##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 x
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended March 31, 2007
  o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from                    to
 Commission File Number 000-50132
 
 Sterling Chemicals, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware(State or other jurisdiction of 
incorporation or organization)
    
    76-0502785(IRS Employer Identification No.)333 Clay Street, Suite 3600
Houston, Texas 77002-4109(Address of principal executive offices)
    
    (713) 650-3700(Registrants telephone number,
including area code)
 þ o
 o o þ
 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
 þ o
 o þ




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IMPORTANT INFORMATION REGARDING THIS FORM 10-Q
   Forward-Looking Statements
  
    
    the cyclicality of the petrochemicals industry;
    
    current and future industry conditions and their effect on our results of operations or financial position;
    
    the extent, timing and impact of expansions of production capacity of our
products, by us or by our competitors;
    
    the potential effects of market and industry conditions and cyclicality on our
competitiveness, business strategy, results of operations or financial position;
    
    the adequacy of our liquidity;
    
    our environmental management programs and safety initiatives;
    
    our market sensitive financial instruments;
    
    future uses of, and requirements for, financial resources;
    
    future contractual obligations;
    
    future amendments, renewals or terminations of existing contractual relationships;
    
    business strategies;
    
    growth opportunities;
    
    competitive position;
    
    expected financial position;
    
    future cash flows or dividends;
    
    budgets for capital and other expenditures;
    
    plans and objectives of management;
    
    outcomes of legal proceedings;
    
    compliance with applicable laws;
    
    our reliance on marketing partners;
    
    adequacy of insurance coverage or indemnification rights;
    
    the timing and extent of changes in commodity prices for our products or raw materials;
    
    petrochemicals industry production capacity or operating rates;
    
    increases in the cost of, or our ability to obtain, raw materials or energy;
    
    regulatory initiatives and compliance with governmental laws or regulations,
including environmental laws or regulations;
    
    customer preferences;
    
    our ability to attract or retain high quality employees;
    
    operating hazards attendant to the petrochemicals industry;
    
    casualty losses, including those resulting from weather related events;
    
    changes in foreign, political, social or economic conditions;
    
    risks of war, military operations, other armed hostilities, terrorist acts or embargoes;
    
    changes in technology, which could require significant capital expenditures in
order to maintain competitiveness or could cause existing manufacturing processes to
become obsolete;
    
    cost, availability or adequacy of insurance; and
    
    various other matters, many of which are beyond our control.
 i




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Document Summaries
  Access to Filings
  ii




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##### 



STERLING CHEMICALS, INC.
INDEX
 PagePART I. FINANCIAL INFORMATIONItem 1.
    
    Financial Statements
    
    
    2Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    16Item 4.
    
    Controls and Procedures
    
    
    16PART II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    18Item 5.
    
    Amendment of Bylaws
    
    
    18Item 6.
    
    Exhibits
    
    
    18
 1




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##### 



PART I.
FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 STERLING CHEMICALS, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three months endedMarch 31,2007
    
    
    2006(Unaudited)(Dollars in Thousands,except share data)Revenues
    
    $
    197,120
    
    
    $
    136,670Cost of goods sold
    
    
    186,956
    
    
    
    148,523Gross profit (loss)
    
    
    10,164
    
    
    
    (11,853
    )Selling, general and administrative expenses.
    
    
    3,556
    
    
    
    679Other (income) expense
    
    
    
    
    
    
    (387
    )Interest and debt related expenses, net of
interest income
    
    
    3,385
    
    
    
    2,388Income (loss) from continuing operations
before income tax
    
    
    3,223
    
    
    
    (14,533
    )Benefit for income taxes
    
    
    
    
    
    
    (5,398
    )Income (loss) from continuing operations
    
    $
    3,223
    
    
    $
    (9,135
    )Loss from discontinued operations (net of
tax benefit of zero and $720, respectively)
    
    
    (554
    )
    
    
    (1,254
    )Net income (loss)
    
    $
    2,669
    
    
    $
    (10,389
    )Preferred stock dividends
    
    
    2,260
    
    
    
    1,932Net income (loss) attributable to common
stockholders
    
    $
    409
    
    
    $
    (12,321
    )Income (loss) per share of common stock,
basic and diluted:Income (loss) from continuing operations
    
    $
    0.34
    
    
    $
    (3.91
    )Loss from discontinued operations, net of tax
    
    
    (0.20
    )
    
    
    (0.45
    )Earnings (loss) per share, basic and diluted.
    
