Exhibit 10.2

 

June 14, 2005

 

 

Martin J. Joyce

11 Spruce Street

Braintree, MA 02184

 

Dear Marty:

 

We are pleased to offer you continued employment with BioSphere Medical, Inc.
(the “Company”) under the following terms and conditions.  As consideration for
your execution of this letter agreement, the Company will grant you a stock
option to purchase 150,000 shares of the Company’s Common Stock, $.01 par value
per share (“Common Stock”), as described below in paragraph 3.  This agreement
will supercede the terms of any prior agreements purporting to set forth the
terms and conditions of your employment.

 

1.                                       Employment; Location; Duties.

 

You will continue to be employed to serve on a full-time basis as Vice President
and Chief Financial Officer, and will continue to be based at the Company’s
headquarters.  You will continue to be subject to the supervision of, and shall
have such authority as is delegated to you by, the Chief Executive Officer of
the Company.

 

By entering into this letter agreement with the Company, you will be agreeing to
undertake the duties and responsibilities inherent in such position and such
other duties and responsibilities as the Chief Executive Officer shall from time
to time reasonably assign to you.  You agree to devote your entire business
time, attention and energies to the business and interests of the Company during
your continued employment.  You also agree to abide by the rules, regulations,
instructions, personnel practices and policies of the Company and any changes
therein which may be adopted from time to time by the Company.

 

2.                                       Compensation.

 

2.1                                 BASE SALARY.  YOUR ANNUALIZED BASE SALARY
WILL CONTINUE TO BE $196,838, LESS APPLICABLE TAXES AND WITHHOLDINGS, PAID
SEMI-MONTHLY IN ACCORDANCE WITH THE COMPANY’S PAYROLL PRACTICES (“BASE
SALARY”).  SUCH SALARY AND PAY SCHEDULE MAY BE ADJUSTED FROM TIME TO TIME, IN
ACCORDANCE WITH NORMAL BUSINESS PRACTICE AND IN THE SOLE DISCRETION OF THE
COMPANY’S BOARD OF DIRECTORS.

 

2.2                                 BONUS.  YOU WILL BE ELIGIBLE TO RECEIVE AN
ANNUAL BONUS IN AN AMOUNT EQUAL TO UP TO 30% OF YOUR THEN CURRENT BASE SALARY,
TO BE PAID BASED UPON THE COMPANY’S EVALUATION OF YOUR ACHIEVEMENT OF MILESTONES
AND OBJECTIVES TO BE MUTUALLY AGREED UPON ANNUALLY BY YOU AND THE COMPENSATION
COMMITTEE OF THE BOARD OF DIRECTORS, PROVIDED THAT YOU REMAIN AN EMPLOYEE OF THE
COMPANY AT THE TIME SUCH BONUSES ARE CUSTOMARILY PAID.

 

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2.3                                 OTHER BENEFITS. YOU SHALL CONTINUE TO BE
ELIGIBLE TO PARTICIPATE IN ALL BENEFIT PROGRAMS THAT THE COMPANY ESTABLISHES AND
GENERALLY MAKES AVAILABLE TO ITS EMPLOYEES, IF ANY, TO THE EXTENT THAT YOUR
POSITION, TENURE, SALARY, AGE, HEALTH AND OTHER QUALIFICATIONS MAKE YOU ELIGIBLE
TO PARTICIPATE, INCLUDING BUT NOT LIMITED TO THE COMPANY’S HEALTH INSURANCE
PLAN, 401(K) PLAN, AND POLICIES GOVERNING PAID TIME OFF.  IN ADDITION, YOU SHALL
CONTINUE TO BE ENTITLED TO THREE (3) WEEKS PAID VACATION PER YEAR, SUBJECT TO
THE COMPANY’S POLICIES AND PROCEDURES, TO BE TAKEN AT SUCH TIMES AS MAY BE
APPROVED BY THE COMPANY’S CHIEF EXECUTIVE OFFICER OR HIS DESIGNEE.  THE COMPANY
RESERVES THE RIGHT TO AMEND AND/OR TERMINATE ANY PLAN, BENEFIT, OR PROGRAM AT
ANY TIME WITH OR WITHOUT NOTICE OR PUBLICATION.

 

2.4                                 REIMBURSEMENT OF EXPENSES.  THE COMPANY
SHALL REIMBURSE YOU FOR ALL REASONABLE TRAVEL, ENTERTAINMENT AND OTHER EXPENSES
INCURRED OR PAID BY YOU IN CONNECTION WITH, OR RELATED TO, THE PERFORMANCE OF
YOUR DUTIES, RESPONSIBILITIES OR SERVICES AS AN EMPLOYEE OF THE COMPANY, IN
ACCORDANCE WITH POLICIES AND PROCEDURES, AND SUBJECT TO LIMITATIONS, ADOPTED BY
THE COMPANY FROM TIME TO TIME.

