AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT
 
 
AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT, dated as of October 1, 2004, by
and among ICO Polymers North America, Inc., a New Jersey corporation ("Polymers
North America"), and Bayshore Industrial, L.P. (formerly known as Bayshore
Industrial, Inc.), a Texas limited partnership ("Bayshore L.P.", and together
with Polymers North America, each individually a "Borrower" and collectively,
"Borrowers"), ICO, Inc., a Texas corporation ("Parent"), ICO Polymers, Inc., a
Delaware corporation ("Polymers"), Wedco Technology, Inc., a New Jersey
corporation ("Wedco Tech"), Wedco Petrochemical, Inc., a Delaware corporation
("Wedco Petro") and ICO Technology, Inc., a Delaware corporation ("ICO Tech",
and together with Parent, Polymers, Wedco Tech and Wedco Petro each individually
an "Existing Guarantor" and collectively, "Existing Guarantors"), Bayshore
Industrial GP, L.L.C., a Delaware limited liability company ("Bayshore GP LLC")
and Bayshore Industrial LP, L.L.C. ("Bayshore LP LLC", and together with
Bayshore GP LLC, each individually a "New Guarantor" and collectively, "New
Guarantors") and ICO P&O, Inc., a Delaware corporation ("P&O"), and ICO Global
Services, Inc., a Delaware corporation ("Global"), and Congress Financial
Corporation (Southwest), a Texas corporation ("Lender").
 
 
W I T N E S S E T H :
 
 
WHEREAS, Lender and Borrowers have entered into financing arrangements pursuant
to which Lender may make loans and advances and provide other financial
accommodations to Borrowers as set forth in the Loan and Security Agreement,
dated as of April 9, 2002, among Lender, Borrowers, Existing Guarantors, P&O and
Global, Amendment No. 1 to Loan and Security Agreement, dated as of September 6,
2002, by and among Lender, Borrowers, Existing Guarantors, P&O and Global and
Amendment No. 2 to Loan and Security Agreement, dated as of August 26, 2004, by
and among Lender, Borrowers, Existing Guarantors, P&O and Global (as amended
hereby and as the same may hereafter be further amended, modified, supplemented,
extended, renewed, restated or replaced, the "Loan Agreement", and together with
all agreements, documents and instruments at any time executed and/or delivered
in connection therewith or related thereto, as from time to time amended and
supplemented, collectively, the "Financing Agreements");
 
WHEREAS, Borrowers and Guarantors have requested that Lender agrees to certain
amendments to the Loan Agreement and Lender is willing to so agree, subject to
the terms and conditions contained herein; and
 
 
WHEREAS, by this Amendment No. 3, Lender, Borrowers, Guarantors and New
Guarantors desire and intend to evidence such amendments.
 
 
NOW THEREFORE, in consideration of the foregoing, the mutual agreements and
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
 
1.  Definitions.
 
(a)  Additional Definitions. As used herein, the following terms shall have the
meanings given to them below, and the Loan Agreement and the other Financing
Agreements are hereby amended to include, in addition to and not in limitation
of, the following definitions:
 
(i)  "Agreement of Limited Partnership" shall mean the Agreement of Limited
Partnership of Bayshore Industrial, L.P., dated September 27, 2004, between
Bayshore Industrial GP, L.L.C., as general partner, and Bayshore Industrial LP,
L.L.C., as limited partner.
 
(ii)  "Amendment No. 3" shall mean this Amendment No. 3 to Loan and Security
Agreement by and among Lender, Borrowers, Guarantors, P&O and Global, as the
same now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
 
(iii)  "Bayshore Conversion Documents" shall mean, collectively, the following
(as the same may hereafter exist or be amended, modified, supplemented,
extended, renewed, restated or replaced): (A) Agreement of Limited Partnership,
(B) Plan of Conversion, (C) Certificate of Limited Partnership, and (D) all
other agreements, documents and instruments relating to any of the foregoing.
 
(iv)  "Bayshore Inc." shall mean Bayshore Industrial, Inc., a Texas corporation,
and its successors and assigns.
 
(v)  "Bayshore GP LLC" shall mean Bayshore Industrial GP, L.L.C., a Delaware
limited liability company, and its successors and assigns.
 
(vi)  "Bayshore LP LLC" shall mean Bayshore Industrial LP, L.L.C., a Delaware
limited liability company, and its successors and assigns.
 