    $
    0.14
    
    
    $
    (4.36
    )Weighted average shares outstanding:Basic and diluted
    
    
    2,828,460
    
    
    
    2,828,466
  2




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##### 



STERLING CHEMICALS, INC.
 CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31,
    
    
    December 31,2007
    
    
    2006(Unaudited)(Dollars in Thousands)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    68,342
    
    
    $
    20,690Restricted cash
    
    
    44,146
    
    
    
    Accounts receivable, net of allowance of $1,498 and $1,987,
respectively
    
    
    45,343
    
    
    
    63,289Inventories, net
    
    
    57,823
    
    
    
    62,078Prepaid expenses
    
    
    2,097
    
    
    
    3,215Deferred tax asset
    
    
    3,044
    
    
    
    3,044Assets of discontinued operations
    
    
    
    
    
    
    20Total current assets
    
    
    220,795
    
    
    
    152,336Property, plant and equipment, net
    
    
    83,569
    
    
    
    83,833Other assets, net
    
    
    16,860
    
    
    
    9,654Total assets
    
    $
    321,224
    
    
    $
    245,823LIABILITIES AND STOCKHOLDERS DEFICIENCY IN ASSETSCurrent liabilities:Accounts payable
    
    $
    25,600
    
    
    $
    39,123Accrued liabilities
    
    
    20,491
    
    
    
    22,872Current portion of long-term debt
    
    
    42,585
    
    
    
    Liabilities of discontinued operations
    
    
    217
    
    
    
    217Total current liabilities
    
    
    88,893
    
    
    
    62,212Long-term debt
    
    
    150,000
    
    
    
    100,579Deferred tax liability
    
    
    3,044
    
    
    
    Deferred credits and other liabilities
    
    
    42,867
    
    
    
    49,291Redeemable preferred stock
    
    
    58,767
    
    
    
    56,507Commitments and contingencies (Note 6)
Stockholders equity:Common stock, $.01 par value
    
    
    28
    
    
    
    28Additional paid-in capital
    
    
    182,250
    
    
    
    184,500Accumulated deficit
    
    
    (210,945
    )
    
    
    (213,614
    )Accumulated other comprehensive income
    
    
    6,320
    
    
    
    6,320Total stockholders deficiency in assets
    
    
    (22,347
    )
    
    
    (22,766
    )Total liabilities and stockholders deficiency in assets
    
    $
    321,224
    
    
    $
    245,823
  3




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##### 



STERLING CHEMICALS, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Three months endedMarch 31,2007
    
    
    2006(Unaudited)(Dollars in Thousands)Cash flows from operating activities:Net income (loss)
    
    $
    2,669
    
    
    $
    (10,389
    )Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:Depreciation and amortization
    
    
    2,729
    
    
    
    8,441Interest amortization
    
    
    100
    
    
    
    100Lower-of-cost-or-market adjustment
    
    
    
    
    
    
    901Gain on disposal of property, plant and equipment
    
    
    (182
    )
    
    
    Deferred tax benefit
    
    
    
    
    
    
    (6,117
    )Other
    
    
    10
    
    
    
    91Change in assets/liabilities:Accounts receivable
    
    
    17,966
    
    
    
    9,553Inventories
    
    
    4,255
    
    
    
    (14,789
    )Prepaid expenses
    
    
    1,118
    
    
    
    1,630Other assets
    
    
    2,181
    
    
    
    (1,095
    )Accounts payable
    
    
    (13,405
    )
    
    
    1,192Accrued liabilities
    
    
    (2,381
    )
    
    
    (4,833
    )Other liabilities
    
    
    (6,424
    )
    
    
    (2,633
    )Net cash provided by (used in) operating activities.
    