 

3.                                       Consideration.

 

If you enter into this letter agreement with the Company, you will be granted,
pursuant to the Company’s 1997 Stock Incentive Plan (the “Plan”) (a) an option
to purchase 100,000 shares of Common Stock of the Company pursuant to the terms
and conditions of the Plan and a stock option agreement issued thereunder, such
option to be exercisable at a price per share equal to the closing price of the
Company’s Common Stock on the NASDAQ Stock Market on date of grant, such option
to vest and become exercisable, subject to your continued employment, at a rate
of 20% of the total shares underlying the option on the first anniversary of the
date of grant and as to an additional 20% at the end of each full year
thereafter and (b) an option, to purchase 50,000 shares of the Company’s Common
Stock pursuant to the terms and conditions of the Plan and a stock option
agreement issued thereunder, such option to be exercisable at a price per share
equal to the closing price of the Company’s Common Stock on the date of grant,
such option to vest and become exercisable, subject to your continued
employment, at a rate of 33.3333% of the total shares underlying the option on
the first anniversary of the date on which the Company books revenue from the
commercial sale of its products in excess of $25.0 million (as reflected on the
Company’s financial statements prepared in accordance with generally accepted
accounting principles in the United States) in any continuous 12-month period
and as to an additional 33.3333% at the end of each full year thereafter;
provided that such option shall vest, in any event, on the end of the seventh
year after the date of grant.

 

4.                                       Termination Upon or in Anticipation of
a Change in Control.

 

4.1                                 IN THE EVENT YOUR AT-WILL EMPLOYMENT IS
TERMINATED BY THE COMPANY WITHOUT CAUSE (AS DEFINED BELOW) IN ANTICIPATION OF,
OR WITHIN TWELVE MONTHS AFTER, A CHANGE IN CONTROL (AS DEFINED BELOW), THE
COMPANY SHALL CONTINUE TO PAY TO YOU YOUR SALARY AS IN EFFECT ON THE DATE OF
TERMINATION AND THE AMOUNT OF THE ANNUAL BONUS PAID TO YOU FOR THE FISCAL YEAR
IMMEDIATELY PRECEDING THE DATE OF TERMINATION (PAYABLE IN ANNUALIZED MONTHLY
INSTALLMENTS) AND SHALL, PROVIDED YOU ELECT TO RECEIVE GROUP MEDICAL INSURANCE
PURSUANT TO THE FEDERAL “COBRA”

 

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LAW,  29 U.S.C. § 1161 ET SEQ., PROVIDE TO YOU REIMBURSEMENT FOR THE SHARE OF
THE PREMIUM FOR GROUP MEDICAL AND DENTAL THAT IS PAID BY THE COMPANY FOR ACTIVE
AND SIMILARLY-SITUATED EMPLOYEES WHO RECEIVE THE SAME TYPE OF COVERAGE, UNTIL
THE DATE 12 MONTHS AFTER THE DATE OF TERMINATION, PROVIDED, HOWEVER, THAT THE
COMPANY’S OBLIGATION TO MAKE THE AFORESAID PAYMENTS OR PROVIDE THE AFORESAID
BENEFITS SHALL IMMEDIATELY TERMINATE IN THE EVENT THAT YOU VIOLATE THE
PROVISIONS OF SECTION 5 OR SECTION 6 OF THIS LETTER AGREEMENT DURING SUCH 12
MONTH PERIOD.  THE PAYMENT TO YOU OF THE AMOUNTS PAYABLE UNDER THIS SECTION 4.1
SHALL BE CONTINGENT UPON YOUR EXECUTION OF A RELEASE IN A FORM REASONABLY
ACCEPTABLE TO AND PREPARED BY THE COMPANY AND (II) SHALL CONSTITUTE YOUR SOLE
REMEDY IN THE EVENT OF A TERMINATION OF YOUR EMPLOYMENT IN THE CIRCUMSTANCES SET
FORTH IN THIS SECTION 4.1.

 

4.2                                 “CAUSE” SHALL, FOR THE PURPOSES OF
SECTION 4.1, MEAN (A) A FINDING BY THE COMPANY OF FAILURE BY YOU TO PERFORM YOUR
ASSIGNED DUTIES FOR THE COMPANY, DISHONESTY, GROSS NEGLIGENCE, MISCONDUCT, OR
ANY ACT OR OMISSION BY YOU THAT MAY HAVE AN ADVERSE EFFECT ON THE COMPANY’S
BUSINESS OR ON YOUR ABILITY TO PERFORM SERVICES FOR THE COMPANY; OR (B) YOUR
CONVICTION OR THE ENTRY OF A PLEADING OF GUILTY OR NOLO CONTENDERE TO ANY CRIME
INVOLVING MORAL TURPITUDE OR ANY FELONY.

