Document:

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                                                                    EXHIBIT 10.1

                             BUSINESS LOAN AGREEMENT
                             -----------------------

         This Business Loan Agreement (this "Agreement") is entered into by and
between Comerica Bank-California ("Bank") and Sipex Corporation, a Massachusetts
corporation ("Borrower") as of this 1st day of June, 2000, at Bank's
headquarters office at 333 West Santa Clara Street, San Jose, California 95113:

     1.  LOANS TO BORROWER. Bank and Borrower agree that any loans which Bank in
its sole discretion has made or may now or hereafter make to Borrower (sometimes
hereinafter collectively referred to as the "Loan") shall be subject to the
terms and conditions of this Agreement unless otherwise agreed to in writing by
Bank and Borrower. In the event there are contradictions between the provisions
of this Agreement and any other written agreement with the Bank, this Agreement
shall prevail. Loan shall be subject to the terms and conditions of this
Agreement, promissory notes) executed in connection herewith and/or previously
or subsequently executed, and all amendments, renewals and extensions thereof
(singularly or collectively, the "Note"), and all those certain security
agreements and/or such other security or other documents as Bank has required or
may now or hereafter require in connection with the Loan (collectively, the
"Loan Documents").

     2.  LEGAL EFFECT. This Agreement supplements the terms and conditions of
the Loan Documents. Except as otherwise specified herein, all terms used in this
Agreement shall have the same meaning as given in the Note and/or Loan Documents
which are incorporated herein by this reference. Any and all terms used in this
Agreement, the Note and/or the Loan Documents shall be construed and defined in
accordance with the meaning and definition of such term under and pursuant to
the California Uniform Commercial Code, as amended. Except as specifically
modified hereby, all of the terms and conditions of the Note and/or the Loan
Documents shall remain in full force and effect.

     3.  INTEREST RATE; PAYMENT TERMS: LOAN FEES. The principal and interest on
the Loan shall be payable on the terms set forth in the Note and/or the Loan
Documents. If applicable, a loan fee in the sum of Twenty Five Thousand and
No/100 Dollars ($25 000.00) shall be paid concurrently with the execution of
this Agreement. In addition, Borrower shall pay such additional loan fees from
time to time in the future as agreed between Bank and Borrower.

     4.  SECURITY. As security for Borrower's obligations to Bank under this
Agreement, the Note and/or the Loan Documents and all other indebtedness and
liabilities whatsoever of Borrower to Bank, whether direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter arising,
evidenced by the Note and/or the Loan Documents (collectively, the
"Indebtedness"), Borrower hereby grants to Bank, prior to or simultaneously with
the borrowing hereunder, a continuing security interest of first priority in all
accounts receivable, inventory, and intangibles and all proceeds thereof, and in
all collateral provided to Bank pursuant to any security agreement and/or all
collateral that is delivered to Bank and/or which Bank possesses and all
proceeds thereof, (collectively, the "Collateral").

     5.  REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower represents and
warrants to Bank that as of the date of acceptance of this Agreement, the Note
and/or the Loan Documents,

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as of the date of borrowing hereunder and at all times the Loan or any other
Indebtedness are outstanding hereunder:

          (a) If Borrower is a corporation, Borrower is duly organized, validly
existing and in good standing under the laws of the state of its incorporation;
if a partnership, Borrower is duly organized and validly existing under the
partnership agreement and the applicable laws of the state in which the
partnership is formed or exists or if a limited liability company, Borrower is
duly organized and validly existing under the operating agreement and the
applicable laws of the state in which the limited liability company is formed;

          (b) Borrower has the legal power and authority, to own its properties
and assets and to carry out its business as now being conducted; it is qualified
to do business in every jurisdiction wherein such qualification is necessary; it
has the legal power and authority to execute and perform this Agreement, the
Note and/or the Loan Documents to borrow money in accordance with its terms, to
execute and deliver this Agreement, the Note and the Loan Documents, and to do
any and all other things required of it hereunder; and this Agreement, the Note
and all the Loan Documents, when executed on behalf of Borrower by its duly
authorized officers, partners or members, as the case may be, shall be its valid
and binding obligations legally enforceable in accordance with their terms;

          (c) The execution, delivery and performance of this Agreement, the
Note and/or the Loan Documents and the borrowings hereunder and thereunder (i)
have been duly authorized by all requisite corporate, partnership or company
action; (ii) do not require governmental approval; (iii) will not result (with
or without notice and/or the passage of time) in any conflict with or breach or
violation of or default under, any provision of law, the articles of
incorporation, articles of organization, operating agreement, bylaws or
partnership agreement of Borrower, any provision of any indenture, agreement or
other instrument to which Borrower is a party, or by which it or any of its
properties or assets are bound; and (iv) will not result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the properties or assets of Borrower;

          (d) The balance sheet of Borrower as provided to Bank in connection
herewith and the related statement of income of Borrower provided to Bank for
the period ended December 31, 1999, fairly present the financial condition of
Borrower in accordance with generally accepted accounting principles ("GAAP")
consistently applied; and from the date thereof to the date hereof, there has
been no material adverse change in such condition or operations; and

          (e) There is not pending nor, to the best of Borrower's knowledge,
threatened, any litigation, proceeding or governmental investigation which could
materially and adversely affect its business or its ability to perform its
obligations, pay the Indebtedness and/or comply with the covenants set forth
herein and/or in the Note and/or the other Loan Documents.

     6.  AFFIRMATIVE COVENANTS. Until the Indebtedness is paid in full, Borrower
covenants and agrees to do the following:

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          (a) Furnish to Bank within thirty (30) days after the end of each
quarter, a copy of Borrower's "10-Q" report. Within ninety (90) days of the end
of each of Borrower's fiscal years, furnish to Bank statements of the financial
condition of Borrower for each such fiscal year, including but not limited to, a
balance sheet, profit and loss statement, statement of cash flow, and
projections for Borrower's next 12 month operating period. Said annual
statements shall be prepared by the Borrower's current certified public
accountant, an independent certified public accountant selected by Borrower and
acceptable to Bank on an audited basis, and shall include a Management Letter.

          (b) In addition to the financial statements requested above, Borrower
agrees to provide Bank with the following schedules in a form acceptable to
Bank:

   X    Accounts Receivable Aging Reports               on a monthly basis
------

   X    Accounts Payable Aging Reports                  on a monthly basis
------

        Job Progress Reports                            on a         basis; and
------

        Inventory Reports                               on a         basis
------

                                                        on a         basis
------

          (c) Promptly inform Bank of the occurrence of any default or event of
default as defined in the Note and/or the Loan Documents (hereinafter referred
to as "Default") or of any event which could have a materially adverse effect
upon Borrower's business, properties, financial condition or ability to comply
with its obligations hereunder, including without limitation its ability to pay
the Indebtedness;

          (d) Furnish such other information as Bank may reasonably request;

          (e) Keep in full force and effect its own corporate, company or
partnership existence in good standing; continue to conduct and operate its
business substantially as presently conducted and operated and maintain and
protect all franchises and trade names and preserve all the remainder of its
property used or useful in the conduct of its business and keep the same in good
repair and condition;

          (f) Comply with the financial covenants set forth in Addendum A,
attached hereto and made a part hereof;

          (g) Maintain a standard and modern system of accounting in accordance
with GAAP consistently applied with ledger and account cards and/or computer
tapes and computer disks, computer printouts and computer records pertaining to
the Collateral which contain information as may from time to time be requested
by Bank, not modify or change its method of accounting without the written
consent of Bank first obtained, permit Bank and any of its employees, officers,
or agents, upon demand, during Borrower's usual business hours, or the usual
business hours of any third person having control thereof, to have access to and
examine all of Borrower's records relating to the Collateral, Borrower's
financial condition and the results

                                      -3-

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of Borrower's operations and in connection therewith, permit Bank or any of its
agents, employees, or officer to copy and make extracts therefrom;

          (h) Maintain Borrower's same place of business or chief executive
office or residence as indicated below, and not relocate said address without
giving Bank 30 days prior written notice;

          (i) Maintain insurance with such insurers in such amounts and of a
type satisfactory to Bank, with Bank to be designated as the payee of any such
insurance policies under a payee/secured lender clause acceptable to Bank; and

          (j) Keep all of its principal bank accounts with Bank and shall notify
the Bank immediately in writing of the existence of any other bank account,
deposit account, or any other account into which money can be deposited. Bank
acknowledges that funds in the amount of $36,750,000 may be held at and pledged
to Union Bank of Switzerland.

          (k) On a continuing basis from the date of this Agreement until the
Indebtedness is paid in full and the Borrower has performed all of its other
obligations hereunder, the Borrower represents and agrees that:

               (1) There are not and will not be Hazardous Materials (as later
defined) on, in or under any real or personal property ("Property") now or at
anytime owned, occupied or operated by the Borrower which in any manner violate
any Environmental Law (as later defined).

               (2) The Borrower shall promptly conduct all investigations,
testing and other actions necessary to clean up and remove all Hazardous
Materials on or affecting the Property in accordance with every Environmental
Law.

               (3) The Borrower shall defend, indemnify and hold harmless the
Bank, its employees, agents, officers, shareholders and directors from and
against any and all claims, damages, fines, expenses, liabilities or causes of
action of whatever kind, including without limit consultant fees, legal expenses
and reasonable attorneys' fees, suffered by any of them as a direct or indirect
result of any actual or asserted violation of any Environmental Law.

               (4) Upon ten days notice to the Borrower (except in an
emergency), the Bank may (but is not obligated to) enter on the Property or take
such other actions as it deems appropriate to inspect, test for, clean up,
remove or minimize the impact of any Hazardous Materials upon the Bank's receipt
of any notice from any source asserting the existence of any Hazardous Materials
in violation of any Environmental Law. All costs and expenses so incurred by the
Bank, including without limit consultant fees, legal expenses and reasonable
attorneys' fees, shall be payable by the Borrower upon demand.

               (5) The provisions of this section shall survive the repayment of
the Indebtedness, the satisfaction of all other obligations of Borrower to the
Bank, the discharge or termination by the Bank of any lien or security interest
from Borrower, and the foreclosure of or exercise of rights as to any collateral
given to the Bank.

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               (6) "Hazardous Materials" mean all of the following: any
asbestos, petroleum, petroleum byproducts, flammable explosives, or radioactive
materials or any hazardous or toxic materials as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Sections 9601 et seq.) or in any other Environmental Law.

               (7) "Environmental Law" means any federal, state, local or other
law, ordinance, statute, directive, rule, order or regulation on object of which
is to regulate or improve health, safety or the environment.

     7.  NEGATIVE COVENANTS. Borrower shall not, without Bank's prior written
consent, do any of the following:

          (a) Grant a security interest in or permit a lien, claim or
encumbrance upon any of the Collateral to any person, association, firm,
corporation, entity, governmental agency or instrumentality;

          (b) Permit any levy, attachment or restraint to be made affecting any
of Borrower's assets;

          (c) Permit any judicial officer or assignee to be appointed or to take
possession of any or all of Borrower's assets;

          (d) Other than sales of inventory in the ordinary course of Borrower's
business, to sell, lease or otherwise dispose of, move, or transfer, whether by
sale or otherwise, any of Borrower's assets exceeding One Million Five Hundred
Thousand Dollars ($1,500,000);

          (e) Change its name, business structure, corporate identity or
structure; add any new fictitious name, liquidate, merge or consolidate with or
into any other business organization where Borrower is not the surviving entity;

          (f) Move or relocate any collateral except in the ordinary course of
Borrower's business;

          (g) Acquire any other business organization. Such consent will not be
unreasonably withheld by Bank;

          (h) Enter into any transaction not in the usual course of Borrower's
business;

          (i) Make any investment in securities greater than Five Million
Dollars ($5,000,000) of any person, association, firm, entity or corporation
other than securities of the United States of America;

          (j) Make any change in Borrower's financial structure or in any of its
business objects, purposes or operations which would adversely affect the
ability of Borrower to pay its obligations;

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          (k) Incur any debt outside the ordinary course of Borrower's business
in excess of $5,000,000 on an aggregate basis;

          (l) Make any advance or loan greater than One Million Five Hundred
Thousand Dollars ($1,500,000) on an aggregate basis except in the ordinary
course of Borrower's business;

          (m) Make loans, advances or extensions of credit to any person greater
than $1,500,000.00 on an aggregate basis, except for sales on open account and
otherwise in the ordinary course of business;

          (n) Guaranty or otherwise, directly or indirectly, in any way be or
become responsible for obligations of any other person other than subsidiaries
of Borrower, whether by agreement to purchase the indebtedness of any other
person, agreement for the furnishing of funds to any other person through the
furnishing of goods, supplies or services, by way of stock purchase, capital
contribution, advance or loan, for the purpose of paying and discharging (or
causing the payment or discharge of) the indebtedness of any other person, or
otherwise, except for the endorsement of negotiable instruments by Borrower in
the ordinary course of business for deposit or collection;

          (o) Allow any fact, condition or event to occur or exist with respect
to any employee, pension or profit sharing plan established or maintained by it
which might constitute grounds for termination of any such plan or for the court
appointment of a trustee to administer any such plan;

     8.  DEFAULT. The terms "Default" or "Event of Default", as used herein,
shall have the meaning given in the Note and/or the Loan Documents. In addition,
the parties agree that any one or more of the following events shall constitute
a default by Borrower under this Agreement, the Note and/or the Loan Documents:

          (a) If Borrower fails or neglects to perform, keep or observe any
term, provision, condition, covenant, agreement, warranty or representation
contained in this Agreement, the Note, the Loan Documents or any other present
or future agreement between Borrower and Bank;

          (b) If any material representation, statement, report or certificate
made or delivered by Borrower, or any of its officers, employees or agents to
Bank is not true and correct;

          (c) If Borrower fails to pay when due and payable or declared due and
payable, all or any portion of the Indebtedness (whether or principal, interest,
taxes, reimbursement of Bank expenses, or otherwise);

          (d) If there is a material impairment of the prospect of repayment of
all or any portion of Borrower's obligations, including without limitation the
Indebtedness or a material impairment of the value or priority of Bank's
security interest in the collateral;

          (e) If all or any of Borrower's assets are affected, become subject to
a writ or distress warrant, or are levied upon, or come into the possession of
any judicial officer or

                                      -6-
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assignee and the same are not released, discharged or bonded against within ten
(10) days thereafter;

          (f) If any insolvency proceeding is filed or commenced by or against
Borrower without being dismissed within ten (10) days thereafter;

          (g) If any bankruptcy or other proceeding is filed or commenced by or
against Borrower for its reorganization, dissolution or liquidation without
being dismissed within ten (10) days of its commencement;

          (h) If Borrower is enjoined, restrained or in any way prevented by
court order from continuing to conduct all or any material part of its business
affairs;

          (i) If a notice of lien, levy or assessment is filed of record with
respect to any or all of Borrower's assets by the United States Government, or
any department, agency or instrumentality thereof, or by any state, county,
municipal or other government agency, or if any taxes or debts owing at any time
hereafter to any one or more of such entities becomes a lien, whether inchoate
or otherwise, upon any or all of the Borrower's assets and the same is not paid
on the payment date thereof;

          (j) If a judgment or other claim becomes a lien or encumbrance upon
any or all of Borrower's assets and the same is not satisfied, dismissed or
bonded against within ten (10) days thereafter;

          (k) If Borrower's records are prepared and kept by an outside computer
service bureau at the time this Agreement, the Note and/or the Loan Documents
are entered into or during the term of this Agreement, the Note and/or the Loan
Documents, such an agreement with an outside service bureau is entered into, and
at any time thereafter, without first obtaining the written consent of Bank,
Borrower terminates, modifies, amends or changes its contractual relationship
with said computer service bureau or said computer service bureau fails to
provide Bank with any requested information or financial data pertaining to
Bank's Collateral, Borrower's financial condition or the results of Borrower's
operations;

          (l) If Borrower permits a default in any material agreement to which
Borrower is a party with third parties so as to result in an acceleration of the
maturity of Borrower's indebtedness to others, whether under any indenture,
agreement or otherwise;

          (m) If Borrower makes any payment on account of indebtedness which has
been subordinated to Borrower's obligations to Bank, including without
limitation the Indebtedness;

          (n) If any material misrepresentation exists now or thereafter in any
warranty or representation made to Bank by any officer or director of Borrower,
or if any such warranty or representation is withdrawn by any officer or
director;

          (o) If any party subordinating its claims to that of Bank's or any
guarantor of Borrower's obligations terminates its subordination or guaranty,
becomes insolvent or an insolvency proceeding is commenced by or against any
such subordinating party or guarantor;

                                      -7-

<PAGE>   8

          (p) If Borrower is an individual and Borrower dies;

          (q) If any reportable event, which the Bank determines constitutes
grounds for the termination of any deferred compensation plan by the Pension
Benefit Guaranty Corporation or for the appointment by the appropriate United
States District Court of a trustee to administer any such plan, shall have
occurred and be continuing thirty (30) days after written notice of such
determination shall have been given to Borrower by Bank, or any such Plan shall
be terminated within the meaning of Title IV of the Employment Retirement Income
Security Act ("ERISA"), or a trustee shall be appointed by the appropriate
United States District Court to administer any such plan, or the Pension Benefit
Guaranty Corporation shall institute proceedings to terminate any plan and in
case of any event described in this Section 8, the aggregate amount of the
Borrower's liability to the Pension Benefit Guaranty Corporation under Sections
4062, 4063 or 4064 of ERISA shall exceed five percent (5%) of Borrower's
Tangible Effective Net Worth.

