EX-10.2






Exhibit 10.2



THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION THEREFROM. THE PRINCIPAL AMOUNT REPRESENTED HEREBY AND THE
SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE
HEREOF PURSUANT TO SECTION 3(A)(4) HEREOF. A PROSPECTIVE ACQUIROR HEREOF IS ADVISED TO CONTACT THE
ISSUER HEREOF AS TO THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT HEREOF.



SIPEX CORPORATION




9% SECURED NOTE WITH CONVERTIBLE INTEREST DUE JANUARY 19, 2008




No. 2006-1 U.S. $7,000,000



1. Security.



This Security is a duly authorized 9% Secured Note with convertible interest due January 19,
2008 of Sipex Corporation, a Delaware corporation (the “Company”). Capitalized terms used
and not otherwise defined herein, shall have the respective meanings given to those terms in
Section 10 hereof.



2. Principal Amount and Interest.



(a) The Company for value received, hereby promises to pay to the order of Rodfre Holdings LLC
(“Lender”), or its registered assigns, the principal sum of U.S. $7,000,000 (the “Principal
Amount”) on January 19, 2008 (the “Final Maturity Date”). Except as specifically set forth in this
Security, the Company does not have any right, option, or obligation to pay any portion of the
principal at any time prior to the Final Maturity Date. The Company also undertakes to pay to the
Holder, interest, at the rate of 9% per annum (“Interest”) and payable on the Final Maturity Date.
Interest shall accrue as and from the date that the purchase price of this Security is paid by the
Holder to the Company (or to an agreed upon escrow agent, as the case may be).



On each of April 19, 2006, July 19, 2006, October 19, 2006, January 19, 2007, April 19, 2007,
July 19, 2007, October 19, 2007, and January 19, 2008, the accrued Interest for the quarterly
period ending on that date shall be compounded and thereafter Interest shall accrue on the sum of
the Principal Amount and the amount of Interest accrued during such quarterly period and each
previous quarterly period (if any) described in this paragraph. The sum total of the Principal
Amount and the Conversion Account Balance (as defined below) shall constitute the “Adjusted
Principal Amount”.



The amount due and payable on the Final Maturity Date or on the date of any redemption
pursuant to Section 4 shall be the Adjusted Principal Amount, as applicable, adjusted to reflect
any portion of the Conversion Account Balance, which the Holder has converted or elected to convert
into Common Stock.



(b) Interest shall be computed on the basis of a 365 day year, and actual days elapsed.
Interest shall be payable in U.S. Dollars to the Holder in whose name this Security was registered
at the close of business on the Final Maturity Date.



(c) Payment of the Principal Amount of and Interest accrued on this Security shall be made
upon the surrender of this Security to the Company, at the office designated by the Company for
delivery of notices pursuant to Section 11(a) hereof (the “Designated Office”), in such
coin or currency of the United States of America as at the time of payment shall be legal tender
for the payment of public and private debts.



(d) Payment of the Principal Amount, and Interest, shall be made by wire transfer of
immediately available funds to the Holder entitled thereto in accordance with the wire transfer
instructions provided by the Holder to the Company at least three Business Days prior to the Final
Maturity Date.



3. Conversion.



For purposes of calculating the amount of Interest available to be converted in accordance
with this Section 3, Interest accruing under Section 2(a) (including compounded interest) shall be
credited on a daily basis to a notional account (the “Conversion Account”). On January 19, 2007,
and again on January 19, 2008 (each a “Conversion Date”), the Holder shall have the right to
convert, on each such occasion, any and all Interest then credited to the Conversion Account (the
“Conversion Account Balance”) into Common Stock of the Company. The following terms and conditions
set forth in this Section 3 shall also be applicable to the conversion of the Conversion Account
Balance.



(a) (1) Subject to compliance with applicable laws, including but not limited to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, if and to the extent that the
same may be applicable, and with the provisions of Section 4(a)(1) and Section 5, the Holder of
this Security may, as indicated in Section 2(e) above, convert the Conversion Account Balance (or
any portion thereof) into Common Stock at the Conversion Price then in effect. The number of
shares of Common Stock into which all or any portion of the Conversion Account Balance may be
converted upon any such conversion shall be a number of shares equal to the quotient (rounded down
to the nearest whole share) obtained by dividing (A) the then Conversion Account Balance or portion
thereof being converted by (B) the Conversion Price then in effect; provided, however, that in no
event may the Holder convert a portion of the Conversion Account Balance that would result in the
issuance of shares of Common Stock in excess of 19.9% of the total number of shares of Common Stock
outstanding immediately prior to conversion.



Subject to the other provisions of this Agreement pertaining to adjustment of the Conversion
Price (as defined below), the rate at which the Conversion Account Balance may be converted into
Common Stock (the “Conversion Price”) shall be equal to the VWAP of the Common Stock, for the
period of twenty Trading Days immediately preceding the Conversion Date. To convert Conversion
Account Balance or any portion thereof, the Holder hereof shall, not less than ten (10) nor more
than thirty (30) days prior to the applicable Conversion Date: (x) send by facsimile (or otherwise
deliver) a copy of the fully executed conversion notice in the form attached as Exhibit A
hereto (the “Conversion Notice”) to the Company, and (y) pay any transfer taxes or other
applicable taxes or duties, if any, required in connection with the issuance of shares of Common
Stock in the name of someone other than the Holder. Upon receipt by the Company of a facsimile
copy of a Conversion Notice from the Holder, the Company shall as soon as practicable, but in any
event on or before the second Business Day following the date of receipt of the Conversion Notice,
send, via facsimile (or otherwise deliver), a confirmation to the Holder and the transfer agent for
the Common Stock stating that the Conversion Notice has been received, the date upon which the
Company expects to deliver the Common Stock issuable upon such conversion and the name and
telephone number of a contact person at the Company regarding the conversion. The Company shall
not be obligated to issue shares of Common Stock upon a conversion unless the Holder complies with
the foregoing requirements set forth in this paragraph.