 

4.3                                 “CHANGE IN CONTROL” MEANS AN EVENT OR
OCCURRENCE SET FORTH IN ANY ONE OR MORE OF SUBSECTIONS (A) THROUGH (D) BELOW
(INCLUDING AN EVENT OR OCCURRENCE THAT CONSTITUTES A CHANGE IN CONTROL UNDER ONE
OF SUCH SUBSECTIONS BUT IS SPECIFICALLY EXEMPTED FROM ANOTHER SUCH SUBSECTION):

 

(A)                                  THE ACQUISITION BY AN INDIVIDUAL, ENTITY OR
GROUP (WITHIN THE MEANING OF SECTION 13(D)(3) OR 14(D)(2) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (THE “EXCHANGE ACT”)) (A “PERSON”) OF
BENEFICIAL OWNERSHIP OF ANY CAPITAL STOCK OF THE COMPANY IF, AFTER SUCH
ACQUISITION, SUCH PERSON BENEFICIALLY OWNS (WITHIN THE MEANING OF RULE 13D-3
PROMULGATED UNDER THE EXCHANGE ACT) 50% OR MORE OF EITHER (X) THE
THEN-OUTSTANDING SHARES OF COMMON STOCK OF THE COMPANY (THE “OUTSTANDING COMPANY
COMMON STOCK”) OR (Y) THE COMBINED VOTING POWER OF THE THEN-OUTSTANDING
SECURITIES OF THE COMPANY ENTITLED TO VOTE GENERALLY IN THE ELECTION OF
DIRECTORS (THE “OUTSTANDING COMPANY VOTING SECURITIES”); PROVIDED, HOWEVER, THAT
FOR PURPOSES OF THIS SUBSECTION (A), THE FOLLOWING ACQUISITIONS SHALL NOT
CONSTITUTE A CHANGE IN CONTROL: (I) ANY ACQUISITION DIRECTLY FROM THE COMPANY
(EXCLUDING AN ACQUISITION PURSUANT TO THE EXERCISE, CONVERSION OR EXCHANGE OF
ANY SECURITY EXERCISABLE FOR, CONVERTIBLE INTO OR EXCHANGEABLE FOR COMMON STOCK
OR VOTING SECURITIES OF THE COMPANY, UNLESS THE PERSON EXERCISING, CONVERTING OR
EXCHANGING SUCH SECURITY ACQUIRED SUCH SECURITY DIRECTLY FROM THE COMPANY OR AN
UNDERWRITER OR AGENT OF THE COMPANY), (II) ANY ACQUISITION BY THE COMPANY,
(III) ANY ACQUISITION BY ANY EMPLOYEE BENEFIT PLAN (OR RELATED TRUST) SPONSORED
OR MAINTAINED BY THE COMPANY OR ANY CORPORATION CONTROLLED BY THE COMPANY, OR
(IV) ANY ACQUISITION BY ANY CORPORATION PURSUANT TO A TRANSACTION WHICH COMPLIES
WITH CLAUSES (I) AND (II) OF SUBSECTION (C) OF THIS SECTION 4.3; OR

 

(B)                                 SUCH TIME AS THE CONTINUING DIRECTORS (AS
DEFINED BELOW) DO NOT CONSTITUTE A MAJORITY OF THE BOARD (OR, IF APPLICABLE, THE
BOARD OF DIRECTORS OF A SUCCESSOR CORPORATION TO THE COMPANY), WHERE THE TERM
“CONTINUING DIRECTOR” MEANS AT ANY DATE A MEMBER

 

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OF THE BOARD (I) WHO WAS A MEMBER OF THE BOARD ON THE DATE OF THE EXECUTION OF
THIS LETTER AGREEMENT OR (II) WHO WAS NOMINATED OR ELECTED SUBSEQUENT TO SUCH
DATE BY AT LEAST A MAJORITY OF THE DIRECTORS WHO WERE CONTINUING DIRECTORS AT
THE TIME OF SUCH NOMINATION OR ELECTION OR WHOSE ELECTION TO THE BOARD WAS
RECOMMENDED OR ENDORSED BY AT LEAST A MAJORITY OF THE DIRECTORS WHO WERE
CONTINUING DIRECTORS AT THE TIME OF SUCH NOMINATION OR ELECTION; PROVIDED,
HOWEVER, THAT THERE SHALL BE EXCLUDED FROM THIS CLAUSE (II) ANY INDIVIDUAL WHOSE
INITIAL ASSUMPTION OF OFFICE OCCURRED AS A RESULT OF AN ACTUAL OR THREATENED
ELECTION CONTEST WITH RESPECT TO THE ELECTION OR REMOVAL OF DIRECTORS OR OTHER
ACTUAL OR THREATENED SOLICITATION OF PROXIES OR CONSENTS, BY OR ON BEHALF OF A
PERSON OTHER THAN THE BOARD; OR

