Pliant LLC, et al. – IPO: ‘424B3’ on 2/27/98

As of:  Friday, 2/27/98   ·   Accession #:  950136-98-403   ·   File #s:  333-40067, -01, -02, -03, -04, -05, -06, -07

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Initial Public Offering (IPO):  Prospectus   —   Rule 424(b)(3)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B3       Registration Statement                               147    761K 

Document Table of Contents

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                                      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

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(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."                                              

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 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                                                        

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(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.                                                          

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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                              

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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                                                     

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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.                              

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  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

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                              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.

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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."                                                                     

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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).

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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."                                      

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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.                                                                       

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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.                       

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                                                        [Enlarge/Download Table]

                                                                                    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.                                                      

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(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:                   

                                                        [Enlarge/Download Table]

                                                                                         
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.          

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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,                  

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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        

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--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         

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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                                      

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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                                           

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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.                                                             

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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.                                                              

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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.                                                     

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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.     

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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                                                                        

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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                        

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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;                                                 

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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:                  

                                                                [Download Table]
                                                                           
   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.                         

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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.                                             

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CAPITALIZATION  

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

                                                                [Download Table]

                                               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."

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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  

                                                        [Enlarge/Download Table]


                                              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)

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------------                                                                    
(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:                                        

                                                                [Download Table]

                               
     (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:                             

                                                        [Enlarge/Download Table]
                                                                                                               
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.                                                 

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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.       

                                                        [Enlarge/Download Table]

                                                         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.

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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.                                                                           

                                                                [Download Table]

                                         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.                                     

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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                         

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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                 

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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         

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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.                                                         

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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.     

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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.                                                                     

                                                                [Download Table]

                         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
                      ========== ==========
                                                                [Download Table]

                                         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                                       

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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.                                                     

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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                             

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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.                                                                         

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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.                                                                         

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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.                                                                      

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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.                                       

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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.   

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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.                                                           

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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.                                                                       

                                                        [Enlarge/Download Table]

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.               

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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.                                                                 

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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.                                                                  

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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   

                                                                [Download Table]

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.                            

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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.                                      

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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.                                                          

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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  

                                                        [Enlarge/Download 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.

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(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.                                          

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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 

                                                        [Enlarge/Download 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

                                                        [Enlarge/Download 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.                                                        

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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.                            

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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.                                                 

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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.    

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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)   

                                                                [Download Table]

                                                                   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                        

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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.                                                                 

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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:                                     

                                                                [Download Table]

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                                         

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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                                                                          

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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                        

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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.                                                

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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               

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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                                                           

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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               

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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      

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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                 

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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.                       

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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).                       

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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                                  

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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                                      

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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                        

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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                                         

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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   

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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                                

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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                                  

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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.   

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"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                                   

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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                                  

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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;                                           

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(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;                                          

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 (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.                                                                       

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"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.                                       

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"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                 

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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                                

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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.                                                      

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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    

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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                         

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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.                                      

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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                                         

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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.    

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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.                                

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS  

                                                        [Enlarge/Download Table]

                                                                                            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  

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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                                                               

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

                                                        [Enlarge/Download Table]

 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)

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

                                                        [Enlarge/Download Table]

                                                                   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.                                 

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

                                                        [Enlarge/Download Table]

                                                               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.                                 

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

                                                        [Enlarge/Download Table]

                                        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. 

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

                                                        [Enlarge/Download Table]

                                                               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)

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

                                                                [Download Table]

                                           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. 

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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.    

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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:                                          

                                                                [Download Table]
                                                                        
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:                                                                     

                                                                [Download Table]
                                                                    
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.

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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):                                                                     

                                                                [Download Table]

                    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.                                       

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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):                                     

                                                                [Download Table]

                                                        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):                                                                 

                                                                [Download Table]

                                                                  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                                

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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):                                                  

                                                                [Download Table]
                                   
 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%.        

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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:                     

                                                                [Download Table]
                                          
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):                                                 

                                                                [Download Table]

                                  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.                                                             

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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):                                                         

                                                                [Download Table]

                                                              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):                              

                                                        [Enlarge/Download Table]

                                                         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 
                                                       ======== ==========  =========

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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):                

                                                                [Download Table]

                                                        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):                                

                                                                [Download Table]

                                                                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)
                                                   ========= ========== 

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

                                                                [Download Table]

                                                                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):                                                       

                                                                [Download Table]

                                                    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 
                                                  ======== ========  =========

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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):    

                                                        [Enlarge/Download Table]

                                                                       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.                                         

                                                                [Download Table]

                                                                      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.                        

