received by it will be acquired in the ordinary course of its 
business, (ii) that at the time of the commencement of the Exchange Offer it 
has no arrangement or understanding with any person to participate in the 
distribution (within the meaning of the Securities Act) of the New Notes in 
violation of the Securities Act, (iii) that it is not an "affiliate" (as 
defined in Rule 405 promulgated under the Securities Act) of Huntsman 
Packaging, (iv) if such Holder is not a broker-dealer, that it is not engaged 
in, and does not intend to engage in, the distribution of New Notes and (v) if 
such Holder is a Participating Broker-Dealer that will receive New Notes for 
its own account in exchange for Old Notes that were acquired as a result of 
market-making or other trading activities, that it will deliver a prospectus 
in connection with any resale of such New Notes. However, Huntsman Packaging 
does not intend to request the Commission to consider, and the Commission has 
not considered, the Exchange Offer in the context of a no-action letter and 
there can be no assurance that the staff of the Commission would make a 
similar determination with respect to the Exchange Offer as in such other 
circumstances. Huntsman Packaging will agree to make available, during the 
period required by the Securities Act, a prospectus meeting the requirements 
of the Securities Act for use by Participating Broker-Dealers and other 
persons, if any, with similar prospectus delivery requirements for use in 
connection with any resale of New Notes. If any Holder is an affiliate of 
Huntsman Packaging or is engaged in or intends to engage in or has any 
arrangement with any person to participate in the distribution of the New 
Notes to be acquired pursuant to the Exchange Offer, such Holder (i) could 
not rely on the applicable interpretations of the staff of the Commission and 
(ii) must comply with the registration and prospectus delivery requirements of 
the Securities Act in connection with any resale transaction, including the 
delivery of a prospectus which contains the information with respect to any 
selling holder required by the Securities Act. Each broker-dealer that 
receives New Notes for its own account pursuant to the Exchange Offer where 
Old Notes were acquired by such broker-dealer as a result of market-making 
activities or other trading activities must represent to Huntsman Packaging 
that it will deliver a prospectus in connection with any resale of such New 
Notes and that it acquired such Old Notes as a result of market-making 
activities or other trading activities. The Letter of Transmittal states 
that by so representing and by delivering a prospectus, a broker-dealer 
will not be deemed to admit that it is an "underwriter" within the 
meaning of the Securities Act. This Prospectus, as it may be 
amended or supplemented from time to time, may be used by a broker-dealer 
in connection with resales of New Notes received in exchange 
for Old Notes where such Old Notes were acquired by such broker-dealer as a 
result of market-making activities or other trading activities. Huntsman 
Packaging has agreed that, starting on the Expiration Date (as defined 
herein) and ending on the close of business on the 90th day following the 
Expiration Date, it will make this Prospectus available to any broker-dealer 
for use in connection with any such resale. See "Plan of Distribution." 
However, to comply with the securities laws of certain jurisdictions, if 
applicable, the New Notes may not be offered or sold unless they have been 
registered or qualified for sale in such jurisdictions or an exemption from 
registration or qualification is available and is complied with. Huntsman 
Packaging does not currently intend to register or qualify the sale of the 
New Notes in any such jurisdiction. 


                                       26

                                CAPITALIZATION 


   The following table sets forth the capitalization of Huntsman Packaging as 
of December 31, 1997. 





                                               AS OF DECEMBER 31, 1997 
                                               ----------------------- 
                                                    (IN MILLIONS) 
                                            
Total cash ...................................          $ 12.4(1) 
                                               ======================= 
Long-term debt: 
Revolving credit facility(2) .................          $ 47.0 
Term loan(3) .................................            75.0 
9 1/8% Senior Subordinated Notes due 2007 ....           125.0 
Line of credit agreement and other ...........             3.5 
                                               ----------------------- 
Total long-term debt..........................           250.5 
                                               ----------------------- 
Stockholders' equity: 
 Common stock ................................            63.7 
 Stockholder note receivable .................             (.7) 
 Retained earnings ...........................             5.4 
 Translation adjustment ......................            (5.4) 
                                               ----------------------- 
Total stockholders' equity ...................            63.0 
                                               ----------------------- 
Total stockholders' equity and long-term 
 debt.........................................          $313.5 
                                               ======================= 



- ------------ 
(1)    $9.5 million of this amount is held by the Company's European and 
       Australian subsidiaries. See "Management's Discussion and Analysis of 
       Financial Condition and Results of Operations -- Liquidity and Capital 
       Resources -- Liquidity." 
(2)    Represents drawn portion of $150.0 million revolving credit facility. 
(3)    The eight-year $75 million Term Loan was issued pursuant to the terms 
       of the Credit Agreement. See "Description of the Credit Facilities." 

                                       27

                      UNAUDITED PRO FORMA FINANCIAL DATA 


   The unaudited pro forma condensed statement of operations and other 
financial data for the year ended December 31, 1997 give effect to the Pro 
Forma Transactions as if they had occurred on January 1, 1997. The pro forma 
financial data do not purport to be indicative of the combined financial 
position or results of operations of future periods or indicative of results 
that would have occurred had the transactions referred to above been 
consummated on the dates indicated. Since 1992, Huntsman Packaging has 
completed eight acquisitions, including acquisitions in 1996 of Deerfield and 
United Films and in 1997 of CT Film, and in 1996 received a capital 
contribution from Huntsman Corporation of European Foam. During the past 
several years, Huntsman Packaging's net sales have increased significantly 
from year to year primarily as a result of the aforementioned acquisitions 
and capital contribution. The pro forma financial data should be read in 
conjunction with "Management's Discussion and Analysis of Financial Condition 
and Results of Operations," Huntsman Packaging's Consolidated Financial 
Statements and the Notes thereto and the Combined Financial Statements of CT 
Film and Rexene Corporation Limited and the Notes thereto contained herein. 

            UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS 
                           AND OTHER FINANCIAL DATA 
                     FOR THE YEAR ENDED DECEMBER 31, 1997 




                                                                                     
                                              HUNTSMAN          CT                       HUNTSMAN     
                                              PACKAGING        FILM                      PACKAGING 
                                             HISTORICAL     HISTORICAL                   PRO FORMA 
                                            FOR THE YEAR  FOR THE NINE    ADJUSTMENTS   FOR THE YEAR
                                               ENDED      MONTHS ENDED        FOR          ENDED
                                            DECEMBER 31,  SEPTEMBER 30,    PRO FORMA    DECEMBER 31,
                                               1997           1997      TRANSACTIONS(1)    1997
                                            ------------  ------------- --------------- ------------ 
                                                              (DOLLARS IN MILLIONS) 
                                                                            
STATEMENT OF OPERATIONS:                                  
                                                          
Net sales .................................    $491.1         $123.5            --         $614.6 
Costs of goods sold .......................     424.8          116.8         $(2.1)(2)      539.5 
                                            ------------  ------------  --------------- ----------- 
 Gross profit .............................      66.3            6.7           2.1           75.1 
Total operating expenses ..................      49.2           10.0            --           59.2 
                                            ------------  ------------  --------------- ----------- 
 Income (loss) from operations ............      17.1           (3.3)          2.1           15.9 
Interest expense--net .....................     (16.4)          (0.9)         (5.3)(3)      (22.6) 
Other income ..............................       0.5             --            --            0.5 
                                            ------------  ------------  --------------- ----------- 
Income (loss) before income taxes and                     
 extraordinary item .......................       1.2           (4.2)         (3.2)          (6.2) 
Provision for (benefit from) income taxes         0.8           (0.1)         (1.3)(4)       (0.6) 
                                            ------------  ------------  --------------- ----------- 
Net income (loss)..........................    $  0.4         $ (4.1)        $(1.9)        $ (5.6) 
                                            ============  ============  =============== =========== 
OTHER FINANCIAL DATA:                                     
                                                          
Depreciation and amortization..............    $ 16.4         $  5.0         $(2.1)        $ 19.3 
EBITDA (5) ................................      34.0 (6)        1.7            --           35.7 (7) 
Net cash interest expense..................      16.2            0.9           5.3           22.4 
Capital expenditures ......................      17.9            2.5            --           20.4 
Ratio of earnings to fixed charges (8)  ...       1.1x            --            --            0.7x 
                                                         



                                                 (footnotes on following page) 

                               28           



- ------------ 
(1)    To reflect the September 30, 1997 purchase of CT Film and Rexene 
       Corporation Limited as if it occurred on January 1, 1997. Under the 
       purchase method of accounting, the total cash purchase price of $72.9 
       million (including transaction costs of $2.9 million) was allocated to 
       the net assets as follows: 



                     
     (IN MILLIONS) 
Current assets.........  $46.6 
Plant and equipment  ..   33.6 
Goodwill ..............    1.8 
                        ------- 
 Total assets .........   82.0 
Current liabilities  ..  $ 9.0 
Other liabilities  ....    0.1 
                        ------- 
 Total liabilities  ...    9.1 
                        ------- 
 Total purchase price    $72.9 
                        ======= 


       The above amounts reflect a fair value write-down of net plant and 
       equipment of $50.2 million. 


(2)    Represents the net reduction in depreciation and amortization of
       $2.1 million as a result of recording plant and equipment and goodwill
       in accordance with the purchase method of accounting for the CT Film
       Purchase.
(3)    Represents  additional interest expense at a rate of 9 1/8% on the Senior
       Subordinated Notes due 2007 as a result of the Pro Forma Transactions.

(4)    Represents the tax effect of all pro forma adjustments. 
(5)    EBITDA is defined as net income before interest expense, taxes, 
       depreciation and amortization and extraordinary items. Huntsman 
       Packaging's management believes EBITDA information enhances an 
       investor's understanding of a company's ability to satisfy principal 
       and interest obligations with respect to its indebtedness and to 
       utilize cash for other purposes. However, there may be contractual, 
       legal, economic or other reasons which may prevent the Company from 
       satisfying its principal and interest obligations with respect to its 
       indebtedness and may require the Company to allocate funds for other 
       purposes. EBITDA does not represent and should not be considered as an 
       alternative to net income or cash flows from operations as determined 
       by GAAP and may not be comparable to other similarly titled measures of 
       other companies. 
(6)    Includes aggregate nonrecurring charges of $9.3 million resulting from 
       the closing of a certain facility in the year ended December 31, 1997. 
       Had this facility been closed January 1, 1997, the Company estimates 
       overhead savings of $3.0 million would have been realized in the year 
       ended December 31, 1997. 
(7)    The pro forma income statement for the year ended December 31, 1997 
       does not include certain cost savings the Company expects to achieve 
       due to the combination of Huntsman Packaging and CT Film. Management 
       believes these savings will be fully realized by the end of 1998. Had 
       these cost savings been in place January 1, 1997, management believes 
       the following portion of estimated annual cost savings of $16.3 million 
       would have been achieved during 1997: 


                                                                                                      
Net reduction in raw material costs under the Company's existing contractual arrangements compared to 
 CT Film's historical raw material costs................................................................  $ 3.0 
Plant headcount reductions..............................................................................    0.9 
Administrative headcount reductions.....................................................................    4.1 
Cost savings from the elimination of corporate allocations from Rexene Corporation recorded by CT Film 
 which will not recur...................................................................................    1.8 
Savings from United States plant closure................................................................    4.1 
Savings from United Kingdom plant closure...............................................................    1.6 
                                                                                                         ------ 
 Total estimated recurring net cost savings.............................................................  $15.5 
                                                                                                         ====== 


(8)    For purposes of this computation, earnings are defined as income before 
       income taxes plus fixed charges. Fixed charges consist of interest 
       (including amortization of deferred financing costs) and that portion 
       of rental expense that is representative of interest (deemed to be 
       one-third of operating lease rental expense). For the year ended 
       December 31, 1997, on a pro forma basis, earnings were insufficient to 
       cover fixed charges by $6.2 million, due primarily to additional 
       interest expense. 

                                       29

                      SELECTED HISTORICAL FINANCIAL DATA 


   The selected financial data set forth below present the historical 
financial data of Huntsman Packaging. The selected financial data as of 
December 31, 1994, 1995, 1996 and 1997 and for the years then ended have been 
derived from the audited financial statements of Huntsman Packaging. The 
selected financial data as of December 31, 1993 and for the year then ended 
have been derived from the unaudited financial statements of Huntsman 
Packaging. Since 1992, Huntsman Packaging has completed eight acquisitions, 
including acquisitions in 1996 of Deerfield and United Films and in 1997 of 
CT Film, and in 1996 received a capital contribution from Huntsman 
Corporation of European Foam. During the past several years, Huntsman 
Packaging's net sales have increased significantly from year to year 
primarily as a result of the aforementioned acquisitions and capital 
contribution. The selected financial data should be read in conjunction with 
"Unaudited Pro Forma Financial Data," "Management's Discussion and Analysis 
of Financial Condition and Results of Operations" and Huntsman Packaging's 
Consolidated Financial Statements and the Notes thereto contained herein. 





                                                         YEAR ENDED DECEMBER 31, 
                                            -------------------------------------------------- 
                                              1993      1994     1995       1996       1997 
                                            -------- --------  -------- ----------  --------- 
                                                          (DOLLARS IN MILLIONS) 
                                                                     
STATEMENT OF OPERATIONS: 
Net sales .................................  $236.3    $294.7   $325.0     $339.1     $491.1 
Costs of goods sold .......................   195.2     242.4    273.5      288.9      424.8 
                                            -------- --------  -------- ----------  --------- 
 Gross profit .............................    41.1      52.3     51.5       50.2       66.3 
Total operating expenses ..................    31.1      37.1     36.5       42.2       49.2 
                                            -------- --------  -------- ----------  --------- 
 Income from operations ...................    10.0      15.2     15.0        8.0       17.1 
Interest expenses--net ....................    (6.5)     (7.5)    (8.7)     (11.6)     (16.4) 
Other income (expense) ....................     0.5      (0.3)    (2.3)      (3.8)       0.5 
                                            -------- --------  -------- ----------  --------- 
Income (loss) before income taxes and 
 extraordinary item .......................     4.0       7.4      4.0       (7.4)       1.2 
Provision for (benefit from) income taxes       1.4       3.0      1.7       (4.2)       0.8 
                                            -------- --------  -------- ----------  --------- 
Income (loss) before extraordinary item  ..     2.6       4.4      2.3       (3.2)       0.4 
                                            -------- --------  -------- ----------  --------- 
Extraordinary item ........................      --        --       --       (1.3)(1)     -- 
                                            -------- --------  -------- ----------  --------- 
 Net income (loss) ........................  $  2.6    $  4.4   $  2.3     $ (4.5)    $  0.4 
                                            ======== ========  ======== ==========  ========= 
OTHER FINANCIAL DATA: 
Depreciation and amortization .............  $  9.0    $  9.5   $ 11.6     $ 14.0     $ 16.4 
EBITDA (2) ................................    19.5      24.4     24.3       18.2 (3)   34.0 (4) 
Cash flows from operating activities  .....    18.9       1.0     12.8       20.1       28.6 
Cash flows from investing activities  .....   (42.8)     (8.2)   (20.5)     (88.9)     (87.2) 
Cash flows from financing activities  .....     4.5       9.9      6.7       68.6       63.2 
Capital expenditures ......................     7.2       8.4     19.5       12.8       17.9 
Ratio of earnings to fixed charges (5)  ...     1.6x      1.9x     1.4x       0.4x       1.1x 
BALANCE SHEET DATA (AT PERIOD END): 
Working capital ...........................  $ 34.1    $ 46.8   $ 54.8     $ 74.6     $ 94.1 
Total assets ..............................   181.3     196.1    231.7      329.1      409.6 
Long-term debt ............................    78.1      88.7    103.0      187.2      250.5 
Total liabilities .........................   123.6     136.1    160.7      262.1      346.6 
Stockholders' equity ......................    57.7      60.0     71.0       67.0       63.0 



- ------------ 
(1)    In 1996, the Company refinanced most of its long-term debt and recorded 
       an extraordinary item for the write-off of previously deferred loan 
       costs. See Note 5 of the Notes to Huntsman Packaging's Consolidated 
       Financial Statements contained herein for further information. 
(2)    EBITDA is defined as net income before interest expense, taxes, 
       depreciation and amortization and extraordinary items. Huntsman 
       Packaging's management believes EBITDA information enhances an 
       investor's understanding of a company's ability to satisfy principal 
       and interest obligations with respect to its indebtedness and to 
       utilize cash for other purposes. However, there may be contractual, 
       legal, economic or other reasons which may prevent the Company from 
       satisfying its principal and interest obligations with respect to its 
       indebtedness and may require the Company to allocate funds for other 
       purposes. EBITDA does not represent and should not be considered as an 
       alternative to net income or cash flows from operations as determined 
       by GAAP and may not be comparable to other similarly titled measures of 
       other companies. 
(3)    Includes aggregate nonrecurring charges of $12.1 million resulting from 
       the closing of certain facilities in the year ended December 31, 1996. 
       Had these facilities been closed on January 1, 1996, the Company 
       estimates overhead savings of $2.9 million would have been realized in 
       the year ended December 31, 1996. 
(4)    Includes aggregate nonrecurring charges of $9.3 million resulting from 
       the closing of a certain facility in the year ended December 31, 1997. 
       Had this facility been closed January 1, 1997, the Company estimates 
       overhead savings of $3.0 million would have been realized in the year 
       ended December 31, 1997. 
(5)    For purposes of this computation, earnings are defined as income before 
       income taxes plus fixed charges. Fixed charges consist of interest 
       (including amortization of deferred financing costs) and that portion 
       of rental expense that is representative of interest (deemed to be 
       one-third of operating lease rental expense). For the year ended 
       December 31, 1996, earnings were insufficient to cover fixed charges by 
       $7.4 million due primarily to a $10.9 million plant closing charge. 

                                       30

                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

GENERAL 


   The following discussion and analysis of Huntsman Packaging's results of 
operations, financial condition and liquidity should be read in conjunction 
with "Unaudited Pro Forma Financial Data" and Huntsman Packaging's 
Consolidated Financial Statements and the Notes thereto contained herein. The 
following discussion also contains certain forward-looking statements that 
involve risks and uncertainties, and Huntsman Packaging's results could 
differ materially from those discussed herein. See "Cautionary Statements." 

   Huntsman Packaging derives its revenue, earnings and cash flow from the 
sale of film and flexible packaging products to customers located throughout 
the world. Huntsman Packaging manufactures these products at its facilities 
located in North America, Europe and Australia. Huntsman Packaging's sales 
have grown primarily as a result of the growth in the market for film and 
flexible packaging products, acquisitions over the past several years and 
production increases at acquired facilities. Since 1992, Huntsman Packaging 
has completed eight acquisitions, including acquisitions in 1996 of Deerfield 
and United Films and in 1997 of CT Films, and in 1996 received a capital 
contribution from Huntsman Corporation of European Foam. During the past 
several years, Huntsman Packaging's net sales have increased significantly 
from year to year, primarily as a result of the aforementioned acquisitions 
and capital contribution. 


RESULTS OF OPERATIONS 


   The following table indicates net sales and expenses, and such amounts as 
a percentage of net sales, for the years ended December 31, 1995, 1996 and 
1997. 



                                         YEAR ENDED DECEMBER 31, 
                          ----------------------------------------------------- 
                                1995              1996               1997 
                          ----------------- ----------------- ----------------- 
                                     % OF              % OF              % OF 
                              $      SALES      $      SALES      $      SALES 
                          -------- -------  -------- -------  -------- ------- 
                                          (DOLLARS IN MILLIONS) 
                                                     
Net sales ...............  $325.0     100%   $339.1     100%   $491.1     100% 
Cost of goods sold ......   273.5      84%    288.9      85%    424.8      86% 
                          -------- -------  -------- -------  -------- ------- 
Gross profit ............    51.5      16%     50.2      15%     66.3      14% 
Total operating 
 expenses................    36.5      11%     42.2      12%     49.2      10% 
                          -------- -------  -------- -------  -------- ------- 
Operating income ........  $ 15.0       5%   $  8.0       3%   $ 17.1       4% 
                          ======== =======  ======== =======  ======== ======= 


YEAR ENDED DECEMBER 31, 1997 COMPARED WITH THE YEAR ENDED DECEMBER 31, 1996 


 Net Sales 


   Net sales increased by $152.0 million, or 44.8%, in 1997 to $491.1 million 
from $339.1 million in 1996. The increase was primarily due to the 
acquisition of CT Film in September 1997 and a full year's results from the 
1996 Deerfield and United Films acquisitions. All of these operations became 
part of the Company's flexible packaging segment. These acquisitions 
increased sales by $158.0 million in 1997. Excluding the effect of these 
acquisitions, flexible packaging sales decreased approximately $6.0 million 
in 1997, primarily due to approximately 5% lower sales volumes in the North 
America PVC product line and unfavorable Australian and European currency 
translation rates. Foam products sales were virtually unchanged in 1997. 

   The Company's average sales prices generally follow the movement in resin 
prices, as resins are the primary component of the Company's raw material 
costs. As compared to 1995 and 1996, average resin prices were relatively 
stable in 1997. As a result, changes in average sales prices were due to 
factors other than changes in resin prices. 


                                       31

 Gross Profit 


   Gross profit increased by $16.1 million, or 32.1%, in 1997 to $66.3 
million from $50.2 million in 1996. The CT Film, Deerfield and United Films 
acquisitions discussed above increased gross profit by approximately $22.0 
million in 1997. Gross profit in the foam products segment improved slightly, 
$0.1 million, due to improved manufacturing efficiencies resulting from 
capital additions made in 1996 and 1997. These increases were offset by 
decreased gross profit of approximately $6.0 million in the flexible 
packaging segment due primarily to decreased margins in the Company's 
polyethylene film product lines. In the stretch film business, gross profit 
decreased by approximately $3.0 million in 1997, due to continuing general 
pricing pressure as a result of excess supply of stretch film. The remaining 
gross profit decrease was due primarily to reduced North American PVC product 
line sales volume and unfavorable Australian and European currency 
translation rates. 


 Total Operating Expenses 


   Total operating expenses for 1997 (including research and development 
expenses) increased by $7.0 million, or 16.6%, to $49.2 million from $42.2 
million in 1996. All of this increase was attributable to the flexible 
packaging segment. 

   Additional operating expenses of $8.6 million associated with the 
Deerfield, United Films and CT Film acquisitions were incurred in 1997. This 
increase was partially offset by $1.6 million in reduced plant closing costs 
compared with 1996. 

   In 1997, the Company recognized a non-recurring plant closing charge of 
$9.3 million. As with the 1996 acquisitions of Deerfield and United Films, 
the acquisition of CT Film in 1997 provided the Company with relatively new, 
efficient manufacturing equipment with significant available capacity. The 
Company decided to consolidate the Carrollton, Ohio facility (purchased in 
1992) and relocate most of the Carrollton equipment to the newly acquired CT 
Film facilities and other facilities acquired in 1996. The non-recurring $9.3 
million charge includes $4.2 million for the write-off of assets not 
relocated, $3.3 million for the write-off of goodwill associated with the 
acquisition of the Carrollton facility and $1.8 million for work force 
reductions and other costs. See Note 3 of the Notes to Huntsman Packaging's 
Consolidated Financial Statements contained herein. 


 Operating Income 


   Operating income increased by $9.1 million, or 113.8%, to $17.1 million 
from $8.0 million due to the factors discussed above. 


YEAR ENDED DECEMBER 31, 1996 COMPARED WITH THE YEAR ENDED DECEMBER 31, 1995 

 Net Sales 


   Net sales increased by $14.1 million, or 4.3%, in 1996 to $339.1 million 
from $325.0 million in 1995, primarily due to the acquisitions of Deerfield 
and United Films in 1996. These acquisitions increased sales by $24.9 million 
in 1996. In addition, an approximate 9.0% sales volume increase in North 
American polyethylene film sales in the flexible packaging segment increased 
net sales approximately $15.0 million in 1996. These increases were offset by 
decreases in average sales prices in North America in the flexible packaging 
segment as a result of decreases in the average market price of polyethylene 
and PVC resins from 1995 to 1996. These decreases in average sales prices 
resulted in decreased sales of approximately $27.5 million in 1996 as 
compared to 1995. Polyethylene resin prices dropped significantly toward the 
end of 1995 and increased steadily during 1996. Notwithstanding the upward 
trend in polyethylene resin prices during 1996, such prices were 
approximately 10% lower on average in 1996 as compared to 1995. Foam products 
sales decreased approximately $1.6 million, due primarily to lower average 
currency exchange rates during 1996. 


 Gross Profit 


   Gross profit decreased by $1.3 million, or 2.5%, in 1996 to $50.2 million 
from $51.5 million in 1995. This decrease was due to lower margins, primarily 
as a result of the Company's inability to promptly pass 


                                       32


through to customers increases in the costs of resins and other raw materials 
in 1996. This decline in margins was most significant in flexible packaging's 
polyethylene stretch films, where margins decreased by $0.08 per pound, or 
approximately $7.6 million, from 1995 to 1996. These decreases were offset by 
increased margins in flexible packaging's European and Australian PVC film 
operations, as well as an increase of $2.0 million due to the acquisitions of 
Deerfield and United Films. Gross profit in the foam products segment 
increased approximately $1.5 million, due to improved manufacturing 
efficiencies resulting from capital additions made in 1996. 


 Total Operating Expenses 


   Total operating expenses (including research and development expenses) 
increased by $5.7 million, or 15.6%, in 1996 to $42.2 million from $36.5 
million in 1995, primarily due to a non-recurring plant closing charge of 
$10.9 million in the flexible packaging segment. This charge resulted from 
the closure of the Bowling Green, Kentucky and Dallas, Texas manufacturing 
facilities. With the 1996 acquisitions of United Films and Deerfield, the 
Company acquired relatively new, efficient equipment and significant 
available capacity. In addition, the newly acquired facilities contained open 
space considered necessary for future expansion. The Company decided to 
consolidate and relocate most of the equipment in its Bowling Green 
(purchased in July 1992) and Dallas (purchased in June 1995) facilities to 
the newly-acquired Deerfield and United Films facilities. The non-recurring 
$10.9 million charge includes $5.3 million for the write-off of assets not 
relocated, $3.3 million for the write-off of goodwill associated with the 
acquisitions of the Bowling Green and Dallas facilities and $2.3 million for 
work force reduction expenses and other costs. See Note 3 of the Notes to 
Huntsman Packaging's Consolidated Financial Statements contained herein. The 
increase due to the non-recurring charge was offset partially by reduced 
administration cost resulting from staff reduction programs initiated in 
1995. Foam products operating expenses decreased approximately $0.5 million, 
due primarily to staff reductions. 


 Operating Income 


   Operating income decreased by $7.0 million, or 46.6%, in 1996 to $8.0 
million from $15.0 million in 1995, due primarily to the factors discussed 
above. 


LIQUIDITY AND CAPITAL RESOURCES 


   Huntsman Packaging has historically financed its operations through cash 
provided by operations and by borrowings from Huntsman Corporation or under 
Huntsman Packaging's credit facilities. Huntsman Packaging's primary uses of 
cash have been the payment of operating expenses, funding capital 
expenditures and payment for acquisitions. 

 Net Cash Provided by Operating Activities 

   Net cash provided by operating activities was $28.6 million for the year 
ended December 31, 1997, an increase of $8.5 million, or 42.3%, from $20.1 
million for the same period in 1996. The increase resulted primarily from 
increased net income in 1997 of $4.9 million and a favorable change in 
inventories. Net cash provided by operating activities increased $7.3 
million, or 57.0%, in 1996 to $20.1 million from $12.8 million in 1995. The 
1996 increase resulted primarily from favorable changes in operating 
liabilities, particularly accounts payable and accrued liabilities. 

   All of the net cash provided by operating activities was generated by the 
Company's two operating segments, flexible packaging and foam products. The 
flexible packaging segment's net cash provided by operating activities was 
$23.1 million, $15.0 million and $9.6 million for the years ended December 
31, 1997, 1996 and 1995, respectively. The foam products segment's net cash 
provided by operating activities was $5.5 million, $5.1 million and $3.2 
million for the same periods, respectively. 


 Net Cash Used in Investing Activities 


   Net cash used in investing activities was $87.2 million, $88.9 million and 
$20.5 million for the years ended December 31, 1997, 1996 and 1995, 
respectively. The majority of cash used in investing activities 


                                       33



resulted from the Deerfield, United Films and CT Film acquisitions. During 
1996, the Company made net cash payments of approximately $12.3 million and 
$63.9 million for the purchase of United Films and Deerfield, respectively. 
During 1997, the Company made net cash payments of approximately $69.4 
million for the purchase of CT Film. See Note 11 of the Notes to Huntsman 
Packaging's Consolidated Financial Statements contained herein. 

 Capital Expenditures 

   Total capital expenditures were $17.9 million, $12.8 million and $19.5 
million for the years ended December 31, 1997, 1996 and 1995, respectively. 
Capital expenditures for the flexible packaging segment were $14.8 million, 
$8.9 million and $18.4 million for the same periods. The 1997 capital 
expenditures included film production capacity expansions in the Company's 
newly-acquired Deerfield and United Film facilities, as well as printing 
capacity expansion in the Company's Rochester, New York facility. The 1995 
capital expenditures included $7.5 million for the purchase of the Rochester, 
New York manufacturing building. Capital expenditures for the foam products 
segment were $2.6 million, $3.1 million, and $0.6 million for 1997, 1996 and 
1995, respectively. The 1996 and 1997 expenditures included a project to 
significantly upgrade the foam products' manufacturing processes to newer, 
more efficient technology. The Company estimates that total maintenance 
capital expenditures of $12.0 million per year will be required in the near 
future. 

 Net Cash Provided by Financing Activities 

   Net cash provided by financing activities was $63.2 million, $68.6 million 
and $6.7 million for the years ended December 31, 1997, 1996 and 1995, 
respectively. Net cash provided by financing activities consists primarily of 
net borrowings under the Company's current and prior credit arrangements. See 
Note 5 of the Notes to Huntsman Packaging's Consolidated Financial Statements 
contained herein. Net cash provided by financing activities was used 
primarily to fund the acquisitions of Deerfield, United Films and CT Film, as 
well as the Company's capital expenditures. 


 Liquidity 



   As of December 31, 1997, Huntsman Packaging had $94.1 million of working 
capital. As of December 31, 1997, Huntsman Packaging had approximately $103.0 
million available under the Credit Facilities, $9.4 million of which was issued 
as letters of credit. The debt under the Credit Facilities bears interest at 
LIBOR plus 2.00%, and may adjust downward based on Huntsman Packaging's 
leverage ratio (as defined in the Credit Agreement) to a minimum of LIBOR 
plus 1.00%. See "Description of the Credit Facilities." 

   As of December 31, 1997, the Company had $9.5 million in cash and cash
equivalents held by the Company's European and Australian subsidiaries. The
effective tax rate of repatriating this money and future foreign earnings to the
United States varies from approximately 40% to 65% depending on various U.S. and
foreign tax factors, including each foreign subsidiary's country of
incorporation. High effective repatriation tax rates may limit the ability of
the Company to access cash and cash equivalents generated by its European and
Australian operations for use in its United States operations, including to pay
principal, premium, if any, and interest on the Notes. In the years ended
December 31, 1997, 1996 and 1995, the Company's European and Australian
operations generated net income of $6.3 million, $7.4 million and $2.4 million,
respectively, and EBITDA of $13.1 million, $11.5 million and $5.9 million,
respectively.



   Huntsman Packaging expects that cash flows from operations and available 
borrowings under the Credit Facilities will provide sufficient working 
capital to operate its business, to make expected capital expenditures and to 
meet foreseeable liquidity requirements. 


 Accounting Standards 

   In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS 
No. 130, Reporting Comprehensive Income ("SFAS No. 130"). SFAS No. 130 
establishes standards for reporting and display of comprehensive income and 
its components (revenues, expenses, gains, and losses) in a full set of 

                               34           




general purpose financial statements. SFAS No. 130 requires that all items 
that are required to be recognized under accounting standards as components 
of comprehensive income be reported in a financial statement that is displayed 
with the same prominence as other financial statements. SFAS No. 130 does not 
require a specific format for that financial statement but requires that an 
enterprise display an amount representing total comprehensive income for the 
period in that financial statement. SFAS No. 130 is effective for fiscal 
years beginning after December 15, 1997. Reclassification of financial 
statements for earlier periods provided for comparative purposes is required. 
The impact of SFAS No. 130 on Huntsman Packaging is not expected to be 
material in relation to Huntsman Packaging's Consolidated Financial Statements 
and the Notes thereto contained herein. 


   In June 1997, the FASB issued SFAS No. 131, Disclosure About Segments of 
an Enterprise and Related Information ("SFAS No. 131"). SFAS No. 131 
establishes standards for the way that public business enterprises report 
information about operating segments in annual financial statements and 
requires that those enterprises report selected information about operating 
segments in interim financial reports issued to stockholders. It also 
establishes standards for related disclosure about products and services, 
geographic areas, and major customers. SFAS No. 131 is effective for 
financial statements for fiscal years beginning after December 15, 1997. 
Huntsman Packaging does not expect the impact of SFAS No. 131 to be material 
in relation to Huntsman Packaging's Consolidated Financial Statements and the 
Notes thereto contained herein. 


 Environmental Matters 


   The operation of any flexible packaging manufacturing plant and the 
distribution of such products, and the related production of by-products and 
wastes, entails risk of adverse environmental effects. Huntsman Packaging and 
its operations are subject to certain federal, state, local and foreign laws, 
regulations, rules and ordinances relating to pollution, the protection of 
the environment and the generation, storage, handling, transportation, 
treatment, disposal and remediation of hazardous substances and waste 
materials ("Environmental Laws"). In the ordinary course of business, 
Huntsman Packaging is subject to periodic environmental inspections and 
monitoring by governmental enforcement authorities. As a result of actual or 
alleged violations arising under or in connection with any Environmental 
Laws, the Company could incur substantial costs, including fines and civil or 
criminal sanctions. In addition, Huntsman Packaging's production facilities 
require environmental permits that are subject to revocation, modification 
and renewal ("Environmental Permits"). Violations of Environmental Permits 
can also result in substantial fines and civil or criminal sanctions. 
Huntsman Packaging believes that it is in material compliance with applicable 
Environmental Laws and Environmental Permits. The ultimate costs under 
Environmental Laws and the timing of such costs, however, are difficult to 
predict and potentially significant expenditures could be required in order 
to comply with Environmental Laws that may be adopted or imposed in the 
future. 

   Huntsman Packaging's costs and operating expenses relating to 
environmental matters totaled approximately $200,000 in each of 1995, 1996 
and 1997. This amount is expected to be sufficient to cover, among other 
things, Huntsman Packaging's routine measures to prevent, contain and clean 
up spills of materials that occur in the ordinary course of business. 
Huntsman Packaging's estimated capital expenditures for environmental matters 
were approximately $330,000 in 1995, $295,000 in 1996 and $517,000 in 1997 
and are expected to be approximately $725,000 in 1998 and approximately 
$175,000 in 1999. Capital expenditures and, to a lesser extent, costs and 
operating expenses relating to environmental matters will be subject to 
evolving regulatory requirements and will depend on the timing of and the 
promulgation of specific standards which impose requirements on Huntsman 
Packaging's operations. 

                               35           



                                   BUSINESS 

GENERAL 



   Huntsman Packaging is one of the largest manufacturers of film and flexible
packaging products in North America. The Company offers one of the most diverse
product lines in the industry and has attained a leading market position in each
of its major product lines. Management attributes its market leadership
primarily to its advanced film extrusion equipment and technology, broad and
innovative product lines, well-established customer relationships and low-cost
production capabilities. The Company's product lines constitute two business
segments, flexible packaging and foam products. The flexible packaging segment's
product lines are comprised of the following: (i) converter films that are sold
for additional fabrication and resale by other flexible packaging manufacturers
for use in a wide range of consumer and industrial markets; (ii) barrier films
that contain and protect food and other products; (iii) printed products that
include printed rollstock, bags and sheets used to package products in the food
and medical industries; (iv) stretch films that are used for industrial
unitizing and containerization; and (v) PVC films that are used by supermarkets,
institutions and homes to wrap meat, cheese and produce. The foam products
segment includes meat trays, egg cartons and fast food containers. For the year
ended December 31, 1997, approximately 91% of the Company's sales were derived
from flexible packaging and approximately 9% were derived from foam products.
Further information regarding the Company's operations in different business
segments appears in Note 12 of the Notes to Huntsman Packaging's Consolidated
Financial Statements contained herein.


Flexible Packaging: 

   Converter Films. Converter films are polyethylene films that are sold to 
converters and laminators for final processing into consumer products such as 
bags, pouches and printed products. With the consummation of the CT Film 
Purchase, the Company currently holds North America's number one market 
position in the converter film segment, with a 23% market share. 


   Barrier Films. Barrier films are polyethylene films that are sold to food 
processors and other end users. These films provide specific types of barrier 
protection against moisture, oxygen, light and gases, and are puncture 
resistant. The Company is the second largest producer of cookie, cracker and 
cereal box liners in North America, with a 19% market share. The CT Film 
Purchase allowed the Company to gain entry or increase access to other 
barrier film markets, including medical, personal care and agricultural 
films. 


   Printed Products. Printed products are manufactured and sold to fresh and 
frozen food processors, bakeries, textile manufacturers and other dry goods 
processors. The Company is North America's leading supplier of film used in 
the frozen food segment, with a 31% market share. The Company is also the 
second largest producer in the bakery market, with a 20% market share, 
supplying approximately one-fifth of the five billion bread bags manufactured 
in North America each year. Management also anticipates growth opportunities 
in the packaged salad and fresh produce market, which is expected to grow 
approximately 9% annually over the next several years. 


   Stretch Films. Stretch films are used primarily to bundle products and 
wrap pallets. Currently, approximately one-half of all loads shipped in North 
America are unitized with stretch film. Management expects additional growth 
in stretch films as they continue to replace less economical and less 
environmentally-acceptable packaging alternatives, such as steel strapping. 
The Company is North America's fourth largest producer of stretch films, with 
an 11% market share. 

   PVC Films. PVC films are used by supermarkets, institutions and homes to 
wrap meat, cheese and produce. Management believes the Company has North 
America's number two market position in PVC films. Management estimates that 
the Company also has the number one and three market shares in Australia and 
Western Europe with 60% and 16%, respectively. The Company expects PVC film 
export sales to increase in the growing Central and South American markets. 

                                       36


Foam Products: 


   The Company's polystyrene foam products include meat trays, egg cartons 
and fast food containers, which it manufactures in the U.K. and France. 
Management estimates that the Company is the largest producer of egg cartons 
in France, with a 26% market share and the third largest producer of 
polystyrene foam food packaging in Western Europe, with an 11% market share. 
The Company expects growth in foam products sales by penetrating emerging 
markets in Eastern Europe and the Middle East. 



   The Company has engaged J.P. Morgan to represent it in soliciting bids for a
possible sale of its foam products business. A "first round" of bids has been
received. Potential purchasers have conducted preliminary due diligence, and
"second round" bids were received February 16, 1998. If the Company ultimately
accepts one of the bids and determines to sell the foam products business, it is
contemplated that such a transaction would be concluded in March or April of
1998. There can be no assurance that the Company will ultimately accept any of
the bids or any offer for the sale of the foam products business, that the
Company will ultimately be successful in negotiating any such sale, or that the
foam products business will ultimately be sold.


Customers: 

   The Company currently has over 2,000 customers, including General Mills, 
Kraft/General Foods, Campbell Soup, Albertson's, Safeway, American Stores, 
Tyson Foods, Interstate Bakeries (Wonder Bread), Becton-Dickinson, 
Kimberly-Clark, 3M and Johnson & Johnson. With the addition of CT Film, the 
Company has a manufacturing capacity of nearly 800 million pounds of 
polyethylene and PVC films. For the year ended December 31, 1997, the 
Company, on a pro forma basis after giving effect to the CT Film Purchase, 
would have had net sales of $614.6 million, a net loss of $5.6 million and 
EBITDA (as defined under "Prospectus Summary -- Summary Historical and Pro 
Forma Financial Data") of $35.7 million. 

   The Company operates principally in the United States and Europe. The 
following is information regarding the Company's foreign and domestic 
operations. 




                         1996        1997 
                      ---------- ---------- 
                           
IDENTIFIABLE ASSETS: 
United States........  $270,493    $336,897 
Europe...............    39,843      54,643 
Other................    18,821      18,015 
                      ---------- ---------- 
  Total..............  $329,157    $409,555 
                      ========== ========== 



                                         1995        1996       1997 
                                      ---------- ----------  ---------- 
                                                    
NET SALES TO UNAFFILIATED CUSTOMERS: 
United States........................  $220,542    $236,726   $389,069 
Europe...............................    68,966      68,008     69,091 
Other................................    35,528      34,401     33,003 
                                      ---------- ----------  ---------- 
  Total..............................  $325,036    $339,135   $491,163 
                                      ========== ==========  ========== 
OPERATING PROFIT: 
United States........................  $ 13,917    $  1,285   $ 13,516 
Europe...............................     2,357       6,926      6,780 
Other................................     2,695       3,942      3,345 
General corporate expenses...........    (3,967)     (4,100)    (6,555) 
                                      ---------- ----------  ---------- 
  Total..............................  $ 15,002    $  8,053   $ 17,086 
                                      ========== ==========  ========== 



HUNTSMAN PACKAGING 

   Huntsman Packaging was founded in 1992 for the purpose of acquiring 
Goodyear Tire & Rubber Company's Film Products Division. Since its formation, 
Huntsman Packaging has pursued its growth 

                               37           


strategy by improving operating efficiency and by completing eight strategic 
acquisitions and receiving a capital contribution from Huntsman Corporation 
of European Foam, each of which has complemented Huntsman Packaging's 
existing product lines and provided it with new products and access to new 
markets. For example, the Deerfield Acquisition established Huntsman 
Packaging as a leading converter film producer and nearly doubled its share 
in the stretch film market. The United Films Acquisition established Huntsman 
Packaging as a premier producer of cookie, cracker and cereal box liners. 
Huntsman Packaging has a successful track record of improving capacity 
utilization, reducing overhead costs and increasing profits of its acquired 
businesses. The Company's recent acquisitions have provided it with 
additional state-of-the-art equipment, which has allowed it to reduce capital 
expenditures and consolidate its manufacturing operations by closing older, 
less efficient operations. Management believes that additional cost savings 
can be achieved as it continues to integrate acquired companies. 


   Prior to September 30, 1997, Huntsman Packaging was a wholly-owned 
subsidiary of Huntsman Corporation. Contemporaneous with the Offering, 
Huntsman Packaging was separated from Huntsman Corporation in the Split-Off. 
As a result of the Split-Off, Jon M. Huntsman owns approximately 65% 
of the total equity of Huntsman Packaging. Richard P. Durham and the 
Christena Karen H. Durham Trust collectively own approximately 35% of the 
total equity of Huntsman Packaging. See "Ownership of Capital Stock." Mr. 
Durham is Mr. Huntsman's son-in-law and the President and Chief Executive 
Officer of Huntsman Packaging. Christena Durham is the daughter of Mr. 
Huntsman, the beneficiary of the Christena Karen H. Durham Trust and the 
wife of Mr. Durham. Jon M. Huntsman, Richard P. Durham and Christena H. Durham 
are currently the directors of the Company. 

   The Company intends to sell additional shares of its common stock and to 
issue incentive stock options to certain members of the Company's senior 
management. See "Ownership of Capital Stock." 



CT FILM PURCHASE 

   On August 27, 1997, an indirect subsidiary of Huntsman Corporation was 
merged into Rexene Corporation. The surviving corporation was renamed 
Huntsman Polymers Corporation. On September 30, 1997, Huntsman Packaging 
acquired CT Film, including Rexene Corporation Limited, from Huntsman 
Polymers Corporation for $70 million in cash. 


   Management believes that the CT Film Purchase strengthened the Company's 
position as a market leader in the film and flexible packaging industry by 
enhancing its existing product lines and provided new growth opportunities. 
The CT Film Purchase provided the Company with new customers, including 
Becton-Dickinson, Kimberly-Clark and Johnson & Johnson, and provided access 
to the growing medical, personal care and agricultural film markets. In 
addition, CT Film increased the Company's share of the North American 
converter film market from 11% to a leading 23% share. 


   With the CT Film Purchase, management expects to generate significant cost 
savings, primarily from three sources: (i) approximately $4.0 million in 
annual savings from raw material cost reductions; (ii) approximately $6.6 
million in annual savings from the elimination of duplicative management and 
operating personnel; and (iii) approximately $5.7 million in annual savings 
through the consolidation of less efficient facilities and the related 
elimination of personnel and fixed costs. 


   Because the former CT Film assets were at approximately 67% of capacity 
prior to the acquisition of CT Film, management believes that CT Film's 
available capacity can be used to: (i) relocate manufacturing to facilities 
closer to customers, thereby reducing transportation costs and increasing 
logistical flexibility in product delivery; (ii) reduce production lead 
times; and (iii) reduce capital expenditures. 


COMPETITIVE STRENGTHS 

   Superior Manufacturing Capability. With the acquisition of CT Film, 
management believes the Company possesses a broader range of manufacturing 
equipment and more state-of-the-art manufacturing equipment than any of its 
competitors. The resulting combination of manufacturing flexibility and 
efficiency enhances the Company's ability to bring new technologies to the 
marketplace and meet the ever-increasing performance needs of its customers 
in a cost-effective manner. 

                                       38

   Strong Market Positions. The Company has a leading market position in each 
of its major product lines. With the CT Film Purchase, the Company is North 
America's largest supplier of converter and frozen food films and its second 
largest supplier of PVC films, cookie, cracker and cereal box liners and 
bakery bags. The Company also maintains significant market shares in PVC film 
in Western Europe and Australia and polystyrene foam food packaging products 
in Western Europe. The Company attributes its market leadership primarily to 
its broad and innovative product lines, well-established customer 
relationships, low-cost manufacturing capabilities and technological 
innovation. 


   Proven Management Team. The Company has assembled an outstanding 
management team at both the corporate and operating levels, with extensive 
experience in the flexible packaging industry. Senior management has an 
average of over 20 years of experience in the film and flexible packaging 
industry. Since the Company's formation in 1992, management has successfully 
integrated eight acquisitions and one capital contribution, enhanced 
productivity, diversified its product lines, strengthened its customer 
relationships and increased EBITDA. 