 

(C)                                  THE CONSUMMATION OF A MERGER,
CONSOLIDATION, REORGANIZATION, RECAPITALIZATION OR STATUTORY SHARE EXCHANGE
INVOLVING THE COMPANY OR A SALE OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL
OF THE ASSETS OF THE COMPANY IN ONE OR A SERIES OF TRANSACTIONS (A “BUSINESS
COMBINATION”), UNLESS, IMMEDIATELY FOLLOWING SUCH BUSINESS COMBINATION, EACH OF
THE FOLLOWING TWO CONDITIONS IS SATISFIED: (I) ALL OR SUBSTANTIALLY ALL OF THE
INDIVIDUALS AND ENTITIES WHO WERE THE BENEFICIAL OWNERS OF THE OUTSTANDING
COMPANY COMMON STOCK AND OUTSTANDING COMPANY VOTING SECURITIES IMMEDIATELY PRIOR
TO SUCH BUSINESS COMBINATION BENEFICIALLY OWN, DIRECTLY OR INDIRECTLY, MORE THAN
50% OF THE THEN-OUTSTANDING SHARES OF COMMON STOCK AND THE COMBINED VOTING POWER
OF THE THEN-OUTSTANDING SECURITIES ENTITLED TO VOTE GENERALLY IN THE ELECTION OF
DIRECTORS, RESPECTIVELY, OF THE RESULTING OR ACQUIRING CORPORATION IN SUCH
BUSINESS COMBINATION (WHICH SHALL INCLUDE, WITHOUT LIMITATION, A CORPORATION
WHICH AS A RESULT OF SUCH TRANSACTION OWNS THE COMPANY OR SUBSTANTIALLY ALL OF
THE COMPANY’S ASSETS EITHER DIRECTLY OR THROUGH ONE OR MORE SUBSIDIARIES) (SUCH
RESULTING OR ACQUIRING CORPORATION IS REFERRED TO HEREIN AS THE “ACQUIRING
CORPORATION”) IN SUBSTANTIALLY THE SAME PROPORTIONS AS THEIR OWNERSHIP,
IMMEDIATELY PRIOR TO SUCH BUSINESS COMBINATION, OF THE OUTSTANDING COMPANY
COMMON STOCK AND OUTSTANDING COMPANY VOTING SECURITIES, RESPECTIVELY; AND
(II) NO PERSON (EXCLUDING ANY EMPLOYEE BENEFIT PLAN (OR RELATED TRUST)
MAINTAINED OR SPONSORED BY THE COMPANY OR BY THE ACQUIRING CORPORATION)
BENEFICIALLY OWNS, DIRECTLY OR INDIRECTLY, 50% OR MORE OF THE THEN OUTSTANDING
SHARES OF COMMON STOCK OF THE ACQUIRING CORPORATION, OR OF THE COMBINED VOTING
POWER OF THE THEN-OUTSTANDING SECURITIES OF SUCH CORPORATION ENTITLED TO VOTE
GENERALLY IN THE ELECTION OF DIRECTORS (EXCEPT TO THE EXTENT THAT SUCH OWNERSHIP
EXISTED PRIOR TO THE BUSINESS COMBINATION); OR

 

(D)                                 APPROVAL BY THE STOCKHOLDERS OF THE COMPANY
OF A COMPLETE LIQUIDATION OR DISSOLUTION OF THE COMPANY.

 

5.                                       Non-Competition and Non-Solicitation.

 

5.1                                 RESTRICTED ACTIVITIES.  WHILE YOU ARE
EMPLOYED BY THE COMPANY AND FOR A PERIOD OF ONE YEAR AFTER THE TERMINATION OR
CESSATION OF SUCH EMPLOYMENT FOR ANY REASON, YOU WILL NOT DIRECTLY OR
INDIRECTLY:

 

(A)                                  ENGAGE IN ANY BUSINESS OR ENTERPRISE
(WHETHER AS OWNER, PARTNER, OFFICER, DIRECTOR, EMPLOYEE, CONSULTANT, INVESTOR,
LENDER OR OTHERWISE, EXCEPT AS THE HOLDER OF NOT MORE THAN 1% OF THE OUTSTANDING
STOCK OF A PUBLICLY-HELD COMPANY) THAT IS COMPETITIVE WITH THE COMPANY’S
BUSINESS, INCLUDING BUT NOT LIMITED TO ANY BUSINESS OR ENTERPRISE THAT DEVELOPS,

 

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MANUFACTURES, MARKETS, LICENSES, SELLS OR PROVIDES ANY PRODUCT OR SERVICE THAT
COMPETES WITH ANY PRODUCT OR SERVICE DEVELOPED, MANUFACTURED, MARKETED,
LICENSED, SOLD OR PROVIDED, OR PLANNED TO BE DEVELOPED, MANUFACTURED, MARKETED,
LICENSED, SOLD OR PROVIDED, BY THE COMPANY OR ANY OF ITS SUBSIDIARIES WHILE YOU
WERE EMPLOYED BY THE COMPANY; OR