On or prior to the third Business Day after any Conversion Date (the “Share Delivery
Date”), the Company shall issue and deliver to the Holder or its nominee (x) that number of
shares of Common Stock issuable upon conversion of the portion of the Conversion Account Balance
being converted and (y) if applicable, cash in lieu of any fractional shares pursuant to Section
3(a)(5). If the Company’s transfer agent is participating in DTC’s Fast Automated Securities
Transfer program, and so long as the certificate for the Common Stock to be issued upon conversion
of the Conversion Account Balance is not required to bear a legend and the Holder is not then
required to return such certificate for the placement of a legend thereon and the Holder has
provided the Company with the information required by DTC relating to the DTC account of the Holder
or such Holder’s nominee, the Company shall cause its transfer agent to electronically transmit the
Common Stock issuable upon conversion of the Conversion Account Balance to the Holder by crediting
the account of the Holder or its nominee with DTC through its Deposit Withdrawal Agent Commission
system. If the aforementioned conditions for a DTC Transfer are not satisfied, the Company shall
deliver to the Holder physical certificates representing the Common Stock issuable upon conversion
of the Conversion Account Balance. Further, even if the aforementioned conditions to a DTC
Transfer are satisfied, the Holder may instruct the Company in writing to deliver to the Holder
physical certificates representing the Common Stock issuable upon conversion in lieu of delivering
such shares by way of DTC Transfer.



(2) The Holder, as such, is not entitled to any rights of a holder of Common Stock until the
Holder has converted all or a portion of the Conversion Account Balance into Common Stock, and only
to the extent all or a portion of the Conversion Account Balance is deemed to have been converted
into Common Stock pursuant to this Section 3.



(3) The Conversion Account Balance shall be deemed to have been converted immediately prior to
the close of business on the Conversion Date, and at such time the rights of the Holder of this
Security as the Holder hereof shall cease with respect to the portion of the Conversion Account
Balance converted on such Conversion Date, and the Person or Persons entitled to receive the shares
of Common Stock issuable upon conversion shall be deemed to be a stockholder of record as of the
Conversion Date.



(4) N/A.



(5) The Company will not issue fractional shares of Common Stock upon conversion of all or a
portion of the Conversion Account Balance. In lieu thereof, the Company will pay an amount in cash
for the current market value of the fractional shares. The current market value of a fractional
share shall be determined (calculated to the nearest 1/1000th of a share) by multiplying
the Conversion Price by such fractional share and rounding the product to the nearest whole cent.



(6) The Company shall, if the Holder so elects, deliver the Common Stock issuable upon
conversion of all or a portion of the Conversion Account Balance to any third party designated by
the Holder, subject to compliance with Sections 3(e) and 11(b) hereof.



(b) N/A.




(c) In case at any time after the date hereof:



(1) N/A.



(2) the Company shall authorize the granting to the holders of its Common Stock generally of
rights or warrants to subscribe for or purchase any shares of capital stock of any class (or of
securities convertible into shares of capital stock of any class) or of any other rights;



(3) there shall occur any reclassification of the Common Stock of the Company (other than a
subdivision or combination of its outstanding Common Stock, a change in par value, a change from
par value to no par value or a change from no par value to par value), or any merger,
consolidation, statutory share exchange or combination to which the Company is a party and for
which approval of any stockholders of the Company is required, or the sale, transfer or conveyance
of all or substantially all of the assets of the Company; or



(4) there shall occur the voluntary or involuntary dissolution, liquidation or winding up of
the Company;



(5) the Company shall cause to be provided to the Holder of this Security in accordance with
Section 11(a), at least 20 days (or 10 days in any case specified in clause (1) or (2) above) prior
to the applicable record or effective date hereinafter specified, a written notice (which notice
shall not include any material non-public information) stating:



(A) the date on which a record is to be taken for the purpose of such dividend, distribution,
grant of rights or warrants, or, if a record is not to be taken, the date as of which the holders
of shares of Common Stock of record to be entitled to such dividend, distribution, rights or
warrants are to be determined; or



(B) the date on which such reclassification, merger, consolidation, statutory share exchange,
combination, sale, transfer, conveyance, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of shares of Common Stock of
record shall be entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, merger, consolidation, statutory share exchange,
sale, transfer, dissolution, liquidation or winding up.



At any time from the date of such notice to the applicable record or effective date on which
any of the foregoing events is to occur, the Holder shall have the right to convert the Conversion
Account Balance into Common Stock, and all other provisions of this Security pertaining to
conversion of the Conversion Account Balance on a Conversion Date shall apply mutatis mutandis to
such conversion.



(d) The Company shall ensure the reservation of sufficient shares of Common Stock to allow the
conversion of the Conversion Account Balance. The Company covenants that all shares of Common
Stock that may be issued upon conversion of the Conversion Account Balance will upon issue be free
from preemptive rights and validly issued, fully paid and nonassessable.



(e) Except as provided in the next sentence, the Company will pay any and all taxes (other
than taxes on income) and duties that may be payable in respect of the issue or delivery of Common
Stock upon conversion of the Conversion Account Balance. The Company shall not, however, be
required to pay any tax or duty that may be payable in respect of any transfer involved in the
issue and delivery of Common Stock in a name other than that of the Holder of this Security, and no
such issue or delivery shall be made unless and until the Person requesting such issue has paid to
the Company the amount of any such tax or duty, or has established to the reasonable satisfaction
of the Company that such tax or duty has been paid.



(f) If any of following events occur:



(1) any reclassification or change of the outstanding shares of Common Stock (other than a
change in par value, or from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), as a result of which holders of Common Stock shall be
entitled to receive Capital Stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock;



(2) any merger, consolidation, statutory share exchange or combination of the Company with
another Person as a result of which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to or in exchange for such
Common Stock; or



(3) any sale or conveyance of the properties and assets of the Company as, or substantially
as, an entirety to any other Person as a result of which holders of Common Stock shall be entitled
to receive stock, securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock.



Then the Company or the successor or purchasing entity, as applicable, shall execute with the
Holder of this Security a supplemental agreement providing that the Conversion Account Balance
shall be convertible into the kind and amount of shares of capital stock and other securities or
property or assets (including cash) that such Holder would have been entitled to receive upon such
reclassification, change, merger, consolidation, statutory share exchange, combination, sale or
conveyance had the Conversion Account Balance been converted into Common Stock immediately prior to
such reclassification, change, merger, consolidation, statutory share exchange, combination, sale
or conveyance assuming the Holder, as a holder of Common Stock, did not exercise its rights of
election, if any, as to the kind or amount of securities, cash or other property receivable upon
such reclassification, change, merger, consolidation, statutory share exchange, combination, sale
or conveyance (provided that, if the kind or amount of securities, cash or other property
receivable upon such reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance is not the same for each of the shares of Common Stock in respect
of which such rights of election shall not have been exercised (“Non-Electing Share”), then
for the purposes of this Section 3(f) the kind and amount of securities, cash or other property
receivable upon such reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance for each Non-Electing Share shall be deemed to be the kind and
amount so receivable per share by a plurality of the Non-Electing Shares). Such supplemental
agreement shall provide for adjustments that shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section 3. If, in the case of any such reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or conveyance, the stock
or other securities and assets receivable thereupon by a holder of Common Stock includes shares of
stock or other securities and assets of a person other than the successor, purchasing or transferee
entity, as applicable, in such reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance, then such supplemental agreement shall also be executed
by such other person and shall contain such additional provisions to protect the interests of the
Holder as the Board of Directors shall reasonably consider necessary by reason of the foregoing.