    
    8,636
    
    
    
    (17,948
    )Cash flows used in investing activities:Capital expenditures
    
    
    (2,248
    )
    
    
    (6,162
    )Increase in restricted cash
    
    
    (44,146
    )
    
    
    Proceeds from the sale of assets
    
    
    182
    
    
    
    Cash used for methanol dismantling
    
    
    
    
    
    
    (55
    )Net cash used in investing activities
    
    
    (46,212
    )
    
    
    (6,217
    )Cash flows from financing activities:Repayment of tendered Secured Notes
    
    
    (57,994
    )
    
    
    Proceeds from the issuance of New Notes
    
    
    150,000
    
    
    
    Debt issuance costs
    
    
    (6,778
    )
    
    
    Net cash provided by financing activities
    
    
    85,228
    
    
    
    Net increase (decrease) in cash
    
    
    47,652
    
    
    
    (24,165
    )Cash and cash equivalents  beginning of year
    
    
    20,690
    
    
    
    42,197Cash and cash equivalents  end of period
    
    $
    68,342
    
    
    $
    18,032Supplemental disclosures of cash flow information:Interest paid, net of interest income received
    
    $
    2,425
    
    
    $
    64Cash paid for income taxes
    
    
    299
    
    
    
    
  4




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##### 



STERLING CHEMICALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 1. Basis of Presentation
  2. Stock-Based Compensation
   3. Discontinued Operations
   March 31,
    
    
    December 31,2007
    
    
    2006(Dollars in Thousands)Assets of discontinued operations:Accounts receivable, net
    
    $
    
    
    
    $
    20Liabilities of discontinued operations:Accrued liabilities
    
    
    217
    
    
    
    217
  Three months endedMarch 31,2007
    
    
    2006(Dollars in Thousands)Revenue
    
    $
    
    
    
    $
    851Loss before income taxes
    
    
    554
    
    
    
    1,975
 5




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STERLING CHEMICALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)
  Accrued as of
    
    Additional
    
    
    
    
    
    Accrued as ofDecember 31, 2006
    
    accruals
    
    Cash payments
    
    March 31, 2007Severance accrual
    
    $
    217
    
    
    $
    
    
    
    $
    
    
    
    $
    217
 4. Inventories
 March 31,
    
    
    December 31,2007
    
    
    2006(Dollars in thousands)Finished products
    
    $
    35,756
    
    
    $
    38,485Raw materials
    
    
    17,983
    
    
    
    17,841Inventories under exchange agreements
    
    
    92
    
    
    
    1,818Stores and supplies, net
    
    
    3,992
    
    
    
    3,934$
    57,823
    
    
    $
    62,078
 5. Long-Term Debt
  1 4
  6




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STERLING CHEMICALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)
      6. Commitments and Contingencies
 Product Contracts:
  Environmental Regulations:
  7




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STERLING CHEMICALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)
      Legal Proceedings:
  8




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##### 



STERLING CHEMICALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)
     7. Income Taxes
  9




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STERLING CHEMICALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)
    8. Pension Plans and Other Postretirement Benefits
  Three months endedMarch 31,2007
    
    
    2006(Dollars in Thousands)Service cost
    
    $
    152
    
    
    $
    194Interest cost
    
    
    1,783
    
    
    
    1,805Expected return on plan assets
    
    
    (2,025
    )
    
    
    (1,750
    )Net pension costs
    
    $
    (90
    )
    
    $
    249
  Three months endedMarch 31,2007
    
    
    2006Service cost
    
    $
    46
    
    
    $
    53Interest cost
    
    
    364
    
    
    
    388Amortization of unrecognized
costs
    
    
    (342
    )
    
    
    (288
    )Net plan costs
    
    $
    68
    
    
    $
    153
 9. New Accounting Standards
  10




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
       
 11




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##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Business Overview
       12




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##### 



Results of Operations
 Three Months Ended March 31, 2007 Compared to Three Months Ended March 31, 2006
 Revenues and Income (Loss) from continuing operations
    Selling, general and administrative expenses
  Interest and debt related expenses, net of interest income
  13




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##### 



Provision (benefit) for income taxes
  Liquidity and Capital Resources
  1 4
    14




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##### 



Working Capital
  Cash Flow
  Capital Expenditures
  Recent Developments
  15




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Contractual Cash Obligations
  Critical Accounting Policies, Use of Estimates and Assumptions
  New Accounting Standards
  Item 3. Quantitative and Qualitative Disclosures about Market Risk
 1 4
 Item 4. Controls and Procedures
  16




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17




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PART II.
OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 5. Amendment of Bylaws
   
    
    Section 7.01 has been revised to provide that our Board of Directors
may by resolution provide that any or all classes or series of our
capital stock may be represented by uncertificated shares. The
provision specifies, however, that any such resolution will not apply
to any shares that are currently represented by certificates until
those certificates are surrendered.
    