     Bank shall not be obligated to make advances to Borrower during any cure
period provided for in Sections 8(e), 8(f), 8(j), and 8(q) above.

     9.   RIGHTS AND REMEDIES. The parties have agreed as follows with respect
to Bank's rights and remedies upon Default:

          (a) Bank shall have all rights and remedies available hereunder and
under the Note and the Loan Documents and under applicable law;

          (b) Bank may at its option without notice, accelerate the Indebtedness
and declare all Indebtedness to be due, owing and payable in full;

          (c) Bank may at its option without notice, cease advancing money or
extending credit to or for the benefit of Borrower under this Agreement or any
other agreement between Borrower and Bank.

          (d) No Default (as defined in this Agreement, the Note and/or the Loan
Documents) shall be waived by Bank except in writing and a waiver of any Default
shall not be a waiver of any other default or of the same default on a future
occasion;

          (e) No single or partial exercise of any right, power or privilege
hereunder, or any delay in the exercise hereof, shall preclude other or further
exercise of the rights of the parties under this Agreement, the Note and/or the
Loan Documents; and

          (f) No forbearance on the part of Bank in enforcing any of its rights
under this Agreement, the Note and/or the Loan Documents nor any renewal,
extension or rearrangement of any payment or covenant to be made or performed by
Borrower hereunder shall constitute a waiver of any of the terms of this
Agreement, the Note, and/or the Loan Documents, or of any such right.

     10.  CROSS-DEFAULT. A Default under this Agreement shall also be a Default
under the Note and the Loan Documents, and vice versa. A Default under this
Agreement, the Note and/or the Loan Documents shall also be a Default under
every other note and other agreement between Bank and Borrower, and vice versa.

                                      -8-

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     11.  CROSS-COLLATERAL. Any Collateral for this Agreement, the Note and/or
the Loan Documents shall also be Collateral for any other obligations owing by
Borrower to Bank. Notwithstanding the above, (i) to the extent that any portion
of the Indebtedness is a consumer loan, that portion shall not be secured by any
deed of trust or mortgage on or other security interest in any of the
undersigned's principal dwelling or in any of the undersigned's real property
which is not a purchase money security interest as to that portion, unless
expressly provided to the contrary in another place, or (ii) if the undersigned
(or any of them) has (have) given or give(s) Bank a deed of trust or mortgage
covering real property, that deed of trust or mortgage shall not secure this
Note or any other indebtedness of the undersigned (or any of them), unless
expressly provided to the contrary in another place.

     12.  SURVIVAL OF COVENANTS. AGREEMENTS. REPRESENTATIONS AND WARRANTIES. All
covenants, agreements, representations and warranties (a) previously made
(except as specifically subsequently modified); (b) made in connection herewith
or with the Note and/or the Loan Documents and/or any document contemplated
hereby; or (c) executed hereafter (unless such document expressly states that
this Agreement does not apply thereto) shall survive the borrowing hereunder and
thereunder and the repayment in full of the Note and/or the Loan Documents and
any amendments, renewals or extensions thereof and shall be deemed to have been
relied upon by Bank. All statements contained in any certificate or other
document delivered to Bank at any time by or on behalf of Borrower shall
constitute representations and warranties by Borrower.

     13.  MISCELLANEOUS. The parties agree to the following miscellaneous terms:

          (a) This Agreement, the Note and the Loan Documents shall be governed
by California law, without regard for the effect of conflict of laws;

          (b) Borrower agrees that it will pay all out of pocket costs of Bank
and expenses (including, without limitation, Bank's attorneys' fees and costs
and/or fees, transfer charges and costs of Bank's in-house counsel) in
connection with the preparation of this Agreement, the Note and/or the Loan
Documents and/or the documents contemplated hereby and the closing of the Loan
which are not covered by the loan fee;

          (c) This Agreement, the Note and/or the Loan Documents shall inure to
the benefit of and shall be binding upon the parties hereto and their respective
successors and assigns; provided, however, that Borrower shall not assign or
transfer its right or obligations under this Agreement, the Note and/or the Loan
Documents without the prior written consent of Bank;

          (d) Borrower acknowledges that Bank may provide information regarding
Borrower and the Loan to Bank's parent, subsidiaries and affiliates and service
providers, and

          (e) This Agreement is an integrated agreement and supersedes all prior
negotiations and agreements regarding the subject matter hereof. Any amendments
hereto shall be in writing and be signed by all parties hereto.

     14.  JURY WAIVER. THE BORROWER AND THE BANK ACKNOWLEDGE THAT THE RIGHT TO
TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT

                                      -9-

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MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO
CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR
MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION
REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS
AGREEMENT OR THE INDEBTEDNESS.

     IN WITNESS WHEREOF, the parties have executed this Business Loan Agreement
as of the date first set forth above.

Address of Borrower:                           Borrower:

233 South Hillview Drive                       Sipex Corporation
--------------------------                     ---------------------------------

Milpitas, CA  95035                            By: /s/ Frank R. DiPietro
--------------------------                        ------------------------------

                                               Title: EXE Vice President
                                                     ---------------------------

                                               By:
                                                  ------------------------------

                                               Title:
                                                     --------------------------

                                                Comerica Bank-California
                                                ("Bank")

                                                By:
                                                   -----------------------------

                                                Title:
                                                      --------------------------

                                      -10-

<PAGE>   11

                      ADDENDUM A TO BUSINESS LOAN AGREEMENT
                      -------------------------------------

                              (FINANCIAL COVENANTS)

     1.  DEFINITIONS RELATING TO FINANCIAL COVENANTS.

         CASH FLOW as used in this Agreement means for any applicable period of
determination, the net income (as later defined) (after deduction for income
taxes and other taxes of Borrower or its subsidiaries, determined by reference
to income or profits of Borrower or its subsidiaries) for such period, plus, to
the extent deducted in computation of such net income, the amount of
depreciation and amortization expense and the amount of deferred tax liability
during such period, all as determined in accordance with GAAP. For Borrower and
its subsidiaries, the applicable period of determination will be N/A , beginning
with the period from N/A to ___________.

          CASH FLOW COVERAGE RATIO means the ratio, as of any applicable period
of determination, the numerator of which is net income plus depreciation plus
amortization plus (or minus) the increase (or decrease) in the deferred tax
liability minus dividends and S-Draws, if an S-Corp, at the greater of actual
draws or net income times the highest prevailing personal tax rate, and the
denominator of which is the current portion of long term debt plus the current
portion of capital lease payments for the same period of determination.

          CURRENT ASSETS as used in this Agreement means, as of any applicable
date of determination, all unrestricted cash, CD's or marketable securities,
non-affiliated accounts receivable, United States Government securities and/or
claims against the United States Government, and inventories (held for sale in
the ordinary course of business) of Borrower and its subsidiaries.

          CURRENT LIABILITIES as used in this Agreement means, as of any
applicable date of determination, (i) all liabilities of Borrower or its
subsidiaries that should be classified as current in accordance with GAAP,
including, without limitation, any portion of the principal of the Indebtedness
under this Agreement, the Note and/or the Loan Documents classified as current,
plus (ii) to the extent not otherwise included, all liabilities of Borrower to
any of its affiliates (including officers, directors, shareholders, subsidiaries
and commonly held companies), whether or not classified as current in accordance
with GAAP unless same shall be the long term portion of Subordinated Debt (as
defined below).

          CURRENT RATIO as used in this Agreement means, as of an applicable
date of determination, Current Assets divided by Current Liabilities.

          DEBT shall mean, as of any applicable date of determination, all items
of indebtedness, obligation or liability of a person, whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, that should be classified as liabilities in
accordance with GAAP excepting such liabilities as shall be Subordinated Debt
(as defined below).

          FIXED CHARGES as used in this Agreement means, as of any applicable
period of determination, with respect to Borrower and its subsidiaries, the sum,
without duplication, of (a)

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<PAGE>   12

all interest paid or payable during such period by Borrower or its subsidiaries
on debt of such person; plus (b) all payments of principal or other sums paid or
payable during such period by such person with respect to Debt having a final
maturity more than one year from the date of creation of such Debt; plus (c) all
debt discount and expense amortized or required to be amortized during such
period by such person; plus (d) the maximum amount of all rents and other
payments paid or required to be paid by such person during such period under any
lease or other contract or arrangement providing for use of real or personal
property in respect of which such person is obligated as a lessee, user or
obligor; plus (e) all dividends and other distributions paid or payable by
Borrower (including S-Draws, if applicable, as per the Cash Flow Coverage Ratio
above) or its subsidiaries or otherwise accumulating during such period on any
capital stock of Borrower or its subsidiaries; plus (f) all loans or other
advances made by Borrower or its subsidiaries during such period to any
affiliate of such person. The applicable period of determination will be N/A ,
beginning with the period from N/A to __________.

          NET INCOME shall mean the net income (or loss) of a person for any
period determined in accordance with GAAP but, however, excluding:

          (a) any gains or losses on the sale or other disposition, not in the
ordinary course of business, of investments or fixed or capital assets, and any
taxes on the excluded gains and any tax deductions or credits on account on any
excluded losses; and

          (b) in the case of the Borrower, net earnings of any person in which
Borrower has an ownership interest, unless such net earnings shall have actually
been received by Borrower in the form of cash distributions.

          QUICK ASSETS as used in this Agreement means, as of any applicable
date of determination, unrestricted cash, CD's or marketable securities and net
accounts receivable arising from the sale of goods and services, and United
States Government securities and/or claims against the United States Government
of Borrower and its subsidiaries.

          QUICK RATIO as used in this Agreement means, as of an applicable date
of determination, Quick Assets divided by Current Liabilities, excluding
subordinated debt.

          TANGIBLE EFFECTIVE NET WORTH as used in this Agreement means Tangible
Net Worth as of any applicable date of determination, increased by the long term
portion of Subordinated Debt (as defined below), if any, of Borrower or its
subsidiaries and decreased by the following: Subscription lists, organization
expenses, trade accounts receivable converted to notes, and money due to
Borrower or its subsidiaries from affiliates (including officers, directors,
subsidiaries and commonly held companies).

          TANGIBLE NET WORTH as used in this Agreement means, as of any
applicable date of determination, the excess of:

          (a) the net book value of all assets of Borrower and its subsidiaries
(other than patents, patent rights, trademarks, trade names, franchises,
copyrights, licenses, goodwill, and similar intangible assets) after all
appropriate deductions in accordance with GAAP (including, without limitation,
reserves for doubtful receivables, obsolescence, depreciation and amortization),
minus

                                      -12-

<PAGE>   13

          (b) all Total Liabilities of Borrower and its subsidiaries.

          TOTAL LIABILITIES as used in this Agreement means, as of any
applicable date, the total of all items of indebtedness, obligation or liability
which, in accordance with GAAP consistently applied, would be included in
determining the total liabilities of Borrower or its subsidiaries, including,
without limitation, (a) all obligations secured by any mortgage, pledge,
security interest or other lien on property owned or acquired, whether or not
the obligations secured thereby shall have been assumed; (b) all obligations
which are capitalized lease obligations; and (c) all guaranties, endorsements or
other contingent or surety obligations with respect to the indebtedness of
others, whether or not reflected on the balance sheets of Borrower or its
subsidiaries, including, without limitation, any obligation to furnish funds,
directly or indirectly through the purchase of goods, supplies, services, or by
way of stock purchase, capital contribution, advance or loan or any obligation
to enter into a contract for any of the foregoing.

          TOTAL LIABILITIES TO TANGIBLE EFFECTIVE NET WORTH RATIO means, as of
any applicable date, Total Liabilities divided by Tangible Effective Net Worth.

          SUBORDINATED DEBT as used in this Agreement means indebtedness of
Borrower to third parties which has been subordinated to all Indebtedness owing
by Borrower to Bank pursuant to a subordination agreement in form and content
satisfactory to Bank.

          WORKING CAPITAL as used in this Agreement means, as of any applicable
date of determination, Current Assets less Current Liabilities.

     2.   FINANCIAL COVENANTS. Borrower shall maintain the following financial
ratios and covenants on a consolidated and non-consolidated basis, which shall
be monitored on a Quarterly basis, except as noted below.

          (a) Working Capital: Intentionally  Omitted ________________;

          (b) Tangible Effective Net Worth in an amount not less than
$104,000.00 increasing to $113,000.00 at December 31, 2000 and then increasing
to $129,000.00 at December 31, 2001;

          (c) A ratio of Current Assets to Current Liabilities of not less than
Intentionally Omitted; (d) A ratio of Quick Assets to Current
Liabilities:1.30;1.00 ______________;

          (e) A ratio of Total Liabilities (less Subordinated Debt as defined
herein) to Tangible Effective Net Worth: Intentionally Omitted ______________;

          (f) A Cash Flow Coverage Ratio: Intentionally Omitted _____________;

          (g) Net income after taxes or S-Draws as per Cash Flow Coverage
Ratio: Intentionally Omitted ___________________________________________;

          (h) Profitability: Intentionally Omitted _________________;

                                      -13-

<PAGE>   14

          (i) Fixed Charge Ratio: INTENTIONALLY OMITTED _________________;

          (j) MAINTAIN A LEVEL OF ADVANCES WHICH WOULD NOT EXCEED AN AGGREGATE
IN EXCESS OF EIGHTY PERCENT (80%) OF BORROWER'S ACCOUNTS RECEIVABLE, AS SUCH
ADVANCES ARE EVIDENCED BY THAT CERTAIN MASTER REVOLVING NOTE DATED OF EVEN DATE
HEREWITH.

     All financial covenants shall be computed in accordance with GAAP
consistently applied except as otherwise specifically set forth in this
Agreement. All monies due from affiliates (including officers, directors and
shareholders) shall be excluded from Borrower's assets for all purposes
hereunder.

                                      -14-

<PAGE>   15

                              MASTER REVOLVING NOTE
                 Variable Rate-Maturity Date-Obligatory Advances
                      (Business and Commercial Loans Only)

<TABLE>
--------------------------------------------------------------------------------------------------------------
<S>                              <C>                         <C>                          <C>
AMOUNT                          NOTE DATE                    MATURITY DATE                TAX IDENTIFICATION #

   $10,000,000.00               June 01, 2000                June 01, 2002                04-6135748
--------------------------------------------------------------------------------------------------------------
</TABLE>

On the Maturity Date, as stated above, for value received, the undersigned
promise(s) to pay to the order of Comerica Bank -- California ("Bank"), at any
office of the Bank in the State of California, ________________________________
Dollars (U.S.) (or that portion o t advance by the Bank and not repaid as later
provided) with interest until maturity, whether by acceleration or otherwise, or
an Event of Default, as later defined, at a per annum rate equal to the Bank's
base rate from time to time in effect minus 0.500% per annum and after that at
a rate equal to the rate of interest otherwise prevailing under this Note plus
3% per annum (but in no event in excess of the maximum rate permitted by law).
The Bank's "base rate" is that annual rate of interest so designated by the Bank
and which is changed by the Bank from time to time. Interest rate changes will
be effective for Interest computation purposes as and when the Bank's base rate
changes. Interest shall be calculated on the basis of a 360-day year for the
actual number of days the principal Is outstanding. Accrued Interest on this
Note shall be payable on the 1st day of each month commencing July 01, 2000 ,
until the Maturity Date when all amounts outstanding under this note shall be
due an payable in full. If the frequency of interest payments is not otherwise
specified, accrued interest on this Note shall be payable monthly on the first
day of each month. If any payment of principal or interest under this Note shall
be payable on a day other than a day on which the Bank is open for business,
this payment shall be extended to the next succeeding business day and interest
shall be payable at the rate specified in this Note during this extension. A
late payment charge equal to 5% of each late payment may be charged on any
payment not received by the Bank within 10 calendar days after the payment due
date, but acceptance of payment of this charge shall not waive any Default under
this Note.

The principal amount payable under this Note shall be the sum of all advances
made by the Bank to or at the request of the undersigned, less principal
payments actually received in cash by the Bank. The books and records of the
Bank shall be the best evidence of the principal amount and the unpaid interest
amount owing at any time under this Note and shall be conclusive absent manifest
error. No interest shall accrue under this Note until the date of the first
advance made by the Bank; after that Interest on all advances shall accrue and
be computed on the principal balance outstanding from time to time under this
Note until the same is paid in full.

This Note and any other indebtedness and liabilities of any kind of the
undersigned (or any of them) to the Bank, and any and all modifications,
renewals or extensions of it, whether joint or several, contingent or absolute,
now existing or later arising, and however evidenced (collectively
"Indebtedness" are secured by and the Bank is granted a security interest in all
items deposited in any account of any of the undersigned with the Bank and by
all proceeds of these items (cash or otherwise), all account balances of any of
the undersigned from time to time with the Bank, by all property of any of the
undersigned from time to time in the possession of the Bank and by any other
collateral, rights and properties described in each and every deed of trust,
mortgage, security agreement, pledge, assignment and other security or
collateral agreement which has been, or will at any time(s) later be, executed
by any (or all) of the

                                      -15-

<PAGE>   16

undersigned to or for the benefit of the Bank (collectively "Collateral").
Notwithstanding the above, (i) to the extent that any portion of the
Indebtedness is a consumer loan, that portion shall not be secured by any deed
of trust or mortgage on or other security interest in any of the undersigned's
principal dwelling or any of the undersigned's real property which is not a
purchase money security interest as to that portion, unless expressly provided
to the contrary in another place, or (iii) if the undersigned (or any of them)
has (have) given or give(s) Bank a deed of trust or mortgage covering real
property, that deed of trust or mortgage shall not secure this Note or any other
indebtedness of the undersigned (or any of them), unless expressly provided to
the contrary in another place.