The above provisions of this Section 3(f) shall apply to successive or a series of related
reclassifications, changes, mergers, consolidations, statutory share exchanges, combinations, sales
and conveyances. If this Section 3(f) applies to any event or occurrence, then the other
provisions of Section 3(b) shall not apply to the issuance of securities pursuant to such event or
occurrence, provided that such other provisions shall continue to apply to all other
issuances.



(g) The Company (i) will effect all registrations with, and obtain all approvals by, all
governmental authorities that may be necessary under any United States federal or state law
(including the Securities Act, the Exchange Act and state securities and Blue Sky laws) for the
Common Stock issuable upon conversion of the Conversion Account Balance to be lawfully issued and
delivered as provided herein, and thereafter publicly traded (if permissible under the Securities
Act) and qualified or listed as contemplated by clause (ii) (it being understood that the Company
shall not be required to register the Common Stock issuable on conversion of the Conversion Account
Balance under the Securities Act; and (ii) will list the Common Stock required to be issued and
delivered upon conversion of the Conversion Account Balance within 30 calendar days after the first
anniversary of the Issuance Date, on each national securities exchange on which outstanding Common
Stock is listed or quoted at such time of such delivery, or if the Common Stock is not then listed
on any national securities exchange, to qualify the Common Stock for quotation on the Nasdaq Stock
Market or such other inter-dealer quotation system, if any, on which the Common Stock is then
quoted.



4. Rights of the Holder upon a Change of Control and Sale of the Property; Optional Repayment
of the Note.



(a) Conversion Rights and Repayment.



(1) In the event that a Change of Control or sale of the Property (as defined in the Deed of
Trust) shall occur at any time prior to the Final Maturity Date, the Holder of this Security shall
have the right, at the Holder’s option, but subject to the provisions of Sections 4(b) and 4(c), to
convert any portion of the Conversion Account Balance into Common Stock at the Conversion Price
then in effect, on the terms and conditions of Section 3.



(2) In the event that a Change of Control or sale of the Property shall occur at any time that
this Security is outstanding the Holder of this Security shall have the right (such right, together
with the conversion rights described above under Section 4(a)(1), the “Change of Control
Right”), at the Holder’s option, but subject to the provisions of Sections 4(b) and 4(c), to
elect to require that the Company repay the entire outstanding Principal Amount, or Adjusted
Principal Amount, as applicable, of this Security, together with the Conversion Account Balance
(for which conversion rights are not being exercised) up to, but excluding the day on which the
Change of Control or sale of the Property is consummated.



(3) Subject to any restrictions under the terms of the Subordination Agreement, the Company
shall have the right at any time to redeem all or any portion of the Note in accordance with the
provisions of this Section 4 (an “Optional Repayment”).



(b) No sooner than 15 days nor later than 10 days prior to the expected date of consummation
of a Change of Control, sale of the Property or Optional Repayment, but in no event prior to the
public announcement of such Change of Control if applicable, the Company shall deliver written
notice thereof via facsimile and overnight courier to the Holder (a “Change of Control
Notice” or “Sale of Property Notice” or “Optional Repayment Notice”, as the
case may be). The Change of Control Notice or Sale of Property Notice or Optional Repayment Notice
shall include a form of Conversion Notice and a form of Notice of Election to Require Repayment, if
applicable, to be completed by the Holder and delivered to the Company pursuant to this Section
4(b), and shall state the following:



(1) that it is a Change of Control Notice or Sale of Property Notice or an Optional Repayment
Notice pursuant to this Section 4;



(2) the events causing the Change of Control or sale of the Property and the expected date of
such Change of Control or sale of the Property, or the expected date and amount of the proposed
Optional Repayment; and



(3) the procedures with which such Holder must comply to exercise its right to have the
Conversion Account Balance converted and/or this Security repurchased pursuant to Section 4(a),
including the date by which the completed Conversion Notice or Notice of Election to Require
Repayment and this Security must be delivered to the Company in order to have the Conversion
Account Balance converted or this Security redeemed by the Company pursuant to Section 4(a), the
address for delivery, the Conversion Price then in effect and any adjustments thereto, the amount
of accrued and unpaid interest thereon as of the expected date of consummation of such Change of
Control or sale of the Property, and that this Security as to which a Conversion Notice has been
given may be converted.



No failure by the Company to give the foregoing Change of Control Notice or Sale of the
Property Notice or Optional Repayment Notice shall limit the Holder’s right to exercise its rights
pursuant to Section 4(a).



(c) To exercise a Change of Control Right pursuant to Section 4(a), a Holder must deliver to
the Company, at its Designated Office on or prior to the close of business on the Business Day
prior to the date on which the Change of Control or sale of the Property is consummated, the
following:



(1) a completed Conversion Notice, the form of which is contained in Exhibit A hereto,
and/or a completed Notice of Election to Require Repayment, the form of which is contained in
Exhibit B hereto; and



(2) this Security, with, if the Company so requires, due endorsement by, or a written
instrument of transfer, in form satisfactory to the Company duly executed by, the Holder or such
Holder’s attorney duly authorized in writing.



In the event an a Sale of the Property Notice or an Optional Repayment Notice is given, the Holder
shall deliver this Security into any escrow established by the Company in connection with the sale
of the Property. If the Optional Repayment occurs other than in connection with the sale of the
Property, the Holder shall deliver this Security to the Company for cancellation if paid in full or
reduction and reissuance if redeemed in part.



(d) In the event that the Holder becomes entitled to convert the Conversion Account Balance
pursuant to this Section 4, the Conversion Price shall be the VWAP for the Company’s Common Stock
for the twenty (20) Trading Days immediately preceding the announcement by the Company of the
change of control, or in the case of the sale of the Property, the VWAP for the Company’s Common
Stock for the twenty (20) Trading Days immediately preceding the closing date of the sale
transaction, or in the case of an Optional Repayment, the VWAP for the Company’s Common Stock for
the twenty (20) Trading Days immediately preceding the date of the Optional Repayment.