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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):                                                                 

                                                                [Download Table]

                                               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.            

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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                                                                      

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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):                                 

                                                                [Download Table]

                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):                                  

                                                                [Download Table]

                      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) 

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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.     

                                                                [Download Table]

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 
                                       ==========  ==========

                                                                [Download Table]

                                         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 
                                      ========== ==========  ==========

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

                                                                [Download Table]

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 
                                 ==========  ==========

                                                                [Download Table]

                                         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.                                                                      

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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):                                          

                                                        [Enlarge/Download Table]

                                                        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. This was a transaction of entities  
under common control which was accounted for in a manner similar to a pooling   
of interests. 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.                                       

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

                                                        [Enlarge/Download Table]

                             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     
                          ============= ============  ============== ==============     

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

                                                        [Enlarge/Download Table]

                                                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  
                                            =============== ==============  ============== ==============

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

                                                        [Enlarge/Download Table]

                                      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   
                                   ============= ============  ============ ==============  ==============

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

                                                        [Enlarge/Download Table]

                                   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)  
                                ============= ============  ============ ==============  ==============

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

                                                        [Enlarge/Download Table]

                                                 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  
                                             ===============  ============  ============  ============== ==============

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

                                                        [Enlarge/Download Table]

                                     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   
                                  ============= ============  ============== ==============  ==============

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

                                                        [Enlarge/Download Table]

                                 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    
                              ============= ============  ============== ==============  ==============

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

                                                        [Enlarge/Download Table]

                                              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  
                                           ============== ============== ==============  ============== ==============

* * * * * * * *   

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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                                                               

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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)  

                                                        [Enlarge/Download Table]

                                                                       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.   

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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)

                                                        [Enlarge/Download Table]

                                                 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. 

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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)  

                                                        [Enlarge/Download Table]

                                                          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)
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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.   

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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:                                                                        

                                                                [Download Table]
                                     
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.                                                

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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:                                                          

                                                                [Download Table]
                                                
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."      

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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):                                                                     

                                                                [Download Table]

                           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.                      

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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):                                                        

                                                                [Download Table]

                                         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):                                              

                                                                [Download Table]

                                                  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.                            

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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):        

                                                        [Enlarge/Download Table]

                                                              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):   

                                                        [Enlarge/Download Table]

                                              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       
                                   ================= ===============  ==================


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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):                                                                     

                                                        [Enlarge/Download Table]

                                                   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):                      

                                                        [Enlarge/Download Table]

                                                 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  
                                            ========= ===========  ========= =========== 


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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):            

                                                        [Enlarge/Download Table]

                                                  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       
                                       ================= ===============  ==================

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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):                          

                                                        [Enlarge/Download Table]

                                                                    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):                                            

                                                        [Enlarge/Download Table]

                                                 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       
                                      ================= ===============  ==================

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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):                          

                                                        [Enlarge/Download Table]

                                                                 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):                                                            

                                                                [Download Table]

                                          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.                                                                         

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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):    

                                                                [Download Table]
                                                       
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.                                  

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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.                   

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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 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘424B3’ Filing		Date		First		Last			Other Filings
		12/31/15		60
		10/1/07		11		111
		12/31/05		60		117			10-K
		3/31/03		139					10-Q
		10/1/02		1		111
		5/8/02		52		118			8-K
		11/5/01		112
		10/1/00		1		111
		12/31/98		95
		9/30/98		145					10-Q
		5/31/98		97		147
		4/1/98		1		111
		3/2/98		1		147
Filed on:		2/27/98							424B3
		2/16/98		6		41
		2/11/98		100		131
		12/31/97		1		130			10-K405
		12/15/97		39		146
		11/24/97		54		56
		10/1/97		54		136
		9/30/97		1		146
		9/29/97		122
		9/19/97		2		24
		9/15/97		55
		9/1/97		54		144
		8/31/97		61		146
		8/27/97		7		136
		5/12/97		52		118
		1/1/97		14		59
		12/31/96		14		146
		12/29/96		135
		10/21/96		106		118
		8/31/96		119
		8/20/96		93
		8/1/96		106
		7/31/96		118
		1/29/96		111
		1/1/96		16		119
		12/31/95		14		124			10-K405
		6/1/95		106
		1/1/95		104		122
		12/31/94		14		34
		12/31/93		14		34
		5/18/92		52		118
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