If the undersigned (or any of them) or any guarantor under a guaranty of all or
part of the Indebtedness ("guarantor") (i) fall(s) to pay any of the
indebtedness when due, by maturity, acceleration or otherwise, or fall(s) to pay
any indebtedness owing on a demand basis upon demand; or (ii) fails(s) to comply
with any of the terms or provisions of any agreement between the undersigned (or
any of them) or any such guarantor and the Bank; or (iii) become(s) insolvent or
the subject of a voluntary or involuntary proceeding In bankruptcy, or a
reorganization, arrangement or creditor composition proceeding, (if a business
entity) cease(s) doing business as a going concern, (if a natural person) die(s)
or become(s) incompetent, (if a partnership) dissolve(s) or any general partner
of it dies, becomes incompetent or becomes the subject of a bankruptcy
proceeding or (if a corporation of a limited liability company) is the subject
of a dissolution, merger or consolidation; or (a) if any warranty or
representation made by any of the undersigned or any guarantor In connection
with this Note or any of the Indebtedness shall be discovered to be untrue or
Incomplete; or (b) if there is any termination, notice of termination, or breach
of any guaranty, pledge, collateral assignment or subordination agreement
relating to all or any part of the indebtedness; or (c) if there is any failure
by any of the undersigned or any guarantor to pay when due any of its
indebtedness (other than to the Bank) or in the observance or performance of any
term, covenant or condition in any document evidencing, securing or relating to
such indebtedness; or (d) if the Bank deems itself insecure believing that the
prospect of payment of this Note or any of the indebtedness is impaired or shall
fear deterioration, removal or waste of any of the Collateral; or (e) if there
is filed or issued a levy or writ of attachment or garnishment or other like
judicial process upon the undersigned (or any of them) or any guarantor or any
of the Collateral, including without limit, any accounts of the undersigned (or
any of them) or any guarantor with the Bank, then the Bank, upon the occurrence
of any of these events (each a "Default", may at its option and without prior
notice to the undersigned (or any of them), declare any or all of the
indebtedness to be immediately due and payable (notwithstanding any provisions
contained in the evidence of it to the contrary), cease advancing money or
extending credit to or for the benefit of the undersigned under this Note or any
other agreement between the undersigned and Bank, terminate this Note as to any
future liability or obligation of Bank, but without affecting Bank's rights and
security interests in any Collateral and the Indebtedness of the undersigned to
Bank, sell or liquidate all or any portion of the Collateral, set off against
the indebtedness any amounts owing by the Bank to the undersigned (or any of
them), charge interest at the default rate provided In the document evidencing
the relevant Indebtedness and exercise any one or more of the rights and
remedies granted to the Bank by any agreement with the undersigned (or any of
them) or given to it under applicable law. In addition, if this Note is secured
by a deed of trust or mortgage covering real property, then the trustor or
mortgagor shall not mortgage or pledge the mortgaged premises as security for
any other Indebtedness or obligations. This Note, together with all other

                                      -16-

<PAGE>   17

indebtedness secured by said deed of trust or mortgage, shall become due and
payable immediately, without notice, at the option of the Bank, (a) if said
trustor or mortgagor shall mortgage or pledge the mortgaged premises for any
other indebtedness or obligations or shall convey, assign or transfer the
mortgaged premises by deed, installment sale contract instrument, or (b) if the
title to the mortgaged premises shall become vested in any other person or party
In any manner whatsoever, or (c) if there is any disposition (through one or
more transactions) of legal or beneficial title to a controlling Interest of
said trustor or mortgagor. All payments under this Note shall be in Immediately
available United States funds, without setoff or counterclaim.

If this Note is signed by two or more parties (whether by all as makers or by
one or more as an accommodation party or otherwise), the obligations and
undertakings under this Note shall be that of all and any two or more jointly
and also of each severally. This Note shall bind the undersigned, and the
undersigned's respective heirs, personal representatives, successors and
assigns.

The undersigned waive(s) presentment, demand, protest, notice of dishonor,
notice of demand or intent to demand, notice of acceleration, or intent to
accelerate, and all other notices and agree(s) that no extension or Indulgence
to the undersigned (or any of them) or release, substitution or nonenforcement
of any security, or release or substitution of any of the undersigned, any
guarantor or any other party, whether with or without notice, shall affect the
obligations of any of the undersigned. The undersigned waive(s) all defenses or
right to discharge available under Section 3-605 of the California Uniform
Commercial Code and waive(s) all other suretyship defenses or right to
discharge. The undersigned agree(s) that the Bank has the right to sell; assign,
or grant participations, or any interest, in any or all of the Indebtedness, and
that, in connection with this right, but without limiting its ability to make
other disclosures to the full extent allowable, the Bank may disclose all
documents and information which the Bank now or later has relating to the
undersigned or the indebtedness. The undersigned agree(s) that the Bank may
provide information relating to the Note or to the undersigned to the Bank's
parent, affiliates, subsidiaries and service providers.

The undersigned agree(s) to reimburse the holder or owner of this Note for any
and all costs and expenses (including without limit, court costs, legal expenses
and reasonable attorney fees, whether inside or outside counsel is used, whether
or not suit is instituted and, if suit is Instituted, whether at the trial court
level, appellate level, in a bankruptcy, probate or administrative proceeding or
otherwise) incurred in collecting or attempting to collect this Note or incurred
in any other matter or proceeding relating to this Note.

The undersigned acknowledge(s) and agree(s) that there are no contrary
agreements, oral or written, establishing a term of this Note and agree(s) that
the terms and conditions of this Note may not be amended, waived or modified
except in a writing signed by an officer of the Bank expressly stating that the
writing constitutes an amendment, waiver or modification of the terms of this
Note. As used in this Note, the word "undersigned" means, Individually and
collectively, each maker, accommodation party, indorser and other party signing
this Note in a similar capacity. If any provision of this Note is unenforceable
to whole or part for any reason, the remaining provisions shall continue to be
effective. THIS NOTE IS MADE IN THE STATE OF CALIFORNIA AND SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE

                                      -17-

<PAGE>   18

WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES.

The maximum interest rate shall not exceed the highest applicable usury ceiling.

THE UNDERSIGNED AND THE BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED, EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANYWAY RELATED TO, THIS NOTE OR THE INDEBTEDNESS.

This Note is subject to the Terms and Conditions of that certain Business Loan
Agreement dated of even date herewith.

INITIAL HERE   /s/  FD
              ---------

Sipex Corporation

By:  /s/ Frank DiPietro    its:      EXE VP
  -----------------------------------------------------------------
     SIGNATURE OF                             TITLE

By:                        its:
  -----------------------------------------------------------------
     SIGNATURE OF                             TITLE

By:                        its:
  -----------------------------------------------------------------
     SIGNATURE OF                             TITLE

By:                        its:
  -----------------------------------------------------------------
     SIGNATURE OF                             TITLE

<TABLE>

-------------------------------------------------------------------------------------------------------------------
<S>                                     <C>             <C>                             <C>
STREET ADDRESS                          CITY            STATE (COUNTRY)                 ZIP CODE
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------ -------------------------------------------------------------
                     For Bank Use Only                                              CCAR #
------------------------------------------------------------ -------------------------------------------------------------
<S>                             <C>                          <C>               <C>                  <C>
------------------------------- ---------------------------- -------------------------------------------------------------
Loan Officer Initials           Loan Group Name              Obligor(s) Name
PK                              San Francisco Metro          Sipex Corporation
------------------------------- ---------------------------- -------------------------------------------------------------
------------------------------- ---------------------------- ------------------ ------------------- ----------------------
Loan Officer I.D. No.           Loan Group No.               Obligor #          Note #              Amount
48351                           95742                                                                    $10,000,000.00
------------------------------- ---------------------------- ------------------ ------------------- ----------------------
</TABLE>

                                      -18-

<PAGE>   19

                               LIBOR/COST OF FUNDS
                        ADDENDUM TO MASTER REVOLVING NOTE

     This Addendum to Master Revolving Note (this "Addendum").is entered into as
of this 1st day of June, 2000, by and between Comerica Bank-California ("Bank")
and Sipex Corporation ("Borrower"). This Addendum supplements the terms of the
Master Revolving Note of even date herewith.

1.   DEFINITIONS.

     a.  ADVANCE. As used herein, "ADVANCE" means a borrowing requested by
Borrower and made by Bank under the Note, including a LIBOR Option Advance
and/or a Base Rate Option Advance.

     b.  BUSINESS DAY. As used herein, "BUSINESS DAY" means any day except a
Saturday, Sunday or any other day designated as a holiday under Federal or
California statute or regulation.

     c.  LIBOR. As used herein, "LIBOR" means the rate per annum (rounded upward
if necessary, to the nearest whole 1/8 of 1%) and determined pursuant to the
following formula:

         LIBOR =            Base LIBOR
                 -------------------------------
                 100% - LIBOR Reserve Percentage

          (1) "Base LIBOR" means the rate per annum determined by Bank at which
              deposits for the relevant LIBOR Period would be offered to Bank
              in the approximate amount of the relevant LIBOR Option Advance in
              the inter-bank LIBOR market selected by Bank, upon request of
              Bank at 10:00 a.m. California time, on the day that is the first
              day of such LIBOR Period.

          (2) "LIBOR Reserve Percentage" means the reserve percentage
              prescribed by the Board of Governors of the Federal Reserve
              System (or any successor) for "Eurocurrency Liabilities" (as
              defined in Regulation D of the Federal Reserve Board, as
              amended), adjusted by Bank for expected changes in such reserve
              percentage during the applicable LIBOR Period.

     d.  LIBOR BUSINESS DAY. As used herein, "LIBOR business day" means a
Business day on which dealings in Dollar deposits may be carried out in the
interbank LIBOR market.

     e.  LIBOR period. As used herein, "LIBOR Period" means, with respect to a
LIBOR Option Advance:

          (1) initially, the period commencing on, as the case may be, the date
              the Advance is made or the date on which the Advance is converted
              to a LIBOR Option Advance, and continuing for, in every case, a
              period of from sixty to three hundred sixty five days thereafter
              so long as the LIBOR Option is quoted for such period in the
              applicable interbank LIBOR market, as such period is selected by
              Borrower in the notice of

                                      -19-

<PAGE>   20

              Advance as provided in the Note or in the notice of conversion as
              provided in this Addendum; and

          (2) thereafter, each period commencing on the last day of the next
              preceding LIBOR Period applicable to such LIBOR Option Advance
              and continuing for, in every case, a period of from sixty to
              three hundred sixty five days thereafter so long as the LIBOR
              Option is quoted for such period in the applicable interbank
              LIBOR market, as such period is selected by Borrower in the
              notice of continuation as provided in this Addendum.

     f.  COST OF FUNDS: As used herein, "COST OF FUNDS" means the rate
determined by Bank, in its sole discretion, from time to time as its cost of
funds, as such rate may change from time to time.

     g.  As used herein, "COST OF FUNDS PERIOD" means a period commencing on a
Business Day, and continuing for, in every case, a period which is in excess of
one year (e.g. 366 days), as designated by Borrower, during which all or a
portion of the outstanding principal balance of the Note bears interest
determined in relation to Bank's COST OF FUNDS, provided that:

          (1) In any COST OF FUNDS PERIOD would end on day that is not a
              Business Day then such COST OF FUNDS Period shall be extended to
              the next succeeding Business Day; and

          (2) NO COST OF FUNDS Period shall extend beyond the Maturity Date of
              the Note.

     h.  NOTE: As used herein, "NOTE" means the Master Revolving Note of even
date herewith.

     i.  REGULATION D. As used herein, "REGULATION D" means Regulation D of the
Board of Governors of the Federal Reserve System as amended or supplemented from
time to time.

     j.  REGULATORY DEVELOPMENT. As used herein, "REGULATORY DEVELOPMENT" means
any or all of the following: (i) any change in any law, regulation or
interpretation thereof by any public authority (whether or not having the force
of law); (ii) the application of any existing law, regulation or the
interpretation thereof by any public authority (whether or not having the force
of law); and (iii) compliance by Bank with any request or directive (whether or
not having the force of law) of any public authority.

2.   INTEREST RATE OPTIONS. Borrower shall have the following options regarding
the interest rate to be paid by Borrower on Advances under the Note:

     a.  A rate equal to Two and 25/100 percent (2.250%) above Bank's LIBOR,
(the "LIBOR Option"), which LIBOR Option shall be in effect during the relevant
LIBOR Period; or

                                      -20-

<PAGE>   21

     b.  A rate equal to TWO AND 25/100 percent (2.250%) above Banks COST OF
FUNDS, (the "COST OF FUNDS" Option), which COST OF FUNDS Option shall be in
effect during the relevant COST OF FUNDS Period; or

     c.  A rate equal to ZERO AND 5/10 percent (0.500 %) below the "Base Rate"
as referenced in the Note and quoted from time to tire by Bank as such rate may
change from time to time (the "Base Rate Option").

3.  LIBOR OPTION ADVANCE. The minimum LIBOR Option Advance will not be less
than ONE MILLION AND NO/100 Dollars ($1,000,000.00) for any LIBOR Option
Advance.

4.  PAYMENT OF INTEREST ON LIBOR OPTION ADVANCES. Interest on each LIB OR Option
Advance shall be payable pursuant to the terms of the Note. Interest on such
LIBOR Option Advance shall be computed on the basis of a 360-day year and shall
be assessed for the actual number of days elapsed from the first day of the
LIBOR Period applicable thereto but not including the last day thereof.

5.  BANK'S RECORDS RE: LIBOR OPTION ADVANCES. With respect to each LIBOR
Option Advance, Bank is hereby authorized to note the date, principal amount,
interest rate and LIBOR Period applicable thereto and any payments made thereon
on Bank's books and records (either manually or by electronic entry) and/or on
any schedule attached to the Note, which notations shall be prima facie evidence
of the accuracy of the information noted.

6.  COST OF FUNDS OPTION ADVANCE. The minimum COST OF FUNDS option advance will
be not less than ONE MILLION AND NO/100 for any COST OF FUNDS Option Advance.

7.  PAYMENT OF COST OF FUNDS OPTION. Interest on each COST OF FUNDS Option
Advance shall be payable pursuant to the terms of the Note. Interest on such
COST OF FUNDS Option Advance shall be computed on the basis of a 360-day year
and shall be assessed for the actual number of days elapsed from the first day
of the COST OF FUNDS Period applicable thereto but not including the last day
thereof.

8.  SELECTION/CONVERSION OF INTEREST RATE OPTIONS. At the time any Advance is
requested under the Note and/or Borrower wishes to select the LMOR or COST OF
FUNDS Option for all or a portion of the outstanding principal balance of the
Note, and at the end of each LIBOR or COST OF FUNDS Period, Borrower shall give
Bank notice specifying (a) the interest rate option selected by Borrower; (b)
the principal amount subject thereto; and (c) if the LIBOR or COST OF FUNDS
Option is selected, the length of the applicable LIBOR or COST OF FUNDS Period.
Any such notice may be given by telephone so long as, with respect to each LIBOR
or COST OF FUNDS Option selected by Borrower, (i) Bank receives written
confirmation from Borrower not later than three (3) LIBOR Business Days after
such telephone notice is given; and (ii) such notice is given to Bank prior to
10:00 a.m., California time, on the first day of the LIBOR or COST OF FUNDS
Period. For each LIBOR or COST OF FUND Option requested hereunder, Bank will
quote the applicable fixed LIBOR or COST OF FUNDS Rate to Borrower at
approximately 10:00 a.m., California time, on the first day of the LIBOR or COST
OF FUNDS Period. If Borrower does not immediately accept the rate quoted by
Bank, any subsequent acceptance by Borrower shall be subject to a
redetermination of the rate by Bank; provide,

                                      -21-

<PAGE>   22

however, that if Borrower fails to accept any such quotation as given, then the
quoted rate shall appear and Bank shall have no obligation to permit a LIBOR or
COST OF FUNDS Option to be selected on such day. If no specific designation of
interest is made at the time any Advance is requested under the Note or at the
end of any LIBOR or COST OF FUNDS Period, Borrower shall be deemed to have
selected the Base Rate Option for such Advance or the principal amount to which
such LIBOR or COST OF FUNDS Period applied. At any time the LIBOR or COST OF
FUNDS Option is in effect, Borrower may, at the end of the applicable LIBOR or
COST OF FUNDS Period, convert to the Base Rate Option. At any time the Base
Rate Option is in effect, Borrower may convert to the LIBOR or COST OF FUNDS
OPTION, and shall designate a LIBOR or COST OF FUNS Period.

9.  DEFAULT INTEREST RATE. From and after the maturity date of the Note, or such
earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of the Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to three percent (3.00%)
above the rate of interest from time to time applicable to the Note.

10.  PREPAYMENT. Bank is not under any obligation to accept any prepayment of
any LIBOR or COST OF FUNDS Option Advance except as described below or as
required under applicable law. Borrower may prepay a Base Rate Option Advance at
any time, without paying any Prepayment Amount, as defined below. Borrower may
prepay an LIBOR or COST OF FUNDS Option Advance in increments of Five Hundred
Dollars ($500.00), prior to the end of the LIBOR or COST OF FUNDS Period, as
long as (i) Bank is provided written notice of such prepayment at least five (5)
LIBOR or COST OF FUNDS Business Days prior to the date thereof (the "Prepayment
Date"); and (ii) Borrower pays the Prepayment Amount. The notice of prepayment
shall contain the following information: (a) the Prepayment Date; and (b) the
LIBOR or COST OF FUNDS Option Advance which will be prepaid. On the Prepayment
Date, Borrower shall pay to Bank, in addition to any other amount that may then
be due on the Note, the Prepayment Amount Bank, in its sole discretion, may
accept any prepayment of a LIBOR or COST OF FUNDS Option Advance even if not
required to do so under the Note and may deduct from the amount to be applied
against the LIBOR or COST OF FUNDS Option Advance any other amounts required to
be paid as part of the Prepayment Amount.