5. Veto Right. Until full repayment of this Security, the Company shall not without the
Holder’s prior written consent, which shall be subject to the Holder’s sole discretion, sell the
Property for a purchase price that is less than the Principal Amount of this Security, plus the
Conversion Account Balance.



5.1 Option to Purchase: As and from the Final Maturity Date, and until repayment in full of
this Security, unless the Property has been previously sold, the Holder shall have an option to
purchase the Property, at the then fair market value, as determined by a board of three appraisers,
one of which will be nominated by each party, and the third to be nominated by the two parties’
nominees. Each appraiser shall have experience in the real estate market where the Property is
located and in the type of property represented by the Property. In such event, the fair market
value shall be the average of the three values arrived at by the three appraisers. However, if the
lowest and/or highest value differs from the middle value by more than 15%, and the other value is
within 15% of the middle value, the fair market value shall be the average of the two values that
are within 15% of one another. If the Holder exercises such option, the Company shall lease the
Property from the Holder, on a “triple net” basis, at a rate equal to the fair market rental value
of the Property, for a term of at least three years.




6. Covenants of the Company.




(a) The Company covenants and agrees that it will duly and punctually pay or cause to be paid
the Principal Amount, and the interest accrued thereon at the times and in the manner provided for
herein.



(b) Unless otherwise permitted herein, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence and the rights (charter and
statutory) of the Company and each of its Subsidiaries; provided, however, that the
Company shall not be required to preserve any such right with respect to a Subsidiary if the
Company shall determine in good faith that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries as a whole and that the loss thereof is
not disadvantageous in any material respect to the Holder.



(c) The Company covenants and agrees that it shall, at all times during the term hereof and
until the Final Maturity Date:



(i) provide the Holder, within one (1) business day of the release of same to Silicon Valley
Bank, with a copy of any certificate issued by the Company in respect of its compliance with
financial covenants including, but not limited to, any underlying financial ratios and compliance
calculations; and



(ii) within one (1) business day of acquiring knowledge of a default under any material
contract or of circumstances that may result in material adverse changes to the Company’s financial
position, the Company shall notify the Holder, in writing, of the specific nature of such default
and/or circumstances and of the expected impact of same upon the Company.



(d) The Company and its Affiliates, shall not, without the prior approval of the Holder, which
may be withheld at the Holder’s discretion acting reasonably and in good faith, enter into any
contracts or agreements, or subscribe any obligations, the result of which would be to increase
existing Indebtedness, or create new Indebtedness and/or charge, mortgage or otherwise encumber the
Property (as defined in the Deed of Trust being entered into concurrently herewith).




7. Events of Default.



(a) “Event of Default”, wherever used herein, means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree or order of any court or any
order;



(1) the Company defaults in the payment of the Principal Amount, and/or interest accrued
thereon, (a “Defaulted Payment”), when the same becomes due and payable;



(2) the Company fails, to perform or observe in any material respect any material term,
covenant or agreement contained in this Security, the Purchase Agreement or the Deed of Trust and,
in any case, the default continues for a period of 15 days after written notice of such failure,
requiring the Company to remedy the same, shall have been given to the Company by the Holder or in
the event of a material breach of any representations or warranties of the Company in this
Security, the Purchase Agreement or the Deed of Trust;



(3) the Company or any Subsidiary of the Company (A) fails to make any payment at maturity,
including any grace period, in respect of any obligation for borrowed money evidenced by an
Instrument (other than this Note) in an outstanding principal amount in excess of $1,000,000 and
such failure continues without such Indebtedness having been discharged within 15 days or (B)
defaults with respect to any Instrument, which default permits or results in the acceleration of
Indebtedness represented by such Instrument (other than this Note) in an amount in excess of
$1,000,000 without such default or acceleration having been cured, waived, rescinded or annulled
within 15 days;



(4) the entry by a court having jurisdiction in the premises of (A) a decree or order for
relief in respect of the Company or any Subsidiary of the Company in an involuntary case or
proceeding under any applicable U.S. federal or state bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company or any Subsidiary of the Company
bankrupt or insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company or any Subsidiary of the
Company, under any applicable U.S. federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the Company or any
Subsidiary of the Company or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other decree or order unstayed and
in effect for a period of 30 consecutive days; or



(5) the commencement by the Company or any Subsidiary of the Company of a voluntary case or
proceeding under any applicable U.S. federal or state bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by the Company or any Subsidiary of the Company, to the entry of a decree or order for
relief in respect of the Company or any Subsidiary of the Company in an involuntary case or
proceeding under any applicable U.S. federal or state bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against
the Company or any Subsidiary of the Company, or the filing by the Company or any Subsidiary of the
Company of a petition or answer or consent seeking reorganization or relief under any applicable
U.S. federal or state law, or the consent by the Company or any Subsidiary of the Company to the
filing of such petition or to the appointment of or the taking of possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or
any Subsidiary of the Company, or the making by the Company or any Subsidiary of the Company of an
assignment for the benefit of creditors, or the admission by the Company or any Subsidiary of the
Company in writing of its inability to pay the Company’s or any Subsidiary of the Company’s debts
generally as they become due, or the taking of corporate action by the Company or any Subsidiary of
the Company expressly in furtherance of any such action.



(6) the proposed settlement of the outstanding class action(s) against the Company does not
receive approval, either preliminary or final, from the United States District Court for the
Northern District of California, or more than twenty percent (20%) of the class members, other than
Lender and/or its Affiliates, opt out of the proposed settlement, and/or the Company disavows or
repudiates such settlement for any reason whatsoever;



A default under clause (2) above is not an Event of Default until the Holder notifies the
Company of the default and, if applicable, the Company does not cure such default (and such default
is not waived) within the time specified in clause (2) above after actual receipt of such notice.
Any such notice must specify the default, if applicable demand that it be remedied, and state that
such notice is a “Notice of Default”.



(b) If an Event of Default (other than an Event of Default specified in Sections 7(a)(4),
7(a)(5) or 7(a)(6) hereof with respect to the Company) occurs and is continuing, the Holder, by
written notice to the Company, may declare due and payable, in whole or in part, in its unfettered
and absolute discretion, the Principal Amount, as well as any interest accrued on this Security to
the date of payment. Upon a declaration of acceleration, such Principal Amount (or part thereof,
as the case may be) and accrued and unpaid interest to the date of payment, shall be immediately
due and payable.



