Document:

Exhibit 10.1

 

MONSTER
WORLDWIDE, INC.

STOCK
OPTION AGREEMENT

 

AGREEMENT
(“Agreement”) made as of the         day of                    ,
by and between MONSTER WORLDWIDE, INC. (formerly known as TMP Worldwide Inc.),
a Delaware corporation (the “Company”), and                         
(the “Optionee”).

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS,
pursuant to the Monster Worldwide, Inc. 1999 Long Term Incentive Plan (the “Plan”),
the Committee (as defined in the Plan) desires to grant to the Optionee and the
Optionee desires to accept an option to purchase shares of common stock, $.001
par value, of the Company (the “Common Stock”) upon the terms and conditions
set forth in this Agreement;

 

NOW,
THEREFORE, the parties hereto agree as follows:

 

1.             Grant.  The Committee hereby grants to the Optionee
an option to purchase up to                    
shares of Common Stock at a purchase price per share of $            .  This option is intended to be treated as an
option that does not qualify as an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended.

 

2.             Vesting
and Exercisability.

 

(a)           Vesting.   Except as specifically provided otherwise in
this Agreement, the option will vest, if at all, on              ,
provided however that the Optionee remains in the continuous employment of the
Company or an affiliate (as defined below) of the Company between the date
hereof and               .
The option shall automatically expire if not vested on             .

 

(b)           Exercisability.
Except as specifically provided otherwise in this Agreement, options which have
vested in accordance with Section 2(a) above will become exercisable, if at
all, in incremental installments based upon the passage of time between the
date of this Agreement and the applicable dates set forth below:

 

	
  Date

  	
   

  	
  Incremental Percentage of

  Vested Option Exercisable

  	
   

  	
  Cumulative Percentage of

  Vested Option Exercisable

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

Any fractional shares
resulting from the strict application of the incremental percentages set forth
above will be disregarded and the actual number of vested shares becoming
exercisable on any specific date will cover only the full number of shares
determined by applying the relevant incremental percentage.  Unless sooner terminated, the option will
expire on the tenth anniversary of the date hereof.

 

1

 

3.             Exercise.  Any portion of the option which has vested in
accordance with Section 2(a) and is exercisable in accordance with Section 2(b)
may be exercised in whole or in part by delivering to the Vice-President, Human
Resources of the Company (“VP-Human Resources”) in Maynard, Massachusetts (a) a
written notice specifying (1) the number of shares to be purchased, (2) the
date of this Agreement and the specific number of shares referred to in Section
1 of this Agreement, (3) the Optionee’s home address and, if the Optionee has
one, the Optionee’s social security or U.S. taxpayer identification number and
(4) delivery instructions with respect to the shares of Common Stock issuable
upon exercise, and (b) cash payment in full of the exercise price, together
with the amount, if any, deemed necessary by the Company to enable it to
satisfy any federal, foreign or other tax withholding obligations with respect
to the exercise (unless other arrangements acceptable to the Company in its
sole discretion have been made).  The
Company may from time to time change (or provided alternatives to) the method
of exercise of the option granted hereunder by notice to the Optionee, it being
understood that from and after such notice the Optionee will be bound by the
method (or alternatives) specified in any such notice.  The Company (in its sole and absolute
discretion) may permit all or part of the exercise price to be paid with shares
of Common Stock which have been owned by the Optionee for at least six months,
or in installments (together with interest) evidenced by the Optionee’s secured
promissory note.

 

4.             Issuance
of Shares.  No shares of Common Stock
shall be sold or delivered hereunder until full payment for such shares has
been made.  The Optionee shall have no
rights as a stockholder with respect to any shares covered by the option until
a stock certificate for such shares is issued to the Optionee.  Except as otherwise provided herein, no
adjustment shall be made for dividends or distributions of other rights for
which the record date is prior to the date such stock certificate is issued.

 

5.             No
Assignment of Option.  This option is
not assignable or transferable except upon the Optionee’s death to a
beneficiary designated by the Optionee in a written beneficiary designation
filed with the Company or, if no duly designated beneficiary shall survive the
Optionee, pursuant to the Optionee’s will and/or by the laws of descent and
distribution, and is exercisable during the Optionee’s lifetime only by the
Optionee or the Optionee’s guardian or legal representative.

