##### 



EXECUTION COPY
  NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE
COLLATERAL AGENT, FOR THE RATABLE BENEFIT OF SECURED PARTIES, PURSUANT TO THIS AGREEMENT AND THE
EXERCISE OF ANY RIGHT OR REMEDY BY THE COLLATERAL AGENT AND THE OTHER SECURED PARTIES HEREUNDER
WITH RESPECT TO THE SECOND LIEN COLLATERAL (AS DEFINED IN THE INTERCREDITOR AGREEMENT DESCRIBED
BELOW), ARE SUBJECT TO THE PROVISIONS OF SUCH INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY
CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT
WITH RESPECT TO THE SECOND LIEN COLLATERAL, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL
CONTROL. SEE SECTION 7.10.
 SECURITY AGREEMENT
 Agreement Company Energy Article I Guarantor Guarantors Grantors Collateral Agent
 RECITALS
 Indenture Trustee 1 4 1 4 Notes
 Credit Agreement Lenders Administrative Agent




---



##### 



Intercreditor Agreement
 Secured
Obligations
     
 Certain Terms
 Administrative Agent recital B
 Agreement preamble
 CFC
 Collateral Section 2.1
 2




---



##### 



Collateral Agent
 Company preamble
 Computer Hardware and Software Collateral
  clause (a)
  clauses (a) (c)
  Control Agreement
 Copyright Collateral
 3




---



##### 



Credit Agreement recital B
 Energy preamble
 Excluded Collateral
    Governmental Authority
 Grantors preamble
 Guarantor Guarantors preamble
 Indenture recital A
 Intellectual Property Collateral
 Intercreditor Agreement recital C
 Material Adverse Effect
 4




---



##### 



Lenders recital B
 Notes recital A
 Patent Collateral
  clause (a)
  clauses (a) (b) clause (c)
 Receivable
 Secured Obligations recital D
 Termination Date
 Trademark Collateral
 clause (a) Trademark
 5




---



##### 



clauses
(a) (b)
 clauses (a) (c)
 clauses (a) (c)
 Trade Secrets Collateral Trade
Secret
 Trustee recital A
 U.C.C.
 Indenture Definitions
 U.C.C. Definitions
 
 6




---



##### 



Grant of Security Collateral
              7




---



##### 



Security for Secured Obligations
 Continuing Security Interest
    clause (c) Section 4.23 provided Section
2.3 Section 6.3
 8




---



##### 



Grantor Remains Liable
    Security Interest Absolute
      9




---



##### 



Postponement of Subrogation, etc provided however
    10




---



##### 



Representations and Warranties Article III
 Location of Collateral, etc Item 3 Item 3 Item
3 Item
1(d) Item 1(a) Item 1(c) Section 4.6 Item 13
 Ownership, No Liens, etc
 Possession and Control
 Negotiable Documents, Instruments and Chattel Paper
 Intellectual Property Collateral
 11




---



##### 



Validity, etc Section 3.8(b)
 Authorization, Approval, etc
 12




---



##### 



Due Authorization; Enforceability
 No Conflicts
 Existing Indenture
  Compliance with Laws
 Commercial Tort Claims
 
 Certain Covenants Article IV
 13




---



##### 



As to Equipment and Inventory
 Section 3.2 Article III first
sentence Section 4.6
   As to Receivables Section 3.5 Section 4.6(a) Section 3.2 Section 3.2 first sentence Section 4.6
   14




---



##### 



As to Collateral
  15




---



##### 



As to Intellectual Property Collateral
   clauses (a) (b)
 16




---



##### 



Further Assurances, etc
     17




---



##### 



inter alia inter alia
 Insurance
   Commercial Tort Claims
 
 Collateral Agent Appointed Attorney-in-Fact
 18




---



##### 



clause (a)
  Section 4.6
  Collateral Agent May Perform Section 6.3
 Collateral Agent Has No Duty
   Action Under Agreement provided Section
7.2
 19




---



##### 



Reasonable Care provided
 
 Certain Remedies
   20




---



##### 



21




---



##### 



Section 6.1(c) provided
 Compliance with Restrictions
 Indemnity and Expenses
       22