   Well-Established Customer Relationships. The Company has close working 
relationships with both its end-use customers and its distributors. The 
Company is a major supplier to some of the most significant end users of film 
products in the world, including Albertson's, American Stores, Campbell Soup, 
General Mills, Interstate Bakeries (Wonder Bread), Keebler, Kraft/General 
Foods, Pillsbury, Safeway, Tyson Foods and most of the flexible packaging 
converters that supply such end users. In addition, the Company manufactures 
and supplies film to some of the largest non-food film consumers in North 
America, including Baxter, Becton-Dickinson, Kimberly-Clark, 3M, Johnson & 
Johnson, Goodyear, Wal-Mart and Owens Corning. During the past five years, 
the Company also has assembled a distribution network that includes the four 
leading national film distributors: Unisource, Bunzl, Zellerbach and 
ResourceNet. Management believes that the combination of its end-use 
customers and leading national distributors gives the Company a strategic 
advantage in the marketplace. 


   Low-Cost Production. The Company believes that its manufacturing costs are 
among the lowest in the industry due to: (i) economies of scale provided by 
its high volume production; (ii) high plant utilization, attained through the 
continual consolidation of less efficient operations; (iii) favorable resin 
and other raw material prices, based on its significant purchasing 
requirements; (iv) state-of-the-art manufacturing equipment that minimizes 
resin requirements and waste; and (v) capital investment that has resulted in 
improved operating efficiency. 


STRATEGY 

   Since its formation, the Company has focused on strategic acquisitions, 
technology development and production improvements to take advantage of 
current and projected market trends. Management believes that the following 
trends will drive future growth in the film and flexible packaging industry: 
(i) traditional forms of rigid packaging (paperboard, glass, metals and rigid 
plastic) will be replaced by sophisticated, less expensive, higher 
performing, flexible packaging alternatives; (ii) new metallocene-based resin 
technologies will encourage growth in flexible packaging and require 
state-of-the-art extrusion equipment to deliver these technologies in a 
cost-efficient manner; and (iii) customers and distributors will continue to 
prefer large, integrated suppliers, such as the Company, to smaller 
suppliers. Management believes that the Company's combination of core 
technological competencies, modern, flexible manufacturing capabilities and 
innovative management and marketing practices will position the Company as 
the premier film extrusion company in North America. To that end, the Company 
will continue to pursue the following strategies: 

   Develop New Products and New Markets. To capitalize on the Company's core 
technological and manufacturing competencies, the Company will continue to 
focus on customer needs through its specialized product development teams 
consisting of sales, marketing, technical and manufacturing professionals. In 
cooperation with major customers, the Company is developing films for 
stand-up plastic pouches that are replacing traditional rigid packaging for a 
broad range of consumer products, including juices, pet food, laundry 
detergent and snack foods. The Company recently developed a high-integrity 
shrink film for Campbell Soup that replaces traditional corrugated box and 
tray applications used in bundling canned goods. The Company also achieves 
product innovation by identifying and purchasing or 

                                       39

licensing value-added technologies. A recent example is the Company's 
acquisition of the patent rights to the G-Bond manufacturing process. This 
cost-effective method of film production has allowed Huntsman Packaging to 
gain market share in the rapidly growing packaged salad market, most notably 
with Dole Foods. 

   Continue Cost Reductions and Productivity Enhancements.  The Company 
continues to seek opportunities to reduce its operating costs and enhance 
productivity. Recently, following the acquisitions of United Films and 
Deerfield, the Company closed older, less efficient production facilities in 
Dallas, Texas and Bowling Green, Kentucky, thereby reducing manufacturing 
costs. Through the CT Film Purchase, the Company intends to achieve 
significant cost savings through reduction in raw material prices and 
overhead expenditures and further plant rationalizations. With the addition 
of CT Film, the Company's plants will be able to service customers from 
lower-cost manufacturing facilities that are located closer to the customers, 
reducing both delivery times and transportation costs. 

   Enhance and Leverage Customer Relationships. The Company has developed 
long-standing relationships with many of its customers. These customers value 
product innovation and reliable supply, and consequently exercise great care 
in establishing and maintaining their supplier relationships. The Company 
believes that its reputation for innovation and reliability is recognized in 
the marketplace. In addition, management believes that the trend of supplier 
consolidation will continue. The Company focuses on meeting the increasingly 
complex packaging needs of its customers with its wide array of film and 
flexible packaging products. As the Company has grown through acquisitions, 
it has successfully sold existing products to newly-acquired customers and 
has sold newly-acquired products to existing customers. Management believes 
this leveraging has provided and will continue to provide growth 
opportunities. 

INDUSTRY OVERVIEW 

   Flexible packaging and film products are thin, pliable bags, pouches, 
labels and films for food and non-food consumer and industrial goods that are 
generally produced from single or multi-layer laminates of various 
combinations of plastics, paper, film and foil. Flexible packaging containers 
not only protect their contents, they are also cost-effective, space-saving, 
lightweight, tamper-evident, convenient and often recyclable. 


   Flexible packaging represents the fastest growing sector in the $94 
billion North American packaging industry. Currently, flexible plastic 
packaging is the second largest segment in the packaging industry, at 16%, 
and is expected to become the largest in the next several years. There are 
approximately 650 flexible packaging companies in the United States with over 
950 plants, predominately concentrated in the Midwest. These companies have 
approximately $16 billion in industry sales and approximately 84,000 
employees. The flexible packaging industry has experienced record levels of 
consolidation recently. There were 34 business combinations in 1995 and 1996, 
totalling $2.1 billion in revenues. In addition to the high level of merger 
and acquisition activity, companies in the industry are participating in more 
joint ventures, partnerships, expansions and technology sharing agreements. 
Large consumers of flexible packaging materials are driving market 
consolidation by using fewer suppliers in order to increase buying 
efficiencies and reduce administrative costs. 


   The food processing industry represents approximately 50% of the market 
for flexible packaging. The remaining markets include medical and 
pharmaceutical applications, household goods, garden supplies, pet food, 
cosmetics, retail merchandise, agricultural, industrial and institutional 
applications. End users of flexible packaging have increasingly sought better 
performing and less expensive packaging alternatives to meet changing 
demographics and customer needs. For example, in consumer markets, 
convenience and health consciousness are driving demand for low-fat foods 
such as ready-to-eat fresh salads and produce, which require sophisticated 
packaging solutions to maintain freshness, increase shelf life and provide 
resealability. 


   There is a general industry trend to replace rigid containers (paperboard, 
glass, metals and rigid plastic) with lower-cost and lighter-weight flexible 
packaging. In consumer markets, stand-up pouches are used to replace boxes, 
jars or cans. In industrial markets, stretch and shrink films are being used 
to unitize cans, boxes and loads for transport and are replacing traditional 
forms of packaging, such as steel strapping, corrugated paper boxes and 
taping. 


                                       40

   As end users continue to replace rigid packaging with flexible packaging, 
consumers are demanding thinner, stronger and clearer packaging products. In 
response, resin manufacturers have introduced new resin technologies, such as 
metallocene resins, which enhance different physical properties of the film. 
As demand for improved product offerings continues, management anticipates 
that product lines and manufacturing equipment will change rapidly. 

PRODUCTS, MARKETS AND CUSTOMERS 



   Huntsman Packaging is one of the largest manufacturers of film and flexible
packaging products in North America. The Company offers one of the most diverse
product lines in the industry and has attained a leading market position in each
of its major product lines. Management attributes its market leadership
primarily to its advanced film extrusion equipment and technology, broad and
innovative product lines, well-established customer relationships and low-cost
production capabilities. The Company's product lines constitute two business
segments, flexible packaging and foam products. The flexible packaging segment's
product lines are comprised of the following: (i) converter films that are sold
for additional fabrication and resale by other flexible packaging manufacturers
for use in a wide range of consumer and industrial markets; (ii) barrier films
that contain and protect food and other products; (iii) printed products that
include printed rollstock, bags and sheets used to package products in the food
and medical industries; (iv) stretch films that are used for industrial
unitizing and containerization; and (v) PVC films that are used by supermarkets,
institutions and homes to wrap meat, cheese and produce. The foam products
segment includes meat trays, egg cartons and fast food containers.


Flexible Packaging: 


 Converter Films 


   Converter films are single-and multi-layer extruded polyethylene films 
that are sold to converters and laminators for final processing into consumer 
products, such as bags, pouches and printed products. Converter films may 
also be laminated to another film or to paper or foil to give each layer a 
specific performance characteristic, such as moisture or oxygen barriers or 
light protection. Converter films are sold either for their sealability 
characteristics or their barrier characteristics, and must meet stringent 
performance specifications, including gauge control, layer thickness, 
sealability and web width accuracy. 


   Prior to the CT Film Purchase, the Company was the second largest supplier 
of converter films in the estimated 710 million pound North American market. 
With the consummation of the CT Film Purchase, the Company has the number one 
market position, increasing its market share from approximately 11% to 
approximately 23%. 

   Management believes the technological advantages of the Company's 
converter films are recognized and respected in the marketplace. Adherence to 
strict performance specifications allows the Company to price many of these 
products at a premium. Single-layer films are a blend of resins that provide 
desired sealant characteristics for specific packaging applications. 
Three-and five-layer coextrusions produce films with distinct layers joined 
together to form what appears to be a single-layer film. Each layer and each 
resin in each layer provides a specific characteristic -a barrier, an 
adhesive, a seal or a gloss. The Company's technological capabilities in 
five-layer film offer an efficient and cost-effective method of sealing in or 
sealing out moisture, oxygen or odors. 

   The Company continues to enhance its market share in converter films by 
introducing new product offerings to meet new industry trends and customer 
needs. Recently, for example, the Company worked closely with one of its 
converter customers to develop a three-layer film that will replace paper 
products in pet food packaging applications. In addition, the Company has 
recently developed a thermal imaging polyethylene film for billboard 
advertising in cooperation with a national media company. 

   Major converter film customers include All-Pak, Clear Lam Packaging, 
Lawson Mardon, Plastic Packaging and Sonoco Flexible Packaging. Virtually all 
laminators in North America buy at least a portion of their film from 
Huntsman Packaging. These laminated structures are sold to such end users as 
Federal Express, Heinz, Kraft/General Foods, M&M Mars, Nabisco and Procter & 
Gamble. 

                                       41

 Barrier Films 

   Barrier films are polyethylene films that are sold to food processors and 
other end users. These films provide specific types of barrier protection 
against moisture, oxygen, light or gases, and are puncture resistant. Barrier 
films produced by the Company are sold in the following product segments: (i) 
cookie, cracker and cereal box liners; (ii) medical packaging and personal 
care films; (iii) shrink film; and (iv) agricultural film. 


   Cookie, Cracker and Cereal Box Liner Film Market 

   The Company sells coextruded barrier films that are manufactured into 
sealed pouches as box liners for packaging cookies, crackers, cereals and 
other dry goods. The Company is a leading supplier of these films, with a 19% 
market share. This market of approximately 180 million pounds is expected to 
grow approximately 8% annually over the next several years. The Company's 
advanced, state-of-the-art coextrusion technology has allowed it to gain 
market share and introduce new products in this segment, such as the 
successful introduction of a cake mix box liner for General Mills. The 
Company is a supplier to many market leaders, including General Mills, 
Kellogg, Nabisco, Keebler and Pillsbury. 


   Medical and Personal Care Film Market 

   With the consummation of the CT Film Purchase, the Company increased its 
presence in the medical film market and entered the personal care market. 
There is an estimated 205 million pound medical film market, including 
medical supply packaging and surgical drapes and gowns. This market is 
expected to grow approximately 8% annually through the year 2000. The Company 
now also produces films for use in infant care, adult incontinence and 
feminine hygiene products for a portion of the estimated 280 million pound 
personal care market. This market is expected to grow approximately 5% 
annually through the year 2000. The Company's customers include 
Becton-Dickinson, Kimberly-Clark, Drypers and Johnson & Johnson. 

   Shrink Film Market 

   Polyethylene shrink films, so-called because of their ability to shrink or 
contract around a product when heated, are used in many applications, 
including unitizing consumer products and protecting industrial items during 
storage and shipment. The Company participates primarily in the industrial 
segment of the shrink film market. The industrial shrink film market is 
approximately 344 million pounds and is expected to grow approximately 5% 
annually through the year 2000. 

   The Company has recently developed a technologically-advanced shrink film 
that enables end users to downgauge from their current products and offers 
greater strength and puncture resistance than ordinary shrink film. The 
introduction of this film has been highly successful, and it is currently 
used by such nationally-recognized industry leaders as General Mills, 
Campbell Soup, Del Monte and Perrier. 

   Agricultural Film Market 

   The agricultural film market segment is generally divided into five 
categories: mulch film, greenhouse film, fumigation/sterilization film, water 
and soil conservation film and crop storage film. With the consummation of 
the CT Film Purchase, the Company now produces mulch films and greenhouse 
films. The North American market for mulch and greenhouse films is 
approximately 230 million pounds and is expected to grow approximately 4% 
annually. The Company's agricultural film customers include Asgrow, Gargiulo 
Farms, Griffin Suppliers and Mecca Farms. The Company believes that it is 
well-positioned to capitalize on the trends in the agricultural film segment, 
which include downgauging and the use of metallocene resins. 

 Printed Products 

   The Company's printed products are manufactured and sold in two formats: 
roll stock and bags. Printed roll stock is sold to fresh and frozen food 
processors, who use their own packaging equipment to fabricate pouches and 
bags for their products. Printed bags are sold to fresh and frozen food 
processors, bakeries, textile manufacturers and other dry goods processors. 
The Company has profitable niches in the markets for dry goods, ready-to-eat 
salad and fresh-cut produce, textile, tortilla, medical and specialty 
packaging. 

                                       42

   The Company is the number one supplier of film used in the frozen food 
segment, with a 31% market share. The North American frozen food packaging 
market is approximately 42 million pounds and is expected to grow 
approximately 5% annually through the year 2000. The Company is also the 
second largest producer in the 210 million pound bakery market, with a 20% 
share, supplying approximately one-fifth of the five billion bread bags 
manufactured in North America each year. The Company is also the number one 
supplier of non-household zipper bags in North America. 

   The Company recently developed a new heat-sealed, puncture-resistant 
printed film for one of the largest food processors in the country. In 
addition, the Company was named the sole provider of bread bags for 
IGA/Fleming and the preferred provider of zipper bags for Mission Foods, the 
largest producer of tortillas in the world. 

   Along with the Company's superior printing and pre-press reclosable 
technology, the Company's license to the patented G-Bond process further 
differentiates the Company from its competitors. G-Bond is a lamination 
simulation that can be achieved with a printing press. Traditional 
laminations are a two-step process, first printing an image onto film and 
then laminating the printed film onto a second film. G-Bond accomplishes both 
steps in one process, eliminating the need for laminating equipment. A 
modification to the G-Bond process, known as the Dial-a-Barrier process, 
which is owned by the Company and is the subject of a pending patent 
application, has become an industry leader in the growing packaged salad and 
pre-cut produce market. The Company is currently working with Dole Foods, 
Fresh Express and Mann Packing in this growing market. The Company continues 
to invest in modern processing equipment, including 8-color presses, 
specialty reclosability equipment, and state-of-the-art pre-press equipment 
to reduce changeover time and enhance printing flexibility. This technology 
recently allowed the Company to print a 17-color product for Hanes using 
screening techniques on an 8-color press. 

   Huntsman Packaging's printed product customers include Dole Foods, 
Interstate Bakeries (Wonder Bread), Mission Foods, Ore-Ida, Pepperidge Farms 
and Pillsbury (Green Giant). 

 Stretch Films 

   Stretch films, used primarily to bundle products and wrap pallets, are 
made of a blend or coextrusion of linear low density polyethylene, low 
density polyethylene, metallocene and other specialty resins. Currently, 
approximately one-half of all loads shipped in North America are unitized 
with stretch film. Management expects additional growth as stretch films 
continue to replace less economical and less environmentally-acceptable 
packaging alternatives, such as steel strapping. 

   Consumption of stretch film in North America exceeds one billion pounds 
per year and has grown at a rate of approximately 7% annually over the last 
few years. The Company expects that this market will maintain a growth rate 
of approximately 7%, and will reach approximately 1.3 billion pounds by 2000. 
The Company is the fourth largest producer of stretch films in North America, 
with an 11% market share. 

   Most of the Company's competitors view stretch film as a commodity product 
and compete primarily on the basis of price. The Company views stretch film 
as a value-added product. By using state-of-the-art extrusion equipment and 
continually refining its product offering mix, the Company seeks to be the 
supplier of choice in this market. Ongoing product development includes the 
Company's license to the patented Winwrap product, a new lightweight stretch 
wrap that is half the weight of traditional handwrap. Despite its reduced 
weight, Winwrap brand stretch wrap offers superior elasticity and holding 
force, and is also more durable than traditional handwrap. The Company is 
engaged in a program to sub-license this technology to third parties. 

   Market trends include downgauging of film and the use of more 
sophisticated resins. Management believes that recent capital improvements in 
production equipment, strong relationships with all major resin suppliers and 
ongoing investment in product development have positioned the Company to take 
advantage of these trends. 

   The stretch film market has also recently been the focus of significant 
industry consolidation. Tenneco recently purchased Mobil's packaging and 
stretch film division, AEP purchased Borden's stretch film division, and in 
October 1996, Huntsman Packaging purchased Deerfield. Management believes 
that the stretch film market will continue to consolidate, with larger 
manufacturers, such as the Company, gaining a competitive advantage in 
servicing large, sophisticated customers. 

                                       43

   Huntsman Packaging sells stretch film primarily to distributors for resale 
to end users. In North America, there are more than 3,700 distributors 
selling stretch film products to more than 200,000 end users. The Company is 
the only major stretch film producer that distributes its films through all 
of the major national distributors. The Company's largest customers in this 
market include Unisource, Zellerbach, NPS, Pacific Packaging and Resinas 
Poli. 

 PVC Films 

   PVC films are used by supermarkets, institutions and homes to wrap meat, 
cheese and produce. Management believes the Company has North America's 
number two market position in PVC films. Management estimates that the 
Company also has the number one and three market shares in Australia and 
Western Europe, with 60% and 16%, respectively. The Company's PVC export 
sales increased by over 20% in 1996, and the Company expects PVC film export 
sales to further increase in the growing Central and South American markets. 

   In North America, PVC film is sold to distributors, supermarket chains and 
converters. Approximately 58% of the Company's PVC film is sold through 
distributors, 26% is sold directly to supermarket chains, and 16% is sold to 
converters. Major customers include Albertson's, Bunzl, Kroger, Publix Super 
Markets and Safeway. In Europe, the Company's major PVC film customers 
include Disposable Supplies, Errecia, Northern Packaging, Omnipac and 
Vitembal. In Australia, the Company's customers include Chep Australia, 
Dalton Packaging, Grocery Holdings, Onwards Industrial and Woolworth. 


Foam Products: 


   The Company's polystyrene foam products include primarily meat trays, egg 
cartons and fast food containers, which it produces in the U.K. and France. 
Management estimates that the Company is the largest producer of egg cartons 
in France, with a 26% market share, and the third largest producer of all 
polystyrene foam food packaging products in Western Europe, with an 11% 
market share. The Company expects growth in PVC film sales by penetrating 
emerging markets in Eastern Europe and the Middle East. 

   Approximately 45% of the Company's sales in the foam market are through 
distributors to supermarkets, fast food chains and food processors. The 
remainder of the Company's sales are directly to end users. The Company's 
largest customers in this market include ACS Catering, Autobar, GB Quick, 
Marshall Food and Sovereign Foods. 

COMPETITION 

   The film and flexible packaging industry includes several hundred 
companies. Small and medium-sized manufacturers, who compete primarily in 
regional markets, predominate, with relatively few large, national 
manufacturers. Statistics of the Flexible Packaging Association and available 
trade and industry information indicate that the ten largest flexible 
packaging companies accounted for 40% of the total industry sales in 1995. 
Other sales leaders in this industry include Bemis, American National Can, 
Printpack, Cryovac (a division of W.R. Grace), Tenneco, AEP and Exxon. See 
"Risk Factors -- Competition." 

SALES AND MARKETING 


   Nine sales professionals, located in eight cities, serve national 
accounts, and approximately 70 additional professionals are responsible for 
selling the Company's products. All of the Company's sales, marketing and 
technical support personnel receive extensive training before assuming 
account responsibilities. The Company believes it is critical that its sales, 
marketing and technical support teams have in-depth knowledge of the 
Company's products, and in some instances engineering and other technical 
experience, in order to meet customers' product needs and provide meaningful 
information to the Company for new product development. Technical support 
personnel assist the sales force with technical expertise and assure 
compliance with customer specifications. 


   The Company's major national accounts are serviced by national account 
salespeople who are qualified to sell the entire range of the Company's 
products. In addition, since each of the Company's product lines have 
different characteristics and properties, and generally are sold and 
distributed in different ways, the Company has sales, marketing and technical 
support personnel dedicated specifically to each product. The Company's 
products are sold directly to end users, to distributors and through brokers. 

                                       44

RESEARCH AND DEVELOPMENT 


   Huntsman Packaging spent $2.0 million, $2.1 million and $2.5 million on 
research and development for its products in 1995, 1996 and 1997, 
respectively. CT Film spent $3.7 million, $2.7 million and $1.4 million on 
research and development in 1995, 1996 and 1997, respectively. On a pro forma 
basis, Huntsman Packaging and CT Film spent 0.6% of net sales in 1997 for 
research and development. Huntsman Packaging conducts its research and 
development at facilities in Akron, Ohio and Chippewa Falls, Wisconsin. Both 
facilities have extensive physical property and analytical test equipment and 
both blown and cast extrusion pilot line equipment. 


INTELLECTUAL PROPERTY RIGHTS 

   Proprietary protection of Huntsman Packaging's processes, apparatuses, and 
other technology and inventions is important to its business. Huntsman 
Packaging owns approximately 25 unexpired U.S. patents. Approximately seven 
patent applications, of which one is a provisional application, are currently 
pending at the United States Patent and Trademark Office, and approximately 
17 foreign patents have either been issued or are pending. While a 
presumption of validity exists with respect to issued U.S. patents, Huntsman 
Packaging cannot assure that any of its patents will not be challenged, 
invalidated, circumvented or rendered unenforceable. Furthermore, Huntsman 
Packaging cannot assure the issuance of any pending patent application, or 
that if patents are issued, such patents will provide meaningful protection 
against competitors or against competitive technologies. 

   Huntsman Packaging also relies on unpatented proprietary know-how, 
continuing technological innovation and other trade secrets to develop and 
maintain its competitive position. Huntsman Packaging has entered into a 
number of confidentiality agreements to protect its trade secrets and 
proprietary know-how upon making necessary disclosures to third parties. 
There can be no assurance, however, that such agreements will not be 
breached, that they will provide meaningful protection for Huntsman 
Packaging's trade secrets or proprietary know-how, or that adequate remedies 
will be available in the event of an unauthorized use or disclosure of such 
trade secrets and know-how. In addition, there can be no assurance that 
others will not obtain knowledge of such trade secrets through independent 
development or other access by legal means. 

   In addition to its own patents, proprietary trade secrets and know-how, 
Huntsman Packaging is a party to certain licensing arrangements and other 
agreements authorizing Huntsman Packaging to use certain trade secrets, 
know-how and related technology and/or operate within the scope of certain 
patents owned by other entities. Huntsman Packaging also has licensed or 
sub-licensed certain intellectual property rights to third parties. 

   Huntsman Packaging has associated brand names with a number of its 
products, and owns approximately 35 U.S. trademark registrations, one 
application for registration currently pending at the United States Patent 
and Trademark Office, and approximately 170 foreign counterparts, including 
both registrations and applications for registration. However, there can be 
no assurance that Huntsman Packaging's trademark registrations will provide 
meaningful protection against the use of similar trademarks by competitors, 
or that the value of Huntsman Packaging's trademarks will not be diluted. 

RAW MATERIALS 


   Polyethylene resin, PVC resin and polystyrene resin constitute the primary 
raw materials used to manufacture all of the Company's products, with 
polyethylene resin being the single largest raw material purchased by the 
Company. In 1997, these three resins comprised approximately 80% of total raw 
material costs and approximately 43% of the Company's net sales. The prices 
of raw materials are a function of, among other things, manufacturing 
capacity, demand, and the price of crude oil and natural gas feedstocks. See 
"Risk Factors -- Exposure to Fluctuations in Resin Prices and Dependence on 
Resin Supplies." 


   The Company's major suppliers of polyethylene resin are Dow Chemical, 
Exxon, Chevron and Huntsman Polymers, its major suppliers of PVC resin are 
Geon and BASF, and its major supplier of polystyrene resin is Huntsman 
Chemical Corporation. 

                                       45

MANUFACTURING 

   Huntsman Packaging manufactures its film products using both the blown and 
cast extrusion processes. In each process, thermoplastic resin pellets are 
combined with other resins, plasticizers, or modifiers in a controlled high 
temperature and pressurized process to create films with specific performance 
characteristics. These two basic film manufacturing processes produce 
uniquely different performance characteristics. Cast films are generally 
clearer, softer, and more uniform in thickness. Blown films offer enhanced 
physical properties, such as increased tear and puncture strength and barrier 
protection. 


   In the cast film process, the molten resin mixture is extruded through a 
horizontal die onto a polished chill roll, where the film is quickly cooled. 
As the film comes off the end of the chill roll, it is wound onto rolls. 
Blown film is produced by extruding the molten resin mixture through a 
circular die and chilled air ring to form a bubble as large as 55 feet high 
and 25 feet in diameter. The bubble is then collapsed, cut and wound onto 
rolls. 


PROPERTIES 

   The principal executive offices of Huntsman Packaging are located at 500 
Huntsman Way, Salt Lake City, Utah 84108, and are occupied pursuant to a 
lease with Huntsman Corporation. 

   The following is a list of the Company's owned or leased properties where 
manufacturing and research and development are located. In addition, the 
Company leases sales offices and warehouse space in 30 locations spread over 
14 states and 4 foreign countries. Unless otherwise indicated, the property 
is owned. 




LOCATION                      FACILITY                                    SQ. FOOTAGE 
- --------                      --------                                    -----------
                                                                     
Birmingham, Alabama            Manufacturing                               120,000 sq. ft. 
Bloomington, Indiana           Manufacturing*                              21,500 sq. ft. 
Calhoun, Georgia               Manufacturing                               39,000 sq. ft. 
                               Manufacturing**                             63,000 sq. ft. owned 
Carrollton, Ohio (1)                                                       12,000 sq. ft. leased 
Danville, Kentucky             Manufacturing                               180,000 sq. ft. 
Deerfield, Massachusetts       Manufacturing                               140,000 sq. ft. 
Guegon, France                 Manufacturing and warehouse                 45,000 sq. ft. 
Lewisburg, Tennessee           Manufacturing                               42,000 sq. ft. 
Merced, California             Manufacturing                               37,500 sq. ft. 
Odon, Indiana                  Manufacturing*                              20,000 sq. ft. 
Philippsburg, Germany          Manufacturing                               38,000 sq. ft. 
Melbourne, Australia           Manufacturing*                              40,000 sq. ft. 
Rochester, New York            Manufacturing                               327,000 sq. ft. 
Seattle, Washington            Manufacturing                               110,000 sq. ft. 
Skelmersdale, U.K.             Manufacturing and warehouse*                291,000 sq. ft. 
Toronto, Canada                Manufacturing                               106,000 sq. ft. 
Uniontown, Ohio                Research and development* 
Chippewa Falls, Wisconsin      Manufacturing; Research and development     40,400 sq. ft. 
Clearfield, Utah               Manufacturing*                              41,000 sq. ft. 
Dalton, Georgia                Manufacturing                               52,000 sq. ft. 
Harrington, Delaware           Manufacturing                               42,200 sq. ft. 
Scunthorpe, U.K. (2)           Manufacturing                               32,000 sq. ft. 



- ------------ 
*      Leased 

**     Partially owned and partially leased 


(1)    In December 1997, the Company announced its plan to close the 
       Carrollton, Ohio facility and relocate most of the equipment to other 
       of the Company's facilities. The Company expects to complete the 
       Carrollton, Ohio plant closing in the first half of 1998. 
(2)    The Company has announced that it will either sell or close the 
       Scunthorpe, U.K. facility prior to the end of 1998. 


                                       46

EMPLOYEES 


   As of December 31, 1997, Huntsman Packaging employed approximately 2,250 
persons. Approximately 21% of Huntsman Packaging's employees work outside the 
United States. Huntsman Packaging has approximately 540 employees located in 
the United States and 310 employees internationally who are subject to 
collective bargaining agreements which expire from February 1998 to June 
2000. Management believes its relationships with employees are good. There 
have been no strikes or work stoppages. 


ENVIRONMENTAL MATTERS 

   Huntsman Packaging is subject to certain environmental laws, including 
those described below. Huntsman Packaging's operating budgets include costs 
and expenses associated with complying with such laws, including the 
acquisition, maintenance and repair of pollution control equipment. 
Additional costs and expenses may also be incurred to meet new requirements 
under Environmental Laws, as well as in connection with the investigation and 
remediation of threatened or actual pollution. In many instances, the 
ultimate costs under Environmental Laws and the time period during which such 
costs are likely to be incurred are difficult to predict. 

   Under certain Environmental Laws, the Company may be jointly and severally 
liable for the cost of remediation of environmental contamination on-site and 
at certain off-site locations at which the Company disposed of or arranged 
for the disposal or treatment of hazardous substances. Under the 
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 
as amended ("CERCLA"), and similar state statutes, an owner or operator of 
real property may be liable for the costs of removal or remediation of 
certain hazardous substances on or under the property, regardless of whether 
the owner or operator owned or operated the real property at the time of the 
release of the hazardous substances and regardless of whether the release or 
disposal was in compliance with law at the time it occurred. To date, 
Huntsman Packaging is not aware that any claims under CERCLA or similar state 
statutes are pending against it. 

   Under the Resource Conservation and Recovery Act of 1976, as amended 
("RCRA"), and similar state statutes, companies that hold permits to treat or 
store hazardous waste can be required to remediate contamination from solid 
waste management units at the facility, regardless of when the contamination 
occurred. The Company's plants generate only small, incidental volumes of 
hazardous waste or larger volumes stored less than 90 days, and such 
quantities do not require RCRA permits to be held at the individual 
facilities. Such waste, when generated, is disposed of at fully-permitted, 
off-site facilities or is recycled in fully-permitted recovery facilities. 

   At the Deerfield, Massachusetts plant, an underground storage tank ("UST") 
used to store fuel oil was closed in place prior to acquiring the facility in 
October 1996. Two tanks below the size regulated by the Commonwealth of 
Massachusetts remain in service; one active 1,000 gallon fuel oil tank and a 
500 gallon tank, which serves as a spill containment vessel for the process. 
The spill containment tank has never contained any material. No indication of 
soil or groundwater contamination from these vessels has been detected. There 
are currently four 4,000 gallon USTs for n-propyl alcohol at the Rochester, 
New York plant. These tanks are double-walled steel with an epoxy coating, 
and they are monitored on a regular basis. Proper notifications relative to 
the installation of the tanks have been provided to state and local 
authorities. Fourteen additional USTs have been removed from the site between 
1987 and 1992. For those tanks from which leakage was discovered, appropriate 
remedial measures were taken to address soil and groundwater contamination. 


   At the Dalton, Georgia facility, two underground tanks that were installed 
by a previous owner were discovered when a release to the soil was detected. 
The release was reported to the State of Georgia Department of Natural 
Resources in October 1990 by CT Film. Investigation revealed limited levels 
of soil and groundwater contamination. A risk-based remediation plan, which 
requires no further action, has been proposed to the State. However, the 
Company has accrued $125,000 in its December 31, 1997 balance sheet to 
remediate should the State decide such remediation is necessary. At this 
time, Huntsman Packaging does not believe that this project constitutes a 
material issue. 


                                       47

   Huntsman Packaging's operations are also subject to regulation under the 
Clean Air Act and the Clean Water Act, as well as under similar state 
statutes. Under such statutes, Huntsman Packaging may also incur costs for 
capital improvements and other requirements, including requirements under the 
Clean Air Act that are scheduled to take effect in the future. The facilities 
at Rochester, New York and Seattle, Washington have the potential to emit air 
pollutants in quantities that require them to obtain a Title V permit under 
the Clean Air Act Amendments of 1990 and the implementing state regulations. 
Both facilities have timely filed Title V applications under their respective 
state programs and receipt of permits is expected. Some capital costs for 
additional air pollution controls or monitors may be required at both sites, 
however, such expenditures are not expected to be materially adverse to the 
business. Several facilities may be required to obtain stormwater permits 
under the Clean Water Act and implementing regulations. Expenditures are not 
expected to exceed $20,000 to obtain and comply with all such permits. 
Additional costs could be incurred if additional regulations are promulgated 
under the Clean Air and Clean Water Acts and similar state statutes or under 
other Environmental Laws. 

   An analysis is currently being performed at the Harrington, Delaware and 
Chippewa Falls, Wisconsin facilities acquired in the CT acquisition to 
determine if potential emissions from ozone pollution control equipment will 
require permits under Title V of the Clean Air Act Amendments of 1990. 
Preliminary estimates indicate that such permits will probably not be 
required. However, a portion of contingent environmental reserves have been 
accrued against the possibility that some additional capital investment will 
be needed. Capital costs are expected to be less than $50,000. Additional 
costs could be incurred if additional regulations are promulgated under the 
federal Clean Air and Clean Water Acts and similar state statutes or under 
other Environmental Laws. 

   In conjunction with the sale of a plant site in 1992, the Company agreed 
to indemnify environmental losses of up to $5 million which may have been 
created at the plant site between January 1, 1988 and May 18, 1992. This 
indemnity expires on May 8, 2002 and reduces ten percent each year beginning 
May 12, 1997. The Company believes that the ultimate liability, if any, 
resulting from this indemnification will not be material. 


   Huntsman Packaging's costs and operating expenses relating to 
environmental matters totaled approximately $200,000 in each of 1995, 1996 
and 1997. This amount is expected to be sufficient to cover, among other 
things, Huntsman Packaging's routine measures to prevent, contain and clean 
up spills of materials that occur in the ordinary course of business. 
Huntsman Packaging's estimated capital expenditures for environmental matters 
are expected to be approximately $725,000 in 1998 and approximately $175,000 
in 1999. Capital expenditures and, to a lesser extent, costs and operating 
expenses relating to environmental matters will be subject to evolving 
regulatory requirements and will depend on the timing of the promulgation of 
specific standards which impose requirements on Huntsman Packaging's 
operations. 

   Rexene Corporation's operating expenses for environmental remediation, 
compliance and waste disposal for the CT Film division were approximately 
$250,000 in 1997, $345,000 in 1996 and $127,000 in 1995. In 1996, Rexene 
Corporation spent approximately $124,000 on environmental capital 
expenditures for CT Film. Rexene Corporation did not incur any environmental 
capital expenditures for CT Film in 1995. For the foreseeable future, 
Huntsman Packaging expects to incur approximately $50,000 per year in capital 
spending to address the requirements of Environmental Laws for CT Film. 


LITIGATION 

   Huntsman Packaging is involved in litigation from time to time in the 
ordinary course of its business. In management's opinion, none of such 
litigation is material to Huntsman Packaging's financial condition or results 
of operations. 

                                       48

                                  MANAGEMENT 

DIRECTORS AND EXECUTIVE OFFICERS 

   Below are the names, ages, positions and offices held, and a brief account 
of the educational and business experience of each current director and 
executive officer of Huntsman Packaging. 

                  BOARD OF DIRECTORS AND EXECUTIVE OFFICERS 




NAME                  AGE                      POSITION 
- ----                  --                       --------
                      
Jon M. Huntsman* ....   60  Director and Chairman of the Board of Directors 
Karen H. Huntsman*  .   59  Vice Chairman** 
Richard P. Durham* ..   33  Director, President and Chief Executive Officer 
Christena H. Durham*.   33  Director, Vice President 
Jack E. Knott........   43  Executive Vice President and Chief Operating 
                              Officer 
Scott K. Sorensen*  .   36  Executive Vice President and Chief Financial 
                              Officer, Treasurer 
N. Brian Stevenson ..   53  Senior Vice President and General Manager, 
                              Packaging Division 
Douglas W. Bengtson .   50  Senior Vice President and General Manager, 
                              Performance Films Division 
Ronald G. Moffitt ...   45  Senior Vice President and General Counsel, 
                              Secretary 
Stanley B. Bikulege .   34  Vice President Stretch Films, Packaging 
                              Division 
Dale A. Brockman ....   47  Vice President Manufacturing, Performance Films 
                              Division 
Daren G. Cottle......   35  Vice President and Controller, Assistant 
                              Secretary 
Thornton L. Hill ....   60  Vice President Sales and Marketing National 
                              Accounts 
Gary J. Penna........   49  Vice President Sales and Marketing Converter 
                              Films, Performance Films Division 
Patrick H. Price ....   52  Vice President Administration 
Edwin W. Stranberg ..   47  Vice President PVC Films, Packaging Division 


- ------------ 

* Such persons are related as follows: Jon M. Huntsman is the father of 
  Christena H. Durham and the father-in-law of Richard P. Durham. Karen H. 
  Huntsman is the wife of Jon M. Huntsman, the mother of Christena H. Durham 
  and the mother-in-law of Richard P. Durham. Scott K. Sorensen is the 
  brother-in-law of Richard P. Durham. 


** The Vice Chairman is an advisory position to the Board of Directors but 
   does not vote on matters brought to the Board. 

                                       49

   JON M. HUNTSMAN is a Director and the Chairman of the Board of Directors 
of Huntsman Packaging and has served as Chairman of the Board, Chief 
Executive Officer and a Director of Huntsman Corporation, its predecessors 
and other Huntsman companies for over 25 years. He is also the Chairman and 
founder of the Huntsman Cancer Foundation. In addition, Mr. Huntsman serves 
on numerous charitable, civic and industry boards. In 1994, Mr. Huntsman 
received the prestigious Kavaler Award as the chemical industry's outstanding 
Chief Executive Officer. Mr. Huntsman formerly served as Special Assistant to 
the President of the United States and as Vice Chairman of the U.S. Chamber 
of Commerce. 



   KAREN H. HUNTSMAN was appointed Vice Chairman of Huntsman Packaging
Corporation on November 24, 1997, and serves as an officer and director of other
Huntsman companies. She has served as a Vice President and Director of Huntsman
Corporation since 1995 and as a Vice President and director of Huntsman Chemical
Corporation since 1982 and 1986, respectively. By appointment of the Governor of
the State of Utah, Mrs. Huntsman also serves as a member of the Utah State Board
of Regents. Mrs. Huntsman serves on the board of directors of various corporate
and non-profit entities, including First Security Corporation and Intermountain
Health Care Inc.



   RICHARD P. DURHAM became President and Chief Executive Officer of Huntsman 
Packaging in March 1997. Mr. Durham is a Director of Huntsman Packaging and 
also is a Director of Huntsman Corporation. Mr. Durham has been with the 
Huntsman organization in various positions since 1985. Most recently, Mr. 
Durham served as Co-President and Chief Financial Officer of Huntsman 
Corporation, where in addition to being responsible for accounting, treasury, 
finance, tax, legal, human resources, public affairs, purchasing, research 
and development, and information systems, he also was responsible for 
Huntsman Packaging. Mr. Durham attended Columbia College and graduated from 
the Wharton School of Business at the University of Pennsylvania. 


   CHRISTENA H. DURHAM was appointed a Director of Huntsman Packaging 
Corporation on October 1, 1997, and became a Vice President on November 24, 
1997. Prior to joining the Company, Mrs. Durham held no other officer 
positions or directorships with any other for-profit organizations. Mrs. 
Durham also serves on the Board of Directors of various non-profit 
organizations, including the YWCA of Salt Lake City and as a trustee of the 
Huntsman Excellence in Education Foundation. 

   JACK E. KNOTT became Executive Vice President and Chief Operating Officer 
of Huntsman Packaging on September 1, 1997. Prior to joining the Company, Mr. 
Knott was a member of the Board of Directors of Rexene Corporation from April 
1996 until August 1997 and held the position of Executive Vice President of 
Rexene Corporation and President of Rexene Products from March 1995 to August 
1997. Mr. Knott was Executive Vice President--Sales and Market Development of 
Rexene Corporation from March 1992 to March 1995, Executive Vice President of 
Rexene Corporation from January 1991 to March 1992 and President of CT Film, 
a division of Rexene Corporation, from February 1989 to January 1991. Prior 
to joining Rexene Corporation, Mr. Knott worked for American National Can. 
Mr. Knott received a B.S. degree in Chemical Engineering and an M.B.A. degree 
from the University of Wisconsin and holds nine patents. 

   SCOTT K. SORENSEN recently joined Huntsman Packaging as Executive Vice 
President and Chief Financial Officer. Prior to joining the Company, Mr. 
Sorensen was Chief Financial Officer of the Power Generation Division of 
Westinghouse Electric Corporation. Prior to joining Westinghouse in 1996, Mr. 
Sorensen spent two years as Director of Business Development and Planning at 
Phelps Dodge Industries and over four years as an Associate with McKinsey & 
Company. Mr. Sorensen received an M.B.A. degree from Harvard Business School 
and a B.S. degree in Accounting from the University of Utah. 

   N. BRIAN STEVENSON became Senior Vice President and General Manager, 
Packaging Division on September 1, 1997. Mr. Stevenson joined Huntsman 
Packaging in April 1992 as Executive Vice President and Chief Operating 
Officer. He has 27 years of operating and management experience in the 
flexible packaging industry. Prior to joining the Company, Mr. Stevenson held 
numerous management positions at James River and Crown Zellerbach, including 
Plant and Divisional Controller, Eastern Regional Sales Manager, Eastern 
General Manager and, most recently, Vice President of James River's Flexible 
Packaging Division. In 1990, he left James River to become President of 
Packaging Industries. Mr. Stevenson holds a B.S. degree in Accounting and an 
M.B.A. degree from the University of Utah. 


                                       50

   DOUGLAS W. BENGTSON joined Huntsman Packaging on September 15, 1997 as 
Senior Vice President and General Manager, Performance Films Division. Mr. 
Bengtson has 24 years of experience in sales, marketing and senior 
management. Most recently, Mr. Bengtson was Vice President, Sales and 
Marketing for Food Packaging at American National Can, where Mr. Bengtson was 
responsible for the sales and marketing of flexible packaging to the food 
industry segment. His former positions include Vice President, Sales and 
Marketing at CT Film and Vice President, Sales and Marketing, Rexene Products 
Division. Mr. Bengtson holds a B.S. degree in Business/Marketing from 
Colorado State University. 

   RONALD G. MOFFITT joined Huntsman Packaging in 1997, after serving as Vice 
President and General Counsel of Huntsman Chemical Corporation. Prior to 
joining Huntsman in 1994, Mr. Moffitt was a partner and director in the Salt 
Lake City law firm of Van Cott, Bagley, Cornwall & McCarthy, with which he 
had been associated since 1981. Mr. Moffitt holds a B.A. degree in 
Accounting, a Master of Professional Accountancy degree, and a J.D. degree 
from the University of Utah. 


   STANLEY B. BIKULEGE joined Huntsman Packaging in 1992 and was appointed 
Vice President Stretch Films, Packaging Division in 1997. Mr. Bikulege's 
prior positions with the Company include General Manager--Castflex in 1997, 
Managing Director-Europe from 1996 to 1997, Managing Director PVC 
Films-Europe from 1995 to 1996, Director of Manufacturing from 1993 to 1995, 
and Plant Manager in 1992. Prior to joining Huntsman, Mr. Bikulege held 
numerous positions in Goodyear's Wingfoot Films. Mr. Bikulege received a B.S. 
degree in chemical Engineering from Youngstown State University and an M.B.A. 
degree from Georgia State University. 


   DALE A. BROCKMAN joined Huntsman Packaging in February 1993 as the plant 
manager of the newly-acquired Huntsman Design Products plant in Rochester, 
New York and later that year was appointed to the position of Director of 
Operations. In 1994 he became Vice President Operations and in 1995 became 
responsible for numerous plants. He was appointed Vice President 
Manufacturing, Packaging Division in September 1997 and was appointed Vice 
President Manufacturing, Performance Films Division on November 24, 1997. He 
has 24 years of experience in the flexible packaging industry. He has held 
numerous engineering and management positions at Crown Zellerbach and James 
River, including General Manager/Bakery Business Unit Manager. Mr. Brockman 
holds a B.S. degree in Mechanical Technology from Indiana State University. 

   DAREN G. COTTLE joined the Huntsman organization in 1989 and has held 
various positions at Huntsman Chemical Corporation, including Plant 
Controller. Mr. Cottle joined Huntsman Packaging in July 1992 as the 
Assistant Controller, was named Controller in March 1997, and became Vice 
President and Controller on November 24, 1997. Prior to joining Huntsman, Mr. 
Cottle was employed by the international accounting firm of Deloitte & 
Touche. Mr. Cottle is a Certified Public Accountant and received a B.A. and a 
masters degree in Professional Accountancy from Weber State University. 

   THORNTON L. HILL joined the Company as Vice President Sales in July 1992 
and became Vice President Sales and Marketing National Accounts on November 
24, 1997. Prior to that time, Mr. Hill was General Sales Manager of 
Goodyear's Film Products Division and had worked for Goodyear for 29 years in 
various sales and marketing positions, including Executive Vice President and 
Chief Operating Officer of Goodyear's Wingfoot Films. He holds a B.A. degree 
in Education from Morehead State University and has attended executive 
management programs at Kent State University and Northwestern University. 

   GARY J. PENNA became Vice President Sales and Marketing Converter Films, 
Performance Films Division on September 1, 1997. Mr. Penna joined Huntsman 
Packaging in 1996 as a result of the Deerfield Acquisition. Mr. Penna had 
been with Deerfield since 1994, as Vice President of Sales for Converter 
Films. Prior to joining Deerfield, Mr. Penna served a variety of management 
positions at Exxon Corporation. Mr. Penna has a degree in Chemical 
Engineering from Princeton University and an M.B.A. degree from The Amos Tuck 
School at Dartmouth College. 

   PATRICK H. PRICE joined the Company in April 1992 as Vice President 
Administration. Prior to joining the Company, he was employed for fifteen 
years with Huntsman Chemical Corporation in the human resource department, 
holding positions as Director of Personnel and Director of Benefits. He holds 
a B.S. degree in Business Administration from California State 
University-Northridge. 