     The Prepaid Principal Amount (as defined below) will be applied to the
LIBOR or COST OF FUNDS Option Advance being prepaid as Bank, shall determine in
its sole discretion.

     If Bank exercises its right to accelerate the payment of the Note prior to
maturity based upon an Event of Default under the Note, Borrower shall pay to
Bank, in addition to any other amounts that may then be due on the Note, on the
dated, specified by Bank as the Prepayment Date, the Prepayment Amount.

         Bank's determination of the Prepayment Amount shall be conclusive in
the absence of obvious error or fraud. If requested in writing by Borrower, Bank
shall provide Borrower a written statement specifying the Prepayment Amount.

     The following (the "Prepayment Amount") shall be due and payable in full on
the Prepayment Date:

                                      -22-

<PAGE>   23

          a. If the principal amount of the LIBOR or COST OF FUNDS Option
Advance being prepaid exceeds Seven Hundred Fifty Thousand Dollars ($750,000),
then the Prepayment Amount is the sum of (i) the amount of the principal balance
of the LIBOR or COST OF FUNDS Option Advance which Borrower has elected to
prepay or the amount of the principal balance of the LIBOR or COST OF FUNDS
Option Advance which Bank has required Borrower to prepay because of
acceleration, as the case may be (the "Prepaid Principal Amount"); (ii) interest
accruing on the Prepaid Principal Amount up to, but not including, the
Prepayment Date; (iii) Five Hundred Dollars ($500.00); plus (iv) the present
value, discounted at the Reinvestment Rates (as defined below) of the positive
amount by which (A) the interest Bank would have earned had the Prepaid
Principal Amount not been paid prior to the end of the LIBOR or COST OF FUNDS
Period at the Note's interest rate exceeds (B) the interest Bank would earn by
reinvesting the Prepaid Principal Amount at the Reinvestment Rates.

          b. If the principal amount of tile LIBOR or COST OF FUNDS Option
Advance being prepaid is Seven Hundred Fifty Thousand Dollars ($750,000) or
less, then the Prepayment Amount is the sum of (i) the principal amount of the
LIBOR or COST OF FUNDS Option Advance which Borrower has elected to prepay or
the principal amount of the LIBOR or COST OF FUNDS Option Advance which Bank has
required Borrower to prepay because of acceleration due to an Event of Default
under the Note, as the case maybe (the "Prepaid Principal Amount"); (ii)
interest accruing on the Prepaid Principal Amount up to, but not including, the
Prepayment Date; plus (iii) an amount equal to two percent (2%) of the Prepaid
Principal Amount.

     "Reinvestment Rates" mean the per annum rates of interest equal to one half
percent (1/2%) above the rates of interest reasonably determined by Bank to be
in effect not more than seven (7) days prior to the Prepayment Date in the
secondary market for United States Treasury Obligations in amount(s) and with
maturity(ies) which correspond (as closely as possible) to the LIBOR or COST OF
FUNDS Option Advance being prepaid.

     BY INITIALING BELOW, BORROWER,ACKNOWLEDGE(S) AND AGREE(S) THAT: (A) THERE
IS NO RIGHT TO PREPAY ANY LIBOR OPTION ADVANCE OR ANY COST OF FUNDS OPTION
ADVANCE, IN WHOLE OR IN PART, WITHOUT PAYING THE PREPAYMENT AMOUNT, EXCEPT AS
OTHERWISE REQUIRED UNDER APPLICABLE LAW; (B) BORROWER SHALL BE LIABLE FOR
PAYMENT OF THE PREPAYMENT AMOUNT IF BANK EXERCISES ITS RIGHT TO ACCELERATE
PAYMENT OF ANY LIBOR OPTION ADVANCE AS PART OR ALL OF THE (OBLIGATIONS OWING
UNDER THE NOTE, INCLUDING WITHOUT LIMITATION, ACCELERATION UNDER A DUE-ON-SALE
PROVISION; (C) BORROWER WAIVES ANY RIGHTS UNDER SUCCESSOR STATUTE; AND (D) BANK
HAS MADE EACH LIB,OR OPTION ADVANCE PURSUANT TO THE NOTE IN RELIANCE ON THESE
AGREEMENTS.

-----------------------
BORROWER'S INITIALS

                                      -23-

<PAGE>   24

11.  HOLD HARMLESS AND INDEMNIFICATION. Borrower agrees to indemnify Bank and to
hold Bank harmless from, and to reimburse Bank on demand for, all losses and
expenses which Bank sustains or incurs as a result of (i) any payment of a LIBOR
or COST OF FUNDS Option Advance prior to the last day of the applicable LIBOR or
COST OF FUNDS Period for any reason, including, without limitation, termination
of the Note, whether pursuant to this Addendum or the occurrence of an Event of
Default; (ii) any termination of a LIBOR or COST OF FUNDS Period prior to the
date it would otherwise end in accordance with this Addendum; or (iii) any
failure by Borrower, for any reason, to borrow any portion of a LIBOR or COST OF
FUNDS Option Advance.

12.  FUNDING LOSSES. The indemnification and hold harmless provisions set forth
in this Addendum shall include, without limitation, all losses and expenses
arising from interest and fees that Bank pays to lenders of funds it obtains in
order to fund the loans to Borrower on the basis of the LIBOR or COST OF FUNDS
Option(s) and all losses incurred in liquidating or re-deploying deposits from
which such funds were obtained and loss of profit for the period after
termination. A written statement by Bank to Borrower of such losses and expenses
shall be conclusive and binding, absent manifest error, for all purposes. This
obligation shall survive the termination of this Addendum and the payment of the
Note.

13.  REGULATORY DEVELOPMENTS OR OTHER CIRCUMSTANCES RELATING TO ILLEGALITY OR
IMPRACTICALITY OF LIBOR. If any Regulatory Development or other circumstances
relating to the interbank Euro-dollar markets shall, at any time, in Bank's
reasonable determination, make it unlawful or impractical for Bank to fund or
maintain, during any LIBOR or COST OF FUNDS Period, to determine or charge
interest rates based upon LIBOR or COST OF FUNDS, Bank shall give notice of such
circumstances to Borrower and:

         (i)  In the case of a LIBOR or COST OF FUNDS Period in progress,
              Borrower shall, if requested by Bank, promptly pay any interest
              which had accrued prior to such request and the date of such
              request shall be deemed to be the last day of the term of the
              LIBOR or COST OF FUNDS Period; and

         (ii) No LIBOR or COST OF FUNDS Period may be designated thereafter
              until Bank determines that such would be practical.

14.  ADDITIONAL COSTS. Borrower shall pay to Bank from time to time, upon Bank's
request, such amounts as Bank determines are needed to compensate Bank for any
costs it incurred which are attributable to Bank having made or maintained a
LIBOR or COST OF FUNDS Option Advance or to Bank's obligation to make a LIBOR
Option Advance, or any reduction in any amount receivable by Bank hereunder with
respect to any LIBOR or COST OF FUNDS Option or such obligation (such increases
in costs and reductions in amounts receivable being herein called "ADDITIONAL
COSTS"), resulting from any Regulatory Developments, which (i) change the basis
of taxation of any amounts payable to Bank hereunder with respect to taxation of
any amounts payable to Bank hereunder with respect to any LIBOR or COST OF FUNDS
Option Advance (other than taxes imposed on the overall net income of Bank for
any LIBOR or COST OF FUNDS Option Advance by the jurisdiction where Bank is
headquartered or the jurisdiction where Bank extends the LIBOR or COST OF FUNDS
Option Advance; (ii) impose or modify any reserve, special deposit, or similar
requirements relating to any extensions of credit or other

                                      -24-

<PAGE>   25

assets of, or any deposits with or other liabilities of, Bank (including any
LIBOR or COST OF FUNDS Option Advance or any deposits referred to in the
definition of LIBOR or COST OF FUNDS); or (iii) impose any other condition
affecting this Addendum (or any of such extension of credit or liabilities).
Bank shall notify Borrower of any event occurring after the date hereof which
entitles Bank to compensation pursuant to this paragraph as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation. Determinations by Bank for purposes of this paragraph, shall be
conclusive, provided that such determinations are made on a reasonable basis.

15.  LEGAL EFFECT. Except as specifically modified hereby, all of the terms and
conditions of the Note remain in full force and effect.

     IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date
first set forth above.

Sipex Corporation                         COMERICA BANK-CALIFORNIA

By: /s/ Frank R. DiPietro                  By:
   -------------------------------            ----------------------------------
                                               Philip Koblis
                                               Corporate Banking Officer

Title: EXE VP
      ----------------------------

By:
   -------------------------------

Title:
      ----------------------------

                                      -25-

<PAGE>   26

                               SECURITY AGREEMENT
                               ------------------

     As of June 01, 2000 , for value received, the undersigned ("Debtor") grants
to COMERICA BANK-CALIFORNIA ("Bank"), a CALIFORNIA banking corporation, a
continuing security interest in the Collateral (as defined below) to secure
payment when due, whether by stated maturity, demand acceleration or otherwise,
of all existing and future indebtedness ("Indebtedness") to the Bank of Sipex
Corporation ("Borrower") and/or Debtor. Indebtedness includes without limit any
and all obligations or liabilities of the Borrower and/or Debtor to the Bank,
whether absolute or contingent, direct or indirect, voluntary or involuntary,
liquidated or unliquidated, joint or several known or unknown; any and all
obligations or liabilities for which the Borrower and/or Debtor would otherwise
be liable to he Bank were it not for the invalidity or unenforceability of them
by reason of any bankruptcy, insolvency or other Law, or for any other reason;
any and all amendments, modifications, renewals and/or extensions of any of the
above; all costs incurred by Bank in establishing, determining, continuing, or
defending the validity or priority of its security interest, or in pursuing its
rights and remedies under this Agreement or under any other agreement between
Bank and Borrower and or Debtor or in connection with any proceeding involving
Bank as a result of any financial accommodation to Borrower and/or Debtor; and
all other costs of collecting indebtedness, including without limit attorney
fees. Debtor agrees to pay Ban all such costs incurred by the Bank, immediately
upon demand, and until paid all costs shall bear interest at the highest per
annum rate applicable to any of the Indebtedness, but not in excess of the
maximum rate permitted by law. Any reference in this Agreement to attorney fees
shall be deemed a reference to reasonable fees, costs, and expenses of both
in-house and outside counsel and paralegals, whether or not a suit or action is
instituted and to court costs if a suit or action is instituted, and whether
attorney fees or court costs are incurred at the trial court level, on appeal,
in a bankruptcy, administrative or probate proceeding or otherwise.

1.     Collateral shall mean all of the following property Debtor now or later
       owns or has an interest in, wherever located:

o    all Accounts Receivable (for purposes of this Agreement, "Accounts
     Receivable" consists of all accounts, general intangibles, chattel paper,
     contract rights, deposit accounts, documents and instruments),

o    all Inventory,

o    specific items listed below and/or on attached Schedule A, if any, is/are
     also included in Collateral:

o    all goods, instruments, documents, policies and certificates of insurance,
     deposits, money or other property (except real property which is not a
     fixture) which are now or later in possession of Bank, or as to which Bank
     now or later controls possession by documents or otherwise, and

o    all additions, attachments, accessions, parts replacements, substitutions,
     renewals, interest, dividends, distributions, rights of any kind (including
     but not limited to stock splits, stock rights, voting and preferential
     rights), products, and proceeds of or pertaining to the above including,
     without limit, cash or other property which were proceeds and are recovered
     by a bankruptcy trustee or otherwise as a preferential transfer by Debtor.

2.     Warranties, Covenants and Agreements. Debtor warrants, covenants and
       agrees as follows:

       2.1      Debtor shall furnish to Bank, in form and at intervals as Bank
                may request, any information Bank may reasonably request and
                allow Bank to examine, inspect, and copy any of Debtor's books
                and records. Debtor shall, at the request of Bank, mark its
                records and the Collateral to clearly indicate the security
                interest of Bank under this Agreement.

       2.2      At the time any Collateral becomes, or is represented to be,
                subject to a security interest in favor of Bank, Debtor shall
                be deemed to have warranted that (a) Debtor is the lawful
                owner of the Collateral and has the right and authority to
                subject it to a security interest granted to Bank; (b) none of
                the Collateral is subject to any security interest other than
                that in favor of Bank and there

<PAGE>   27

                are no financing statements on file, other than in favor of
                Bank; and (c) Debtor acquired its rights in the Collateral
                in the ordinary course of its business.

       2.3      Debtor will keep the Collateral free at all times from all
                claims, liens, security interests and encumbrances other than
                those in favor of Bank. Debtor will not, without the prior
                written consent of Bank, sell, transfer or lease, or permit to
                be sold, transferred or leased, any or all of the Collateral,
                except (where inventory is pledged as Collateral) for
                Inventory in the ordinary course of its business and will not
                return any Inventory to its supplier. Bank or its
                representatives may at all reasonable times inspect the
                Collateral and may enter upon all premises where the
                Collateral is kept or might be located.

       2.4      Debtor will do all acts and will execute or cause to be
                executed all writings requested by Bank to establish, maintain
                and continue a perfected and first security interest of Bank
                in the Collateral. Debtor agrees that Bank has no obligation
                to acquire or perfect any lien on or security interest in any
                asset(s), whether realty or personalty, to secure payment of
                the Indebtedness, and Debtor is not relying upon assets in
                which the Bank may have a lien or security interest for
                payment of the Indebtedness.

       2.5      Debtor will pay within the time that they can be paid without
                interest or penalty all taxes, assessments and similar charges
                which at any time are or may become a lien, charge, or
                encumbrance upon any Collateral, except to the extent
                contested in good faith and bonded in a manner satisfactory to
                Bank. If Debtor fails to pay any of these taxes, assessments,
                or other charges in the time provided above, Bank has the
                option (but not the obligation) to do so and Debtor agrees to
                repay it amounts so expended by Bank immediately upon demand,
                together with interest at the highest lawful default rate
                which could be charged by Bank on any Indebtedness.

       2.6      Debtor will keep the Collateral in good condition and will
                protect it from loss, damage, or deterioration from any cause.
                Debtor has and will maintain at all times (a) with respect to
                the Collateral, insurance under an "all risk" policy against
                fire and other risks customarily insured against, and (b)
                public liability insurance and other insurance as may be
                required by law o reasonably required by Bank, all of which
                insurance shall be in amount, form and content, and written by
                companies as may be satisfactory to Bank, containing a
                lender's loss payable endorsement acceptable to Bank. Debtor
                will deliver to Bank immediately upon demand evidence
                satisfactory to Bank that the required insurance has been
                procured. If Debtor fails to maintain satisfactory insurance,
                Bank has the option (but not the obligation) to do so and
                Debtor agrees to repay all amounts so expended by Bank
                immediately upon demand, together with interest a the highest
                lawful default rate which could be charged by Bank on any
                Indebtedness.

       2.7      If Accounts Receivable are pledged as Collateral under this
                Agreement, then on each occasion on which Debtor evidences to
                Bank the account balances on and the nature and extent of the
                Accounts Receivable, Debtor shall be deemed to have warranted
                that except as otherwise indicated (a) each of those Accounts
                Receivable is valid and enforceable without performance by
                Debtor of an act; (b) each of those account balances are in
                fact owing, (c) there are no setoffs, recoupments, credits,
                contra accounts, counterclaims or defenses against any of
                those Accounts Receivable, (d) as to any Accounts Receivable
                represented by a note, trade acceptance, draft or other
                instrument or by any chattel paper or document, the same have
                been endorsed and/or delivered by Debtor to Bank, (e) Debtor
                has not received with respect to any Account Receivable, any
                notice of the death of the related account debtor, nor of the
                dissolution, liquidation, termination of existence,
                insolvency, business failure, appointment of a receiver for,
                assignment for the benefit of creditors by, or filing of a
                petition in bankruptcy by or against, the account debtor, and
                (f) as to each Account Receivable, the account debtor is not
                an affiliate of Debtor, the United States of America or any
                department, agency or instrumentality of it, or a citizen or,
                resident of any jurisdiction outside of the Unite States.
                Debtor will do all acts and will execute all writings'
                requested by Bank to perform, enforce performance of, and
                collect all Accounts Receivable. Debtor shall neither account
                debtors or by other methods acceptable to Bank.

                                      -2-

<PAGE>   28

       2.8      Debtor at all times shall be in strict compliance with all
                applicable laws, including without limit any laws, ordinances,
                directives, orders, statutes, or regulations an object of
                which is to regulate or improve health, safety, or the
                environment ("Environmental Laws").

       2.9      If marketable securities are pledged as Collateral under this
                Agreement and if at any time the outstanding principal balance
                of the Indebtedness exceeds _________________ of the value of
                the Collateral, as such value is determined from time to time
                by Bank (herein called the "Margin Requirement"), Debtor shall
                immediately pay or cause to be paid to Bank an amount
                sufficient to reduce the Indebtedness such that the remaining
                principal outstanding thereunder is equal to or less than the
                Margin Requirement. Bank shall apply payments made under this
                paragraph in payment of the Indebtedness in such order and
                manner of application as Bank in its sole discretion elects.
                In the alternative, Debtor may provide or cause to be provided
                to Bank additional collateral in the form of cash or other
                property acceptable to Bank and with a value, as determined by
                Bank, that when added to the Collateral will constitute
                compliance with the Margin Requirement.

