Entry into a Material Definitive Agreement

Exhibit 10.1

AMENDMENT NO. 2
TO
LOAN AND SECURITY AGREEMENT WITH LIMITED WAIVER

     THIS AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT WITH LIMITED WAIVER (this “Amendment”) is entered into this 10 day of November, 2005, by and between Silicon Valley Bank (“Bank”) and Sipex Corporation, a Delaware corporation (“Borrower”) whose address is 233 South Hillview Drive, Milpitas, California 95035.

Recitals

     A. Bank and Borrower have entered into that certain Loan and Security Agreement dated as of July 21, 2005,(as amended by that certain Amendment No. 1 dated October 7, 2005, and as the same may from time to time be further amended, modified, supplemented or restated, the “Loan Agreement”).

     B. Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.

     C. Borrower has requested that Bank waive compliance with a covenant and amend the Loan Agreement to make certain revisions to the Loan Agreement as more fully set forth herein.

     D. Bank has agreed to so waive and amend certain provisions of the Loan Agreement, but only to the extent, in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below.

Agreement

     NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

     1. Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

     2. Amendments to Loan Agreement.

          2.1 Section 6.7 (Financial Covenants). Section 6.7 is amended in its entirety to read as follows:

“(a) Minimum Liquidity Ratio. Borrower will maintain as of the last day of each month, a Liquidity Ratio of not less than 1.50:1.00. The Liquidity Ratio is calculated as the sum of (i) Borrower’s unrestricted cash and cash equivalents and consolidated Accounts divided by (ii) the Obligations.”

“(b) Tangible Net Worth. Borrower will maintain, as of the last day of each quarter set forth below, a Tangible Net Worth of at least the amount set forth opposite such date. For purposes of this calculation, up to $5,000,000 in non-cash charges relating to inventory write-downs may be added to Tangible Net Worth.

Quarter Ending Date		Minimum Tangible Net Worth
September 30, 2005		Compliance waived
December 31, 2005		$	37,500,000
March 31,2006		$	32,151,200
June 30, 2006		$	26,113,000

          2.2 Exhibits to the Loan Agreement. Exhibit C (Compliance Certificate) is deleted and replaced with the form attached hereto as Exhibit A.

     3. Limited Waiver. Bank hereby waives Borrower’s compliance with the financial covenant contained in Section 6.7(b) (Tangible Net Worth) for the period ended September 30, 2005 only.

     4. Limitation of Amendments and Waiver.

          4.1 The amendments and waiver set forth in Sections 2 and 3, above, are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under or in connection with any Loan Document.

          4.2 This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.

     5. Representations and Warranties. To induce Bank to enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:

          5.1 Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;

          5.2 Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;

          5.3 The organizational documents of Borrower delivered to Bank on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

          5.4 The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized;

          5.5 The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower;

          5.6 The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on either Borrower, except as already has been obtained or made; and

          5.7 This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.

     6. Counterparts. This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

     7. Effectiveness. This Amendment shall be deemed effective upon (a) the due execution and delivery to Bank of this Amendment by each party hereto, and (b) Borrower’s payment of a loan fee in an amount equal to $3,000.

[Signature page follows.]

     In Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

BANK				BORROWER
Silicon Valley Bank				Sipex Corporation
By: /s/ Tom Smith				By: /s/ Clyde R. Wallin
Name:		Tom Smith		Name:		Clyde R. Wallin
Title:		Senior Relationship Manager		Title:		Sr. VP Finance & CFO

EXHIBIT A

EXHIBIT C
COMPLIANCE CERTIFICATE

TO:		SILICON VALLEY BANK 3003 Tasman Drive Santa Clara, CA 95054

FROM:		Sipex Corporation

     The undersigned authorized officer (“Officer”) of Sipex Corporation (“Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending ___ with all required covenants except as noted below, and (ii) all representations and warranties in the Agreement are true and correct in all material respects on this date. In addition, the Officer certifies that Borrower and each Subsidiary (i) has timely filed all required tax returns and paid, or made adequate provision to pay, all material taxes, except those being contested in good faith with adequate reserves under GAAP and (ii) does not have any legal actions pending or threatened against Borrower or any Subsidiary of which Borrower has not notified Bank in accordance with Section 6.2 of the Agreement. Attached are the required documents supporting the certifications contained herein. The Officer certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The Officer acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered.

Please indicate compliance status by circling Yes/No under “Complies” column.

Reporting Covenant		Required		Complies
Compliance Certificate		With 10Q, 10K and monthly financial statements		Yes		No
Monthly Financial Statements		Monthly within 30 days		Yes		No
10Q, 10K (Audited)		Within 5 days of issuance (at 6/30/05, company prepared financial statements. Thereafter, financial statements prepared by outside accountants, until SEC filings are timely made)		Yes		No
A/R and A/P Aging Report and Borrowing Base Certificate		Semi-monthly within 15 and 30 days		Yes		No
Cash Holding Report and Deferred Revenue Report		Monthly within 30 days		Yes		No
Annual Forecast		Annually within 45 days of FYE		Yes		No

Reporting Covenant		Required		Complies
Budgets, sales projections, operating plans, or other financial information as Lender may request		Promptly after Lender requests		Yes		No

Financial Covenant		Required		Actual		Complies
Maintain (at month end):
Minimum Liquidity Ratio		1.5:1.00		___:1.00		Yes		No
Maintain (at quarter end):
Minimum Tangible Net Worth		$37,500,000 (at 12/30/05)		$___		Yes		No
		$32,151,200 (at 3/31/06)
		$26,113,000 (at 6/30/06)

Borrower has deposit accounts located at the
following institutions only: Silicon Valley
Bank,___________________________