<PAGE>   1

                                                                    EXHIBIT 4.11

                CURRENT ASSETS SECURED PARTIES SECURITY AGREEMENT

         THIS CURRENT ASSETS SECURED PARTIES SECURITY AGREEMENT (as amended,
supplemented, amended and restated or otherwise modified from time to time, this
"Agreement"), dated as of July 19, 2001, is among STERLING CHEMICALS, INC., a
Delaware corporation, STERLING CANADA, INC., a Delaware corporation, STERLING
PULP CHEMICALS US, INC., a Delaware corporation, STERLING PULP CHEMICALS, INC.,
a Georgia corporation, STERLING FIBERS, INC., a Delaware corporation, STERLING
CHEMICALS ENERGY, INC., a Delaware corporation, and STERLING CHEMICALS
INTERNATIONAL, INC., a Delaware corporation (each individually a "Borrower" and
collectively the "Borrowers "), and each other Person (such capitalized term and
all other capitalized terms not otherwise defined herein shall have the meanings
provided for or incorporated by reference in Article I below) that may, from
time to time become, pursuant to the terms of the Credit Agreement, a party to
this Agreement (individually referred to as a "Grantor", and collectively
referred to as the "Grantors"), and THE CIT GROUP/BUSINESS CREDIT, INC., as
Administrative Agent for each of the Current Assets Secured Parties.

                                    RECITALS:

         A. The Borrowers are Wholly-Owned Subsidiaries of Sterling Chemicals
Holdings, Inc., a Delaware corporation (the "Parent").

         B. The Parent and the Borrowers have elected to file voluntary
petitions with the United States Bankruptcy Court for the Southern District of
Texas and have continued in possession of their respective assets and in the
management of their respective businesses pursuant to Sections 1107 and 1108 of
the Bankruptcy Code.

         C. Pursuant to a Revolving Credit Agreement, dated as of even date
herewith (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Credit Agreement"), among the Borrowers, the various
financial institutions as are, or may from time to time become, parties thereto
(the "Lenders"), and the Administrative Agent, the Lenders and the Issuer have
extended Commitments to make Credit Extensions to the Borrowers.

         D. As a condition precedent to the making of each Credit Extension
(including the initial Credit Extension) under the Credit Agreement, each
Grantor is required to execute and deliver this Agreement.

         E. Each Grantor has duly authorized the execution, delivery and
performance of this Agreement.

         F. It is in the best interests of each Grantor to execute this
Agreement inasmuch as such Grantor will derive substantial direct and indirect
benefits from the Credit Extensions made

<PAGE>   2

from time to time to the Borrowers by the Lenders and the Issuer pursuant to the
Credit Agreement and the execution and delivery of Rate Protection Agreements
between the Borrowers and certain Current Assets Secured Parties.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce (i) the
Current Assets Lenders, the Swing Line Lender and the Issuer to make Current
Assets Loans and Swing Line Loans and issue Letters of Credit to the Borrowers
pursuant to the Credit Agreement and (ii) the Current Assets Secured Parties to
enter into Rate Protection Agreement(s), each Grantor jointly and severally
agrees, for the benefit of each Current Assets Secured Party, as follows:

                                    ARTICLE I
                                   DEFINITIONS

         SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):

         "Administrative Agent" is defined in the preamble.

         "Agreement" is defined in the preamble.

         "Borrower" and "Borrowers" are defined in the preamble.

         "CIT" is defined in the preamble.

         "Collateral" is defined in Section 2.1.

         "Computer Hardware and Software Collateral" means:

         (a) all computer and other electronic data processing hardware,
integrated computer systems, central processing units, memory units, display
terminals, printers, features, computer elements, card readers, tape drives,
hard and soft disk drives, cables, electrical supply hardware, generators, power
equalizers, accessories and all peripheral devices and other related computer
hardware;

         (b) all software programs (including both source code, object code and
all related applications and data files), whether now owned, licensed or leased
or hereafter acquired by any Grantor, designed for use on the computers and
electronic data processing hardware described in clause (a) above;

         (c)  all firmware associated therewith;



                                       2
<PAGE>   3

         (d) all documentation (including flow charts, logic diagrams, manuals,
guides and specifications) with respect to such hardware, software and firmware
described in the preceding clauses (a) through (c); and

         (e) all rights with respect to all of the foregoing, including any and
all copyrights, licenses, options, warranties, service contracts, program
services, test rights, maintenance rights, support rights, improvement rights,
renewal rights and indemnifications and any substitutions, replacements,
additions or model conversions of any of the foregoing.

         "Copyright Collateral" means all copyrights of each Grantor, whether
statutory or common law, registered or unregistered, now or hereafter in force
in the United States including all of such Grantor's right, title and interest
in and to all copyrights registered in the United States Copyright Office and
also including the copyrights referred to in Item A of Schedule IV attached
hereto, and all applications for registration thereof, whether pending or in
preparation, all copyright licenses in the United States, including each
copyright license referred to in Item B of Schedule IV attached hereto, the
right to sue for past, present and future infringements of any thereof, all
rights corresponding thereto, all extensions and renewals of any thereof and all
proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.

         "Credit Agreement" is defined in recital C.

         "Current Assets Termination Date" means the date on which all Current
Assets Obligations have been paid in full in cash, all Letters of Credit have
been terminated, expired or Cash Collateralized, all Rate Protection Agreements
have been terminated and all Current Assets Commitments have been permanently
terminated.

         "Equipment" is defined in clause (b) of Section 2.1.

         "Grantor" and "Grantors" are defined in the preamble.

         "Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.

         "Inventory" is defined in clause (a) of Section 2.1.

         "Lenders" is defined in recital C.

         "Material Contracts" is defined in clause (c) of Section 2.1.

         "Patent Collateral" means:

                  (a) all letters patent and applications for letters patent in
         the United States, including all patent applications in preparation for
         filing in the United States and


                                       3
<PAGE>   4

         including each patent and patent application referred to in Item A of
         Schedule II attached hereto;

                  (b) all reissues, divisions, continuations,
         continuations-in-part, extensions, renewals and reexaminations of any
         of the items described in clause (a);

                  (c) all patent licenses in the United States, including each
         patent license referred to in Item B of Schedule II attached hereto;
         and

                  (d) all proceeds of, and rights associated with, the foregoing
         (including license royalties and proceeds of infringement suits), the
         right to sue third parties for past, present or future infringements of
         any patent or patent application, referred to in clauses (a) or (b)
         above, and for breach or enforcement of any patent license referred to
         in clause (c) above.

         "Receivables" is defined in clause (c) of Section 2.1.

         "Related Contracts" is defined in clause (c) of Section 2.1.

         "Trademark Collateral" means:

                  (a) all trademarks, trade names, corporate names, company
         names, business names, fictitious business names, trade styles, service
         marks, certification marks, collective marks, logos, other source of
         business identifiers, prints and labels on which any of the foregoing
         have appeared or appear, designs and general intangibles of a like
         nature (all of the foregoing items in this clause (a) being
         collectively called a "Trademark"), now existing anywhere in the United
         States or hereafter adopted or acquired in the United States, whether
         currently in use or not, all registrations and recordings thereof and
         all applications in connection therewith, whether pending or in
         preparation for filing, including registrations, recordings and
         applications in the United States Patent and Trademark Office or in any
         office or agency of the United States of America or any State,
         including those referred to in Item A of Schedule III attached hereto;

                  (b) all Trademark licenses in the United States, including
         each Trademark license referred to in Item B of Schedule III attached
         hereto;

                  (c)  all reissues, extensions or renewals of any of the items
         described in clause (a) and (b);

                  (d)  all of the goodwill of the business connected with the
         use of, and symbolized by the items described in, clauses (a) and (b);
         and

                  (e) all proceeds of, and rights associated with, the
         foregoing, including any claim by any Grantor against third parties
         for past, present or future infringement or dilution of any Trademark,
         Trademark registration or Trademark license, including any Trademark,


                                       4
<PAGE>   5

         Trademark registration or Trademark license referred to in clauses (a)
         through (c) above, or for any injury to the goodwill associated with
         the use of any such Trademark or for breach or enforcement of any such
         Trademark license.

         "Trade Secrets Collateral" means all common law and statutory trade
secrets and all other confidential or proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of any Grantor (all of the foregoing being collectively called a "Trade
Secret"), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or referring in any way to such Trade Secret, all Trade Secret licenses,
including each Trade Secret license referred to in Schedule V attached hereto,
and including the right to sue for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.

         SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.

         SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the U.C.C.
are used in this Agreement, including its preamble and recitals, with such
meanings; provided, that, (a) in the event any term that is used herein is not
defined in Article 9 of the U.C.C., as in effect on the date hereof, but is
thereafter defined in Article 9 of the U.C.C., such term shall have the meaning
ascribed to such term in Article 9 of the U.C.C. as thereafter defined, and (b)
in the event that any term that is used herein is defined in both Article 9 of
the U.C.C., as in effect on or after the date hereof and Article 9 of the U.C.C.
as in force at any relevant time hereafter, the meaning to be ascribed to such
term herein shall be the most encompassing of such definitions.