---



##### 



Collateral Document
 Amendments; etc
 Protection of Collateral
 Addresses for Notices
 Headings
 Severability
 Counterparts; Effectiveness
 23




---



##### 



Governing Law THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
 Additional Grantors Annex I
 Intercreditor Agreement .
 (a) The Liens granted hereunder in favor of the Collateral Agent for the benefit of the
Secured Parties with respect to any Second Lien Collateral (as defined in the Intercreditor
Agreement) and the exercise of any right related thereto thereby shall be subject, in each case, to
the terms of the Intercreditor Agreement.
 (b) In the event of any direct conflict between the express terms and provisions of this
Agreement and of the Intercreditor Agreement with respect to any Second Lien Collateral, the terms
and provisions of the Intercreditor Agreement shall control until the Discharge of First Lien
Obligations (as defined in the Intercreditor Agreement) shall have occurred.
 (c) Notwithstanding anything to the contrary herein, any provision hereof that requires any
Grantor to (i) deliver any Second Lien Collateral to the Collateral Agent or (ii) provide that the
Collateral Agent have control over such Second Lien Collateral may be satisfied by (A) the delivery
of such Second Lien Collateral by such Grantor to the First Lien Agent (as defined in the
Intercreditor Agreement) for the benefit of the First Lien Secured Parties (as defined in the
Intercreditor Agreement) and the Collateral Agent for the benefit of the Secured Parties pursuant
to Article V of the Intercreditor Agreement and (B) providing that the First Lien Agent be provided
with control with respect to such Second Lien Collateral of such Grantor for the benefit of the
First Lien Secured Parties and the Collateral Agent for the benefit of Secured Parties pursuant to
Article V of the Intercreditor Agreement.
 [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
 24




---



##### 



GRANTORS:STERLING CHEMICALS, INC.ByName:
    
    Paul G. VanderhovenTitle:
    
    Senior Vice President  Finance and Chief
Financial OfficerSTERLING CHEMICALS ENERGY, INC.ByName:
    
    Paul G. VanderhovenTitle:
    
    Vice President
 Signature Page to Security Agreement




---



##### 



COLLATERAL AGENT:U. S. BANK NATIONAL ASSOCIATION, as 
     Collateral
Agent, on behalf of the Secured PartiesByName:Title:
 Signature Page to Security Agreement




---



##### 



Perfection Information for Grantor
 Names and Business Qualifications
 Jurisdictions WhereOrganizational
    
    Qualified to TransactJurisdiction of
    
    Identification
    
    Business as a ForeignName
    
    Incorporation
    
    Number
    
    CorporationSterling Chemicals, Inc.
    
    Delaware
    
    
    2622672
    
    
    TexasSterling Chemicals
Energy, Inc.
    
    Delaware
    
    
    2196747
    
    
    Texas




---



##### 



Taxpayer Identification Numbers
 Taxpayer IdentificationName
    
    NumberSterling Chemicals, Inc.
    
    76-0502785Sterling Chemicals Energy, Inc.
    
    76-0326761
 Current Locations
 
  Name
    
    Office LocationSterling Chemicals, Inc.
    
    333 Clay Street, Suite 3600
Houston, Texas 77002-4109
201 Bay Street South
P. O. Box 1311
Texas City, Texas 77590Sterling Chemicals Energy, Inc.
    
    333 Clay Street, Suite 3600
Houston, Texas 77002-4109
201 Bay Street South
P. O. Box 1311
Texas City, Texas 77590
  Name, Address and TelephoneGrantor
    
    Number of Bank
    
    Account Number
    
    Contact PersonSterling Chemicals, Inc.
    
    JPMorgan Chase Bank, N.A.
    
    001-033-16882
    
    Desiree ONeillP.O. Box 2558
    
    Disbursement Acct.Houston, TX 77252




---



##### 



Name, Address and TelephoneGrantor
    
    Number of Bank
    
    Account Number
    
    Contact PersonJPMorgan Chase Bank, N.A.
    
    001-018-24317Receipt Acct  WiresJPMorgan Chase Bank, N.A.
    