    Section 7.03 has been revised to provide that we will mail to the
holders of any uncertificated shares of our capital stock a written
copy of any restrictive legends applicable to their uncertificated shares of stock.
    
    Sections 7.05, 7.07 and 7.09 of our Bylaws have been revised to
provide procedures for the transfer of uncertificated shares of our
capital stock.
  
 Item 6. Exhibits
  Exhibit 
Number
    
    
    
    Description of Exhibit2.1
    
    -
    
    Certificate of Ownership and Merger merging Sterling Chemicals Holdings, Inc. into
Sterling Chemicals, Inc. (incorporated by reference from Exhibit 2.1 to our Annual
Report on Form 10-K for the fiscal year ended September 30, 2002).2.2
    
    -
    
    Joint Plan of Reorganization of Sterling Chemicals Holdings, Inc., et al., dated
October 14, 2002 (incorporated by reference from Exhibit 2.1 to our Form 8-K filed
on November 26, 2002).2.3
    
    -
    
    First Modification to Joint Plan of Reorganization of Sterling Chemicals Holdings,
Inc., et al., dated November 18, 2002 (incorporated by reference from Exhibit 2.2 to
our Form 8-K filed on November 26, 2002).3.1
    
    -
    
    Amended and Restated Certificate of Incorporation of Sterling Chemicals, Inc.
(conformed copy) (incorporated by reference from Exhibit 3.1 to our Quarterly Report
on Form 10-Q for the fiscal quarter ended March 31, 2005).3.2
    
    -
    
    Restated Certificate of Designations, Preferences, Rights and Limitations of
Series A Convertible Preferred Stock of Sterling Chemicals, Inc. (incorporated by
reference from Exhibit 3.2 to our Annual Report on Form 10-K for the fiscal year
ended December 31, 2003).**3.3
    
    -
    
    Restated Bylaws of Sterling Chemicals, Inc. (conformed copy).**4.1
    
    -
    
    Supplemental Indenture dated March 15, 2007 to the Indenture dated December 19,
2002 by and among Sterling Chemicals, Inc., Sterling Chemicals Energy, Inc. and U.
S. Bank National Association, successor to National City Bank, as Trustee
(incorporated by reference from Exhibit 10.1 to our Form 8-K filed on March 16,
2007.**4.2
    
    -
    
    Indenture dated March 29, 2007 by and among Sterling Chemicals, Inc., as Issuer,
Sterling Chemicals Energy, Inc., as Guarantor, and U. S. Bank National Association,
as Trustee and Collateral Agent, governing the 101/4% Senior Secured Notes due 2015 of
Sterling Chemicals, Inc.
 18




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**4.3
    
    -
    
    Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture
Filing dated March 29, 2007 made by Sterling Chemicals, Inc., Trustor, to Stanley
Keeton, an Individual Trustee, for the benefit of U. S. Bank National Association,
as Collateral Agent, Beneficiary**4.4
    
    -
    
    Security Agreement dated as of March 29, 2007 by and among Sterling Chemicals,
Inc. and Sterling Chemicals Energy, Inc., as Assignors, U.S. Bank National
Association, as Collateral Agent, and U.S. Bank National Association, as Indenture
Trustee for the benefit of the holders the 101/4% Senior Secured Notes due 2015 of
Sterling Chemicals, Inc.**4.5
    
    -
    
    Pledge Agreement dated as of March 29, 2007 by Sterling Chemicals, Inc. and
Sterling Chemicals Energy, Inc. in favor of U. S. Bank National Association, as
Collateral Agent for the Secured Parties.**4.6
    
    -
    
    Registration Rights Agreement dated as of March 29, 2007 by and among Sterling
Chemicals, Inc., as the Company, Sterling Chemicals Energy, Inc., as Guarantor, and
Jefferies & Company, Inc. and CIBC World Markets Corp., as the Initial Purchasers of
the 101/4% Senior Secured Notes due 2015 of Sterling Chemicals, Inc.**10.1
    