On the occurrence and during the continuance of any Event of Default, in addition to and
without limitation of the other rights of the Holder hereunder, all conversion rights in respect of
the Conversion Account Balance shall immediately and automatically become exercisable and the
provisions of this Security pertaining to conversion of the Conversion Account Balance on a
Conversion Date shall apply mutatis mutandis to such conversion; provided that the Holder shall
specify the date of conversion to the Company in a notice complying with time periods specified in
Section 3(a).



If an Event of Default specified in Section 7(a)(4), 7(a)(5) or 7(a)(6) occurs with respect to
the Company, the Principal Amount and accrued and unpaid interest on this Security shall become and
be immediately due and payable, without any declaration or other act on the part of the Holder.



(c) If an Event of Default with respect to this Security occurs and is continuing, the Holder
may pursue any available remedy by proceeding at law or in equity (including a decree of specific
performance and/or other injunctive relief) to collect the Defaulted Payment or interest or any
other amount due and payable on this Security or to enforce the performance of any provision of
this Security.



(d) Notwithstanding any other provision in this Security, the Holder of this Security shall
have the right, which is absolute and unconditional, to receive payment of the Principal Amount and
accrued interest on or after the respective due dates, to convert the the Conversion Account
Balance in accordance with Section 3 or to bring suit for the enforcement of any such payment
and/or the right to convert the the Conversion Account Balance, and such rights shall not be
impaired or affected adversely without the consent of the Holder. Amounts set forth or provided
for herein with respect to payments, conversion and the like (and the computation thereof) shall be
the amounts to be received by the Holder and shall not, except as expressly provided herein, be
subject to any other obligation of the Company (or the performance thereof).



(e) If the Holder of this Security has instituted any proceeding to enforce any right or
remedy under this Security and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Holder, then and in every such case, subject to any
determination in such proceeding, the Company and the Holder shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and remedies of the
Holder shall continue as though no such proceeding had been instituted.



(f) Except as otherwise provided herein, no right or remedy conferred in this Security upon
the Holder is intended to be exclusive of any other right or remedy available to the Holder under
this Security, the Purchase Agreement, and the Deed of Trust and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right and remedy given
hereunder or hereafter existing at law or in equity or otherwise. The assertion or employment of
any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.



(g) The Company covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim to take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Security; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that
it will not hinder, delay or impede the execution of any power herein granted to the Holder hereof,
but will suffer and permit the execution of every such power as though no such law had been
enacted.




8. Consolidation, Merger, Etc.



(a) The Company shall not consolidate with or merge into any other Person or, directly or
indirectly, convey, transfer, sell or lease its properties and assets as, or substantially as, an
entirety to any Person unless:



(1) In the event that the Company shall consolidate with or merge into another Person or
convey, transfer, sell or lease its properties and assets substantially as an entirety to any
Person, the Person formed by such consolidation or into which the Company is merged or the Person
which acquires by conveyance, transfer or sale, or which leases, all or substantially all of the
properties and assets of the Company shall be a corporation, partnership, limited liability company
or other business entity organized and validly existing under the laws of the Untied States of
America, any State thereof or the District of Columbia, which shall, prior to or upon the
consummation of such transaction, expressly assume, if other than the Company, by an agreement
supplemental hereto, executed and delivered to the Holder of this Security in form reasonably
satisfactory to the Holder, the due and punctual payment of the Principal Amount of and any
interest on this Security and the performance or observance of every covenant of this Security on
the part of the Company to be performed or observed, including without limitation the conversion
rights provided herein; and



(2) immediately after giving effect to such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default, shall have happened
and be continuing.



(b) Upon any consolidation of the Company with, or merger of the Company into, any other
Person or any conveyance, transfer, sale or lease of all or substantially all of the properties and
assets of the Company in accordance with Section 8(a), the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance, transfer, sale or
lease is made shall succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Security with the same effect as if such successor Person had been named as
the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Security.



9. Security Interest. The Company covenants and agrees that this Security as well as any
replacement Security or other instrument issued in complete or partial replacement hereof shall be
secured by the Deed of Trust.



10. Definitions. Unless otherwise defined in this Security, the following capitalized terms
shall have the following respective meanings when used herein:



“Affiliate” of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with such specified Person.
For the purposes of this definition, “control”, when used with respect to any specified
Person, means the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or otherwise; and the
terms “controlling” and “controlled” have meanings correlative to the foregoing.



“Board of Directors” means the board of directors of the Company or any authorized
committee of the board of directors.



“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not
a day on which the banking institutions in the State of New York are authorized or obligated by law
or executive order to close or be closed.



“Capital Stock” of any Person means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interest in (however designated)
equity of such Person, but excluding any debt securities convertible into such equity.



A “Change of Control” shall be deemed to have occurred if any of the following occurs
after the date hereof:



(1) the consolidation, merger or other business combination (including, without limitation, a
reorganization or recapitalization) of the Company with or into another Person (other than (A) a
consolidation, merger or other business combination (including, without limitation, reorganization
or recapitalization) in which holders of the Company’s voting power immediately prior to the
transaction continue after the transaction to hold, directly or indirectly, the voting power of the
surviving entity or entities necessary to elect a majority of the members of the board of directors
(or their equivalent if other than a corporation) of such entity or entities, or (B) pursuant to a
migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of
the Company);



(2) the sale or transfer of all or substantially all of the Company’s assets; or



(3) the consummation of a purchase, tender or exchange offer made to and accepted by the
holders of more than 50% of the outstanding shares of Common Stock (other than a purchase or tender
or exchange offer made by the Company or any of its subsidiaries that does not result in the
transaction constituting a “Rule 13e-3 transaction” for purposes of Rule 13e-3 under the
Exchange Act).



“Closing Date” means the date of the closing of the purchase and sale of this Security
pursuant to the Purchase Agreement.



“Commission” means the United States Securities and Exchange Commission, or any other
federal agency at the time administering the Securities and Exchange Act of 1934, as amended, or
the Securities Act, whichever is the relevant statute for the particular purpose.



“Common Stock” means any stock of any class of the Company which has no preference in
respect of dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and which is not subject to redemption by the
Company.



“Convertible Securities” shall mean any evidences of indebtedness, shares (other than
Common Stock) or other securities convertible into or exchangeable for Common Stock.



“Deed of Trust” means the Deed of Trust dated as of January 19, 2006 entered into
between the Company and the initial holder of this Security, creating a first ranking mortgage
interest in and to the real property owned by the Company.