    001-034-05743Payroll Acct.JPMorgan Chase Bank, N.A.
    
    001-034-13978General AccountJPMorgan Chase Bank, N.A.
    
    Lockbox 88852JPMorgan Chase Bank, N.A.
    
    063-000-65581A/P Control Disb. Acct.JPMorgan Chase Bank, N.A.
    
    001-034-13945Money Market AccountJPMorgan Chase Bank, N.A.
    
    36000164601 Travis St; 18th Floor
    
    Overnight InvestmentsHouston, TX 77002Sterling
    
    JPMorgan Chase Bank, N.A.
    
    001-018-18459
    
    Desiree ONeillChemicals
    
    P.O. Box 2558
    
    Depository Acct.Energy, Inc.
    
    Houston, TX 77252JPMorgan Chase Bank, N.A.
    
    001-033-17203Disbursement
  Address and
    
    Nature of real
    
    Lessors namecounty of real
    
    property
    
    and address
    
    
    
    ApproximaGrantor Name
    
    property
    
    interest
    
    (if applicable)
    
    Use
    
    te valueSterling Chemicals,
Inc.
    
    201 Bay 
Street
South,
    
    Petrochemical
Facility
    
    N/A
    
    Manufacture
Commodity
Petrochemicals
    
    Land -
Unknown
Plant &
Equipment  Unknown
Inventory  $68MTexas City, 
TX 77590
Galveston County,
TX*




---



##### 



Address and
    
    Nature of real
    
    Lessors namecounty of real
    
    property
    
    and address
    
    
    
    ApproximaGrantor Name
    
    property
    
    interest
    
    (if applicable)
    
    Use
    
    te value333 Clay Street, Suite 3600
Houston, TX 
77002

None.
    
    Corporate Office
    
    Brookfield
Properties
    
    Corporate Office
    
    N/ASterling Chemicals
Energy, Inc.
    
    
    
    
    Management, LLC 
1200 Smith Street
Suite 1200

Houston, TX 77002
 
 *
    
    A portion of this property is leased from Texas City Railroad Company.      not identified above
 Grantor Name
    
    Equipment
    
    InventorySterling Chemicals, Inc.
    
    One rotor 920EG200 in
    
    Nonestorage #S-2877Leased from HickhamIndustries, Inc.11518 Old La Porte Road
LaPorte, TX 77571One drive Motor(89908P16MD-1 spare motor)*Leased from GraysonArmature Works1205 S. WitterPasadena, TX 77506




---



##### 



Grantor Name
    
    Equipment
    
    InventorySterling Chemicals Energy, Inc.
    
    201 Bay Street South
    
    NoneTexas City, TX 77590 -turbo generatorApproximate value $5M
 
 *
    
    This drive motor is presently at Grayson to be reconditioned and then will be stored
there in a controlled environment.   e.g.
  Intentionally deleted
 Consigned Inventory 0.00
 Inventory Located Outside of U.S. 0.00
 Method of Shipment of Inventory e.g etc
 
 Unusual Transactions




---



##### 



Government Contracts
  Patents Schedule 10
      Trademarks Schedule 11
 Registered Trademarks




---



##### 



Copyrights Schedule 12
 Copyrights
        Copyright Applications:
      Investment Property Schedule 13
 Material Contract Rights Schedule 14




---



##### 








---



##### 



Schedule 10
 Patents and Patent Applications




---



##### 



Schedule 11
 Trademarks and Trademark Applications
 REGISTERED TRADEMARKS
 OWNER
    
    COUNTRY
    
    REG. NO.
    
    MARK
    
    GOODS/SERVICE CLASS
    
    REG. DATESterling Chemicals, Inc.
    
    United States
    
    
    1,568,816
    
    
    Sterling Chemicals
and S. Logo
    
    Manufacturing of
Petrochemicals for
others  C1.37
    
    11/28/1989Sterling Chemicals, Inc.
    
    United States
    
    
    2,110,534
    
    
    Sterling
    
    Manufacturing of
Petrochemicals to
the order of others
- C1.40
    
    11/4/1997Sterling Chemicals, Inc.
    