 

6.             Termination
of Employment.  If the Optionee
ceases to be employed by the Company or any of its affiliates for any reason
other than death prior to the vesting date provided in Section 2(a)
above, then the option will automatically expire on such date of termination of
employment.  If the Optionee ceases to be
employed by the Company or any of its affiliates for any reason other than
death on or after the vesting date provided in Section 2(a) above, then,
unless sooner terminated, the option will automatically expire on the later of
(i) the date which is five (5) years after the date of this Agreement or (ii)
the date which is six months after the Optionee’s last day of employment, but
in no event shall the option survive after the expiration of the option in
accordance with Section 2(b) above. 
If the Optionee ceases to be employed by the Company or any of its
affiliates by reason of the Optionee’s death prior to, on or after the
vesting date provided in Section 2(a) above, then, unless sooner
terminated, the option will become fully vested (to the extent it was not
vested on the date of death) and the option will automatically expire on the
later of (i) the date which is five (5) years after the date of this Agreement
or (ii) the date which is one year after the Optionee’s date of death, but
in no event shall the option survive after the expiration of the option in
accordance with Section 2(b) above.

 

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Any vested option which
is not exercised within the applicable period following termination of
employment or death will automatically expire.

 

7.             Securities
Registration Requirement. 
Notwithstanding anything herein to the contrary, the option may not be
exercised unless and until a registration statement covering the shares of
Common Stock issuable upon exercise of the option granted hereunder has been
filed with and declared effective by the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and the option shall in no event
be exercisable and shares shall not be issued hereunder if, in the opinion of
counsel to the Company, such exercise and/or issuance may result in a violation
of federal or state securities laws or the securities laws of any other
relevant jurisdiction.  Nothing in this
Agreement shall be deemed to obligate the Company to effect any such
registration.

 

8.             Capital
and Corporate Changes.

 

(a)           Adjustments
Upon Changes in Capitalization.  The
number and class of shares covered by this option and, if applicable, the
exercise price per share shall be adjusted proportionately or as otherwise
appropriate to reflect any increase or decrease in the number of issued shares
of Common Stock resulting from a split-up or consolidation of shares or any
like capital adjustment, or the payment of any stock dividend, and/or to
reflect a change in the character or class of shares covered by the Plan
arising from a readjustment or recapitalization of the Company’s capital stock.

 

(b)           Change
in Control.  If, in connection with a
Change in Control (defined below), the stockholders of the Company receive
capital stock of another corporation (“Exchange Stock”) in exchange for their
shares of Common Stock (whether or not such Exchange Stock is the sole
consideration), and if the Board of Directors of the Company (the “Board”) so
directs, then this option will be converted into an option to purchase shares
of Exchange Stock.  The number of shares
and exercise price under the converted option will be determined by adjusting
the number of shares and exercise price under this option on the same basis as
the determination of the number of shares of Exchange Stock the holders of
Common Stock will receive in connection with the Change in Control and, unless
the Board determines otherwise, the vesting and exercisability conditions with
respect to the converted options will be substantially the same as the vesting
and exercisability conditions set forth herein. 
If the Board does not direct a conversion of the outstanding option in
connection with a Change in Control, then to the extent the option has not
theretofore expired the Optionee will be permitted to exercise the outstanding
option in whole or in part (whether or not otherwise vested or exercisable)
prior to the Change in Control, and any outstanding option which is not
exercised before the Change in Control will thereupon terminate.

 

(c)           Definition
of Change in Control.  For purposes
hereof, the term “Change in Control” shall be deemed to occur if (1) there
shall be consummated (A) any consolidation, merger or reorganization involving
the Company, unless such consolidation, merger or reorganization is a “Non-Control
Transaction” (as defined below) or (B) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, or (2) the stockholders of the
Company shall approve any plan or proposal for liquidation or dissolution of
the Company, or (3) any person (as such term is used in Section 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as

 

3

 

amended (the “Exchange
Act”)), shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of more than 50% of the combined voting power of the
Company’s then outstanding voting securities other than (a) a person who owns
or owned shares of Class B Common Stock of the Company, (b) pursuant to a plan
or arrangement entered into by such person and the Company, or (c) pursuant to
receipt of such shares from a stockholder of the Company pursuant to such
stockholder’s will or the laws of descent and distribution.   A “Non-Control Transaction” shall mean a
consolidation, merger or reorganization of the Company where (1) the
stockholders of the Company immediately before such consolidation, merger or
reorganization own, directly or indirectly, at least a majority of the combined
voting power of the outstanding voting securities of the corporation resulting
from such consolidation, merger or reorganization (the “Surviving Corporation”),
(2) the individuals who were members of the Board of the Company immediately
prior to the execution of the agreement providing for such consolidation,
merger or reorganization constitute at least 50% of the members of the Board of
Directors of the Surviving Corporation, or a corporation directly or indirectly
beneficially owning a majority of the voting securities of the Surviving
Corporation and (3) no person (other than (a) the Company, (b) any subsidiary
of the Company, (c) any employee benefit plan (or any trust forming a part
thereof) maintained by the Company, the Surviving Corporation or any
subsidiary, or (d) any person who, immediately prior to such consolidation,
merger or reorganization, beneficially owned more than 50% of the combined
voting power of the Company’s then outstanding voting securities) beneficially
owns more than 50% of the combined voting power of the Surviving Corporation’s
then outstanding voting securities.