                                   ARTICLE II
                                SECURITY INTEREST

         SECTION 2.1. Grant of Security. Effective upon the entry of the Interim
Order, each Grantor hereby assigns, pledges, hypothecates, charges, delivers and
transfers to the Administrative Agent, for its benefit and the ratable benefit
of each of the Current Assets Secured Parties, and hereby grants to the
Administrative Agent, for its benefit and the ratable benefit of each of the
Current Assets Secured Parties, a continuing security interest in all of the
following, whether now or hereafter existing or acquired by such Grantor (the
"Collateral"):

                  (a) all inventory in all of its forms of such Grantor,
         wherever located, including

                           (i) all raw materials and work in process therefor,
                  finished goods thereof and materials used or consumed in the
                  manufacture or production thereof,



                                       5
<PAGE>   6

                           (ii) all goods in which such Grantor has an interest
                  in mass or a joint or other interest or right of any kind
                  (including goods in which such Grantor has an interest or
                  right as consignee), and

                           (iii) all goods which are returned to or repossessed
                  by such Grantor,

and all accessions thereto, products thereof and documents therefor (any and all
such inventory, materials, goods, accessions, products and documents being the
"Inventory");

                  (b) all equipment in all of its forms of such Grantor
         (including, without limitation, all machinery, storage tanks, valves,
         pipelines, furniture, trucks, trailers, other motor vehicles, rolling
         stock, aircraft, vessels, barges and boats), wherever located,
         including all parts thereof and all accessions, additions, attachments,
         improvements, substitutions and replacements thereto and therefor and
         all accessories related thereto (any and all of the foregoing being the
         "Equipment");

                  (c) all accounts (including, but not limited to, all rights to
         payment arising out of the sale, lease, license or other transfer of
         tangible and intangible property or the rendering of services and all
         credit card receivables), contracts (including, but not limited to, all
         service contracts, supply contracts and marketing agreements (all such
         service contracts, supply contracts and marketing agreements,
         collectively, the "Material Contracts")), contract rights, chattel
         paper, documents, instruments, letter-of-credit rights, general
         intangibles, including Tax refunds, of such Grantor, whether or not
         arising out of or in connection with the sale, lease, license or other
         transfer of tangible and intangible property or the rendering of
         services, and all rights of such Grantor now or hereafter existing in
         and to all security agreements, guaranties, letters of credit, leases
         and other contracts or supporting obligations securing or otherwise
         relating to any such accounts, contracts, contract rights, chattel
         paper, documents, instruments, letter-of-credit rights, and general
         intangibles (any and all such accounts, contracts, contract rights,
         chattel paper, documents, instruments, warehouse receipts, bills of
         lading, Material Contracts and general intangibles being the
         "Receivables", and any and all such security agreements, guaranties,
         leases and other contracts being the "Related Contracts");

                  (d) in furtherance of, and not in limitation of, clause (c),
         all Material Contracts, together with (i) all rights of such Grantor to
         receive monies due and to become due under or pursuant to each Material
         Contract, (ii) all rights of such Grantor to receive proceeds of any
         insurance, indemnity, warranty, guaranty or collateral security with
         respect to each Material Contract, (iii) all claims of such Grantor for
         damages arising out of or for breach or default under each Material
         Contract, (iv) all rights of such Grantor to terminate a Material
         Contract, to perform thereunder and to compel performance and otherwise
         exercise all remedies thereunder and (v) to the extent not included in
         the foregoing, all proceeds of any and all of the foregoing;

                  (e) all Intellectual Property Collateral of such Grantor;



                                       6
<PAGE>   7

                  (f) all deposit accounts, including, but not limited to each
         Lockbox Account (including all deposits and investments therein and all
         earnings thereon);

                  (g) all books, records, writings, data bases, information and
         other property relating to, used or useful in connection with,
         evidencing, embodying, incorporating or referring to, any of the
         foregoing in this Section 2.1;

                  (h) all investment property in which such Grantor has an
         interest;

                  (i) all interest and other payments and rights with respect
         to all investment property in which such Grantor has an interest;

                  (j) all of such Grantor's other property and rights of every
         kind and description and interests therein; and

                  (k) all products, offspring, rents, issues, profits, returns,
         income and proceeds of and from any and all of the foregoing Collateral
         (including proceeds which constitute property of the types described in
         clauses (a) through (j), and, to the extent not otherwise included, all
         payments under insurance (whether or not the Administrative Agent is
         the loss payee thereof) or any indemnity, warranty or guaranty, payable
         by reason of loss or damage to or otherwise with respect to any of the
         foregoing Collateral).

Notwithstanding the foregoing, "Collateral" shall not include any general
intangibles or other rights arising under any contracts, instruments, licenses
or other documents as to which the grant of a security interest would constitute
a violation of a valid and enforceable restriction in favor of a third party on
such grant, unless and until any required consents shall have been obtained.
Each Grantor agrees to use its best efforts to obtain any such required consent
with respect to any material item of such Collateral.

         SECTION 2.2. Security for Current Assets Obligations. This Agreement
secures the payment in cash in full of all Current Assets Obligations.

         SECTION 2.3. Intentionally deleted.

         SECTION 2.4. Intentionally deleted.

         SECTION 2.5. Continuing Security Interest. This Agreement shall create
a continuing security interest in the Collateral and shall:

                  (a) remain in full force and effect until the Current Assets
         Termination Date;

                  (b) be binding upon each Grantor, its successors, transferees
         and assigns; and

                  (c) inure, together with the rights and remedies of the
         Administrative Agent hereunder, to the benefit of the Administrative
         Agent and each other Current Assets Secured Party.



                                       7
<PAGE>   8

Without limiting the generality of the foregoing clause (c), any Current Assets
Secured Party may assign or otherwise transfer (in whole or in part) any Current
Assets Loan Commitment or Swing Line Loan Commitment or Current Assets Loan held
by it to any other Person, and such other Person shall thereupon become vested
with all the rights and benefits in respect thereof granted to such Current
Assets Secured Party under any Loan Document (including this Agreement) or
otherwise, subject, however, to any contrary provisions in such assignment or
transfer, and to the provisions of Section 10.11 of the Credit Agreement. Upon
(i) the sale, transfer or other disposition of Collateral in accordance with the
Credit Agreement or (ii) the Current Assets Termination Date, the security
interests granted herein shall automatically terminate and all rights to the
applicable Collateral shall revert to the applicable Grantor with respect to (A)
such Collateral, but not the proceeds thereof (in the case of clause (i)) or (B)
all Collateral (in the case of clause (ii)). Upon any such sale, transfer,
disposition or termination, the Administrative Agent will, at such Grantor's
sole expense, execute and deliver to such Grantor, without any representations,
warranties or recourse, such documents as such Grantor shall reasonably request
to evidence such termination or release.

         SECTION 2.6. Grantor Remains Liable. Anything herein to the contrary
notwithstanding:

                  (a) each Grantor will remain liable under the contracts and
         agreements included in the Collateral to the extent set forth therein,
         and will perform all of its duties and obligations under such contracts
         and agreements to the same extent as if this Agreement had not been
         executed;

                  (b) the exercise by the Administrative Agent of any of its
         rights hereunder will not release any Grantor from ANY of its duties or
         obligations under any such contracts or agreements included in the
         Collateral; and

                  (c) neither the Administrative Agent nor any other Current
         Assets Secured Party will have any obligation or liability under any
         such contracts or agreements included in the Collateral by reason of
         this Agreement, nor will the Administrative Agent or any other Current
         Assets Secured Party be obligated to perform any of the obligations or
         duties of any Grantor thereunder or to take any action to collect or
         enforce any claim for payment assigned hereunder.

         SECTION 2.7. Security Interest Absolute. All rights of the
Administrative Agent and the security interests granted to the Administrative
Agent hereunder, and all obligations of each Grantor hereunder, shall be
absolute and unconditional, irrespective of:

                  (a) any lack of validity or enforceability of any Loan
          Document;

                  (b) the failure of any Current Assets Secured Party

                           (i) to assert any claim or demand or to enforce any
                  right or remedy against the Borrowers, any other Obligor or
                  any other Person under the provisions of any Loan Document or
                  otherwise or



                                       8
<PAGE>   9

                           (ii) to exercise any right or remedy against any
                  guarantor of, or collateral securing, any Current Assets
                  Obligations;

                  (c) any change in the time, manner or place of payment of, or
         in any other term of, all or any of the Current Assets Obligations or
         any other extension, compromise or renewal of any Current Assets
         Obligations;

                  (d) any reduction, limitation, impairment or termination of
         any Current Assets Obligations for any reason (other than the repayment
         in full and in cash of all Current Assets Obligations), including any
         claim of waiver, release, surrender, alteration or compromise, and
         shall not be subject to (and each Grantor hereby waives any right to or
         claim of) any defense or set-off, counterclaim, recoupment or
         termination whatsoever by reason of the invalidity, illegality,
         nongenuineness, irregularity, compromise or unenforceability of, or any
         other event or occurrence affecting, any Current Assets Obligations or
         otherwise;

                  (e) any amendment to, rescission, waiver or other
         modification of, or any consent to departure from, any of the
         terms of any Loan Document;

                  (f) any addition, exchange, release, surrender or
         non-perfection of any collateral (including the Collateral) or any
         amendment to or waiver or release of or addition to or consent to
         departure from any guaranty for any of the Current Assets Obligations;
         or

                  (g) any other circumstances which might otherwise constitute a
         defense available to, or a legal or equitable discharge of, any
         Borrower, any other Obligor, any surety or any guarantor.

         SECTION 2.8. Postponement of Subrogation, etc. Each Grantor hereby
agrees that it will not exercise any rights which it may acquire by reason of
any payment made hereunder, whether by way of subrogation, reimbursement or
otherwise, until the Current Assets Termination Date. Any amount paid to any
Grantor on account of any payment made hereunder prior to the Current Assets
Termination Date shall be held in trust for the benefit of the Current Assets
Secured Parties and shall immediately be paid to the Administrative Agent for
the ratable benefit of the Current Assets Secured Parties and credited and
applied against the Current Assets Obligations, whether matured or unmatured, in
accordance with the terms of the Credit Agreement; provided, however, that if:

                  (a) such Grantor has made payment to the Administrative Agent
         for the ratable benefit of the Current Assets Secured Parties of all or
         any part of the Current Assets Obligations; and

                  (b) the Current Assets Termination Date has occurred,

each Current Assets Secured Party agrees that, at the requesting Grantor's
request, the Administrative Agent, on behalf of the Current Assets Secured
Parties, will execute and deliver




                                       9
<PAGE>   10

to such Grantor appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by subrogation to
such Grantor of an interest in the Current Assets Obligations resulting from
such payment by such Grantor. In furtherance of the foregoing, prior to the
Current Assets Termination Date, each Grantor shall refrain from taking any
action or commencing any proceeding against any Borrower or any other Obligor
(or its successors or assigns, whether in connection with a bankruptcy
proceeding or otherwise) to recover any amounts in respect of payments made
under this Agreement to the Administrative Agent or any other Current Assets
Secured Party.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

         SECTION 3.1. Representations and Warranties. Each Grantor represents
and warrants to each Current Assets Secured Party as set forth in this Article
III.