    United States
    
    
    2,189,412
    
    
    SM: S Logo
    
    Manufacturing of
Petrochemicals to
the order of others
    
    9/15/1998




---



##### 



PENDING TRADEMARK APPLICATIONS
 OWNER
    
    COUNTRY
    
    APPLICATION NO.
    
    MARK
    
    GOODS/SERVICE CLASS
    
    APPLICATION DATENone




---



##### 



Schedule 12
 Copyrights and Copyright Applications




---



##### 



Schedule 13
 Investment Property
 Certificated
    
    107,418 shares of Series A-1 Preferred Stock of ChemConnect, Inc.
    
    Yes þ No o
    
    50% interest in S&L Cogeneration Company
    
    Yes o No þ
    
    2,500 shares of Common Stock of Primex, Ltd.
    
    Yes þ No o
    
    4,164 shares of Series A Preferred Stock of Primex, Ltd.
    
    Yes þ No o
    
    1 share of Series C Preferred Stock of Primex, Ltd. (can be converted to
Series B which is for prospective dividends for $1,000 per share when board
declares dividend from excess reserves)
    
    Yes þ No o
    
    2 shares of common stock of Georgia Gulf Corporation
    
    Yes þ No o
    
    10 shares of common stock of Monsanto Company
(being reissued to Sterling in current share amounts by Pfizer Inc.)
    
    Yes þ No o
    
    2 shares of common stock of Chevron Corporation
    
    Yes þ No o




---



##### 



Schedule 14
 Material Contract Rights, Franchises and Licenses
  Material Contracts
 1.
    
    Second Amended and Restated Plasticizers Production Agreement dated January 1, 2006 between
BASF Corporation and Sterling Chemicals, Inc., as amended.2.
    
    License Agreement dated August 1, 1986, between Monsanto Company and Sterling Chemicals, Inc.3.
    
    Second Amended and Restated Production Agreement dated effective as of August 1, 1996,
between BP Chemicals Inc. and Sterling Chemicals, Inc., as amended.4.
    
    Amended and Restated Product Supply Agreement, dated January 1, 2006 between Praxair Hydrogen
Supply, Inc. and Sterling Chemicals, Inc., as amended by Second Amendment to Utilities
Agreement dated as of July 1, 2006, as amended.5.
    
    Acetic Acid Technology Agreement, dated December 30, 1997, among Sterling Chemicals, Inc., BP
Chemicals, Ltd., BP Chemicals Inc. and Sterling Chemicals, Inc.




---



##### 



Supplement Security Agreement Company Energy Section 7.9 Guarantor Guarantors Grantors U.S. Bank    Additional Grantor
 RECITALS
 Indenture Trustee 1 4 1 4 Notes




---



##### 



Section 7.9
   Section 7.9 Additional Collateral
   [all Commercial Tort Claims described on Schedule I attached hereto
 ] 1
      
 1
    
    Item to be deleted if the Additional Grantor
does not have any Commercial Tort Claims.




---



##### 



Article III




---



##### 








---



##### 



[NAME OF ADDITIONAL GRANTOR]ByName:Title:
  
 ByName:Title:




---



##### 



Commercial Tort Claims] 2
 
 2
    
    This Schedule to be deleted if the
Additional Grantor does not have any Commercial Tort Claims




---



##### 



[I][II]
 Perfection Information for Additional Grantor
 Names and Business Qualifications
 Jurisdictions WhereOrganizational
    
    Qualified to TransactJurisdiction of
    
    Identification
    
    Business as a ForeignName
    
    Incorporation
    
    Number
    
    Corporation
    Taxpayer Identification Numbers
 Current Locations




---



##### 



not identified above
  e.g.
 Intentionally Omitted
 Consigned Inventory
 Inventory Located Outside of U.S.
 Method of Shipment of Inventory e.g etc
 Unusual Transactions
 Government Contracts
 Patents




---



##### 



Trademarks
 Registered Trademarks
       Trademark Applications
      Copyrights
 Copyrights




---



##### 



Copyright Applications:
      Investment Property
 Material Contract Rights