 

(B)                                 EITHER ALONE OR IN ASSOCIATION WITH OTHERS
(I) SOLICIT, OR PERMIT ANY ORGANIZATION DIRECTLY OR INDIRECTLY CONTROLLED BY YOU
TO SOLICIT, ANY EMPLOYEE OF THE COMPANY TO LEAVE THE EMPLOY OF THE COMPANY, OR
(II) SOLICIT FOR EMPLOYMENT, HIRE OR ENGAGE AS AN INDEPENDENT CONTRACTOR, OR
PERMIT ANY ORGANIZATION DIRECTLY OR INDIRECTLY CONTROLLED BY YOU TO SOLICIT FOR
EMPLOYMENT, HIRE OR ENGAGE AS AN INDEPENDENT CONTRACTOR, ANY PERSON WHO WAS
EMPLOYED BY THE COMPANY AT THE TIME OF THE TERMINATION OR CESSATION OF YOUR
EMPLOYMENT WITH THE COMPANY; PROVIDED, THAT THIS CLAUSE (II) SHALL NOT APPLY TO
THE SOLICITATION, HIRING OR ENGAGEMENT OF ANY INDIVIDUAL WHOSE EMPLOYMENT WITH
THE COMPANY HAS BEEN TERMINATED FOR A PERIOD OF SIX MONTHS OR LONGER.

 

5.2                                 EXTENSION.  IF YOU VIOLATE THE PROVISIONS OF
SECTION 5.1, YOU SHALL CONTINUE TO BE BOUND BY THE RESTRICTIONS SET FORTH IN
SECTION 5.1 UNTIL A PERIOD OF ONE YEAR HAS EXPIRED WITHOUT ANY VIOLATION OF SUCH
PROVISIONS.

 

5.3                                 INTERPRETATION.  IF ANY RESTRICTION SET
FORTH IN SECTION 5.1 IS FOUND BY ANY COURT OF COMPETENT JURISDICTION TO BE
UNENFORCEABLE BECAUSE IT EXTENDS FOR TOO LONG A PERIOD OF TIME OR OVER TOO GREAT
A RANGE OF ACTIVITIES OR IN TOO BROAD A GEOGRAPHIC AREA, IT SHALL BE INTERPRETED
TO EXTEND ONLY OVER THE MAXIMUM PERIOD OF TIME, RANGE OF ACTIVITIES OR
GEOGRAPHIC AREA AS TO WHICH IT MAY BE ENFORCEABLE.

 

5.4                                 EQUITABLE REMEDIES.  THE RESTRICTIONS
CONTAINED IN THIS SECTION 5 ARE NECESSARY FOR THE PROTECTION OF THE BUSINESS AND
GOODWILL OF THE COMPANY AND ARE CONSIDERED BY YOU TO BE REASONABLE FOR SUCH
PURPOSE.  YOU AGREE THAT ANY BREACH OF THIS SECTION 5 IS LIKELY TO CAUSE THE
COMPANY SUBSTANTIAL AND IRREVOCABLE DAMAGE WHICH IS DIFFICULT TO MEASURE. 
THEREFORE, IN THE EVENT OF ANY SUCH BREACH OR THREATENED BREACH, YOU AGREE THAT
THE COMPANY, IN ADDITION TO SUCH OTHER REMEDIES WHICH MAY BE AVAILABLE, SHALL
HAVE THE RIGHT TO OBTAIN AN INJUNCTION FROM A COURT RESTRAINING SUCH A BREACH OR
THREATENED BREACH AND THE RIGHT TO SPECIFIC PERFORMANCE OF THE PROVISIONS OF
THIS SECTION 5 AND YOU HEREBY WAIVE THE ADEQUACY OF A REMEDY AT LAW AS A DEFENSE
TO SUCH RELIEF.

 

6.                                       Proprietary Information and
Developments.

 

6.1                                 PROPRIETARY INFORMATION.

 

(A)                                  YOU AGREE THAT ALL INFORMATION, WHETHER OR
NOT IN WRITING, OF A PRIVATE, SECRET OR CONFIDENTIAL NATURE CONCERNING THE
COMPANY’S BUSINESS, BUSINESS RELATIONSHIPS OR FINANCIAL AFFAIRS (COLLECTIVELY,
“PROPRIETARY INFORMATION”) IS AND SHALL BE THE EXCLUSIVE PROPERTY OF THE
COMPANY.  BY WAY OF ILLUSTRATION, BUT NOT LIMITATION, PROPRIETARY INFORMATION
MAY INCLUDE INVENTIONS, PRODUCTS, PROCESSES, METHODS, TECHNIQUES, FORMULAS,
COMPOSITIONS, COMPOUNDS, PROJECTS, DEVELOPMENTS, PLANS, RESEARCH DATA, CLINICAL
DATA, FINANCIAL DATA, PERSONNEL DATA, COMPUTER PROGRAMS, CUSTOMER AND SUPPLIER
LISTS, AND CONTACTS AT OR KNOWLEDGE OF CUSTOMERS OR