       2.10     If Bank, acting in its sole discretion, redelivers Collateral
                to Debtor or Debtor's designee for the purpose of (a) the
                ultimate sale or exchange thereof; or (b) presentation,
                collection, renewal, or registration of transfer thereof; or
                (c) loading, unloading, storing, shipping, transshipping,
                manufacturing, processing or otherwise dealing with it
                preliminary to sale or exchange; such redelivery shall be in
                trust for the benefit of Bank and shall not constitute a
                release of Bank's security interest in it or in the proceeds,
                or products of it unless Bank specifically so agrees in
                writing. If Debtor requests any such redelivery, Debtor will
                deliver with such request a duly executed financing statement
                in form and substance satisfactory to Bank. Any proceeds of
                Collateral coming into Debtor's possession as a result of any
                such redelivery shall be held in trust for Bank and
                immediately delivered to Bank for application on the
                Indebtedness. Bank may (in its sole discretion) deliver any or
                all of the Collateral to Debtor, and such delivery by Bank
                shall discharge Bank from all liability or responsibility for
                such Collateral. Bank, at its option, may require delivery of
                any Collateral to Bank at any time with such endorsements or
                assignments of the Collateral as Bank may request.

       2.11     At any time and without notice, Bank may, as to Collateral
                other than Equipment, Fixtures or Inventory, (a) cause any or
                all of such Collateral to be transferred to its name or to the
                name of its nominees; (b) receive or collect by legal
                proceedings or otherwise all dividends, interest, principal
                payments and other sums and all other distributions at any
                time payable or receivable on account of such Collateral, and
                hold the same as Collateral, or apply the same to the
                Indebtedness, the manner and distribution of the application
                to be in the sole discretion of Bank; (c) enter into any
                extension, subordination, reorganization, deposit, merger or
                consolidation agreement or any other agreement relating to or
                affecting such Collateral, and deposit or surrender control of
                such Collateral, and accept other property in exchange for
                such Collateral and hold or apply the property or money so
                received pursuant to this Agreement.

       2.12     Bank may assign any of the indebtedness and any or all of the
                Collateral to its assignee, who then shall have with respect
                to Collateral so delivered all the rights and powers of Bank
                under this Agreement, and after that Bank shall be fully
                discharged from all liability and responsibility with respect
                to Collateral so delivered.

                Debtor delivers this Agreement based solely on Debtor's
                independent investigation of (or decision not to investigate)
                the financial condition of Borrower and is not relying on any
                information furnished by Bank. Debtor assumes full
                responsibility for obtaining any further information
                concerning the Borrower's financial condition, the status of
                the Indebtedness or any other matter which the undersigned may
                deem necessary or appropriate now or later. Debtor waives any
                duty on the part of Bank, and agrees that Debtor is not
                relying upon nor expecting Bank to disclose to Debtor any fact
                now or later known by Bank, whether relating to the operations
                or condition of Borrower, the existence, liabilities or
                financial condition of any guarantor of the Indebtedness, the
                occurrence of any default with respect to the Indebtedness, or
                otherwise, notwithstanding any

                                      -3-

<PAGE>   29

                effect such fact may have upon Debtor's risk or Debtor's
                rights against Borrower. Debtor knowingly accepts the full
                range of risk encompassed in this Agreement, which risk
                includes without limit the possibility that Borrower may
                incur Indebtedness to Bank after the financial condition of
                Borrower, or Borrower's ability to pay debts as they mature,
                has deteriorated.

       2.14     Debtor shall defend, indemnify and hold harmless Bank, its
                employees, agents, shareholders, affiliates, officers, and
                directors from and against any and all claims, damages, fines,
                expenses, liabilities or causes of action of whatever kind,
                including without limit consultant fees, legal expenses, and
                attorney fees, suffered by any of them as a direct or indirect
                result of any actual or asserted violation of any law,
                including, without limit, Environmental Laws, or of any
                remediation relating to any property required by any law,
                including without limit Environmental Laws.

3.     Collection of Proceeds.

       3.1      Debtor agrees to collect and enforce payment of all Collateral
                until Bank shall direct Debtor to the contrary. Immediately
                upon notice to Debtor by Bank and at all times after that,
                Debtor agrees to fully and promptly cooperate and assist Bank
                in the collection and enforcement of all Collateral and to
                hold in trust for Bank all payments received in connection
                with Collateral and from the sale, lease or other disposition
                of any Collateral, all rights by way of suretyship or guaranty
                and all rights in the nature of a Lien or security interest
                which Debtor now or Later has regarding Collateral.
                Immediately upon and after such notice, Debtor agrees to (a)
                endorse to Bank and immediately deliver to Bank all payments
                received on Collateral or from the sale, lease or other
                disposition of any Collateral or arising from any other rights
                or interests of Debtor in the Collateral, in the form received
                by Debtor without commingling with any other funds, and (b)
                immediately deliver to Bank all property in Debtor's
                possession or later coming into Debtor's possession through
                enforcement of Debtor's rights or interests in the Collateral.
                Debtor irrevocably authorizes Bank or any Bank employee or
                agent to endorse the name of Debtor upon any checks or other
                items which are received in payment for any Collateral, and to
                do any and all things necessary in order to reduce these items
                to money. Bank shall have no duty as to the collection or
                protection of Collateral or the proceeds of it, nor as to the
                preservation of any related rights, beyond the use of
                reasonable care in the custody and preservation of Collateral
                in the possession of Bank. Debtor agrees to take all steps
                necessary to preserve rights against prior parties with
                respect to the Collateral. Nothing in this Section 3.1 shall
                be deemed a consent by Bank to any sale, lease or other
                disposition of any Collateral.

       3.2      If Accounts Receivable are pledged as Collateral, this Section
                3.2 shall be applicable and Debtor agrees that immediately
                upon Bank's request (whether or not any Event of Default
                exists) the indebtedness shall be on a "remittance basis" as
                follows: Debtor shall at its sole expense establish and
                maintain (and Bank, at Bank's option, may establish and
                maintain at Debtor's expense): (a) an United States Post
                Office lock box (the "Lock Box"), to which Bank shall have
                exclusive access and control. Debtor expressly authorizes
                Bank, from time to time, to remove contents from the Lock Box,
                for disposition in accordance with this Agreement. Debtor
                agrees to notify all account debtors and other parties
                obligated to Debtor that all payments made to Debtor (other
                than payments by electronic funds transfer) shall be remitted,
                for the credit of Debtor, to the Lock Box, and Debtor shall
                include a like statement on all invoices; and (b) a
                non-interest bearing deposit account with Bank which shall be
                titled as designated by Bank (the "Cash Collateral Account")
                to which Bank shall have exclusive access and control. Debtor
                agrees to notify all account debtors and other parties
                obligated to Debtor that all payments made to Debtor by
                electronic funds transfer shall be remitted to the Cash
                Collateral Account, and Debtor, at Bank's request, shall
                include a like statement on all invoices. Debtor shall execute
                all documents and authorizations as required by Bank to
                establish and maintain the Lock Box and the Cash Collateral
                Account.

       3.3      If Accounts Receivable are pledged as Collateral, this Section
                3.3 shall be applicable, and all items or amounts which are
                remitted to the Lock Box, to the Cash Collateral Account, or
                otherwise delivered by or for the benefit of Debtor to Bank on
                account of partial or full payment of, or with respect to, any
                Collateral shall, at Bank's option, (i) be applied to the
                payment of the indebtedness,

                                      -4-

<PAGE>   30

                whether than due or not, in such order or at such time of
                application as Bank may determine in its sole discretion, or,
                (ii) be deposited to the Cash Collateral Account.

                processing or item or its exercise of any other rights or
                remedies under this Agreement, including without limitation
                indirect, special or consequential damages, loss of revenues
                or profits, or any claim, demand or action by any third party
                arising out of or in connection with the processing of items
                or the exercise of any other rights or remedies under this
                Agreement. Debtor agrees to indemnify and hold Bank harmless
                from and against all such third party claims, demands or
                actions, and all related expenses or liabilities, including,
                without limitation, attorney fees.

4.     Defaults, Enforcement and Application of Proceeds

       4.1      Upon the occurrence of any of the following events (each an
                "Event of Default"), Debtor shall be in default under this
                Agreement:

                (a)      Any failure to pay the Indebtedness or any other
                         indebtedness when due, or such portion of it as may be
                         due, by acceleration or otherwise; or

                (b)      Any failure or neglect to comply with, or breach of
                         or default under, any term of this Agreement, or any
                         other agreement or commitment between Borrower,
                         Debtor, or any guarantor of any of the Indebtedness
                         ("Guarantor") and Bank; or

                (c)      Any warranty, representation, financial statement, or
                         other information made, given or furnished to Bank by
                         or on behalf of Borrower, Debtor, or any Guarantor
                         shall be, or shall prove to have been, false or
                         materially misleading when made, given, or furnished;
                         or

                (d)      Any loss, theft, substantial damage or destruction to
                         or of any Collateral, or the issuance or filing of
                         any attachment, levy, garnishment or the commencement
                         of any proceeding in connection with any Collateral
                         or of any other judicial process of, upon or in
                         respect of Borrower, Debtor, any Guarantor, or any
                         Collateral; or

                (e)      Sale or other disposition by Borrower, Debtor, or any
                         Guarantor of any substantial portion of its assets or
                         property or voluntary suspension of the transaction of
                         business by Borrower, Debtor, or any Guarantor, or
                         death, dissolution, termination of existence, merger,
                         consolidation, insolvency, business failure, or
                         assignment for the benefit of creditors of or by
                         Borrower, Debtor, or any Guarantor; or commencement of
                         any proceedings under any state or federal bankruptcy
                         or insolvency laws or laws for the relief of debtors
                         by or against Borrower, Debtor, or any Guarantor; or
                         the appointment of a receiver, trustee, court
                         appointee, sequestrator or otherwise, for all or any
                         part of the property of Borrower, Debtor, or any
                         Guarantor; or

                (f)      Bank deems the margin of Collateral insufficient or
                         itself insecure, in good faith believing that the
                         prospect of payment of the Indebtedness or
                         performance of this Agreement is impaired or shall
                         fear deterioration, removal, or waste of Collateral.

       4.2      Upon the occurrence of any Event of Default, Bank may at its
                discretion and without prior notice to Debtor declare any or
                all of the Indebtedness to be immediately due and payable, and
                shall have and may exercise any one or more of the following
                rights and remedies:

                (a)      Exercise all the rights and remedies upon default, in
                         foreclosure and otherwise, available to secured
                         parties under the provisions of the Uniform
                         Commercial Code and other applicable law;

                                      -5-

<PAGE>   31

                (b)      Institute legal proceedings to foreclose upon the
                         lien and security interest granted by this Agreement,
                         to recover judgment for all amounts then due and
                         owing as Indebtedness, and to collect the same out of
                         any Collateral or the proceeds of any sale of t;

                (c)      Institute legal proceedings for the sale, under the
                         judgment or decree of any court of  competent
                         jurisdiction, of any or all Collateral; and/or

                (d)      Personally or by agents, attorneys, or appointment of a
                         receiver, enter upon any premises where Collateral may
                         then be located, and take possession of all or any of
                         it and/or render it unusable; and without being
                         responsible for loss or damage to such Collateral,
                         hold, operate, sell, lease, or dispose of all or any
                         Collateral at one or more public or private to sales,
                         leasings or other dispositions, at places and times
                         and on terms and conditions as Bank may deem fit,
                         without any previous demand or advertisement; and
                         except as provided in this Agreement, all notice of
                         sale, lease or other disposition, and advertisement,
                         and other notice or demand, any right or equity of
                         redemption, and any obligation of a prospective
                         purchaser or lessee to inquire as to the power an
                         authority of Bank to sell, lease, or otherwise dispose
                         of the Collateral or as to the application by Bank of
                         the proceeds of sale or otherwise, which would
                         otherwise be required by, or available to Debtor
                         under, applicable law are expressly waived by Debtor
                         to the fullest extent permitted.

                         At any sale pursuant to this Section 4.2, whether
                         under the power of sale, by virtue of judicial
                         proceedings or otherwise, it shall not be necessary
                         for Bank or a public officer under order of a court
                         to have present physical or constructive possession
                         of Collateral to be sold. The recitals contained in
                         any conveyances and receipts made and given by Bank
                         or the public officer to any purchaser at any sale
                         made pursuant to this Agreement shall, to the extent
                         permitted by applicable law, conclusively establish
                         the truth and accuracy of the matters stated
                         (including, without limit, as to the amounts of the
                         principal of and interest on the indebtedness, the
                         accrual and nonpayment of it and advertisement and
                         conduct of the sale); and all prerequisites to the
                         sale shall be presumed to have been satisfied and
                         performed. Upon any sale of any Collateral, the
                         receipt of the officer making the sale under judicial
                         proceedings or of Bank shall be sufficient discharge
                         to the purchaser for the purchase money, and the
                         purchaser shall not be obligated to see to the
                         application of the money. Any sale of any Collateral
                         under this Agreement shall be a perpetual bar against
                         Debtor with respect to that Collateral.

       4.3      Debtor shall at the request of Bank, notify the account
                debtors or obligors of Banks security interest in the
                Collateral and direct payment of it to Bank. Bank may, itself,
                upon the occurrence of any Event of Default so notify and
                direct any account debtor or obligor.

       4.4      The proceeds of any sale or other disposition of Collateral
                authorized by this Agreement shall be applied by Bank first
                upon all expenses authorized by the Uniform Commercial Code
                and all reasonable attorney fees and legal expenses incurred
                by Bank; the balance of the proceeds of the sale or other
                disposition shall be applied in the payment of the
                indebtedness, first to interest, then to principal, then to
                remaining indebtedness and the surplus, if any, shall be paid
                over to Debtor or to such other person(s) as may be entitled
                to it under applicable law. Debtor shall remain liable for any
                deficiency, which it shall pay to Bank immediately upon
                demand.

       4.5      Nothing in this Agreement is intended, nor shall it be
                construed, to preclude Bank from pursuing any other remedy
                provided by law for the collection of the Indebtedness or for
                the recovery of any other sum to which Bank may be entitled
                for the breach of this Agreement by Debtor. Nothing in this
                Agreement shall reduce or release in any way any rights or
                security interests of Bank contained in any existing agreement
                between Borrower, Debtor, or any Guarantor and Bank.

       4.6      No waiver of default or consent to any act Debtor shall be
                effective unless in writing and signed by an authorized
                officer of Bank. No waiver of any default or forbearance on
                the part of Bank in
                                      -6-

<PAGE>   32

                enforcing any of its rights under this Agreement shall
                operate as waiver of any other default or of the same
                default on a future occasion or of any rights.

       4.7      Debtor irrevocably appoints Bank or any agent of Bank (which
                appointment is coupled with an interest) the true and lawful
                attorney of Debtor (with full power of substitution) in the
                name, place and stead of, and at the expense of, Debtor:

                (a)      to demand, receive, sue for, and give receipts of
                         acquittances for any moneys due or to become due on any
                         Collateral and to endorse any item representing any
                         payment on or proceeds of the Collateral;

                (b)      to execute and file in the name of and on behalf of
                         Debtor all financing statements or other filings
                         deemed necessary or desirable by Bank to evidence,
                         perfect, or continue the security interests granted
                         in this Agreement; and

                (c)      to do and perform any act on behalf of Debtor permitted
                         or required under this Agreement.

       4.8      Upon the occurrence of an Event of Default, Debtor also
                agrees, upon request of Bank, to assemble the Collateral and
                make it available to Bank at any place designated by Bank
                which is reasonably convenient to Bank and Debtor.

5.     Miscellaneous.

       5.1      Until Bank is advised in writing by Debtor to the contrary,
                all notices, requests and demands required under this
                Agreement or by law shall be given to, or made upon, Debtor at
                the first address indicated in Section 5.15 below.

       5.2      Debtor will give Bank not less than 90 days prior written
                notice of all contemplated changes in Debtor's name, chief
                executive office location, and/or location of any Collateral,
                but the giving of this notice shall not cure any Event of
                Default caused by this change.

       5.3      Bank assumes no duty of performance or other responsibility
                under any contracts contained within the Collateral.

       5.4      Bank has the right to sell, assign, transfer, negotiate or
                grant participations or any interest in, any or all of the
                Indebtedness and any related obligations, including without
                limit this Agreement. In connection with the above, but
                without limiting its ability to make other disclosures to the
                full extent allowable, Bank may disclose all documents and
                information which Bank now or later has relating to Debtor,
                the Indebtedness or this Agreement, however obtained. Debtor
                further agrees that Bank may provide information relating to
                this Agreement or relating to Debtor to the Bank's parent,
                affiliates, subsidiaries, and service providers.

       5.5      In addition to Bank's other rights, any indebtedness owing
                from Bank to Debtor can be set off and applied by Bank on any
                Indebtedness at any time(s) either before or after maturity or
                demand without notice to anyone.