“Defaulted Payment” has the meaning set forth in Section 7(a)(1) hereof.



“Exchange Act” means the Securities Exchange Act of 1934, as amended and the rules and
regulations promulgated thereunder.



“fair market value” shall, except as otherwise specifically defined elsewhere, mean,
if there is a current market for the asset, debt or transaction in question, the amount that a
willing buyer would pay a willing seller in an arm’s length transaction or, in the absence of a
current market value for such asset, debt or transaction, the amount determined in good faith by an
independent third party jointly selected by the Holder and the Company.



“Final Maturity Date” has the meaning set forth in Section 2(a) hereof.



“Holder” means the person in whose name this Security is registered on the Note
Register.



“Indebtedness” means, with respect to any Person, at any date of determination
(without duplication):



(a) all obligations and other liabilities (contingent or otherwise) of such Person for
borrowed money (including obligations of the Company in respect of overdrafts, foreign exchange
contracts, currency exchange agreements, interest rate protection agreements, and any loans or
advances from banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of the lender is to
the whole of the assets of such Person or to only a portion thereof),



(b) all reimbursement obligations and other liabilities (contingent or otherwise) of such
Person with respect to letters of credit, bank guarantees or bankers’ acceptances,



(c) all obligations and liabilities (contingent or otherwise) in respect of leases of such
Person required, in conformity with generally accepted accounting principles, to be accounted for
as capitalized lease obligations on the balance sheet of such Person,



(d) all obligations of such Person (contingent or otherwise) with respect to an interest rate
swap, cap or collar agreement or other similar instrument or agreement,



(e) all direct or indirect guaranties or similar agreements by such Person in respect of any
obligations or liabilities (contingent or otherwise) of such Person to purchase or otherwise
acquire or otherwise assure a creditor against loss in respect of, indebtedness, obligations or
liabilities of another Person of the kind described in clauses (a) through (d),



(f) any indebtedness or other obligations described in clauses (a) through (e) secured by any
mortgage, pledge, lien or other encumbrance existing on property which is owned or held by such
Person, regardless of whether the indebtedness or other obligation secured thereby shall have been
assumed by such Person and



(g) any indebtedness or other obligation resulting from “off-balance” sheet financing, or any
such transaction; and



(h) any and all deferrals, renewals, extensions and refunding of, or amendments, modifications
or supplements to, any indebtedness, obligation or liability of the kind described in clauses (a)
through (g).



(i) any partnership obligations of such Person, of the kind described in clauses (a) through
(h).



“Instrument” means any bond, debenture, note or similar instrument.



“Note Register” means the register or other ledger maintained by the Company that
records the record owners of this Security.



“Person” or “person” shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, a limited liability company, an
unincorporated association, a joint venture or other entity or a governmental authority.



“Purchase Agreement” means the Securities Purchase Agreement entered into between the
Company and the initial holder of this Security relating to the sale and purchase of this Security.



“Security” means this Convertible Secured Note, as amended, replaced, or supplemented
from time to time, initially issued on January 19, 2006.



“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.



“Share Delivery Date” has the meaning set forth in Section 3(a)(1) hereof.



“Subordination Agreement” means the Subordination Agreement, dated as of January 19,
2005, among Silicon Valley Bank, the Holder and the Company.



“Subsidiary” means, in respect of any Person, any corporation, association,
partnership or other business entity of which more than 50% of the total voting power of shares of
Capital Stock or other interests (including partnership interests) entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers, general partners or
trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person;
(ii) such Person and one or more Subsidiaries of such Person; or (iii) one or more Subsidiaries of
such Person.



“Trading Day” means, with respect to any security, a day during which trading in the
security generally occurs on the Nasdaq Stock Market or, if the security is not quoted on the
Nasdaq Stock Market, on the principal other national or regional securities exchange on which the
security then is listed or, if the security is not listed on a national or regional securities
exchange, on the principal other market on which the security is then traded; provided, however,
that “Trading Day” shall not include any day during which trading in the security is suspended for
more than three hours between 9:30 a.m. (New York time) and 4:00 p.m. (New York time).



“Voting Stock” of a Person means all classes of Capital Stock or other interests
(including partnership interests) of such Person then outstanding and normally entitled (without
regard to the occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof.



“VWAP” means, for any period, the aggregate dollar amount of all trades of the Common
Stock during such period divided by the number of shares of the Common Stock traded during such
period as reported by the Nasdaq Stock Market (the “NSM”) or, if the Common Stock is not
quoted on the NSM, by the principal national securities exchange on which the Common Stock is
listed or admitted to trading or, if the Common Stock is not quoted on the NSM or listed or
admitted to trading on any national securities exchange, by the OTC Bulletin Board or the Pink
Sheets, LLC, or a similar generally accepted reporting service.




11. Miscellaneous.



(a) The Company will give prompt written notice to the Holder of this Security of any change
in the location of the Designated Office. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Security must be in writing and will be
deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile, provided that such notice is also delivered by regular mail; (iii) two (2)
Business Days after deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses and facsimile numbers for such
communications shall be:



If to the Company:




Sipex Corporation




233 South Hillview Drive




Milpitas, CA 95035




Telephone: (408) 934-7500




Facsimile: (408) 935-7678




Attention: Ray Wallin, Chief Financial Officer



with a copy to:




Wilson Sonsini Goodrich & Rosati, P.C.




650 Page Mill Road




Palo Alto, California 94304




Telephone: (650) 493-9300




Facsimile: (650) 493-6811




Attention: Robert G. Day



If to the Holder:



Rodfre Holding LLC


c/o Joe Prudente


Future Electronics Corp.


41 Main Street


Bolton, MA, 01740



With a copy to:



Future Electronics Inc.


237 Hymus Blvd.


Pointe Claire, Quebec


H9R 5C7


Telephone: (514) 694-7710 Ext: 2986


Facsimile: (514) 694-7515


Attention: Guy Lavergne, Esq.


Associate General Counsel



or at such other address and/or facsimile number and/or to the attention of such other person as
the recipient party has specified by written notice given to each other party 5 days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or electronically generated by the
sender’s facsimile machine containing the time, date, recipient facsimile number and an image of
the first page of such transmission, or (C) provided by a courier or overnight courier service
shall be rebuttal evidence of personal service, receipt by facsimile, or receipt from a nationally
recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.



