Exhibit
10.1


ACKNOWLEDGEMENT
AND AMENDMENT AGREEMENT


This Acknowledgement and Amendment Agreement (the “Acknowledgement”)
is dated October 10, 2007, and is entered into by and between Martin J. Joyce (the “Employee”), and
BioSphere Medical, Inc., a Delaware corporation (the “Company”).


WHEREAS, the Employee and the Company have entered
into a certain letter agreement dated June 14, 2005 regarding the Employee’s
employment with the Company (the “Letter Agreement”); and


WHEREAS, the parties desire to modify the provisions
of the Letter Agreement.


NOW, THEREFORE, in
consideration of the mutual covenants contained herein and for other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
undersigned hereby agree as follows:


1.             The
Letter Agreement is hereby amended as follows:


(a)                                  Section
2.2 is hereby deleted in its entirety and replaced with the following new
Section 2.2:


“2.2         Bonus.  You will be entitled to receive an annual
bonus in an amount equal to up to 40% of your then current base salary, to be
paid based upon your achievement of milestones and objectives to be mutually
agreed upon annually by you and the Compensation Committee of the Board of
Directors but in any event such bonus shall be paid by March 15 of the year following
the year to which the bonus relates, provided that you remain an employee of
the Company at the time such bonuses are customarily paid.”


(b)                                 Section
2.4 is hereby deleted in its entirety and replaced with the following new
Section 2.4:


“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.  Notwithstanding the
foregoing, (i) the expenses eligible for reimbursement may not affect the expenses
eligible for reimbursement in any other taxable year, (ii) such reimbursement
must be made on or before the last day of the year following the year in which
the expenses was incurred, and (iii) the right to reimbursement is not subject
to liquidation or exchange for another benefit.”













 


(c)                                  Section
4.1 is hereby deleted in its entirety and replaced with the following new
Section 4.1:


“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” law,  29 U.S.C. §
1161 et  seq.,
provide to you (so long as you are entitled to COBRA coverage) 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 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 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.


Payments to the Employee
under this Section 4.1 shall be bifurcated into two portions, consisting of a
portion that does not constitute “nonqualified deferred compensation” within
the meaning of Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) and a portion that does constitute nonqualified deferred
compensation.  Payments hereunder shall
first be made from the portion that does not consist of nonqualified deferred
compensation until it is exhausted and then shall be made from the portion that
does constitute nonqualified deferred compensation.  Notwithstanding the foregoing, because the
Employee is a “specified employee” as defined in Section 409A (a)(3)(B)(i) of
the Code, the commencement of the delivery of any such payments that constitute
nonqualified deferred compensation will be delayed to the date that is 6 months
and one day after the Employee’ termination of employment (the “Earliest
Payment Date”) unless payable upon the Employee’s death.  Any payments that are delayed pursuant to the
preceding sentence shall be paid on the Earliest Payment Date.  The determination of whether, and the extent
to which, any of the payments to be made to the Employee hereunder are
nonqualified deferred compensation shall be made after the application of all
applicable exclusions under Treasury Reg. § 1.409A-1(b)(9).  Any payments that are intended to qualify for
the exclusion for separation pay due to involuntary separation from service set
forth in Reg. § 1.409A-1(b)(9)(iii) must be paid no later than the last day of
the second taxable year of the Employee following the taxable year of the
Employee in which the Employee’s termination of employment occurs.”



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(d)                                 A
new Section 15 is hereby added to the Letter Agreement which reads as follows:


“15.                           Section
409A.


Notwithstanding
anything else to the contrary in this agreement, to the extent that any of the
payments that may be made hereunder constitute “nonqualified deferred
compensation”, within the meaning of Section 409A and the Employee is a “
specified employee” upon his separation (as defined under Section 409A), the
timing of any such payment following the separation date shall be modified if,
absent such modification, such payment would otherwise be subject to penalty
under Section 409A.  In any event, the
Company makes no representation or warranty and shall have no liability to the
Employee or to any other person if any provisions of this agreement are
determined to constitute “nonqualified deferred compensation” subject to
Section 409A but do not satisfy the requirements of that section.”


2.             The
parties acknowledge and agree that all other provisions of the Letter Agreement
shall remain in full force and effect.


3.             This
Acknowledgement shall be governed by and construed and interpreted in accordance
with the substantive laws of the Commonwealth of Massachusetts without regard
to its principles of conflicts of law.


4.             This Acknowledgement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original instrument,
but all such counterparts together shall constitute but one agreement.


[Remainder of Page Intentionally Left Blank]



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IN WITNESS WHEREOF, the
Parties have executed this Acknowledgement and Amendment Agreement as of the
date first above written.


	
  

  	
   

  	
  BIOSPHERE MEDICAL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Richard J. Faleschini

  
	
   

  	
   

  	
   

  	
  Richard J. Faleschini

  
	
   

  	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Martin J. Joyce

  
	
   

  	
   

  	
  Martin J. Joyce

  
	
   

  	
   

  	
  Executive Vice President of Finance and

  
	
   

  	
   

  	
  Administration and Chief Financial Officer

  



 



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