         SECTION 3.2. Location of Collateral, etc. All of the Equipment,
Inventory and deposit accounts of such Grantor are respectively located at the
places specified in Item 3 of the Perfection Certificate. None of the Equipment
or Inventory has, within the four months preceding the date of this Agreement if
then owned by such Grantor, been located at any place other than the places
specified in Item 3 of the Perfection Certificate. The place of business and
chief executive office of such Grantor and the office where such Grantor keeps
its records concerning the Receivables, and all originals of all chattel paper
which evidence Receivables, are located at the address set forth in Item 3 of
the Perfection Certificate. Such Grantor has no trade names other than those
specified in Item 1 of the Perfection Certificate. During the four months
preceding the date hereof, such Grantor has not been known by any legal name nor
has it had a federal taxpayer identification number different from the one set
forth on Item 2 of the Perfection Certificate, nor has such Grantor been the
subject of any merger or other corporate reorganization, except as set forth in
Item 1 of the Perfection Certificate. If the Collateral includes any Inventory
located in the State of California, such Grantor is not a "retail merchant"
within the meaning of Section 9102 of the California U.C.C. All Receivables
evidenced by a promissory note or other instrument, negotiable document or
chattel paper have been duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance reasonably
satisfactory to the Administrative Agent and delivered and pledged to the
Administrative Agent pursuant to Section 4.6. Such Grantor is not a party to any
Federal, State or local government contract except as set forth in Item 13 of
the Perfection Certificate.

         SECTION 3.3. Ownership, No Liens, etc. Such Grantor owns its Collateral
free and clear of any Lien, except for the security interest created by this
Agreement and Permitted Liens. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording office, except such as may have been filed in favor of the
Administrative Agent relating to this Agreement or as have been filed in
connection with Permitted Liens.



                                       10
<PAGE>   11

         SECTION 3.4. Possession and Control. Each Grantor has exclusive
possession and control of its Equipment and Inventory except where the absence
of possession and control results from actions of such Grantor in the ordinary
course of business.

         SECTION 3.5. Negotiable Documents, Instruments and Chattel Paper. Such
Grantor has, contemporaneously herewith, delivered to the Administrative Agent
possession of all originals of all negotiable documents, instruments and chattel
paper currently owned or held by such Grantor (duly endorsed in blank, if
requested by the Administrative Agent).

         SECTION 3.6. Intellectual Property Collateral. With respect to any
Intellectual Property Collateral owned by such Grantor the loss, impairment or
infringement of which might have a Material Adverse Effect, except as set froth
in Item 6.18 of the Disclosure Schedule:

                  (a) such Intellectual Property Collateral is subsisting and
         has not been adjudged invalid or unenforceable, in whole or in part;

                  (b) such Intellectual Property Collateral is valid and
         enforceable;

                  (c) such Grantor has made all necessary filings and
         recordations to protect its interest in such Intellectual Property
         Collateral, including (if permissible) recordations of all of its
         interests in the Patent Collateral and Trademark Collateral in the
         United States Patent and Trademark Office and its claims to the
         Copyright Collateral in the United States Copyright Office;

                  (d) such Grantor is the owner of the unencumbered right, title
         and interest in and to such Intellectual Property Collateral (except
         for (i) Liens created under the Loan Documents, (ii) the second
         priority Lien on such Intellectual Property in favor of the Trustee to
         secure the obligations of the Borrowers related to the Senior Secured
         Notes (if any) and (iii) Permitted Liens and except for rights of
         licensees under licenses of such Intellectual Property Collateral in
         the ordinary course of business) and no claim has been made that the
         use of such Intellectual Property Collateral does or may violate the
         asserted rights of any third party except for claims that could not
         reasonably be expected to have a Material Adverse Effect; and

                  (e) such Grantor has performed all acts and has paid all
         required fees and taxes required to maintain any Intellectual Property
         Collateral that is material or necessary to any Borrower's business.

Such Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, licenses, technology, know-how,
processes and rights with respect to any of the foregoing necessary for or of
importance to the conduct of such Grantor's business as currently conducted.

         SECTION 3.7. Validity, etc. Upon the entry of the Interim Order, this
Agreement will create a valid, perfected security interest in and Lien on all
Collateral senior to all Liens other than the then applicable Priority Liens.



                                       11
<PAGE>   12

         SECTION 3.8. Authorization, Approval, etc. Upon the entry of the
Interim Order, no material authorization, material approval or other action by,
and no material notice to or material filing with, any Governmental Authority or
regulatory body is required either (a) for the grant by such Grantor of the
security interest granted hereby, the pledge by such Grantor of any Collateral
pursuant hereto or for the execution, delivery and performance of this Agreement
by such Grantor or (b) for the perfection of or the exercise by the
Administrative Agent of its rights and remedies hereunder.

         SECTION 3.9. Compliance with Laws. Such Grantor is in compliance with
the requirements of all applicable laws (including the provisions of the Fair
Labor Standards Act), rules, regulations and orders of every Governmental
Authority, the non-compliance with which could reasonably be expected to have a
Material Adverse Effect or which could reasonably be expected to materially
adversely affect the value of the Collateral.

                                   ARTICLE IV
                                    COVENANTS

         SECTION 4.1. Certain Covenants. Each Grantor covenants and agrees that,
at all times prior to the Current Assets Termination Date, such Grantor will,
unless the Required Lenders shall otherwise consent in writing, perform, comply
with and be bound by the obligations set forth in this Article IV.

         SECTION 4.2. As to Equipment and Inventory. Such Grantor hereby agrees
that it will:

                  (a) keep all the Equipment and Inventory (other than Inventory
         sold in the ordinary course of business) at the places therefor
         specified in Section 3.2 or, upon 30 days' prior written notice to the
         Administrative Agent, at such other places in a jurisdiction where all
         representations and warranties set forth in Article III shall be true
         and correct in all material respects, and all action required pursuant
         to the first sentence of Section 4.6 shall have been taken with respect
         to the Equipment and Inventory; and

                  (b) cause the Equipment to be maintained and preserved in its
         existing condition, ordinary wear and tear excepted, or in the case of
         any loss or damage to any of the Equipment, as soon as practicable
         after the occurrence thereof, make or cause to be made all repairs,
         replacements and other improvements in connection therewith which are
         necessary or desirable to such end; and promptly furnish to the
         Administrative Agent a statement respecting any loss or damage to any
         of the Equipment which is material in amount; and

                  (c) pay when due all Taxes, assessments and governmental
         charges imposed upon, the Equipment and Inventory, except to the extent
         the validity thereof is being contested in good faith by appropriate
         proceedings and for which adequate reserves in accordance with GAAP
         have been set aside.



                                       12
<PAGE>   13

         SECTION 4.3. As to Receivables. (a) Such Grantor will keep its chief
executive office and the office(s) where it keeps its records concerning the
Receivables, and all originals of all chattel paper which evidences Receivables,
located at the address(es) set forth in Section 3.2 and shall keep its other
places of business at the addresses set forth in Item 3 of the Perfection
Certificate, or, upon 30 days' prior written notice to the Administrative Agent,
at such other locations in a jurisdiction where all actions required by the
first sentence of Section 4.6 shall have been taken with respect to the
Receivables and such other Collateral; not change its name, corporate identity,
jurisdiction of organization or federal taxpayer identification number except
upon 30 days' prior written notice to the Administrative Agent; hold and
preserve such records; and permit representatives of the Administrative Agent,
at reasonable times and intervals and upon reasonable notice during normal
business hours to inspect (and photocopy extracts from) such records.

         (b) Such Grantor shall have the right to collect, demand, receive,
receipt for, sue for, compound and give acquittances for any and all amounts due
or to become due on Receivables and settle and adjust disputes and claims with
its customers and account debtors, handle returns and recoveries and grant
discounts, credits and allowances with respect to Receivables in the ordinary
course of business so long as no Event of Default shall have occurred and be
continuing.

         (c) All proceeds of Collateral received by such Grantor shall be
delivered in kind for deposit to the applicable Lockbox Account. Such proceeds
of Collateral received by such Grantor shall, prior to deposit in the Lockbox
Account, be held separate and apart from, and not commingled with, any other
property and in express trust for the benefit of the Administrative Agent until
delivery thereof is made to the applicable Lockbox Account.

         (d) The Administrative Agent shall have the right, without further
order or action of the Bankruptcy Court, to apply any amount in any Lockbox
Account and/or the Concentration Account as set forth in the Credit Agreement
and subject to the applicable provisions of the Revolver Intercreditor Agreement
and any applicable requirements of the Financing Order.

         (e) With respect to each Lockbox Account and the Concentration Account,
it is hereby confirmed and agreed that (i) deposits in such account are subject
to a security interest as contemplated hereby, (ii) each such account shall be
under the sole dominion and control of the Administrative Agent and (iii) the
Administrative Agent shall have the sole right of withdrawal over such
Collateral.

         (f) Such Grantor will not create any chattel paper without placing a
legend on such chattel paper acceptable to the Administrative Agent indicating
that the Administrative Agent has a security interest in such chattel paper.