                                       51


   EDWIN W. STRANBERG joined Huntsman Packaging in February 1993 as Vice 
President of Operations and became Vice President PVC Films, Packaging 
Division on November 24, 1997. He has 25 years of experience in the flexible 
packaging industry. He held various manufacturing, technical and sales 
management positions with Crown Zellerbach and James River prior to joining 
Huntsman Packaging. Prior to James River, he was Vice President and General 
Manager of Sealright Co. Inc. Mr. Stranberg holds a B.S. degree in Industrial 
Engineering from New Mexico State University. 


EXECUTIVE COMPENSATION 


SUMMARY OF COMPENSATION 

   The following Summary Compensation Table sets forth information concerning 
compensation earned in the fiscal year ended December 31, 1997, by the 
Company's Chief Executive Officers and its remaining four most highly 
compensated executive officers (the "Named Executive Officers") as of the end 
of the last fiscal year. 

                          SUMMARY COMPENSATION TABLE 




                                            ANNUAL COMPENSATION                LONG TERM COMPENSATION           ALL OTHER   
                                   ------------------------------------ -------------------------------------  COMPENSATION 
                                                                                  AWARDS            PAYOUTS        ($)      
                                                                        -------------------------- ---------   -------------
                                                                                       NUMBER OF 
                                                                                       SECURITIES 
                                                             OTHER       RESTRICTED    UNDERLYING 
                                                             ANNUAL         STOCK       OPTION/       LTIP 
NAME AND PRINCIPAL                   SALARY     BONUS     COMPENSATION    AWARD(S)        SARS      PAYOUTS 
POSITION                     YEAR      ($)       ($)         ($)(1)          ($)          (#)         ($) 
- --------------------------  ------ ---------  --------- --------------  ------------ ------------  --------- 
                                                                                        
Jon M. Huntsman 
 Chief Executive 
 Officer(2)                  1997     70,400   360,000         --             0            0           0         68,679(3) 
Richard P. Durham 
 Chief Executive 
 Officer(4)................  1997    415,618   420,000         --             0            0           0        117,033(5) 
N. Brian Stevenson 
 President, Chief 
 Operating Officer(4)......  1997    215,000    60,000         --             0            0           0         22,525(6) 
Ronald G. Moffitt 
 Senior Vice President 
 and General Counsel, 
 Secretary(4)..............  1997    116,939    50,000         --             0            0           0         17,973(7) 
Thornton L. Hill 
 Vice President--Sales ....  1997    163,500    25,000         --             0            0           0          4,904(8) 
Dale A. Brockman 
 Vice 
 President--Operations ....  1997    138,775    30,000         --             0            0           0          5,043(8) 



- ------------ 
(1)    Perquisites and other personnel benefits, securities or property are 
       less than either $50,000 or 10% of the total annual salary and bonus 
       reported for the named executive officer. 
(2)    Jon M. Huntsman's compensation, other than his director's fee (which is 
       described in "Compensation of Directors," and listed in the "All Other 
       Compensation" column), was paid entirely by Huntsman Corporation, 
       Huntsman Packaging's parent company prior to September 30, 1997. 
       Compensation figures for Jon M. Huntsman represent a prorated percentage 
       (based on the 1997 corporate overhead allocation formula) of Huntsman 
       Corporation compensation attributable to services rendered to Huntsman 
       Packaging. 
(3)    Consists of $25,000 director's fee from Huntsman Packaging, which is 
       also described in "Compensation of Directors;" $8,706 employer's 401(k) 
       contribution; and $34,973 employer's Money Purchase Plan contribution. 

(4)    Richard P. Durham's, N. Brian Stevenson's and Ronald G. Moffitt's
       compensation, other than Mr. Durham's and Mr. Stevenson's directors fees
       (which are described in "Compensation of Directors," and listed in the
       "All Other Compensation" column), was paid entirely by Huntsman
       Corporation, Huntsman Packaging's parent company prior to September 30,
       1997. Huntsman Packaging reimbursed Huntsman Corporation for such
       compensation for the period beginning October 1, 1997 and ending December
       31, 1997. Salary figures for Mr. Durham and Mr. Moffitt represent a
       prorated portion of Huntsman Corporation compensation attributable to the
       percentage of executive services that were dedicated to Huntsman
       Packaging.

(5)    Consists of $25,000 director's fee from Huntsman Packaging, which is 
       also described in "Compensation of Directors;" $17,233 employer's 
       401(k) contribution; and $74,800 Money Purchase Plan contribution. 
(6)    Consists of $18,750 director's fee (represents three fourths of
       annual directors' fee -- Mr. Stevenson served as director from January 1,
       1997 to September 30, 1997) from Huntsman Packaging, which is 
       also described in "Compensation of Directors;" $3,200 employer's 401(k) 
       contribution; and $575 Money Purchase Plan contribution. 
(7)    Consists of $3,200 employer's 401(k) contribution and $14,773 Money 
       Purchase Plan contribution. 
(8)    Employer's 401(k) contribution. 

                                       52

   The following table shows the estimated annual benefits payable under the 
Huntsman Corporation's tax-qualified defined benefit pension plan (the 
"Huntsman Corporation Pension Plan") and supplemental pension plan ("SERP") 
in specified final average earnings and years-of-service classifications. 

                     HUNTSMAN PACKAGING PENSION PLAN TABLE 



                                        YEARS OF BENEFIT SERVICE AT RETIREMENT 
                           ---------------------------------------------------------------------- 
FINAL AVERAGE COMPENSATION    10        15       20        25         30        35         40 
- -------------------------  -------- --------  -------- ---------  --------- ---------  --------- 
                                                                  
$125,000                   $20,000   $30,000  $40,000    $50,000   $60,000    $70,000   $80,000 
 150,000                    24,000    38,000   48,000     60,000    72,000     84,000    96,000
 175,000                    24,533    36,800   49,067     61,333    73,600     85,867    98,133
 200,000                    24,533    36,800   49,067     61,333    73,600     85,867    98,133



                       HUNTSMAN CORPORATION PENSION PLAN TABLE 



                                   HUNTSMAN CORPORATION PENSION PLAN AND SERP
                                     YEARS OF BENEFIT SERVICE AT RETIREMENT
FINAL AVERAGE               -----------------------------------------------------------
COMPENSATION                 10      15        20      25       30        35      40 
- ---------------------------------------------------------------------------------------
                                                           
$ 150,000                 $21,000  $31,500  $41,100  $52,600  $63,000  $73,500  $84,000
  200,000                  28,000   42,000   68,000   70,000   78,000   98,000  112,000
  250,000                  35,000   52,500   70,000   87,500  105,000  122,500  140,000
  300,000                  42,000   63,000   84,000  105,000  128,000  147,000  168,000
  350,000                  49,000   73,500   98,000  122,500  147,000  171,500  196,000
  400,000                  56,000   84,000  112,000  140,000  168,000  196,000  224,000
  450,000                  63,000   94,500  126,000  157,500  189,000  220,500  252,000
  500,000                  70,000  105,000  140,000  175,000  210,000  245,000  280,000
  600,000                  84,000  126,000  168,000  210,000  252,000  294,000  336,000
  700,000                  98,000  147,000  196,000  245,000  294,000  343,000  392,000
  800,000                 112,000  166,000  224,000  280,000  336,000  392,000  448,000
  900,000                 126,000  189,000  252,000  315,000  378,000  441,000  504,000
1,000,000                 140,000  210,000  280,000  350,000  420,000  490,000  560,000
1,100,000                 154,000  231,000  308,000  386,000  462,000  539,000  616,000
1,200,000                 168,000  252,000  336,000  420,000  504,000  598,000  672,000




   The current Huntsman Corporation Pension Plan benefit is based on the 
following formula: 1.4% of final average compensation multiplied by years of 
credited service, minus 1.4% of estimated Social Security benefits multiplied 
by years of credited service (with a maximum of 50% of Social Security 
benefits). Final Average Compensation is based on the highest average of three 
consecutive years of compensation. Messrs. Jon M. Huntsman, Richard P. Durham, 
N. Brian Stevenson and Ronald G. Moffitt were participants in the Huntsman 
Corporation Pension Plan in 1997. For the foregoing named executive officers, 
covered compensation consists of base salary and is reflected in the "Salary" 
column of the Summary Compensation Table. Federal regulations require that 
for the 1997 plan year, no more than $160,000 in compensation be considered 
for the calculation of retirement benefits under the Pension Plan, and the 
maximum annual benefit paid from a qualified defined benefit plan cannot 
exceed $125,000 as of January 1, 1997. Benefits are calculated on a straight 
life annuity basis. The benefit amounts under the Huntsman Corporation Pension 
Plan are offset for Social Security as described above. 

   The SERP is a nonqualified supplemental pension plan for designated 
executive officers, that provides benefits based on certain compensation 
amounts not included in the calculation of benefits payable under the Pension 
Plan. Messrs. Huntsman and Stevenson and Moffitt were participants in the SERP 
in 1997. The compensation amounts taken into account for these named 
executive officers under the SERP include bonuses (as reflected in the "Bonus" 
column of the Summary Compensation Table) and base salary in excess of the 
qualified plan limitations. The SERP benefit is calculated as the difference 
between (a) and (b) where (a) is the benefit determined using the Pension Plan 
formula with unlimited base salary plus bonus, and (b) is the benefit 
determined using base salary as limited by federal regulations. 


   The number of completed years of credited service as of December 31, 1997
under the Huntsman Corporation Pension Plan and SERP for the named executive 
officers participating in the plans were 27, 12, 5 and 13  years for each of 
Messrs. Huntsman, Durham, Stevenson and Moffitt, respectively.

   The following table shows the estimated annual benefits payable under 
Huntsman Packaging's tax-qualified defined benefit pension plan (the "Huntsman 
Packaging Pension Plan"), in specified final average earnings and years of 
service classifications.


                                       53

   The current Huntsman Packaging Pension Plan benefit is based on the 
following formula: 1.6% of final average compensation multiplied by years 
of credited service, minus 1.5% of estimated Social Security benefits 
multiplied by years of credited service (with a maximum of 50% of Social 
Security benefits). Final Average Compensation is based on the highest average 
of three consecutive years of compensation. Messrs. Jon M. Huntsman, Richard P.
Durham, N. Brian Stevenson and Ronald G. Moffitt were participants in the 
Huntsman Corporation Pension Plan in 1997. For Messrs. Brockman and Hill,
who were participants in the Huntsman Packaging Pension Plan in 1997, covered 
compensation consists of base salary and is reflected in the "Salary" column 
of the Summary Compensation Table. Federal regulations require that for the 
1997 plan year, no more than $160,000 in compensation be considered for the 
calculation of retirement benefits under the Pension Plan, and the maximum 
annual benefit paid from a qualified defined benefit plan cannot exceed 
$125,000 as of January 1, 1997. Benefits are calculated on a straight life 
annuity basis. The benefit amounts under the Huntsman Packaging Pension Plan 
are offset for Social Security as described above.


   The number of complete years of credited service as of December 31, 1997
under the Huntsman Packaging Pension Plan for the two named executive officers
participating in the plan were four years for each of Messrs. Brockman and
Hill.


COMPENSATION COMMITTEE 

   The Board of Directors of the Company has designated the Executive 
Committee, which is comprised of Jon M. Huntsman and Richard P. Durham, to 
perform the duties of a compensation committee for the Company. Richard P. 
Durham is an officer and employee of the Company, and Jon M. Huntsman is the 
Chairman of the Board of Directors of the Company, but is neither an officer 
nor an employee of the Company. 


   Jon M. Huntsman is one of the people who performs the duties of a 
compensation committee of the Board of Directors of Huntsman Corporation and 
is on the Executive Committee of the Company. Jon M. Huntsman and Richard P. 
Durham serve on the Board of Directors of Huntsman Corporation and are on the 
Executive Committee of the Company. Jon M. Huntsman is one of the people who 
performs the duties of a compensation committee of the Board of Directors of 
Huntsman Corporation and is on the Board of Directors of the Company. 

COMPENSATION OF DIRECTORS 


   Each director receives an annual fee of $25,000. N. Brian Stevenson served
as a director from January 1, 1997 to September 30, 1997 and Christena H. 
Durham served as a director from October 1, 1997 to December 31, 1997. Their
director's fees were pro-rated and paid accordingly.


                                       54

                          OWNERSHIP OF CAPITAL STOCK 



   Jon M. Huntsman, 500 Huntsman Way, Salt Lake City, Utah 84108, owns
approximately 65% of the total equity of Huntsman Packaging. Richard P. Durham
and the Christena Karen H. Durham Trust, 500 Huntsman Way, Salt Lake City, Utah
84108, collectively own approximately 35% of the total equity of Huntsman
Packaging.

   The Company intends to authorize 60,000 shares of a new class of non-voting
common stock for issuance to certain members of its senior management (the
"Option Shares") as incentive stock options (the "Incentive Stock Options") and
for sale to certain members of senior management (the "Purchase Shares").

   Purchase Shares and Option Shares would total approximately 5.6% of the total
of all classes of issued and outstanding common stock of the Company on a fully
diluted basis. The purchase price of Purchase Shares and the exercise price of
Option Shares is expected to be $100.00 per share. The Chief Executive Officer,
Executive Vice Presidents and Senior Vice Presidents will be eligible to receive
Incentive Stock Options. The Executive Vice Presidents and Senior Vice
Presidents will be eligible to purchase Purchase Shares.


   The Company anticipates granting the Incentive Stock Options and selling 
the Purchase Shares during the first quarter of 1998. 


                CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 

   Huntsman Packaging is party to a lease agreement with Huntsman 
Headquarters Corporation, an indirect wholly-owned subsidiary of Huntsman 
Corporation, pursuant to which Huntsman Packaging leases its headquarters and 
office space. Huntsman Packaging is obligated to pay rent calculated as a 
pro-rata portion (based on its percentage occupancy) of the mortgage loan on 
the headquarters facility. The term of the lease expires on December 31, 
2005, with an option to extend until December 31, 2015. 


   In connection with the Offering, Huntsman Packaging repaid all outstanding 
intercompany long-term indebtedness owed to Huntsman Corporation which 
amounted to $195.8 million. See "Use of Proceeds." Jon M. Huntsman and his 
family own approximately 99.6% of the outstanding capital stock of Huntsman 
Corporation. 

   Prior to the Split-Off, Huntsman Packaging was a licensee under a license 
agreement with Huntsman Group Intellectual Property Holdings Corporation to 
use the "Huntsman" tradename. Huntsman Corporation owns all of the 
outstanding common stock of Huntsman Group Intellectual Property Holdings 
Corporation. 

   Huntsman Packaging is a party to agreements with certain affiliates of 
Huntsman Corporation including, but not limited to, Huntsman Chemical 
Corporation for the purchase of polystyrene and Huntsman Polymers for the 
purchase of various resins. All such agreements provide for the purchase of 
materials or services at prevailing market prices. 


   Huntsman Packaging obtains some of its insurance coverage under policies 
of Huntsman Corporation. Huntsman Packaging is party to an agreement with 
Huntsman Corporation that provides for reimbursement of insurance premiums 
paid by Huntsman Corporation on behalf of Huntsman Packaging. The 
reimbursement payments are based on premium allocations which are determined 
in cooperation with Huntsman Corporation's independent insurance broker. It 
is anticipated that Huntsman Packaging will continue to carry a portion of 
its insurance coverage under Huntsman Corporation's policies. 

   In connection with the Split-Off, Huntsman Packaging entered into a 
services agreement with Huntsman Corporation covering the provision of 
certain tax, finance, treasury and other administrative services. These 
services are provided to Huntsman Packaging at prices that would be payable 
to an unaffiliated third party. 

                               55           



   In connection with the Split-Off, Huntsman Packaging issued 7,000 shares 
of its common stock to Richard P. Durham, President and Chief Executive 
Officer and a director of Huntsman Packaging, in exchange for a $700,000 note 
receivable. Such note bears interest at 7% per annum and is payable over 
approximately 51 months. 

   See Note 9 of the Notes to Huntsman Packaging's Consolidated Financial 
Statements, Note 8 of the Notes to the Combined Financial Statements of CT 
Film and Rexene Corporation Limited and "Supplemental Disclosures of Noncash 
Investing and Financing Activities" in the Combined Statement of Cash Flows 
for the Year Ended December 31, 1996, Eight Months Ended August 31, 1997 and 
One Month Ended September 30, 1997 included in the Combined Financial 
Statements of CT Film and Rexene Corporation Limited, each contained herein. 


                                       56

                     DESCRIPTION OF THE CREDIT FACILITIES 

CREDIT AGREEMENT 

   Huntsman Packaging has entered into a credit agreement (the "Credit 
Agreement") dated as of September 30, 1997 with the Lenders party thereto, 
The Chase Manhattan Bank ("Chase"), as Administrative Agent, and Chase 
Securities Inc. ("CSI"), as arranger, pursuant to which Chase has agreed to 
underwrite the credit facilities described below and CSI has agreed to act as 
arranger for such credit facilities. A copy of the Credit Agreement is filed 
as an exhibit to the Registration Statement of which this Prospectus 
constitutes a part. The following summary of certain provisions of the Credit 
Agreement is subject to, and is qualified in its entirety by reference to the 
Credit Agreement. 

   The Credit Agreement provides for an eight-year $75 million term loan (the 
"Term Loan") and a seven-year $150 million revolving credit facility (the 
"Revolving Credit Facility"), $20 million of which may be used for the 
issuance of letters of credit and $5 million of which will be available as a 
swingline facility. The Term Loan will amortize quarterly commencing 
approximately four years after the closing. The Term Loan will amortize as 
follows: 

                                 AMORTIZATION 
                                (IN MILLIONS) 



                                                                   ANNUAL 
                                                                 AMORTIZATION 
YEAR                                                                AMOUNT 
                                                                -------------- 
                                                             
1997...........................................................     $    -- 
1998...........................................................          -- 
1999...........................................................          -- 
2000...........................................................          -- 
2001...........................................................       1.875 
2002...........................................................      17.500 
2003...........................................................      17.500 
2004...........................................................      19.375 
2005...........................................................      18.750 

     
   The Term Loan and the loans under the Revolving Credit Facility (the 
"Revolving Loans", and, together with the Term Loan, the "Loans") bear 
interest, at Huntsman Packaging's option, at adjusted LIBOR plus a margin 
commencing at 2.00% per annum or Chase's adjusted base rate plus a margin 
commencing at 0.75% per annum. Huntsman Packaging pays a quarterly commitment 
fee on the unused amount of the Revolving Credit Facility at a rate 
commencing at 0.50% per annum. Such margins and the commitment fee rate are 
subject to reduction if Huntsman Packaging's ratio of maximum total debt to 
consolidated EBITDA improves. 

   The Term Loan will be subject to mandatory prepayment with 50% of Excess 
Cash Flow (as defined in the Credit Agreement) and the net proceeds of 
certain asset sales and debt and equity issuances. 

   The obligations of Huntsman Packaging under the Credit Agreement will be 
guaranteed by all of Huntsman Packaging's domestic subsidiaries and will be 
secured by a first priority perfected lien or pledge on substantially all 
assets of Huntsman Packaging and its domestic subsidiaries, including (i) all 
cash, deposits, accounts receivable, inventory, and related intangible 
assets, (ii) all personal property, plant and equipment, (iii) all material 
real property, (iv) all general intangibles relating to the accounts 
receivable and the inventory, including, without limitation, all technology 
rights, contract rights related thereto and patents, trademarks, or 
tradenames necessary to operate the business and dispose of receivables 
and/or inventory; and (v) all equity and debt securities, stock rights and 
intercompany notes (limited to a pledge of 65% of the capital stock of 
foreign subsidiaries). 

   The Credit Agreement will contain covenants customary for transactions of 
this type, including, without limitation, restrictions on indebtedness, 
liens, sale/leaseback transactions, asset sales, capital 

                                       57

expenditures, acquisitions, investments, transactions with affiliates, 
dividends and other restricted payments, prepayment and redemptions of debt 
and changes in business. The Credit Agreement will also contain financial 
covenants including ratio of maximum total debt/EBITDA, minimum interest 
coverage ratio and minimum net worth. 

   Events of Default under the Credit Facilities will include, without 
limitation and subject to certain cure periods and exceptions: (i) the 
failure by the Company to pay interest, principal or fees when due; (ii) the 
failure by the Company to comply with any term, covenant, condition or 
agreement provided for by the Credit Facilities, or the fact that any 
representation or warranty made by the Company pursuant to the Credit 
Facilities was false in any material respect when made; (iii) the existence 
of defaults with respect to, or acceleration of, other material indebtedness 
of the Company; (iv) a "Change in Control" (as defined in the Credit 
Facilities) of the Company; (v) the occurrence of certain material adverse 
events with respect to ERISA plans or environmental occurrences; and (vi) the 
imposition of certain judgment defaults on the Company and the commencement 
of a voluntary or involuntary bankruptcy or similar proceedings with respect 
to the Company. 

                                       58

                   DESCRIPTION OF THE NOTES AND GUARANTEES 

   The Old Notes were issued, and the New Notes will be issued under an 
indenture (the "Indenture"), dated as of September 30, 1997 by and among the 
Company, the Guarantors and The Bank of New York, as Trustee (the "Trustee"), 
a copy of which is filed as an exhibit to the Registration Statement of which 
this Prospectus constitutes a part. The following summary of certain 
provisions of the Indenture is subject to, and is qualified in its entirety 
by reference to, the Trust Indenture Act of 1939, as amended (the "TIA"), and 
to all of the provisions of the Indenture, including the definitions of 
certain terms therein and those terms made a part of the Indenture by 
reference to the TIA as in effect on the date of the Indenture. The 
definitions of certain capitalized terms used in the following summary are 
set forth below under "--Certain Definitions." For purposes of this section 
and the section entitled "The Exchange Offer" only, references to the 
"Company" include only Huntsman Packaging Corporation and not its 
Subsidiaries. 

   The Old Notes are, and the New Notes will be, unsecured senior 
subordinated obligations of the Company, ranking subordinate in right of 
payment to all existing and future Senior Debt of the Company, pari passu in 
right of payment with all senior subordinated Indebtedness of the Company, 
and senior in right of payment to all existing, and future subordinated 
obligations of the Company. 

   The Old Notes were issued, and the New Notes will be issued in fully 
registered form only, without coupons, in denominations of $1,000 and 
integral multiples thereof. Initially, the Trustee will act as Paying Agent 
and Registrar for the Notes. The Notes may be presented for registration of 
transfer and exchange at the offices of the Registrar, which initially will 
be the Trustee's corporate trust office. The Company may change any Paying 
Agent and Registrar without notice to Holders. The Company will pay principal 
(and premium, if any) on the Notes through the facilities of the Depository 
Trust Company in New York, New York. At the Company's option, interest may be 
paid at the Trustee's principal corporate trust office or by check mailed to 
the registered address of Holders. Any Notes that remain outstanding after 
the completion of the Exchange Offer, together with the Exchange Notes issued 
in connection with the Exchange Offer, will be treated as a single class of 
securities under the Indenture. 

PRINCIPAL, MATURITY AND INTEREST 

   The Notes are limited in aggregate principal amount to $125 million and 
will mature on October 1, 2007. Interest on the Notes will accrue at the rate 
of 9 1/8% per annum and will be payable semi-annually in cash on each April 1 
and October 1 (each an "Interest Payment Date") commencing on April 1, 1998, 
for the period commencing on and including the immediately preceding Interest 
Payment Date and ending on and including the day next preceding the Interest 
Payment Date (an "Interest Period"), with the exception that the first 
Interest Period commenced on and included September 30, 1997 and shall end on 
and include April 1, 1998. Interest is payable to the persons who are 
registered Holders at the close of business on March 15, and September 15 
immediately preceding the applicable Interest Payment Date. 

   The Notes will not be entitled to the benefit of any mandatory sinking 
fund. 

REDEMPTION 

   Optional Redemption. The Notes will be redeemable, at the Company's 
option, in whole at any time or in part from time to time, on and after 
October 1, 2002, upon not less than 30 nor more than 60 days' notice, at the 
following redemption prices (expressed as percentages of the principal amount 
thereof) if redeemed during the twelve-month period commencing on October 1 
of the year set forth below, plus, in each case, accrued and unpaid interest 
thereon, if any, to the date of redemption: 



YEAR                 PERCENTAGE 
- ----                 ------------ 
                  
2002................    104.563% 
2003................    103.042% 
2004................    101.521% 
2005 and thereafter.    100.000% 


   Optional Redemption upon Equity Offerings. At any time, or from time to 
time, on or prior to October 1, 2000, the Company may, at its option, use the 
net cash proceeds of one or more Equity 

                                       59

Offerings (as defined below) to redeem up to 35% of the aggregate principal 
amount of the Notes originally issued at a redemption price equal to 109 1/8% 
of the principal amount thereof plus accrued and unpaid interest thereon, if 
any, to the date of redemption; provided that at least 65% of the principal 
amount of the Notes originally issued remains outstanding immediately after 
any such redemption. In order to effect the foregoing redemption with the 
proceeds of any Equity Offering, the Company shall make such redemption not 
more than 120 days after the consummation of any such Equity Offering. 

   As used in the preceding paragraph, "Equity Offering" means any sale of 
Qualified Capital Stock of the Company or any capital contribution to the 
equity of the Company. 

SELECTION AND NOTICE OF REDEMPTION 

   In the event that less than all of the Notes are to be redeemed at any 
time, selection of such Notes for redemption will be made by the Trustee in 
compliance with the requirements of the principal national securities 
exchange, if any, on which such Notes are listed or, if such Notes are not 
then listed on a national securities exchange, on a pro rata basis, by lot or 
by such method as the Trustee shall deem fair and appropriate; provided, 
however, that no Notes of a principal amount of $1,000 or less shall be 
redeemed in part; provided, further, that if a partial redemption is made 
with the proceeds of an Equity Offering, selection of the Notes or portions 
thereof for redemption shall be made by the Trustee only on a pro rata basis 
or on as nearly a pro rata basis as is practicable (subject to DTC 
procedures), unless such method is otherwise prohibited. Notice of redemption 
shall be mailed by first-class mail at least 30 but not more than 60 days 
before the redemption date to each Holder to be redeemed at its registered 
address. If any Note is to be redeemed in part only, the notice of redemption 
that relates to such Note shall state the portion of the principal amount 
thereof to be redeemed. A new Note in a principal amount equal to the 
unredeemed portion thereof will be issued in the name of the Holder thereof 
upon cancellation of the original Note. On and after the redemption date, 
interest will cease to accrue on Notes or portions thereof called for 
redemption as long as the Company has deposited with the Paying Agent funds 
in satisfaction of the applicable redemption price pursuant to the Indenture. 

RANKING 

   The payment of all Obligations on the Notes is subordinated in right of 
payment to the prior payment in full in cash or Cash Equivalents of all 
Obligations on Senior Debt including, without limitation, the Company's 
Obligations under the Credit Agreement. Upon any payment or distribution of 
assets of the Company of any kind or character, whether in cash, property or 
securities, to creditors upon any liquidation, dissolution, winding up, 
reorganization, assignment for the benefit of creditors or marshaling of 
assets of the Company or in a bankruptcy, reorganization, insolvency, 
receivership or other similar proceeding relating to the Company or its 
property, whether voluntary or involuntary, all Obligations due or to become 
due upon all Senior Debt shall first be paid in full in cash or Cash 
Equivalents, or such payment duly provided for to the satisfaction of the 
holders of Senior Debt, before any payment or distribution of any kind or 
character is made on account of any Obligations on the Notes, or for the 
acquisition of any of the Notes for cash or property or otherwise. If any 
default occurs and is continuing in the payment when due, whether at 
maturity, upon any redemption, by declaration or otherwise, of any principal 
of, interest on, unpaid drawings for letters of credit issued in respect of, 
or regularly accruing fees with respect to, any Senior Debt, no payment or 
distribution of any kind or character shall be made by or on behalf of the 
Company or any other Person on its or their behalf with respect to any 
Obligations on the Notes or to acquire any of the Notes for cash or property 
or otherwise. 

   In addition, if any other event of default occurs and is continuing with 
respect to any Designated Senior Debt, as such event of default is defined in 
the instrument creating or evidencing such Designated Senior Debt, permitting 
the holders of such Designated Senior Debt then outstanding (or an agent or 
trustee on their behalf) to accelerate the maturity thereof and if the 
Representative for such issue of Designated Senior Debt gives written notice 
of the event of default to the Trustee invoking the provisions described in 
this paragraph (a "Default Notice"), then, unless and until all events of 
default have been cured or waived or have ceased to exist or the Trustee 
receives notice from the Representative for the respective issue of 
Designated Senior Debt terminating the Blockage Period (as defined below), 
during 

                                       60

the 180 days after the delivery of such Default Notice (the "Blockage 
Period"), neither the Company nor any other Person on its behalf shall (x) 
make any payment or distribution of any kind or character with respect to any 
Obligations on the Notes or (y) acquire any of the Notes for cash or property 
or otherwise. Notwithstanding anything herein to the contrary, in no event 
will a Blockage Period extend beyond 180 days after the delivery of the 
Default Notice and only one such Blockage Period may be commenced within any 
360 consecutive days. No event of default which existed or was continuing on 
the date of the commencement of any Blockage Period with respect to the 
Designated Senior Debt shall be, or be made, the basis for commencement of a 
second Blockage Period by the Representative of such Designated Senior Debt 
whether or not within a period of 360 consecutive days, unless such event of 
default shall have been cured or waived for a period of not less than 90 
consecutive days (it being acknowledged that any subsequent action, or any 
breach of any financial covenants for a period commencing after the date of 
commencement of such Blockage Period that, in either case, would give rise to 
an event of default pursuant to any provisions under which an event of 
default previously existed or was continuing shall constitute a new event of 
default for this purpose). 

   By reason of such subordination, in the event of the insolvency of the 
Company, creditors of the Company who are not holders of Senior Debt, 
including the Holders, may recover less, ratably, than holders of Senior 
Debt. 


   As of December 31, 1997 Huntsman Packaging had approximately $125.5 
million of Senior Debt outstanding (excluding unused commitments and 
outstanding letters of credit totalling $93.6 million under the Credit 
Facilities) and Restricted Subsidiaries that are not Guarantors would have 
had no Indebtedness outstanding (excluding intercompany loans and guarantees 
of Huntsman Packaging's Indebtedness). See "Risk Factors -- Substantial 
Leverage and Ability to Service Indebtedness." 


GUARANTEES 

   Each Guarantor fully and unconditionally guarantees, on a senior 
subordinated basis, jointly and severally, to each Holder and the Trustee, 
the full and prompt performance of the Company's obligations under the 
Indenture and the Notes, including the payment of principal of and interest 
on the Notes. The Old Guarantees are, and the New Guarantees will be, 
subordinated to Guarantor Senior Debt on the same basis as the Notes are 
subordinated to Senior Debt. The obligations of each Guarantor are limited to 
the maximum amount which, after giving effect to all other contingent and 
fixed liabilities of such Guarantor and after giving effect to any 
collections from or payments made by or on behalf of any other Guarantor in 
respect of the obligations of such other Guarantor under its Guarantee or 
pursuant to its contribution obligations under the Indenture, will result in 
the obligations of such Guarantor under the Guarantee not constituting a 
fraudulent conveyance or fraudulent transfer under federal or state law. Each 
Guarantor that makes a payment or distribution under a Guarantee shall be 
entitled to a contribution from each other Guarantor in an amount pro rata, 
based on the net assets of each Guarantor, determined in accordance with 
GAAP. 

   Each Guarantor may consolidate with or merge into or sell its assets to 
(i) the Company, another Guarantor that is a Restricted Subsidiary of the 
Company or a Restricted Subsidiary that is or in connection therewith becomes 
a Guarantor without limitation, or (ii) other Persons upon the terms and 
conditions set forth in the Indenture. See "--Certain Covenants -- Merger, 
Consolidation and Sale of Assets." In the event all the Capital Stock or 
assets of a Guarantor or parent company of a Guarantor are sold and the sale 
complies with the provisions set forth in "--Certain Covenants -- Limitation 
on Asset Sales," the Guarantor's Guarantee will be released. 

CHANGE OF CONTROL 

   The Indenture provides that upon the occurrence of a Change of Control, 
each Holder will have the right to require that the Company purchase all or a 
portion of such Holder's Notes pursuant to the offer described below (the 
"Change of Control Offer"), at a purchase price equal to 101% of the 
principal amount thereof plus accrued interest to the date of purchase. 

   The Indenture provides that, prior to the mailing of the notice referred 
to below, but in any event within 30 days following any Change of Control, 
the Company covenants to (i) repay in full and terminate 

                                       61

all commitments under Indebtedness under the Credit Agreement and all other 
Senior Debt the terms of which require repayment upon a Change of Control or 
offer to repay in full and terminate all commitments under all Indebtedness 
under the Credit Agreement and all other such Senior Debt and to repay the 
Indebtedness owed to each lender which has accepted such offer or (ii) obtain 
the requisite consents under the Credit Agreement and all other Senior Debt 
to permit the repurchase of the Notes as provided below. The Company shall 
first comply with the covenant in the immediately preceding sentence before 
it shall be required to repurchase Notes pursuant to the provisions described 
below. The Company's failure to comply with the covenant described in the 
immediately preceding sentence shall constitute an Event of Default described 
in clause (iii) and not in clause (ii) under "Events of Default" below. 

   Within 30 days following the date upon which the Change of Control 
occurred, the Company must send, by first class mail, a notice to each 
Holder, with a copy to the Trustee, which notice shall govern the terms of 
the Change of Control Offer. Such notice shall state, among other things, the 
purchase date, which must be no earlier than 30 days nor later than 60 days 
from the date such notice is mailed, other than as may be required by law 
(the "Change of Control Payment Date"). Holders electing to have a Note 
purchased pursuant to a Change of Control Offer will be required to surrender 
the Note, with the form entitled "Option of Holder to Elect Purchase" on the 
reverse of the Note completed, to the Paying Agent at the address specified 
in the notice prior to the close of business on the third business day prior 
to the Change of Control Payment Date. 

   If a Change of Control Offer is made, there can be no assurance that the 
Company will have available funds sufficient to pay the Change of Control 
purchase price for all the Notes that might be delivered by Holders seeking 
to accept the Change of Control Offer. In the event the Company is required 
to purchase outstanding Notes pursuant to a Change of Control Offer, the 
Company expects that it would seek third party financing to the extent it 
does not have available funds to meet its purchase obligations. However, 
there can be no assurance that the Company would be able to obtain such 
financing. 

   Neither the Board of Directors of the Company nor the Trustee may waive 
the covenant relating to a Holder's right to redemption upon a Change of 
Control. Restrictions in the Indenture described herein on the ability of the 
Company and its Restricted Subsidiaries to incur additional Indebtedness, to 
grant liens on its property, to make Restricted Payments and to make Asset 
Sales may also make more difficult or discourage a takeover of the Company, 
whether favored or opposed by the management of the Company. Consummation of 
any such transaction in certain circumstances may require redemption or 
repurchase of the Notes, and there can be no assurance that the Company or 
the acquiring party will have sufficient financial resources to effect such 
redemption or repurchase. Such restrictions and the restrictions on 
transactions with Affiliates may, in certain circumstances, make more 
difficult or discourage any leveraged buyout of the Company or any of its 
Subsidiaries by the management of the Company. While such restrictions cover 
a wide variety of arrangements which have traditionally been used to effect 
highly leveraged transactions, the Indenture may not afford the Holders 
protection in all circumstances from the adverse aspects of a highly 
leveraged transaction, reorganization, restructuring, merger or similar 
transaction. 

   The Company will comply with the requirements of Rule 14e-1 under the 
Exchange Act and any other securities laws and regulations thereunder to the 
extent such rule, laws and regulations are applicable in connection with the 
repurchase of Notes pursuant to a Change of Control Offer. To the extent that 
the provisions of any securities laws or regulations conflict with the 
"Change of Control" provisions of the Indenture, the Company shall comply 
with the applicable securities laws and regulations and shall not be deemed 
to have breached its obligations under the "Change of Control" provisions of 
the Indenture by virtue thereof. 

                                       62

CERTAIN COVENANTS 

   The Indenture contains, among others, the following covenants: 

   Limitation on Incurrence of Additional Indebtedness. The Company will not, 
and will not permit any of its Restricted Subsidiaries to, directly or 
indirectly, create, incur, assume, guarantee, acquire, become liable, 
contingently or otherwise, with respect to, or otherwise become responsible 
for payment of (collectively, "incur") any Indebtedness (other than Permitted 
Indebtedness); provided, however, that if no Default or Event of Default 
shall have occurred and be continuing at the time of or as a consequence of 
the incurrence of any such Indebtedness, the Company and its Restricted 
Subsidiaries which are Guarantors may incur Indebtedness (including, without 
limitation, Acquired Indebtedness) and Restricted Subsidiaries of the Company 
which are not Guarantors may incur Acquired Indebtedness in each case if on 
the date of the incurrence of such Indebtedness, after giving effect to the 
incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the 
Company is greater than 2.0 to 1.0 if such proposed incurrence is on or prior 
to the third anniversary of the Issue Date and 2.25 to 1.0 if such proposed 
incurrence is thereafter. 

   Limitation on Restricted Payments. The Company will not, and will not 
cause or permit any of its Restricted Subsidiaries to, directly or 
indirectly, (a) declare or pay any dividend or make any distribution (other 
than dividends or distributions payable in Qualified Capital Stock of the 
Company) on or in respect of shares of Capital Stock of the Company or any 
Restricted Subsidiary of the Company to holders of such Capital Stock (other 
than dividends or distributions payable to the Company or any Restricted 
Subsidiary of the Company), (b) purchase, redeem or otherwise acquire or 
retire for value any Capital Stock of the Company or any Restricted 
Subsidiary of the Company or any warrants, rights or options to purchase or 
acquire shares of any class of such Capital Stock (other than any such 
Capital Stock, warrants, rights or options owned by the Company or any 
Restricted Subsidiary of the Company), (c) make any principal payment on, 
purchase, defease, redeem, prepay, decrease or otherwise acquire or retire 
for value, prior to any scheduled final maturity, scheduled repayment or 
scheduled sinking fund payment, any Indebtedness of the Company or any 
Restricted Subsidiary of the Company that is subordinate or junior in right 
of payment to the Notes or the Guarantees, or (d) make any Investment (other 
than Permitted Investments) (each of the foregoing actions set forth in 
clauses (a), (b) (c) and (d) being referred to as a "Restricted Payment"), if 
at the time of such Restricted Payment or immediately after giving effect 
thereto, (i) a Default or an Event of Default shall have occurred and be 
continuing or (ii) the Company is not able to incur at least $1.00 of 
additional Indebtedness (other than Permitted Indebtedness) in compliance 
with the "Limitation on Incurrence of Additional Indebtedness" covenant or 
(iii) the aggregate amount of Restricted Payments (including such proposed 
Restricted Payment) made subsequent to the Issue Date (the amount expended 
for such purposes, if other than in cash, being the fair market value of such 
property as determined reasonably and in good faith by the Board of Directors 
of the Company) shall exceed the sum of: (w) $10 million plus (x) 50% of the 
cumulative Consolidated Net Income (or if cumulative Consolidated Net Income 
shall be a loss, minus 100% of such loss) of the Company earned subsequent to 
the Issue Date and on or prior to the date the Restricted Payment occurs (the 
"Reference Date") (treating such period as a single accounting period); plus 
(y) 100% of the aggregate net cash proceeds received by the Company from any 
Person (other than a Subsidiary of the Company) from the issuance and sale 
subsequent to the Issue Date and on or prior to the Reference Date of 
Qualified Capital Stock of the Company; plus (z) without duplication of any 
amounts included in clause (iii)(y) above, 100% of the aggregate net cash 
proceeds of any equity contribution received by the Company from a holder of 
the Company's Capital Stock (excluding, in the case of clauses (iii) (y) and 
(z), any net cash proceeds from the issuance or sale of Specified Venture 
Capital Stock). 

   Notwithstanding the foregoing, the provisions set forth in the immediately 
preceding paragraph do not prohibit: (1) the payment of any dividend within 
60 days after the date of declaration of such dividend if the dividend would 
have been permitted on the date of declaration; (2) the acquisition of any 
shares of Capital Stock of the Company, either (i) solely in exchange for 
shares of Qualified Capital Stock of the Company or (ii) if no Default or 
Event of Default shall have occurred and be continuing, through the 
application of net proceeds of a substantially concurrent sale for cash 
(other than to a Subsidiary of the Company) of shares of Qualified Capital 
Stock of the Company; (3) if no Default or Event of Default shall 

                                       63

have occurred and be continuing, the acquisition of any Indebtedness of the 
Company that is subordinate or junior in right of payment to the Notes either 
(i) solely in exchange for shares of Qualified Capital Stock of the Company, 
or (ii) through the application of net proceeds of a substantially concurrent 
sale or incurrence for cash (other than to a Subsidiary of the Company) of 
(A) shares of Qualified Capital Stock of the Company or (B) Refinancing 
Indebtedness; (4) so long as no Default or Event of Default shall have 
occurred and be continuing, repurchases by the Company of Common Stock of the 
Company from employees of the Company or any of its Subsidiaries or their 
authorized representatives upon the death, disability or termination of 
employment of such employees, in an aggregate amount not to exceed $2 million 
in any calendar year; (5) the redemption or repurchase of any Common Stock of 
the Company held by a Wholly Owned Restricted Subsidiary of the Company which 
obtained such Common Stock directly from the Company; or (6) the payment of 
consideration by an unaffiliated third party to shareholders of the Company. 
In determining the aggregate amount of Restricted Payments made subsequent to 
the Issue Date in accordance with clause (iii) of the immediately preceding 
paragraph, cash amounts expended pursuant to clauses (1), (2), (3)(ii)(A) and 
(4) shall be included in such calculation. 

   Not later than the date of making any Restricted Payment, the Company 
shall deliver to the Trustee an officers' certificate stating that such 
Restricted Payment complies with the Indenture and setting forth in 
reasonable detail the basis upon which the required calculations were 
computed, which calculations may be based upon the Company's quarterly 
financial statements last provided to the Trustee pursuant to "--Reports to 
Holders." 

   Limitation on Asset Sales. The Company will not, and will not permit any 
of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the 
Company or the applicable Restricted Subsidiary, as the case may be, receives 
consideration at the time of such Asset Sale at least equal to the fair 
market value of the assets sold or otherwise disposed of (as determined in 
good faith by the Company's Board of Directors), (ii) at least 75% of the 
consideration received by the Company or the Restricted Subsidiary, as the 
case may be, from such Asset Sale shall be in the form of cash or Cash 
Equivalents (provided that the amount of any liabilities (as shown on the 
Company's or such Restricted Subsidiary's most recent balance sheet) of the 
Company or any such Restricted Subsidiary (other than liabilities that are by 
their terms subordinated to the Notes) that are assumed by the transferee of 
any such assets shall be deemed to be cash for purposes of this provision) 
and is received at the time of such disposition; and (iii) upon the 
consummation of an Asset Sale, the Company shall apply, or cause such 
Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset 
Sale within 365 days (or in the case of Foreign Subsidiary Asset Sales, 545 
days) of receipt thereof either (A) to prepay any Senior Debt, Guarantor 
Senior Debt or Indebtedness of a Restricted Subsidiary that is not a 
Guarantor and, in the case of any such Indebtedness under any revolving 
credit facility, effect a permanent reduction in the availability under such 
revolving credit facility, (B) to make an investment in or expenditures for 
properties and assets (including Capital Stock of any entity) that replace 
the properties and assets that were the subject of such Asset Sale or in 
properties and assets (including Capital Stock of any entity) that will be 
used in the business of the Company and its Subsidiaries as existing on the 
Issue Date or in businesses reasonably related thereto ("Replacement 
Assets"), or (C) a combination of prepayment and investment permitted by the 
foregoing clauses (iii)(A) and (iii)(B). On the 366th day (or in the case of 
Foreign Subsidiary Asset Sales, the 546th day) after an Asset Sale or such 
earlier date, if any, as the Board of Directors of the Company or of such 
Restricted Subsidiary determines not to apply the Net Cash Proceeds relating 
to such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of 
the next preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such 
aggregate amount of Net Cash Proceeds which have not been applied on or 
before such Net Proceeds Offer Trigger Date as permitted in clauses (iii)(A), 
(iii)(B) and (iii)(C) of the next preceding sentence (each a "Net Proceeds 
Offer Amount") shall be applied by the Company or such Restricted Subsidiary 
to make an offer to purchase (the "Net Proceeds Offer") on a date (the "Net 
Proceeds Offer Payment Date") not less than 30 nor more than 45 days 
following the applicable Net Proceeds Offer Trigger Date, from all Holders on 
a pro rata basis, that amount of Notes equal to the Net Proceeds Offer Amount 
at a price equal to 100% of the principal amount of the Notes to be 
purchased, plus accrued and unpaid interest thereon, if any, to the date of 
purchase; provided, however, that if at any time any non-cash consideration 
received by the Company or any Restricted Subsidiary of the Company, as the 
case may be, in connection with any Asset Sale is converted into or sold or 
otherwise disposed of 

                                       64

for cash (other than interest received with respect to any such non-cash 
consideration), then such conversion or disposition shall be deemed to 
constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be 
applied in accordance with this covenant. The Company shall not be required 
to make a Net Proceeds Offer until there is an aggregate unutilized Net 
Proceeds Offer Amount equal to or in excess of $10 million resulting from one 
or more Asset Sales, at which time, the unutilized Net Proceeds Offer Amount, 
shall be applied as required pursuant to this paragraph, provided, however, 
that the first $10 million of such Net Proceeds Offer Amount need not be 
applied as required pursuant to this paragraph. 

   In the event of the transfer of substantially all (but not all) of the 
property and assets of the Company and its Restricted Subsidiaries as an 
entirety to a Person in a transaction permitted under "--Merger, 
Consolidation and Sale of Assets," and as a result thereof the Company is no 
longer an obligor on the Notes, the successor corporation shall be deemed to 
have sold the properties and assets of the Company and its Restricted 
Subsidiaries not so transferred for purposes of this covenant, and shall 
comply with the provisions of this covenant with respect to such deemed sale 
as if it were an Asset Sale. In addition, the fair market value of such 
properties and assets of the Company or its Restricted Subsidiaries deemed to 
be sold shall be deemed to be Net Cash Proceeds for purposes of this 
covenant. 