(vii)  "Bayshore L.P." shall mean Bayshore Industrial, L.P., a Texas limited
partnership, and its successors and assigns.
 
(viii)  "Certificate of Limited Partnership" shall mean the Certificate of
Limited Partnership of Bayshore L.P.
 
(ix)  "Plan of Conversion" shall mean the Plan of Conversion of Bayshore Inc.
into Bayshore L.P. pursuant to Section 2.15 of the Texas Revised Limited
Partnership Act.
 
(b)  Amendments to Definitions. All references to the term "Guarantor" or
"Guarantors" in the Loan Agreement or any of the other Financing Agreements and
each such reference is hereby amended to include, in addition and not in
limitation, each New Guarantor.
 
(c)  Interpretation. For purposes of this Amendment No. 3, unless otherwise
defined herein, all terms used herein, including, but not limited to, those
terms used and/or defined in the recitals above, shall have the respective
meanings assigned to such terms in the Loan Agreement.
 
2.  Consent to Conversion. Subject to the terms and conditions set forth herein
and notwithstanding the provisions of Sections 9.1 of the Loan Agreement, Lender
hereby consents to the conversion of Bayshore Inc. into Bayshore L.P. pursuant
to the Certificate of Limited Partnership and the other applicable Bayshore
Conversion Documents as in effect on the date hereof (the "Bayshore
Conversion").
 
3.  Name Change. All references in the Loan Agreement and the other Financing
Agreements to the term "Bayshore Industrial, Inc." are hereby deleted and
replaced with the following: "Bayshore Industrial, L.P.".
 
4.  Assumption of Obligations and Financing Agreements. Bayshore L.P. hereby
expressly:
 
(a)  assumes and agrees to be directly liable to Lender for all Obligations
under, contained in, or arising pursuant to the Loan Agreement or any of the
other Financing Agreements applicable to Bayshore Inc. and as applied to
Bayshore L.P. as a Borrower;
 
(b)  agrees to perform, comply with and be bound by all terms, conditions and
covenants of the Loan Agreement and the other Financing Agreements applicable to
Bayshore Inc. and as applied to Bayshore Inc., with the same force and effect as
if Bayshore L.P. had originally executed and been an original Borrower party
signatory to the Loan Agreement and the other Financing Agreements;
 
(c)  is deemed to make as of the date hereof, and is, in all respects, bound by
all representations and warranties made by the other Borrowers to Lender set
forth in the Loan Agreement or in any of the other Financing Agreements; and
 
(d)  agrees that Lender shall have all rights, remedies and interests, including
security interests in and to the Collateral granted pursuant to the Loan
Agreement and the other Financing Agreements, with respect to Bayshore L.P. and
its properties and assets with the same force and effect as Lender has with
respect to the other Borrowers and their assets and properties, as if Bayshore
L.P. had originally executed and had been an original Borrower party signatory
to the Loan Agreement and the other Financing Agreements.
 
5.  Acknowledgment: Each Borrower and Existing Guarantor hereby acknowledges,
confirms and agrees that on the date hereof and after the consummation of the
Bayshore Conversion, the security interests in and liens upon the assets and
properties of each Borrower and Existing Guarantor in favor of Lender shall
continue to be, and the security interests in and liens upon the assets and
properties of any New Guarantor in favor of Lender shall be, valid and perfected
first priority liens and security interests.
 
6.  Representations, Warranties and Covenants. Borrowers and Guarantors
(including New Guarantors), P&O and Global, jointly and severally, represent,
warrant and covenant with and to Lender as follows, which representations,
warranties and covenants are continuing and shall survive the execution and
delivery hereof, and the truth and accuracy of, or compliance with each,
together with the representations, warranties and covenants in the other
Financing Agreements, being a continuing condition of the making of Loans by
Lender to Borrowers:
 
(a)  This Amendment No. 3 has been duly executed and delivered by each Borrower,
Guarantor and New Guarantor and is in full force and effect as of the date
hereof and the agreements and obligations of each Borrower, Guarantor and New
Guarantor contained herein constitute legal, valid and binding obligations of
each Borrower, Guarantor and New Guarantor enforceable against each of them in
accordance with their respective terms.
 