 

(d)           Fractional
Shares.  In the event of any
adjustment in the number of shares covered by this option pursuant to the
provisions hereof, any fractional shares resulting from such adjustment will be
disregarded, and the option, as adjusted, will cover only the number of full
shares resulting from the adjustment.

 

(e)           Determination
of Board to be Final.  All
adjustments under this Section shall be made by the Board, and its
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive.

 

9.             Nonsolicitation;
Confidentiality.  As a material
inducement to the Company to grant this option and to enter into this
Agreement, the Optionee hereby expressly agrees to be bound by the following
covenants, terms and conditions.

 

(a)           During
the course of the Optionee’s relationship with the Company or any of its
affiliates, the Optionee has had, and will have, access to trade secrets,
proprietary and confidential information relating to the Company and its
affiliates and their respective clients, including but not limited to,
marketing data, financial information, client lists (including without limitation,
Rolodex type or computer based compilations maintained by the Company or its
affiliates or the Optionee), and details of programs and methods, pricing
policies, strategies, profit margins and software, in each case of the Company,
its affiliates and/or their respective clients. 
During the term of the Optionee’s employment with one or more of the
Company and its affiliates and thereafter, the Optionee agrees to keep secret
and retain in strictest confidence all of such trade secret, proprietary and
confidential information, and will not disclose, disseminate or use such
information for the Optionee’s own advantage or for the advantage of any other
person or entity.  In the event
disclosure of any such trade secret, proprietary and confidential information
is required or purportedly required by law, the Optionee will provide the
Company

 

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with prompt notice of any
such requirement so that the Company may seek an appropriate protective order.

 

(b)           Through
the date which is one year after the last day of the Optionee’s employment with
the Company or any of its affiliates (such last day is sometimes referred to
herein as the “Termination Date”), except prior to the Termination Date on
behalf of the Company and its affiliates in accordance with the terms of the
Optionee’s employment, the Optionee will not, directly or indirectly, solicit
or perform Business (as defined below) related services for, or interfere with
or endeavor to entice away from the Company or any of its affiliates, any
client to whom the Company or any of its affiliates provided services at any
time during the 12 months preceding the Termination Date,  or
any prospective client to whom the Company or any of its affiliates had made a
formal presentation at any time during the 12 months preceding the Termination
Date, and the Optionee will not, directly or indirectly, hire, attempt to hire,
solicit for employment or encourage the departure of any employee of the
Company or any of its affiliates or any individual who was employed by the
Company or any of its affiliates at any time during the 12 months preceding the
Termination Date.  As used herein, the
term “Business” means the yellow pages advertising business, the recruitment
advertising business, the Internet advertising business, the relocation
business and any other business in which the Company or any of its affiliates
is currently involved or becomes engaged at any time prior to the Termination
Date.  As used in this Agreement, the
term “affiliate” means an affiliate of the Company within the meaning of Rule
405 under the Securities Act of 1933, as amended.

 

(c)           The
Optionee acknowledges that in the event the Optionee violates any provisions of
this Section 9, in addition to its other rights and remedies, the Company shall
be entitled to injunctive relief without the necessity of proving actual
damages.  The Optionee acknowledges that
if any provision of this Section 9 is held to be unenforceable, the court
making such holding shall have the power to modify such provision and in its
modified form such provision shall be enforced.

 

(d)           The
Optionee acknowledges and agrees that the provisions of this Section 9 are in
addition to, and not in lieu of, any non-solicitation, confidentiality,
non-competition, nonraid and/or similar obligations which the Optionee may have
with respect to the Company and/or its affiliates, whether by agreement,
fiduciary obligation or otherwise and that the grant and exercisability of the
option contemplated by this Agreement are expressly made contingent on the
Optionee’s compliance with the provisions of this Section 9.  Without in any way limiting the provisions of
this Section 9, the Optionee further acknowledges and agrees that the
provisions of this Section 9 shall remain applicable in accordance with their
terms after the Optionee’s Termination Date, regardless of whether (i) the
Optionee’s termination or cessation of employment is voluntary or involuntary,
(ii) the Optionee has exercised the option in whole or in part or (iii) the
option has not or will not vest.