   Notwithstanding the two immediately preceding paragraphs, the Company and 
its Restricted Subsidiaries will be permitted to consummate an Asset Sale 
without complying with such paragraphs to the extent (i) at least 80% of the 
consideration for such Asset Sale constitutes Replacement Assets and (ii) 
such Asset Sale is for fair market value; provided that any consideration not 
constituting Replacement Assets received by the Company or any of its 
Restricted Subsidiaries in connection with any Asset Sale permitted to be 
consummated under this paragraph shall constitute Net Cash Proceeds subject 
to the provisions of the two preceding paragraphs. 

   Each Net Proceeds Offer will be mailed to the record Holders as shown on 
the register of Holders within 30 days following the Net Proceeds Offer 
Trigger Date, with a copy to the Trustee, and shall comply with the 
procedures set forth in the Indenture. Upon receiving notice of the Net 
Proceeds Offer, Holders may elect to tender their Notes in whole or in part 
in integral multiples of $1,000 in exchange for cash. To the extent Holders 
properly tender Notes in an amount exceeding the Net Proceeds Offer Amount, 
Notes of tendering Holders will be purchased on a pro rata basis (based on 
amounts tendered). A Net Proceeds Offer shall remain open for a period of 20 
business days or such longer period as may be required by law. 

   The Company will comply with the requirements of Rule 14e-1 under the 
Exchange Act and any other securities laws and regulations thereunder to the 
extent such rule, laws and regulations are applicable in connection with the 
repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the 
provisions of any securities laws or regulations conflict with the "Asset 
Sale" provisions of the Indenture, the Company shall comply with the 
applicable securities laws and regulations and shall not be deemed to have 
breached its obligations under the "Asset Sale" provisions of the Indenture 
by virtue thereof. 

   Limitation on Dividend and Other Payment Restrictions Affecting 
Subsidiaries. The Company will not, and will not cause or permit any of its 
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause 
or permit to exist or become effective any encumbrance or restriction on the 
ability of any Restricted Subsidiary of the Company to (a) pay dividends or 
make any other distributions on or in respect of its Capital Stock; (b) make 
loans or advances or to pay any Indebtedness or other obligation owed to the 
Company or any other Restricted Subsidiary of the Company; or (c) transfer 
any of its property or assets to the Company or any other Restricted 
Subsidiary of the Company, except for such encumbrances or restrictions 
existing under or by reason of: (1) applicable law; (2) the Indenture; (3) 
customary non-assignment provisions of any contract or any lease governing a 
leasehold interest of any Restricted Subsidiary of the Company; (4) any 
instrument governing Acquired Indebtedness, which encumbrance or restriction 
is not applicable to any Person, or the properties or assets of any Person, 
other than the Person or the properties or assets of the Person so acquired; 
(5) agreements existing on the Issue Date to the extent and in the manner 
such agreements are in effect on the Issue Date; (6) restrictions 

                                       65

imposed by any agreement to sell assets or Capital Stock permitted under the 
Indenture to any Person pending the closing of such sale; (7) any agreement 
or instrument governing Capital Stock of any Person that is acquired as in 
effect at the time of such acquisition which was not entered into in 
connection with, or in anticipation or contemplation of, such acquisition; 
(8) Indebtedness or other contractual requirements of a Securitization Entity 
in connection with a Qualified Securitization Transaction; provided that such 
restrictions apply only to such Securitization Entity; (9) Liens incurred in 
accordance with the covenant described under "--Limitation on Liens"; (10) 
any restrictions under an agreement governing Indebtedness of a Foreign 
Subsidiary permitted under "--Limitation on Incurrence of Additional 
Indebtedness"; (11) the Credit Agreement; or (12) an agreement governing 
Indebtedness incurred to Refinance the Indebtedness issued, assumed or 
incurred pursuant to an agreement referred to in clause (2), (4), (5), (8), 
(9), (10) or (11) above; provided, however, that the provisions relating to 
such encumbrance or restriction contained in any such Indebtedness are no 
less favorable to the Company in any material respect as determined by the 
Board of Directors of the Company in their reasonable and good faith judgment 
than the provisions relating to such encumbrance or restriction contained in 
agreements referred to in such clause (2), (4), (5), (8), (9), (10) or (11). 

   Limitation on Preferred Stock of Restricted Subsidiaries. The Company will 
not permit any of its Restricted Subsidiaries to issue any Preferred Stock 
(other than to the Company or to a Wholly Owned Restricted Subsidiary of the 
Company) or permit any Person (other than the Company or a Wholly Owned 
Restricted Subsidiary of the Company) to own any Preferred Stock of any 
Restricted Subsidiary of the Company. 

   Limitation on Liens. The Company shall not, and shall not permit any of 
its Restricted Subsidiaries to, create, incur or otherwise cause or suffer to 
exist or become effective any Liens of any kind upon any property or assets 
of the Company or any Restricted Subsidiary, now owned or hereafter acquired, 
which secures Indebtedness pari passu with or subordinated to the Notes or 
the Guarantees unless (i) if such Lien secures Indebtedness which is pari 
passu with the Notes or the Guarantees, then the Notes or the Guarantees, as 
the case may be, are secured on an equal and ratable basis with the 
obligations so secured until such time as such obligation is no longer 
secured by a Lien or (ii) if such Lien secures Indebtedness which is 
subordinated to the Notes or the Guarantees, any such Lien shall be 
subordinated to a Lien granted to the Holders of the Notes in the same 
collateral as that securing such Lien to the same extent as such subordinated 
Indebtedness is subordinated to the Notes or the Guarantees, as the case may 
be. 

   Prohibition on Incurrence of Senior Subordinated Debt. The Company will 
not, and will not cause or permit any Guarantor to, incur or suffer to exist 
Indebtedness that is senior in right of payment to the Notes or the 
Guarantees, as the case may be, and subordinate in right of payment to any 
other Indebtedness of the Company or such Guarantor, as the case may be. 

   Merger, Consolidation and Sale of Assets. The Company will not, in a 
single transaction or series of related transactions, consolidate or merge 
with or into any Person, or sell, assign, transfer, lease, convey or 
otherwise dispose of (or cause or permit any Restricted Subsidiary of the 
Company to sell, assign, transfer, lease, convey or otherwise dispose of) all 
or substantially all of the Company's assets (determined on a consolidated 
basis for the Company and the Company's Restricted Subsidiaries) whether as 
an entirety or substantially as an entirety to any Person unless: (i) either 
(1) the Company shall be the surviving or continuing entity or (2) the Person 
(if other than the Company) formed by such consolidation or into which the 
Company is merged or the Person which acquires by sale, assignment, transfer, 
lease, conveyance or other disposition the properties and assets of the 
Company and of the Company's Restricted Subsidiaries substantially as an 
entirety (the "Surviving Entity") (x) shall be an entity organized and 
validly existing under the laws of the United States or any State thereof or 
the District of Columbia and (y) shall expressly assume, by supplemental 
indenture (in form and substance satisfactory to the Trustee), executed and 
delivered to the Trustee, the due and punctual payment of the principal of, 
and premium, if any, and interest on all of the Notes and the performance of 
every covenant of the Notes, the Indenture and the Registration Rights 
Agreement on the part of the Company to be performed or observed; (ii) 
immediately after giving effect to such transaction and the assumption 
contemplated by clause (i)(2)(y) above (including giving effect to any 
Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred 
in connection with or in respect of such transaction), the Company or such 

                                       66

Surviving Entity, as the case may be, (1) shall have a Consolidated Net Worth 
equal to or greater than the Consolidated Net Worth of the Company 
immediately prior to such transaction and (2) shall be able to incur at least 
$1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant 
to the "--Limitation on Incurrence of Additional Indebtedness" covenant; 
(iii) immediately before and immediately after giving effect to such 
transaction and the assumption contemplated by clause (i)(2)(y) above 
(including, without limitation, giving effect to any Indebtedness and 
Acquired Indebtedness incurred or anticipated to be incurred and any Lien 
granted in connection with or in respect of the transaction), no Default or 
Event of Default shall have occurred or be continuing; and (iv) the Company 
or the Surviving Entity shall have delivered to the Trustee an officers' 
certificate and an opinion of counsel, each stating that such consolidation, 
merger, sale, assignment, transfer, lease, conveyance or other disposition 
and, if a supplemental indenture is required in connection with such 
transaction, such supplemental indenture comply with the applicable 
provisions of the Indenture and that all conditions precedent in the 
Indenture relating to such transaction have been satisfied. 

   For purposes of the foregoing, the transfer (by lease, assignment, sale or 
otherwise, in a single transaction or series of transactions) of all or 
substantially all of the properties or assets of one or more Restricted 
Subsidiaries of the Company the Capital Stock of which constitutes all or 
substantially all of the properties and assets of the Company, shall be 
deemed to be the transfer of all or substantially all of the properties and 
assets of the Company unless such transfer is to the Company or one or more 
Wholly-Owned Restricted Subsidiaries. 

   The Indenture provides that upon any consolidation, combination or merger 
or any transfer of all or substantially all of the assets of the Company in 
accordance with the foregoing, in which the Company is not the continuing 
corporation, the successor Person formed by such consolidation or into which 
the Company is merged or to which such conveyance, lease or transfer is made 
shall succeed to, and be substituted for, and may exercise every right and 
power of, the Company under the Indenture and the Notes with the same effect 
as if such surviving entity had been named as such. 

   Each Guarantor (other than any Guarantor whose Guarantee is to be released 
in accordance with the terms of the Guarantee and the Indenture in connection 
with any transaction complying with the provisions of "--Limitation on Asset 
Sales") will not, and the Company will not cause or permit any Guarantor to, 
consolidate with or merge with or into any Person other than the Company or 
any other Guarantor unless: (i) the entity formed by or surviving any such 
consolidation or merger (if other than the Guarantor) or to which such sale, 
lease, conveyance or other disposition shall have been made is an entity 
organized and existing under the laws of the United States or any State 
thereof or the District of Columbia; (ii) such entity assumes by supplemental 
indenture all of the obligations of the Guarantor on the Guarantee; (iii) 
immediately after giving effect to such transaction, no Default or Event of 
Default shall have occurred and be continuing; and (iv) immediately after 
giving effect to such transaction and the use of any net proceeds therefrom 
on a pro forma basis, the Company could satisfy the provisions of clause (ii) 
of the first paragraph of this covenant. Any merger or consolidation of a 
Guarantor with and into the Company (with the Company being the surviving 
entity) or another Guarantor need not comply with the first paragraph of this 
covenant. Any merger of the Company with and into a Guarantor need not comply 
with clause (ii)(2) of the first paragraph of this covenant. 

   Limitations on Transactions with Affiliates. (a) The Company will not, and 
will not permit any of its Restricted Subsidiaries to, directly or 
indirectly, enter into or permit to exist any transaction or series of 
related transactions (including, without limitation, the purchase, sale, 
lease or exchange of any property or the rendering of any service) with, or 
for the benefit of, any of its Affiliates (each an "Affiliate Transaction"), 
other than (x) Affiliate Transactions permitted under paragraph (b) below and 
(y) Affiliate Transactions on terms that are no less favorable than those 
that might reasonably have been obtained in a comparable transaction at such 
time on an arm's-length basis from a Person that is not an Affiliate of the 
Company or such Restricted Subsidiary. All Affiliate Transactions (and each 
series of related Affiliate Transactions which are similar or part of a 
common plan) that involve an aggregate fair market value of more than $2 
million shall be approved by the Board of Directors of the Company or such 
Restricted Subsidiary, as the case may be, such approval to be evidenced by a 
Board Resolution stating that such Board of Directors has determined that 
such transaction complies with the foregoing provisions. If the 

                                       67

Company or any Restricted Subsidiary of the Company enters into an Affiliate 
Transaction (or a series of related Affiliate Transactions related to a 
common plan) that involves an aggregate fair market value of more than $5 
million, the Company or such Restricted Subsidiary, as the case may be, 
shall, prior to the consummation thereof, obtain a favorable opinion as to 
the fairness of such transaction or series of related transactions to the 
Company or the relevant Restricted Subsidiary, as the case may be, from a 
financial point of view, from an Independent Financial Advisor and file the 
same with the Trustee. 

   (b) The restrictions set forth in clause (a) shall not apply to (i) 
reasonable fees and compensation paid to and indemnity provided on behalf of, 
officers, directors, employees or consultants of the Company or any 
Restricted Subsidiary of the Company as determined in good faith by the 
Company's Board of Directors or senior management; (ii) transactions 
exclusively between or among the Company and any of its Restricted 
Subsidiaries or exclusively between or among such Restricted Subsidiaries, 
provided such transactions are not otherwise prohibited by the Indenture; 
(iii) any agreement as in effect as of the Issue Date or any amendment 
thereto or any transaction contemplated thereby (including pursuant to any 
amendment thereto) in any replacement agreement thereto so long as any such 
amendment or replacement agreement is not more disadvantageous to the Holders 
in any material respect than the original agreement as in effect on the Issue 
Date; (iv) Restricted Payments permitted by the Indenture; (v) transactions 
with distributors or other purchasers of sales of goods or services, in each 
case in the ordinary course of business and otherwise in compliance with the 
terms of the Indenture and which are fair to the Company or the Restricted 
Subsidiaries as applicable, in the reasonable determination of the Board of 
Directors of the Company or the senior management thereof, or are on terms at 
least as favorable as might reasonably have been obtained at such time from 
an unaffiliated party; and (vi) the CT Film Purchase. 

   Limitation of Guarantees by Restricted Subsidiaries. The Company will not 
permit any of its Restricted Subsidiaries, directly or indirectly, by way of 
the pledge of any intercompany note or otherwise, to assume, guarantee or in 
any other manner become liable with respect to any Indebtedness of the 
Company or any other Restricted Subsidiary (other than (A) Indebtedness under 
Currency Agreements in reliance on clause (v) of the definition of Permitted 
Indebtedness, (B) Interest Swap Obligations or Commodity Agreements incurred 
in reliance on clause (iv) of the definition of Permitted Indebtedness or (C) 
any guarantee by a Foreign Subsidiary of Indebtedness of another Foreign 
Subsidiary permitted under "--Limitation of Incurrence of Additional 
Indebtedness"), unless, in any such case (a) such Restricted Subsidiary that 
is not a Guarantor executes and delivers a supplemental indenture to the 
Indenture, providing a Guarantee and (b) (x) if any such assumption, 
guarantee or other liability of such Restricted Subsidiary is provided in 
respect of Senior Debt, the guarantee or other instrument provided by such 
Restricted Subsidiary in respect of such Senior Debt may be superior to the 
Guarantee pursuant to subordination provisions no less favorable in any 
material respect to the Holders than those contained in the Indenture and (y) 
if such assumption, guarantee or other liability of such Restricted 
Subsidiary is provided in respect of Indebtedness that is expressly 
subordinated to the Notes, the guarantee or other instrument provided by such 
Restricted Subsidiary in respect of such subordinated Indebtedness shall be 
subordinated to the Guarantee pursuant to subordination provisions no less 
favorable in any material respect to the Holders than those contained in the 
Indenture. 

   Notwithstanding the foregoing, any such Guarantee by a Restricted 
Subsidiary of the Notes shall provide by its terms that it shall be 
automatically and unconditionally released and discharged, without any 
further action required on the part of the Trustee or any Holder, upon: (i) 
the unconditional release of such Restricted Subsidiary from its liability in 
respect of the Indebtedness in connection with which such Guarantee was 
executed and delivered pursuant to the preceding paragraph; or (ii) any sale 
or other disposition (by merger or otherwise) to any Person which is not a 
Restricted Subsidiary of the Company of all of the Company's Capital Stock 
in, or all or substantially all of the assets of, such Restricted Subsidiary 
or the parent of such Restricted Subsidiary; provided that (a) such sale or 
disposition of such Capital Stock or assets is otherwise in compliance with 
the terms of the Indenture and (b) such assumption, guarantee or other 
liability of such Restricted Subsidiary has been released by the holders of 
the other Indebtedness so guaranteed or (iii) such Guarantor becoming an 
Unrestricted Subsidiary in accordance with the Indenture. 

                                       68

   Conduct of Business. The Company and its Restricted Subsidiaries (other 
than a Securitization Entity) will not engage in any businesses which are not 
the same, similar or related to the businesses in which the Company and its 
Restricted Subsidiaries are engaged on the Issue Date, except to the extent 
that after engaging in any new business, the Company and its Restricted 
Subsidiaries, taken as a whole, remain substantially engaged in similar lines 
of business as are conducted by them on the Issue Date. 

   Reports to Holders. The Indenture provides that the Company will deliver 
to the Trustee within 15 days after the filing of the same with the 
Commission, copies of the quarterly and annual reports and of the 
information, documents and other reports, if any, which the Company is 
required to file with the Commission pursuant to Section 13 or 15(d) of the 
Exchange Act. The Indenture further provides that, 180 days after the Issue 
Date, notwithstanding that the Company may not be subject to the reporting 
requirements of Section 13 or 15(d) of the Exchange Act, the Company will 
file with the Commission, to the extent permitted, and provide the Trustee 
and Holders with such annual reports and such information, documents and 
other reports specified in Sections 13 and 15(d) of the Exchange Act which it 
would have been required to file had it been subject to the reporting 
requirements of Section 13 or 15(d) of the Exchange Act. The Company will 
also comply with the other provisions of TIA Section 314(a). 

EVENTS OF DEFAULT 

   The following events are defined in the Indenture as "Events of Default": 

   (i) the failure to pay interest on any Notes when the same becomes due and 
payable and the default continues for a period of 30 days (whether or not 
such payment shall be prohibited by the subordination provisions of the 
Indenture); 

   (ii) the failure to pay the principal on any Notes, when such principal 
becomes due and payable, at maturity, upon acceleration, upon redemption or 
otherwise (including the failure to make a payment to purchase Notes tendered 
pursuant to a Change of Control Offer or a Net Proceeds Offer) (whether or 
not such payment shall be prohibited by the subordination provisions of the 
Indenture); 

   (iii) a default in the observance or performance of any other covenant or 
agreement contained in the Indenture which default continues for a period of 
45 days after the Company receives written notice specifying the default (and 
demanding that such default be remedied) from the Trustee or the Holders of 
at least 25% of the outstanding principal amount of the Notes (except in the 
case of a default with respect to the "Merger, Consolidation and Sale of 
Assets" covenant, which will constitute an Event of Default with such notice 
requirement but without such passage of time requirement); 

   (iv) the failure to pay at final maturity (giving effect to any applicable 
grace periods and any extensions thereof) the principal amount of any 
Indebtedness of the Company or any Restricted Subsidiary of the Company, or 
the acceleration of the final stated maturity of any such Indebtedness, if, 
in either case, the aggregate principal amount of such Indebtedness, together 
with the principal amount of any other such Indebtedness in default for 
failure to pay principal at final maturity or which has been accelerated, 
aggregates $10 million or more at any time and such Indebtedness has not been 
discharged in full or such acceleration has not been rescinded or annulled 
within 30 days of such final maturity or acceleration; 

   (v) one or more judgments in an aggregate amount in excess of $10 million 
(which are not covered by third party insurance as to which the insurer has 
not disclaimed coverage) shall have been rendered against the Company or any 
of its Restricted Subsidiaries and such judgments remain undischarged, unpaid 
or unstayed for a period of 60 days after such judgment or judgments become 
final and non-appealable; 

   (vi) certain events of bankruptcy affecting the Company or any of its 
Restricted Subsidiaries which is also a Material Subsidiary; or 

   (vii) any Guarantee of a Material Subsidiary ceases to be in full force 
and effect or any Guarantee of a Material Subsidiary is declared to be null 
and void and unenforceable or any Guarantee of a Material Subsidiary is found 
to be invalid or any of the Guarantors that is a Material Subsidiary denies 
its liability under its Guarantee (other than by reason of release of a 
Guarantor in accordance with the terms of the Indenture). 

                                       69

   If an Event of Default (other than an Event of Default specified in clause 
(vi) above with respect to the Company) shall occur and be continuing, the 
Trustee or the Holders of at least 25% in principal amount of outstanding 
Notes may declare the principal of and accrued interest on all the Notes to 
be due and payable by notice in writing to the Company and the Trustee 
specifying the respective Event of Default and that it is a "notice of 
acceleration" (the "Acceleration Notice"), and the same (i) shall become 
immediately due and payable or (ii) if there are any amounts outstanding 
under the Designated Senior Debt, shall become immediately due and payable 
upon the first to occur of an acceleration under the Designated Senior Debt 
or 5 business days after receipt by the Company and the Representative under 
the Designated Senior Debt of such Acceleration Notice. If an Event of 
Default specified in clause (vi) above with respect to the Company occurs and 
is continuing, then all unpaid principal of, and premium, if any, and accrued 
and unpaid interest on all of the outstanding Notes shall ipso facto become 
and be immediately due and payable without any declaration or other act on 
the part of the Trustee or any Holder. 

   The Indenture provides that, at any time after a declaration of 
acceleration with respect to the Notes as described in the preceding 
paragraph, the Holders of a majority in principal amount of the Notes may 
rescind and cancel such declaration and its consequences (i) if the 
rescission would not conflict with any judgment or decree, (ii) if all 
existing Events of Default have been cured or waived except nonpayment of 
principal or interest that has become due solely because of the acceleration, 
(iii) to the extent the payment of such interest is lawful, interest on 
overdue installments of interest and overdue principal, which has become due 
otherwise than by such declaration of acceleration, has been paid, (iv) if 
the Company has paid the Trustee its reasonable compensation and reimbursed 
the Trustee for its expenses, disbursements and advances and (v) in the event 
of the cure or waiver of an Event of Default of the type described in clause 
(vi) of the description above of Events of Default, the Trustee shall have 
received an officers' certificate and an opinion of counsel that such Event 
of Default has been cured or waived. No such rescission shall affect any 
subsequent Default or impair any right consequent thereto. 

   The Holders of a majority in principal amount of the Notes may waive any 
existing Default or Event of Default under the Indenture, and its 
consequences, except a default in the payment of the principal of or interest 
on any Notes. 

   Holders of the Notes may not enforce the Indenture or the Notes except as 
provided in the Indenture and under the TIA. Subject to the provisions of the 
Indenture relating to the duties of the Trustee, the Trustee is under no 
obligation to exercise any of its rights or powers under the Indenture at the 
request, order or direction of any of the Holders, unless such Holders have 
offered to the Trustee reasonable indemnity. Subject to all provisions of the 
Indenture and applicable law, the Holders of a majority in aggregate 
principal amount of the then outstanding Notes have the right to direct the 
time, method and place of conducting any proceeding for any remedy available 
to the Trustee or exercising any trust or power conferred on the Trustee. The 
Trustee may withhold from Holders of the Notes notice of any continuing 
Default or Event of Default (except a Default or Event of Default relating to 
the payment of principal, premium or interest) if it determines that 
withholding notice is in their interest. 

   Under the Indenture, the Company is required to provide an officers' 
certificate to the Trustee promptly upon any such officer obtaining knowledge 
of any Default or Event of Default (provided that such officers shall provide 
such certification at least annually whether or not they know of any Default 
or Event of Default) that has occurred and, if applicable, describe such 
Default or Event of Default and the status thereof. 

LEGAL DEFEASANCE AND COVENANT DEFEASANCE 

   The Company may, at its option and at any time, elect to have its 
obligations and the obligations of the Guarantors discharged with respect to 
the outstanding Notes ("Legal Defeasance"). Such Legal Defeasance means that 
the Company shall be deemed to have paid and discharged the entire 
indebtedness represented by the outstanding Notes, except for (i) the rights 
of Holders to receive, solely from the trust fund described below, payments 
in respect of the principal of, premium, if any, and interest on the Notes 
when such payments are due, (ii) the Company's obligations with respect to 
the Notes concerning issuing temporary Notes, registration of Notes, 
mutilated, destroyed, lost or stolen Notes and 

                                       70

the maintenance of an office or agency for payments, (iii) the rights, 
powers, trust, duties and immunities of the Trustee and the Company's 
obligations in connection therewith and (iv) the Legal Defeasance provisions 
of the Indenture. In addition, the Company may, at its option and at any 
time, elect to have the obligations of the Company released with respect to 
certain covenants that are described in the Indenture ("Covenant Defeasance") 
and thereafter any omission to comply with such obligations shall not 
constitute a Default or Event of Default with respect to the Notes. In the 
event Covenant Defeasance occurs, certain events (not including non-payment, 
bankruptcy, receivership, reorganization and insolvency events) described 
under "Events of Default" will no longer constitute an Event of Default with 
respect to the Notes. 

   In order to exercise either Legal Defeasance or Covenant Defeasance, (i) 
the Company must irrevocably deposit with the Trustee, in trust, for the 
benefit of the Holders cash in U.S. dollars, non-callable U.S. government 
obligations, or a combination thereof, in such amounts as will be sufficient, 
in the opinion of a nationally recognized firm of independent public 
accountants, to pay the principal of, premium, if any, and interest on the 
Notes on the stated date for payment thereof or on the applicable redemption 
date, as the case may be; (ii) in the case of Legal Defeasance, the Company 
shall have delivered to the Trustee an opinion of counsel in the United 
States reasonably acceptable to the Trustee confirming that (A) the Company 
has received from, or there has been published by, the Internal Revenue 
Service a ruling or (B) since the date of the Indenture, there has been a 
change in the applicable federal income tax law, in either case to the effect 
that, and based thereon such opinion of counsel shall confirm that, the 
Holders will not recognize income, gain or loss for federal income tax 
purposes as a result of such Legal Defeasance and will be subject to federal 
income tax on the same amounts, in the same manner and at the same times as 
would have been the case if such Legal Defeasance had not occurred; provided, 
however, such opinion of counsel shall not be required if all the Notes will 
become due and payable on the maturity date within one year or are to be 
called for redemption within one year under arrangements satisfactory to the 
Trustee; (iii) in the case of Covenant Defeasance, the Company shall have 
delivered to the Trustee an opinion of counsel in the United States 
reasonably acceptable to the Trustee confirming that the Holders will not 
recognize income, gain or loss for federal income tax purposes as a result of 
such Covenant Defeasance and will be subject to federal income tax on the 
same amounts, in the same manner and at the same times as would have been the 
case if such Covenant Defeasance had not occurred; (iv) no Default or Event 
of Default shall have occurred and be continuing on the date of such deposit 
or insofar as Events of Default from bankruptcy or insolvency events are 
concerned, at any time in the period ending on the 91st day after the date of 
deposit; (v) such Legal Defeasance or Covenant Defeasance shall not result in 
a breach or violation of, or constitute a default under the Indenture or any 
other material agreement or instrument to which the Company or any of its 
Subsidiaries is a party or by which the Company or any of its Subsidiaries is 
bound; (vi) the Company shall have delivered to the Trustee an officers' 
certificate stating that the deposit was not made by the Company with the 
intent of preferring the Holders over any other creditors of the Company or 
with the intent of defeating, hindering, delaying or defrauding any other 
creditors of the Company or others; (vii) the Company shall have delivered to 
the Trustee an officers' certificate and an opinion of counsel, each stating 
that all conditions precedent provided for or relating to the Legal 
Defeasance or the Covenant Defeasance have been complied with; (viii) the 
Company shall have delivered to the Trustee an opinion of counsel to the 
effect that (A) either (i) the Company has assigned all its ownership 
interest in the trust funds to the Trustee or (ii) the Trustee has a valid 
perfected security interest in the trust funds and (B) assuming no 
intervening bankruptcy of the Company between the date of the deposit and the 
124th day following the perfection of a security interest in the deposit and 
that no Holder is an insider of the Company, after the 124th day following 
the perfection of a security interest in the deposit, the trust funds will 
not be subject to avoidance as a preference under Section 547 of the Federal 
Bankruptcy Code. 

SATISFACTION AND DISCHARGE 

   The Indenture will be discharged and will cease to be of further effect 
(except as to surviving rights or registration of transfer or exchange of the 
Notes, as expressly provided for in the Indenture) as to all outstanding 
Notes when (i) either (a) all the Notes theretofore authenticated and 
delivered (except lost, stolen or destroyed Notes which have been replaced or 
paid and Notes for whose payment money has 

                                       71

theretofore been deposited in trust or segregated and held in trust by the 
Company and thereafter repaid to the Company or discharged from such trust) 
have been delivered to the Trustee for cancellation or (b) all Notes not 
theretofore delivered to the Trustee for cancellation have become due and 
payable and the Company has irrevocably deposited or caused to be deposited 
with the Trustee funds in an amount sufficient to pay and discharge the 
entire Indebtedness on the Notes not theretofore delivered to the Trustee for 
cancellation, for principal of, premium, if any, and interest on the Notes to 
the date of deposit together with irrevocable instructions from the Company 
directing the Trustee to apply such funds to the payment thereof at maturity 
or redemption, as the case may be; (ii) the Company has paid all other sums 
payable under the Indenture by the Company; and (iii) the Company has 
delivered to the Trustee an officers' certificate and an opinion of counsel 
stating that all conditions precedent under the Indenture relating to the 
satisfaction and discharge of the Indenture have been complied with. 

MODIFICATION OF THE INDENTURE 

   From time to time, the Company, the Guarantors and the Trustee, without 
the consent of the Holders, may amend the Indenture for certain specified 
purposes, including curing ambiguities, defects or inconsistencies, so long 
as such change does not, in the opinion of the Trustee, adversely affect the 
rights of any of the Holders in any material respect. In formulating its 
opinion on such matters, the Trustee will be entitled to rely on such 
evidence as it deems appropriate, including, without limitation, solely on an 
opinion of counsel. Other modifications and amendments of the Indenture may 
be made with the consent of the Holders of a majority in principal amount of 
the then outstanding Notes issued under the Indenture, except that, without 
the consent of each Holder affected thereby, no amendment may: (i) reduce the 
amount of Notes whose Holders must consent to an amendment; (ii) reduce the 
rate of or change or have the effect of changing the time for payment of 
interest, including defaulted interest, on any Notes; (iii) reduce the 
principal of or change or have the effect of changing the fixed maturity of 
any Notes, or change the date on which any Notes may be subject to redemption 
or repurchase, or reduce the redemption or repurchase price therefore; (iv) 
make any Notes payable in money other than that stated in the Notes; (v) make 
any change in provisions of the Indenture protecting the right of each Holder 
to receive payment of principal of and interest on such Note on or after the 
due date thereof or to bring suit to enforce such payment, or permitting 
Holders of a majority in principal amount of Notes to waive Defaults or 
Events of Default; (vi) amend, change or modify in any material respect the 
obligation of the Company to make and consummate a Change of Control Offer in 
the event of a Change of Control or make and consummate a Net Proceeds Offer 
with respect to any Asset Sale that has been consummated or modify in any 
material respect any of the provisions or definitions with respect thereto; 
(vii) modify or change any provision of the Indenture or the related 
definitions affecting the subordination or ranking of the Notes or any 
Guarantee in a manner which adversely affects the Holders; or (viii) release 
any Guarantor from any of its obligations under its Guarantee or the 
Indenture otherwise than in accordance with the terms of the Indenture. 

GOVERNING LAW 

   The Indenture provides that it, the Notes and the Guarantees will be 
governed by, and construed in accordance with, the laws of the State of New 
York but without giving effect to applicable principles of conflicts of law 
to the extent that the application of the law of another jurisdiction would 
be required thereby. 

THE TRUSTEE 

   The Indenture provides that, except during the continuance of an Event of 
Default, the Trustee will perform only such duties as are specifically set 
forth in the Indenture. During the existence of an Event of Default, the 
Trustee will exercise such rights and powers vested in it by the Indenture, 
and use the same degree of care and skill in its exercise as a prudent man 
would exercise or use under the circumstances in the conduct of his own 
affairs. 

   The Indenture and the provisions of the TIA contain certain limitations on 
the rights of the Trustee, should it become a creditor of the Company, to 
obtain payments of claims in certain cases or to realize 

                                       72

on certain property received in respect of any such claim as security or 
otherwise. Subject to the TIA, the Trustee will be permitted to engage in 
other transactions; provided that if the Trustee acquires any conflicting 
interest as described in the TIA, it must eliminate such conflict or resign. 

CERTAIN DEFINITIONS 

   Set forth below is a summary of certain of the defined terms used in the 
Indenture. Reference is made to the Indenture for the full definition of all 
such terms, as well as any other terms used herein for which no definition is 
provided. 

   "Acquired Indebtedness" means Indebtedness of a Person or any of its 
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary 
of the Company or at the time it merges or consolidates with the Company or 
any of its Restricted Subsidiaries or assumed in connection with the 
acquisition of assets from such Person and in each case not incurred by such 
Person in connection with, or in anticipation or contemplation of, such 
Person becoming a Restricted Subsidiary of the Company or such acquisition, 
merger or consolidation. 

   "Affiliate" means, with respect to any specified Person, any other Person 
who directly or indirectly through one or more intermediaries controls, or is 
controlled by, or is under common control with, such specified Person. The 
term "control" means the possession, directly or indirectly, of the power to 
direct or cause the direction of the management and policies of a Person, 
whether through the ownership of voting securities, by contract or otherwise; 
and the terms "controlling" and "controlled" have meanings correlative of the 
foregoing. 

   "Asset Acquisition" means (a) an Investment by the Company or any 
Restricted Subsidiary of the Company in any other Person pursuant to which 
such Person shall become a Restricted Subsidiary of the Company or of any 
Restricted Subsidiary of the Company, or shall be merged with or into the 
Company or of any Restricted Subsidiary of the Company, or (b) the 
acquisition by the Company or any Restricted Subsidiary of the Company of the 
assets of any Person (other than a Restricted Subsidiary of the Company), 
which constitute all or substantially all of the assets of such Person or 
comprise any division or line of business of such Person or any other 
properties or assets of such Person other than in the ordinary course of 
business. 

   "Asset Sale" means any direct or indirect sale, issuance, conveyance, 
transfer, lease (other than operating leases entered into in the ordinary 
course of business), assignment or other transfer for value by the Company or 
any of its Restricted Subsidiaries (including any Sale and Leaseback 
Transaction) to any Person other than the Company or a Restricted Subsidiary 
of the Company of (a) any Capital Stock of any Restricted Subsidiary of the 
Company; or (b) any other property or assets of the Company or any Restricted 
Subsidiary of the Company other than in the ordinary course of business; 
provided, however, that Asset Sales shall not include (i) a transaction or 
series of related transactions for which the Company or its Restricted 
Subsidiaries receive aggregate consideration of less than $5 million, (ii) 
sales of accounts receivable and related assets (including contract rights) 
of the type specified in the definition of "Qualified Securitization 
Transaction" to a Securitization Entity for the fair market value thereof, 
(iii) sales or grants of licenses to use the Company's or any Restricted 
Subsidiary's patents, trade secrets, know-how and technology to the extent 
that such license does not prohibit the licensor from using the patent, trade 
secret, know-how or technology licensed in North America or require the 
licensor to pay any fees for any such use, (iv) the sale, lease, conveyance, 
disposition or other transfer (A) of all or substantially all of the assets 
of the Company or a Restricted Subsidiary of the Company as permitted under 
"Merger, Consolidation and Sale of Assets", (B) of any Capital Stock or other 
ownership interest in or assets or property of an Unrestricted Subsidiary or 
a Person which is not a Subsidiary, (C) pursuant to any foreclosure of assets 
or other remedy provided by applicable law to a creditor of the Company or 
any Subsidiary of the Company with a Lien on such assets, which Lien is 
permitted under the Indenture; provided that such foreclosure or other remedy 
is conducted in a commercially reasonable manner or in accordance with any 
bankruptcy law, (D) involving only Cash Equivalents or inventory in the 
ordinary course of business or obsolete equipment in the ordinary course of 
business consistent with past practices 

                                       73

of the Company or (E) including only the lease or sublease of any real or 
personal property in the ordinary course of business; (v) the consummation of 
any transaction in accordance with the terms of "--Limitation on Restricted 
Payments", and (vi) Permitted Investments. 

   "Board of Directors" means, as to any Person, the board of directors of 
such Person or any duly authorized committee thereof. 

   "Board Resolution" means, with respect to any Person, a copy of a 
resolution certified by the Secretary or an Assistant Secretary of such 
Person to have been duly adopted by the Board of Directors of such Person and 
to be in full force and effect on the date of such certification, and 
delivered to the Trustee. 

   "Capital Stock" means (i) with respect to any Person that is a 
corporation, any and all shares, interests, participations or other 
equivalents (however designated and whether or not voting) of corporate 
stock, including each class of Common Stock and Preferred Stock of such 
Person and (ii) with respect to any Person that is not a corporation, any and 
all partnership or other equity interests of such Person. 

   "Capitalized Lease Obligation" means, as to any Person, the obligations of 
such Person under a lease that are required to be classified and accounted 
for as capital lease obligations under GAAP and, for purposes of this 
definition, the amount of such obligations at any date shall be the 
capitalized amount of such obligations at such date, determined in accordance 
with GAAP. 

   "Cash Equivalents" means (i) a marketable obligation, maturing within two 
years after issuance thereof, issued or guaranteed by the United States of 
America or an instrumentality or agency thereof, (ii) a certificate of 
deposit or banker's acceptance, maturing within one year after issuance 
thereof, issued by any lender under the Credit Agreement, or a national or 
state bank or trust company or a European, Canadian or Japanese bank in each 
case having capital, surplus and undivided profits of at least $100,000,000 
and whose long-term unsecured debt has a rating of "A" or better by Standard 
& Poor's Ratings Group, a division of McGraw Hill Companies ("S&P") or A2 or 
better by Moody's Investors Service, Inc. ("Moody's") or the equivalent 
rating by any other nationally recognized rating agency (provided that the 
aggregate face amount of all Investments in certificates of deposit or 
bankers' acceptances issued by the principal offices of or branches of such 
European or Japanese banks located outside the United States shall not at any 
time exceed 33 1/3% of all Investments described in this definition), (iii) 
open market commercial paper, maturing within 270 days after issuance 
thereof, which has a rating of A1 or better by S&P or P1 or better by 
Moody's, or the equivalent rating by any other nationally recognized rating 
agency, (iv) repurchase agreements and reverse repurchase agreements with a 
term not in excess of one year with any financial institution which has been 
elected a primary government securities dealer by the Federal Reserve Board 
or whose securities are rated AA-or better by S&P or Aa3 or better by Moody's 
or the equivalent rating by any other nationally recognized rating agency 
relating to marketable direct obligations issued or unconditionally 
guaranteed by the United States of America or any agency or instrumentality 
thereof and backed by the full faith and credit of the United States of 
America, (v) "Money Market" preferred stock maturing within six months after 
issuance thereof or municipal bonds issued by a corporation organized under 
the laws of any state of the United States, which has a rating of "A" or 
better by S&P or Moody's or the equivalent rating by any other nationally 
recognized rating agency and (vi) tax exempt floating rate option tender 
bonds backed by letters of credit issued by a national or state bank whose 
long-term unsecured debt has a rating of AA or better by S&P or Aa2 or better 
by Moody's or the equivalent rating by any other nationally recognized rating 
agency. 

   "Change of Control" means (i) prior to the initial public equity offering 
of the Company, the failure by Jon M. Huntsman, his spouse, direct 
descendants or their spouses, an entity controlled by any of the foregoing 
and/or by a trust of the type described hereafter, and/or a trust for the 
benefit of any of the foregoing (the "Huntsman Group"), collectively to own 
and control at least a sufficient amount of the outstanding voting capital 
stock of the Company to elect at least a majority of the Board of Directors 
of the Company or (ii) after the initial public equity offering of the 
Company, the occurrence of the following: (x) any "person" or "group" (as 
such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other 
than one or more members of the Huntsman Group, is or becomes the "beneficial 

                                       74

owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except 
that a person shall be deemed to have "beneficial ownership" of all 
securities that such Person has the right to acquire, whether such right is 
exercisable immediately or only after the passage of time), directly or 
indirectly, of 35% or more of the then outstanding voting capital stock of 
the Company other than in a transaction having the approval of the board of 
directors of the Company at least a majority of which members are Continuing 
Directors; or (y) Continuing Directors shall cease to constitute at least a 
majority of the directors constituting the board of directors of the Company. 

   "Commodity Agreements" means any commodity futures contract, commodity 
option or other similar agreement or arrangement entered into by the Company 
or any of its Subsidiaries designed to protect the Company or any of its 
Subsidiaries against fluctuation in the price of commodities actually at that 
time used in the ordinary course of business of the Company or its 
Subsidiaries. 

   "Common Stock" of any Person means any and all shares, interests or other 
participations in, and other equivalents (however designated and whether 
voting or non-voting) of such Person's common stock, whether outstanding on 
the Issue Date or issued after the Issue Date, and includes, without 
limitation, all series and classes of such common stock. 

   "Consolidated EBITDA" means, with respect to any Person, for any period, 
the sum (without duplication) of (i) Consolidated Net Income and (ii) to the 
extent Consolidated Net Income has been reduced thereby, (A) all income taxes 
of such Person and its Restricted Subsidiaries paid or accrued in accordance 
with GAAP for such period (other than income taxes attributable to 
extraordinary, unusual or nonrecurring gains or losses or taxes attributable 
to sales or dispositions outside the ordinary course of business), (B) 
Consolidated Interest Expense and (C) Consolidated Non-cash Charges less any 
non-cash items increasing Consolidated Net Income for such period, all as 
determined on a consolidated basis for such Person and its Restricted 
Subsidiaries in accordance with GAAP. 

   "Consolidated Fixed Charge Coverage Ratio" means, with respect to any 
Person, the ratio of Consolidated EBITDA of such Person during the four full 
fiscal quarters for which financial statements have been or should have been 
delivered to the Trustee under "--Reports to Holders" (the "Four Quarter 
Period") ending on or prior to the date of the transaction giving rise to the 
need to calculate the Consolidated Fixed Charge Coverage Ratio (the 
"Transaction Date") to Consolidated Fixed Charges of such Person for the Four 
Quarter Period. In addition to and without limitation of the foregoing, for 
purposes of this definition, "Consolidated EBITDA" and "Consolidated Fixed 
Charges" shall be calculated after giving effect on a pro forma basis for the 
period of such calculation to (i) the incurrence or repayment of any 
Indebtedness of such Person or any of its Restricted Subsidiaries (and the 
application of the proceeds thereof) giving rise to the need to make such 
calculation and any incurrence or repayment of other Indebtedness (and the 
application of the proceeds thereof), other than the incurrence or repayment 
of Indebtedness in the ordinary course of business for working capital 
purposes pursuant to working capital facilities, occurring during the Four 
Quarter Period or at any time subsequent to the last day of the Four Quarter 
Period and prior to the Transaction Date, as if such incurrence or repayment, 
as the case may be (and the application of the proceeds thereof), occurred on 
the first day of the Four Quarter Period and (ii) any Asset Sales or Asset 
Acquisitions (including, without limitation, any Asset Acquisition giving 
rise to the need to make such calculation as a result of such Person or one 
of its Restricted Subsidiaries (including any Person who becomes a Restricted 
Subsidiary as a result of the Asset Acquisition) incurring, assuming or 
otherwise being liable for Acquired Indebtedness and also including any 
Consolidated EBITDA (including any pro forma expense and cost reduction 
calculated on a basis consistent with Regulation S-X under the Securities Act 
as in effect on the Issue Date) (provided that such Consolidated EBITDA shall 
be included only to the extent includable pursuant to the definition of 
"Consolidated Net Income") attributable to the assets which are the subject 
of the Asset Acquisition or Asset Sale during the Four Quarter Period 
occurring during the Four Quarter Period or at any time subsequent to the 
last day of the Four Quarter Period and on or prior to the Transaction Date, 
as if such Asset Sale or Asset Acquisition (including the incurrence, 
assumption or liability for any such Acquired Indebtedness) occurred on the 
first day of the Four Quarter Period. If such Person or any of its Restricted 
Subsidiaries directly or indirectly guarantees Indebtedness of a Person other 
than the Company or a Restricted Subsidiary, the preceding sentence shall 
give effect to the incurrence of such guaranteed 

                                       75

Indebtedness as if such Person or any Restricted Subsidiary of such Person 
had directly incurred or otherwise assumed such guaranteed Indebtedness. 
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of 
determining the denominator (but not the numerator) of this "Consolidated 
Fixed Charge Coverage Ratio," (1) interest on outstanding Indebtedness 
determined on a fluctuating basis as of the Transaction Date and which will 
continue to be so determined thereafter shall be deemed to have accrued at a 
fixed rate per annum equal to the rate of interest on such Indebtedness in 
effect on the Transaction Date; (2) if interest on any Indebtedness actually 
incurred on the Transaction Date may optionally be determined at an interest 
rate based upon a factor of a prime or similar rate, a eurocurrency interbank 
offered rate, or other rates, then the interest rate in effect on the 
Transaction Date will be deemed to have been in effect during the Four 
Quarter Period; and (3) notwithstanding clause (1) above, interest on 
Indebtedness determined on a fluctuating basis, to the extent such interest 
is covered by agreements relating to Interest Swap Obligations, shall be 
deemed to accrue at the rate per annum resulting after giving effect to the 
operation of such agreements. 

   "Consolidated Fixed Charges" means, with respect to any Person for any 
period, the sum, without duplication, of (i) Consolidated Interest Expense, 
plus (ii) the product of (x) the amount of all dividend payments on any 
series of Preferred Stock of such Person and its Restricted Subsidiaries 
(other than dividends paid in Qualified Capital Stock and other than 
dividends paid to such Person or to a Restricted Subsidiary of such Person) 
paid, accrued or scheduled to be paid or accrued during such period times (y) 
a fraction, the numerator of which is one and the denominator of which is one 
minus the then current effective consolidated federal, state and local tax 
rate of such Person, expressed as a decimal. 

   "Consolidated Interest Expense" means, with respect to any Person for any 
period, the sum of, without duplication: (i) the aggregate of the interest 
expense of such Person and its Restricted Subsidiaries for such period 
determined on a consolidated basis in accordance with GAAP, including without 
limitation, (a) any amortization of debt discount and amortization or 
write-off of deferred financing costs, (b) the net costs under Interest Swap 
Obligations, (c) all capitalized interest and (d) the interest portion of any 
deferred payment obligation; and (ii) the interest component of Capitalized 
Lease Obligations paid, accrued and/or scheduled to be paid or accrued by 
such Person and its Restricted Subsidiaries during such period as determined 
on a consolidated basis in accordance with GAAP. 