    -
    
    Amended and Restated Revolving Credit Agreement dated as of March 29, 2007 by and
among Sterling Chemicals, Inc. and Sterling Chemicals Energy, Inc., as Borrowers,
the various financial institutions as are or may become parties thereto from time to
time, as the Lenders, and The CIT Group/Business Credit, Inc., as the Administrative
Agent for the Lenders, and Wachovia Bank, National Association, as Documentation
Agent.**10.2
    
    -
    
    Amended and Restated Security Agreement dated as of March 29, 2007 made by
Sterling Chemicals, Inc. and Sterling Chemicals Energy, Inc., as Grantors in favor
of the CIT Group/Business Credit, Inc. as Administrative Agent for the Secured
Parties.**10.3
    
    -
    
    Amended and Restated Pledge Agreement dated as of March 29, 2007 made by Sterling
Chemicals, Inc. and Sterling chemicals Energy, Inc. as Pledgors, in favor of The CIT
Group/Business Credit, Inc., as Administrative Agent for the Secured Parties.**10.4
    
    -
    
    Intercreditor Agreement dated as of March 29, 2007 among Sterling Chemicals, Inc.
and Sterling Chemicals Energy, Inc., as Borrowers, The CIT Group/Business Credit,
Inc., as First Lien Collateral Agent, and U. S. Bank National Association, as Second
Lien Collateral Agent**10.5
    
    -
    
    Articles of Agreement between Sterling Chemicals, Inc., its successors and
assigns, and Texas City, Texas Metal Trades Council, AFL-CIO Texas City, Texas, May
1, 2007 to May 1, 2012.**10.6
    
    -
    
    Tenth Amendment to the Sterling Chemicals, Inc. Hourly Paid Employees Pension
Plan.**15.1
    
    -
    
    Letter of Deloitte & Touche LLP regarding unaudited interim financial information.**31.1
    
    -
    
    Rule 13a-14(a) Certification of the Chief Executive Officer**31.2
    
    -
    
    Rule 13a-14(a) Certification of the Chief Financial Officer**32.1
    
    -
    
    Section 1350 Certification of the Chief Executive Officer**32.2
    
    -
    
    Section 1350 Certification of the Chief Financial Officer
  19




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SIGNATURES
  STERLING CHEMICALS, INC.
(Registrant)Date: May 7, 2007
    By:
    /s/ RICHARD K. CRUMPRichard K. CrumpPresident and Chief Executive OfficerDate: May 7, 2007
    By:
    /s/ JOHN R. BEAVERJohn R. BeaverSenior Vice President-Finance andChief Financial Officer
(Principal Financial Officer) 20




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EXHIBIT INDEX
 Exhibit 
Number
    
    
    
    Description of Exhibit2.1
    
    -
    
    Certificate of Ownership and Merger merging Sterling Chemicals Holdings, Inc. into
Sterling Chemicals, Inc. (incorporated by reference from Exhibit 2.1 to our Annual
Report on Form 10-K for the fiscal year ended September 30, 2002).2.2
    
    -
    
    Joint Plan of Reorganization of Sterling Chemicals Holdings, Inc., et al., dated
October 14, 2002 (incorporated by reference from Exhibit 2.1 to our Form 8-K filed
on November 26, 2002).2.3
    
    -
    
    First Modification to Joint Plan of Reorganization of Sterling Chemicals Holdings,
Inc., et al., dated November 18, 2002 (incorporated by reference from Exhibit 2.2 to
our Form 8-K filed on November 26, 2002).3.1
    
    -
    
    Amended and Restated Certificate of Incorporation of Sterling Chemicals, Inc.
(conformed copy) (incorporated by reference from Exhibit 3.1 to our Quarterly Report
on Form 10-Q for the fiscal quarter ended March 31, 2005).3.2
    
    -
    
    Restated Certificate of Designations, Preferences, Rights and Limitations of
Series A Convertible Preferred Stock of Sterling Chemicals, Inc. (incorporated by
reference from Exhibit 3.2 to our Annual Report on Form 10-K for the fiscal year
ended December 31, 2003).**3.3
    