(b) (1) The transfer of this Security is registrable on the Note Register upon surrender
of this Security for registration of transfer at the Designated Office, duly endorsed by, or
accompanied by a written instrument of transfer in form reasonably satisfactory to the Company duly
executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon
one or more new Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. Such Securities are issuable
only in registered form without coupons in denominations of $500,000 (or such lesser remaining
amount after all possible issuances in denominations of $500,000). No service charge shall be made
for any such registration of transfer, but the Company may require payment of a sum sufficient to
recover any tax or other governmental charge payable in connection therewith in the event that the
Holder requests that this Security or the Common Stock issuable hereunder be issued in the name of
someone other than the Holder. Prior to due presentation of this Security for registration of
transfer, the Company and any agent of the Company may treat the Person in whose name this Security
is registered as the owner thereof for all purposes, whether or not this Security be overdue, and
neither the Company nor any such agent shall be affected by notice to the contrary.



(2) This Security and the Common Stock issuable upon conversion of the Conversion Account
Balance have not been registered under the Securities Act, or the securities laws of any state or
other jurisdiction. Neither this Security nor the Common Stock issuable upon conversion of the
Conversion Account Balance nor any interest or participation herein may be reoffered, sold,
assigned, transferred, pledged, encumbered or otherwise disposed of (a “Transfer”) in the
absence of such registration or unless such transaction is exempt from, or not subject to,
registration. The Holder by its acceptance of this Security or the Common Stock issuable upon
conversion of the Conversion Account Balance agrees that it shall not offer, sell, assign,
transfer, pledge, encumber or otherwise dispose of this Security, other than for conversions
pursuant to the terms hereof, or any portion thereof or interest therein. and then (other than
with respect to a Transfer pursuant to a registration statement that is effective at the time of
such Transfer) only to (a) the Company or (b) an Affiliate of the Holder and in the case of (b)
above in which the transferor furnishes the Company with such certifications, legal opinions or
other information as the Company may reasonably request to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the registration requirements of
the Securities Act.



(3) Upon presentation of this Security for registration of transfer at the Designated Office
accompanied by (i) certification by the transferor that such transfer is in compliance with the
terms hereof and (ii) by a written instrument of transfer in a form approved by the Company
executed by the Holder, in person or by the Holder’s attorney thereunto duly authorized in writing,
and including the name, address and telephone and fax numbers of the transferee and name of the
contact person of the transferee, such Security shall be transferred on the Note Register, and a
new Security of like tenor and bearing the same legends shall be issued in the name of the
transferee and sent to the transferee at the address and c/o the contact person so indicated.
Transfers and exchanges of this Security shall be subject to such additional restrictions as are
set forth in the legends on this Security and to such additional reasonable regulations as may be
prescribed by the Company as specified in Section 11(b)(2) hereof. Successive registrations of
transfers as aforesaid may be made from time to time as desired, and each such registration shall
be noted on the Note register.



(4) Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Security, and in the case of loss, theft or destruction, receipt
of indemnity reasonably satisfactory to the Company and upon surrender and cancellation of this
Security, if mutilated, the Company will deliver a new Security of like tenor and dated as of such
cancellation, in lieu of such Security.



(5) The Holder represents that it is an “accredited investor” within the meaning of
Rule 501(a) of the Securities Act. The Holder has been advised that this Security and the Common
Stock issuable upon conversion of the Conversion Account Balance have not been registered under the
Securities Act, or any state securities laws and, therefore, cannot be resold unless it is
registered under the Securities Act and applicable state securities laws or unless an exemption
from such registration requirements is available. The Holder is aware that the Company is under no
obligation to effect any such registration or to file for or comply with any exemption from
registration. The Holder has not been formed solely for the purpose of making this investment and
is acquiring the Security for its own account for investment, and not with a view to, or for resale
in connection with, the distribution thereof.



(6) Such Holder understands that:



(A) until the end of the holding period under Rule 144(k) of the Securities Act (or any
successor provision), this Security (and all securities issued in exchange therefor or in
substitution thereof, other than the shares of Common Stock issuable upon conversion of the
Conversion Account Balance, which shall bear the legend set forth in Section 11(b)(6)(B) of this
Security, if applicable) shall bear a legend in substantially the following form:



THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION THEREFROM.



THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A VOTING AGREEMENT WHICH PLACES CERTAIN RESTRICTIONS ON THE VOTING
OF THE SECURITIES REPRESENTED HEREBY. ANY PERSON ACCEPTING ANY INTEREST IN SUCH
SECURITIES SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE
PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH VOTING AGREEMENT WILL BE FURNISHED
TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO
THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS.



The legend set forth above shall be removed and the Company shall issue a new Security of like
tenor and aggregate principal amount, and which shall not bear the restrictive legend required by
this Section 11(b)(6)(A), (i) if, in connection with a sale transaction, the Holder provides the
Company with an opinion of counsel reasonably acceptable to the Company to the effect that a public
sale, assignment, pledge or transfer of this Security may be made without registration under the
Securities Act, or (ii) upon expiration of the applicable two-year holding period under Rule 144(k)
of the Securities Act (or any successor rule). The Company shall not require such opinion of
counsel for the sale of this Security in accordance with Rule 144 of the Securities Act in the
event that the Holder provides such representations that the Company shall reasonably request
confirming compliance with the requirements of Rule 144;



(B) until the end of the holding period under Rule 144(k) of the Securities Act (or any
successor provision), any stock certificate representing such shares of Common Stock shall bear a
legend in substantially the following form unless, in the case of shares of Common Stock issued
upon conversion of the Conversion Account Balance, the Security submitted for conversion is not
required to bear the legend specified in Section 11(b)(6)(A):



THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN EXEMPTION
THEREFROM.



THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A VOTING AGREEMENT WHICH PLACES CERTAIN RESTRICTIONS ON THE VOTING
OF THE SECURITIES REPRESENTED HEREBY. ANY PERSON ACCEPTING ANY INTEREST IN SUCH
SECURITIES SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE
PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH VOTING AGREEMENT WILL BE FURNISHED
TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO
THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS.