 

10.           No
Employment Rights.  Nothing in this
Agreement, including but not limited to the provisions of Sections 15 or 16
below, shall give the Optionee any right to continue in the employment of the
Company or any affiliate of the Company, or interfere in any way with the right
of the Company or any affiliate of the Company to terminate the employment of
the Optionee. It is understood that the option granted hereunder is
automatically void and of no force or effect unless at the date of grant
referred to on the first page of this Agreement the Optionee is an employee of
the Company or one of its affiliates and that the execution or delivery of this

 

5

 

Agreement by the Company
and references in this Agreement to non employment services shall in no way
constitute a waiver or modification of the foregoing.

 

11.           Plan
Provisions.  The provisions of the
Plan shall govern if and to the extent that there are inconsistencies between
those provisions and the provisions hereof. The Optionee acknowledges receipt
of a copy of the Plan prior to the execution of this Agreement.

 

12.           Administration.  The Committee will have full power and
authority to interpret and apply the provisions of this Agreement and act on
behalf of the Company and the Board in connection with this Agreement, and the
decision of the Committee as to any matter arising under this Agreement shall
be binding and conclusive as to all persons.

 

13.           Binding
Effect; Headings; Dollar Amounts. 
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns.  The subject headings of Sections of this
Agreement are included for the purpose of convenience only and shall not affect
the construction or interpretation of any of its provisions.  All references in this Agreement to “$” or “dollars”
are to United States dollars.

 

14.           Applicable
Law.  Except with respect to Sections
15 and 16 below, this Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.  This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
controls and supersedes any prior understandings, agreements or representations
by or between the parties, written or oral with respect to its subject matter,
and may not be modified except by written instrument executed by the
parties.  The Optionee has not relied on
any representation not set forth in this Agreement.

 

15.           Agreement
to Arbitrate Claims (Employment and Termination of Employment).

 

(a)           Any
controversy or claim (contract, tort, or statutory) under federal, state, or
local law between the Company or any of its affiliates (or any of their
respective benefit plans, benefit plan sponsors, fiduciaries, administrators,
successors and assigns) and the Optionee arising out of or in connection with
the Optionee’s employment with the Company or any of its affiliates, or the
termination of that employment (with the exception of any workers’ compensation
or unemployment compensation claims, claims for employee benefits where the
applicable benefit plan or pension plan expressly specifies that its claims
procedure shall culminate in an arbitration procedure different from the one
described in this Section 15 or any claim for equitable or injunctive relief
contemplated by or referred to in Section 9(c) or 9(d) of this Agreement),
including without limitation the construction or application of any of
the terms, provisions or conditions of this Agreement, shall be submitted to
final and binding arbitration in accordance with this Section 15.  With respect to individuals who at the time
of the option grant or thereafter are, were or at any time hereafter become
employed by the Company or any of its affiliates in, or are, were or become
residents or citizens of, the United States (“U.S. Employees”), such
arbitration shall be compelled and enforced according to the Federal
Arbitration Act and shall be conducted according to the then-current National
Rules for the Resolution of Employment Disputes of the American Arbitration
Association except as otherwise provided herein.  With respect to all individuals who are, were
or become employees of the Company or any of its affiliates who do not qualify
as U.S. Employees under the foregoing definition, such arbitration shall be
compelled, enforced and conducted according to

 

6

 

such rules as the parties
may agree at the time of commencement of the arbitration and, in the absence of
any such agreement, in accordance with the Federal Arbitration Act and the
then-current National Rules for the Resolution of Employment Disputes of the
American Arbitration Association except as otherwise provided herein.  The current National Rules, and other
information about the American Arbitration Association, can be accessed via the
Internet at www.adr.org or can be obtained from the
Company by a request directed to its VP-Human Resources.  The arbitrator shall be appointed by
agreement of the parties hereto or, if no agreement can be reached, by the
American Arbitration Association pursuant to its rules.   The arbitrator shall apply the substantive
law (and the law of remedies, if applicable) of the state or other jurisdiction
in which the claim arose, or federal law, or both, as applicable to the
claim(s) asserted.  Without limiting the
arbitrator’s power and authority, it is understood that (i) the arbitrator
shall have exclusive authority to resolve any dispute relating to the
interpretation, applicability or formation of this Agreement, including but not
limited to the provisions of this Section 15, and any claim that all or any
part of this Agreement is void or voidable and (ii) the arbitrator shall have
the authority to entertain motions to dismiss and motions for summary judgment
by any party and shall apply the standards governing such motions under the
Federal Rules of Civil Procedure (unless otherwise agreed to by the parties in
connection with disputes involving a non-US Employee).