         SECTION 4.4. As to Collateral. (a) Until the occurrence and continuance
of an Event of Default, and such time as the Administrative Agent shall notify
such Grantor of the revocation of such power and authority, such Grantor (i) may
in the ordinary course of its business (except to the extent prohibited under
any Loan Document) at its own expense, refine, process, store, transport, sell,
lease or furnish under the contracts of service any of the Inventory normally
held




                                       13
<PAGE>   14

by such Grantor for such purpose, and use and consume, in the ordinary course of
its business (except to the extent prohibited under the Credit Agreement or any
other Loan Document), any raw materials, including work in process or materials
normally held by such Grantor for such purpose, (ii) will, at its own expense,
endeavor to collect, as and when due, all amounts due with respect to any
Collateral, including the taking of such action with respect to such collection
as the Administrative Agent may reasonably request upon the occurrence and
during the continuance of an Event of Default or, in the absence of such
request, as such Grantor may deem advisable, and (iii) may grant, in the
ordinary course of business (except to the extent prohibited under any Loan
Document), to any party obligated on any of the Collateral, any rebate, refund
or allowance to which such party may be lawfully entitled, and may accept, in
connection therewith, the return of goods, the sale or lease of which shall have
given rise to such Collateral. The Administrative Agent, however, may, without
further order of or application to the Bankruptcy Court, at any time upon the
occurrence and during the continuance of an Event of Default, notify any parties
obligated on any of the Collateral to make payment to the Administrative Agent
of any amounts due or to become due thereunder and enforce collection of any of
the Collateral by suit or otherwise and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any period (whether or
not longer than the original period) any indebtedness thereunder or evidenced
thereby. Upon request of the Administrative Agent, upon the occurrence and
during the continuance of an Event of Default, such Grantor will, at its own
expense, notify any parties obligated on any of the Collateral to make payment
to the Administrative Agent of any amounts due or to become due thereunder.

         (b) The Administrative Agent is authorized, without further order of or
application to the Bankruptcy Court, to endorse, in the name of such Grantor,
any item, howsoever received by the Administrative Agent, representing any
payment on or other proceeds of any of the Collateral.

         SECTION 4.5. As to Intellectual Property Collateral. Each Grantor
covenants and agrees to comply with the following provisions as such provisions
relate to any Intellectual Property Collateral of such Grantor:

                  (a) such Grantor will not (i) do any act, or omit to do any
         act, whereby any of the Patent Collateral may lapse or become abandoned
         or dedicated to the public or unenforceable, (ii) permit any of its
         licensees to, (A) fail to continue to use any of the Trademark
         Collateral in order to maintain all of the Trademark Collateral in full
         force free from any claim of abandonment for non-use, (B) fail to
         maintain as in the past the quality of products and services offered
         under all of the Trademark Collateral, (C) fail to employ all of the
         Trademark Collateral registered with any Federal or State authority
         with an appropriate notice of such registration, (D) adopt or use any
         other Trademark which is confusingly similar or a colorable imitation
         of any of the Trademark Collateral, (E) use any of the Trademark
         Collateral registered with any Federal or State authority except for
         the uses for which registration or application for registration of all
         of the Trademark Collateral has been made, or (F) do or permit any act
         or knowingly omit to do any act whereby any of the Trademark Collateral
         may lapse or become invalid or unenforceable or (iii) do or permit any
         act or knowingly omit to do any act whereby any of the Copyright
         Collateral or any of the Trade Secrets Collateral may lapse or become
         invalid or unenforceable or placed in the public domain except upon
         expiration of the end

                                       14
<PAGE>   15

         of an unrenewable term of a registration thereof, unless such Grantor
         shall either (x) reasonably and in good faith determine (and notice of
         such determination shall have been delivered to the Administrative
         Agent) that any of the Intellectual Property Collateral is not of
         material economic value to such Grantor, or (y) in the exercise of its
         reasonable business judgment determines to do otherwise;

                  (b) such Grantor shall notify the Administrative Agent as soon
         as practicable if it knows, or has reason to know, that any application
         or registration relating to any material item of the Intellectual
         Property Collateral may become abandoned or dedicated to the public or
         placed in the public domain or invalid or unenforceable other than upon
         the natural expiration of protective periods under applicable law, or
         of any adverse determination or development (including the institution
         of, or any such determination or development in, any proceeding in the
         United States Patent and Trademark Office, the United States Copyright
         Office or any U.S. court) regarding such Grantor's ownership of any
         material item of the Intellectual Property Collateral, its right to
         register the same or to keep and maintain and enforce the same;

                  (c) in no event will such Grantor or any of its agents,
         employees, designees or licensees file an application for the
         registration of any Intellectual Property Collateral with the United
         States Patent and Trademark Office or the United States Copyright
         Office, unless it promptly informs the Administrative Agent, and upon
         request of the Administrative Agent, executes and delivers any and all
         agreements, instruments, documents and papers as the Administrative
         Agent may reasonably request to evidence the Administrative Agent's
         security interest in such Intellectual Property Collateral and the
         goodwill and general intangibles of such Grantor relating thereto or
         represented thereby;

                  (d) unless such Grantor shall otherwise determine in the
         exercise of its reasonable business judgment, such Grantor will take
         all necessary steps, including in any proceeding before the United
         States Patent and Trademark Office or the United States Copyright
         Office, to maintain and pursue any application (and to obtain the
         relevant registration) filed with respect to, and to maintain any
         registration of, any material item of the Intellectual Property
         Collateral, including the filing of applications for renewal,
         affidavits of use, affidavits of incontestability and opposition,
         interference and cancellation proceedings and the payment of fees and
         taxes (except to the extent that dedication, abandonment or
         invalidation is permitted under the foregoing clauses (a), (b) and
         (c)); and

                  (e) such Grantor will, contemporaneously herewith, execute and
         deliver to the Administrative Agent a Patent Security Agreement,
         Trademark Security Agreement and Copyright Security Agreement in the
         forms of Exhibit A, Exhibit B and Exhibit C hereto, and shall execute
         and deliver to the Administrative Agent any other document required to
         acknowledge or register or perfect the Administrative Agent's interest
         in any material item of the Intellectual Property Collateral.



                                       15
<PAGE>   16

         SECTION 4.6. Further Assurances, etc. Such Grantor agrees that, from
time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Administrative Agent may reasonably request,
in order to perfect, preserve and protect any security interest granted or
purported to be granted hereby or to enable the Administrative Agent to exercise
and enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, such Grantor will:

                  (a) if any Receivable shall be evidenced by a promissory note
         or other instrument, negotiable document or chattel paper, deliver and
         pledge to the Administrative Agent hereunder such promissory note,
         instrument, negotiable document or chattel paper duly endorsed and
         accompanied by duly executed instruments of transfer or assignment, all
         in form and substance satisfactory to the Administrative Agent;

                  (b) take such actions as are requested by the Administrative
         Agent in order to allow the Administrative Agent to obtain control with
         respect to all Collateral consisting of (i) deposit accounts, (ii)
         investment property, (iii) letter-of-credit rights and (iv) electronic
         chattel paper;

                  (c) execute such financing or continuation statements, or
         amendments thereto, and such other instruments or notices (including
         any assignment of claim form under or pursuant to the federal
         assignment of claims statute, 31 U.S.C. Section 3726, any successor or
         amended version thereof or any regulation promulgated under or pursuant
         to any version thereof), as may be necessary or desirable, or as the
         Administrative Agent may request; and

                  (d) furnish to the Administrative Agent, from time to time at
         the Administrative Agent's request, statements and schedules further
         identifying and describing the Collateral and such other reports in
         connection with the Collateral as the Administrative Agent may
         reasonably request, all in reasonable detail.

With respect to the foregoing and the grant of the security interest hereunder,
such Grantor hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of such Grantor where permitted
by law. A carbon, photographic or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.

         SECTION 4.7. Intentionally deleted.

         SECTION 4.8. Insurance. Each Grantor will:

                  (a) maintain insurance on its property with financially sound
         and reputable insurance companies against loss and damage in at least
         the amounts (and with only those deductibles) customarily maintained,
         (and if insurance companies cease to offer such insurance generally,
         such insurance as is acceptable to the Administrative Agent) and


                                       16
<PAGE>   17

         against such risks as are typically insured against in the same general
         area, by Persons of comparable size engaged in the same or similar
         business as the Grantor; and

                  (b) all worker's compensation, employer's liability insurance
         or similar insurance as may be required under the laws of any state or
         jurisdiction in which it may be engaged in business.

                                    ARTICLE V
                            THE ADMINISTRATIVE AGENT

         SECTION 5.1. Administrative Agent Appointed Attorney-in-Fact. Each
Grantor hereby irrevocably appoints the Administrative Agent as such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time in the
Administrative Agent's discretion, upon the occurrence and during the
continuance of an Event of Default, to, without further order of or application
to the Bankruptcy Court, take any action and to execute any instrument which the
Administrative Agent may deem necessary or advisable to accomplish the purposes
of this Agreement, including:

                  (a) to ask, demand, collect, sue for, recover, compromise and
         receive and give acquittance and receipts for moneys due and to become
         due under or in respect of any of the Collateral;

                  (b) to receive, endorse and collect any drafts or other
         instruments, documents and chattel paper, in connection with clause
         (a) above;

                  (c) to file any claims or take any action or institute any
         proceedings which the Administrative Agent may deem necessary or
         desirable for the collection of any of the Collateral or otherwise to
         enforce the rights of the Administrative Agent with respect to any of
         the Collateral; and

                  (d) to perform the affirmative obligations of such Grantor
         hereunder (including all obligations of such Grantor pursuant to
         Section 4.6).

Such Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.

         SECTION 5.2. Administrative Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Administrative Agent may, without
further order of or application to the Bankruptcy Court, itself perform, or
cause performance of, such agreement, and the expenses of the Administrative
Agent incurred in connection therewith shall be payable by such Grantor pursuant
to Section 6.3.