The legend set forth above shall be removed and the Company shall issue a stock certificate
evidencing such shares of Common Stock, as the case may be, without such legend to the holder of
the stock certificate evidencing such shares of Common Stock and upon which such legend is stamped,
(i) if such shares of Common Stock have been resold or transferred pursuant to the registration
statement contemplated by the Purchase Agreement and the registration statement was effective at
the time of such transfer, (ii) if, in connection with a sale transaction, such holder provides the
Company with an opinion of counsel reasonably acceptable to the Company to the effect that a public
sale, assignment, pledge or transfer of the shares of Common Stock may be made without registration
under the Securities Act, or (iii) upon expiration of the applicable two-year holding period under
Rule 144(k) of the Securities Act (or any successor rule). The Company shall not require such
opinion of counsel for the sale of such shares of Common Stock in accordance with Rule 144 of the
Securities Act, provided that the Seller provides such representations that the Company shall
reasonably request confirming compliance with the requirements of Rule 144; and



(C) in the event Rule 144(k) as promulgated under the Securities Act (or any successor rule)
is amended to change the two-year holding period under Rule 144(k) (or the corresponding holding
period under any successor rule), (i) each reference in Sections 11(b)(6) of this Agreement to
“two-year holding period” shall be deemed for all purposes of this Agreement to be
references to such changed period, and (ii) all corresponding references in this Security shall be
deemed for all purposes to be references to the changed period, provided that such changes shall
not become effective if they are otherwise prohibited by, or would otherwise cause a violation of,
the then-applicable federal securities laws.



(7) Neither this Security nor any term hereof may be amended or waived orally or in writing,
except that any term of this Security may be amended and the observance of any term of this
Security may be waived (either generally or in a particular instance and either retroactively or
prospectively), upon the approval of the Company and the Holder; provided, however,
that the Company may, without the consent of the Holder, amend the Security for the purpose of (i)
surrendering any right or power conferred upon the Company, (ii) providing for conversion rights of
Holder if any reclassification or change of the Common Stock or any consolidation, merger or sale
of all or substantially all of the Company’s assets occurs, (iii) providing for the assumption of
the Company’s obligations to the Holder in the case of a merger, consolidation, conveyance,
transfer or lease, or (iv) reducing the Conversion Price, provided that the reduction will not
adversely affect the interests of the Holder.



(c) In any case in which the date of maturity of, the date of payment of any interest on this
Security will not be a Business Day, then payment of such interest on or Principal Amount of this
Security need not be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on such date of maturity or date of payment, as the case may
be, and no interest shall accrue for the period from and after such date.



(d) In the case of a dispute as to the determination of the Closing Price, the Conversion
Price, the fair market value of assets (other than cash or securities), or the arithmetic
calculation of any shares of Common Stock to be issued hereunder, the Company shall submit the
disputed determinations or arithmetic calculations via facsimile within one Business Day from the
manifestation of such dispute to the Holder. If the Company and the Holder are unable to agree
upon such determination or calculation of the Closing Price, the Conversion Price or the fair
market value of assets (other than cash or securities), or the arithmetic calculation of any shares
of Common Stock to be issued hereunder, as the case may be, within one Business Day of such
disputed determination or arithmetic calculation being submitted to the Holder, then the Company
shall, within 10 Business Days, submit via facsimile (a) the disputed determination of Closing
Price, the Conversion Price or the fair market value of assets (other than cash or securities) to
an independent, reputable investment bank selected by the Company and approved by the Holder or (b)
the disputed arithmetic calculation of any shares of Common Stock to be issued hereunder to the
Company’s independent, outside accountant. The Company shall make reasonable efforts to cause the
investment bank or the accountant, as the case may be, to perform the determinations or
calculations and notify the Company and the Holder of the results no later than 15 Business Days
from the date it receives the disputed determinations or calculations. Such investment bank’s or
accountant’s determination or calculation, as the case may be, shall be binding upon all parties
absent demonstrable error. The fees and expenses of the accountant or investment bank, as the case
may be, shall be paid by the party whose calculation or determination is, on a percentage basis,
the least closest to that determined by the accountant or investment bank; provided, however, that
if each of the amounts originally determined or calculated by the Company and the Holder are at
least equal to 80% of the amount calculated or determined by the accountant or investment bank but
not more than 120% of the amount calculated or determined by the accountant or investment bank,
then the Company and the Holder will each pay one half of the fees and expenses of such accountant
or investment bank.



(e) If (a) this Security is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to
collect amounts due under this Security or to enforce the provisions of this Security or (b) there
occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting
Company creditors’ rights and involving a claim under this Security, then the Company shall pay the
reasonable costs incurred by the Holder for such collection, enforcement or action or in connection
with such bankruptcy, reorganization, receivership or other proceeding, including but not limited
to reasonable attorneys fees and disbursements.



(f) THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF CALIFORNIA.



[Remainder of page intentionally left blank.]

1


IN WITNESS WHEREOF, the Company has caused this
Security to be duly executed.



Dated: January 19, 2006



	 
	 

	SIPEX CORPORATION

	 

	 

	By: /s/ Clyde R. Wallin

	 

	 

	Name: Clyde R. Wallin

	 

	 

	Title: Sr. VP Finance & CFO

	 

	 

	RODFRE HOLDINGS LLC

	 

	 

	By: /s/ Joseph Prudente

	 

	 

	Name: Joseph Prudente

	 

	 

	Title: Director

	 







2




EXHIBIT A




CONVERSION NOTICE




The undersigned holder of this Security hereby irrevocably exercises the conversion rights
granted pursuant to this Security and does hereby convert the amount of the Conversion Account
Balance below designated, into Common Stock in accordance with the terms of this Security, and
directs that such shares, be delivered to and be registered in the name of the undersigned unless a
different name has been indicated below. If shares of Common Stock are to be registered in the
name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto.




Dated:




RODFRE HOLDINGS LLC




By:

Name:      

Title:      




If shares are to be registered in the name of a Person other than the holder, please print such
Person’s name and address:



Name



Address



Social Security or other Taxpayer Identification Number, if any



Amount of accrued interest: $     



3




EXHIBIT B




NOTICE OF ELECTION TO REQUIRE REPAYMENT




Pursuant to Section 4(a)(2) of the this 9% Convertible Secured Note Due 2008 dated January19,
2006 of Sipex Corporation (the “Security”), the undersigned holder of this Security hereby
irrevocably exercises the option to require redemption and repayment of the principal amount of
this Security, together with all accrued interest thereon for which conversion rights have not been
exercised, on the day on which the Change of Control (as defined in this Security) is consummated
and directs that such check for such payment be delivered to the undersigned unless a different
name has been indicated below.




Dated:




RODFRE HOLDINGS LLC




By:

Name:      

Title:      




If a check is to be delivered in the name of a Person other than the holder, please print such
Person’s name and address:



Name



Address



Social Security or other Taxpayer Identification Number, if any




4