   "Consolidated Net Income" means, with respect to any Person, for any 
period, the aggregate net income (or loss) of such Person and its Restricted 
Subsidiaries for such period on a consolidated basis, determined in 
accordance with GAAP; provided that there shall be excluded therefrom (a) 
after-tax gains from Asset Sales or abandonments or reserves relating 
thereto, (b) after-tax items classified as extraordinary or nonrecurring 
gains, (c) the net income of any Person acquired in a "pooling of interests" 
transaction accrued prior to the date it becomes a Restricted Subsidiary of 
the referent Person or is merged or consolidated with the referent Person or 
any Restricted Subsidiary of the referent Person, (d) the net income (but not 
loss) of any Restricted Subsidiary of the referent Person to the extent that 
the declaration of dividends or similar distributions by that Restricted 
Subsidiary of that income is restricted by a contract, operation of law or 
otherwise; (e) the net income of any Person, other than a Restricted 
Subsidiary of the referent Person, except to the extent of cash dividends or 
distributions paid to the referent Person or to a Wholly Owned Restricted 
Subsidiary of the referent Person by such Person, (f) any restoration to 
income of any contingency reserve, except to the extent that provision for 
such reserve was made out of Consolidated Net Income accrued at any time 
following the Issue Date, (g) income or loss attributable to discontinued 
operations (including without limitation, operations disposed of during such 
period whether or not such operations were classified as discontinued), (h) 
in the case of a successor to the referent Person by consolidation or merger 
or as a transferee of the referent Person's assets, any earnings of the 
successor corporation prior to such consolidation, merger or transfer of 
assets and (i) all gains or losses from the cumulative effect of any change 
in accounting principles. 

   "Consolidated Net Worth" of any Person means the consolidated 
stockholders' equity of such Person, determined on a consolidated basis in 
accordance with GAAP, less (without duplication) amounts attributable to 
Disqualified Capital Stock of such Person. 

   "Consolidated Non-cash Charges" means, with respect to any Person, for any 
period, the aggregate depreciation, amortization and other non-cash expenses 
of such Person and its Restricted Subsidiaries 

                                       76

reducing Consolidated Net Income of such Person and its Restricted 
Subsidiaries for such period, determined on a consolidated basis in 
accordance with GAAP (excluding any such charges constituting an 
extraordinary item or loss or any such charge which requires an accrual of or 
a reserve for cash charges for any future period). 

   "Continuing Directors" means, as of any date, the collective reference to 
(i) all members of the board of directors of the Company who have held office 
continuously since a date no later than twelve months prior to the Company's 
initial public equity offering, and (ii) all members of the board of 
directors of the Company who assumed office after such date and whose 
appointment or nomination for election by the Company's shareholders was 
approved by a vote of at least 50% of the Continuing Directors in office 
immediately prior to such appointment or nomination. 

   "Credit Agreement" means the Credit Agreement, dated as of September 30, 
1997 among the Company, the lenders party thereto in their capacities as 
lenders thereunder and The Chase Manhattan Bank, as agent, together with the 
related documents thereto (including, without limitation, any guarantee 
agreements and security documents), in each case as such Credit Agreement and 
related documents may be amended (including any amendment and restatement 
thereof), supplemented or otherwise modified from time to time, including any 
agreement extending the maturity of, refinancing, replacing (whether or not 
contemporaneously) or otherwise restructuring (including increasing the 
amount of available borrowings thereunder (to the extent that such increase 
in borrowings is permitted by the "Limitation on Incurrence of Additional 
Indebtedness" covenant above) or adding Restricted Subsidiaries of the 
Company as additional borrowers or guarantors thereunder) all or any portion 
of the Indebtedness under such agreement or any successor or replacement 
agreement and whether by the same or any other agent, lender or group of 
lenders. 

   "CT Film" means the CT Film Division of Huntsman Polymers Corporation. 

   "CT Film Purchase" means the acquisition of substantially all of the 
assets of CT Film for an aggregate consideration of not in excess of $70 
million pursuant to that certain Asset Purchase Agreement dated August 27, 
1997 between the Company and Huntsman Polymers Corporation as in effect on 
the date hereof. 

   "Currency Agreement" means any foreign exchange contract, currency swap 
agreement or other similar agreement or arrangement designed to protect the 
Company or any Restricted Subsidiary of the Company against fluctuations in 
currency values. 

   "Default" means an event or condition the occurrence of which is, or with 
the lapse of time or the giving of notice or both would be, an Event of 
Default. 

   "Designated Senior Debt" means (i) Indebtedness under or in respect of the 
Credit Agreement and (ii) any other Indebtedness constituting Senior Debt 
which, at the time of determination, has an aggregate principal amount of at 
least $25 million and is specifically designated in the instrument evidencing 
such Senior Debt as "Designated Senior Debt" by the Company. 

   "Disqualified Capital Stock" means that portion of any Capital Stock 
which, by its terms (or by the terms of any security into which it is 
convertible or for which it is exchangeable), or upon the happening of any 
event, matures or is mandatorily redeemable, pursuant to a sinking fund 
obligation or otherwise, or is redeemable at the sole option of the holder 
thereof on or prior to the final maturity date of the Notes. 

   "Domestic Overdraft Facility" means an overdraft line of credit in a 
maximum principal amount of $5 million at any time outstanding. 

   "Exchange Act" means the Securities Exchange Act of 1934, as amended, or 
any successor statute or statutes thereto. 

   "fair market value" means, with respect to any asset or property, the 
price which could be negotiated in an arm's-length. free market transaction, 
for cash, between a willing seller and a willing and able buyer, neither of 
whom is under undue pressure or compulsion to complete the transaction. Fair 
market value shall be determined by the Board of Directors of the Company 
acting reasonably and in good faith and shall be evidenced by a Board 
Resolution of the Board of Directors of the Company delivered to the Trustee. 

                                       77

   "Foreign Subsidiary" means any Restricted Subsidiary of the Company 
organized and conducting its principal operations outside the United States. 

   "Foreign Subsidiary Asset Sale" means any direct or indirect sale, 
issuance, conveyance, transfer, lease, assignment or other transfer for value 
by the Company or any of its Restricted Subsidiaries (including any Sale and 
Leaseback Transaction) to any Person other than the Company or a Restricted 
Subsidiary of the Company of the Capital Stock of any Foreign Subsidiary or 
any of the property or assets of any Foreign Subsidiary. 

   "GAAP" means generally accepted accounting principles set forth in the 
opinions and pronouncements of the Accounting Principles Board of the 
American Institute of Certified Public Accountants and statements and 
pronouncements of the Financial Accounting Standards Board or in such other 
statements by such other entity as may be approved by a significant segment 
of the accounting profession of the United States, which are in effect as of 
the Issue Date. 

   "Guarantees" means the guarantees of the Notes of the Company by the 
Guarantors. 

   "Guarantor" means (i) each of the guarantors under the Credit Agreement 
and (ii) each of the Company's Restricted Subsidiaries that in the future 
executes a supplemental indenture in which such Restricted Subsidiary agrees 
to be bound by the terms of the Indenture as a Guarantor; provided that any 
Person constituting a Guarantor as described above shall cease to constitute 
a Guarantor when its respective Guarantee is released in accordance with the 
terms of the Indenture. 

   "Guarantor Senior Debt" means with respect to any Guarantor, (i) the 
principal of, premium, if any, and interest (including any interest accruing 
subsequent to the filing of a petition of bankruptcy at the rate provided for 
in the documentation with respect thereto, whether or not such interest is an 
allowed claim under applicable law) on any Indebtedness of a Guarantor, 
whether outstanding on the Issue Date or thereafter created, incurred or 
assumed, unless, in the case of any particular Indebtedness, the instrument 
creating or evidencing the same or pursuant to which the same is outstanding 
expressly provides that such Indebtedness shall not be senior in right of 
payment to the Guarantee of such Guarantor. Without limiting the generality 
of the foregoing, "Guarantor Senior Debt" shall also include the principal 
of, premium, if any, interest (including any interest accruing subsequent to 
the filing of a petition of bankruptcy at the rate provided for in the 
documentation with respect thereto, whether or not such interest is an 
allowed claim under applicable law) on, and all other amounts owing in 
respect of, (w) all monetary obligations of every nature of a Guarantor in 
respect of the Credit Agreement, including, without limitation, obligations 
to pay principal and interest, reimbursement obligations under letters of 
credit, fees, expenses and indemnities, (x) all monetary obligations of every 
nature of a Guarantor evidence by a promissory note and which is, directly or 
indirectly, pledged as security for the obligations of the Company under the 
Credit Agreement, (y) all Interest Swap Obligations and (z) all obligations 
under Currency Agreements, in each case whether outstanding on the Issue Date 
or thereafter incurred. Notwithstanding the foregoing, "Guarantor Senior 
Debt" shall not include (i) any Indebtedness of such Guarantor to a 
Subsidiary of such Guarantor or any Affiliate of such Guarantor or any such 
Affiliate's Subsidiaries other than as described in clause (x), (ii) 
Indebtedness to, or guaranteed on behalf of, any shareholder, director, 
officer or employee of such Guarantor or any Restricted Subsidiary of such 
Guarantor (including, without limitation, amounts owed for compensation), 
(iii) Indebtedness to trade creditors and other amounts owed to suppliers in 
connection with obtaining goods, materials or services, (iv) Indebtedness 
represented by Disqualified Capital Stock, (v) any liability for federal, 
state, local or other taxes owed or owing by such Guarantor, (vi) 
Indebtedness to the extent incurred in violation of the Indenture provisions 
set forth under "Limitation on Incurrence of Additional Indebtedness," (vii) 
Indebtedness which, when incurred and without respect to any election under 
Section 1111(b) of Title 11, United States Code, is without recourse to such 
Guarantor and (viii) any Indebtedness which is, by its express terms, 
subordinated in right of payment to any other Indebtedness of such Guarantor. 

   "Indebtedness" means with respect to any Person, without duplication, (i) 
all Obligations of such Person for borrowed money, (ii) all Obligations of 
such Person evidenced by bonds, debentures, notes or other similar 
instruments, (iii) all Capitalized Lease Obligations of such Person, (iv) all 
Obligations of such Person issued or assumed as the deferred purchase price 
of property, all conditional sale obligations 

                                       78

and all Obligations under any title retention agreement (but excluding trade 
accounts payable and other accrued liabilities arising in the ordinary course 
of business that are not overdue by 90 days or more or are being contested in 
good faith by appropriate proceedings promptly instituted and diligently 
conducted), (v) all Obligations for the reimbursement of any obligor on any 
letter of credit, banker's acceptance or similar credit transaction, (vi) 
guarantees and other contingent obligations in respect of Indebtedness 
referred to in clauses (i) through (v) above and clause (viii) below, (vii) 
all Obligations of any other Person of the type referred to in clauses (i) 
through (vi) which are secured by any lien on any property or asset of such 
Person, the amount of such Obligation being deemed to be the lesser of the 
fair market value of such property or asset or the amount of the Obligation 
so secured, (viii) all Obligations under Currency Agreements, Commodity 
Agreements and Interest Swap Agreements of such Person and (ix) all 
Disqualified Capital Stock issued by such Person with the amount of 
Indebtedness represented by such Disqualified Capital Stock being equal to 
the greater of its voluntary or involuntary liquidation preference and its 
maximum fixed repurchase price, but excluding accrued dividends, if any. For 
purposes hereof, the "maximum fixed repurchase price" of any Disqualified 
Capital Stock which does not have a fixed repurchase price shall be 
calculated in accordance with the terms of such Disqualified Capital Stock as 
if such Disqualified Capital Stock were purchased on any date on which 
Indebtedness shall be required to be determined pursuant to the Indenture, 
and if such price is based upon, or measured by, the fair market value of 
such Disqualified Capital Stock, such fair market value shall be determined 
reasonably and in good faith by the Board of Directors of the issuer of such 
Disqualified Capital Stock; provided, however that notwithstanding the 
foregoing, "Indebtedness" shall not include unsecured indebtedness of the 
Company and/or its Restricted Subsidiaries incurred to finance insurance 
premiums in a principal amount not in excess of the insurance premiums to be 
paid by the Company and/or its Restricted Subsidiaries for a three year 
period beginning on the date of any incurrence of such indebtedness. 

   "Independent Financial Advisor" means a firm (i) which does not, and whose 
directors, officers and employees or Affiliates do not, have a direct or 
indirect financial interest in the Company and (ii) which, in the judgment of 
the Board of Directors of the Company, is otherwise independent and qualified 
to perform the task for which it is to be engaged. 

   "Interest Swap Obligations" means the obligations of any Person pursuant 
to any arrangement with any other Person, whereby, directly or indirectly, 
such Person is entitled to receive from time to time periodic payments 
calculated by applying either a floating or a fixed rate of interest on a 
stated notional amount in exchange for periodic payments made by such other 
Person calculated by applying a fixed or a floating rate of interest on the 
same notional amount and shall include, without limitation, interest rate 
swaps, caps, floors, collars and similar agreements. 

   "Investment" means, with respect to any Person, any direct or indirect 
loan or other extension of credit (including, without limitation, a 
guarantee) or capital contribution to (by means of any transfer of cash or 
other property to others or any payment for property or services for the 
account or use of others), or any purchase or acquisition by such Person of 
any Capital Stock, bonds, notes, debentures or other securities or evidences 
of Indebtedness issued by, any Person. "Investment" shall exclude extensions 
of trade credit by the Company and its Restricted Subsidiaries on 
commercially reasonable terms in accordance with normal trade practices of 
the Company or such Restricted Subsidiary, as the case may be. For the 
purposes of the "Limitation on Restricted Payments" covenant, (i) 
"Investment" shall include and be valued at the fair market value of the net 
assets of any Restricted Subsidiary at the time that such Restricted 
Subsidiary is designated an Unrestricted Subsidiary and shall exclude the 
fair market value of the net assets of any Unrestricted Subsidiary at the 
time that such Unrestricted Subsidiary is designated a Restricted Subsidiary 
and (ii) the amount of any Investment shall be the original cost of such 
Investment plus the cost of all additional Investments by the Company or any 
of its Restricted Subsidiaries, without any adjustments for increases or 
decreases in value, or write-ups, write-downs or write-offs with respect to 
such Investment, reduced by the payment of dividends or distributions in 
connection with such Investment or any other amounts received in respect of 
such Investment; provided that no such payment of dividends or distributions 
or receipt of any such other amounts shall reduce the amount of any 
Investment if such payment of dividends or distributions or receipt of any 
such amounts would be included in Consolidated Net Income. If the Company or 
any Restricted Subsidiary of the Company sells 

                                       79

or otherwise disposes of any Common Stock of any direct or indirect 
Restricted Subsidiary of the Company such that, after giving effect to any 
such sale or disposition, the Company no longer owns, directly or indirectly, 
greater than 50% of the outstanding Common Stock of such Restricted 
Subsidiary, the Company shall be deemed to have made an Investment on the 
date of any such sale or disposition equal to the fair market value of the 
Common Stock of such Restricted Subsidiary not sold or disposed of. 

   "Issue Date" means the date of original issuance of the Notes. 

   "Lien" means any lien, mortgage, deed of trust, pledge, security interest, 
charge or encumbrance of any kind (including any conditional sale or other 
title retention agreement, any lease in the nature thereof and any agreement 
to give any security interest). 

   "Material Subsidiary" means, at any date of determination, any Subsidiary 
of the Company that, together with its Subsidiaries, (i) for the most recent 
fiscal year of the Company accounted for more than 10% of the consolidated 
revenues of the Company or (ii) as of the end of such fiscal year, was the 
owner of 10% of the consolidated assets of the Company, all as set forth on 
the most recently available consolidated financial statement of the Company 
and its consolidated Subsidiaries for such fiscal year prepared in conformity 
with GAAP. 

   "Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in 
the form of cash or Cash Equivalents including payments in respect of 
deferred payment obligations when received in the form of cash or Cash 
Equivalents (other than the portion of any such deferred payment constituting 
interest) received by the Company or any of its Restricted Subsidiaries from 
such Asset Sale net of (a) all out-of-pocket expenses and fees relating to 
such Asset Sale (including, without limitation, legal, accounting and 
investment banking fees and sales commissions), (b) taxes paid or payable 
after taking into account any reduction in consolidated tax liability due to 
available tax credits or deductions and any tax sharing arrangements, 
including any taxes to be paid by the Company or any of its Subsidiaries upon 
the repatriation of such cash proceeds to the United States upon consummation 
of a Foreign Subsidiary Asset Sale, (c) repayment of Indebtedness that is 
required to be repaid in connection with such Asset Sale, (d) the decrease in 
proceeds from Qualified Securitization Transactions which results from such 
Asset Sale and (e) appropriate amounts to be provided by the Company or any 
Restricted Subsidiary, as the case may be, as a reserve, in accordance with 
GAAP, against any liabilities associated with such Asset Sale and retained by 
the Company or any Restricted Subsidiary, as the case may be, after such 
Asset Sale, including, without limitation, pension and other post-employment 
benefit liabilities, liabilities related to environmental matters and 
liabilities under any indemnification obligations associated with such Asset 
Sale. 

   "Obligations" means all obligations for principal, premium, interest, 
penalties, fees, indemnifications, reimbursements, damages and other 
liabilities payable under the documentation governing any Indebtedness. 

   "Permitted Indebtedness" means, without duplication, each of the 
following: 

     (i) Indebtedness under the Notes, the Indenture and the Guarantees; 

     (ii) Indebtedness incurred pursuant to the Credit Agreement in an 
    aggregate principal amount not exceeding $225 million at any one time 
    outstanding, less (i) the amount of any principal payments made by the 
    Company under the Credit Agreement with the Net Cash Proceeds of any Asset 
    Sale (which are accompanied by a corresponding permanent commitment 
    reduction to the extent that the amount paid could otherwise be reborrowed 
    under the Credit Agreement) pursuant to clause (iii)(A) of the first 
    sentence of "--Limitation on Asset Sales" and (ii) if the CT Film Purchase 
    is not consummated on or before December 31, 1997, a permanent reduction 
    of the facilities under the Credit Agreement in an aggregate principal 
    amount equal to $70 million; 

     (iii) other Indebtedness of the Company and its Restricted Subsidiaries 
    outstanding on the Issue Date reduced by the amount of any scheduled 
    amortization payments or mandatory prepayments when actually paid or 
    permanent reductions thereon; 

                                       80

     (iv) Commodity Agreements and Interest Swap Obligations of the Company 
    covering Indebtedness of the Company or any of its Restricted Subsidiaries 
    (or Indebtedness which the Company or any Restricted Subsidiary intends to 
    incur) and Interest Swap Obligations of any Restricted Subsidiary of the 
    Company covering Indebtedness of such Restricted Subsidiary (or 
    Indebtedness which such Restricted Subsidiary intends to incur); provided, 
    however, that such Interest Swap Obligations are entered into to protect 
    the Company and its Restricted Subsidiaries from fluctuations in interest 
    rates on Indebtedness permitted under the Indenture to the extent the 
    notional principal amount of such Interest Swap Obligation, when incurred, 
    does not exceed the principal amount of the Indebtedness to which such 
    Interest Swap Obligation relates; 

     (v) Indebtedness under Currency Agreements; provided that in the case of 
    Currency Agreements which relate to Indebtedness, such Currency Agreements 
    do not increase the Indebtedness of the Company and its Restricted 
    Subsidiaries outstanding other than as a result of fluctuations in foreign 
    currency exchange rates or by reason of fees, indemnities and compensation 
    payable thereunder; 

     (vi) Indebtedness of a Restricted Subsidiary of the Company to the 
    Company or to a Wholly-Owned Restricted Subsidiary of the Company for so 
    long as such Indebtedness is held by the Company or a Wholly-Owned 
    Restricted Subsidiary of the Company, in each case subject to no Lien held 
    by a Person other than the Company or a Restricted Subsidiary of the 
    Company; provided that if as of any date any Person other than the Company 
    or a Wholly-Owned Restricted Subsidiary of the Company owns or holds any 
    such Indebtedness or holds a Lien in respect of such Indebtedness such 
    date shall be deemed the incurrence of Indebtedness not constituting 
    Permitted Indebtedness by the issuer of such Indebtedness; 

     (vii) Indebtedness of the Company to a Restricted Subsidiary of the 
    Company for so long as such Indebtedness is held by a Restricted 
    Subsidiary of the Company, in each case subject to no Lien; provided that 
    (a) any Indebtedness of the Company to any Restricted Subsidiary of the 
    Company is unsecured and subordinated, pursuant to a written agreement, to 
    the Company's obligations under the Indenture and the Notes and (b) if as 
    of any date any Person other than a Restricted Subsidiary of the Company 
    owns or holds any such Indebtedness or any Person holds a Lien in respect 
    of such Indebtedness (other than pledges securing the Credit Agreement) 
    such date shall be deemed the incurrence of Indebtedness not constituting 
    Permitted Indebtedness by the Company; 

     (viii)  Indebtedness arising from the honoring by a bank or other 
    financial institution of a check, draft or similar instrument 
    inadvertently (except in the case of daylight overdrafts) drawn against 
    insufficient funds in the ordinary course of business; provided, however, 
    that such Indebtedness is extinguished within two business days of 
    incurrence; 

     (ix) Indebtedness of the Company or any of its Restricted Subsidiaries 
    represented by letters of credit for the account of the Company or such 
    Restricted Subsidiary, as the case may be, in order to provide security 
    for workers' compensation claims, payment obligations in connection with 
    self-insurance or similar requirements in the ordinary course of business; 

     (x) Refinancing Indebtedness; 

     (xi) Indebtedness arising from agreements of the Company or a Subsidiary 
    providing for indemnification, adjustment of purchase price or similar 
    obligations, in each case, incurred in connection with the disposition of 
    any business, assets or Subsidiary, other than guarantees of Indebtedness 
    incurred by any Person acquiring all or any portion of such business, 
    assets or Subsidiary for the purpose of financing such acquisition; 
    provided that the maximum aggregate liability in respect of all such 
    Indebtedness shall at no time exceed the gross proceeds actually received 
    by the Company and the Subsidiary in connection with such disposition; 

     (xii)  Obligations in respect of performance bonds and completion, 
    guarantee, surety and similar bonds provided by the Company or any 
    Restricted Subsidiary in the ordinary course of business; 

     (xiii) Guarantees by the Company or a Subsidiary of Indebtedness incurred 
    by the Company or a Subsidiary so long as the incurrence of such 
    Indebtedness by the Company or any such Subsidiary is otherwise permitted 
    by the terms of the Indenture; 

                                       81

     (xiv) Indebtedness of the Company or any Restricted Subsidiary incurred 
    in the ordinary course of business not to exceed $10 million at any time 
    outstanding (A) representing Capitalized Lease Obligations or (B) 
    constituting purchase money Indebtedness incurred to finance property or 
    assets of the Company or any Restricted Subsidiary of the Company acquired 
    in the ordinary course of business; provided, however, that such purchase 
    money Indebtedness shall not exceed the cost of such property or assets 
    and shall not be secured by any property or assets of the Company or any 
    Restricted Subsidiary of the Company other than the property and assets so 
    acquired; 

     (xv) Indebtedness of Foreign Subsidiaries that are Restricted 
    Subsidiaries to the extent that the aggregate outstanding amount of 
    Indebtedness incurred by such Foreign Subsidiaries under this clause (xv) 
    does not exceed at any one time an amount equal to the sum of (A) 80% of 
    the consolidated book value of the accounts receivable of all Foreign 
    Subsidiaries and (B) 60% of the consolidated book value of the inventory 
    of all Foreign Subsidiaries. 

     (xvi) the incurrence by a Securitization Entity of Indebtedness in a 
    Qualified Securitization Transaction that is not recourse to the Company 
    or any Subsidiary of the Company (except for Standard Securitization 
    Undertakings); 

     (xvii) additional Indebtedness of the Company and its Restricted 
    Subsidiaries in an aggregate principal amount not to exceed $15 million at 
    any one time outstanding; and 

     (xviii) Indebtedness under any Domestic Overdraft Facility. 

   "Permitted Investments" means (i) Investments by the Company or any 
Restricted Subsidiary of the Company in any Person that is or will become 
immediately after such Investment a Wholly Owned Restricted Subsidiary of the 
Company or that will merge or consolidate into the Company or a Wholly Owned 
Restricted Subsidiary of the Company, (ii) Investments in the Company by any 
Restricted Subsidiary of the Company; provided that any Indebtedness 
evidencing such Investment is unsecured and subordinated (other than pursuant 
to intercompany notes pledged under the Credit Agreement), pursuant to a 
written agreement, to the Company's Obligations under the Notes and the 
Indenture; (iii) Investments in cash and Cash Equivalents; (iv) loans and 
advances to employees and officers of the Company and its Restricted 
Subsidiaries in the ordinary course of business for travel, relocation and 
related expenses for bona fide business purposes not in excess of $3 million 
at any one time outstanding; (v) Commodity Agreements, Currency Agreements 
and Interest Swap Obligations entered into in the ordinary course of the 
Company's or its Restricted Subsidiaries' businesses and otherwise in 
compliance with the Indenture; (vi) Investments in Unrestricted Subsidiaries 
or joint ventures not to exceed $20 million, plus (A) the aggregate net 
after-tax amount returned to the Company or any Restricted Subsidiary in cash 
on or with respect to any Investments made in Unrestricted Subsidiaries and 
joint ventures whether through interest payments, principal payments, 
dividends or other distributions or payments (including such dividends, 
distributions or payments made concurrently with such Investment), (B) the 
net after-tax cash proceeds received by the Company or any Restricted 
Subsidiary from the disposition of all or any portion of such Investments 
(other than to the Company or a Subsidiary of the Company), (C) upon 
redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the 
fair market value of such Subsidiary and (D) the net cash proceeds received 
by the Company from the issuance of Specified Venture Capital Stock; (vii) 
Investments in securities received pursuant to any plan of reorganization or 
similar arrangement upon the bankruptcy or insolvency of any debtors of the 
Company or its Restricted Subsidiaries; (viii) Investments made by the 
Company or its Restricted Subsidiaries as a result of consideration received 
in connection with an Asset Sale made in compliance with the "Limitation on 
Asset Sales" covenant; (ix) Investments existing on the Issue Date; (x) any 
Investment by the Company or a Wholly Owned Subsidiary of the Company in a 
Securitization Entity or any Investment by a Securitization Entity in any 
other Person in connection with a Qualified Securitization Transaction; 
provided that any Investment in a Securitization Entity is in the form of a 
Purchase Money Note or an equity interest; (xi) Investments constituting 
guarantees by the Company or a Subsidiary of Indebtedness incurred by the 
Company or a Subsidiary so long as the incurrence of such Indebtedness by the 
Company or any such Subsidiary is otherwise permitted by the terms of the 
Indenture; and (xii) additional Investments in an aggregate amount not to 
exceed $2 million. 

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   "Person" means an individual, partnership, corporation, unincorporated 
organization, trust or joint venture, or a governmental agency or political 
subdivision thereof. 

   "Preferred Stock" of any Person means any Capital Stock of such Person 
that has preferential rights to any other Capital Stock of such Person with 
respect to dividends or redemptions or upon liquidation. 

   "Qualified Capital Stock" means any Capital Stock that is not Disqualified 
Capital Stock. 

   "Qualified Securitization Transaction" means any transaction or series of 
transactions that may be entered into by the Company or any of its 
Subsidiaries pursuant to which the Company or any of its Subsidiaries may 
sell, convey or otherwise transfer pursuant to customary terms to (a) a 
Securitization Entity (in the case of a transfer by the Company or any of its 
Subsidiaries) and (b) any other Person (in the case of transfer by a 
Securitization Entity), or may grant a security interest in any accounts 
receivable (whether now existing or arising or acquired in the future) of the 
Company or any of its Subsidiaries, and any assets related thereto including, 
without limitation, all collateral securing such accounts receivable, all 
contracts and contract rights and all guarantees or other obligations in 
respect of such accounts receivable, proceeds of such accounts receivable and 
other assets (including contract rights) which are customarily transferred or 
in respect of which security interests are customarily granted in connection 
with asset securitization transactions involving accounts receivable. 

   "Refinance" means, in respect of any security or Indebtedness, to 
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, 
or to issue a security or Indebtedness in exchange or replacement for, such 
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing" 
shall have correlative meanings. 

   "Refinancing Indebtedness" means any Refinancing by the Company or any 
Restricted Subsidiary of the Company of Indebtedness incurred in accordance 
with the "Limitation on Incurrence of Additional Indebtedness" covenant 
(other than pursuant to clause (ii), (iv), (v), (vi), (vii), (viii), (ix), 
(xi), (xii), (xiii), (xiv), (xv), or (xvi) of the definition of Permitted 
Indebtedness), in each case that does not (1) result in an increase in the 
aggregate principal amount of Indebtedness of such Person as of the date of 
such proposed Refinancing (plus the amount of any premium required to be paid 
under the terms of the instrument governing such Indebtedness and plus the 
amount of reasonable expenses incurred by the Company in connection with such 
Refinancing) or (2) create Indebtedness with (A) a Weighted Average Life to 
Maturity that is less than the Weighted Average Life to Maturity of the 
Indebtedness being Refinanced or (B) a final maturity earlier than the final 
maturity of the Indebtedness being Refinanced; provided that (x) if such 
Indebtedness being Refinanced is Indebtedness of the Company, then such 
Refinancing Indebtedness shall be Indebtedness solely of the Company, (y) if 
such Indebtedness being Refinanced is subordinate or junior to the Notes, 
then such Refinancing Indebtedness shall be subordinate to the Notes at least 
to the same extent and in the same manner as the Indebtedness being 
Refinanced and (z) if such Indebtedness being refinanced is subordinated or 
junior to the Guarantee of such Guarantor, then such Refinancing Indebtedness 
shall be subordinate to the Guarantee of such Guarantor at least to the same 
extent and in the same manner as the Indebtedness being Refinanced. 

   "Representative" means the indenture trustee or other trustee, agent or 
representative in respect of any Designated Senior Debt; provided that if, 
and for so long as, any Designated Senior Debt lacks such a representative, 
then the Representative for such Designated Senior Debt shall at all times 
constitute the holders of a majority in outstanding principal amount of such 
Designated Senior Debt in respect of any Designated Senior Debt. 

   "Restricted Subsidiary" of any Person means any Subsidiary of such Person 
which at the time of determination is not an Unrestricted Subsidiary. 

   "Sale and Leaseback Transaction" means any direct or indirect arrangement 
with any Person or to which any such Person is a party, providing for the 
leasing to the Company or a Restricted Subsidiary of any property, whether 
owned by the Company or any Restricted Subsidiary at the Issue Date or later 
acquired, which has been or is to be sold or transferred by the Company or 
such Restricted Subsidiary to such Person or to any other Person from whom 
funds have been or are to be advanced by such Person on the security of such 
property. 

                                       83

   "Securitization Entity" means a Wholly Owned Subsidiary of the Company (or 
another Person in which the Company or any Subsidiary of the Company makes an 
Investment and to which the Company or any Subsidiary of the Company 
transfers accounts receivable or equipment and related assets) which engages 
in no activities other than in connection with the financing of accounts 
receivable or equipment and which is designated by the Board of Directors of 
the Company (as provided below) as a Securitization Entity (a) no portion of 
the Indebtedness or any other Obligations (contingent or otherwise) of which 
(i) is guaranteed by the Company or any Subsidiary of the Company (excluding 
guarantees of Obligations (other than the principal of, and interest on, 
Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is 
recourse to or obligates the Company or any Subsidiary of the Company in any 
way other than pursuant to Standard Securitization Undertakings or (iii) 
subjects any property or asset of the Company or any Subsidiary of the 
Company, directly or indirectly, contingently or otherwise, to the 
satisfaction thereof, other than pursuant to Standard Securitization 
Undertakings, (b) with which neither the Company nor any Subsidiary of the 
Company has any material contract, agreement, arrangement or understanding 
other than on terms no less favorable to the Company or such Subsidiary than 
those that might be obtained at the time from Persons that are not Affiliates 
of the Company, other than fees payable in the ordinary course of business in 
connection with servicing receivables of such entity and (c) to which neither 
the Company nor any Subsidiary of the Company has any obligation to maintain 
or preserve such entity's financial condition or cause such entity to achieve 
certain levels of operating results. Any such designation by the Board of 
Directors of the Company shall be evidenced to the Trustee, by filing with 
the Trustee a certified copy of the resolution of the Board of Directors of 
the Company giving effect to such designation and an officers' certificate 
certifying that such designation complied with the foregoing conditions. 

   "Senior Debt" means the principal of, premium, if any, and interest 
(including any interest accruing subsequent to the filing of a petition of 
bankruptcy at the rate provided for in the documentation with respect 
thereto, whether or not such interest is an allowed claim under applicable 
law) on any Indebtedness of the Company, whether outstanding on the Issue 
Date or thereafter created, incurred or assumed, unless, in the case of any 
particular Indebtedness, the instrument creating or evidencing the same or 
pursuant to which the same is outstanding expressly provides that such 
Indebtedness shall not be senior in right of payment to the Notes. Without 
limiting the generality of the foregoing, "Senior Debt" shall also include 
the principal of, premium, if any, interest (including any interest accruing 
subsequent to the filing of a petition of bankruptcy at the rate provided for 
in the documentation with respect thereto, whether or not such interest is an 
allowed claim under applicable law) on, and all other amounts owing in 
respect of, (x) all monetary obligations of every nature of the Company under 
the Credit Agreement, including, without limitation, obligations to pay 
principal and interest, reimbursement obligations under letters of credit, 
fees, expenses and indemnities, (y) all Interest Swap Obligations and (z) all 
Obligations under Currency Agreements and Commodity Agreements in each case 
whether outstanding on the Issue Date or thereafter incurred. Notwithstanding 
the foregoing, "Senior Debt" shall not include (i) any Indebtedness of the 
Company to a Restricted Subsidiary of the Company or any Affiliate of the 
Company or any of such Affiliate's Subsidiaries, (ii) Indebtedness to, or 
guaranteed on behalf of, any shareholder, director, officer or employee of 
the Company or any Subsidiary of the Company (including, without limitation, 
amounts owed for compensation), (iii) Indebtedness to trade creditors and 
other amounts owed to suppliers in connection with obtaining goods, materials 
or services, (iv) Indebtedness represented by Disqualified Capital Stock, (v) 
any liability for federal, state, local or other taxes owed or owing by the 
Company, (vi) Indebtedness to the extent incurred in violation of the 
Indenture provisions set forth under "Limitation on Incurrence of Additional 
Indebtedness," (vii) Indebtedness which, when incurred and without respect to 
any election under Section 1111(b) of Title 11, United States Code, is 
without recourse to the Company and (viii) any Indebtedness which is, by its 
express terms, subordinated in right of payment to any other Indebtedness of 
the Company. 

   "Specified Venture Capital Stock" means Qualified Capital Stock of the 
Company issued to a Person (or Affiliates of such Person) who is not an 
Affiliate of the Company and the proceeds from the issuance of which are 
applied within 180 days after the issuance thereof to an Investment in an 
Unrestricted Subsidiary or joint venture. 

                                       84

   "Standard Securitization Undertakings" means representations, warranties, 
covenants and indemnities entered into by the Company or any Subsidiary of 
the Company which are reasonably customary in an accounts receivable 
securitization transaction. 

   "Subsidiary" with respect to any Person, means (i) any corporation of 
which the outstanding Capital Stock having at least a majority of the votes 
entitled to be cast in the election of directors under ordinary circumstances 
shall at the time be owned, directly or indirectly, by such Person or (ii) 
any other Person of which at least a majority of the voting interest under 
ordinary circumstances is at the time, directly or indirectly, owned by such 
Person. 

   "Unrestricted Subsidiary" of any Person means (i) any Subsidiary of such 
Person that at the time of determination shall be or continue to be 
designated an Unrestricted Subsidiary in the manner provided below and (ii) 
any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may 
designate any Subsidiary (including any newly acquired or newly formed 
Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary owns any 
Capital Stock of or owns or holds any Lien on any property of, the Company or 
any other Subsidiary of the Company that is not a Subsidiary of the 
Subsidiary to be so designated; provided that (x) the Company certifies to 
the Trustee that such designation complies with the "Limitation on Restricted 
Payments" covenant and (y) each Subsidiary to be so designated and each of 
its Subsidiaries has not at the time of designation, and does not thereafter, 
create, incur, issue, assume, guarantee or otherwise become directly or 
indirectly liable with respect to any Indebtedness pursuant to which the 
lender has recourse to any of the assets of the Company or any of its 
Restricted Subsidiaries. The Board of Directors may designate any 
Unrestricted Subsidiary to be a Restricted Subsidiary only if (x) immediately 
after giving effect to such designation, the Company is able to incur at 
least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in 
compliance with the "Limitation on Incurrence of Additional Indebtedness" 
covenant and (y) immediately before and immediately after giving effect to 
such designation, no Default or Event of Default shall have occurred and be 
continuing. Any such designation by the Board of Directors shall be evidenced 
to the Trustee by promptly filing with the Trustee a copy of the Board 
Resolution giving effect to such designation and an officers' certificate 
certifying that such designation complied with the foregoing provisions. 

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

   "Wholly Owned Restricted Subsidiary" of any Person means any Restricted 
Subsidiary of such Person that is a Wholly Owned Subsidiary of such Person. 

   "Wholly Owned Subsidiary" of any Person means any Subsidiary of such 
Person of which all the outstanding voting securities (other than in the case 
of a foreign Subsidiary, directors' qualifying shares or an immaterial amount 
of shares required to be owned by other Persons pursuant to applicable law) 
are owned by such Person or any Wholly Owned Subsidiary of such Person. 

REGISTRATION RIGHTS 

   Holders of New Notes are not entitled to any registration rights with 
respect to the New Notes. Pursuant to the Registration Rights Agreement, 
Holders of Old Notes are entitled to certain registration rights. Pursuant to 
the Registration Rights Agreement, the Company has agreed that it will, at 
its cost, for the benefit of the Holders, (i) use its best efforts with 
respect to the Exchange Offer to cause the Exchange Offer Registration 
Statement to become effective under the Securities Act within 150 days after 
the original issuance of the Old Notes (the "Issue Date") and (ii) upon the 
Exchange Offer Registration Statement becoming effective, to offer the New 
Notes in exchange for surrender of the Old Notes. The Registration Statement 
of which this Prospectus is a part constitutes the Exchange Offer 
Registration Statement. The Company will keep the Exchange Offer open for not 
less than 30 days (or longer if required by applicable law) after the date 
notice of the Exchange Offer is mailed to the Holders. For each 

                                       85

of the Old Notes surrendered to the Company pursuant to the Exchange Offer, 
the Holder who surrendered such Old Notes will receive a New Note having a 
principal amount equal to that of the surrendered Old Notes. Interest on each 
New Note will accrue (A) from the later of (i) the last interest payment date 
on which interest was paid on the Old Note surrendered in exchange therefor, 
or (ii) if the Old Note is surrendered for exchange on a date in a period 
which includes the record date for an interest payment date to occur on or 
after the date of such exchange and as to which interest will be paid, the 
date of such interest payment date or (B) if no interest has been paid on the 
Old Notes, from the Issue Date. 


   Under existing interpretations of the Commission contained in several 
no-action letters to third parties, the New Notes will be freely transferable 
by holders thereof (other than affiliates of the Company) after the Exchange 
Offer without further registration under the Securities Act; provided, 
however, that each Holder that wishes to exchange its Old Notes for New Notes 
will be required to represent (i) that any New Notes to be received by it 
will be acquired in the ordinary course of its business, (ii) that at the 
time of the commencement of the Exchange Offer it has no arrangement or 
understanding with any person to participate in the distribution (within the 
meaning of the Securities Act) of the New Notes in violation of the 
Securities Act, (iii) that it is not an "affiliate" (as defined in Rule 405 
promulgated under the Securities Act) of the Company, (iv) if such 
Holder is not a broker-dealer, that it is not engaged in, and does not 
intend to engage in, the distribution of Exchange Notes and (v) if such 
Holder is a Participating Broker-Dealer that will receive Exchange Notes 
for its own account in exchange for Old Notes that were acquired as a result 
of market-making or other trading activities, that it will deliver a 
prospectus in connection with any resale of such Exchange Notes. The 
Company has agreed to make available, during the period required by 
the Securities Act, a prospectus meeting the requirements of the 
Securities Act for use by Participating Broker-Dealers and other persons, if 
any, with similar prospectus delivery requirements for use in connection with 
any resale of New Notes. 


   If, (i) because of any change in law or in currently prevailing 
interpretations of the staff of the Commission, the Company is not permitted 
to effect an Exchange Offer, (ii) the Exchange Offer is not consummated 
within 195 days of the Issue Date, (iii) in certain circumstances, certain 
holders of unregistered New Notes so request, or (iv) in the case of any 
Holder that participates in the Exchange Offer, such Holder does not receive 
New Notes on the date of the exchange that may be sold without restriction 
under state and federal securities laws (other than due solely to the status 
of such Holder as an affiliate of the Company within the meaning of the 
Securities Act), then in each case, the Company will (x) promptly deliver to 
the Holders and the Trustee written notice thereof and (y) at their sole 
expense, (a) as promptly as practicable, file a shelf registration statement 
covering resales of the Old Notes (the "Shelf Registration Statement"), (b) 
use their best efforts to cause the Shelf Registration Statement to be 
declared effective under the Securities Act and (c) use their best efforts to 
keep effective the Shelf Registration Statement until the earlier of two 
years after the Issue Date or such time as all of the applicable Notes have 
been sold thereunder. The Company will, in the event that a Shelf 
Registration Statement is filed, provide to each Holder copies of the 
prospectus that is a part of the Shelf Registration Statement, notify each 
such Holder when the Shelf Registration Statement for the Notes has become 
effective and take certain other actions as are required to permit 
unrestricted resales of the Notes. A Holder that sells Old Notes pursuant to 
the Shelf Registration Statement will be required to be named as a selling 
security holder in the related prospectus and to deliver a prospectus to 
purchasers, will be subject to certain of the civil liability provisions 
under the Securities Act in connection with such sales and will be bound by 
the provisions of the Registration Rights Agreement that are applicable to 
such a Holder (including certain indemnification rights and obligations). 

ADDITIONAL INTEREST 

   If the Company fails to comply with the provisions above under 
"--Registration Rights" or if the Exchange Offer Registration Statement or 
the Shelf Registration Statement fails to become effective, then, as 
liquidated damages, additional interest (the "Additional Interest") shall 
become payable in respect of the Notes as follows: 

   (i) if (A) neither the Exchange Offer Registration Statement nor Shelf 
Registration Statement is filed with the Commission on or prior to the Filing 
Date or (B) notwithstanding that the Company has 

                                       86

consummated or will consummate an Exchange Offer, the Company is required to 
file a Shelf Registration Statement and such Shelf Registration Statement is 
not filed on or prior to the date required by the Registration Rights 
Agreement, then commencing on the day after either such required filing date, 
Additional Interest shall accrue on the principal amount of the Notes at a 
rate of 0.50% per annum for the first 90 days immediately following each such 
filing date, such Additional Interest rate increasing by an additional 0.50% 
per annum at the beginning of each subsequent 90-day period; or 

   (ii) if (A) neither the Exchange Offer Registration Statement nor a Shelf 
Registration Statement is declared effective by the Commission on or prior to 
the date required by the Registration Rights Agreement or (B) notwithstanding 
that the Company has consummated or will consummate an Exchange Offer, the 
Company is required to file a Shelf Registration Statement and such Shelf 
Registration Statement is not declared effective by the Commission on or 
prior to the 90th day following the date such Shelf Registration Statement 
was filed, then, commencing on the day after the required effectiveness date, 
Additional Interest shall accrue on the principal amount of the Notes at a 
rate of 0.50% per annum for the first 90 days immediately following such 
date, such Additional Interest rate increasing by an additional 0.50% per 
annum at the beginning of each subsequent 90-day period; or 

   (iii) if (A) the Company has not exchanged New Notes for all Notes validly 
tendered in accordance with the terms of the Exchange Offer on or prior to 
the 45th day after the date on which the Exchange Offer Registration 
Statement was declared effective or (B) if applicable, the Shelf Registration 
Statement has been declared effective and such Shelf Registration Statement 
ceases to be effective at any time prior to the second anniversary of the 
Issue Date (other than after such time as all Notes have been disposed of 
thereunder), then Additional Interest shall accrue on the principal amount of 
the Notes at a rate of 0.50% per annum for the first 90 days commencing on 
(x) the 46th day after such effective date, in the case of (A) above, or (y) 
the day such Shelf Registration Statement ceases to be effective in the case 
of (B) above, such Additional Interest rate increasing by an additional 0.50% 
per annum at the beginning of each subsequent 90-day period; 

provided, however, that the Additional Interest rate on the Notes may not 
exceed in the aggregate 1.0% per annum; provided, further, however, that (1) 
upon the filing of the Exchange Offer Registration Statement or a Shelf 
Registration Statement (in the case of clause (i) above), (2) upon the 
effectiveness of the Exchange Offer Registration Statement or a Shelf 
Registration Statement (in the case of clause (ii) above), or (3) upon the 
exchange of New Notes for all Notes tendered (in the case of clause (iii) (A) 
above), or upon the effectiveness of the Shelf Registration Statement which 
had ceased to remain effective (in the case of clause (iii) (B) above), 
Additional Interest on the Notes as a result of such clause (or the relevant 
subclause thereof), as the case may be, shall cease to accrue. 

   Any amounts of Additional Interest due pursuant to clause (i), (ii) or 
(iii) above will be payable in cash on April 1 and October 1 of each year to 
the Holders of record on the preceding March 15 or September 15, 
respectively. 

   The summary herein of certain provisions of the Registration Rights 
Agreement does not purport to be complete and is subject to, and is qualified 
in its entirety by, all the provisions of the Registration Rights Agreement, 
a copy of which is filed as an exhibit to the Registration Statement of which 
this Prospectus is a part. 