         SECTION 5.3. Administrative Agent Has No Duty. The powers conferred on
the Administrative Agent hereunder are solely to protect its interest (on behalf
of the Current Assets Secured Parties) in the Collateral and shall not impose
any duty on it to exercise any such




                                       17
<PAGE>   18

powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Administrative
Agent shall have no duty as to any Collateral or responsibility for:

                  (a) ascertaining or taking action with respect to calls,
         conversions, exchanges, maturities, tenders or other matters relative
         to any investment property, whether or not the Administrative Agent has
         or is deemed to have knowledge of such matters; or

                  (b) taking any necessary steps to preserve rights against
         prior parties or any other rights pertaining to any Collateral.

         SECTION 5.4. Reasonable Care. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, that the Administrative Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of any of the Collateral, if it takes such action for that purpose
as any Grantor reasonably requests in writing from time to time, but failure of
the Administrative Agent to comply with any such request at any time shall not
in itself be deemed a failure to exercise reasonable care. If an Event of
Default has occurred and is continuing, the Administrative Agent shall not be
required to comply with any request of the Grantor with respect to the matters
described in this Section.

                                   ARTICLE VI
                                    REMEDIES

         SECTION 6.1. Certain Remedies. Without further order of or application
to the Bankruptcy Court, but subject to any applicable requirements of the
Financing Order, the Credit Agreement and the Revolver Intercreditor Agreement,
if any Event of Default shall have occurred and be continuing:

                  (a) The Administrative Agent may exercise in respect of the
         Collateral, in addition to other rights and remedies provided for
         herein or otherwise available to it, all the rights and remedies of a
         secured party on default under the U.C.C. (whether or not the U.C.C.
         applies to the affected Collateral) and also may

                           (i) require each Grantor to, and such Grantor hereby
                  agrees that it will, at its expense and upon request of the
                  Administrative Agent forthwith, assemble all or part of the
                  Collateral as directed by the Administrative Agent and make it
                  available to the Administrative Agent at a place to be
                  designated by the Administrative Agent which is reasonably
                  convenient to both parties, and

                           (ii) without notice except as specified below, sell
                  the Collateral or any part thereof in one or more parcels at
                  public or private sale, at any of the Administrative Agent's
                  offices or elsewhere, for cash, on credit or for future
                  delivery, and upon such other terms as the Administrative
                  Agent may deem commercially reasonable. Each Grantor agrees
                  that, to the extent notice of sale


                                       18
<PAGE>   19

                  shall be required by law, at least ten days prior notice to
                  such Grantor of the time and place of any public sale or the
                  time after which any private sale is to be made shall
                  constitute reasonable notification. The Administrative Agent
                  shall not be obligated to make any sale of such Collateral
                  regardless of notice of sale having been given. The
                  Administrative Agent may adjourn any public or private sale
                  from time to time by announcement at the time and place
                  fixed therefor, and such sale may, without further notice,
                  be made at the time and place to which it was so adjourned.

                  (b) All cash proceeds received by the Administrative Agent in
         respect of any sale of, collection from or other realization upon all
         or any part of the Collateral shall be applied by the Administrative
         Agent, subject to any applicable requirements of the Financing Order,
         the Credit Agreement and the Revolver Intercreditor Agreement, against
         all or any part of the Current Assets Obligations as follows:

                           (i) first, to the payment of any amounts payable to
                  the Administrative Agent pursuant to Section 10.3 of the
                  Credit Agreement and Section 6.3;

                           (ii) second, to the equal and ratable payment of
                  Current Assets Obligations, in accordance with each Current
                  Assets Secured Party's Current Assets Obligations owing to it
                  under or pursuant to the Credit Agreement or any other Loan
                  Document, or under or pursuant to any Rate Protection
                  Agreement included in the Current Assets Obligations, as to
                  each Current Assets Secured Party, applied

                                    (A) first to fees and expense reimbursements
                           then due to such Current Assets Secured Party,

                                    (B) then to interest due to such Current
                           Assets Secured Party,

                                    (C) then to pay or prepay principal of the
                           Current Assets Loans and Swing Line Loans owing to,
                           or to reduce the "credit exposure" of, such Current
                           Assets Secured Party under any Rate Protection
                           Agreement, as the case may be, and

                                    (D) then to pay the remaining outstanding
                           Current Assets Obligations and Cash Collateralize all
                           Letter of Credit Outstandings;

                           (iii) third, without duplication of any amounts paid
                  pursuant to clause (b)(ii) above, to the Indemnified Parties
                  to the extent of any amounts owing pursuant to Section 10.4 of
                  the Credit Agreement; and

                           (iv) fourth, to be held as additional collateral
                  security until the Current Assets Termination Date, after
                  which such remaining cash proceeds shall be paid over to the
                  applicable Grantor (or the Fixed Assets Secured Parties, if
                  applicable,




                                       19
<PAGE>   20

                  or the holders of any applicable Priority Liens)or to
                  whomsoever may be lawfully entitled to receive such surplus.

For purposes of this Agreement, the "credit exposure" at any time of any Current
Assets Secured Party with respect to a Rate Protection Agreement to which such
Current Assets Secured Party is a party shall be determined at such time in
accordance with the customary methods of calculating credit exposure under
similar arrangements by the counterparty to such arrangements, taking into
account potential interest rate movements and the respective termination
provisions and notional principal amount and term of such Rate Protection
Agreement.

                  (c) The Administrative Agent may

                           (i) transfer all or any part of the Collateral into
                  the name of the Administrative Agent or its nominee, with or
                  without disclosing that such Collateral is subject to the lien
                  and security interest hereunder,

                           (ii) notify the parties obligated on any of the
                  Collateral to make payment to the Administrative Agent
                  of any amount due or to become due thereunder,

                           (iii) enforce collection of any of the Collateral by
                  suit or otherwise, and surrender, release or exchange all or
                  any part thereof, or compromise or extend or renew for any
                  period (whether or not longer than the original period) any
                  obligations of any nature of any party with respect thereto,

                           (iv) endorse any checks, drafts or other writings in
                  such Grantor's name to allow collection of the Collateral,

                           (v) take control of any proceeds of the Collateral
                  and

                           (vi) execute (in the name, place and stead of such
                  Grantor) endorsements, assignments, stock powers and other
                  instruments of conveyance or transfer with respect to all or
                  any of the Collateral.

         SECTION 6.2. Compliance with Restrictions. Each Grantor agrees that in
any sale of any of the Collateral whenever an Event of Default shall have
occurred and be continuing, the Administrative Agent is hereby authorized,
without further order of or application to the Bankruptcy Court, to comply with
any limitation or restriction in connection with such sale as it may be advised
by counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications and restrict such prospective bidders and
purchasers to Persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral) or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority or official, and such
Grantor further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Administrative Agent be liable nor accountable to



                                       20
<PAGE>   21

such Grantor for any discount allowed by the reason of the fact that such
Collateral is sold in compliance with any such limitation or restriction.

         SECTION 6.3. Indemnity and Expenses. Each Grantor hereby jointly and
severally indemnifies and holds harmless the Administrative Agent from and
against any and all claims, losses and liabilities arising out of or resulting
from this Agreement (including enforcement of this Agreement), except claims,
losses, or liabilities resulting from the Administrative Agent's gross
negligence or willful misconduct and, each Grantor will, upon demand pay to the
Administrative Agent the amount of any and all reasonable expenses, including
the reasonable fees and disbursements of its counsel and of any experts and
agents, which the Administrative Agent may incur, in each case, in connection
with:

                  (a) the administration of this Agreement;

                  (b) the custody, preservation, use or operation of, or the
         sale of, collection from or other realization upon, any of the
         Collateral;

                  (c) the exercise or enforcement of any of the rights of the
         Administrative Agent hereunder; or

                  (d) the failure by any Grantor to perform or observe any of
         the provisions hereof.

                                   ARTICLE VII
                            MISCELLANEOUS PROVISIONS

         SECTION 7.1. Loan Document. This Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof.

         SECTION 7.2. Amendments; etc. No amendment to or waiver of any
provision of this Agreement nor consent to any departure by any Grantor herefrom
shall in any event be effective unless the same shall be in writing and signed
by the Administrative Agent (on behalf of the Lenders or the Required Lenders,
as the case may be) and each Grantor and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

         SECTION 7.3. Protection of Collateral. The Administrative Agent may
from time to time, at its option, perform any act which each Grantor agrees
hereunder to perform and which such Grantor shall fail to perform after being
requested in writing so to perform (it being understood that no such request
need be given after the occurrence and during the continuance of an Event of
Default) and the Administrative Agent may from time to time take any other
action which the Administrative Agent reasonably deems necessary for the
maintenance, preservation or protection of any of the Collateral or of its
security interest therein.



                                       21
<PAGE>   22

         SECTION 7.4. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing and addressed,
delivered or transmitted, if to any Grantor, at the address or facsimile number
of the Company provided for in the Credit Agreement, and, if to the
Administrative Agent, at the address or facsimile number provided for in the
Credit Agreement, or as to any such party at such other address or facsimile
number as shall be designated by such party in a written notice to each other
party complying as to delivery with the terms of this Section. Any notice, (a)
if mailed and properly addressed with postage prepaid or if properly addressed
and sent by pre-paid courier service, shall be deemed given when received, or
(b) if transmitted by facsimile, shall be deemed given when transmitted (and
telephonic confirmation of receipt thereof has been received).

         SECTION 7.5. Headings. The various headings of this Agreement are
inserted for convenience only, and shall not affect the meaning or
interpretation of this Agreement or any provisions thereof.

         SECTION 7.6. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.

         SECTION 7.7. Counterparts; Effectiveness. This Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original (whether such counterpart is originally executed or an
electronic copy of an original) and all of which shall constitute together but
one and the same agreement. This Agreement shall become effective as of the date
first above written and be binding upon a Grantor when a counterpart hereof
executed on behalf of such Grantor shall have been received by the
Administrative Agent.

         SECTION 7.8. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK,
EXCLUDING THE LAW OF CONFLICTS BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.