(b)  No action of, or filing with, or consent or any governmental or public body
or authority, other than the filing of UCC financing statements or a certificate
of limited partnership, and no approval or consent of any other party, is or
will be required to authorize, or is or will be otherwise required in connection
with, the execution, delivery and performance of this Amendment No. 3.
 
(c)  None of the transactions contemplated by this Amendment No. 3 violate or
will violate any applicable law or regulation, or do or will give rise to a
default or breach under any agreement to which any Borrower, Guarantor or New
Guarantor is a party or by which any property of any Borrower, Guarantor or New
Guarantor is bound.
 
(d)  The Bayshore Conversion is valid and effective in accordance with the terms
of the Bayshore Conversion Documents and the Texas Revised Limited Partnership
Act and Bayshore L.P. is the new limited partnership pursuant to the Bayshore
Conversion. Effective as of the date hereof, Bayshore L.P. has changed its name
from "Bayshore Industrial, Inc." to "Bayshore Industrial, L.P.".
 
(e)  All actions and proceedings required by the Bayshore Conversion Documents
and applicable law and regulation have been taken and the transactions required
thereunder have been duly and validly taken and consummated.
 
(f)  No court of competent jurisdiction has issued any injunction, restraining
order or other order which prohibits consummation of the transactions described
in the Bayshore Conversion Documents and no governmental action or proceeding
has been threatened or commenced seeking any injunction, restraining order or
other order which seeks to void or otherwise modify the transactions described
in the Bayshore Conversion Documents.
 
(g)  Borrowers, Guarantors and New Guarantors shall take such steps and execute
and deliver, and cause to be executed and delivered, to Lender, such additional
UCC financing statements, and other and further agreements, documents and
instruments as Lender may require in order to more fully evidence, perfect and
protect Lender's first priority security interest in the Collateral (including
the Collateral of New Guarantors).
 
(h)  Borrowers have delivered, or caused to be delivered, to Lender, true,
correct and complete copies of the Bayshore Conversion Documents.
 
7.  Additional Items to be Delivered. Borrowers, Guarantors and New Guarantors
hereby agree that, in addition to all other terms, conditions and provisions set
forth in the other Financing Agreements, Borrowers, Guarantors and New
Guarantors shall deliver or cause to be delivered to Lender, true, correct and
complete copies of the following items, each in form and substance satisfactory
to Lender, as duly authorized executed and delivered by the parties thereto, by
the date referred to below with respect to each such item:
 
(a)  within two (2) Business Days of the effective date of the Bayshore
Conversion, (i) the Bayshore Conversion Documents, (ii) a Certificate of Limited
Partners' Resolutions evidencing the adoption and subsistence of partners'
resolutions approving the execution, delivery and performance by Bayshore L.P.
of the agreements, documents and instruments described herein and (iii) such
other further agreements, documents and instruments as Lender may reasonably
request.
 
(b)  within three (3) Business Days of the effective date of this Amendment No.
3, a Pledge and Security Agreement by Bayshore GP LLC and Bayshore LP LLC in
favor of Lender with respect to all of the partnership interests of Bayshore
Industrial, L.P.
 
(c)  within three (3) Business Days Lender shall have received (i) a Guarantee
by the New Guarantors in favor of Lender with respect to the Obligations of
Polymers North America to Lender (the "Polymers North America Guarantee") and
(ii) a Guarantee by the New Guarantors in favor of Lender with respect to the
Obligations of Bayshore L.P. to Lender (the "Bayshore L.P. Guarantee", and
together with the Polymers North America Guarantee, collectively, the "New
Guarantees").
 
8.  Conditions Precedent. The effectiveness of the amendments contained herein
shall be subject to the satisfaction of each of the following, in a manner
satisfactory to Lender and its counsel:
 
(a)  Lender shall have received no later than October 1, 2004, this Amendment
No. 3 duly authorized, executed and delivered by the parties hereto;
 
(b)  Lender shall have received UCC, Federal and State tax lien and judgment
searches with respect to New Guarantors in all relevant jurisdictions, as
determined by Lender;
 
(c)  Lender shall have received, in form and substance reasonably satisfactory
to Lender, the New Guarantees, duly authorized, executed and delivered by each
of the New Guarantors;
 
(d)  New Guarantors shall have authorized Lender to prepare and file such UCC
financing statements and other documents and instruments which Lender has
determined are necessary to perfect or continue perfecting the security
interests of Lender in all of the assets now or hereafter owned by New
Guarantors;
 
(e)  Lender shall have received a copy of the Certificate of Formation (or
comparable document), and all amendments thereto, for each New Guarantor
certified by the Secretary of State of its jurisdiction of formation;
 
(f)  no Event of Default, or event, act or condition which with notice or
passage of time or both would constitute an Event of Default, shall exist or
have occurred.
 