 

(b)           Without
in any way limiting the breadth of the controversies or claims intended to be
covered by the arbitration agreement set forth in this Section 15, it is
understood and agreed that this agreement to arbitrate shall include without
limitation any and all controversies, claims or allegations arising out of
or in connection with the Age Discrimination in Employment Act, the Americans
with Disabilities Act, Title VII of the Civil Rights Act, the Family and
Medical Leave Act, the Fair Labor Standards Act, the Rehabilitation Act, the
Employee Retirement Income Security Act, the Equal Pay Act, the Uniformed
Services Employment and Reemployment Rights Act, the Worker Adjustment and
Retraining Notification Act, any federal, state or local statute prohibiting
discrimination or harassment (on the basis of sex, race, color, national
origin, ancestry, religion, age, marital status, veteran status, pregnancy,
sexual orientation, medical condition, handicap, disability or otherwise), any
alleged wrongful employment practice, any alleged wrongful termination, and any
allegation concerning the failure to pay wages, bonuses, compensation or
benefits.

 

(c)           The
aggrieved party must initiate arbitration by sending written notice of an
intention to arbitrate by registered or certified mail or by courier to the
other party.  The notice to the Company
or one of its affiliates shall be sent to the Company’s VP-Human
Resources.  The notice to the Optionee
shall be sent to the Optionee’s last known address (as noted in the Optionee’s
personnel file).  This notice must
contain a description of the dispute and the remedy sought.  The arbitrator shall be impartial and
experienced in employment matters. 
Judgment on the award the arbitrator renders may be entered in any court
having jurisdiction over the parties. 
The arbitration shall be conducted in the county or within 75 miles of
the county where the Optionee is employed or was last employed by the Company
or one of its affiliates.  Each party may
be represented by an attorney or other representative selected by the
party.  Each party shall have the right
to take the deposition of one individual and any expert witness proposed to be
utilized by another party and to make requests for production of documents;
additional discovery may be had only where the arbitrator selected pursuant to
this Section 15 so orders, upon showing of substantial need.  Each party shall have the right to subpoena
witnesses and documents for the arbitration. 
At least 30 days before the arbitration,

 

7

 

each party must provide
to the other lists of witnesses, including any expert, and copies of all
exhibits intended to be used at arbitration.

 

(d)           Each
party to the arbitration shall equally share the fees and costs of the
arbitrator.  Each party will deposit
funds or post other appropriate security for its share of the arbitrator’s
fees, in an amount and manner determined by the arbitrator, 10 days before the
first day of hearing.  If the Optionee
cannot pay the Optionee’s share of arbitrator fees and other related costs due
to financial hardship, the Optionee can make a request to the arbitrator for
financial relief.  If the arbitrator
agrees that the Optionee cannot pay and grants the Optionee’s request, the
other party to the arbitration (or the Company) shall advance the Optionee’s
share of the fee and other related costs, or any portion thereof so ordered by
the arbitrator.  If this occurs, the Optionee
understands that the arbitrator is required to address the Optionee’s share of
the arbitrator’s fee and other related costs, and the Optionee’s potential
obligation to reimburse the other party to the arbitration (or the Company) for
that fee and those costs, in the arbitrator’s decision.  Each party to the arbitration shall pay for
its own costs and attorneys’ fees, if any, incurred in pursuing or defending
the claim submitted to arbitration. 
However, if any party prevails on a statutory claim which affords the
prevailing party attorneys’ fees, or if there is a written agreement providing
for attorneys’ fees, the arbitrator may award reasonable attorneys’ fees to the
prevailing party.  The arbitrator may
also award costs, including the cost of the arbitrator’s fees, to the
prevailing party.

 

(e)           This
agreement to arbitrate shall survive the expiration or termination of this
Agreement and termination of the Optionee’s employment for any reason.  This arbitration procedure, which substitutes
an arbitral forum for a judicial forum, is intended to be the exclusive method
of resolving any claim arising out of or in connection with the Optionee’s
employment with the Company or any of its affiliates, or the termination of
that employment, with the exception of any workers’ compensation claim or
unemployment compensation claim, any claim for employee benefits where the
applicable benefit plan or pension plan expressly specifies that its claims
procedure shall culminate in an arbitration procedure different from the one
described in this Section 15 or any claim for equitable or injunctive relief
contemplated by or referred to in Section 9(c) or 9(d) of this Agreement.  If any part of this agreement to arbitrate is
found to be void as a matter of law or public policy, the remainder of the
agreement to arbitrate will continue to be in full force and effect to the
maximum extent permissible.