         SECTION 7.9. Additional Grantors. Upon the execution and delivery by
any other Person of an instrument in the form of Annex I hereto, together with
each Schedule thereto, such Person shall become a "Grantor" hereunder with the
same force and effect as if originally named as a Grantor herein. The execution
and delivery of any such instrument shall not require the consent of any other
Grantor hereunder. The rights and obligations of each Grantor hereunder shall
remain in full force and effect notwithstanding the addition of any new Grantor
as a party to this Agreement.



                                       22
<PAGE>   23

         SECTION 7.10. Agreement Subject to Revolver Intercreditor Agreement.
Notwithstanding anything to the contrary contained herein, it is expressly
understood and agreed by the parties hereto that this Agreement shall be subject
to the terms of the Revolver Intercreditor Agreement.



                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]



                                       23
<PAGE>   24

         IN WITNESS WHEREOF, each Grantor has caused this Current Assets Secured
Parties Security Agreement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.


                                          GRANTORS:

                                          STERLING CHEMICALS, INC.



                                          By
                                            ------------------------------------
                                             Title:



                                          STERLING CANADA, INC.



                                          By
                                            ------------------------------------
                                             Title:



                                          STERLING PULP CHEMICALS US, INC.



                                          By
                                            ------------------------------------
                                             Title:



                                          STERLING PULP CHEMICALS, INC.



                                          By
                                            ------------------------------------
                                             Title:




<PAGE>   25




                                          STERLING FIBERS, INC.



                                          By
                                            ------------------------------------
                                             Title:



                                          STERLING CHEMICALS ENERGY, INC.



                                          By
                                            ------------------------------------
                                             Title:



                                          STERLING CHEMICALS INTERNATIONAL, INC.



                                          By
                                            ------------------------------------
                                             Title:


                                          ADMINISTRATIVE AGENT:


                                          THE CIT GROUP/BUSINESS CREDIT, INC.
                                          as Administrative Agent, on behalf of
                                          the Current Assets Secured Parties



                                          By
                                            ------------------------------------
                                             Title:

<PAGE>   26


                                                                       EXHIBIT A
                                                           to Security Agreement


                                                     PATENT SECURITY AGREEMENT

         This PATENT SECURITY AGREEMENT (this "Agreement"), dated as of
__________, ____, is made between _____________________, a ____________________
(the "Grantor"), and THE CIT GROUP/BUSINESS CREDIT. INC., as administrative
agent (together with any successor(s) thereto in such capacity, the
"Administrative Agent") for each of the Current Assets Secured Parties.

                                   WITNESSETH:

         WHEREAS, pursuant to a Revolving Credit Agreement, dated as of July
___, 2001 (as amended, supplemented. amended and restated or otherwise modified
from time to time, the "Credit Agreement"), among Sterling Chemicals, Inc., a
Delaware corporation, Sterling Canada, Inc., a Delaware corporation, Sterling
Pulp Chemicals US, Inc., a Delaware corporation, Sterling Pulp Chemicals, Inc.,
a Georgia corporation, Sterling Fibers, Inc., a Delaware corporation, Sterling
Chemicals Energy, Inc., a Delaware corporation, and Sterling Chemicals
International, Inc., a Delaware corporation (collectively, the "Borrowers "),
the various financial institutions as are, or may from time to time become,
parties thereto (the "Lenders") and the Administrative Agent, the Lenders and
the Issuer have extended Commitments to make Credit Extensions to the Borrowers;

         WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Current Assets Secured Parties Security Agreement,
dated as of July __, 2001 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Security Agreement");

         WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement
and pursuant to clause (e) of Section 4.5 of the Security Agreement, the Grantor
is required to execute and deliver this Agreement and to grant to the
Administrative Agent a continuing security interest in all of the Patent
Collateral (as defined below) to secure all Current Assets Obligations;

         WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce (i) the
Current Assets Lenders, the Swing Line Lender and the Issuer to make Current
Assets Loans and Swing Line Loans and issue Letters of Credit to the Borrowers
pursuant to the Credit Agreement and (ii) the Current

                                    EX. A-1

<PAGE>   27

Assets Secured Parties to enter into Rate Protection Agreements, the Grantor
agrees, for the benefit of each Current Assets Secured Party, as follows:

         SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.

         SECTION 2. Grant of Security Interest. For good and valuable
consideration. the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Current Assets Obligations, the Grantor does hereby pledge and
hypothecate to the Administrative Agent, and grant to the Administrative Agent a
security interest in. for its benefit and the benefit of each Current Assets
Secured Party, all of the following property (the "Patent Collateral"), whether
now owned or hereafter acquired or existing by it:

                  (a) all letters patent and applications for letters patent in
         the United States, including all patent applications in preparation for
         filing in the United States and including each patent and patent
         application referred to in Item A of Schedule I attached hereto;

                  (b) all reissues, divisions, continuations,
         continuations-in-part, extensions, renewals and reexaminations of
         any of the items described in clause (a);

                  (c) all patent licenses in the United States, including each
         patent license referred to in Item B of Schedule I attached hereto; and

                  (d) all proceeds of, and rights associated with, the foregoing
         (including license royalties and proceeds of infringement suits), the
         right to sue third parties for past, present or future infringements of
         any patent or patent application, referred to in clauses (a) or (b)
         above, and for breach or enforcement of any patent license referred to
         in clause (c) above.

         SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Administrative Agent in the Patent Collateral with the United States Patent
and Trademark Office. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the benefit of each Current Assets
Secured Party under the Security Agreement. The Security Agreement (and all
rights and remedies of the Administrative Agent and each Current Assets Secured
Party thereunder) shall remain in full force and effect in accordance with its
terms.

         SECTION 4. Release of Security Interest. Upon (i) the sale, transfer or
other disposition of any Patent Collateral in accordance with the Credit
Agreement or (ii) the Current Assets Termination Date, the Administrative Agent
shall, at the Grantor's expense, execute and deliver to the Grantor all
instruments and other documents as may be necessary or proper to release the
lien on and security interest in the Patent Collateral which has been granted
hereunder.

                                    Ex. A-2

<PAGE>   28

         SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Administrative Agent with respect
to the security interest in the Patent Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.

         SECTION 6. Loan Document, etc. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreement.

         SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
(whether such counterpart is originally executed or an electronic copy of an
original) and all of which shall constitute together but one and the same
agreement. This Agreement shall become effective and binding as of the date
first above written when a counterpart hereof executed on behalf of the Grantor
shall have been received by the Administrative Agent.

         SECTION 8. Agreement Subject to Revolver Intercreditor Agreement.
Notwithstanding anything to the contrary contained herein, it is expressly
understood and agreed by the parties hereto that this Agreement shall be subject
to the terms of the Revolver Intercreditor Agreement.

                                     Ex. A-3

<PAGE>   29



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.

                                           [NAME OF GRANTOR]


                                           By
                                             -----------------------------------
                                             Title:

                                           THE CIT GROUP/BUSINESS CREDIT, INC.
                                             as Administrative Agent, on behalf
                                             of the Current Assets Secured
                                             Parties


                                           By
                                             -----------------------------------
                                             Title:




                                    Ex. A-4

<PAGE>   30



                                                                      SCHEDULE I
                                                    to Patent Security Agreement


Item A.  Patents

                                 Issued Patents
<Table>
<Caption>
Patent No.         Issue Date          Inventor(s)       Title
----------         ----------          -----------       -----
<S>                <C>                <C>                <C>
</Table>



                           Pending Patent Applications
<Table>
<Caption>
Serial No.         Filing Date          Inventor(s)      Title
----------         -----------          -----------      -----
<S>                <C>                <C>                <C>
</Table>



                       Patent Applications in Preparation
<Table>
<Caption>
Docket No.          Filing Date          Expected Inventor(s)         Title
----------          -----------          --------------------         -----
<S>                 <C>                  <C>                          <C>
</Table>


Item B.  Patent Licenses

<Table>
<Caption>
                                    Effective    Expiration
Licensor      Licensee      Date      Date          Matter        Subject
--------      --------      ----    ---------    ----------       -------
<S>           <C>           <C>     <C>          <C>              <C>
</Table>







<PAGE>   31



                                                                       EXHIBIT B
                                                           to Security Agreement

                          TRADEMARK SECURITY AGREEMENT

         This TRADEMARK SECURITY AGREEMENT (this "Agreement"), dated as of
______________, ______, is made between ___________________, a _________________
(the "Grantor"), and THE CIT GROUP/BUSINESS CREDIT, INC., as administrative
agent (together with any successor(s) thereto in such capacity, the
"Administrative Agent") for each of the Current Assets Secured Parties.

                                   WITNESSETH:

         WHEREAS, pursuant to a Revolving Credit Agreement, dated as of July
___, 2001 (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Credit Agreement"), among Sterling Chemicals, Inc., a
Delaware corporation, Sterling Canada, Inc., a Delaware corporation, Sterling
Pulp Chemicals US, Inc., a Delaware corporation, Sterling Pulp Chemicals, Inc.,
a Georgia corporation, Sterling Fibers, Inc., a Delaware corporation, Sterling
Chemicals Energy, Inc., a Delaware corporation, and Sterling Chemicals
International, Inc., a Delaware corporation (collectively, the "Borrowers"), the
various financial institutions as are, or may from time to time become, parties
thereto (the "Lenders") and the Administrative Agent, the Lenders and the Issuer
have extended Commitments to make Credit Extensions to the Borrowers;

         WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Current Assets Secured Parties Security Agreement,
dated as of July ___, 2001 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Security Agreement");

         WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement
and pursuant to clause (e) of Section 4.5 of the Security Agreement, the Grantor
is required to execute and deliver this Agreement and to grant to the
Administrative Agent a continuing security interest in all of the Trademark
Collateral (as defined below) to secure all Current Assets Obligations;

         WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce (i) the
Current Assets Lenders, the Swing Line Lender and the Issuer to make Current
Assets Loans and Swing Line Loans and issue Letters of Credit to the Borrowers
pursuant to the Credit Agreement, and (ii) the Current Assets Secured Parties to
enter into Rate Protection Agreements, the Grantor agrees, for the benefit of
each Current Assets Secured Party, as follows:

                                    EX. B-1

<PAGE>   32

         SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.