                                       87

           CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS 

   Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Company, 
has advised the Company that the following discussion, except as otherwise 
indicated, expresses their opinion as to the material federal income tax 
consequences applicable to the exchange of Old Notes for New Notes and the 
ownership and disposition of the New Notes by holders who acquire the New 
Notes pursuant to the Exchange Offer. The discussion is based upon current 
laws, regulations, rulings and judicial decisions, all of which are subject 
to change, possibly retroactively. The discussion does not address all 
aspects of United States federal income taxation that may be relevant to 
particular Holders in the context of their specific investment circumstances 
or certain types of Holders subject to special treatment under such laws (for 
example, financial institutions, banks, tax-exempt organizations, insurance 
companies and, except to the extent described below, Non-U.S. Holders (as 
defined below)). In addition, the discussion does not address any aspect of 
state, local or foreign taxation and assumes that a Holder of the New Notes 
will hold them as "capital assets" (generally, property held for investment) 
within the meaning of Section 1221 of the Internal Revenue Code of 1986, as 
amended (the "Code"). 

   For purposes of this discussion, a "U.S. Holder" is (i) an individual 
citizen or resident of the United States, (ii) a corporation, partnership or 
other entity created or organized in or under the laws of the United States 
or of any political subdivision thereof, (iii) an estate that is subject to 
United States federal income taxation without regard to the source of its 
income, or (iv) a trust whose administration is subject to the primary 
supervision of a United States court and which has one or more United States 
fiduciaries who have the authority to control all substantial decisions of 
the trust. Notwithstanding the preceding sentence, to the extent provided in 
Treasury regulations, certain trusts in existence on August 20, 1996, and 
treated as United States persons prior to such date, that elect to continue 
to be treated as United States persons also will be U.S. Holders. For 
purposes of this discussion, a "Non-U.S. Holder" is any Holder who is not a 
U.S. Holder. 

   PROSPECTIVE HOLDERS OF THE NEW NOTES ARE URGED TO CONSULT THEIR TAX 
ADVISORS CONCERNING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF 
ACQUIRING, OWNING AND DISPOSING OF THE NEW NOTES AS WELL AS THE APPLICATION 
OF STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS. 

EXCHANGE OFFER 

   The exchange of Old Notes for New Notes pursuant to the Exchange Offer 
will not be treated as an exchange or other taxable event for United States 
federal income tax purposes because under Treasury regulations, the New Notes 
do not differ materially in kind or extent from the Old Notes. Rather, the 
New Notes received by a Holder will be treated as a continuation of the Old 
Notes in the hands of such Holder. As a result, there will be no United 
States federal income tax consequences to Holders who exchange Old Notes for 
New Notes pursuant to the Exchange Offer and any such Holder will have the 
same tax basis and holding period in the New Notes as it had in the Old Notes 
immediately before the exchange. 

U.S. HOLDERS 

   Interest payable on the New Notes will be includible in the income of a 
U.S. Holder in accordance with such Holder's regular method of accounting. If 
a New Note is redeemed, sold or otherwise disposed of, a U.S. Holder 
generally will recognize gain or loss equal to the difference between the 
amount realized upon such disposition (to the extent such amount does not 
represent accrued but unpaid interest) and such Holder's adjusted tax basis 
in the New Note. Subject to the market discount rules discussed below, such 
gain or loss will be capital gain or loss. Under recently-enacted 
legislation, net capital gain (i.e., generally, capital gain in excess of 
capital loss) recognized by an individual Holder upon the disposition of New 
Notes that have been held for more than 18 months will generally be subject 
to tax at a rate not to exceed 20%. Net capital gain recognized by a Holder 
upon the disposition of New Notes that have been held for more than 12 months 
but for not more than 18 months will continue to be subject to tax at a rate 

                                       88

not to exceed 28% and net capital gain recognized from the disposition of New 
Notes that have been held for 12 months or less will continue to be subject 
to tax at ordinary income tax rates. In addition, capital gain recognized by 
a corporate Holder will continue to be subject to tax at the ordinary income 
tax rates applicable to corporations. 

   Under the market discount rules of the Code, a Holder (other than a Holder 
who made the election described below) who purchased an Old Note with "market 
discount" (generally defined as the amount by which the stated redemption 
price at maturity exceeds the Holder's purchase price) will be required to 
treat any gain recognized on the redemption, sale or other disposition of the 
New Note received in the exchange as ordinary income to the extent of the 
market discount that accrued during the holding period of such New Note 
(which would include the holding period of the Old Note). A Holder who has 
elected under applicable Code provisions to include market discount in income 
annually as such discount accrues will not, however, be required to treat any 
gain recognized as ordinary income under these rules. Holders should consult 
their tax advisors as to the portion of any gain that would be taxable as 
ordinary income under these provisions. 

NON-U.S. HOLDERS 

   Under present United States federal income and estate tax law, assuming 
certain certification requirements are satisfied (which include 
identification of the beneficial owner of the instrument), and subject to the 
discussion of backup withholding below: 

     (a) payments of interest on the New Notes to any Non-U.S. Holder 
    generally will not be subject to United States federal income or 
    withholding tax, provided that (1) the Holder does not actually or 
    constructively own 10% or more of the total combined voting power of all 
    classes of stock of Huntsman Packaging entitled to vote, (2) the Holder is 
    not a controlled foreign corporation that is related to Huntsman Packaging 
    through stock ownership, and (3) such interest payments are not 
    effectively connected with the conduct of a United States trade or 
    business of the Holder; 

     (b) a Holder who is a Non-U.S. Holder generally will not be subject to 
    the United States federal income tax on gain realized on the sale, 
    exchange, or other disposition of a New Note, unless (1) such Holder is an 
    individual who is present in the United States for 183 days or more during 
    the taxable year and certain other requirements are met, or (2) the gain 
    is effectively connected with the conduct of a United States trade or 
    business of the Holder; and 

     (c) if interest on the New Notes is exempt from withholding of United 
    States federal income tax under the rules described above, the New Notes 
    will not be included in the estate of a deceased Non-U.S. Holder for 
    United States federal estate tax purposes. 

   The certification referred to above may be made on an Internal Revenue 
Service ("IRS") Form W-8 or substantially similar substitute form. 

BACKUP WITHHOLDING AND INFORMATION REPORTING 

   A Holder of the New Notes may be subject to information reporting and to 
backup withholding at a rate of 31 percent of certain amounts paid to the 
Holder unless such Holder (a) is a corporation or comes within certain other 
exempt categories and, when required, provides proof of such exemption or (b) 
provides a correct taxpayer identification number, certifies as to no loss of 
exemption from backup withholding and otherwise complies with applicable 
requirements of the backup withholding rules. Under current regulations, 
information reporting and backup withholding do not apply to interest 
payments made at an address outside the United States to a Holder of the New 
Notes that is not a U.S. Holder if the beneficial owner of the New Notes (a) 
provides a statement in which such owner certifies, under penalties of 
perjury, that such owner is not a United States person and provides such 
owner's name and address or (b) otherwise establishes an exemption; provided 
that Huntsman Packaging or its paying agent, as the case may be, does not 
have actual knowledge that the Holder is a U.S. Holder. 

   Under current regulations, payment of the proceeds from the sale of the 
New Notes to or through a foreign office of a "broker" (as defined in 
applicable Treasury regulations) will not be subject to 

                                       89

information reporting or backup withholding, except that if the broker is a 
United States person, a controlled foreign corporation for United States 
federal income tax purposes or a foreign person 50 percent or more of whose 
gross income from all sources for the three-year period ending with the close 
of its taxable year preceding the payment was effectively connected with a 
United States trade or business, information reporting (but not backup 
withholding) may apply to such payments unless the broker has in its records 
documentary evidence that the Holder of the New Note is not a United States 
person and certain conditions are met or the Holder of the New Note otherwise 
establishes an exemption. Payment of the proceeds from a sale of the New 
Notes to or through the United States office of a broker is subject to 
information reporting and backup withholding unless the Holder certifies as 
to its non-U.S. status under penalties of perjury or otherwise establishes an 
exemption. 

   Any amounts withheld under the backup withholding rules are not an 
additional tax and may be credited against the U.S. Holder's United States 
federal income tax liability, provided that the required information is 
furnished to the IRS. 

   Recently, the Treasury Department promulgated final regulations regarding 
the withholding and information reporting rules discussed above. In general, 
the final regulations do not significantly alter the substantive withholding 
and information reporting requirements described above but unify current 
certification procedures and forms and clarify reliance standards. The final 
regulations will generally be effective for payments made after December 31, 
1998, subject to certain transition rules. 

                                       90

                        BOOK-ENTRY; DELIVERY AND FORM 

   Except as described in the next paragraph, the Old Notes initially were, 
and the New Notes will be, represented by Global Notes. The Global Notes are 
or will be deposited on the Issue Date with, or on behalf of DTC and 
registered in the name of a nominee of DTC. 

   The Global Notes. Huntsman Packaging expects that pursuant to procedures 
established by DTC (i) upon the issuance of the Global Notes, DTC or its 
custodian will credit, on its internal system, the principal amount of Notes 
of the individual beneficial interests represented by such Global Notes to 
the respective accounts of persons who have accounts with such depositary and 
(ii) ownership of beneficial interests in the Global Notes will be shown on, 
and the transfer of such ownership will be effected only through, records 
maintained by DTC or its nominee (with respect to interests of participants) 
and the records of participants (with respect to interests of persons other 
than participants). Such accounts initially will be designated by or on 
behalf of the Initial Purchasers and ownership of beneficial interests in the 
Global Notes will be limited to persons who have accounts with DTC 
("participants") or persons who hold interests through participants. QIBs and 
institutional Accredited Investors who are not QIBs may hold their interests 
in the Global Notes directly through DTC if they are participants in such 
system, or indirectly through organizations which are participants in such 
system. 

   So long as DTC, or its nominee, is the registered owner or Holder of the 
Notes, DTC or such nominee, as the case may be, will be considered the sole 
owner or Holder of the Notes represented by such Global Notes for all 
purposes under the Indenture. No beneficial owner of an interest in the 
Global Notes will be able to transfer that interest except in accordance with 
DTC's procedures, in addition to those provided for under the Indenture with 
respect to the Notes. 

   Payments of the principal of, premium, if any, interest (including 
Additional Interest) on, the Global Notes will be made to DTC or its nominee, 
as the case may be, as the registered owner thereof. None of Huntsman 
Packaging, the Trustee or any Paying Agent will have any responsibility or 
liability for any aspect of the records relating to or payments made on 
account of beneficial ownership interests in the Global Notes or for 
maintaining, supervising or reviewing any records relating to such beneficial 
ownership interest. 

   Huntsman Packaging expects that DTC or its nominee, upon receipt of any 
payment of principal, premium, if any, interest (including Additional 
Interest) on the Global Notes, will credit participants' accounts with 
payments in amounts proportionate to their respective beneficial interests in 
the principal amount of the Global Notes as shown on the records of DTC or 
its nominee. Huntsman Packaging also expects that payments by participants to 
owners of beneficial interests in the Global Notes held through such 
participants will be governed by standing instructions and customary 
practice, as is now the case with securities held for the accounts of 
customers registered in the names of nominees for such customers. Such 
payments will be the responsibility of such participants. 

   Transfers between participants in DTC will be effected in the ordinary way 
through DTC's same-day funds system in accordance with DTC rules and will be 
settled in same day funds. If a Holder requires physical delivery of a 
Certificated Security for any reason, including to sell Notes to persons in 
states which require physical delivery of the Notes, or to pledge such 
securities, such Holder must transfer its interest in a Global Note, in 
accordance with the normal procedures of DTC and with the procedures set 
forth in the Indenture. 

   DTC has advised Huntsman Packaging that it will take any action permitted 
to be taken by a Holder of Notes (including the presentation of Notes for 
exchange as described below) only at the direction of one or more 
participants to whose account the DTC interests in the Global Notes are 
credited and only in respect of such portion of the aggregate principal 
amount of Notes as to which such participant or participants has or have 
given such direction. However, if there is an Event of Default under the 
Indenture, DTC will exchange the Global Notes for Certificated Securities, 
which it will distribute to its participants. 

   DTC has advised Huntsman Packaging as follows: DTC is a limited purpose 
trust company organized under the laws of the State of New York, a member of 
the Federal Reserve System, a "clearing 

                                       91

corporation" within the meaning of the Uniform Commercial Code and a 
"Clearing Agency" registered pursuant to the provisions of Section 17A of the 
Exchange Act. DTC was created to hold securities for its participants and 
facilitate the clearance and settlement of securities transactions between 
participants through electronic book-entry changes in accounts of its 
participants, thereby eliminating the need for physical movement of 
certificates. Participants include securities brokers and dealers, banks, 
trust companies and clearing corporations and certain other organizations. 
Indirect access to the DTC system is available to others such as banks, 
brokers, dealers and trust companies that clear through or maintain a 
custodial relationship with a participant, either directly or indirectly 
("indirect participants"). 

   Although DTC has agreed to the foregoing procedures in order to facilitate 
transfers of interests in the Global Note among participants of DTC, it is 
under no obligation to perform such procedures, and such procedures may be 
discontinued at any time. Neither Huntsman Packaging nor the Trustee will 
have any responsibility for the performance by DTC or its participants or 
indirect participants of their respective obligations under the rules and 
procedures governing their operations. 

   Certificated Securities. If DTC is at any time unwilling or unable to 
continue as a depositary for the Global Note and a successor depositary is 
not appointed by Huntsman Packaging within 90 days, Certificated Securities 
will be issued in exchange for the Global Notes. 

                             PLAN OF DISTRIBUTION 



   Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This Prospectus as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with the resales of New Notes received in exchange for Old Notes
where such Old Notes were acquired as a result of market-making activities or
other trading activities. Huntsman Packaging has agreed that, starting on the
Expiration Date and ending on the close of business on the 90th day following
the Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale. In
addition, until May 31, 1998 (90 days from the date of this Prospectus), all
dealers effecting transactions in the New Notes may be required to deliver a
prospectus.



   Huntsman Packaging will not receive any proceeds from any sale of New 
Notes by broker-dealers or any other persons. New Notes received by 
broker-dealers for their own account pursuant to the Exchange Offer may be 
sold from time to time in one or more transactions in the over-the-counter 
market, in negotiated transactions, through the writing of options on the New 
Notes or a combination of such methods of resale, at market prices prevailing 
at the time of resale, at prices related to such prevailing market prices or 
negotiated prices. Any such resale may be made directly to purchasers or to 
or through brokers or dealers who may receive compensation in the form of 
commissions or concessions from any such broker-dealer and/or purchasers of 
any such New Notes. Any broker-dealer that resells New Notes that were 
received by it for its own account pursuant to the Exchange Offer and any 
broker or dealer that participates in a distribution of such New Notes may be 
deemed to be an "underwriter" within the meaning of the Securities Act and 
any profit on any such resale of New Notes and any commissions or concessions 
received by any such persons may be deemed to be underwriting compensation 
under the Securities Act. The Letter of Transmittal states that by 
representing that it will deliver and by delivering a prospectus, a 
broker-dealer will not be deemed to admit that it is an "underwriter" within 
the meaning of the Securities Act. 

   For a period of 90 days after the Expiration Date, Huntsman Packaging will 
promptly send additional copies of this Prospectus and any amendment or 
supplement to this Prospectus to any broker-dealer that requests such 
documents in the Letter of Transmittal. Huntsman Packaging has agreed to pay 
all expenses incident to Huntsman Packaging's performance of, or compliance 
with, the Registration Rights Agreement and will indemnify the Holders 
(including any broker-dealers) and certain parties related to the Holders 
against certain liabilities, including liabilities under the Securities Act. 

                                       92

                                LEGAL MATTERS 


   Certain legal matters as to the validity of the New Notes and the New 
Guarantees offered hereby and certain federal income tax considerations will 
be passed upon for Huntsman Packaging by Skadden, Arps, Slate, Meagher & Flom 
LLP, New York, New York and certain legal matters relating to the New Notes 
and the New Guarantees will be passed upon for Huntsman Packaging by Van 
Cott, Bagley, Cornwall & McCarthy, Salt Lake City, Utah, by King & Spalding, 
Atlanta, Georgia and by Ronald G. Moffitt, Senior Vice President and General 
Counsel of Huntsman Packaging. 


                                   EXPERTS 


   The consolidated financial statements of Huntsman Packaging Corporation 
and subsidiaries as of December 31, 1996 and 1997 and for each of the three 
years in the period ended December 31, 1997 and the combined financial 
statements of CT Film and Rexene Corporation Limited as of December 31, 1996 
and September 30, 1997 and for the eight months ended August 31, 1997 and the 
one month ended September 30, 1997 included in this Prospectus and the 
related financial statement schedule of Huntsman Packaging Corporation 
included elsewhere in the Registration Statement have been audited by 
Deloitte & Touche LLP, independent auditors, as stated in their reports 
appearing herein and elsewhere in the Registration Statement, and have been 
so included in reliance upon the reports of such firm given upon their 
authority as experts in accounting and auditing. 


                                       93




                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 




                                                                                            PAGE 
                                                                                            -------- 
                                                                                         
HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES: 
As of December 31, 1996 and 1997 and for the years ended December 31, 1995, 1996 and 1997: 
 Independent Auditors' Report..............................................................    F-2 
 Consolidated Balance Sheets...............................................................    F-3 
 Consolidated Statements of Operations ....................................................    F-5 
 Consolidated Statements of Stockholders' Equity...........................................    F-6 
 Consolidated Statements of Cash Flows ....................................................    F-7 
 Notes to Consolidated Financial Statements ...............................................    F-9 

CT FILM, A DIVISION OF HUNTSMAN POLYMERS CORPORATION, AND REXENE CORPORATION LIMITED, A 
WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION: 
As of December 31, 1996 and September 30, 1997 and for the eight months ended August 31, 
1997 and for the one month ended September 30, 1997: 
 Independent Auditors' Report .............................................................   F-33 
 Combined Balance Sheets ..................................................................   F-34 
 Combined Statements of Operations ........................................................   F-35 
 Combined Statements of Cash Flows.........................................................   F-36 
 Notes to Combined Financial Statements ...................................................   F-38 



                               F-1           

                         INDEPENDENT AUDITORS' REPORT 


To the Board of Directors and Stockholders of 
 Huntsman Packaging Corporation and Subsidiaries: 

   We have audited the accompanying consolidated balance sheets of Huntsman 
Packaging Corporation and subsidiaries as of December 31, 1996 and 1997, and 
the consolidated statements of operations, stockholders' equity, and cash 
flows for each of the three years in the period ended December 31, 1997. 
These financial statements are the responsibility of the Company's 
management. Our responsibility is to express an opinion on these financial 
statements based on our audits. 


   We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. 
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion. 


   In our opinion, such consolidated financial statements present fairly, in 
all material respects, the financial position of Huntsman Packaging 
Corporation and subsidiaries at December 31, 1996 and 1997, and the results 
of their operations and their cash flows for each of the three years in the 
period ended December 31, 1997 in conformity with generally accepted 
accounting principles. 

/s/ DELOITTE & TOUCHE LLP 
Salt Lake City, Utah 
February 11, 1998 


                                      F-2


               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
                         CONSOLIDATED BALANCE SHEETS 
                          DECEMBER 31, 1996 AND 1997 
                                (IN THOUSANDS) 





 ASSETS                                                             1996        1997 
                                                                 ---------- ---------- 
                                                                      
CURRENT ASSETS: 
 Cash and cash equivalents......................................  $ 10,647    $ 12,411 
 Receivables: 
  Trade accounts (less allowance for doubtful accounts: $2,818 
   and $3,434, respectively)....................................    54,691      81,806 
  Other ........................................................     3,227       4,894 
 Inventories ...................................................    53,441      68,426 
 Prepaid expenses and other ....................................     3,901       2,746 
 Deferred income taxes .........................................     1,088       1,271 
                                                                 ---------- ---------- 
   Total current assets.........................................   126,995     171,554 
                                                                 ---------- ---------- 
PLANT AND EQUIPMENT: 
 Land and improvements .........................................     6,339       7,188 
 Buildings and improvements.....................................    35,126      43,536 
 Machinery and equipment........................................   141,763     171,897 
 Furniture, fixtures, and automobiles ..........................     1,248       1,739 
 Leasehold improvements ........................................       423         419 
 Construction in progress ......................................     6,600       6,261 
                                                                 ---------- ---------- 
   Total........................................................   191,499     231,040 
 Less accumulated depreciation and amortization.................   (50,056)    (56,120) 
                                                                 ---------- ---------- 
   Plant and equipment--net.....................................   141,443     174,920 
                                                                 ---------- ---------- 
INTANGIBLE ASSETS--Net..........................................    54,843      50,053 
OTHER ASSETS ...................................................     5,876      13,028 
                                                                 ---------- ---------- 
TOTAL ..........................................................  $329,157    $409,555 
                                                                 ========== ========== 



                                                                   (Continued) 

                                      F-3


                HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
                         CONSOLIDATED BALANCE SHEETS 
                          DECEMBER 31, 1996 AND 1997 
                   (IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS) 





                                                                   1996       1997 
                                                                ---------- --------- 
                                                                     
LIABILITIES AND STOCKHOLDERS' EQUITY 
CURRENT LIABILITIES: 
 Trade accounts payable........................................  $ 25,779   $ 31,949 
 Accrued liabilities: 
  Customer rebates.............................................     3,393      5,378 
  Other........................................................    16,106     21,278 
 Long-term debt--current portion ..............................       506        343 
 Due to affiliates ............................................     5,966     15,279 
 Income taxes payable .........................................       598      3,237 
                                                                ---------- --------- 
  Total current liabilities....................................    52,348     77,464 
LONG-TERM DEBT ................................................   186,691    250,171 
OTHER LIABILITIES .............................................     9,024      8,869 
DEFERRED INCOME TAXES .........................................    14,082     10,077 
                                                                ---------- --------- 
  Total liabilities............................................   262,145    346,581 
                                                                ---------- --------- 
COMMITMENTS AND CONTINGENCIES 
 (Notes 5, 6, 8, and 10) 

STOCKHOLDERS' EQUITY: 
Common stock--Class A voting $1.00 par value; 50,000 shares 
 authorized; 1,000 shares issued and outstanding at December 
 31, 1996......................................................         1 
Common stock--Class A voting no par value; 1,200,000 shares 
 authorized; 1,000,001 shares issued and outstanding ..........               63,161 
Common stock--Class B voting no par value; 10,000 shares 
 authorized; 6,999 shares issued and outstanding...............                  515 
Additional paid-in capital.....................................    62,975 
Stockholder note receivable....................................                 (700) 
Retained earnings .............................................     5,053      5,393 
Translation adjustment.........................................    (1,017)    (5,395) 
                                                                ---------- --------- 
  Total stockholders' equity...................................    67,012     62,974 
                                                                ---------- --------- 
TOTAL..........................................................  $329,157   $409,555 
                                                                ========== ========= 



                                                                   (Concluded) 

See notes to consolidated financial statements. 

                                      F-4


               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
                    CONSOLIDATED STATEMENTS OF OPERATIONS 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 
                                (IN THOUSANDS) 





                                                               1995        1996       1997 
                                                            ---------- ----------  ---------- 
                                                                          
SALES--Net ................................................  $325,036    $339,135   $491,163 
COST OF SALES .............................................   273,520     288,884    424,868 
                                                            ---------- ----------  ---------- 
GROSS PROFIT ..............................................    51,516      50,251     66,295 
                                                            ---------- ----------  ---------- 
OPERATING EXPENSES: 
 Administration and other .................................    18,662      12,502     17,794 
 Sales and marketing ......................................    15,850      16,666     19,612 
 Research and development .................................     2,002       2,157      2,527 
 Plant closing costs ......................................                10,873      9,276 
                                                            ---------- ----------  ---------- 
  Total operating expenses ................................    36,514      42,198     49,209 
                                                            ---------- ----------  ---------- 
OPERATING INCOME ..........................................    15,002       8,053     17,086 
INTEREST EXPENSE--Net .....................................    (8,683)    (11,571)   (16,402) 
OTHER INCOME (EXPENSE)--Net ...............................    (2,293)     (3,826)       530 
                                                            ---------- ----------  ---------- 
INCOME (LOSS) BEFORE INCOME TAXES 
 AND EXTRAORDINARY ITEM ...................................     4,026      (7,344)     1,214 
                                                            ---------- ----------  ---------- 
INCOME TAX EXPENSE (BENEFIT): 
 Current ..................................................        88       2,334      5,027 
 Deferred .................................................     1,639      (6,490)    (4,188) 
                                                            ---------- ----------  ---------- 
  Total income taxes ......................................     1,727      (4,156)       839 
                                                            ---------- ----------  ---------- 
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ...................     2,299      (3,188)       375 
EXTRAORDINARY ITEM--Loss on early 
 extinguishment of debt (less applicable current income 
 tax benefit of $780) .....................................                (1,338) 
                                                            ---------- ----------  ---------- 
NET INCOME (LOSS) .........................................  $  2,299    $ (4,526)  $    375 
                                                            ========== ==========  ========== 



See notes to consolidated financial statements. 

                                      F-5



                HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 
                                 (IN THOUSANDS)




                                        COMMON STOCK      COMMON STOCK A      COMMON STOCK B 
                                     ------------------ ------------------- ------------------ 
                                      SHARES    AMOUNT   SHARES    AMOUNT    SHARES    AMOUNT 
                                     -------- --------  -------- ---------  -------- -------- 
                                                                   
BALANCE, JANUARY 1, 1995 
 (As previously reported) ..........     1       $ 1 
 Adjustments to record the 
  combination with HCCI as a 
  pooling of interest (Note 11) .... 
                                     -------- --------  -------- ---------  -------- -------- 
BALANCE, JANUARY 1, 1995 (As 
 restated) .........................     1         1 
 Dividends paid on common stock  ... 
 Net income ........................ 
 Aggregate adjustment resulting 
  from the translation of foreign 
  currency statements .............. 
 Other--including gain on sale of 
  land to affiliate ................ 
                                     -------- --------  -------- ---------  -------- -------- 
BALANCE, DECEMBER 31, 1995..........     1         1 
 Net loss .......................... 
 Aggregate adjustment resulting 
  from the translation of foreign 
  currency statements .............. 
 Other ............................. 
                                     -------- --------  -------- ---------  -------- -------- 
BALANCE, DECEMBER 31, 1996..........     1         1 
 Net income ........................ 
 Recapitalization (Note 1) .........    (1)       (1)       995    $62,661      5       $315 
 Shares issued for note receivable                            5        500      2        200 
 Aggregate adjustment resulting 
  from the translation of foreign 
  currency statements .............. 
 Other ............................. 
                                     -------- --------  -------- ---------  -------- -------- 
BALANCE, DECEMBER 31, 1997 .........    None     None     1,000    $63,161      7       $515 
                                     ======== ========  ======== =========  ======== ======== 

                                      ADDITIONAL 
                                        PAID-IN     STOCKHOLDER   RETAINED    TRANSLATION 
                                        CAPITAL     RECEIVABLE    EARNINGS    ADJUSTMENT     TOTAL 
                                     ------------ -------------  ---------- -------------  --------- 
                                                                            
BALANCE, JANUARY 1, 1995 
 (As previously reported) ..........   $ 59,735                    $ 2,703      $(2,483)    $59,956 
 Adjustments to record the 
  combination with HCCI as a 
  pooling of interest (Note 11) ....                                 7,596                    7,596 
                                     ------------ -------------  ---------- -------------  --------- 
BALANCE, JANUARY 1, 1995 (As 
 restated) .........................     59,735                     10,299       (2,483)     67,552 
 Dividends paid on common stock  ...                                (3,000)                  (3,000) 
 Net income ........................                                 2,299                    2,299 
 Aggregate adjustment resulting 
  from the translation of foreign 
  currency statements ..............                                                948         948 
 Other--including gain on sale of 
  land to affiliate ................      3,240                         14                    3,254 
                                     ------------ -------------  ---------- -------------  --------- 
BALANCE, DECEMBER 31, 1995..........     62,975                      9,612       (1,535)     71,053 
 Net loss ..........................                                (4,526)                  (4,526) 
 Aggregate adjustment resulting 
  from the translation of foreign 
  currency statements ..............                                                518         518 
 Other .............................                                   (33)                     (33) 
                                     ------------ -------------  ---------- -------------  --------- 
BALANCE, DECEMBER 31, 1996..........     62,975                      5,053       (1,017)     67,012 
 Net income ........................                                   375                      375 
 Recapitalization (Note 1) .........    (62,975) 
 Shares issued for note receivable                     $(700) 
 Aggregate adjustment resulting 
  from the translation of foreign 
  currency statements ..............                                             (4,378)     (4,378) 
 Other .............................                                   (35)                     (35) 
                                     ------------ -------------  ---------- -------------  --------- 
BALANCE, DECEMBER 31, 1997 .........     None          $(700)      $ 5,393      $(5,395)    $62,974 
                                     ============ =============  ========== =============  ========= 


                See notes to consolidated financial statements. 

                                      F-6


               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
                    CONSOLIDATED STATEMENTS OF CASH FLOWS 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 
                                (IN THOUSANDS) 





                                                               1995        1996         1997 
                                                            ---------- -----------  ----------- 
                                                                           
CASH FLOWS FROM OPERATING ACTIVITIES: 
 Net income (loss).........................................  $  2,299    $  (4,526)  $     375 
 Adjustments to reconcile net income (loss) to net cash 
  provided by operating activities: 
  Extraordinary item--loss on early extinguishment of 
   debt....................................................                  1,338 
  Depreciation and amortization............................    11,646       14,000      16,442 
  Deferred income taxes ...................................     1,639       (6,490)     (4,188) 
  Provision for losses on accounts receivable .............       688          264         241 
  Write-off of goodwill ...................................                  3,283       3,286 
  Provision for write-down of plant and equipment  ........                  5,300       4,262 
  Changes in operating assets and liabilities--net of 
   assets acquired: 
   Trade accounts receivable ..............................       995       (7,484)     (6,431) 
   Other receivables ......................................     2,857        4,957      (1,666) 
   Inventories.............................................     4,660      (12,833)      7,961 
   Prepaid expenses and other .............................       522       (2,665)      1,758 
   Other assets............................................    (1,603)       3,174      (7,621) 
   Trade accounts payable..................................    (6,190)       3,825         340 
   Income taxes receivable.................................    (2,537)         200       3,427 
   Accrued liabilities ....................................    (4,302)       9,722         (96) 
   Due to affiliates ......................................     2,318        5,153       8,839 
   Other liabilities ......................................      (204)       2,901       1,719 
                                                            ---------- -----------  ----------- 
    Net cash provided by operating activities .............    12,788       20,119      28,648 
                                                            ---------- -----------  ----------- 
CASH FLOWS FROM INVESTING ACTIVITIES: 
 Payment for purchase of CT Film, net of cash acquired  ...                            (69,366) 
 Payment for purchase of United Films Corporation  ........                (12,276) 
 Payment for purchase of Deerfield Plastics, net of cash 
  acquired ................................................                (63,889) 
 Payment for purchase of Performance Films ................    (4,279) 
 Sale of land to affiliate ................................     3,239 
 Capital expenditures for plant and equipment .............   (19,479)     (12,774)    (17,861) 
                                                            ---------- -----------  ----------- 
    Net cash used in investing activities..................   (20,519)     (88,939)    (87,227) 
                                                            ---------- -----------  ----------- 
CASH FLOWS FROM FINANCING ACTIVITIES: 
 Principal payments on long-term debt......................   (14,903)    (131,731)   (249,509) 
 Proceeds from long-term debt..............................    24,650      200,348     312,700 
 Payment of cash dividend..................................    (3,000) 
                                                            ---------- -----------  ----------- 
    Net cash provided by financing activities..............     6,747       68,617      63,191 
                                                            ---------- -----------  ----------- 



                                                                   (Continued) 

                                      F-7


                HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
                    CONSOLIDATED STATEMENTS OF CASH FLOWS 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 
                                (IN THOUSANDS) 





                                           1995      1996       1997 
                                         -------- ---------  ---------- 
                                                    
EFFECT OF EXCHANGE RATE CHANGES ON 
 CASH...................................  $  692    $ 3,660    $(2,848) 
                                         -------- ---------  ---------- 
NET INCREASE (DECREASE) IN CASH AND 
 CASH EQUIVALENTS ......................    (292)     3,457      1,764 
CASH AND CASH EQUIVALENTS, BEGINNING OF 
 YEAR ..................................   7,482      7,190     10,647 
                                         -------- ---------  ---------- 
CASH AND CASH EQUIVALENTS, END OF YEAR    $7,190    $10,647    $12,411 
                                         ======== =========  ========== 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW 
 INFORMATION: 
 Cash paid during the year for: 
  Interest .............................  $8,754    $   501    $27,596 
                                         ======== =========  ========== 
  Income taxes .........................  $2,656    $   800    $ 1,614 
                                         ======== =========  ========== 



SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES 
(Note 11): 


   On June 1, 1995, the Company purchased all of the assets of Performance 
Films Corporation for approximately $4,279. In conjunction with the 
acquisition, liabilities assumed were as follows: 


Fair value of assets acquired.  $ 5,172 
Cash paid.....................   (4,279) 
                               --------- 
Liabilities assumed...........  $   893 
                               ========= 


   On August 1, 1996, the Company purchased all of the outstanding capital 
stock of United Films Corporation (United) for approximately $12,276. In 
conjunction with the acquisition, liabilities assumed were as follows: 

Fair value of assets acquired (including goodwill of $12,076)   $ 21,950 
Cash paid ....................................................   (12,276) 
                                                               ---------- 
Liabilities assumed ..........................................  $  9,674 
                                                               ========== 

   On October 21, 1996, the Company purchased all of the outstanding capital 
stock of Deerfield Plastics, Inc. (Deerfield) for approximately $68,207. In 
conjunction with the acquisition, liabilities assumed were as follows: 

Fair value of assets acquired (including goodwill of $18,400)   $ 90,265 
Cash paid.....................................................   (68,207) 
                                                               ---------- 
Liabilities assumed (including deferred acquisition payments)   $ 22,058 
                                                               ========== 


   On September 30, 1997, the Company purchased all of the assets of CT Film 
(a division of Huntsman Polymers Corporation, formerly Rexene Corporation) 
and Rexene Corporation Limited (a wholly-owned subsidiary of Huntsman 
Polymers Corporation) for cash of approximately $70 million. In conjunction 
with the acquisition, liabilities assumed were as follows: 

Fair value of assets acquired (including goodwill of $1,799)   $ 81,959 
Cash paid ...................................................   (70,000) 
                                                              ---------- 
Liabilities assumed .........................................  $ 11,959 
                                                              ========== 

                                                                   (Concluded) 
                See notes to consolidated financial statements.

                                      F-8

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 


   Huntsman Packaging Corporation and subsidiaries (collectively, the 
Company) produce plastic films for food packaging, pallet wrapping, shrink 
wrapping, and medical packaging; printed films and bags; specialty films; and 
foam packaging. The Company's manufacturing facilities are located in North 
America, Europe, and Australia. 


   RECAPITALIZATION -- Prior to September 30, 1997, the Company was a 
wholly-owned subsidiary of Huntsman Corporation (HC). On September 30, 1997, 
the Company was recapitalized by authorizing two new classes of common stock 
with identical rights, except that Class A stockholders are entitled to elect 
one of three directors and Class B stockholders are entitled to elect the 
other remaining directors. The 1,000 shares of common stock previously issued 
and outstanding were canceled. 

   On September 30, 1997, the Company was separated from HC (the Split-Off). 
The Split-Off transaction occurred as follows: 

   o  Jon M. Huntsman exchanged 1,041,896 shares of HC common stock for 
      650,000 shares of the Company's Class A common stock. 

   o  The Christena Karen H. Durham Trust (the Trust) exchanged 561,021 
      shares of HC common stock for 345,001 shares of Class A common stock 
      and 4,999 shares of Class B common stock of the Company. 

   Additionally, on September 30, 1997, Richard P. Durham purchased 5,000 
shares of Class A Common Stock and 2,000 shares of Class B Common Stock of 
the Company in exchange for a note receivable. 


   As a result of the recapitalization and Split-Off, Jon M. Huntsman, 
majority shareholder of HC, Richard P. Durham and the Trust each became 
shareholders of the Company. 


   PRINCIPLES OF CONSOLIDATION -- The consolidated financial statements 
include the accounts of Huntsman Packaging Corporation and its wholly-owned 
subsidiaries; Huntsman Deerfield Films Corporation; Huntsman United Films 
Corporation; Huntsman Preparatory, Inc.; Huntsman Container Corporation 
International; Huntsman Packaging Georgia, Inc.; Huntsman Film Products of 
Mexico, Inc.; and Huntsman Bulk Packaging Corporation (see Note 14). All 
significant intercompany balances and transactions have been eliminated in 
consolidation. 

   USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS -- 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. 

   REVENUE RECOGNITION -- Sales revenue is recognized upon shipment of 
product in fulfillment of a customer order. 

   CARRYING VALUE OF LONG-TERM ASSETS -- The Company evaluates the carrying 
value of long-term assets, including intangible assets, based upon current 
and anticipated undiscounted cash flows, and recognizes an impairment when 
such estimated cash flows will be less than the carrying value of the asset. 
Measurement of the amount of impairment, if any, is based upon the difference 
between carrying value and fair value. 

   INVENTORIES -- Inventories consist principally of finished film products 
and the raw materials necessary to produce them. Finished goods inventories 
are carried at the lower of cost (on a first-in, first-out basis) or market. 

                                      F-9

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 

    PLANT AND EQUIPMENT -- Plant and equipment is stated at cost. 
Depreciation is computed using the straight-line method over the estimated 
useful lives of the assets as follows: 


                                               
Land improvements........................           5 years
Buildings and improvements...............          20 years
Machinery and equipment..................         7-15 years
Furniture, fixtures, and automobiles ....          3-7 years
Leasehold improvements...................   Shorter of the term of lease
                                                 or economic life 


   INTANGIBLE ASSETS -- Intangible assets are stated at cost and amortized 
using the straight-line method over the estimated useful lives of the assets 
as follows: 


                                                       
Cost in excess of fair value of net assets acquired ...   40 years 
Other intangible assets................................   2-15 years 



   OTHER ASSETS -- Other assets consist primarily of deferred debt issuance 
costs, deposits, spare parts, and the cash surrender values of life insurance 
policies. 


   CASH AND CASH EQUIVALENTS -- For the purposes of the consolidated 
statements of cash flows, the Company considers cash in checking accounts and 
in short-term highly liquid investments with an original maturity of three 
months or less to be cash and cash equivalents. Cash and cash equivalents 
generated outside of the United States are generally subject to tax 
liabilities if repatriated. 

   INCOME TAXES -- The Company uses the asset and liability method of 
accounting for income taxes. Deferred income taxes reflect the net tax 
effects of temporary differences between the carrying amounts of assets and 
liabilities for financial and tax reporting purposes. Subsequent to the 
Split-Off, the Company will file its own consolidated income tax returns. 
Prior to the Split-Off in 1997 and during 1996, the Company's operations were 
included in consolidated U.S. income tax returns of HC. Prior to 1996, the 
Company was included in the consolidated returns of other affiliated 
entities. The intercompany tax allocation policy provided for each subsidiary 
to calculate its own provision on a "separate return basis.'' 

   DERIVATIVE FINANCIAL INSTRUMENTS --The Company enters into interest rate 
collar and swap agreements to manage interest rate risk on long-term debt. 
These agreements are classified as hedges or matched transactions. The 
differential to be paid or received as interest rates change is accrued and 
recognized as an adjustment of interest expense. The related amount payable 
to or receivable from the counterparties is included in other liabilities or 
assets. Gains and losses on terminations of interest-rate swap agreements are 
deferred and amortized as an adjustment to interest expense over the lesser 
of the remaining term of the original contract or the life of the debt. 

   ENVIRONMENTAL EXPENDITURES -- Environmental related restoration and 
remediation costs are recorded as liabilities when site restoration and 
environmental remediation and clean-up obligations are either known or 
considered probable, and when the related costs can be reasonably estimated. 
Other environmental expenditures, that are principally maintenance or 
preventative in nature, are recorded when expended and expensed or 
capitalized as appropriate. 


   FOREIGN CURRENCY TRANSLATION -- The accounts of the Company's foreign
subsidiaries consider local currency to be the functional currency. Accordingly,
revenues, expenses, gains, and losses are translated at a weighted average rate
for the period. Transactions are translated at the rate prevailing as of the
transaction date. Cumulative translation adjustments are recorded as an
adjustment to stockholders' equity in a separate translation adjustment account.


                                      F-10

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 


    ACCOUNTING STANDARDS --In June 1997, the Financial Accounting Standards 
Board (FASB) issued SFAS No. 130, Reporting Comprehensive Income. This 
Statement establishes standards for reporting and display of comprehensive 
income and its components (revenues, expenses, gains, and losses) in a full 
set of general purpose financial statements. This Statement requires that all 
items that are required to be recognized under accounting standards as 
components of comprehensive income be reported in a financial statement that 
is displayed with the same prominence as other financial statements. This 
Statement does not require a specific format for that financial statement but 
requires that an enterprise display an amount representing total 
comprehensive income for the period in that financial statement. This 
Statement is effective for fiscal years beginning after December 15, 1997. 
Reclassification of financial statements for earlier periods provided for 
comparative purposes is required. The impact of SFAS No. 130 on the Company 
is not expected to be material in relation to the consolidated financial 
statements. 

   In June 1997, the FASB issued SFAS No. 131, Disclosure About Segments of 
an Enterprise and Related Information. SFAS No. 131 establishes standards for 
the way that public business enterprises report information about operating 
segments in annual financial statements and requires that those enterprises 
report selected information about operating segments in interim financial 
reports issued to stockholders. It also establishes standards for related 
disclosure about products and services, geographic areas, and major 
customers. SFAS No. 131 is effective for financial statements for fiscal 
years beginning after December 15, 1997. The Company does not expect the 
impact of SFAS No. 131 to be material in relation to the consolidated 
financial statements. 


2. INVENTORIES 


   Inventories consist of the following at December 31, 1996 and 1997 (in 
thousands): 





                    1996      1997 
                 --------- --------- 
                     
Finished goods .  $34,843    $39,632 
Raw materials ..   14,586     23,341 
Work-in-process     4,012      5,453 
                 --------- --------- 
Total...........  $53,441    $68,426 
                 ========= ========= 




3. PLANT CLOSING COSTS 

   As the Company has completed recent acquisitions (see Note 11), it has 
developed a plan to close its less efficient production facilities and 
utilize available capacity at other facilities. During 1997 the Company 
terminated operations at its Dallas, Texas and Bowling Green, Kentucky 
flexible packaging facilities. Included in 1996 operating expenses is a $3.3 
million provision for the write-off of impaired goodwill and a $5.3 million 
provision for the write-down of impaired plant and equipment associated with 
the two operations. Also, included in operating expenses is an accrual for 
reduction in work force costs of $1.1 million associated with the elimination 
of approximately 81 full-time equivalent employees from all levels of 
operations and an accrual of $1.2 million of other costs related to the 
closure of the facilities. As of December 31, 1997, these plant closings were 
completed and no additional costs are anticipated. 

   During 1997, the Company announced its plan to terminate operations at its 
Carrollton, Ohio flexible packaging facility. Included in 1997 operating 
expenses is a $3.3 million provision for the write-off of impaired goodwill 
and a $4.2 million provision for the write-down of impaired plant and 
equipment associated with the facility. Also, included in operating expenses 
is an accrual for reduction in work force costs of $1.6 million associated 
with the elimination of approximately 83 full-time equivalent employees from 
all levels of operations and an accrual of $0.2 million of other costs 
related to the closure of the facilities. 



                                      F-11

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 

 4. INTANGIBLE ASSETS 


   The cost of intangible assets and accumulated amortization at December 31, 
1996 and 1997 is as follows (in thousands): 





                                                        1996        1997 
                                                     ---------- ---------- 
                                                          
Cost in excess of fair value of net assets acquired.  $ 52,200    $ 50,458 
Trademarks..........................................     4,676       4,676 
Noncompete agreements...............................     7,283       7,283 
Other...............................................     4,455       4,455 
                                                     ---------- ---------- 
Total...............................................    68,614      66,872 
Less accumulated amortization.......................   (13,771)    (16,819) 
                                                     ---------- ---------- 
Total...............................................  $ 54,843    $ 50,053 
                                                     ========== ========== 




   Amortization expense on intangible assets was approximately $2,736, 
$1,596, and $3,058 for the years ended December 31, 1995, 1996, and 1997, 
respectively. 

5. LONG-TERM DEBT 

   Long-term debt as of December 31, 1996 and 1997 consists of the following 
(in thousands): 





                                                                  1996       1997 
                                                               ---------- --------- 
                                                                    
Credit Agreement: 
 Revolver, variable interest, weighted average 7.93% as of 
  December 31, 1997...........................................             $ 47,000 
 Term Loan, variable interest, 7.72% as of December 31, 1997 .               75,000 
Senior subordinated notes ....................................              125,000 
Line of credit agreement, interest at 8.5%, due September 2000                2,852 
Borrowings under the HC credit facilities, repaid 
 September 30, 1997...........................................  $186,085 
Obligations under capital leases (Note 6).....................     1,107        531 
Other.........................................................         5        131 
                                                               ---------- --------- 
Total.........................................................   187,197    250,514 
Less current portion..........................................      (506)      (343) 
                                                               ---------- --------- 
Long-term portion.............................................  $186,691   $250,171 
                                                               ========== ========= 


   On September 30, 1997, the Company entered into a credit agreement (the 
Credit Agreement). The Credit Agreement provides for an eight year $75 
million term loan (the Term Loan) and a seven year $150 million revolving 
credit facility (the Revolver), $20 million of which may be used for the 
issuance of letters of credit and $5 million of which is available as a 
swingline facility. 

   The Term Loan and Revolver bear interest, at the Company's option, at 
adjusted LIBOR plus a margin commencing at 2% per annum or the bank's 
adjusted base rate plus a margin commencing at 0.75% per annum. The Company 
pays a quarterly commitment fee on the unused amount of the Revolver at a 
rate commencing at 0.5% per annum. Such margins and the commitment fee are 
subject to reduction if the Company achieves certain ratios. As of December 
31, 1997, the Company had unused letters of credit of approximately 
$10,600,000. 

   The Term Loan amortizes quarterly commencing in 2001. The Term Loan is 
subject to mandatory prepayment with 50% of excess cash flow (as defined) and 
the net proceeds of certain asset sales and debt 

                                      F-12


               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 


and equity issuances. Additionally, obligations under the Credit Agreement 
are guaranteed by the assets of all of the Company's domestic subsidiaries. 
The Credit Agreement does not permit cash dividends and contains covenants 
customary for transactions of this type, including restrictions on 
indebtedness, liens, asset sales, capital expenditures, acquisitions, 
investments, transactions with affiliates, and other restricted payments. The 
Credit Agreement also contains financial covenants, including ratio of 
maximum total debt to EBITDA, minimum interest coverage ratio, and minimum 
net worth. 