9.  Effect of this Amendment. Except as expressly set forth herein, no other
amendments, consents, changes or modifications to the Financing Agreements are
intended or implied, and in all other respects the Financing Agreements are
hereby specifically ratified, restated and confirmed by all parties hereto as of
the effective date hereof and Borrowers, Guarantors and New Guarantors shall not
be entitled to any other or further amendment or consent by virtue of the
provisions of this Amendment No. 3 or with respect to the subject matter of this
Amendment No. 3. To the extent of conflict between the terms of this Amendment
No. 3 and the other Financing Agreements, the terms of this Amendment No. 3
shall control. The Loan Agreement and this Amendment No. 3 shall be read and
construed as one agreement.
 
10.  Further Assurances. The parties hereto shall execute and deliver such
additional documents and take such additional action as may be necessary or
desirable to effectuate the provisions and purposes of this Amendment No. 3.
Without limiting any of the terms of the Loan Agreement or any of the other
Financing Agreements, Lender may, at Borrowers' and Guarantors' expense, arrange
for the filing of a Uniform Commercial Code ("UCC") financing statement
amendment to change the name of the debtor to Bayshore Industrial, L.P., as set
forth above and its corporate form from a corporation to a limited partnership.
Borrowers hereby confirm that Lender is authorized to file such UCC Financing
Statement Amendment or such other UCC filings in connection therewith as Lender
may determine.
 
11.  Governing Law. The validity, interpretation and enforcement of this
Amendment No. 3 and the other Financing Agreements and any dispute arising out
of the relationship between the parties hereto whether in contract, tort, equity
or otherwise, shall be governed by the internal laws of the State of Texas but
excluding any principles of conflicts of law or other rule of law that would
cause the application of the law of any jurisdiction other than the laws of the
State of Texas.
 
12.  Binding Effect. This Amendment No. 3 shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.
 
13.  Headings. The headings listed herein are for convenience only and do not
constitute matters to be construed in interpreting this Amendment No. 3.
 
14.  Counterparts. This Amendment No. 3 may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment No. 3, it shall not be
necessary to produce or account for more than one counterpart thereof signed by
each of the parties hereto. Delivery of an executed counterpart of this
Amendment No. 3 by telefacsimile shall have the same force and effect as
delivery of an original executed counterpart of this Amendment No. 3. Any party
delivering an executed counterpart of this Amendment No. 3 by telefacsimile also
shall deliver an original executed counterpart of this Amendment No. 3, but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment No. 3 as to such
party or any other party.
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be
duly executed and delivered by their authorized officers as of the day and year
first above written.
 
 

 
CONGRESS FINANCIAL CORPORATION
  (SOUTHWEST)
By:
 
/s/ Mark Galovic

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Name:   
Title:
 
Mark Galovic
First Vice President
     
ICO POLYMERS NORTH AMERICA, INC
By:
 
/s/ Jon C. Biro

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

Name:
Title:
 
Jon C. Biro
Chief Financial Officer
     
BAYSHORE INDUSTRIAL, L.P.
 
 
By:
   By:  Bayshore Industrial GP, L.L.C., as General Partner
 
/s/ Steve Barkmann

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Name: 
Title:
 
Steve Barkmann
Sole Manager
     
WEDCO TECHNOLOGY, INC.
By:
 
/s/ Jon C. Biro

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

Name:   
Title:
 
Jon C. Biro
Chief Financial Officer
 
     
WEDCO PETROCHEMICAL, INC.
By:
 
/s/ Jon C. Biro

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

Name:
Title:
 
Jon C. Biro
Chief Financial Officer

 
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[SIGNATURES  CONTINUED FROM PREVIOUS PAGE]
 
 
AGREED:
 

 
ICO P&O, INC.
By:
 
/s/ Jon C. Biro

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Name:    
Title:
Jon C. Biro
Chief Financial Officer
     
ICO GLOBAL SERVICES, INC.
By:
 
/s/ Eric Parsons

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Name:
Title:
 
Eric Parsons
President
 
   

 
 

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