         SECTION 2. Grant of Security Interest. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Current Assets Obligations, the Grantor does hereby pledge and
hypothecate to the Administrative Agent, and grant to the Administrative Agent a
security interest in, for its benefit and the benefit of each Current Assets
Secured Party, all of the following property (the "Trademark Collateral"),
whether now owned or hereafter acquired or existing by it:

                  (a) all trademarks, trade names, corporate names, company
         names, business names, fictitious business names, trade styles, service
         marks, certification marks, collective marks, logos, other source of
         business identifiers, prints and labels on which any of the foregoing
         have appeared or appear, designs and general intangibles of alike
         nature (all of the foregoing items in this clause (a) being
         collectively called a "Trademark"), now existing anywhere in the United
         States or hereafter adopted or acquired in the United States, whether
         currently in use or not, all registrations and recordings thereof and
         all applications in connection therewith, whether pending or in
         preparation for filing, including registrations, recordings and
         applications in the United States Patent and Trademark Office or in any
         office or agency of the United States of America or any State,
         including those referred to in Item A of Schedule I attached hereto;

                  (b) all Trademark licenses in the United States, including
         each Trademark license referred to in Item B of Schedule I attached
         hereto;

                  (c) all reissues, extensions or renewals of any of the items
         described in clause (a) and (b);

                  (d) all of the goodwill of the business connected with the
         use of, and symbolized by the items described in, clauses (a) and (b);
         and

                  (e) all proceeds of, and rights associated with, the
         foregoing, including any claim by the Grantor against third parties for
         past, present or future infringement or dilution of any Trademark,
         Trademark registration or Trademark license referred to in clauses (a)
         through (c) above, or for any injury to the goodwill associated with
         the use of any such Trademark or for breach or enforcement of any such
         Trademark license.

         SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Administrative Agent in the Trademark Collateral with the United States
Patent and Trademark Office. The security interest granted hereby has been
granted as a supplement to. and not in limitation of, the security interest
granted to the Administrative Agent for its benefit and the benefit of each
Current Assets Secured Party under the Security Agreement. The Security
Agreement (and all rights and remedies of the Administrative Agent and each
Current Assets Secured Party thereunder) shall remain in full force and effect
in accordance with its terms.

                                    EX. B-2

<PAGE>   33

         SECTION 4. Release of Security Interest. Upon (i) the sale, transfer or
other disposition of any Trademark Collateral in accordance with the Credit
Agreement or (ii) the Current Assets Termination Date, the Administrative Agent
shall, at the Grantor's expense, execute and deliver to the Grantor all
instruments and other documents as may be necessary or proper to release the
lien on and security interest in the Trademark Collateral which has been granted
hereunder.

         SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Administrative Agent with respect
to the security interest in the Trademark Collateral granted hereby are more
fully set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.

         SECTION 6. Loan Document, etc. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreement.

         SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
(whether such counterpart is originally executed or an electronic copy of an
original) and all of which shall constitute together but one and the same
agreement. This Agreement shall become effective and binding as of the date
first above written when a counterpart hereof executed on behalf of the Grantor
shall have been received by the Administrative Agent.

         SECTION 8. Agreement Subject to Revolver Intercreditor Agreement.
Notwithstanding anything to the contrary contained herein, it is expressly
understood and agreed by the parties hereto that this Agreement shall be subject
to the terms of the Revolver Intercreditor Agreement.

                                    EX. B-3


<PAGE>   34



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.


                                       [NAME OF GRANTOR]


                                       By
                                         ---------------------------------------
                                         Title:

                                       THE CIT GROUP/BUSINESS CREDIT, INC. as
                                         Administrative Agent, on behalf of the
                                         Current Assets Secured Parties


                                       By
                                         ---------------------------------------
                                         Title:


                                    EX. B-4


<PAGE>   35



                                                                      SCHEDULE I
                                                 to Trademark Security Agreement

Item A.  Trademarks

                              Registered Trademarks

<Table>
<Caption>
Trademark                Registration No.                 Registration Date
---------                ----------------                 -----------------
<S>                      <C>                              <C>
</Table>

                         Pending Trademark Applications

<Table>
<Caption>
Trademark                 Serial No.                         Filing Date
---------                 ----------                         -----------
<S>                       <C>                                <C>
</Table>


                      Trademark Applications in Preparation

<Table>
<Caption>
                                                              Expected Products/
Trademark            Docket No.            Filing Date        Services
---------            ----------            -----------        ------------------
<S>                  <C>                   <C>                <C>
</Table>


Item B.  Trademark Licenses

<Table>
<Caption>
Trademark       Licensor       Licensee       Effective Date      Expiration Date
---------       --------       --------       --------------      ---------------
<S>             <C>            <C>            <C>                 <C>
</Table>







<PAGE>   36



                                                                       EXHIBIT C
                                                           to Security Agreement

                          COPYRIGHT SECURITY AGREEMENT

         This COPYRIGHT SECURITY AGREEMENT (this "Agreement"), dated as of
_____________, _____, is made between __________________, a ___________________
(the "Grantor"), and THE CIT GROUP/BUSINESS CREDIT. INC., as administrative
agent (together with any successor(s) thereto in such capacity, the
"Administrative Agent") for each of the Current Assets Secured Parties.

                                   WITNESSETH:

         WHEREAS, pursuant to a Revolving Credit Agreement, dated as of July __,
2001 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "Credit Agreement"), among Sterling Chemicals, Inc., a
Delaware corporation, Sterling Canada, Inc., a Delaware corporation, Sterling
Pulp Chemicals US, Inc., a Delaware -corporation, Sterling Pulp Chemicals, Inc.,
a Georgia corporation, Sterling Fibers, Inc., a Delaware corporation, Sterling
Chemicals Energy, Inc., a Delaware corporation, and Sterling Chemicals
International, Inc., a Delaware corporation (collectively, the "Borrowers"), the
various financial institutions as are, or may from time to time become, parties
thereto (the "Lenders") and the Administrative Agent, the Lenders and the Issuer
have extended Commitments to make Credit Extensions to the Borrowers;

         WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Current Assets Secured Parties Security Agreement,
dated as of July ___, 2001 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Security Agreement");

         WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement
and pursuant to clause (e) of Section 4.5 of the Security Agreement, the Grantor
is required to execute and deliver this Agreement and to grant to the
Administrative Agent a continuing security interest in all of the Copyright
Collateral (as defined below) to secure all Current Assets Obligations;

         WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce (i) the
Current Assets Lenders, the Swing Line Lender and the Issuer to make Current
Assets Loans and Swing Line Loans and issue Letters of Credit to the Borrowers
pursuant to the Credit Agreement, and (ii) the Current Assets Secured Parties to
enter into Rate Protection Agreements, the Grantor agrees, for the benefit of
each Current Assets Secured Party, as follows:

                                    EX. C-1

<PAGE>   37

         SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.

         SECTION 2. Grant of Security Interest. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Current Assets Obligations, the Grantor does hereby pledge and
hypothecate to the Administrative Agent, and grant to the Administrative Agent a
security interest in, for its benefit and the benefit of each Current Assets
Secured Party, all of the following property (the "Copyright Collateral"),
whether now owned or hereafter acquired or existing by it, being all copyrights
of the Grantor, whether statutory or common law, registered or unregistered, now
or hereafter in force in the United States including all of the Grantor's right,
title and interest in and to all copyrights registered in the United States
Copyright Office and also including the copyrights referred to in Item A of
Schedule I attached hereto, and all applications for registration thereof,
whether pending or in preparation, all copyright licenses in the United States,
including each copyright license referred to in Item B of Schedule I attached
hereto, the right to sue for past, present and future infringements of any
thereof, all rights corresponding thereto in the United States, all extensions
and renewals of any thereof and all proceeds of the foregoing, including
licenses, royalties, income, payments, claims, damages and proceeds of suit.

         SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Administrative Agent in the Copyright Collateral with the United States
Copyright Office. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the benefit of each Current Assets
Secured Party under the Security Agreement. The Security Agreement (and all
rights and remedies of the Administrative Agent and each Current Assets Secured
Party thereunder) shall remain in full force and effect in accordance with its
terms.

         SECTION 4. Release of Security Interest. Upon (i) the sale, transfer or
other disposition of any Copyright Collateral in accordance with the Credit
Agreement or (ii) the Current Assets Termination Date, the Administrative Agent
shall, at the Grantor's expense, execute and deliver to the Grantor all
instruments and other documents as may be necessary or proper to release the
lien on and security interest in the Copyright Collateral which has been granted
hereunder.

         SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Administrative Agent with respect
to the security interest in the Copyright Collateral granted hereby are more
fully set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.

         SECTION 6. Loan Document, etc. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreement.

                                    EX. C-2

<PAGE>   38

         SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
(whether such counterpart is originally executed or an electronic copy of an
original) and all of which shall constitute together but one and the same
agreement. This Agreement shall become effective and binding as of the date
first above written when a counterpart hereof executed on behalf of the Grantor
shall have been received by the Administrative Agent.

         SECTION 8. Agreement Subject to Revolver Intercreditor Agreement.
Notwithstanding anything to the contrary contained herein, it is expressly
understood and agreed by the parties hereto that this Agreement shall be subject
to the terms of the Revolver Intercreditor Agreement.


                                    EX. C-3

<PAGE>   39



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.