 

(f)            No
claim may be brought under this arbitration procedure on behalf of any other
person or entity.  The Company and its
affiliates (and any of their respective benefit plans, benefit plan sponsors,
fiduciaries, administrators, successors or assigns) reserve the right to sever
or consolidate claims in each instance at its option in order to facilitate
case processing and to lower costs.

 

16.           Agreement
to Arbitrate Claims (Non-Employment Matters).

 

(a)           Any
controversy or claim (contract, tort, or statutory) under federal, state, or
local law between the Company or any of its affiliates (or any of their
respective benefit plans, benefit plan sponsors, fiduciaries, administrators,
successors and assigns) and the Optionee that is not covered by the provisions
of Section 15 above, including but not limited to those arising out of or in
connection with the Optionee’s services for the Company or any of its
affiliates in a capacity other than as an employee, or the termination of those
services (with the exception of

 

8

 

any workers’ compensation
claim or unemployment compensation claim, any claim for employee benefits where
the applicable benefit plan or pension plan expressly specifies that its claims
procedure shall culminate in an arbitration procedure different from the one
described in Section 15 above or any claim for equitable or injunctive relief
contemplated by or referred to in Section 9(c) or 9(d) of this Agreement),
including without limitation the construction or application of any of
the terms, provisions or conditions of this Agreement (in the event the
provisions of Section 15 are inapplicable to the construction or application of
the terms, provisions or conditions of this Agreement), shall be submitted to
final and binding arbitration in accordance with this Section 16.  With respect to (i) individuals who at any
time provide or provided any services to the Company in the United States, or
are, were or become residents or citizens of, the United States, or (ii) any
controversy or claim relating to any issue arising in the United States (the
items described in (i) and (ii) are collectively referred to as “US Claims”),
the arbitration contemplated by this Section 16 shall be compelled and enforced
according to the Federal Arbitration Act and shall be conducted according to
the then-current Commercial Arbitration Rules of the American Arbitration
Association except as otherwise provided herein.  With respect to any other arbitration
contemplated by this Section 16 that is not dealt with in the preceding
sentence, such arbitration shall be compelled, enforced and conducted according
to such rules as the parties may agree at the time of commencement of the
arbitration and, in the absence of any such agreement, in accordance with the
Federal Arbitration Act and the then-current Commercial Arbitration Rules of
the American Arbitration Association except as otherwise provided herein.  The current Commercial Arbitration Rules, and
other information about the American Arbitration Association, can be accessed
via the Internet at www.adr.org or
can be obtained from the Company by a request directed to its Vice-President,
Human Resources.  The arbitrator shall be
appointed by agreement of the parties hereto or, if no agreement can be
reached, by the American Arbitration Association pursuant to its rules.   The arbitrator shall apply the substantive
law (and the law of remedies, if applicable) of the state or other jurisdiction
in which the claim arose, or federal law, or both, as applicable to the
claim(s) asserted.  Without limiting the
arbitrator’s power and authority, it is understood that (i) the arbitrator
shall have exclusive authority to resolve any dispute relating to the
interpretation, applicability or formation of this Agreement, including but not
limited to the provisions of this Section 16, and any claim that all or any
part of this Agreement is void or voidable and (ii) the arbitrator shall have
the authority to entertain motions to dismiss and motions for summary judgment
by any party and shall apply the standards governing such motions under the
Federal Rules of Civil Procedure (unless otherwise agreed to by the parties in
connection with disputes involving a non-US Claim).

 

(b)           The
aggrieved party must initiate arbitration by sending written notice of an
intention to arbitrate by registered or certified mail or by courier to the other
party.  The notice to the Company or one
of its affiliates shall be sent to the Company’s VP-Human Resources.  The notice to the Optionee shall be sent to
the Optionee’s last known address (as noted in the records of the Company or an
affiliate of the Company).  This notice
must contain a description of the dispute and the remedy sought.  The arbitrator shall be impartial and
experienced in commercial matters. 
Judgment on the award the arbitrator renders may be entered in any court
having jurisdiction over the parties. 
The arbitration shall be conducted in the county or within 75 miles of
the county (x) where the Optionee provides services to, or last provided
services to, the Company or one of its affiliates in a capacity other than as
an employee or, if no services are or were provided by the Optionee in any such
capacity, (y) where the issue arose. 
Each party may be represented by an attorney or other representative
selected by the

 

9

 

party.  Each party shall have the right to take the
deposition of one individual and any expert witness proposed to be utilized by
another party and to make requests for production of documents; additional
discovery may be had only where the arbitrator selected pursuant to this
Section 16 so orders, upon showing of substantial need.  Each party shall have the right to subpoena
witnesses and documents for the arbitration. 
At least 30 days before the arbitration, each party must provide to the
other lists of witnesses, including any expert, and copies of all exhibits
intended to be used at arbitration.

