**Exhibit 10.6**

 

BioSphere Medical, Inc.

 

Form of NonstatutoryStock Option AgreementGranted Under 1997 Stock Incentive Plan

 

# 1.                                       Grant of Option.

 

This agreement evidences the grant by BioSphereMedical, Inc., a Delaware corporation (the “Company”), on              ,        ****(the“Grant Date”) to****                    ,an [employee], [consultant], [director] of the Company (the “Participant”), ofan option to purchase, in whole or in part, on the terms provided herein and inthe Company’s 1997 Stock Incentive Plan (the “Plan”), a total of                    shares (the “Shares”) of common stock, $.01****par value pershare, of the Company (“Common Stock”) at $[                ]per Share.  Unless earlier terminated,this option shall expire at 5:00 p.m., Eastern time, on               ,20      ****[generally ten years from the date of grant] (the“Final Exercise Date”).

 

It is intended that the option evidenced by thisagreement shall not be an incentive stock option as defined in Section 422of the Internal Revenue Code of 1986, as amended, and any regulationspromulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term “Participant”, asused in this option, shall be deemed to include any person who acquires theright to exercise this option validly under its terms.

 

# 2.                                       Vesting Schedule.

 

This option will become exercisable (“vest”) as to        %of the original number of Shares on [vesting schedule will generally bebased upon time and/or performance metrics].

 

The right of exercise shall be cumulative so that tothe extent the option is not exercised in any period to the maximum extentpermissible it shall continue to be exercisable, in whole or in part, withrespect to all Shares for which it is vested until the earlier of the FinalExercise Date or the termination of this option under Section 3 hereof orthe Plan.

 

# 3.                                       Exercise of Option.

 

## (a)                                  Formof Exercise.  Each election toexercise this option shall be in writing, signed by the Participant, andreceived by the Company at its principal office, accompanied by this agreement,and payment in full in the manner provided in the Plan.  The Participant may purchase less than thenumber of shares covered hereby, provided that no partial exercise of thisoption may be for any fractional share or for fewer than ten whole shares.

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## (b)                                 ContinuousRelationship with the Company Required. Except as otherwise provided in this Section 3, this option may notbe exercised unless the Participant, at the time he or she exercises thisoption, is, and has been at all times since the Grant Date, an [employee,officer or director of, or consultant or advisor to,] the Company or any parentor subsidiary of the Company as defined in Section 424(e) or (f) of theCode (an “Eligible Participant”).

 

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## (c)                                  Terminationof Relationship with the Company.  Ifthe Participant ceases to be an Eligible Participant for any reason, then,except as provided in paragraph (d)[and paragraph (e) below, with respectto Participants who are employees], the right to exercise this option shallterminate****three months after such cessation (butin no event after the Final Exercise Date), providedthat thisoption shall be exercisable only to the extent that the Participant wasentitled to exercise this option on the date of such cessation.  Notwithstanding the foregoing, if theParticipant, prior to the Final Exercise Date, violates the non-competition orconfidentiality provisions of any employment contract, confidentiality andnondisclosure agreement or other agreement between the Participant and theCompany, unless otherwise required bylaw or by the****Company, the right to exercise thisoption shall terminate immediately upon written notice to the Participant fromthe Company describing such violation.

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## (d)                                 ExercisePeriod Upon Death or Disability.  Ifthe Participant dies or becomes disabled (within the meaning of Section 22(e)(3)of the Code) prior to the Final Exercise Date while he or she is an EligibleParticipant [and, in the case of a Participant who is an employee, the Companyhas not terminated such relationship for “cause” as specified in paragraph (e)below,] this option shall be exercisable, within the period of one yearfollowing the date of death or disability of the Participant, by theParticipant, providedthat this option shall be exercisable onlyto the extent that this option was exercisable by the Participant on the dateof his or her death or disability, and further provided that this option shallnot be exercisable after the Final Exercise Date.

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## (e)                                  Dischargefor Cause.  [For participants who areemployees of the Company] If the Participant, prior to the Final Exercise Date,is discharged by the Company for “cause” (as defined below), the right toexercise this option shall terminate immediately upon the effective date ofsuch discharge.  “Cause” shall mean: (a)a good faith finding by the Company ofwillful misconduct by the Participant, willful and continuous failure by theParticipant to substantially perform his or her responsibilities to theCompany, dishonesty, or gross negligence (other than from a mental or physicaldisability); or (b) the conviction of the Participant of, or the entryof a pleading of guilty or nolo contendere by the Employee to any crimeinvolving moral turpitude or any felony.

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# 4.                                       Withholding.

 

No Shares will be issued pursuant to the exercise ofthis option unless and until the Participant pays to the Company, or makesprovision satisfactory to the Company for payment of, any federal, state orlocal withholding taxes required by law to be withheld in respect of thisoption.

 

# 5.                                       Nontransferability of Option.

 

This option may not be sold, assigned, transferred,pledged or otherwise encumbered by the Participant, either voluntarily or byoperation of law, except by will or the laws of descent and distribution, and,during the lifetime of the Participant, this option shall be exercisable onlyby the Participant.

 

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# 6.                                       Provisions of the Plan.

 

This option is subject to the provisions of the Plan,a copy of which is furnished to the Participant with this option.

 

IN WITNESS WHEREOF, the Company has caused this optionto be executed under its corporate seal by its duly authorized officer.  This option shall take effect as a sealedinstrument.

 
|   | BioSphere Medical, Inc. |
|--------|-------------------------|
|   |                    |
|   |                    |
| Dated: |                    |   | By: |   |   |
|   |                    |   |   |   |
|   |                    | Name: |   |   |
|   |                    | Title: |   |   |
|        |                         |  |  |  |  |  |  |  |  |

 

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PARTICIPANT’S ACCEPTANCE

 

The undersigned hereby accepts the foregoing optionand agrees to the terms and conditions thereof.  The undersigned hereby acknowledges receipt ofa copy of the Company’s 1997 Stock Incentive Plan.

 
|   | PARTICIPANT: |
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|   | Address:     |   |   |
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**NOTICE OF STOCK OPTION EXERCISE**

 
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Attention:  Treasurer

 

DearSir or Madam:

 

I am the holder of a Nonstatutory Stock Option grantedto me under the BioSphere Medical, Inc. (the “Company”) 1997 Stock IncentivePlan on                        forthe purchase of                        sharesof Common Stock of the Company at a purchase price of $                        pershare.

 

I hereby exercise my option to purchase                        sharesof Common Stock (the “Shares”), for which I have enclosed                         inthe amount of                        Pleaseregister my stock certificate as follows:

 
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| Tax I.D. #: |   |   |   |

 

 
| Very truly  yours, |   |
|--------------------|--------|
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| (Signature)        |   |
|                    |        |  |

 

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