    -
    
    Restated Bylaws of Sterling Chemicals, Inc. (conformed copy).**4.1
    
    -
    
    Supplemental Indenture dated March 15, 2007 to the Indenture dated December 19,
2002 by and among Sterling Chemicals, Inc., Sterling Chemicals Energy, Inc. and U.
S. Bank National Association, successor to National City Bank, as Trustee
(incorporated by reference from Exhibit 10.1 to our Form 8-K filed on March 16,
2007.**4.2
    
    -
    
    Indenture dated March 29, 2007 by and among Sterling Chemicals, Inc., as Issuer,
Sterling Chemicals Energy, Inc., as Guarantor, and U. S. Bank National Association,
as Trustee and Collateral Agent, governing the 101/4% Senior Secured Notes due 2015 of
Sterling Chemicals, Inc.**4.3
    
    -
    
    Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture
Filing dated March 29, 2007 made by Sterling Chemicals, Inc., Trustor, to Stanley
Keeton, an Individual Trustee, for the benefit of U. S. Bank National Association,
as Collateral Agent, Beneficiary**4.4
    
    -
    
    Security Agreement dated as of March 29, 2007 by and among Sterling Chemicals,
Inc. and Sterling Chemicals Energy, Inc., as Assignors, U.S. Bank National
Association, as Collateral Agent, and U.S. Bank National Association, as Indenture
Trustee for the benefit of the holders the 101/4% Senior Secured Notes due 2015 of
Sterling Chemicals, Inc.**4.5
    
    -
    
    Pledge Agreement dated as of March 29, 2007 by Sterling Chemicals, Inc. and
Sterling Chemicals Energy, Inc. in favor of U. S. Bank National Association, as
Collateral Agent for the Secured Parties.**4.6
    
    -
    
    Registration Rights Agreement dated as of March 29, 2007 by and among Sterling
Chemicals, Inc., as the Company, Sterling Chemicals Energy, Inc., as Guarantor, and
Jefferies & Company, Inc. and CIBC World Markets Corp., as the Initial Purchasers of
the 101/4% Senior Secured Notes due 2015 of Sterling Chemicals, Inc.**10.1
    
    -
    
    Amended and Restated Revolving Credit Agreement dated as of March 29, 2007 by and
among Sterling Chemicals, Inc. and Sterling Chemicals Energy, Inc., as Borrowers,
the various financial institutions as are or may become parties thereto from time to
time, as the Lenders, and The CIT Group/Business Credit, Inc., as the Administrative
Agent for the Lenders, and Wachovia Bank, National Association, as Documentation
Agent.**10.2
    
    -
    
    Amended and Restated Security Agreement dated as of March 29, 2007 made by
Sterling Chemicals, Inc. and Sterling Chemicals Energy, Inc., as Grantors in favor
of the CIT Group/Business Credit, Inc. as Administrative Agent for the Secured
Parties.**10.3
    
    -
    
    Amended and Restated Pledge Agreement dated as of March 29, 2007 made by Sterling
Chemicals, Inc. and Sterling chemicals Energy, Inc. as Pledgors, in favor of The CIT
Group/Business Credit, Inc., as Administrative Agent for the Secured Parties.




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**10.4
    
    -
    
    Intercreditor Agreement dated as of March 29, 2007 among Sterling Chemicals, Inc.
and Sterling Chemicals Energy, Inc., as Borrowers, The CIT Group/Business Credit,
Inc., as First Lien Collateral Agent, and U. S. Bank National Association, as Second
Lien Collateral Agent**10.5
    
    -
    
    Articles of Agreement between Sterling Chemicals, Inc., its successors and
assigns, and Texas City, Texas Metal Trades Council, AFL-CIO Texas City, Texas, May
1, 2007 to May 1, 2012.**10.6
    
    -
    
    Tenth Amendment to the Sterling Chemicals, Inc. Hourly Paid Employees Pension
Plan.**15.1
    
    -
    
    Letter of Deloitte & Touche LLP regarding unaudited interim financial information.**31.1
    
    -
    
    Rule 13a-14(a) Certification of the Chief Executive Officer**31.2
    
    -
    
    Rule 13a-14(a) Certification of the Chief Financial Officer**32.1
    
    -
    
    Section 1350 Certification of the Chief Executive Officer**32.2
    
    -
    
    Section 1350 Certification of the Chief Financial Officer