 

(c)           Each
party to the arbitration shall equally share the fees and costs of the
arbitrator.  Each party will deposit
funds or post other appropriate security for its share of the arbitrator’s
fees, in an amount and manner determined by the arbitrator, 10 days before the
first day of hearing.  Each party to the
arbitration shall pay for its own costs and attorneys’ fees, if any, incurred
in pursuing or defending the claim submitted to arbitration.  However, if any party prevails on a statutory
claim which affords the prevailing party attorneys’ fees, or if there is a
written agreement providing for attorney’s fees, the arbitrator may award
reasonable attorneys’ fees to the prevailing party.  The arbitrator may also award costs,
including the cost of the arbitrator’s fees, to the prevailing party.

 

(d)           This
agreement to arbitrate shall survive the expiration or termination of this
Agreement and termination of the Optionee’s relationship with the Company or
any of its affiliates for any reason. 
This arbitration procedure, which substitutes an arbitral forum for a
judicial forum, is intended to be the exclusive method of resolving any claim or
controversy that is not covered by the provisions of Section 15 above,
including but not limited any claim or controversy arising out of or in
connection with the Optionee’s services for the Company or any of its
affiliates in a capacity other than as an employee, or the termination of those
services, but this arbitration procedure does not apply to any workers’
compensation claim or unemployment compensation claim, any claim for employee
benefits where the applicable benefit plan or pension plan specifies that its
claim procedure shall culminate in an arbitration procedure different from the
one described in Section 15 above, or to any claim for equitable or injunctive
relief contemplated by or referred to in Section 9(c) or 9(d) of this
Agreement.  If any part of this agreement
to arbitrate is found to be void as a matter of law or public policy, the
remainder of the agreement to arbitrate will continue to be in full force and
effect to the maximum extent permissible.

 

(e)           No
claim may be brought under this arbitration procedure on behalf of any other
person or entity.  The Company and its
affiliates (and any of their respective benefit plans, benefit plan sponsors,
fiduciaries, administrators, successors or assigns) reserve the right to sever
or consolidate claims in each instance at its option in order to facilitate
case processing and to lower costs.

 

The
Optionee acknowledges that the Optionee (1) has been advised to consult with an
attorney prior to executing this Agreement, (2) has read this Agreement
carefully and understands all of its terms, including but not limited to (x)
the provisions relating to confidentiality and non-solicitation and (y) the
provisions requiring mandatory arbitration of controversies or claims whether
or not related to the option granted hereunder, and (3) understands that the
Optionee is giving up valuable rights, including a right to a jury trial.

 

10

 

IN WITNESS WHEREOF, this
Agreement has been executed as of the date first above written.

 

 

	
   

  	
  MONSTER WORLDWIDE, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Optionee - Signature

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Optionee – Print Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Optionee – Global ID/SSN

  	
   

  
				

 

11EXHIBIT
10.1

 

RESTRICTIVE
COVENANTS AGREEMENT

 

This RESTRICTIVE COVENANTS AGREEMENT (the “Agreement”)
is made and entered into as of this 23rd day of December, 2004 (the “Effective
Date”), by and among BioSphere Medical, Inc., a Delaware corporation (the “Biosphere”),
Cerberus Partners, L.P. (“Cerberus”) and Sepracor Inc. (“Sepracor”
and, together with Cerberus, the “Investors”).