   Also on September 30, 1997, the Company issued $125,000,000 of 9.125% 
unsecured senior subordinated notes which mature on October 1, 2007 (the 
Notes). Interest on the Notes is payable semi-annually on each April 1 and 
October 1, commencing April 1, 1998. The Notes are guaranteed by the 
Company's domestic subsidiaries (Note 14). 

   The Notes are redeemable, at the Company's option, in whole at any time or 
in part from time to time, on or after October 1, 2002, at redemption prices 
decreasing from 104.563% to 100% of the outstanding principal balance after 
October 2005. Additionally, up to 35% of the Notes may be redeemed prior to 
October 1, 2000, with the proceeds of one or more equity offerings at a price 
equal to 109.125% of the principal amount. 

   The Notes are subject to certain covenants customary to this type of 
transaction including restrictions on the incurrence of additional 
indebtedness, certain restricted payments, asset sales, dividend and other 
payment restrictions affecting subsidiaries, liens, mergers, and transactions 
with affiliates. 

   Management believes the Company was in compliance with the covenants of 
the Credit Agreement and the Notes as of December 31, 1997. 

   The proceeds of the Credit Agreement and the Notes were used to repay 
indebtedness to HC, at the time of the Split-Off and to purchase CT Film (see 
Notes 1 and 11). 

   On January 29, 1996, the Company wrote-off approximately $2.1 million of 
previously deferred loan costs, which have been recorded, net of the 
applicable income tax benefit of approximately $780,000, as an extraordinary 
item in the accompanying 1996 consolidated statement of operations. 

   The scheduled maturities of long-term debt by year as of December 31, 1997 
are as follows (in thousands): 




                       
 Year ending December 31: 
 1998....................  $    343 
 1999....................        45 
 2000....................     2,898 
 2001....................     1,920 
 2002....................    17,545 
 Thereafter..............   227,765 
                          --------- 
Total....................  $250,516 
                          ========= 




   In 1997, the Company entered into interest rate collar and swap contracts 
to manage interest rate risk on long-term debt. The Company purchased an 
interest rate collar agreement to reduce the impact of changes in interest 
rates on its floating-rate long-term debt. The collar agreement entitles the 
Company to receive from the counterparty (a major bank) the amounts, if any, 
by which the Company's interest payments on certain of its floating-rate 
borrowings exceed 6.25%. The collar agreement requires the Company to pay to 
the counterparty the amounts, if any, by which the Company's interest 
payments on certain of its floating-rate borrowings are less than 5.25%. 


                                      F-13

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 

    The net premium paid for the collar agreement purchased is included in 
other assets in the consolidated balance sheets and is amortized to interest 
expense over the term of the agreement. Amounts receivable or payable under 
the agreement are recognized as yield adjustments over the life of the 
related debt. 

   The Company is exposed to credit losses in the event of nonperformance by 
the counterparty to the financial instrument. The Company anticipates, 
however, that the counterparty will be able to fully satisfy its obligations 
under the contract. Market risk arises from changes in interest rates. 

   As of December 31, 1997, the Company had one outstanding interest rate 
collar contract. The terms of the agreement are as follows: 


                       
Notional amount.....           $20,000,000 
Maturity date.......      November 5, 2001 
Cap rate............                 6.25% 
Floor rate .........                 5.25% 


   The Company also entered into a series of interest rate swap agreements to 
hedge the interest rate exposure in anticipation of issuing the Notes. The 
agreements were accounted for as hedges and were subsequently terminated. 
Termination costs of approximately $1.2 million are being amortized to 
interest expense over the life of the Notes. 

6. LEASES 

   CAPITAL LEASES --The Company is obligated under various capital leases for 
land, a building, and machinery and equipment that expire at various dates 
through 2007. At December 31, 1996 and 1997, the gross amounts of plant and 
equipment and related accumulated amortization recorded under capital leases 
were as follows (in thousands): 



                                  1996      1997 
                               --------- --------- 
                                   
Building......................  $   671    $   671 
Machinery.....................    1,512      1,512 
                               --------- --------- 
Total cost....................    2,183      2,183 
Less accumulated 
 amortization.................   (1,402)    (1,652) 
                               --------- --------- 
Net...........................  $   781    $   531 
                               ========= ========= 


   OPERATING LEASES -- The Company also has several noncancelable operating 
leases, primarily for vehicles, equipment, warehouse, and office space, that 
expire through 2006, as well as month-to-month leases. The total expense 
recorded under all operating lease agreements in the accompanying 
consolidated statements of operations is approximately $2,038,000, 
$2,291,000, and $2,912,000 for the years ended December 31, 1995, 1996, and 
1997, respectively. 

                                      F-14

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 


    Future minimum lease payments under operating leases and the present 
value of future minimum capital lease payments as of December 31, 1997 are as 
follows (in thousands): 





                                                              CAPITAL    OPERATING 
                                                               LEASES     LEASES 
                                                             --------- ----------- 
                                                                 
Years ending December 31: 
 1998.......................................................   $ 340      $2,673 
 1999.......................................................      46       2,117 
 2000.......................................................      45       1,725 
 2001.......................................................      45       1,238 
 2002.......................................................      45         709 
 Thereafter.................................................     261         879 
                                                             --------- ----------- 
Total minimum lease payments................................     782      $9,341 
                                                                       =========== 
Amounts representing interest at rates ranging from 6% to 
 14.5%......................................................    (251) 
                                                             --------- 
Present value of net minimum capital lease payments (Note 
 5).........................................................   $ 531 
                                                             ========= 



7. INCOME TAXES 


   The following is a summary of domestic and foreign provisions for current 
and deferred income taxes and a reconciliation of the U.S. statutory income 
tax rate to the effect income tax rate. 

   The provision (benefit) for income taxes for the years ended December 31, 
1995, 1996, and 1997 is as follows (in thousands): 





                                                         1995       1996       1997 
                                                       -------- ----------  --------- 
                                                                   
Current: 
 Federal..............................................  $ (753) 
 State................................................     (86)              $ 1,156 
 Foreign..............................................     927    $ 2,334      3,871 
                                                       -------- ----------  --------- 
 Total current........................................      88      2,334      5,027 
                                                       -------- ----------  --------- 
Deferred: 
 Federal..............................................     592     (5,876)    (4,110) 
 State................................................      68       (671)      (470) 
 Foreign..............................................     979         57        392 
                                                       -------- ----------  --------- 
 Total deferred.......................................   1,639     (6,490)    (4,188) 
                                                       -------- ----------  --------- 
Total income tax expense (benefit)(excluding current 
 income tax benefit of $780 for extraordinary item in 
 1996)................................................  $1,727    $(4,156)   $   839 
                                                       ======== ==========  ========= 



                                      F-15

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 


    The effective income tax rate reconciliations for the years ended 
December 31, 1995, 1996, and 1997 are as follows (in thousands): 





                                                        1995       1996      1997 
                                                      -------- ----------  -------- 
                                                                  
Income (loss) before income taxes and extraordinary 
 item ...............................................  $4,026    $(7,344)   $1,214 
Extraordinary item--loss on early extinguishment of 
 debt................................................             (2,118) 
                                                      -------- ----------  -------- 
Total................................................  $4,026    $(9,462)   $1,214 
                                                      ======== ==========  ======== 
Expected tax (benefit) at U.S. statutory rate of 
 35%.................................................  $1,409    $(3,312)   $  425 
Increase (decrease) resulting from: 
 Nondeductible cost in excess of fair value of net 
  assets acquired....................................              1,186     1,150 
 State taxes.........................................     (18)      (663)       49 
 Foreign rate difference and other (net).............     336     (2,147)     (785) 
                                                      -------- ----------  -------- 
Total income tax expense (benefit)(including $780 
 benefit in 1996 related to extraordinary item) .....  $1,727    $(4,936)   $  839 
                                                      ======== ==========  ======== 
Effective income tax rate............................    42.9%      67.2%     69.1% 
                                                      ======== ==========  ======== 





   Components of net deferred income tax assets and liabilities as of December
31, 1996 and 1997 are as follows (in thousands):






                                                                LONG- 
DECEMBER 31, 1996                                   CURRENT      TERM 
- -----------------                                  --------- ---------- 
                                                       
Deferred income tax assets: 
 Allowance for doubtful trade accounts 
 receivable.......................................   $  559 
 Net operating loss carryforward..................             $  3,591 
 Amortization of intangibles......................                1,071 
 Plant closing costs not deducted for tax ........                3,392 
 Inventory .......................................      828 
 AMT credit carryforward..........................                  540 
 Other............................................       74         272 
                                                   --------- ---------- 
 Total............................................    1,461       8,866 
                                                   --------- ---------- 
Deferred income tax liabilities: 
 Tax depreciation in excess of book depreciation .              (21,898) 
 Other............................................     (373)     (1,050) 
                                                   --------- ---------- 
 Total............................................     (373)    (22,948) 
                                                   --------- ---------- 
Net deferred income tax asset (liability) ........   $1,088    $(14,082) 
                                                   ========= ========== 




                                      F-16

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 



                                                                LONG- 
DECEMBER 31, 1997                                   CURRENT      TERM 
- -----------------                                  --------- ---------- 
                                                       
Deferred income tax assets: 
 Allowance for doubtful trade accounts 
 receivable.......................................   $  577 
 Net operating loss carryforward..................             $  4,685 
 Amortization of intangibles......................                  501 
 Plant closing costs not deducted for tax  .......                4,439 
 Inventory........................................      234 
 AMT and foreign tax credit carryforward .........                3,617 
 Other............................................      834       1,088 
                                                   --------- ---------- 
 Total............................................    1,645      14,330 
                                                   --------- ---------- 
Deferred income tax liabilities: 
 Tax depreciation in excess of book depreciation .              (23,086) 
 Other............................................     (374)     (1,321) 
                                                   --------- ---------- 
 Total............................................     (374)    (24,407) 
                                                   --------- ---------- 
Net deferred income tax asset (liability) ........   $1,271    $(10,077) 
                                                   ========= ========== 


   As of December 31, 1997, the Company had net operating loss carryforwards 
of approximately $11,700,000 expiring in 2012. 

8. EMPLOYEE BENEFIT PLANS 

   DEFINED CONTRIBUTION PLAN --The Company sponsors a salary deferral plan 
covering substantially all of its non-union domestic employees. Plan 
participants may elect to make voluntary contributions to this plan up to a 
specified amount of their compensation. The Company contributes 1% of the 
participants' compensation and also matches employee contributions up to 2% 
of the participants' compensation. The Company expensed approximately 
$1,158,000, $873,000, and $3,143,000 as its contribution to this plan for the 
years ended December 31, 1995, 1996, and 1997, respectively. 

   DEFINED BENEFIT PLANS --The Company sponsors three noncontributory defined 
benefit pension plans (the United States plans) covering domestic employees 
with 1,000 or more hours of service. The Company funds the actuarially 
computed retirement cost. Contributions are intended to not only provide for 
benefits attributed to service to date but also for those expected to be 
earned in the future. The Company also sponsors a defined benefit plan in 
Germany (the Germany plan). The consolidated accrued net pension expense for 
the years ended December 31, 1995, 1996, and 1997 includes the following 
component (in thousands): 




                                                    1995      1996      1997 
                                                  -------- --------  --------- 
UNITED STATES PLANS (CONSISTING OF THE CORPORATE, 
 AND TWO UNION PLANS): 
- ----------------------
                                                            
Service cost-benefits earned during the 
 period..........................................  $1,703    $1,717   $ 2,240 
Interest cost on projected benefit obligation ...     430       520     1,686 
Actual return on assets..........................    (860)     (683)   (1,769) 
Other............................................     465       107         6 
                                                  -------- --------  --------- 
Total accrued pension expense....................  $1,738    $1,661   $ 2,163 
                                                  ======== ========  ========= 
GERMANY PLAN: 
- -------------
Service cost--benefits earned during the period .  $   82    $   77   $    58 
Interest cost on projected benefit obligation ...      75        22        56 
Other............................................     (57) 
                                                  -------- --------  --------- 
Total accrued pension expense ...................  $  100    $   99   $   114 
                                                  ======== ========  ========= 



                                      F-17

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 


    The following table sets forth the funded status of the United States 
plans and the Germany plan as of December 31, 1996 and 1997 and the amounts 
recognized in the consolidated balance sheets at those dates (in thousands): 





                                                                       1996        1997 
                                                                    ---------- ---------- 
UNITED STATES PLANS (CONSISTING OF THE CORPORATE, 
 AND TWO UNION PLANS): 
- ----------------------
                                                                         
Actuarially computed present value of accumulated benefit 
 obligations: 
 Vested ...........................................................  $ 10,966    $ 15,061 
 Nonvested ........................................................     2,319       2,983 
                                                                    ---------- ---------- 
Total..............................................................  $ 13,285    $ 18,044 
                                                                    ========== ========== 
Actuarially computed present value of projected benefit 
 obligations for service rendered to date .........................  $ 18,861    $ 25,147 
Less plan assets at fair value, principally comprised of equity 
 and bond funds ...................................................   (19,294)    (22,764) 
                                                                    ---------- ---------- 
Projected benefit obligation in excess of (less than) plan assets        (433)      2,383 
Unrecognized net gain .............................................     2,247       1,878 
Unrecognized prior service cost ...................................       (70)       (299) 
Additional liability ..............................................                    14 
                                                                    ---------- ---------- 
Accrued long-term pension liability included in other liabilities    $  1,744    $  3,976 
                                                                    ========== ========== 




   For the above calculations, increases in future compensation of rates 
ranging from 4.00% through 4.75% were used for the non-union plans. There was 
no increase in future compensation used for the two union plans. For the 
calculations, a discount rate of 7.00% and an expected rate of return on plan 
assets of 9.0% were used for all plans. 





                                                                      1996     1997 
                                                                    -------- ------- 
GERMANY: 
- --------
                                                                       
Actuarially computed present value of accumulated benefit 
 obligations: 
 Vested ...........................................................  $  695   $  565 
 Nonvested ........................................................     284      190 
                                                                    -------- ------- 
Total .............................................................  $  979   $  755 
                                                                    ======== ======= 
Actuarially computed present value of projected benefit 
 obligations for service rendered to date .........................  $1,249   $  956 
Less plan assets ..................................................   None     None 
                                                                    -------- ------- 
Projected benefit obligation in excess of plan assets  ............   1,249      956 
Unrecognized net gain .............................................     110       84 
                                                                    -------- ------- 
Accrued long-term pension liability included in other liabilities    $1,359   $1,040 
                                                                    ======== ======= 




   Increases in future compensation ranging from 2.5% through 3.5% and 
discount rates ranging from 6.5% through 7.0% were used in determining the 
actuarially computed present value of the projected benefit obligation of the 
Germany plan. The cash surrender value of life insurance policies for Germany 
plan participants included in other assets is approximately $506,000 and 
$525,000 as of December 31, 1996 and 1997, respectively. 


                                      F-18

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 

    FOREIGN PLANS OTHER THAN GERMANY --Employees in other foreign countries 
are covered by various post employment arrangements consistent with local 
practices and regulations. Such obligations are not significant and are 
included in the consolidated financial statements in other liabilities. 

9. RELATED PARTY TRANSACTIONS 

   The accompanying consolidated financial statements include the following 
balances and transactions with affiliated companies not disclosed elsewhere 
(in thousands): 



                                               1995      1996       1997 
                                            --------- ---------  --------- 
                                                        
BALANCES AT DECEMBER 31, 1996 AND 1997: 
 Due to Huntsman Corporation 
  and subsidiaries ........................            $  5,966   $15,279 
 Long-term debt--Huntsman Corporation  ....             186,085 

TRANSACTIONS FOR THE YEARS ENDED DECEMBER 
 31, 1995, 1996, AND 1997: 
 With Huntsman Corporation and 
 subsidiaries: 
  Inventory purchases .....................  $10,446   $  9,449   $15,692 
  Rent expense under operating lease  .....                 353       423 
  Administrative expenses .................    1,980      2,126     4,220 
  Sale of land ............................    3,239 


   ROYALTY TRANSACTION WITH HUNTSMAN GROUP INTELLECTUAL PROPERTIES HOLDING 
CO. (HUNTSMAN INTELLECTUAL) --During 1996, the Company and other affiliates 
entered into a royalty agreement (the Royalty Agreement) with Huntsman 
Intellectual whereby the Company paid Huntsman Intellectual a royalty for the 
use of certain trademarks, etc. Huntsman Intellectual was owned by the 
Company and certain subsidiaries of HC. During 1996 and 1997, the Company 
paid royalties of approximately $1,708,000 and $1,926,000 to Huntsman 
Intellectual. Huntsman Intellectual recorded a patronage dividend to the 
Company of $1,092,000 and $1,233,000 during 1996 and 1997. The royalty 
expense is included in administration and other expense. The dividend is 
included in other income. Immediately prior to the Split-Off, the patronage 
dividend receivable from Huntsman Intellectual at the date of the Split-Off 
was settled in full. The Company's ownership of Huntsman Intellectual and its 
participation in the Royalty Agreement was terminated. The Company no longer 
uses the trademarks, etc. covered under the royalty Agreement 

   CT FILM EMPLOYEES --Subsequent to the purchase of CT Film from Huntsman 
Polymers Corporation (a subsidiary of HC) (Huntsman Polymers) (see Note 11), 
employees associated with the CT Films operation remained employed by 
Huntsman Polymers through December 31, 1997. The total payroll and benefits 
costs incurred by Huntsman Polymers from September 30, 1997 to December 31, 
1997 for these employees of approximately $6,205,000 was allocated to the 
Company and are included in cost of sales and operating expenses in the 
consolidated statement of operations. 

   INSURANCE COVERAGE --The Company obtains some of its insurance coverage 
under policies of HC. Reimbursement payments to HC are based on premium 
allocations which are determined in cooperation with an independent insurance 
broker. 

   ADMINISTRATIVE EXPENSES --Prior to the Split-Off, HC allocated 
administrative expenses to the Company for the estimated portion of the total 
costs incurred by HC resulting from services provided to the Company and is 
included in administrative and other expense in the consolidated statement of 
operations. In connection with the Split-Off, the Company entered into a 
services agreement with HC covering the provision of certain tax, finance, 
treasury, and other administrative services. 


   OFFICE SPACE --The Company is obligated to pay rent calculated as a pro rata
portion (based on its percentage occupancy) of the mortgage loan on the HC
headquarters facility. The mortgage loan expires on December 31, 2005. Payments
under this obligation were included in administrative expense above.


                                      F-19

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 


10. COMMITMENTS AND CONTINGENCIES 


   INDEMNITY AGREEMENT --The Company's operations are subject to extensive 
environmental laws and regulations concerning emissions to the air, 
discharges to surface and subsurface waters, and the generation, handling, 
storage, transportation, treatment, and disposal of waste materials, as 
adopted by various governmental authorities in the jurisdictions in which the 
Company operates. The Company makes every reasonable effort to remain in full 
compliance with existing governmental regulations. In conjunction with a sale 
of a plant site in 1992, the Company has agreed to indemnify environmental 
losses of up to $5 million which may have been created at the plant site 
between January 1, 1988 and May 18, 1992. This indemnity expires on May 8, 
2002 and reduces ten percent each year beginning May 12, 1997. The Company 
believes that the ultimate liability, if any, resulting from this 
indemnification will not be material to the Company's consolidated financial 
statements. 


   ROYALTY AGREEMENTS --The Company has entered into royalty agreements (the 
Agreements) for the right to use certain patents in the production of certain 
plastic film. The Company paid a fee of $450,000 to the patent holder for the 
first 2,250,000 pounds of film produced in North America. The Agreements 
require the Company to pay the patent holder a fee of $.10 for each pound 
produced in excess of 2,250,000 pounds but less than 37,500,000 pounds and 
$.05 per pound for each pound produced in excess of 37,500,000 pounds in 
North America. The Agreements require the Company to pay certain fees to 
obtain the rights to sell the product outside of North America. The 
Agreements also require the Company to pay $.075 per pound of product sold 
outside of North America. The Company has the option to maintain these rights 
in subsequent years for certain agreed-upon fees. The Agreements terminate 
upon the expiration of the related patents in 2009. 

   LITIGATION --The Company is party to litigation and claims arising in the 
ordinary course of business. Management believes, after consulting with legal 
counsel, that the liabilities, if any, arising from such litigation and 
claims will not have a material adverse effect on the Company's consolidated 
financial statements. 

11. ACQUISITIONS 

   UNITED FILMS CORPORATION --On July 31, 1996, the Company acquired all of 
the issued and outstanding common stock of United Films Corporation for cash 
of approximately $12,276,000. The acquisition has been accounted for using 
the purchase method of accounting; as such, results of operations have been 
included in the accompanying consolidated financial statements from the date 
of acquisition. In conjunction with the acquisition, the Company recorded 
goodwill of approximately $12,076,000, which is being amortized on a 
straight-line basis over 40 years. 

   DEERFIELD PLASTICS COMPANY, INC. --Effective October 21, 1996, the Company 
acquired all of the issued and outstanding common stock of Deerfield Plastics 
Company, Inc. for cash of approximately $68,207,000, a $1,400,000 payment 
made in 1997 based on Deerfield's working capital at the acquisition date, a 
deferred payment paid in 1997 of $2,170,000, and deferred payments over the 
next two years totaling $3,000,000. The acquisition has been accounted for 
using the purchase method of accounting; as such, results of operations have 
been included in the accompanying consolidated financial statements from the 
date of acquisition. In conjunction with the acquisition, the Company 
recorded goodwill of approximately $18,400,000, which is being amortized on a 
straight-line basis over 40 years. 

   CT FILM --At the close of business on September 30, 1997, the Company 
acquired all of the assets of CT Film (a division of Huntsman Polymers 
Corporation, formerly Rexene Corporation) and Rexene Corporation Limited (a 
wholly-owned subsidiary of Huntsman Polymers Corporation) for approximately 
$70 million in cash. The acquisition has been accounted for using the 
purchase method of accounting; as such, results of operations have been 
included in the accompanying consolidated financial statements from the date 
of acquisition. The Company has not finalized its plan to exit certain of the 
activities 

                                      F-20


               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 

acquired with the purchase of CT Film. Management intends to complete plans 
and record a liability as an adjustment to the purchase price during the 
first half of 1998. In conjunction with the acquisition, the Company recorded 
goodwill of approximately $1,799,000 which is being amortized on a 
straight-line basis over 40 years. 


   The pro forma results of operations of the Company for the years ended 
December 31, 1996 and 1997 (assuming the acquisition of United Films 
Corporation, Deerfield Plastics Company, Inc., and CT Film had occurred as of 
January 1, 1996) are as follows (in thousands): 




                1996        1997 
             ---------- ---------- 
                  
Revenues  ..  $567,556    $614,662 
Net loss  ..    (1,342)     (5,600) 



   HUNTSMAN CONTAINER CORPORATION INTERNATIONAL (HCCI) --On August 31, 1996, 
HC contributed all of the outstanding capital stock of HCCI to the Company in 
the form of a capital contribution. The transaction was accounted for at 
historical costs in a manner similar to a pooling of interests and the 
accompanying financial statements for 1995 and 1996 have been restated as if 
the Company and HCCI had been combined at January 1, 1995. At the date of the 
merger, assets and liabilities were $27,090,000 and $16,631,000, 
respectively. There were no significant intercompany transactions prior to 
the merger. 

   Consolidated sales and net income for 1995 and 1996 as previously reported 
and as restated are as follows (in thousands): 



                      THE COMPANY 
                     AS PREVIOUSLY 
                        REPORTED       HCCI     AS RESTATED 
                    --------------- ---------  ------------- 
                                      
1995 
- ----
Net sales .........     $279,991      $45,045     $325,036 
Net income ........          936        1,363        2,299 
1996
- ----
Net sales .........     $308,092      $31,043     $339,135 
Net income (loss)         (6,025)       1,499       (4,526) 


                                      F-21

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 


12. SEGMENTS OF BUSINESS 

   The Company operates principally in two business segments (Flexible 
Packaging and Foam Products) and three geographic areas (United States, 
Europe, and other). The following is information regarding the two business 
segments (in thousands). Sales between industry segments are insignificant. 





LINES OF BUSINESS                         1996       1997 
- -----------------                      ----------  ---------- 
                                             
IDENTIFIABLE ASSETS: 
 Flexible Packaging .......              $298,685   $336,897 
 Foam Products ............                28,982     30,226 
                                       ----------  ---------- 
 Total identifiable assets                327,667    397,639 
Corporate assets ..........                 1,490      7,770 
                                       ----------  ---------- 
TOTAL .....................              $329,157   $409,555 
                                       ==========  ========== 






                                         1995        1996       1997 
                                      ---------- ----------  ---------- 
                                                    
NET SALES TO UNAFFILIATED CUSTOMERS: 
 Flexible Packaging .................  $279,991    $295,679   $447,743 
 Foam Products ......................    45,045      43,456     43,420 
                                      ---------- ----------  ---------- 
TOTAL ...............................  $325,036    $339,135   $491,163 
                                      ========== ==========  ========== 
OPERATING INCOME: 
 Flexible Packaging .................  $ 17,075    $  8,238   $ 19,631 
 Foam Products ......................     1,894       3,915      4,010 
 General corporate expenses .........    (3,967)     (4,100)    (6,555) 
                                      ---------- ----------  ---------- 
 Total operating income .............    15,002       8,053     17,086 
Interest expense--net ...............    (8,683)    (11,571)   (16,402) 
Other income (expense)--net .........    (2,293)     (3,826)       530 
                                      ---------- ----------  ---------- 
INCOME (LOSS) BEFORE INCOME TAXES 
 AND EXTRAORDINARY ITEM .............  $  4,026    $ (7,344)  $  1,214 
                                      ========== ==========  ========== 
DEPRECIATION AND AMORTIZATION: 
 Flexible Packaging .................  $  8,224    $ 11,353   $ 13,375 
 Foam Products ......................     1,073       1,102      1,801 
 Corporate ..........................     2,349       1,545      1,266 
                                      ---------- ----------  ---------- 
TOTAL ...............................  $ 11,646    $ 14,000   $ 16,442 
                                      ========== ==========  ========== 
EXPENDITURES FOR PLANT AND 
 EQUIPMENT: 
 Flexible Packaging .................  $ 18,431    $  8,942   $ 14,833 
 Foam Products ......................       623       3,127      2,602 
 Corporate ..........................       425         705        426 
                                      ---------- ----------  ---------- 
TOTAL ...............................  $ 19,479    $ 12,774   $ 17,861 
                                      ========== ==========  ========== 



                                      F-22

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 




GEOGRAPHIC AREA                      1996       1997 
- ---------------                  ----------  ---------- 
                                       
IDENTIFIABLE ASSETS: 
 United States ......              $270,493   $336,897
 Europe .............                39,843     54,643 
 Other ..............                18,821     18,015 
                                 ----------  ---------- 
TOTAL ...............              $329,157   $409,555
                                 ==========  ========== 






                                         1995        1996       1997 
                                      ---------- ----------  ---------- 
                                                    
NET SALES TO UNAFFILIATED CUSTOMERS: 
 United States ......................  $220,542    $236,726   $389,069 
 Europe .............................    68,966      68,008     69,091 
 Other ..............................    35,528      34,401     33,003 
                                      ---------- ----------  ---------- 
TOTAL ...............................  $325,036    $339,135   $491,163 
                                      ========== ==========  ========== 

OPERATING INCOME: 
 United States ......................  $ 13,917    $  1,285   $ 13,516 
 Europe .............................     2,357       6,926      6,780 
 Other ..............................     2,695       3,942      3,345 
 General corporate expenses .........    (3,967)     (4,100)    (6,555) 
                                                 ----------  ---------- 
TOTAL ...............................  $ 15,002    $  8,053   $ 17,086 
                                      ========== ==========  ========== 



13. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS 

   The estimated fair value of a financial instrument is the amount at which 
the instrument could be exchanged in a current transaction between willing 
parties, other than in a forced or liquidation sale. In the case of cash and 
cash equivalents, the carrying amount is considered a reasonable estimate of 
fair value. The carrying amount of floating rate debt approximates fair value 
because of the floating interest rates associated with such debt. The fair 
value of fixed rate debt is estimated by discounting estimated future cash 
flows through the projected maturity using market discount rates that 
approximately reflect the credit risk, operating cost, and interest rate risk 
potentially inherent in the notes. The estimated fair value of off-balance 
sheet instruments is obtained from market quotes representing the estimated 
amount the Company would receive or pay to terminate the contract, taking 
into account current interest rates. 

   Fair value estimates are made at a specific point in time. Because no 
market exists for a significant portion of the Company's financial 
instruments, fair value estimates are based on judgments regarding future 
expected loss experience, current economic conditions, risk characteristics 
of various financial instruments, interest rate levels, and other factors. 
These estimates are subjective in nature and involve uncertainties and 
matters of judgment and therefore cannot be determined or relied on with any 
degree of certainty. Changes in assumptions could significantly affect the 
estimates. 

                                      F-23

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
            FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 


    A summary of the carrying amounts and estimated fair values for the 
Company was as follows (in thousands): 





                                                        1996                     1997 
                                              ------------------------ ------------------------ 
                                               CARRYING    ESTIMATED    CARRYING    ESTIMATED 
                                                AMOUNT     FAIR VALUE    AMOUNT     FAIR VALUE 
                                              ---------- ------------  ---------- ------------ 
                                                                      
Financial assets--cash and cash equivalents .  $ 10,647     $ 10,647    $  8,265     $  8,265 
                                              ========== ============  ========== ============ 
Financial liabilities: 
 Floating rate debt .........................  $186,691     $186,691    $125,516     $125,516 
 Fixed rate debt ............................    None         None       125,000      127,500 
                                              ---------- ------------  ---------- ------------ 
Total financial liabilities .................  $186,691     $186,691    $250,516     $253,016 
                                              ========== ============  ========== ============ 
Off-Balance Sheet Instruments: 
 Interest rate collar .......................                           $    144     $   (134) 
 Letter of credit ...........................                             None            (50) 




14. CONSOLIDATING CONDENSED FINANCIAL STATEMENTS 


   The following are consolidating condensed financial statements which present,
in separate columns, Huntsman Packaging Corporation carrying its investment in
subsidiaries under the equity method, on a combined basis the guarantors of
Huntsman Packaging Corporation, and on a combined basis the non-guarantors of
Huntsman Packaging Corporation, with additional columns reflecting eliminating
adjustments and the consolidated total as of December 31, 1996 and 1997 and for
the years ended December 31, 1995, 1996 and 1997. There are no restrictions
limiting transfers of cash from guarantor and non-guarantor subsidiaries to
Huntsman Packaging Corporation. On September 29, 1997, in connection with the
Split-Off, Huntsman Film Products Corporation, a guarantor subsidiary, was
merged into Huntsman Packaging Corporation. The consolidating condensed
financial statements of Huntsman Packaging Corporation (Parent Only) for 1995,
1996 and 1997 have been presented as if Huntsman Film Products Corporation had
been combined on January 1, 1995. The consolidating condensed financial
statements are included herein because management has concluded that separate
financial statements relating to the guarantors are not material to investors.



                                      F-24

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
                   CONSOLIDATING CONDENSED INCOME STATEMENT 
                                (IN THOUSANDS) 
                              DECEMBER 31, 1995 




                             HUNTSMAN                                      CONSOLIDATED 
                            PACKAGING                                       HUNTSMAN 
                           CORPORATION       COMBINED                       PACKAGING 
                           PARENT ONLY     NON-GUARANTORS   ELIMINATIONS    CORPORATION 
                          -------------    -------------- --------------  -------------- 
                                                              
SALES--Net ..............  $221,796         $104,558        $(1,318)       $325,036 
COST OF SALES............   184,614           90,224         (1,318)        273,520 
                          -------------   -------------- --------------  -------------- 
GROSS PROFIT.............    37,182           14,334                         51,516 
TOTAL OPERATING 
 EXPENSES................    27,133            9,381                         36,514 
                          -------------   -------------- --------------  -------------- 
OPERATING INCOME (LOSS) .    10,049            4,953                         15,002 
INTEREST EXPENSE--Net ...    (7,902)            (781)                        (8,683) 
EQUITY EARNINGS IN 
 SUBSIDIARIES............    $3,121                          (3,121) 
OTHER INCOME 
 (EXPENSE)--Net..........    (2,997)             704                         (2,293) 
                          -------------   -------------- --------------  -------------- 
NET INCOME (LOSS) BEFORE 
 INCOME TAXES ...........     2,271            4,876         (3,121)          4,026 
INCOME TAX EXPENSE 
 (BENEFIT)...............       (28)           1,755                          1,727 
                          ------------- ------------  -------------- -------------- 
NET INCOME (LOSS) .......    $2,299         $  3,121        $(3,121)       $  2,299 
                          ============= ============  ============== ============== 



                                      F-25


                HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
                    CONSOLIDATING STATEMENT OF CASH FLOWS 
                                (IN THOUSANDS) 
                              DECEMBER 31, 1995 





                                                HUNTSMAN                                    CONSOLIDATED 
                                               PACKAGING                                      HUNTSMAN 
                                              CORPORATION      COMBINED                      PACKAGING 
                                              PARENT ONLY   NON-GUARANTORS  ELIMINATIONS    CORPORATION 
                                            --------------- --------------  -------------- -------------- 
                                                                               
CASH FLOWS FROM OPERATING ACTIVITIES ......     $  2,414        $10,374                        $ 12,788 
                                            --------------- --------------  -------------- -------------- 
CASH FLOWS FROM INVESTING ACTIVITIES: 
 Payments for purchase of Performance 
  Films, net of each.......................       (4,279)                                        (4,279) 
 Sale of land to affiliate.................        3,239                                          3,239 
 Capital acquisitions for property, 
  plants, and equipment....................      (14,559)        (4,920)                        (19,479) 
                                            --------------- --------------  -------------- -------------- 
  Net cash used in investing activities ...      (15,599)        (4,920)                        (20,519) 
                                            --------------- --------------  -------------- -------------- 
CASH FLOWS FROM FINANCING ACTIVITIES: 
 Principal payment on long-term debt ......      (14,424)          (479)                        (14,903) 
 Proceeds from long-term debt..............       24,650                                         24,650 
 Payment of cash dividend..................       (3,000)                                        (3,000) 
                                            --------------- --------------  -------------- -------------- 
  Net cash provided by (used in) financing 
   activities..............................        7,226           (479)                          6,747 
                                            --------------- --------------  -------------- -------------- 
EFFECT OF EXCHANGE RATE CHANGES ON CASH ...          494            198                             692 
                                            --------------- --------------  -------------- -------------- 
NET INCREASE (DECREASE) IN CASH AND CASH 
 EQUIVALENTS...............................       (5,465)         5,173                            (292) 
CASH AND CASH EQUIVALENTS AT BEGINNING OF 
 PERIOD....................................        1,577          5,905                           7,482 
                                            --------------- --------------  -------------- -------------- 
CASH AND CASH EQUIVALENTS AT END OF 
 PERIOD....................................     $ (3,888)       $11,078                        $  7,190 
                                            =============== ==============  ============== ============== 



                                      F-26


               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
                    CONSOLIDATING CONDENSED BALANCE SHEET 
                                (IN THOUSANDS) 
                              DECEMBER 31, 1996 





                                      HUNTSMAN                                               CONSOLIDATED 
                                     PACKAGING                   COMBINED                      HUNTSMAN 
                                    CORPORATION     COMBINED       NON-                        PACKAGING 
                                    PARENT ONLY    GUARANTORS   GUARANTORS    ELIMINATIONS    CORPORATION 
                                   ------------- ------------  ------------ --------------  -------------- 
                                                                             
ASSETS 
CURRENT ASSETS: 
Cash and cash equivalents ........    $  (868)      $   (426)     $11,941                      $ 10,647 
Receivables ......................     26,228         12,653       19,037                        57,918 
Inventories ......................     32,178         12,052        9,211                        53,441 
Prepaid expenses and other  ......      2,853             41        1,007                         3,901 
Deferred income taxes ............      1,047             41                                      1,088 
                                   ------------- ------------  ------------ --------------  -------------- 
  Total current assets ...........     61,438         24,361       41,196                       126,995 
PLANT AND EQUIPMENT--Net .........     75,617         44,602       21,224                       141,443 
INTANGIBLE ASSETS--Net ...........     22,557         30,476        1,810                        54,843 
INVESTMENT IN SUBSIDIARIES  ......    154,460                                  $(154,460) 
OTHER ASSETS .....................      3,878            618        1,380                         5,876 
                                   ------------- ------------  ------------ --------------  -------------- 

TOTAL ............................   $317,950       $100,057      $65,610      $(154,460)      $329,157 
                                   ============= ============  ============ ==============  ============== 
LIABILITIES AND STOCKHOLDER'S 
 EQUITY 
CURRENT LIABILITIES: 
Trade accounts payable ...........   $ 14,107       $  5,429      $ 6,243                      $ 25,779 
Accrued liabilities ..............      8,258          2,100        9,141                        19,499 
Long-term debt--current portion  .         76            430                                        506 
Due to affiliates ................      7,641         (5,117)       3,442                         5,966 
Income taxes payable .............                                    598                           598 
                                   ------------- ------------  ------------ --------------  -------------- 
  Total current liabilities  .....     30,082          2,842       19,424                        52,348 
LONG-TERM DEBT ...................    177,060            706        8,925                       186,691 
OTHER LIABILITIES ................      7,274            252        1,498                         9,024 
DEFERRED INCOME TAXES ............      2,849          9,314        1,919                        14,082 
                                   ------------- ------------  ------------ --------------  -------------- 
  Total liabilities ..............    217,265         13,114       31,766                       262,145 
                                   ------------- ------------  ------------ --------------  -------------- 
COMMITMENTS AND CONTINGENCIES 
STOCKHOLDER'S EQUITY: 
Common stock .....................          1            167       19,021       $(19,188)             1 
Additional paid-in capital  ......     62,975         87,448       10,255        (97,703)        62,975 
Retained earnings (deficit)  .....     38,979           (672)       4,474        (37,728)         5,053 
Translation adjustment ...........     (1,270)                         94            159         (1,017) 
                                   ------------- ------------  ------------ --------------  -------------- 
  Total stockholder's equity  ....    100,685         86,943       33,844       (154,460)        67,012 
                                   ------------- ------------  ------------ --------------  -------------- 
TOTAL ............................   $317,950       $100,057      $65,610      $(154,460)      $329,157 
                                   ============= ============  ============ ==============  ============== 



                                      F-27


                HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
                   CONSOLIDATING CONDENSED INCOME STATEMENT 
                                (IN THOUSANDS) 
                              DECEMBER 31, 1996 





                                   HUNTSMAN                                               CONSOLIDATED 
                                  PACKAGING                   COMBINED                      HUNTSMAN 
                                 CORPORATION     COMBINED       NON-                        PACKAGING 
                                 PARENT ONLY    GUARANTORS   GUARANTORS    ELIMINATIONS    CORPORATION 
                                ------------- ------------  ------------ --------------  -------------- 
                                                                          
SALES--Net ....................   $217,991        $26,974     $104,787       $(10,617)      $339,135 
COST OF SALES .................    189,414         25,011       85,076        (10,617)       288,884 
                                ------------- ------------  ------------ --------------  -------------- 
GROSS PROFIT ..................     28,577          1,963       19,711                        50,251 
TOTAL OPERATING EXPENSES  .....     31,567            834        9,797                        42,198 
                                ------------- ------------  ------------ --------------  -------------- 
OPERATING INCOME (LOSS)  ......     (2,990)         1,129        9,914                         8,053 
INTEREST EXPENSE--Net .........    (10,926)           (38)        (607)                      (11,571) 
EQUITY EARNINGS IN 
 SUBSIDIARIES .................      6,809                                     (6,809) 
OTHER INCOME (EXPENSE)--Net  ..     (1,527)        (2,192)        (107)                       (3,826) 
                                ------------- ------------  ------------ --------------  -------------- 
NET INCOME (LOSS) BEFORE 
 INCOME TAXES AND 
 EXTRAORDINARY ITEM ...........     (8,634)        (1,101)       9,200         (6,809)        (7,344) 
INCOME TAXES EXPENSE 
 (BENEFIT).....................     (6,118)           429        2,391                        (4,156) 
                                ------------- ------------  ------------ --------------  -------------- 
NET INCOME (LOSS) BEFORE 
 EXTRAORDINARY ITEM ...........     (2,516)          (672)       6,809         (6,809)        (3,188) 
EXTRAORDINARY ITEM ............     (1,338)                                                   (1,338) 
                                ------------- ------------  ------------ --------------  -------------- 
NET INCOME (LOSS) .............    $(3,854)      $   (672)    $  6,809       $ (6,809)      $ (4,526) 
                                ============= ============  ============ ==============  ============== 



                                      F-28


                HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
                    CONSOLIDATING STATEMENT OF CASH FLOWS 
                                (IN THOUSANDS) 
                              DECEMBER 31, 1996 





                                                 HUNTSMAN                                                   CONSOLIDATED 
                                                PACKAGING                        COMBINED                     HUNTSMAN 
                                               CORPORATION       COMBINED          NON-                      PACKAGING 
                                               PARENT ONLY      GUARANTORS      GUARANTORS   ELIMINATIONS   CORPORATION 
                                             ---------------   ------------   ------------  -------------- -------------- 
                                                                                            
CASH FLOWS FROM OPERATING ACTIVITIES  ......    $    (872)        $5,584         $ 15,407                     $  20,119 
                                             ---------------   ------------   ------------  -------------- -------------- 
CASH FLOWS FROM INVESTING ACTIVITIES: 
 Payments for purchase of United Films 
  Corporation ..............................      (12,276)                                                      (12,276) 
 Payment for purchase of Deerfield 
  Plastics, net of cash acquired ...........      (63,889)                                                      (63,889) 
 Capital acquisitions for property, plants, 
  and equipment ............................       (6,977)          (336)          (5,461)                      (12,774) 
                                             ---------------   ------------   ------------  -------------- -------------- 
   Net cash used in investing activities  ..      (83,142)          (336)          (5,461)                      (88,939) 
                                             ---------------   ------------   ------------  -------------- -------------- 
CASH FLOW FROM FINANCING ACTIVITIES: 
 Principal payment on long-term debt  ......     (113,879)         (5,674)        (12,178)                     (131,731) 
 Proceeds from long-term debt ..............      200,348                                      200,348 
                                             ---------------   ------------   ------------  -------------- -------------- 
   Net cash provided by (used in) financing 
    activities .............................       86,469          (5,674)        (12,178)                       68,617 
                                             ---------------   ------------   ------------  -------------- -------------- 
EFFECT OF EXCHANGE RATE CHANGES ON CASH  ...          565                           3,095                         3,660 
                                             ---------------   ------------   ------------  -------------- -------------- 
NET INCREASE (DECREASE) IN CASH AND CASH 
 EQUIVALENTS ...............................        3,020            (426)            863                         3,457 
CASH AND CASH EQUIVALENTS AT BEGINNING OF 
 PERIOD ....................................       (3,888)                         11,078                         7,190 
                                             ---------------   ------------   ------------  -------------- -------------- 
CASH AND CASH EQUIVALENTS AT END OF PERIOD      $    (868)          $(426)       $ 11,941                     $  10,647 
                                             ===============   ============   ============  ============== ============== 



                                      F-29

               HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
                    CONSOLIDATING CONDENSED BALANCE SHEET 
                                (IN THOUSANDS) 
                              DECEMBER 31, 1997 




                                     HUNTSMAN                                                 CONSOLIDATED 
                                    PACKAGING                                                   HUNTSMAN 
                                   CORPORATION     COMBINED      COMBINED                       PACKAGING 
                                   PARENT ONLY    GUARANTORS  NON-GUARANTORS   ELIMINATIONS    CORPORATION 
                                  ------------- ------------  -------------- --------------  -------------- 
                                                                              
ASSETS 
CURRENT ASSETS: 
 Cash and cash equivalents  .....    $    402      $    823       $11,186                       $ 12,411 
 Receivables ....................      51,533        16,881        18,286                         86,700 
 Inventories ....................      45,548        11,918        10,960                         68,426 
 Prepaid expenses and other  ....       1,997            (8)          757                          2,746 
 Deferred income taxes ..........       1,266             5                                        1,271 
                                  ------------- ------------  -------------- --------------  -------------- 
  Total current assets ..........     100,746        29,619        41,189                        171,554 
PLANT AND EQUIPMENT--Net.........      93,700        52,778        28,442                        174,920 
INTANGIBLE ASSETS--Net ..........      19,322        29,234         1,497                         50,053 
INVESTMENT IN SUBSIDIARIES ......     132,917                                   $(132,917) 
OTHER ASSETS ....................      11,392           106         1,530                         13,028 
                                  ------------- ------------  -------------- --------------  -------------- 
TOTAL ...........................    $358,077      $111,737       $72,658       $(132,917)      $409,555 
                                  ============= ============  ============== ==============  ============== 
LIABILITIES AND  STOCKHOLDERS' 
EQUITY 
CURRENT LIABILITIES: 
 Trade accounts payable .........    $ 18,516      $  5,809       $ 7,624                       $ 31,949 
 Accrued liabilities ............      16,026         2,133         8,497                         26,656 
 Long-term debt--current 
  portion........................          19           324                                          343 
 Due to affiliates ..............       5,123        (1,656)       11,812                         15,279 
 Income taxes payable ...........       3,237                                                      3,237 
                                  ------------- ------------  -------------- --------------  -------------- 
  Total current liabilities  ....      42,921         6,610        27,933                         77,464 
LONG-TERM DEBT ..................     245,947           319         3,905                        250,171 
OTHER LIABILITIES ...............       7,351           288         1,230                          8,869 
DEFERRED INCOME TAXES ...........      (1,116)        9,275         1,918                         10,077 
                                  ------------- ------------  -------------- --------------  -------------- 
  Total liabilities .............     295,103        16,492        34,986                        346,581 
                                  ------------- ------------  -------------- --------------  -------------- 
COMMITMENTS AND 
 CONTINGENCIES 
STOCKHOLDERS' EQUITY: 
 Common stock ...................    $ 63,676        88,481        29,931       $(118,412)        63,676 
 Stockholder note receivable  ...        (700)                                                      (700) 
 Retained earnings ..............       5,393         6,764        11,837         (18,601)         5,393 
 Translation adjustment .........      (5,395)                     (4,096)          4,096         (5,395) 
                                  ------------- ------------  -------------- --------------  -------------- 
  Total stockholders' equity  ...      62,974        95,245        37,672        (132,917)        62,974 
                                  ------------- ------------  -------------- --------------  -------------- 
TOTAL ...........................    $358,077      $111,737       $72,658       $(132,917)      $409,555 
                                  ============= ============  ============== ==============  ============== 



                                      F-30

                HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
                   CONSOLIDATING CONDENSED INCOME STATEMENT 
                                (IN THOUSANDS) 
                              DECEMBER 31, 1997 




                                 HUNTSMAN                                                 CONSOLIDATED 
                                PACKAGING                                                   HUNTSMAN 
                               CORPORATION     COMBINED      COMBINED                       PACKAGING 
                               PARENT ONLY    GUARANTORS  NON-GUARANTORS   ELIMINATIONS    CORPORATION 
                              ------------- ------------  -------------- --------------  -------------- 
                                                                          
SALES--Net ..................    $256,016      $142,915      $102,094        $(9,862)      $491,163 
COST OF SALES ...............     220,229       131,120        83,381         (9,862)       424,868 
                              ------------- ------------  -------------- --------------  -------------- 
GROSS PROFIT ................      35,787        11,795        18,713                         66,295 
TOTAL OPERATING EXPENSES  ...      29,636        10,985         8,588                         49,209 
                              ------------- ------------  -------------- --------------  -------------- 
OPERATING INCOME (LOSS)  ....       6,151           810        10,125                         17,086 
INTEREST EXPENSE--Net .......     (16,047)         (134)         (221)                       (16,402) 
EQUITY EARNINGS IN 
 SUBSIDIARIES ...............       5,513                                     (5,513) 
OTHER INCOME (EXPENSE)--Net .       1,334            99          (903)                           530 
                              ------------- ------------  -------------- --------------  -------------- 
NET INCOME (LOSS) BEFORE 
 INCOME TAXES ...............      (3,049)          775         9,001         (5,513)         1,214 
INCOME TAXES EXPENSE 
 (BENEFIT) ..................      (3,424)                      4,263                            839 
                              ------------- ------------  -------------- --------------  -------------- 
NET INCOME (LOSS) ...........    $    375      $    775      $  4,738        $(5,513)      $    375 
                              ============= ============  ============== ==============  ============== 



                                      F-31

                HUNTSMAN PACKAGING CORPORATION AND SUBSIDIARIES 
                    CONSOLIDATING STATEMENT OF CASH FLOWS 
                                (IN THOUSANDS) 
                              DECEMBER 31, 1997 





                                              HUNTSMAN                                                    CONSOLIDATED 
                                              PACKAGING                                                     HUNTSMAN 
                                             CORPORATION     COMBINED       COMBINED                       PACKAGING 
                                             PARENT ONLY    GUARANTORS   NON-GUARANTORS   ELIMINATIONS    CORPORATION 
                                           -------------- -------------- --------------  -------------- -------------- 
                                                                                           
CASH FLOWS FROM OPERATING ACTIVITIES .....    $  14,004       $7,965         $ 6,679                       $  28,648 
                                           -------------- -------------- --------------  -------------- -------------- 
CASH FLOWS FROM INVESTING ACTIVITIES:                                    
Payment for purchase of CT Film, net of                                  
 cash acquired ...........................      (69,366)                                                     (69,366) 
Capital acquisitions for plant                                          
 and equipment ...........................       (8,435)      (6,222)         (3,204)                        (17,861) 
                                           -------------- -------------- --------------  -------------- -------------- 
  Net cash used in investing activities  .      (77,801)      (6,222)         (3,204)                        (87,227) 
                                           -------------- -------------- --------------  -------------- -------------- 
CASH FLOWS FROM FINANCING  ACTIVITIES:                                   
Principal payment on long-term debt  .....     (249,015)        (494)                                       (249,509) 
Proceeds from long-term debt .............      312,700                                                      312,700 
Payment of cash dividend .................        1,900                       (1,900) 
                                           -------------- -------------- --------------  -------------- -------------- 
  Net cash provided by (used in)                                         
   financing activities ..................       65,585         (494)         (1,900)                         63,191 
                                           -------------- -------------- --------------  -------------- -------------- 
EFFECT OF EXCHANGE RATE CHANGES ON CASH  .         (518)                      (2,330)                         (2,848) 
                                           -------------- -------------- --------------  -------------- -------------- 
NET INCREASE (DECREASE) IN CASH AND CASH                                 
  EQUIVALENTS ............................        1,270        1,249            (755)                          1,764 
CASH AND CASH EQUIVALENTS AT BEGINNING OF                                
  PERIOD..................................         (868)        (426)         11,941                          10,647 
                                           -------------- -------------- --------------  -------------- -------------- 
CASH AND CASH EQUIVALENTS AT END OF                                      
  PERIOD .................................    $     402          823         $11,186                       $  12,411 
                                           ============== ============== ==============  ============== ============== 
                                                                 

                                                          


                               * * * * * * * * 


                                      F-32

                         INDEPENDENT AUDITORS' REPORT 

To the Board of Directors 
 of Huntsman Polymers Corporation 


   We have audited the accompanying combined balance sheets of CT Film (a 
division of Rexene Corporation) and Rexene Corporation Limited (a 
wholly-owned subsidiary of Rexene Corporation) (collectively, the 
Predecessor) as of December 31, 1996 and the related combined statements of 
operations and of cash flows for the year ended December 31, 1996 and for the 
eight months ended August 31, 1997 and the combined balance sheet of CT Film 
(a division of Huntsman Polymers Corporation) and Rexene Corporation Limited 
(a wholly-owned subsidiary of Huntsman Polymers Corporation) (collectively, 
the Successor) as of September 30, 1997 and the combined statements of 
operations and cash flows for the one month ended September 30, 1997. These 
financial statements are the responsibility of the Predecessor's and 
Successor's management. Our responsibility is to express an opinion on these 
financial statements based on our audits. 