       5.6      Debtor waives any right to require the Bank to: (a) proceed
                against any person or property; (b) give notice of the terms,
                time and place of any public or private sale of personal
                property security held from Borrower or any other person, or
                otherwise comply with the, provisions of Section 9-504 of the
                Uniform Commercial Code; or (c) pursue any other remedy in the
                Bank's power. Debtor waives notice of acceptance of this
                Agreement and presentment, demand, protest, notice of protest;
                dishonor, notice of dishonor, notice of default, notice of
                intent to accelerate or demand payment of any indebtedness,
                any and all other notices to which the undersigned might
                otherwise be entitled, and diligence in collecting any
                Indebtedness, and agree(s) that the Bank may, once or

                                      -7-

<PAGE>   33

                any number of times, modify the terms of any Indebtedness,
                compromise, extend, increase, accelerate, renew or forbear to
                enforce payment of any or all Indebtedness, or permit Borrower
                to incur additional Indebtedness, all without notice to Debtor
                and without affecting in any Manner the unconditional
                obligation of Debtor under this Agreement. Debtor
                unconditionally and irrevocably waives each and every defense
                and setoff of any nature which, under principles of guaranty
                or otherwise, would operate to impair or diminish in any way
                the obligation of Debtor under this Agreement, and
                acknowledges that such waiver is by this reference
                incorporated into each security agreement, collateral
                assignment, pledge and/or other document from Debtor now or
                later securing the Indebtedness, and acknowledges that as of
                the date of this Agreement no such defense or setoff exists.

       5.7      Debtor waives any and all rights (whether by subrogation,
                indemnity, reimbursement, or otherwise) to recover from
                Borrower any amounts paid or the value of any Collateral given
                by Debtor pursuant to this Agreement.

       5.8      In the event that applicable law shall obligate Bank to give
                prior notice to Debtor of any action to be taken under this
                Agreement, Debtor agrees that a written notice given to Debtor
                at least five days before the date of the act shall be
                reasonable notice of the act and, specifically, reasonable
                notification of the time and place of any public sale or of
                the time after which any private sale, lease, or other
                disposition is to be made, unless a shorter notice period is
                reasonable under the circumstances. A notice shall be deemed
                to be given under this Agreement when delivered to Debtor or
                when placed in an envelope addressed to Debtor and deposited,
                with postage prepaid, in a post office or official depository
                under the exclusive care and custody of the United States
                Postal Service or delivered to an overnight courier. The
                mailing shall be by overnight courier, certified, or first
                class mail.

       5.9      Notwithstanding any prior revocation, termination, surrender,
                or discharge of this Agreement in whole or in part, the
                effectiveness of this Agreement shall automatically continue
                or be reinstated in the event that any payment received or
                credit given by Bank in respect of the Indebtedness is
                returned, disgorged, or rescinded under any applicable law,
                including, without limitation, bankruptcy or insolvency laws,
                in which case this Agreement, shall be enforceable against
                Debtor as if the returned, disgorged, or rescinded payment or
                credit had not been received or given by Bank, and whether or
                not Bank relied upon this payment or credit or changed its
                position as a consequence of it. In the event of continuation
                or reinstatement of this Agreement, Debtor agrees upon demand
                by Bank to execute and deliver to Bank those documents which
                Bank determines are appropriate to further evidence (in the
                public records or otherwise) this continuation or
                reinstatement, although the failure of Debtor to do so shall
                not affect in any way the reinstatement or continuation.

       5.10     This Agreement and all the rights and remedies of Bank under
                this Agreement shall inure to the benefit of Bank's successors
                and assigns and to any other holder who derives from Bank
                title to or an interest in the Indebtedness or any portion of
                it, and shall bind Debtor and the heirs, legal
                representatives, successors, and assigns of Debtor. Nothing in
                this Section 5.10 is deemed a consent by Bank to any
                assignment by Debtor.

       5.11     If there is more than one Debtor, all undertakings, warranties
                and covenants made by Debtor and all rights, powers and
                authorities given to or conferred upon Bank are made or given
                jointly and severally.

       5.12     Except as otherwise provided in this Agreement, all terms in
                this Agreement have the meanings assigned to them in Division
                9 (or, absent definition in Division 9, in any other Division)
                of the Uniform commercial Code, as of the date of this
                Agreement. "Uniform Commercial Code" means the California
                Uniform Commercial Code, as amended.

       5.13     No single or partial exercise, or delay in the exercise, of
                any right or power under, this Agreement, shall preclude other
                or further exercise of the rights and powers under this
                Agreement. The

                                      -8-

<PAGE>   34

                unenforceability of any provision of this Agreement shall not
                affect the enforceability of the remainder of this Agreement.
                This Agreement constitutes the entire agreement of Debtor and
                Bank with respect to the subject matter of this Agreement. No
                amendment or modification of this Agreement shall be effective
                unless the same shall be in writing and signed by Debtor and an
                authorized officer of Bank. This Agreement shall be governed by
                and construed in accordance with the internal laws of the State
                of California, without regard to conflict of laws principles.

       5.14     To the extent that any of the Indebtedness is payable upon
                demand, nothing contained in this Agreement shall modify the
                terms and conditions of that Indebtedness nor shall anything
                contained in this Agreement prevent Bank from making demand,
                without notice and with or without reason, for immediate
                payment of any or all of that Indebtedness at any time(s),
                whether or not an Event of Default has occurred.

       5.15     Debtor's chief executive office is located and shall be
                maintained at

                             233 South Hillview Drive
                ----------------------------------------------------------------
                                      STREET ADDRESS

                  Milpitas            CA      95035
                ----------------------------------------------------------------
                CITY                STATE    ZIP CODE          COUNTY

                If Collateral is located at other than the chief executive
                office, such Collateral is located and shall be maintained.

                ----------------------------------------------------------------
                                       STREET ADDRESS

                ----------------------------------------------------------------
                CITY              STATE    ZIP CODE         COUNTY

                Collateral shall be maintained only at the locations
                identified in this Section 5.15.

       5.16     A carbon, photographic or other reproduction of this Agreement
                shall be sufficient as a financing statement under the Uniform
                Commercial Code and may be filed by Bank in any filing office.

       5.17     This Agreement shall be terminated only by the filing of a
                termination statement in accordance with the applicable
                provisions of the Uniform Commercial Code, but the obligations
                contained in Section 2.14 of this Agreement shall survive
                termination.

6.     DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
       CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PART , AFTER
       CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF
       THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT
       WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING
       THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS
       AGREEMENT OR THE INDEBTEDNESS.

                                      -9-

<PAGE>   35

7.     Special Provisions Applicable to this Agreement. (*None, if left blank)

                                     DEBTOR:  Sipex Corporation
                                            ------------------------------------
                                            DEBTOR NAME TYPED/PRINTED

                                     By: /s/  Frank DiPietro
                                        ----------------------------------------
                                        SIGNATURE OF

                                      Its: EXE VP
                                          --------------------------------------
                                           TITLE (If applicable)

                                     By:
                                        ----------------------------------------
                                        SIGNATURE OF

                                     Its:
                                         ---------------------------------------
                                         TITLE (If applicable)

                                     By:
                                        ----------------------------------------
                                        SIGNATURE OF

                                     Its:
                                         ---------------------------------------
                                         TITLE (If applicable)

Borrower(s):
Sipex Corporation

                                      -10-<PAGE>   1

                                                                 EXHIBIT 10.19.2

                       AMENDMENT NO. 1 TO CREDIT AGREEMENT

     THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT ("Amendment") is made this 17 day
of May, 2000 by and among Congress Financial Corporation (New England)
("Congress") and Ableco Finance LLC ("Ableco" and, with Congress, each a
"Lender" and collectively, "Lenders"); Congress Financial Corporation (New
England), as administrative and documentation agent for the Lenders (in such
capacity, "Agent"); PictureTel Corporation, a Delaware Corporation (the
"Company"); and each of the Subsidiaries of the Company that have joined with
the Company under the Credit Agreement dated June 15, 1999 (the "Credit
Agreement") as a "Borrower" thereunder (the "Subsidiary Borrowers" and,
collectively with the Company, the "Borrowers").

                                   BACKGROUND

     Congress, The Chase Manhattan Bank ("Chase") and the Borrowers entered into
the Credit Agreement on June 15, 1999 together with the notes, guarantees,
security agreements and other agreements, documents and instruments in
connection therewith or relating thereto (the "Loan Agreements"). On May 17,
2000, Chase assigned to Congress all of Chase's rights and interests under the
Credit Agreement, resigned as Agent and assigned its interests as Agent to
Congress. In connection with such assignment, Congress entered into an Indemnity
Agreement with Chase to indemnify Chase for Chase's exposure on certain
outstanding letters of credit issued by Chase. The Company has advised the Agent
and Lenders that Events of Default exist under Section 7.16 of the Credit
Agreement. The parties hereto have agreed pursuant to this Amendment to modify
certain terms and conditions of the Credit Agreement including the provisions of
Section 7.16 to eliminate the prior existing Events of Default. Capitalized
terms not otherwise defined in this Amendment shall have the respective meanings
ascribed thereto in the Credit Agreement.

     NOW THEREFORE, with the foregoing Background incorporated herein by
reference and made part hereof, the parties hereto, intending to be legally
bound hereby, promise and agree as follows:

     1. NEW DEFINITIONS. The following new definitions shall be added to Section
1 of the Credit Agreement and shall be applicable to the Credit Agreement, as
amended hereby:

          (a) "ABLECO" means Ableco Finance LLC, a Delaware limited liability
     company.

          (b) "ABLECO ASSIGNMENT" means the Assignment Agreement dated May 17,
     2000 between Congress and Ableco as the same may be amended, supplemented
     or otherwise modified from time to time.

<PAGE>   2

          (c) "AMENDMENT" means this Amendment No. 1 to Credit Agreement dated
     May 17, 2000 among the Lenders, Agent and Borrowers.

          (d) "AMENDMENT EFFECTIVE DATE" has the meaning given such term in
     Section 14 of the Amendment.

          (e) "BANK" means First Union National Bank and its successors and
     assigns.

          (f) "FACILITY PERCENTAGE" means the percentage which the Facility
     Share held by each Lender bears to the Total Credit Facility, as shown on
     Schedule 2.1A attached hereto (as it may be amended, supplemented or
     replaced).

          (g) "FACILITY SHARE" means the aggregate of (i) in the case of Letters
     of Credit, the maximum amount of the LC Obligations and (ii) in the case of
     the Term Loan, the original principal amount thereof, all as shown on
     Schedule 2.1A attached hereto (as it may be amended, supplemented and
     replaced).

          (h) "TERM LOAN" means the $8,500,000.00 term loan made by Ableco to
     the Borrowers pursuant to Section 2.1B of the Agreement.

          (i) "WORKING CAPITAL" shall mean as to any Person, at any time, in
     accordance with GAAP, on a Consolidated basis for such Person and its
     subsidiaries (if any), the amount equal to the difference between: (a) the
     aggregate net book value of all current assets of such Person and its
     subsidiaries (as determined in accordance with GAAP), calculating the book
     value of inventory for this purpose on a first-in-first-out basis, and (b)
     all current liabilities of such Person and its Subsidiaries (as determined
     in accordance with GAAP), PROVIDED, THAT, as to the Company, for purposes
     of Section 7.16(b), the liabilities of the Company and its Subsidiaries to
     Lenders under this Agreement shall not be considered current liabilities
     (whether or not classified as current liabilities in accordance with GAAP).

     2. MODIFIED DEFINITIONS. Section 1 of the Credit Agreement is further
modified in the following respects:

          (a) The term "ACH Facility" and definition thereof are deleted.

          (b) The term "Adjusted Eurocurrency Rate" and definition thereof are
     deleted.

          (c) The definition of "Agent" is modified by replacing the word
     "Chase" with the word "Congress".

          (d) The definition of "Agent Related Persons" is deleted in its
     entirety and replaced with the following:

               "AGENT RELATED PERSONS" means Congress and any successor agent
          under Section 9.9, together with its Affiliates and the officers,
          directors, employees, agents and attorneys-in-fact of such Persons and
          Affiliates.

                                       2
<PAGE>   3

          (e) The definition of "Applicable Letter of Credit Fee" is deleted and
     replaced with the following:

               "APPLICABLE LETTER OF CREDIT FEE" means a letter of credit fee at
          a rate equal to two and one quarter (2.25%) percent per annum".

          (f) The term "Applicable Margin" and the definition thereof are
     deleted.

          (g) The term "Alternative Currency" and definition thereof are
     deleted.

          (h) The term "Arranger" and definition thereof are deleted.

          (i) The definition of "Base Rate" is modified by replacing the word
     "Agent" with the word "Bank".

          (j) The definition of "Business Day" is modified to delete the words
     "and, if the applicable Business Day relates to any Eurocurrency Loan,
     means such day on which trading in dollars and Alternative Currency
     Deposits is carried on between banks in the applicable interlender market
     in which Agent regularly participates".

          (k) The definition of "Cash Collateral" is modified to replace the
     words "on deposit at or maintained in a depository account or" with the
     words "pledged to the Agent and maintained in the".

          (l) The definition of "Commitment" is deleted and replaced with the
     following:

               "COMMITMENT" means (i) with respect to Congress, its agreement
          under Section 2.5 to arrange for Letters of Credit to be issued up to
          an aggregate amount not to exceed the Congress Facility Commitment set
          forth on Schedule 2.1A, and (ii) with respect to Ableco, its agreement
          under Section 2.1B to make the Term Loan.

          (m) The term "Conversion/Continuation Date" and definition thereof are
     deleted.

          (n) The term "Dollar Equivalent" and the definition thereof are
     deleted.

          (o) The definition of "Eligible Assignee" is modified to add the
     following sentence to the end thereof: "Notwithstanding the foregoing, any
     Affiliate of Ableco or of Congress shall be deemed to be an Eligible
     Assignee".

          (p) The term "Eurocurrency Loan" and the definition thereof are
     deleted.

          (q) The term "Eurocurrency Reserve Percentage" and the definition
     thereof are deleted.

          (r) The definition of "FX Facilities" is deleted.

                                       3

<PAGE>   4

          (s) The definition of "Issuing Lender" is deleted and replaced with
     the following:

               "Issuing Lender" means Congress, in its capacity as indemnitor
          (i) of Chase under the Chase Letters of Credit outstanding on the
          Amendment Effective Date and (ii) of the Bank under the Letters of
          Credit issued by the Bank to replace the Chase Letters of Credit. The
          term "Issuing Lender" shall also include the Bank as issuer of the
          Letters of Credit.

          (t) The definition of "Interest Payment Date" is modified to delete
     the words "or converted into another Type of Loan".

          (u) The term "Interest Period" and definition thereof are deleted.

          (v) The term "Lending Office" is modified to delete the words "or
     "Domestic Lending Office" or "Eurocurrency Lending Office", as the case may
     be,"

          (w) The definition of "Loan" is modified to delete the words ", and
     may be a Base Rate Loan, or a Eurocurrency Loan (each, a "TYPE" of Loan)".
     The definition of "Loan" is modified further to add the words "and the Term
     Loan" after the words "Revolving Loan" and before the period.

          (x) The definition of "Maturity Date" is modified to replace the words
     "June 15, 2000" with "May 17, 2001".

          (y) The term "Notice of Conversion/Continuation" and definition
     thereof is deleted.

          (z) The definition of "Obligations" is modified by deleting the words
     "the FX Facilities and the ACH Facility,".

          (aa) The term "Pro Rata Share" and definition thereof is deleted. In
     each place where Pro Rata Share is used in the Agreement, the term Facility
     Share shall replace such term.

          (bb) The definition "Revolving Termination Date" and definition
     thereof are deleted.

          (cc) The definition of "Total Credit Facility" is modified to replace
     "$35,000,000" with "$38,586,815.00".

     3. MODIFICATIONS TO SECTION 2.1. Section 2.1 is deleted and replaced with
the following:

          "2.1A. REVOLVING LOANS. Borrowers acknowledge and agree that Congress
     has no commitment or obligation to make any loans, including any loans of a
     revolving nature ("Revolving Loans") to Borrowers; provided, however,
     Congress may, in its sole and absolute discretion, make Revolving Loans to
     the Company for the

                                       4

<PAGE>   5

     purpose of paying interest, fees, costs and expenses, including Attorney
     Costs, incurred in connection with the Obligations or pursuant to the Loan
     Agreements and to preserve, protect or maintain the Collateral and the
     Agent's rights therein. Under the terms of the Ableco Assignment , Congress
     has agreed not to make any loans including Revolving Loans to Borrowers
     except for Revolving Loans to pay interest, fees, costs and expenses,
     including Attorney Costs, incurred in connection with the Obligations or
     pursuant to the Loan Agreements and to preserve, protect or maintain the
     Collateral and the Agent's rights therein. Congress' only commitment to
     Borrowers shall be to arrange for the issuance of Letters of Credit,
     subject to the terms of Section 2.5 hereof.

          2.1B TERM LOAN. On the Amendment Effective Date, Congress will make a
     loan to the Borrowers in the original principal amount of $8,500,000.00
     (the "Term Loan") and will immediately assign the Term Loan to Ableco
     pursuant to the Ableco Assignment. The Term Loan is (a) evidenced by the
     Term Promissory Note in such original principal amount duly executed and
     delivered by Borrowers to Ableco concurrently with the Amendment; (b) to be
     repaid, together with interest and other amounts, in accordance with this
     Agreement, the Term Promissory Note and other Loan Agreements, and (c)
     secured by all of the Collateral. The unpaid principal balance of the Term
     Loan and all accrued and unpaid interest thereon shall be due and payable
     on the Maturity Date." The Borrowers may, at any time or from time to time,
     upon not less than three (3) Business Days irrevocable notice to Agent and
     Ableco, prepay the Term Loan in whole or in part, without penalty or
     premium.