 

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PROSPECTIVE CUSTOMERS OF THE COMPANY.  YOU WILL NOT DISCLOSE ANY PROPRIETARY
INFORMATION TO ANY PERSON OR ENTITY OTHER THAN EMPLOYEES OF THE COMPANY OR USE
THE SAME FOR ANY PURPOSES (OTHER THAN IN THE PERFORMANCE OF YOUR DUTIES AS AN
EMPLOYEE OF THE COMPANY) WITHOUT WRITTEN APPROVAL BY AN OFFICER OF THE COMPANY,
EITHER DURING OR AFTER YOUR EMPLOYMENT WITH THE COMPANY, UNLESS AND UNTIL SUCH
PROPRIETARY INFORMATION HAS BECOME PUBLIC KNOWLEDGE WITHOUT FAULT BY YOU OR
UNLESS REQUIRED BY LAW.

 

(B)                                 YOU AGREE THAT ALL FILES, LETTERS,
MEMORANDA, REPORTS, RECORDS, DATA, SKETCHES, DRAWINGS, LABORATORY NOTEBOOKS,
PROGRAM LISTINGS, OR OTHER WRITTEN, PHOTOGRAPHIC, OR OTHER TANGIBLE MATERIAL
CONTAINING PROPRIETARY INFORMATION, WHETHER CREATED BY YOU OR OTHERS, WHICH
SHALL COME INTO YOUR CUSTODY OR POSSESSION, SHALL BE AND ARE THE EXCLUSIVE
PROPERTY OF THE COMPANY TO BE USED BY YOU ONLY IN THE PERFORMANCE OF YOUR DUTIES
FOR THE COMPANY.  ALL SUCH MATERIALS OR COPIES THEREOF AND ALL TANGIBLE PROPERTY
OF THE COMPANY IN YOUR CUSTODY OR POSSESSION SHALL BE DELIVERED TO THE COMPANY,
UPON THE EARLIER OF (I) A REQUEST BY THE COMPANY OR (II) TERMINATION OF YOUR
EMPLOYMENT.  AFTER SUCH DELIVERY, YOU SHALL NOT RETAIN ANY SUCH MATERIALS OR
COPIES THEREOF OR ANY SUCH TANGIBLE PROPERTY.

 

(C)                                  YOU AGREE THAT YOUR OBLIGATION NOT TO
DISCLOSE OR TO USE INFORMATION AND MATERIALS OF THE TYPES SET FORTH IN
PARAGRAPHS (A) AND (B) ABOVE, AND YOUR OBLIGATION TO RETURN MATERIALS AND
TANGIBLE PROPERTY, SET FORTH IN PARAGRAPH (B) ABOVE, ALSO EXTENDS TO SUCH TYPES
OF INFORMATION, MATERIALS AND TANGIBLE PROPERTY OF CUSTOMERS OF THE COMPANY OR
SUPPLIERS TO THE COMPANY OR OTHER THIRD PARTIES WHO MAY HAVE DISCLOSED OR
ENTRUSTED THE SAME TO THE COMPANY OR TO YOU.

 

6.2                                 DEVELOPMENTS.

 

(A)                                  YOU WILL MAKE FULL AND PROMPT DISCLOSURE TO
THE COMPANY OF ALL INVENTIONS, IMPROVEMENTS, DISCOVERIES, METHODS, DEVELOPMENTS,
SOFTWARE, AND WORKS OF AUTHORSHIP, WHETHER PATENTABLE OR NOT, WHICH ARE CREATED,
MADE, CONCEIVED OR REDUCED TO PRACTICE BY YOU OR UNDER YOUR DIRECTION OR JOINTLY
WITH OTHERS DURING YOUR EMPLOYMENT BY THE COMPANY, WHETHER OR NOT DURING NORMAL
WORKING HOURS OR ON THE PREMISES OF THE COMPANY (ALL OF WHICH ARE COLLECTIVELY
REFERRED TO IN THIS LETTER AGREEMENT AS “DEVELOPMENTS”).