                                      [NAME OF GRANTOR]


                                      By
                                        ---------------------------------------
                                        Title:

                                      THE CIT GROUP/BUSINESS CREDIT, INC. as
                                        Administrative Agent, on behalf of the
                                        Current Assets Secured Parties


                                      By
                                        ---------------------------------------
                                        Title:


                                    EX. C-4

<PAGE>   40



                                                                      SCHEDULE I
                                                 to Copyright Security Agreement

Item A.  Copyrights

                              Registered Copyrights

<Table>
<Caption>
Registration No.     Registration Date       Author(s)            Title
----------------     -----------------       ---------            -----
<S>                  <C>                     <C>                 <C>
</Table>


                   Copyright Pending Registration Applications

<Table>
<Caption>
Serial No.       Filing Date         Author(s)            Title
----------       -----------         ---------            -----
<S>              <C>                 <C>                  <C>
</Table>


               Copyright Registration Applications in Preparation

<Table>
<Caption>
Docket No.       Filing Date         Expected Author(s)   Title
----------       -----------         ------------------   -----
<S>              <C>                 <C>                  <C>
</Table>




Item B.  Copyright Licenses

<Table>
<Caption>
Licensor      Licensee      Effective Date       Expiration Date     Subject Matter
--------      --------      --------------       ---------------     --------------
<S>           <C>           <C>                  <C>                <C>
</Table>







<PAGE>   41



                                                                         ANNEX I
                                                           to Security Agreement


                        SUPPLEMENT TO SECURITY AGREEMENT

         THIS SUPPLEMENT NO. ___, dated as of ______________, ____ (this
"Supplement"), to the Current Assets Secured Parties Security Agreement, dated
as of July ___, 1999 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Security Agreement"), among the
initial signatories thereto and each other Person which from time to time
thereafter became a party thereto pursuant to Section 7.9 thereof (each,
individually, a "Grantor", and, collectively, the "Grantors"), and THE CIT
GROUP/BUSINESS CREDIT, INC., as Administrative Agent for each of the Current
Assets Secured Parties (such capitalized term and all other capitalized terms
being used herein with the meanings provided, or incorporated by reference, in
the Security Agreement), is made by the undersigned.

                                   WITNESSETH:

         WHEREAS, pursuant to a Revolving Credit Agreement, dated as of July __,
2001 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "Credit Agreement"), among Sterling Chemicals, Inc., a
Delaware corporation, Sterling Canada, Inc., a Delaware corporation, Sterling
Pulp Chemicals US, Inc., a Delaware corporation, Sterling Pulp Chemicals, Inc.,
a Georgia corporation, Sterling Fibers, Inc., a Delaware corporation, Sterling
Chemicals Energy, Inc., a Delaware corporation, and Sterling Chemicals
International, Inc., a Delaware corporation (collectively, the "Borrowers"), the
various financial institutions as are, or may from time to time become, parties
thereto (the "Lenders") and the Administrative Agent, the Lenders and the Issuer
have extended Commitments to make Credit Extensions to the Borrowers;

         WHEREAS, as a condition precedent to the making and maintenance of the
Credit Extensions under the Credit Agreement, the undersigned is required to
execute and deliver this Supplement;

         WHEREAS, the undersigned has duly authorized the execution, delivery
and performance of this Supplement and the Security Agreement;

         WHEREAS, the Security Agreement provides that additional parties may
become Grantors under the Security Agreement by execution and delivery of an
instrument in the form of this Supplement;

         WHEREAS, pursuant to the provisions of Section 7.9 of the Security
Agreement, the undersigned is becoming a Grantor under the Security Agreement;
and

         WHEREAS, the undersigned desires to become a Grantor under the Security
Agreement in order to induce the Current Assets Secured Parties to continue to
make and maintain Current



                                   ANNEX I-1
<PAGE>   42

Assets Loans and Swing Line Loans and issue and maintain Letters of Credit under
the Credit Agreement as consideration therefor:

         NOW, THEREFORE, the undersigned agrees, for the benefit of each Current
Assets Secured Party, as follows:

         SECTION 1. In accordance with the Security Agreement, the undersigned
by its signature below becomes a Grantor under the Security Agreement with the
same force and effect as if it were an original signatory thereto as a Grantor.
In furtherance of the foregoing, each reference to a "Grantor" in the Security
Agreement shall be deemed to include the undersigned and the Schedules hereto
shall be deemed to be Schedules thereto.

         SECTION 2. The undersigned hereby represents and warrants that this
Supplement has been duly authorized, executed and delivered by the undersigned
and constitutes a legal, valid and binding obligation of the undersigned,
enforceable against it in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and general equitable
principles.

         SECTION 3. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect in accordance with its terms.

         SECTION 4. Any provision of this Supplement which is prohibited or
unenforceable in any jurisdiction shall, as to such provision and such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Supplement or affecting the validity or enforceability of such provision in any
other jurisdiction.

         SECTION 5. Without limiting the provisions of the Credit Agreement (or
any other Loan Document, including the Security Agreement), the undersigned
agrees to reimburse the Administrative Agent for its reasonable out-of-pocket
expenses in connection with this Supplement, including reasonable attorneys'
fees and expenses of the Administrative Agent.

         SECTION 6. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCLUDING THE LAW OF
CONFLICTS BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS, EXCEPT
TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

         SECTION 7. This Supplement hereby incorporates by reference the
provisions of the Security Agreement, which provisions are deemed to be a part
hereof, and this Supplement shall be deemed to be a part of the Security
Agreement.

         SECTION 8. This Supplement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original (whether
such counterpart is


                                   ANNEX I-2

<PAGE>   43

originally executed or an electronic copy of an original) and all of which shall
constitute together but one and the same agreement. This Supplement shall become
effective and binding as of the date first above written when a counterpart
hereof executed on behalf of the Grantor shall have been received by the
Administrative Agent.

         IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.

                                                [NAME OF ADDITIONAL GRANTOR]


                                                BY
                                                  ------------------------------
                                                  Title:

ACKNOWLEDGED AND ACCEPTED BY:

THE CIT GROUP/BUSINESS CREDIT, INC.
as Administrative Agent, on behalf of the
Current Assets Secured Parties


By
  ----------------------------------------
  Title:


                                   ANNEX I-3

<PAGE>   44




                                                                      SCHEDULE I
                                                            to Supplement No. __
                                                           to Security Agreement
                                                  ([NAME OF ADDITIONAL GRANTOR])


Perfection Certificate

                      See Exhibit M to the Credit Agreement




<PAGE>   45



                                                                     SCHEDULE II
                                                            to Supplement No. __
                                                           to Security Agreement
                                                  ([NAME OF ADDITIONAL GRANTOR])


Item A.  Patents

                                 Issued Patents
<Table>
<Caption>
Patent No.     Issue Date      Inventor(s)     Title
----------     ----------      -----------     -----
<S>            <C>             <C>             <C>
</Table>


                           Pending Patent Applications

<Table>
<Caption>
Serial No.     Filing Date     Inventor(s)      Title
----------     -----------     -----------      -----
<S>            <C>             <C>              <C>
</Table>


                       Patent Applications in Preparation

<Table>
<Caption>
Docket No.     Filing Date      Expected Inventor(s)         Title
----------     -----------      --------------------         -----
<S>            <C>              <C>                          <C>
</Table>


Item B.  Patent Licenses

<Table>
<Caption>
Licensor     Licensee      Effective Date   Expiration Matter   Subject Matter
--------     --------      --------------   -----------------   --------------
<S>          <C>           <C>              <C>                 <C>

</Table>






<PAGE>   46




                                                                    SCHEDULE III
                                                            to Supplement No. __
                                                           to Security Agreement
                                                  ([NAME OF ADDITIONAL GRANTOR])


Item A.  Trademarks

                              Registered Trademarks

<Table>
<Caption>
Trademark                       Registration No.             Registration Date
---------                       ----------------             -----------------
<S>                             <C>                          <C>
</Table>


                         Pending Trademark Applications

<Table>
<Caption>
Trademark                       Serial No.                   Filing Date
---------                       ----------                   -----------
<S>                             <C>                          <C>
</Table>

                      Trademark Applications in Preparation

<Table>
<Caption>
                                                               Expected Products/
Trademark          Docket No.         Filing Date              Services
---------          ----------         -----------              ------------------
<S>                <C>                <C>                      <C>
</Table>


Item B.  Trademark Licenses

<Table>
<Caption>
Trademark     Licensor       Licensee    Effective Date     Expiration Date
---------     --------       --------    --------------     ---------------
<S>           <C>           <C>          <C>                <C>
</Table>







<PAGE>   47




                                                                     SCHEDULE IV
                                                            to Supplement No. __
                                                           to Security Agreement
                                                  ([NAME OF ADDITIONAL GRANTOR])

Item A.  Copyrights

                              Registered Copyrights

<Table>
<Caption>
Registration No.      Registration Date       Author(s)          Title
----------------      -----------------       ---------          -----
<S>                   <C>                     <C>                <C>
</Table>


                   Copyright Pending Registration Applications

<Table>
<Caption>
Serial No.             Filing Date             Author(s)          Title
----------             -----------             ---------          -----
<S>                    <C>                     <C>                <C>
</Table>


               Copyright Registration Applications in Preparation

<Table>
<Caption>
Docket No.             Filing Date            Expected Author(s)   Title
----------             -----------            ------------------   -----
<S>                    <C>                    <C>                  <C>
</Table>


Item B.  Patent Licenses

<Table>
<Caption>
Licensor        Licensee         Effective Date        Expiration Date     Subject Matter
--------        --------         --------------        ---------------     --------------
<S>             <C>              <C>                   <C>                 <C>
</Table>








<PAGE>   48



                                                                      SCHEDULE V
                                                            to Supplement No. __
                                                           to Security Agreement
                                                  ([NAME OF ADDITIONAL GRANTOR])



                        Trade Secret or Know-How Licenses

<Table>
<Caption>
Licensor       Licensee       Effective Date      Expiration Date     Subject Matter
--------       --------       --------------      ---------------     --------------
<S>            <C>            <C>                 <C>                 <C>
</Table>