     4. MODIFICATION TO SECTION 2.3. Section 2.3 is deleted and replaced with
the following:

               "2.3 PROCEDURES FOR REVOLVING LOANS. Congress is authorized by
          Borrowers to make Revolving Loans at any time, in its discretion, to
          pay interest, fees, costs and expenses incurred with respect to the
          Obligations or pursuant to the Loan Agreements. All Revolving Loans
          shall be conclusively presumed to have been made to and at the request
          of and for the benefit of Borrowers, when deposited to the credit of
          Borrowers or otherwise disbursed in accordance with the terms of this
          Agreement."

     5. MODIFICATION TO SECTION 2.4. Section 2.4 is deleted and replaced with
the words: "Intentionally Deleted".

     6. MODIFICATIONS TO SECTION 2.5. Borrowers acknowledge and agree that
Congress, subject to the terms of Section 2.5, will arrange for Letters of
Credit to be issued by the Bank and that all references to Issuing Lender shall
mean and include both Congress and the Bank. Subsection 2.5(a)(i)(y)(ii) is
deleted and replaced with the following: "(ii) after giving effect to the
issuance of the requested Letter of Credit, the aggregate amount of outstanding
LC Obligations shall not exceed Congress' Facility Share and the market value as
determined by Agent, in its discretion, of Cash Collateral shall equal or exceed
105% of the aggregate amount of LC Obligations;". Subsection 2.5(a)(iii) is
modified to replace the fourth sentence thereof with the following: "Any payment
made on a Letter of Credit shall accrue interest from and after the date of the
Issuing Lender's payment under such Letter of Credit until payment in full at

                                       5

<PAGE>   6

the variable rate per annum in effect from time to time on the Revolving Loans
and such interest shall be payable on demand". Subsection 2.5(c) is modified to
replace the words "Revolving Termination Date" with the words "Maturity Date".
Subsections 2.5(b) and 2.5(d)(ii) are deleted and replaced with the words
"Intentionally Deleted".

     7. MODIFICATIONS TO SECTION 2.6. Section 2.6 is deleted and replaced with
"Intentionally Deleted".

     8. MODIFICATIONS TO SECTION 2.7. Section 2.7 is deleted and replaced with
"Intentionally Deleted".

     9. MODIFICATIONS TO SECTION 2.8. Section 2.8 is deleted and replaced with
the following:

          "The Company and Subsidiary Borrowers shall repay the Lenders on the
     Maturity Date the aggregate principal amount of Loans outstanding on such
     date and make provisions for all outstanding Letters of Credit as provided
     in Section 2.5(c)."

     10. MODIFICATIONS TO SECTION 2.9. Subsection 2.9(a) is deleted and replaced
with the following:

          "(a)(i) The Revolving Loans shall bear interest on the outstanding
     principal amount thereof at a rate per annum equal to the Base Rate plus
     1.00%.

          (a)ii The Term Loan shall bear interest on the outstanding principal
     amount thereof at a rate per annum equal to the Base Rate plus 3.00% and
     such rate shall increase by 1 1/2% on August 15, 2000 and on each ninetieth
     day anniversary of such date thereafter. In no event shall the Base Rate
     for purposes of this Subsection 2.9(a) for any day be less than 9.00%. To
     the extent that the Base Rate for any day is less than the foregoing
     minimum daily rate, the Base Rate for purposes of this Subsection 2.9(a)
     automatically shall be deemed increased to such minimum rate."

     11. MODIFICATIONS TO SECTION 2.10. Notwithstanding any provisions of this
Amendment or the Credit Agreement to the contrary, Ableco shall not have a share
of or have any interest in the Closing Fee, Agency Fees, Facility Fees or Letter
of Credit Fees payable pursuant to Sections 2.10(a) through (d). The second
sentence of Subsection 2.10(d) is modified to replace the word "quarter" with
the word "month". Section 2.10 is amended to add the following subsections(e)
and (f) thereto:

          "(e)TERM LOAN CLOSING FEE. The Company and Subsidiary Borrowers shall
     pay a term loan closing fee to Ableco in the amount of $1,000,000, which
     shall be fully earned as of and payable to Ableco on the Amendment
     Effective Date. Congress shall not have a share of or any interest in this
     term loan closing fee. In the event that Ableco completes its due
     diligence, approves a larger transaction (up to $17,500,000), in its sole
     discretion, and closes such transaction, this term loan closing fee shall
     be applied to satisfy in full the closing fee (but not

                                       6

<PAGE>   7

     other fees that may be charged) of such transaction. Borrowers acknowledge
     that such transaction has not been approved by Ableco and no agreement or
     commitment should be implied by the foregoing.

          (f) AMENDMENT FEE. The Company and Subsidiary Borrowers shall pay an
     amendment fee to Congress in the amount of $50,000, which shall be fully
     earned as of and payable to Congress on the Amendment Effective Date.
     Ableco shall not have a share of or any interest in this amendment fee."

     12. MODIFICATION TO SECTION 2.12. Section 2.12 is modified to replace "at
the Agent's Payment Office" with "the Payment Account (as defined in Section
7.17)".

     13. MODIFICATION TO SECTION 2.15. Section 2.15 is modified to delete the
words "the trademarks, patents, copyrights and applications therefor of the
Company and its Subsidiaries and".

     14. DELETION OF SECTION 2.17. Section 2.17 is deleted.

     15. MODIFICATION TO SECTION 6.2. Section 6.2 is modified to change
subsection "(d)" to "(e)" and to insert the following as a new subsection "(d)":

          "(d)Weekly, on the first Business Day of each calendar week, a report,
     in form and substance satisfactory to Agent and Lenders, showing the amount
     of sales and collections for the prior calendar week and the aggregate
     amount of accounts receivable as of the date of the report certified by a
     Responsible Officer as true, accurate and complete; and"

     16. MODIFICATION TO SECTION 6.13. Section 6.13 is modified to delete the
word "Agent" and to replace it with "Bank".

     17. MODIFICATION TO SECTION 7.1. Subsection 7.1(b) is modified to replace
the word "Document" with "Agreement". Subsection 7.1(i) is deleted and replaced
with the following:

          "(i) Liens incurred prior to the Amendment Effective Date on any
     equipment, capital assets or real property of the Company and its
     Subsidiaries securing purchase money Indebtedness incurred prior to the
     Amendment Effective Date provided that such Liens attach solely to the
     property acquired with such purchase money Indebtedness and the principal
     amount of the Indebtedness secured thereby does not exceed 100% of the cost
     of such property;".

          Subsection 7.1(n) is deleted and replaced with the following:

          "(n) cash collateral in an amount not to exceed $1,500,000 pledged to
     Chase to secure foreign exchange contracts and cash collateral not to
     exceed $150,000 pledged to BankBoston to secure the completion of an ACH
     facility."

     18. MODIFICATIONS TO SECTION 7.2. Section 7.2 is modified to replace
subsections (a), (b), (c) and (d) thereof with the following:

                                       7
<PAGE>   8

          "(a) sales of inventory in the ordinary course of business of the
     Company and its Subsidiaries."

     19. MODIFICATIONS TO SECTION 7.5. Section 7.5 is modified to replace
subsection (d) thereof with the following:

          "(d) Indebtedness secured by Liens permitted by subsection 7.1(i)
     provided that the aggregate principal amount thereof shall not exceed the
     sum of (i) the principal amount thereof on the Amendment Effective Date
     plus (ii) $1,000,000, less all payments made thereon; provided, further,
     that no prepayments shall be made on such Indebtedness and none of such
     Indebtedness shall be refinanced, modified or changed;"

     20. MODIFICATIONS TO SECTION 7.11. Subsection 7.11(b) is modified to delete
the words "; provided that so long as no Default or Event of Default exists or
has occurred and is continuing, the Company may purchase up to 1,000,000 shares
of its common stock at a price not in excess of $9.00 per share for the purpose
of reserving such shares aside for the Company's employee stock option plans".

     21. MODIFICATION TO SECTION 7.14. Section 7.14 is deleted and replaced with
the following:

          "7.14 SWAP TRANSACTIONS OR HEDGING AGREEMENTS. The Company shall not,
     or suffer or permit any Subsidiary to, enter into any SWAP Transactions or
     Hedging Agreements except for foreign exchange contracts with Chase or the
     Bank so long as the aggregate secured exposure thereon does not exceed
     $1,500,000 and unsecured foreign exchange contracts so long as the
     aggregate of such foreign exchange contracts do not exceed $12,500,000 and
     the daily exposure thereon does not exceed $2,500,000."

     22. MODIFICATIONS TO SECTION 7.16. Section 7.16 is deleted and replaced
with the following:

          "7.16 FINANCIAL COVENANTS.

          (a) MAXIMUM NEGATIVE QUARTERLY CONSOLIDATED NET INCOME (LOSS). The
     Company shall not permit its Consolidated Net Income (Loss) for each of the
     periods set forth below to be less than the amount corresponding to such
     periods:

              PERIOD                                   AMOUNT

         Fiscal Quarter ending                      -$25,000,000
             in June, 2000

         Fiscal Quarter ending in
             September, 2000                        -$12,000,000

       Each Fiscal Quarter ending
              Thereafter                                $1.00

                                       8

<PAGE>   9

          (b) WORKING CAPITAL. The Company shall not permit its Consolidated
     Working Capital at any time to be less than $40,300,000.00.

          (c) ACCOUNTS RECEIVABLE. The Company shall not permit the amount of
     its net accounts receivable after deducting all returns, discounts and
     allowances thereon and reserves relating thereto, as determined in
     accordance with GAAP, at any time to be less than $35,000,000.00.

          (d) CASH COLLATERAL. The Company shall maintain at all times Cash
     Collateral with a market value, as determined by Agent, in its discretion,
     equal to or in excess of 105% of the Revolving Loans and LC Obligations.

          (e) COLLECTIONS ON ACCOUNTS. The Company shall not permit collections
     on its accounts receivable for any period of fifteen (15) consecutive
     Business Days to be less than the outstanding principal amount of the Term
     Loan minus $1,000,000. In the event that the Company breaches this covenant
     the Company shall have the right to cure such breach within three (3)
     Business Days by prepaying the portion of the Term Loan in excess of such
     collections amount."

     23. ADDITION OF SECTION 7.18. The following is inserted as Section 7.18:

          "7.18 COLLECTION OF ACCOUNTS.

          (a) Borrowers shall establish and maintain, at their expense,
     lockboxes and related blocked accounts ( "Blocked Accounts") with such
     banks as are acceptable to Agent into which Borrowers shall promptly
     deposit and direct their account debtors to directly remit all payments on
     Accounts (as such term is defined in the Pledge and Security Agreements
     with the Borrowers) and all payments constituting proceeds of Inventory (as
     such term is defined in the Pledge and Security Agreements with the
     Borrowers) or other Collateral (as such term is defined in the Pledge and
     Security Agreements with the Borrowers) in the identical form in which such
     payments are made, whether by cash, check or other manner. The banks at
     which the Blocked Accounts are established shall enter into an agreement,
     in form and substance satisfactory to Agent, providing that all items
     received or deposited in the Blocked Accounts are the property of Agent,
     that the depository bank has no lien upon, or right to setoff against, the
     Blocked Accounts, the items received for deposit therein, or the funds from
     time to time on deposit therein and that the depository bank will wire, or
     otherwise transfer, in immediately available funds, on a daily basis, all
     funds received or deposited into the Blocked Accounts to such bank account
     of Agent as Agent may from time to time designate for such purpose
     ("Payment Account"). Borrowers agrees that all payments made to such
     Blocked Accounts or other funds received and collected by Agent, whether on
     the Accounts or as proceeds of Inventory or other Collateral or otherwise
     shall be the property of Agent for the benefit of the Lenders. So long as
     no Default or Event of Default exists or has occurred and is continuing,
     all such funds received and collected by Agent shall be applied first to
     repay the outstanding Revolving Loans, second to restore

                                       9

<PAGE>   10

     the Cash Collateral to the extent that the amount thereof is less than 105%
     of the outstanding Revolving Loans and LC Obligations and thereafter the
     balance will be transferred on each Business Day or as the Company may
     request to the Company's operating bank account at the cost of and pursuant
     to the instructions of the Company. If a Default or an Event of Default
     exists or has occurred and is continuing, the release of such funds to the
     Company shall be subject to the sole discretion of the Agent.

          (b) Borrowers and all of their respective affiliates, subsidiaries,
     shareholders, directors, employees or agents shall, acting as trustee for
     Agent , receive, as the property of Lender, any monies, checks, notes,
     drafts or any other payment relating to and/or proceeds of Accounts or
     other Collateral which come into their possession or under their control
     and immediately upon receipt thereof, shall deposit or cause the same to be
     deposited in the Blocked Accounts, or remit the same or cause the same to
     be remitted, in kind, to Agent. In no event shall the same be commingled
     with any Borrower's own funds. Borrowers agree to reimburse Agent and
     Lenders on demand for any amounts owed or paid to any bank at which a
     Blocked Account is established or any other bank or person involved in the
     transfer of funds to or from the Blocked Accounts arising out of Agent's or
     Lender's payments to or indemnification of such bank or person. The
     obligation of Borrowers to reimburse Agent and Lenders for such amounts
     pursuant to this Section 6.3 shall survive the termination or non-renewal
     of this Agreement.

          (c) All Obligations shall be payable to the Payment Account as
     provided in this Section 7.18 or such other place as Agent may designate
     from time to time. Agent may apply payments received or collected from
     Borrowers or for the account of Borrowers (including the monetary proceeds
     of collections or of realization upon any Collateral) to such of the
     Obligations, whether or not then due, in such order and manner as Agent
     determines; provided that the Agent shall not apply such payments to prepay
     the principal amount of the Term Loan except upon notice from the Company
     or at the Agent's and Lenders' election upon and during the continuance of
     an Event of Default. At Agent's option, all principal, interest, fees,
     costs, expenses and other charges provided for in this Agreement or the
     other Loan Agreements may be charged directly to the loan account(s) of
     Borrowers. If after receipt of any payment of, or proceeds of Collateral
     applied to the payment of, any of the Obligations, Agent or any Lender is
     required to surrender or return such payment or proceeds to any Person for
     any reason, then the Obligations intended to be satisfied by such payment
     or proceeds shall be reinstated and continue and this Agreement shall
     continue in full force and effect as if such payment or proceeds had not
     been received. Borrowers shall be liable to pay to Agent and Lenders, and
     does hereby indemnify and hold Agent and Lenders harmless for the amount of
     any payments or proceeds surrendered or returned. This Section 7.18 shall
     remain effective notwithstanding any contrary action which may be taken by
     Agent or Lenders in reliance upon such payment or proceeds. This Section
     7.18 shall survive the payment of the Obligations and the termination of
     this Agreement."

     24. MODIFICATIONS TO SECTION 9.8. Section 9.8 is deleted and replaced with
the following:

                                       10

<PAGE>   11

          "9.8AGENT IN INDIVIDUAL CAPACITY. Congress and its Affiliates may make
     loans to, issue letters of credit for the account of, accept deposits from,
     acquire equity interests in and generally engage in any kind of banking,
     trust, financial advisory, underwriting or other business with the Company
     and its Subsidiaries and Affiliates as though Congress were not the Agent
     hereunder and without notice to or consent of the Lenders. The Lenders
     acknowledge that, pursuant to such activities, Congress or its Affiliates
     may receive information regarding the Company or its Affiliates (including
     information that may be subject to confidentiality obligations in favor of
     the Company or such Subsidiary) and acknowledge that the Agent shall be
     under no obligation to provide such information to them. With respect to
     its Loans, Congress shall have the same rights and powers under this
     Agreement as any other Lender and may exercise the same as though it were
     not the Agent and the terms "Lender" and "Lenders" include Congress in its
     individual capacity."

     25. MODIFICATIONS TO SECTION 10.4. Section 10.4(a) is modified to replace
the words "Chase (including in its capacity as Agent) and Congress (including in
its capacity as Documentation Agent)" with the words "Agent and each Lender".
Section 10.4(a) is further amended to insert the words "including reasonable
Attorney Costs" after the words "for all costs and expenses".

     26. MODIFICATIONS TO SECTION 10.8. Section 10.8(a) is modified to add the
following sentence at the end thereof: "The foregoing minimum amount of
$5,000,000 and processing fee of $2,500 will not be applicable to assignments to
Affiliates of Eligible Assignees".

     27. MODIFICATIONS TO SECTION 10.11. Section 10.11 is modified to add the
words "or with Bank" in the fourth line thereof after the words "any deposit
account of the Company with Agent".

     28. MODIFICATIONS TO SCHEDULE 2.1. Schedule 2.1 to the Credit Agreement is
deleted and replaced with the Schedule 2.1A attached to the Amendment.

     29. MODIFICATIONS TO SCHEDULE 10.2. Schedule 10.2 to the Credit Agreement
is deleted and replaced with the Schedule 10.2A attached to the Amendment.

     30. MODIFICATIONS TO EXHIBITS A, B AND F. Exhibits A, B and F to the Credit
Agreement are deleted.

     31. MODIFICATIONS TO SCHEDULE 2 TO EXHIBIT C. Schedule 2 to Exhibit C is
modified to replace the words "Section 7.16(b) Minimum Cash Equivalents and
Marketable Securities" with the words "Section 7.16(b) Working Capital".

     32. MODIFICATIONS TO EXHIBIT E. Exhibit E is modified to replace the words
"The Chase Manhattan Bank" with the words "Congress Financial Corporation (New
England)". Schedule 1 Notice of Assignment and Acceptance is replaced with the
Schedule 1A Notice of Assignment and Acceptance attached to the Amendment.