   We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. 
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion. 


   In our opinion, the Predecessor combined financial statements referred to 
above present fairly, in all material respects, the combined financial 
position of CT Film and Rexene Corporation Limited as of December 31, 1996 
and the combined results of their operations and their cash flows for the 
year ended December 31, 1996 and eight months ended August 31, 1997 in 
conformity with generally accepted accounting principles. Further, in our 
opinion, the Successor combined financial statements referred to above 
present fairly, in all material respects, the combined financial position of 
CT Film and Rexene Corporation Limited as of September 30, 1997 and the 
combined results of their operations and their cash flows for the one month 
ended September 30, 1997 in conformity with generally accepted accounting 
principles. 

/s/ DELOITTE & TOUCHE LLP 

Salt Lake City, Utah 
February 11, 1998 


                                      F-33

                                   CT FILM 
  (A DIVISION OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE CORPORATION) 
                                     AND 

                          REXENE CORPORATION LIMITED 
 (A WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE 
                                 CORPORATION) 

                           COMBINED BALANCE SHEETS 
                   DECEMBER 31, 1996 AND SEPTEMBER 30, 1997 
                                (IN THOUSANDS) 






                                                                       PREDECESSOR     SUCCESSOR 
                                                                      DECEMBER 31,    SEPTEMBER 30, 
                                                                          1996            1997 
                                                                     -------------- --------------- 
                                                                              
ASSETS 
CURRENT ASSETS: 
 Cash and cash equivalents..........................................    $    252         $   634 
 Accounts receivable (less allowance for doubtful accounts and 
 sales  returns of $1,266 and $815, respectively)...................      20,703          22,363 
 Inventory .........................................................      28,732          22,947 
 Prepaid expenses...................................................         262             662 
                                                                     -------------- --------------- 
  Total current assets..............................................      49,949          46,606 
PLANT AND EQUIPMENT -- NET..........................................      86,366          28,642 
NOTE RECEIVABLE ....................................................       1,550           1,550 
                                                                     -------------- --------------- 
TOTAL...............................................................    $137,865         $76,798 
                                                                     ============== =============== 
LIABILITIES AND HUNTSMAN POLYMERS CORPORATION'S 
 INVESTMENT IN THE COMPANY 
CURRENT LIABILITIES: 
 Accounts payable...................................................    $  9,532         $ 6,305 
 Accrued expenses...................................................       5,237           3,086 
                                                                     -------------- --------------- 
  Total current liabilities.........................................      14,769           9,391 
ACCUMULATED POSTRETIREMENT BENEFIT OBLIGATION.......................       2,910           2,905 
LONG-TERM PENSION LIABILITY.........................................         149 
OTHER LONG-TERM LIABILITIES ........................................                         125 
                                                                     -------------- --------------- 
  Total liabilities.................................................      17,828          12,421 
                                                                     -------------- --------------- 
COMMITMENTS AND CONTINGENCIES (Note 9) 
HUNTSMAN POLYMERS CORPORATION'S INVESTMENT IN THE COMPANY ..........     120,037          64,377 
                                                                     -------------- --------------- 
TOTAL...............................................................    $137,865         $76,798 
                                                                     ============== =============== 




                 See notes to combined financial statements. 

                                      F-34

                                    CT FILM 
  (A DIVISION OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE CORPORATION) 
                                     AND 

                          REXENE CORPORATION LIMITED 
 (A WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE 
                                 CORPORATION) 



                        COMBINED STATEMENTS OF OPERATIONS
                      FOR THE YEAR ENDED DECEMBER 31, 1996
                     EIGHT MONTHS ENDED AUGUST 31, 1997, AND
                       ONE MONTH ENDED SEPTEMBER 30, 1997
                                 (IN THOUSANDS)






                                                 PREDECESSOR             SUCCESSOR 
                                         ---------------------------- --------------- 
                                                            EIGHT           ONE 
                                                            MONTHS         MONTH 
                                           YEAR ENDED       ENDED          ENDED 
                                          DECEMBER 31,    AUGUST 31,   SEPTEMBER 30, 
                                              1996           1997           1997 
                                         -------------- ------------  --------------- 
                                                             
SALES--Net of returns and allowances  ..    $152,464       $107,221       $16,278 
COST OF SALES ..........................     141,485        101,492        15,261 
                                         -------------- ------------  --------------- 
GROSS PROFIT............................      10,979          5,729         1,017 
                                         -------------- ------------  --------------- 
OPERATING EXPENSES: 
 Marketing, general, and 
 administrative.........................       8,276          5,839           991 
 Research and development...............       2,685          1,218           220 
 Allocated corporate expenses...........       2,779          1,604           158 
                                         -------------- ------------  --------------- 
  Total operating expenses..............      13,740          8,661         1,369 
                                         -------------- ------------  --------------- 
OPERATING LOSS..........................      (2,761)        (2,932)         (352) 
INTEREST EXPENSE........................      (1,245)          (808)         (110) 
                                         -------------- ------------  --------------- 
LOSS BEFORE INCOME TAXES................      (4,006)        (3,740)         (462) 
INCOME TAX BENEFIT (EXPENSE) 
 --Deferred.............................         689            (93)          177 
                                         -------------- ------------  --------------- 
NET LOSS................................    $ (3,317)      $ (3,833)      $  (285) 
                                         ============== ============  =============== 



                  See notes to combined financial statements.

                                      F-35

                                   CT FILM 
(A DIVISION OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE CORPORATION) 
                                     AND 
                          REXENE CORPORATION LIMITED 
(A WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE 
                                 CORPORATION) 


                      COMBINED STATEMENTS OF CASH FLOWS 
                    FOR THE YEAR ENDED DECEMBER 31, 1996, 
                   EIGHT MONTHS ENDED AUGUST 31, 1997, AND 
                      ONE MONTH ENDED SEPTEMBER 30, 1997 
                                (IN THOUSANDS) 





                                                          PREDECESSOR             SUCCESSOR 
                                                  ---------------------------- --------------- 
                                                                     EIGHT 
                                                                     MONTHS       ONE MONTH 
                                                    YEAR ENDED       ENDED          ENDED 
                                                   DECEMBER 31,    AUGUST 31,   SEPTEMBER 30, 
                                                       1996           1997           1997 
                                                  -------------- ------------  --------------- 
                                                                      
CASH FLOWS FROM OPERATING ACTIVITIES: 
 Net loss........................................     $(3,317)      $(3,833)       $  (285) 
 Adjustments to reconcile net loss to net cash 
  provided by (used in) operating activities: 
  Depreciation and amortization..................       6,516         4,705            309 
  Loss on sale of equipment......................          10            15 
  Deferred income tax benefit (expense) .........        (689)           93           (177) 
  Changes in operating assets and liabilities: 
   Accounts receivable...........................       2,928           375         (2,035) 
   Inventory.....................................      (9,334)         (750)         6,535 
   Prepaid expenses..............................         (57)           86           (428) 
   Accounts payable..............................       3,496        (4,296)           594 
   Accrued expenses..............................        (379)       (2,529)           378 
   Accumulated postretirement benefit 
 obligation......................................         154            (5) 
   Long-term pension liability...................         100          (211)             4 
   Other long-term liability.....................                       125 
                                                  -------------- ------------  --------------- 
    Net cash provided by (used in) operating 
     activities..................................        (572)       (6,225)         4,895 
                                                  -------------- ------------  --------------- 
CASH FLOWS FROM INVESTING ACTIVITIES: 
 Proceeds from sales of equipment................           8            21 
 Capital expenditures for plant and equipment ...      (7,878)       (2,380)          (108) 
                                                  -------------- ------------  --------------- 
    Net cash used in investing activities  ......      (7,870)       (2,359)          (108) 
                                                  -------------- ------------  --------------- 
CASH FLOWS FROM FINANCING ACTIVITIES-- Net 
 transactions with Huntsman Polymers Corporation 
 (formerly Rexene Corporation)...................       8,207         8,885         (4,686) 
                                                  -------------- ------------  --------------- 
EFFECT OF EXCHANGE RATE CHANGES ON CASH .........          20           (20) 
                                                  -------------- ------------  --------------- 
NET DECREASE (INCREASE) IN CASH AND CASH 
 EQUIVALENTS.....................................        (215)          281            101 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ..         467           252            533 
                                                  -------------- ------------  --------------- 
CASH AND CASH EQUIVALENTS, END OF PERIOD ........     $   252       $   533        $   634 
                                                  ============== ============  =============== 



                                                                   (Continued) 
                                      F-36


                                    CT FILM 
  (A DIVISION OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE CORPORATION) 
                                     AND 
                          REXENE CORPORATION LIMITED 
 (A WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE 
                                 CORPORATION) 

                      COMBINED STATEMENTS OF CASH FLOWS 
                    FOR THE YEAR ENDED DECEMBER 31, 1996, 
                   EIGHT MONTHS ENDED AUGUST 31, 1997, AND 
                      ONE MONTH ENDED SEPTEMBER 30, 1997 
                                (IN THOUSANDS) 


SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES: 


   On December 29, 1996, Rexene Corporation Limited issued an additional 
2,500 common shares to Huntsman Polymers Corporation (formerly Rexene 
Corporation) in exchange for a $4,281 reduction to the related party debt 
owing to Rexene Corporation. During the year ended December 31, 1996, the 
eight months ended August 31, 1997, and the one month ended September 30, 
1997, Rexene Corporation Limited incurred approximately $1,245, $810, and 
$111, respectively, of interest which was added to the balance owing to 
Huntsman Polymers Corporation (formerly Rexene Corporation). 

   Due to the operating losses generated, the Company did not make any income 
tax payments during the year ended December 31, 1996, the eight months ended 
August 31, 1997, or the one month ended September 30, 1997. 

                                                                   (Concluded) 


                 See notes to combined financial statements. 

                                      F-37




                                    CT FILM 
  (A DIVISION OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE CORPORATION) 
                                     AND 
                          REXENE CORPORATION LIMITED 
 (A WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE 
                                 CORPORATION) 

                    NOTES TO COMBINED FINANCIAL STATEMENTS 
                    FOR THE YEAR ENDED DECEMBER 31, 1996, 
                   EIGHT MONTHS ENDED AUGUST 31, 1997, AND 
                      ONE MONTH ENDED SEPTEMBER 30, 1997 


1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 


   BASIS OF PRESENTATION --The accompanying combined financial statements 
present on a historical cost basis the assets, liabilities, revenues, and 
expenses related to CT Film (a division of Huntsman Polymers Corporation, 
formerly Rexene Corporation) and Rexene Corporation Limited (a wholly-owned 
subsidiary of Huntsman Polymers Corporation, formerly Rexene Corporation) 
(collectively, the Company). As a result of the transactions described below, 
the combined balance sheet as of December 31, 1996 is not comparable to the 
combined balance sheet as of September 30, 1997. Operating results prior to 
September 1, 1997 are presented on a historical cost basis and are comparable 
to operating results subsequent to September 1, 1997 except for depreciation 
and amortization. 

   SALE OF REXENE CORPORATION TO HUNTSMAN CORPORATION --On August 27, 1997, 
pursuant to an Agreement and Plan of Merger (the Merger Agreement) by and 
with Rexene Corporation (Rexene), Huntsman Corporation (HC) and Huntsman 
Centennial Corporation, a wholly-owned subsidiary of HC, Huntsman Centennial 
Corporation was merged with and into Rexene Corporation and changed its name 
to Huntsman Polymers Corporation (Polymers). Pursuant to this merger, the 
stockholders of Rexene received $16.00 in cash for each outstanding share of 
common stock. As a result, Polymers owns all of the issued common stock. For 
financial accounting purposes, the Merger Agreement was effective September 
1, 1997 (the Effective Date). 

   The merger was accounted for as a purchase transaction and, accordingly, 
the combined financial statements subsequent to the Effective Date reflect 
the purchase price, including transaction costs and liabilities. The cash 
consideration paid has been "pushed down" to the Company. The allocation of 
the purchase price is based upon valuation and other studies. The value 
assigned to the Company's assets was equal to the $70 million selling price 
of the assets to Huntsman Packaging Corporation (Packaging), as discussed 
below. 

   The allocation of the purchase price of the Company is summarized as 
follows: 


                        
Current assets ...........  $ 50,500 
Plant and equipment  .....    28,800 
Other non-current assets       1,600 
Liabilities assumed  .....   (10,900) 
                           ---------- 
Total purchase price  ....  $ 70,000 
                           ========== 


   SALE OF THE COMPANY TO HUNTSMAN PACKAGING --On September 30, 1997 pursuant 
to an Asset Purchase Agreement (the Agreement), Packaging acquired the assets 
and liabilities of the Company for a purchase price of $70 million, plus 
transaction costs. The acquisition was accounted for as a purchase 
transaction. Adjustments to reflect the purchase by Packaging will be 
recorded effective October 1, 1997. 

   Packaging was a wholly-owned subsidiary of HC until September 30, 1997. As 
a result of a split off transaction from HC, Packaging is no longer 
controlled by HC but continues to be an affiliated entity. 

   DESCRIPTION OF THE BUSINESS --The Company produces plastic films for the 
converter, personal care/medical and agricultural films markets in North 
America and the United Kingdom. The following is a summary of the Company's 
significant accounting policies. 


                                      F-38

                                   CT FILM 
(A DIVISION OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE CORPORATION) 
                                     AND 
                          REXENE CORPORATION LIMITED 
(A WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE 
                                 CORPORATION) 

                    NOTES TO COMBINED FINANCIAL STATEMENTS 
                    FOR THE YEAR ENDED DECEMBER 31, 1996, 
                   EIGHT MONTHS ENDED AUGUST 31, 1997, AND 
                      ONE MONTH ENDED SEPTEMBER 30, 1997 

    PRINCIPLES OF COMBINATION --The combined financial statements include the 
accounts of CT Film and Rexene Corporation Limited. All significant 
intercompany balances and transactions have been eliminated in the combined 
financial statements. 

   USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS --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. 


   REVENUE RECOGNITION --Sales revenue is recognized upon shipment of product 
in fulfillment of a customer order. 


   CARRYING VALUE OF LONG-TERM ASSETS --The Company evaluates the carrying 
value of long-term assets based upon current and anticipated undiscounted 
cash flows, and recognizes an impairment when such estimated cash flows are 
less than the carrying value of the asset. Measurement of the amount of 
impairment, if any, is based upon the difference between carrying value and 
fair value. 


   INVENTORY --Inventory consists principally of finished film products and 
the raw materials necessary to produce them. Finished goods are carried at 
the lower of cost (on a first-in, first-out basis) or market. 

   PLANT AND EQUIPMENT --Plant and equipment is stated at cost. Depreciation 
is computed using the straight-line method over the estimated useful lives of 
the assets as follows: 




                                   
Land improvements ..............        20 years 
Buildings and improvements  ....        20 years 
Tools, molds, and dies .........      3-15 years 
Machinery and equipment ........      3-15 years 




   CASH AND CASH EQUIVALENTS --For the purposes of the combined statement of 
cash flows, the Company considers cash in checking accounts and in short-term 
highly liquid investments with original maturities of three months or less to 
be cash and cash equivalents. Cash and cash equivalents generated outside the 
United States are generally subject to tax liabilities if repatriated. 

   FINANCIAL INSTRUMENTS --The carrying amounts reported in the combined 
balance sheet for cash and cash equivalents approximate fair value because of 
the immediate or short-term maturity of these financial instruments. The 
carrying amount of the note receivable approximates fair value because the 
interest rate of the note approximates the current market rates of comparable 
notes. 

   INCOME TAXES --The Company uses the asset and liability method of 
accounting for income taxes. Deferred income taxes reflect the net tax 
effects of temporary differences between the carrying amounts of assets and 
liabilities for financial and tax reporting purposes. Through September 1, 
1997, CT Film's operations were included in the consolidated U.S. income tax 
return of Rexene Corporation. From September 1, 1997 to September 30, 1997, 
CT Film's operations were included in the consolidated U.S. income tax return 
of Polymers. Rexene Corporation Limited files a separate tax return in the 
United Kingdom. For purposes of preparing the combined financial statements, 
CT Film's income tax provision is determined on a "separate return basis." 


                                      F-39

                                   CT FILM 
(A DIVISION OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE CORPORATION) 
                                     AND 
                          REXENE CORPORATION LIMITED 
(A WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE 
                                 CORPORATION) 

                    NOTES TO COMBINED FINANCIAL STATEMENTS 
                    FOR THE YEAR ENDED DECEMBER 31, 1996, 
                   EIGHT MONTHS ENDED AUGUST 31, 1997, AND 
                      ONE MONTH ENDED SEPTEMBER 30, 1997 

    ENVIRONMENTAL EXPENDITURES --Environmental related restoration and 
remediation costs are recorded as liabilities 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, that are principally maintenance or preventative 
in nature, are recorded when expended and expensed or capitalized as 
appropriate. 

   FOREIGN CURRENCY TRANSLATION --The accounts of Rexene Corporation Limited 
are translated into U.S. dollars in the accompanying combined financial 
statements. Assets and liabilities are translated at rates prevailing at the 
balance sheet date. Revenues, expenses, gains, and losses are translated at a 
weighted average rate for the period. Cumulative translation adjustments are 
recorded as an adjustment to equity and are presented as a component of 
Huntsman Polymer Corporation's investment in the Company (see Note 5). 

   The following financial information relating to foreign operations in the 
United Kingdom has been included in the combined financial statements (in 
thousands): 




                           PREDECESSOR                  SUCCESSOR 
                ---------------------------------- ------------------ 
                    YEAR ENDED      EIGHT MONTHS     ONE MONTH ENDED 
                DECEMBER 31, 1996  AUGUST 31, 1997 SEPTEMBER 30, 1997 
                ----------------- ---------------  ------------------ 
                                          
Assets ........      $23,717           $22,947           $11,847 
Liabilities  ..        2,455             1,087             1,005 
Sales .........        7,686             7,036               875 
Net loss ......       (3,807)           (4,137)             (345) 




   Transaction gains and losses on amounts payable in currencies other than 
the Company's functional currencies are recognized in the statements of 
operations. During the year ended December 31, 1996 and the eight months 
ended August 31, 1997, the Company recognized transaction gains of $1,576,000 
and transaction losses of $872,000, respectively. During the one month ended 
September 30, 1997, transaction losses were insignificant. 


                                      F-40

                                   CT FILM 
(A DIVISION OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE CORPORATION) 
                                     AND 
                          REXENE CORPORATION LIMITED 
(A WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE 
                                 CORPORATION) 
                    NOTES TO COMBINED FINANCIAL STATEMENTS 
                    FOR THE YEAR ENDED DECEMBER 31, 1996, 
                   EIGHT MONTHS ENDED AUGUST 31, 1997, AND 
                      ONE MONTH ENDED SEPTEMBER 30, 1997 


 2. INVENTORY 

   Inventory consists of the following as of December 31, 1996 and September 
30, 1997 (in thousands): 





                                         PREDECESSOR    SUCCESSOR 
                                             1996         1997 
                                        ------------- ----------- 
                                                
Finished goods ........................    $ 9,826       $ 9,779 
Raw materials .........................     19,060        12,864 
Work-in process .......................        427           304 
                                        ------------- ----------- 
Total .................................     29,313        22,947 
Less allowance for obsolete inventory         (581) 
                                        ------------- ----------- 
Inventory--net ........................    $28,732       $22,947 
                                        ============= =========== 




3. PLANT AND EQUIPMENT 

   Plant and equipment consists of the following as of December 31, 1996 and 
September 30, 1997 (in thousands): 





                                                  PREDECESSOR    SUCCESSOR 
                                                      1996         1997 
                                                 ------------- ----------- 
                                                         
Land and improvements ..........................    $  1,330      $   922 
Buildings and improvements .....................      12,648        7,472 
Tools, molds, and dies .........................       3,838        2,059 
Machinery and equipment ........................      88,198       18,498 
Construction in progress .......................       1,929 
                                                 ------------- ----------- 
Total ..........................................     107,943       28,951 
Less accumulated depreciation and amortization       (21,577)        (309) 
                                                 ------------- ----------- 
Plant and equipment--net .......................    $ 86,366      $28,642 
                                                 ============= =========== 




4. NOTE RECEIVABLE 

   The Company sold certain equipment in 1995 and received a note in the 
amount of $1,550,000. The note bears interest at 10% and is due on March 31, 
2003. The terms of the note require interest only payments through December 
1997 with quarterly payments of principal and interest ranging from 
approximately $72,000 to $110,000 beginning in 1998. 


                                      F-41

                                   CT FILM 
(A DIVISION OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE CORPORATION) 
                                     AND 
                          REXENE CORPORATION LIMITED 
(A WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE 
                                 CORPORATION) 

                    NOTES TO COMBINED FINANCIAL STATEMENTS 
                    FOR THE YEAR ENDED DECEMBER 31, 1996, 
                   EIGHT MONTHS ENDED AUGUST 31, 1997, AND 
                      ONE MONTH ENDED SEPTEMBER 30, 1997 


 5. HUNTSMAN POLYMERS CORPORATION'S INVESTMENT IN THE COMPANY 

   Huntsman Polymers Corporation's investment in the Company consists of the 
following as of December 31, 1996 and September 30, 1997 (in thousands): 





                                                              PREDECESSOR    SUCCESSOR 
                                                                  1996         1997 
                                                             ------------- ----------- 
                                                                     
Deferred income tax liability (asset) --net ................    $ 13,950      $(8,324) 
Rexene Corporation Limited note payable to Huntsman 
 Polymers Corporation ......................................      16,629       21,987 
Inventory in transit from Huntsman Polymers Corporation  ...      (1,855) 
Accumulated deficit of Rexene Corporation Limited  .........      (2,931)      (8,921) 
Common stock equity of Rexene Corporation Limited  .........       7,297        7,297 
Cumulative translation adjustment ..........................        (138)         871 
Net intercompany payable to Huntsman Polymers Corporation  .      87,085       51,467 
                                                             ------------- ----------- 
Total ......................................................    $120,037      $64,377 
                                                             ============= =========== 




6. INCOME TAXES 

   The following is a summary of domestic and foreign provisions for deferred 
income taxes and a reconciliation of the U.S. statutory income tax rate to 
the effective income tax rate. 

   The deferred income tax benefit (expense) is as follows (in thousands): 





                                              PREDECESSOR                  SUCCESSOR 
                                   ---------------------------------- ------------------ 
                                       YEAR ENDED      EIGHT MONTHS     ONE MONTH ENDED 
                                   DECEMBER 31, 1996  AUGUST 31, 1997 SEPTEMBER 30, 1997 
                                   ----------------- ---------------  ------------------ 
                                                             
Deferred: 
 Federal .........................        $189            $ 1,244            $154 
 State ...........................          28                187              23 
 Foreign .........................         472             (1,524)             -- 
                                   ----------------- ---------------  ------------------ 
Total deferred income tax benefit 
 (expense) .......................        $689            $   (93)            177 
                                   ================= ===============  ================== 




                                      F-42

                                   CT FILM 
(A DIVISION OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE CORPORATION) 
                                     AND 
                          REXENE CORPORATION LIMITED 
(A WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE 
                                 CORPORATION) 

                    NOTES TO COMBINED FINANCIAL STATEMENTS 
                    FOR THE YEAR ENDED DECEMBER 31, 1996, 
                   EIGHT MONTHS ENDED AUGUST 31, 1997, AND 
                      ONE MONTH ENDED SEPTEMBER 30, 1997 

    The effective income tax rate reconciliation is as follows (in 
thousands): 




                                                   PREDECESSOR                  SUCCESSOR 
                                        ---------------------------------- ------------------ 
                                            YEAR ENDED      EIGHT MONTHS     ONE MONTH ENDED 
                                        DECEMBER 31, 1996  AUGUST 31, 1997 SEPTEMBER 30, 1997 
                                        ----------------- ---------------  ------------------ 
                                                                           
Loss before income tax benefit 
 (expense).............................      $(4,006)          $(3,740)           $(462) 
                                        ================= ===============  ================== 
Expected tax benefit at U.S. statutory 
 rate of 35% ..........................      $ 1,402           $ 1,309            $ 162 
Increase (decrease) resulting from: 
 Deferred tax asset valuation 
  allowance ...........................       (1,012)           (1,524) 
 State taxes ..........................           18               122               15 
 Foreign rate difference and other 
  (net) ...............................          281 
                                        ----------------- ---------------  ------------------ 
Total income tax benefit (expense) ....      $   689           $   (93)           $ 177 
                                        ================= ===============  ================== 




   Components of net deferred income tax assets and liabilities, included in 
Huntsman Polymers Corporation's investment in the Company, as of December 31, 
1996 and September 30, 1997 are as follows (in thousands): 



                                                 PREDECESSOR             SUCCESSOR 
                                              DECEMBER 31, 1996      SEPTEMBER 30, 1997 
                                            ---------------------- ---------------------- 
                                             CURRENT    LONG-TERM   CURRENT    LONG-TERM 
                                            --------- -----------  --------- ----------- 
                                                                 
Deferred income tax assets: 
 Allowance for doubtful trade accounts 
  receivable ..............................   $  739                 $  555 
 Allowance for obsolete inventory  ........      152                    260 
 Net operating loss carryforward ..........             $  2,906                $ 5,653 
 Basis difference in fixed assets  ........                                       2,410 
 Inventory ................................      163                    213 
 Other ....................................    2,647       1,526        482       1,295 
                                            --------- -----------  --------- ----------- 
Total .....................................    3,701       4,432      1,510       9,358 
                                            --------- -----------  --------- ----------- 
Deferred income tax liability-basis 
 difference in fixed assets ...............              (21,071) 
                                            --------- -----------  --------- ----------- 
Deferred tax asset valuation allowance  ...               (1,012)                (2,544) 
                                            --------- -----------  --------- ----------- 
Net deferred income tax asset (liability) 
 -included with Huntsman Polymers 
 Corporation's investment in the Company  .   $3,701    $(17,651)    $1,510     $ 6,814 
                                            ========= ===========  ========= =========== 



                                      F-43

                                   CT FILM 
(A DIVISION OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE CORPORATION) 
                                     AND 
                          REXENE CORPORATION LIMITED 
(A WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE 
                                 CORPORATION) 

                    NOTES TO COMBINED FINANCIAL STATEMENTS 
                    FOR THE YEAR ENDED DECEMBER 31, 1996, 
                   EIGHT MONTHS ENDED AUGUST 31, 1997, AND 
                      ONE MONTH ENDED SEPTEMBER 30, 1997 


    NET OPERATING LOSS CARRYFORWARDS --The Company has available 
approximately $12.0 million of net operating loss carryforwards available to 
offset future income taxes in the United Kingdom. Due to the uncertainties 
regarding realization, the Company has established a valuation allowance to 
offset the deferred tax asset associated with the net operating loss 
carryforward. 

7. EMPLOYEE BENEFIT PLANS 

   DEFINED CONTRIBUTION PLANS -- CT Film employees participate in the 
Polymers Employee Savings Plan which covers substantially all CT Film and 
Rexene Corporation Limited employees participate in a separate defined 
contribution plan. Plan participants may elect to make voluntary 
contributions to this plan up to a specified amount of their compensation. 
The Company matches a minimum of 25% of the participants' aggregate 
contributions up to 6% of the participant's base compensation. The Company's 
contributions to these plans for all periods presented were insignificant. 

   DEFINED BENEFIT PLAN --CT Film's employees participate in the Polymers 
non-contributory defined benefit pension plan which covers substantially all 
full-time domestic employees. CT Film funds the actuarially determined 
retirement cost. Contributions are intended to not only provide for benefits 
attributed to service to date but also for those expected to be earned in the 
future. The combined accrued net pension expense for the year ended December 
31, 1996, the eight months ended August 31, 1997, and the one month ended 
September 30, 1997 includes the following components (in thousands): 





                                                  PREDECESSOR                  SUCCESSOR 
                                       ---------------------------------- ------------------ 
                                           YEAR ENDED      EIGHT MONTHS     ONE MONTH ENDED 
                                       DECEMBER 31, 1996  AUGUST 31, 1997 SEPTEMBER 30, 1997 
                                       ----------------- ---------------  ------------------ 
                                                                 
Service cost--benefits earned during 
 the year ............................       $ 327             $ 274             $ 34 
Interest cost on projected benefit 
 obligation ..........................         241               289               36 
Actual return on assets ..............        (221)             (277)             (35) 
Other ................................         (24)               36                5 
                                       ----------------- ---------------  ------------------ 
Total accrued pension expense  .......       $ 323             $ 322             $ 40 
                                       ================= ===============  ================== 



                                      F-44

                                   CT FILM 
(A DIVISION OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE CORPORATION) 
                                     AND 
                          REXENE CORPORATION LIMITED 
(A WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE 
                                 CORPORATION) 

                    NOTES TO COMBINED FINANCIAL STATEMENTS 
                    FOR THE YEAR ENDED DECEMBER 31, 1996, 
                   EIGHT MONTHS ENDED AUGUST 31, 1997, AND 
                      ONE MONTH ENDED SEPTEMBER 30, 1997 

    The following table sets forth the funded status of the plan as of 
December 31, 1996 and September 30, 1997 and the amount recognized in the 
combined balance sheet as of that date (in thousands): 



                                                                    PREDECESSOR    SUCCESSOR 
                                                                        1996         1997 
                                                                   ------------- ----------- 
                                                                           
Present value of accumulated benefit obligation: 
 Vested ..........................................................    $ 2,636       $ 4,834 
 Nonvested .......................................................        401           617 
                                                                   ------------- ----------- 
Total ............................................................    $ 3,037       $ 5,451 
                                                                   ============= =========== 
Present value of projected benefit obligation for service 
 rendered to date ................................................    $ 3,893       $ 6,538 
Less plan assets at fair value, principally comprised of equity 
 securities and bonds ............................................     (3,152)       (5,513) 
                                                                   ------------- ----------- 
Projected benefit obligation in excess of plan assets  ...........        741         1,025 
Unrecognized net loss ............................................       (495)         (818) 
Unrecognized prior service cost ..................................        (97)         (329) 
                                                                   ------------- ----------- 
Accrued (prepaid) long-term pension cost .........................    $   149       $  (122) 
                                                                   ============= =========== 


   Assumptions used in the actuarial valuation include an increase in future 
compensation of 4.5%, a discount rate of 7.75% in 1996 and 7.25% in 1997, and 
an expected rate of return on plan assets of 9% were used. 

   POSTRETIREMENT BENEFITS --CT Film provides certain health care and medical 
benefits for substantially all of its retired employees. CT Film reimburses 
retirees for those benefits but does not provide any additional funding for 
the postretirement benefits. 

   The combined accrued net postretirement benefit expense includes the 
following components (in thousands): 



                                                 PREDECESSOR                  SUCCESSOR 
                                      ---------------------------------- ------------------ 
                                          YEAR ENDED      EIGHT MONTHS     ONE MONTH ENDED 
                                      DECEMBER 31, 1996  AUGUST 31, 1997 SEPTEMBER 30, 1997 
                                      ----------------- ---------------  ------------------ 
                                                                
Service cost -benefits earned 
 during the year ....................       $ 112             $ 72               $ 9 
Interest cost on accumulated 
 postretirement benefit obligation  .         137               90                11 
Other ...............................        (130)             (41)               (5) 
                                      ----------------- ---------------  ------------------ 
Total ...............................       $ 119             $121               $15 
                                      ================= ===============  ================== 


                                      F-45

                                   CT FILM 
(A DIVISION OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE CORPORATION) 
                                     AND 
                          REXENE CORPORATION LIMITED 
(A WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE 
                                 CORPORATION) 

                    NOTES TO COMBINED FINANCIAL STATEMENTS 
                    FOR THE YEAR ENDED DECEMBER 31, 1996, 
                   EIGHT MONTHS ENDED AUGUST 31, 1997, AND 
                      ONE MONTH ENDED SEPTEMBER 30, 1997 


    The following table sets forth the funded status of the plan as of 
December 31, 1996 and September 30, 1997 and the amount recognized in the 
combined balance sheet as of that date (in thousands): 





                                                                 PREDECESSOR    SUCCESSOR 
                                                                     1996         1997 
                                                                ------------- ----------- 
                                                                        
Present value of accumulated postretirement benefit 
 obligation: 
 Retirees .....................................................     $  531       $  534 
 Fully eligible plan participants .............................        469          507 
 Other active plan participants ...............................      1,195        1,250 
                                                                ------------- ----------- 
Accumulated postretirement benefit obligation .................      2,195        2,291 
Unrecognized net gain .........................................        735          624 
Unrecognized prior service cost ...............................        (20)         (10) 
                                                                ------------- ----------- 
Accumulated postretirement benefit obligation .................     $2,910       $2,905 
                                                                ============= =========== 



   CT Film has not funded any part of the accumulated postretirement benefit 
obligation. 


   The assumed health care cost trend rate used to measure the expected cost 
of benefits covered by the plan for 1997 is 9%; the rate is assumed to 
decrease each successive year until it reaches 5.5% in 2003, after which it 
remains constant. A one percent increase in the assumed health care cost 
trend rate for each year would not significantly increase the accumulated 
postretirement benefit obligation for any periods presented. The assumed 
discount rate used in determining the accumulated postretirement benefit 
obligation was 7.75% and 7.25% as of December 31, 1996 and September 30, 
1997, respectively. 


8. RELATED PARTY TRANSACTIONS 


   The accompanying combined financial statements include the following 
transactions with Polymers (formerly Rexene), for the year ended December 31, 
1996, eight months ended August 31, 1997, and one month ended September 30, 
1997 (in thousands): 





                                          PREDECESSOR                  SUCCESSOR 
                               ---------------------------------- ------------------ 
                                   YEAR ENDED      EIGHT MONTHS     ONE MONTH ENDED 
                               DECEMBER 31, 1996  AUGUST 31, 1997 SEPTEMBER 30, 1997 
                               ----------------- ---------------  ------------------ 
                                                         
Inventory purchases ..........      $29,655           $31,882           $4,576 
Allocated operating expenses          2,779             1,604              158 
Interest expense .............        1,245               810              111 




   ADMINISTRATIVE EXPENSES --As noted above, Polymers (formerly Rexene) 
allocated administrative expenses to the Company. The allocation is for the 
estimated portion of the total costs incurred by Polymers resulting from 
services provided to the Company and is included in the combined statement of 
operations. 


   INSURANCE --Effective September 1, 1997, the Company obtained some of its
insurance coverage under policies of HC. Reimbursement payments to HC are based
on premium allocations which are determined in cooperation with an independent
broker.



                                      F-46

                                   CT FILM 
(A DIVISION OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE CORPORATION) 
                                     AND 
                          REXENE CORPORATION LIMITED 
(A WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE 
                                 CORPORATION) 

                    NOTES TO COMBINED FINANCIAL STATEMENTS 
                    FOR THE YEAR ENDED DECEMBER 31, 1996, 
                   EIGHT MONTHS ENDED AUGUST 31, 1997, AND 
                      ONE MONTH ENDED SEPTEMBER 30, 1997 

9. COMMITMENTS AND CONTINGENCIES 

   ENVIRONMENTAL --The Company's operations are subject to extensive 
environmental laws and regulations concerning emissions to the air, 
discharges to surface and subsurface waters, and the generation, handling, 
storage, transportation, treatment, and disposal of waste materials, as 
adopted by various governmental authorities in the jurisdictions in which the 
Company operates. The Company makes every reasonable effort to remain in full 
compliance with existing governmental regulations. 

   LITIGATION --The Company is party to litigation and claims arising in the 
ordinary course of business. Management believes, after consulting with legal 
counsel, that the liabilities, if any, arising from such litigation and 
claims will not have a material adverse effect on the Company's combined 
financial statements. 

   OPERATING LEASES --The Company has several noncancelable operating leases, 
primarily for vehicles, equipment, warehouse, and office space, that expire 
through 2011. The total expense recorded under all operating lease agreements 
in the accompanying combined statement of operations is approximately 
$750,000, $532,000, and $62,000 for the year ended December 31, 1996, the 
eight months ended August 31, 1997, and the one month ended September 30, 
1997, respectively. 

   Future minimum operating lease payments are as follows (in thousands): 


                                             
Year ending September 30, 
1998...........................................  $  555 
1999...........................................     524 
2000 ..........................................     460 
2001...........................................     458 
2002 ..........................................     409 
Thereafter ....................................   4,828 
                                                ------- 
Total future minimum operating lease payments    $7,234 
                                                ======= 



10. ACCOUNTING STANDARDS 

   In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS 
No. 130, Reporting Comprehensive Income. This Statement establishes standards 
for reporting and display of comprehensive income and its components 
(revenues, expenses, gains, and losses) if a full set of general purpose 
financial statements. This Statement requires that all items that are 
required to be recognized under accounting standards as components of 
comprehensive income be reported in a financial statement that is displayed 
with the same prominence as other financial statements. This Statement does 
not require a specific format for that financial statement but requires that 
an enterprise display an amount representing total comprehensive income for 
the period in that financial statement. This Statement is effective for 
fiscal years beginning after December 15, 1997. Reclassification of financial 
statements for earlier periods provided for comparative purposes is required. 
The impact of SFAS No. 130 on the Company is not expected to be material in 
relation to the combined financial statements. 

                                      F-47

                                   CT FILM 
(A DIVISION OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE CORPORATION) 
                                     AND 
                          REXENE CORPORATION LIMITED 
(A WHOLLY-OWNED SUBSIDIARY OF HUNTSMAN POLYMERS CORPORATION, FORMERLY REXENE 
                                 CORPORATION) 

                    NOTES TO COMBINED FINANCIAL STATEMENTS 
                    FOR THE YEAR ENDED DECEMBER 31, 1996, 
                   EIGHT MONTHS ENDED AUGUST 31, 1997, AND 
                      ONE MONTH ENDED SEPTEMBER 30, 1997 


    In June 1997, the FASB issued SFAS No. 131, Disclosure About Segments of 
an Enterprise and Related Information. SFAS No. 131 established standards for 
the way that public business enterprises report information about operating 
segments in annual financial statements and requires that those enterprises 
report selected information about operating segments in interim financial 
reports issued to shareholders. It also establishes standards for related 
disclosure about products and services, geographic areas, and major 
customers. SFAS No. 131 is effective for fiscal years beginning after 
December 15, 1997. The Company does not expect the impact of SFAS No. 131 to 
be material in relation to its combined financial statements. 

                                      F-48





   NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY 
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER 
CONTAINED HEREIN OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN 
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS 
HAVING BEEN AUTHORIZED BY HUNTSMAN PACKAGING. THIS PROSPECTUS DOES NOT 
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY ANY 
SECURITY OTHER THAN THOSE TO WHICH IT RELATES, NOR DOES IT CONSTITUTE AN 
OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY 
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN 
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, 
OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. 
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, 
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE 
IN THE AFFAIRS OF HUNTSMAN PACKAGING SINCE THE DATE HEREOF NOR THAT THE 
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE 
HEREOF. 

                              TABLE OF CONTENTS 


                                               PAGE 
Prospectus Summary..........................      1 
Risk Factors................................     13 
Use of Proceeds.............................     19 
The Exchange Offer .........................     20 
Capitalization..............................     27 
Unaudited Pro Forma Financial Data..........     28 
Selected Historical Financial Data..........     30 
Management's Discussion and Analysis of 
 Financial Condition and Results of 
 Operations.................................     31 
Business....................................     36 
Management..................................     49 
Ownership of Capital Stock .................     55 
Certain Relationships and Related 
 Transactions...............................     55 
Description of the Credit Facilities .......     57
Description of the Notes and Guarantees ....     59
Certain United States Federal Income 
 Tax Considerations ........................     88 
Book-Entry; Delivery and Form...............     91 
Plan of Distribution .......................     92 
Legal Matters...............................     93 
Experts ....................................     93 
Index to Consolidated Financial Statements .    F-1 



   UNTIL MAY 31, 1998, ALL DEALERS OFFERING TRANSACTIONS IN 
THE NEW NOTES, WHETHER OR NOT PARTICIPATING IN THE 
EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS. 






                                  PROSPECTUS 

                           [LOGO HUNTSMAN PACKAGING]



                                 $125,000,000 

                        HUNTSMAN PACKAGING CORPORATION 

                                9 1/8% SENIOR 
                         SUBORDINATED NOTES DUE 2007 


                                 MARCH 2, 1998