 

(B)                                 YOU AGREE TO ASSIGN AND DO HEREBY ASSIGN TO
THE COMPANY (OR ANY PERSON OR ENTITY DESIGNATED BY THE COMPANY) ALL YOUR RIGHT,
TITLE AND INTEREST IN AND TO ALL DEVELOPMENTS AND ALL RELATED PATENTS, PATENT
APPLICATIONS, COPYRIGHTS AND COPYRIGHT APPLICATIONS.  HOWEVER, THIS
PARAGRAPH (B) SHALL NOT APPLY TO DEVELOPMENTS WHICH DO NOT RELATE TO THE
BUSINESS OR RESEARCH AND DEVELOPMENT CONDUCTED OR PLANNED TO BE CONDUCTED BY THE
COMPANY AT THE TIME SUCH DEVELOPMENT IS CREATED, MADE, CONCEIVED OR REDUCED TO
PRACTICE AND WHICH ARE MADE AND CONCEIVED BY YOU NOT DURING NORMAL WORKING
HOURS, NOT ON THE COMPANY’S PREMISES AND NOT USING THE COMPANY’S TOOLS, DEVICES,
EQUIPMENT OR PROPRIETARY INFORMATION.  YOU UNDERSTAND THAT, TO THE EXTENT THIS
LETTER AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF ANY STATE
WHICH PRECLUDES A REQUIREMENT IN AN EMPLOYEE AGREEMENT TO ASSIGN CERTAIN CLASSES
OF INVENTIONS MADE BY AN EMPLOYEE, THIS PARAGRAPH (B) SHALL BE INTERPRETED NOT
TO APPLY TO ANY INVENTION WHICH A COURT RULES AND/OR THE COMPANY AGREES FALLS
WITHIN SUCH CLASSES.  YOU ALSO HEREBY WAIVE ALL CLAIMS TO MORAL RIGHTS IN ANY
DEVELOPMENTS.

 

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(C)                                  YOU AGREE TO COOPERATE FULLY WITH THE
COMPANY, BOTH DURING AND AFTER YOUR EMPLOYMENT WITH THE COMPANY, WITH RESPECT TO
THE PROCUREMENT, MAINTENANCE AND ENFORCEMENT OF COPYRIGHTS, PATENTS AND OTHER
INTELLECTUAL PROPERTY RIGHTS (BOTH IN THE UNITED STATES AND FOREIGN COUNTRIES)
RELATING TO DEVELOPMENTS.  YOU SHALL SIGN ALL PAPERS, INCLUDING, WITHOUT
LIMITATION, COPYRIGHT APPLICATIONS, PATENT APPLICATIONS, DECLARATIONS, OATHS,
FORMAL ASSIGNMENTS, ASSIGNMENTS OF PRIORITY RIGHTS, AND POWERS OF ATTORNEY,
WHICH THE COMPANY MAY DEEM NECESSARY OR DESIRABLE IN ORDER TO PROTECT ITS RIGHTS
AND INTERESTS IN ANY DEVELOPMENT.  YOU FURTHER AGREE THAT IF THE COMPANY IS
UNABLE, AFTER REASONABLE EFFORT, TO SECURE YOUR SIGNATURE ON ANY SUCH PAPERS,
ANY EXECUTIVE OFFICER OF THE COMPANY SHALL BE ENTITLED TO EXECUTE ANY SUCH
PAPERS AS YOUR AGENT AND ATTORNEY-IN-FACT, AND YOU HEREBY IRREVOCABLY DESIGNATE
AND APPOINT EACH EXECUTIVE OFFICER OF THE COMPANY AS YOUR AGENT AND
ATTORNEY-IN-FACT TO EXECUTE ANY SUCH PAPERS ON YOUR BEHALF, AND TO TAKE ANY AND
ALL ACTIONS AS THE COMPANY MAY DEEM NECESSARY OR DESIRABLE IN ORDER TO PROTECT
ITS RIGHTS AND INTERESTS IN ANY DEVELOPMENT, UNDER THE CONDITIONS DESCRIBED IN
THIS SENTENCE.

 

6.3                                 UNITED STATES GOVERNMENT OBLIGATIONS.  YOU
ACKNOWLEDGE THAT THE COMPANY FROM TIME TO TIME MAY HAVE AGREEMENTS WITH OTHER
PARTIES OR WITH THE UNITED STATES GOVERNMENT, OR AGENCIES THEREOF, WHICH IMPOSE
OBLIGATIONS OR RESTRICTIONS ON THE COMPANY REGARDING INVENTIONS MADE DURING THE
COURSE OF WORK UNDER SUCH AGREEMENTS OR REGARDING THE CONFIDENTIAL NATURE OF
SUCH WORK.  YOU AGREE TO BE BOUND BY ALL SUCH OBLIGATIONS AND RESTRICTIONS WHICH
ARE MADE KNOWN TO YOU AND TO TAKE ALL APPROPRIATE ACTION NECESSARY TO DISCHARGE
THE OBLIGATIONS OF THE COMPANY UNDER SUCH AGREEMENTS.