                                       11

<PAGE>   12

     33. REPRESENTATIONS AND WARRANTIES.

     To induce Agent and Lenders to enter into this Amendment, the Company, each
Subsidiary Borrower and each Subsidiary Guarantor warrants, represents and
covenants to the Lender and Agent that:

          (a) ORGANIZATION AND QUALIFICATION. The Company, each Subsidiary
     Borrower and each Subsidiary Guarantor is a corporation duly incorporated,
     validly existing and in good standing under the laws of the jurisdiction of
     its incorporation. The Company, each Subsidiary Borrower and each
     Subsidiary Guarantor is duly qualified or is authorized to do business and
     is in good standing as a foreign corporation or limited liability company
     in all states and jurisdictions in which the failure of such entity to be
     so qualified would have a material adverse effect on the financial
     condition, business or properties of such entity.

          (b) CORPORATE POWER AND AUTHORITY. The Company, each Subsidiary
     Borrower and each Subsidiary Guarantor is duly authorized and empowered to
     enter into, execute, deliver and perform this Amendment and each of the
     Loan Agreements to which it is a party. The execution, delivery and
     performance of this Amendment and each of the other Loan Agreements have
     been duly authorized by all necessary corporate action and do not and will
     not (i) require any consent or approval of the shareholders or members of
     the Company, any Subsidiary Borrower or any Subsidiary Guarantor; (ii)
     contravene the Company's, any Subsidiary Borrower's or any Subsidiary
     Guarantor's charter, by-laws or operating agreement; (iii) violate, or
     cause the Company, any Subsidiary Borrower or any Subsidiary Guarantor to
     be in default under, any provision of any law, rule, regulation, order,
     writ, judgment, injunction, decree, determination or award in effect having
     applicability to the Company, any Subsidiary Borrower or any Subsidiary
     Guarantor; (iv) result in a breach of or constitute a default under any
     indenture or loan or credit agreement or any other agreement, lease or
     instrument to which the Company, any Subsidiary Borrower or any Subsidiary
     Guarantor is a party or by which the Company's, any Subsidiary Borrower's
     or any Subsidiary Guarantor's properties may be bound or affected; or (v)
     result in, or require, the creation or imposition of any Lien (other than
     Permitted Liens) upon or with respect to any of the properties now owned or
     hereafter acquired by the Company, each Subsidiary Borrower and each
     Subsidiary Guarantor.

          (c) LEGALLY ENFORCEABLE AGREEMENT. This Amendment and each of the
     other Loan Agreements when delivered under this Amendment will be, a legal,
     valid and binding obligation of the Company, each Subsidiary Borrower and
     each Subsidiary Guarantor, enforceable against the Company, each Subsidiary
     Borrower and each Subsidiary Guarantor in accordance with its respective
     terms.

          (d) NO MATERIAL ADVERSE CHANGE. Since the date of the last financial
     statements provided by the Company to the Lenders, there has been no
     material adverse change in the condition, financial or otherwise, of the
     Company, any Subsidiary Borrower or any Subsidiary Guarantor as shown on
     the Consolidated balance sheet as of such date and no change in the
     aggregate value of the Collateral, except changes in the

                                       12

<PAGE>   13

     ordinary course of business, none of which individually or in the aggregate
     has been materially adverse.

          (e) CONTINUOUS NATURE OF REPRESENTATIONS AND WARRANTIES. Each
     representation and warranty contained in the Credit Agreement and the other
     Loan Agreements remains (after giving effect to this Amendment) accurate,
     complete and not misleading in any material respect on the date of this
     Amendment, except for representations and warranties that explicitly relate
     to an earlier date and changes in the nature of the Company, any Subsidiary
     Borrower's, or any Subsidiary Guarantor's business or operations, so long
     as such changes are disclosed in the amended Exhibits attached hereto or
     Lenders have consented to such changes in writing or such changes are
     expressly permitted by the Loan Agreement.

     34. CONDITIONS PRECEDENT.

     Notwithstanding any other provision of this Amendment or any of the other
Loan Agreements, and without affecting in any manner the rights of Agent and
Lenders under the other sections of this Amendment, this Amendment shall not be
effective as to Agent and Lenders unless and until each of the following
conditions has been and continues to be satisfied (the "Amendment Effective
Date"):

          (a) DOCUMENTATION. Lenders shall have received, in form and substance
     satisfactory to Lenders and their counsel, a duly executed copy of this
     Amendment, together with such additional documents, instruments, opinions
     of Company's counsel and certificates as Lender and their respective
     counsel shall require in connection therewith, all in form and substance
     satisfactory to Lenders and their counsel.

          (b) ASSIGNMENT FROM CHASE. Chase and Congress shall have duly executed
     and delivered an assignment and assumption agreement whereby Chase shall
     have assigned to Congress its interests in the credit facilities under the
     Loan Agreements including its rights as Agent thereunder, Congress shall
     have accepted such assignment and been appointed the Agent and Chase shall
     have executed all instructions and assignments of collateral security and
     delivered to Congress all stock certificates and other collateral in its
     possession.

          (c) ASSIGNMENT TO ABLECO. Ableco and Congress shall have duly executed
     and delivered the Ableco Assignment attached hereto and all conditions to
     the effectiveness thereof shall have been satisfied.

          (d) ISSUANCE OF TERM NOTE. The Company and Subsidiary Borrowers shall
     have issued to Ableco a $8,500,000 Term Note.

          (e) CONTROL AGREEMENT. The Company shall have entered into the Amended
     and Restated Control Agreement attached hereto and Agent and Lenders shall
     have verified that an amount of Cash Collateral at least equal to 105% of
     the outstanding Revolving Loans (if any) and LC Obligations is subject to
     the Control Account.

                                       13

<PAGE>   14

          (f) NO DEFAULT. After giving effect to this Amendment, no Default or
     Event of Default shall exist except as previously disclosed to and
     consented to by Lenders in writing.

          (g) NO LITIGATION. Except as previously disclosed to and consented to
     by Lenders in writing, no action, proceeding, investigation, regulation or
     legislation shall have been instituted, threatened or proposed before any
     court, governmental agency or legislative body to enjoin, restrain or
     prohibit, or to obtain damages in respect of, or which is related to or
     arises out of the Loan Agreement or this Amendment or the consummation of
     the transactions contemplated thereby or hereby.

          (h) PATENT, TRADEMARK AND COPYRIGHT SEARCHES. The Agent and Lenders
     shall have received searches on all patents, trademarks, copyrights and
     applications therefor of the Company and its Subsidiaries and such searches
     shall be satisfactory to the Agent and Lenders.

          (i) ADDITIONAL DOCUMENTS AND DELIVERIES. Company, Subsidiary Borrowers
     and Subsidiary Guarantors shall have executed and/or delivered each of the
     items listed on the Document Checklist attached hereto except as set forth
     in Section 35.

     35. ADDITIONAL CONDITIONS AND COVENANTS.

     The Company, Subsidiary Borrowers and Subsidiary Guarantors covenant and
agree to perform or satisfy or cause to be performed or satisfied each of the
following conditions and covenants and that the failure of any of the following
conditions or covenants to timely occur or be performed by the specified dates
shall constitute an Event of Default under the Credit Agreement, without any
action or notice by Agent or Lenders of any kind, time being of the essence:

          (a) TRANSFER OF CASH COLLATERAL. Within five (5) Business Days of the
     Amendment Effective Date, Company and Subsidiary Borrowers will cause to be
     transferred to the Agent all of the Cash Collateral and such Cash
     Collateral shall thereafter be held by the Agent for the benefit of the
     Lenders pursuant to a cash collateral agreement in form and substance
     satisfactory to the Agent and Lenders. Agent will arrange for payment of
     interest on such cash collateral transferred to the Agent and held by Agent
     at a rate equal to the Base Rate less 3.5%.

          (b) LOCKBOX AND BLOCKED ACCOUNTS. Within five (5) Business Days of the
     Amendment Effective Date, Borrowers shall have established the lockbox and
     blocked accounts satisfying the requirements of Section 7.17 of the Credit
     Agreement with banks as are acceptable to Agent and pursuant to terms and
     conditions satisfactory to Agent.

          (c) UK COLLATERAL. Within seven (7) Business Days of the Amendment
     Effective Date, PictureTel UK Limited shall have granted to the Agent a
     first priority charge on substantially all of its assets and a first
     priority share charge on all of the capital stock thereof and shall deliver
     to Agent a legal opinion thereon in form and substance satisfactory to
     Agent.

                                       14

<PAGE>   15

          (d) LANDLORD AGREEMENTS. Within twenty (20) consecutive Business Days
     of the Amendment Effective Date, the Borrowers will obtain and deliver to
     Agent Landlord Agreements, in form and substance satisfactory to Agent,
     from the landlords of each location leased by the Borrowers or Guarantors
     where Collateral is located (other than for sales offices where de minimus
     items of Collateral is located)

          (e) CORPORATE DOCUMENTS FOR NON-US ENTITIES. Within twenty (20)
     consecutive Business Days of the Amendment Effective Date, Borrower will
     deliver to Agent, certified charter documents, bylaws, resolutions and
     legal existence and good standing certificates for each non-U.S. Borrower
     and Guarantor in form and substance satisfactory to Agent.

     36. ACKNOWLEDGMENT OF OBLIGATIONS.

     The Company, each Subsidiary Borrower and each Subsidiary Guarantor hereby
(1) reaffirms and ratifies all of the promises, representations, warranties,
agreements, covenants and obligations to Lenders under or in respect of the
Credit Agreement and other Loan Agreements as amended hereby and (2)
acknowledges that it is unconditionally liable for the punctual and full payment
of all Obligations, including, without limitation, all charges, fees, expenses
and costs (including reasonable attorneys' fees and expenses) under the Loan
Agreements, as amended hereby, and that it has no defenses, counterclaims or
setoffs with respect to full, complete and timely payment and performance of all
Obligations.

     37. CONFIRMATION OF LIENS.

     The Company, each Subsidiary Borrower and each Subsidiary Guarantor
acknowledges, confirms and agrees that the Loan Agreements, as amended hereby,
are effective to grant to Agent and to Lenders duly perfected, valid and
enforceable first priority security interests and liens in the Collateral
described therein and that the locations for such Collateral specified in the
Loan Agreements have not changed. The Company and each Subsidiary Borrower
further acknowledges and agrees that all Obligations are and shall be secured by
the Collateral.

     38. IP COLLATERAL.

     Agent and Lenders agree that in the event the Company proposes to enter
into a merger or other acquisition transaction and the Agent and Lenders consent
to such transaction, in their sole and absolute discretion, the Agent and
Lenders will not require that the entity(ies) to the transaction, other than the
Borrowers or Guarantors or other Affiliates, grant a security interest to the
Agent and Lenders in its trademarks, patents or copyrights or applications
therefore.

     39. MISCELLANEOUS.

     Except as set forth herein, the undersigned confirm and agree that the Loan
Agreements remain in full force and effect without amendment or modification of
any kind. The Company and each Subsidiary Borrower hereby acknowledges its
obligation to pay the Lenders'

                                       15

<PAGE>   16

and Agent's reasonable attorneys' fees and costs incurred in connection with
this Amendment, as set forth in the Loan Agreement (and a $50,000 good faith
deposit has been made to Ableco with respect to Ableco's fees and expenses). The
execution and delivery of this Amendment by Lenders and Agent shall not be
construed as a waiver by Lenders of any Default or Event of Default under the
Loan Agreements. This Amendment, together with the Loan Agreement and other Loan
Agreements, constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior dealings, correspondence,
conversations or communications between the parties with respect to the subject
matter hereof. This Amendment and the transactions hereunder shall be deemed to
be consummated in the Commonwealth of Massachusetts and shall be governed by and
interpreted in accordance with the laws of that state. This Amendment and the
agreements, instruments and documents entered into pursuant hereto or in
connection herewith shall be "Loan Agreements" under and as defined in the
Credit Agreement.

                  [Remainder of Page Left Intentionally Blank]

                                       16

<PAGE>   17

                Executed under seal on the date set forth above.

                                          COMPANY:

                                          PICTURETEL CORPORATION

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

                                          SUBSIDIARY BORROWERS:

                                          PICTURETEL (SCHWIEZ) AG

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

                                          PICTURETEL SECURITIES CORPORATION

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

                                          PICTURETEL TECHNOLOGY CORPORATION

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

                                          PICTURETEL UK LIMITED

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

                                          STARLIGHT NETWORKS, INC.

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

                                       17

<PAGE>   18

                                          PICTURETEL AUSTRALIA PTY, LTD.

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

                                          PICTURETEL COMPANY, LTD. (JAPAN)

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

                                          PICTURETEL GMBH

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

                                          SUBSIDIARY GUARANTORS:

                                          PICTURETEL INTERNATIONAL CORPORATION

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

                                          MULTILINK, INC.

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

                                          PICTURETEL SCANDINAVIA AB

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

                                       18

<PAGE>   19

Accepted in Boston, Massachusetts

CONGRESS FINANCIAL CORPORATION
(NEW ENGLAND), as Agent and as a Lender

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

ABLECO FINANCE LLC, as a Lender

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

                                       19

<PAGE>   20

                                  SCHEDULE 2.1A
                   FACILITIES, COMMITMENTS AND FACILITY SHARES

LENDER                           FACILITY COMMITMENTS            FACILITY SHARE

Congress Financial Corporation   100% of LC Obligations              78.25%
(New England)                    (Letters of Credit with
                                 face amount of
                                 $30,086,815.00)*

Ableco Finance LLC               100% of $8,500,000.00               21.75%
                                 Term Loan

TOTAL                            $38,586,815.00                        100%

* In addition, Congress will hold 100% of the Revolving Loans, without any
commitment to make Revolving Loans.

                                 Section 2.1A-1

<PAGE>   21

                                 SCHEDULE 10.2A
                              ADDRESSES FOR NOTICES

FOR CONGRESS:

Congress Financial Corporation
  (New England)
One Post Office Square
Boston, MA 02109

Attention:        Marc Swartz
                  Senior Vice President
                  Telephone:  617-338-1998
                  Fax Number: 617-338-1497

FOR ABLECO:

Ableco Finance LLC
450 Park Avenue, 28th Floor
New York, NY 10022

Attention:  Daniel Wolf
               Vice President
               Telephone:  212-891-2121
               Fax Number: 212-891-1541

FOR COMPANY AND ALL SUBSIDIARY BORROWERS:

PictureTel Corporation
100 Minuteman Road M/S 720
Andover, MA 01810

Attention:        Arthur Fatum
                  Vice President and Chief Financial Officer
                  Telephone:  978-292-5372
                  Fax Number: 978-292-3334

                                 Schedule 10.2A

<PAGE>   22

                                   SCHEDULE 1A
                       NOTICE OF ASSIGNMENT AND ACCEPTANCE

                                                          _______________, 200__
Congress Financial Corporation
  (New England)
One Post Office Square, Suite 3600
Boston, MA 02109

PictureTel Corporation
100 Minuteman Road, M/S 720
Andover, MA  01810

Ladies and Gentlemen:

     We refer to the Credit Agreement dated as of June 15, 1999 (as amended,
restated, modified, supplemented or renewed from time to time the "CREDIT
AGREEMENT") among PictureTel Corporation (the "COMPANY"), the Lenders referred
to therein and Congress Financial Corporation (New England), as agent for the
Lenders (the "AGENT"). Terms defined in the Credit Agreement are used herein as
therein defined.

     1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "ASSIGNOR") to _______________ (the
"ASSIGNEE") of _____% of the right, title and interest of the Assignor in and to
the Credit Agreement (including, without limitation, the right, title and
interest of the Assignor in and to the Commitments of the Assignor[,] [and] all
outstanding Loans made by the Assignor [and the Assignor's participation in the
Letters of Credit]) pursuant to the Assignment and Acceptance Agreement attached
hereto (the "ASSIGNMENT AND ACCEPTANCE"). Before giving effect to such
assignment the Assignor's Commitment is $ ___________[,] [and] the aggregate
amount of its outstanding Loans is $_____________[, and its participation in LC
Obligations is $_____________].

     2. The Assignee agrees that, upon receiving the consent of the Agent and,
if applicable, PictureTel Corporation to such assignment, the Assignee will be
bound by the terms of the Credit Agreement as fully and to the same extent as if
the Assignee were the Lender originally holding such interest in the Credit
Agreement.

     3. The following administrative details apply to the Assignee:

(A)                                   Notice Address:

  Assignee name:                      --------------------------------
  Address:
                                      --------------------------------

                                      --------------------------------

                                 Schedule 1A-1

<PAGE>   23

  Attention:
                                      --------------------------------
  Telephone:                         (   )
                                      --- ----------------------------
  Telecopier:                        (   )
                                      --- ----------------------------

  Telex (Answerback):
                                      --------------------------------

(B)                             Payment Instructions:

  Account No.:
                                      ---------------------------------
  At:
                                      ---------------------------------

                                      ---------------------------------

  Reference:                          ---------------------------------

  Attention:                          ---------------------------------

     4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.

                  [Remainder of Page Intentionally Left Blank]

                                 Schedule 1A-2
<PAGE>   24

     IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice
of Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.

                                          [NAME OF ASSIGNOR]

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

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

                                          [NAME OF ASSIGNEE]

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

                                          ACKNOWLEDGED AND ASSIGNMENT
                                          CONSENTED TO:

                                          PICTURETEL CORPORATION

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

                                          CONGRESS FINANCIAL CORPORATION
                                          (NEW ENGLAND), as Agent

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

                                  Schedule 1A-3

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