 

6.4                                 EQUITABLE REMEDIES.  THE RESTRICTIONS
CONTAINED IN THIS SECTION 6 ARE NECESSARY FOR THE PROTECTION OF THE BUSINESS AND
GOODWILL OF THE COMPANY AND ARE CONSIDERED BY YOU TO BE REASONABLE FOR SUCH
PURPOSE.  YOU AGREE THAT ANY BREACH OF THIS SECTION 6 IS LIKELY TO CAUSE THE
COMPANY SUBSTANTIAL AND IRREVOCABLE DAMAGE WHICH IS DIFFICULT TO MEASURE. 
THEREFORE, IN THE EVENT OF ANY SUCH BREACH OR THREATENED BREACH, YOU AGREE THAT
THE COMPANY, IN ADDITION TO SUCH OTHER REMEDIES WHICH MAY BE AVAILABLE, SHALL
HAVE THE RIGHT TO OBTAIN AN INJUNCTION FROM A COURT RESTRAINING SUCH A BREACH OR
THREATENED BREACH AND THE RIGHT TO SPECIFIC PERFORMANCE OF THE PROVISIONS OF
THIS SECTION 6 AND YOU HEREBY WAIVE THE ADEQUACY OF A REMEDY AT LAW AS A DEFENSE
TO SUCH RELIEF.

 

7.                                       Conflicts.

 

You represent that you are not bound by any employment contract, restrictive
covenant or other restriction preventing you from entering into employment with
or carrying out your responsibilities for the Company, or which is in any way
inconsistent with the terms of this letter.

 

8.                                       Successors and Assigns.

 

This letter agreement shall be binding upon and inure to the benefit of both
parties and their respective successors and assigns, including any corporation
with which, or into which,

 

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the Company may be merged or which may succeed to the Company’s assets or
business, provided, however, that your obligations are personal and shall not be
assigned by you.  Notwithstanding the foregoing, if the Company is merged with
or into a third party which is engaged in multiple lines of business, or if a
third party engaged in multiple lines of business succeeds to the Company’s
assets or business, then for purposes of Section 4.1(a), the term “Company”
shall mean and refer to the business of the Company as it existed immediately
prior to such event and as it subsequently develops and not to the third party’s
other businesses.

 

9.                                       At-Will Status.

 

This letter shall not be construed as an agreement, either express or implied,
to employ you for any stated term, and shall in no way alter the Company’s
policy of employment at will, under which both you and the Company remain free
to terminate the employment relationship, with or without cause, at any time,
with or without notice.  Similarly, nothing in this letter shall be construed as
an agreement, either express or implied, to pay you any compensation or grant
you any benefit beyond the end of your employment with the Company except as
described in Section 4.1.

 

10.                                 Entire Agreement.

 

This letter agreement constitutes the entire agreement between you and the
Company regarding the terms and conditions of employment with the Company.  This
letter agreement supercedes all prior agreements and understandings, whether
written or oral, relating to the subject matter of this letter agreement,
including, but not limited to, compensation and payments upon termination of
employment.  As such, the Employment Agreement dated September 14, 2004 and
Executive Retention Agreement dated September 14, 2004 previously executed
between you and the Company shall be null and void.

 

11.                                 Amendment.

 

This letter agreement may be amended or modified only by a written instrument
executed by both you and the Company.

 

12.                                 Waivers.

 

No delay or omission by the Company in exercising any right under this letter
agreement shall operate as a waiver of that or any other right.  A waiver or
consent given by the Company on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.

 

13.                                 Choice of Law.

 

This letter agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts (without reference to the conflicts of
laws

 

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provisions thereof).  Any action, suit or other legal proceeding arising under
or relating to any provision of this letter agreement shall be commenced only in
a court of the Commonwealth of Massachusetts (or, if appropriate, a federal
court located within Massachusetts), and you and the Company each consent to the
jurisdiction of such a court.  You and the Company each hereby irrevocably waive
any right to a trial by jury in any action, suit or other legal proceeding
arising under or relating to any provision of this letter agreement.

 

14.                                 Severability.

 

In the case that any provision of this letter agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.

 

If this letter correctly sets forth the terms of your continued employment with
the Company, please sign the enclosed duplicate of this letter in the space
provided below and return it to me.

 

 

Sincerely,

 

 

 

 

 

By:

/s/ Richard J. Faleschini

 

 

Name: Richard J. Faleschini

 

Title: President and Chief Executive Officer

 

The foregoing correctly sets forth the terms of Martin J. Joyce’s at-will
employment by BioSphere Medical, Inc., including but not limited to Sections 5
and 6 above.

 

 

/s/ Martin J. Joyce

 

/s/ Richard J. Faleschini

 

Martin J. Joyce

BioSphere Medical, Inc.

 

By:

Richard J. Faleschini

 

 

President and Chief Executive Officer

 

 

 

 

Date:

June 14, 2005

 

Date:

June 14, 2005

 

 

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