 

RECITALS:

 

WHEREAS,
on November 10, 2004, BioSphere and the Investors entered into a
Securities Purchase Agreement (the “Securities Purchase Agreement”)
pursuant to which BioSphere sold to the Investors (i) an aggregate of 8,000
shares (the “Preferred Shares”) of its Series A Preferred Stock, $0.01
par value per share (the “Series A Preferred Stock”), and (ii) warrants
(the “Warrants” and together with the Preferred Shares, the “Securities”)
to purchase an aggregate of up to 400,000 shares of BioSphere’s common stock,
$0.01 par value per share (the “Common Stock”), for aggregate gross
proceeds of $8,000,000;

 

WHEREAS,
BioSphere and the Investors have agreed to amend certain terms of the
Securities in accordance with the terms and conditions set forth in this
Agreement;

 

WHEREAS,
BioSphere and the Investors have further agreed that (i) BioSphere will submit
to BioSphere’s stockholders for approval certain amendments to the Certificate
of Designations, Preferences and Rights of Series A Preferred Stock of
BioSphere filed with the Secretary of State of the State of Delaware on November 9,
2004 (the “Certificate of Designations”), as more specifically described
in this Agreement, and (ii) that this Agreement shall remain in full force and
effect until the earlier of (x) the time that such amendments to the
Certificate of Designations are approved by BioSphere’s stockholders or (y)
termination of this Agreement pursuant to Article IV; and

 

WHEREAS,
the parties intend that this Agreement be binding on all transferees of the
Securities.

 

NOW,
THEREFORE, in consideration of the foregoing and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

ARTICLE I

 

RESTRICTIONS
ON

CONVERSION OF SERIES A PREFERRED STOCK

AND EXERCISE OF WARRANTS

 

SECTION 1.01.  Restrictions on Conversion of Series A
Preferred Stock and Exercise of Warrants. 
Notwithstanding anything to the contrary contained in the Certificate of
Designations or the Warrants, the parties hereto agree that, from and after the
Effective Date and until the termination of this Agreement in accordance with
the terms hereof:

 

(a)                                  BioSphere
shall not issue any shares of Common Stock upon conversion of the Series A
Preferred Stock and/or exercise of the Warrants (i) to the extent that such
conversion and/or exercise would result in a change of control (within the meaning
of Nasdaq Marketplace Rule 4350(i)(1)(B)) (“Change of Control”), or (ii)
to the extent that such conversion and/or exercise would result in the
aggregate issuance of more than 19.9% of Common Stock outstanding as of the
Initial

 

 

Issuance Date (as such
term is defined in the Certificate of Designations), for purposes of Nasdaq
Marketplace Rule 4350(i)(1)(D) (“19.9% Threshold”).

 

(b)                                 No
holder of Series A Preferred Stock shall convert its Series A Preferred Stock
and/or exercise its Warrants (i) to the extent that such conversion and/or
exercise would result in a Change of Control or (ii) to the extent that such
conversion and/or exercise would result in the aggregate issuance in excess of
the 19.9% Threshold.

 

ARTICLE II

 

VOTING OF
PREFERRED SHARES

 

SECTION 2.01.  Voting of Preferred Shares.  Notwithstanding anything to the contrary
contained in the Certificate of Designations, each holder of Series A Preferred
Stock agrees that, from and after the Effective Date and until the termination
of this Agreement in accordance with the terms hereof, at any meeting of
stockholders of BioSphere, however called, and in any action by written consent
of stockholders of BioSphere, such Investor will not vote, or cause to be voted
(by means of proxy, voting trust, voting agreement or otherwise), on any matter
on which the holders of Series A Preferred Stock vote together with the holders
of the Common Stock (and any other class or series of capital stock of
BioSphere) as a single class, more than the number of shares of Common Stock in
respect of its Preferred Shares that exceeds the quotient of (x) the aggregate
purchase price paid by such Investor for its Preferred Shares divided by
(y) the closing bid price of the Common Stock on the Initial Issuance Date (the
“Voting Shares”).  Notwithstanding
the foregoing, nothing in this Agreement shall restrict any holder of Series A
Preferred Stock from voting or causing to be voted at any meeting of
stockholders of BioSphere or in any action by written consent of stockholders of
BioSphere any Preferred Shares on any matter upon which the holders of
Preferred Shares are voting as a separate class, solely to the extent such
holders of Preferred Shares are voting as a separate class.  Notwithstanding the foregoing, nothing in
this Article II shall restrict or otherwise effect the right of any holder
of Series A Preferred Stock to vote (or give its consent in respect of) any
outstanding shares of Common Stock, whether acquired upon conversion of the
Preferred Shares or otherwise.

 

ARTICLE III

 

AMENDMENTS
TO CERTIFICATE OF DESIGNATIONS AND WARRANTS

 

SECTION 3.01.  Certificate of Designations.

 

(a)                                  Amendments
to Certificate of Designations.

 

(1)                                  BioSphere
hereby agrees to seek the consent of its stockholders to a Certificate of
Amendment of the Certificate of Designations, in a form reasonably satisfactory
the Investors (the “Certificate of Amendment”) to effect the following
amendments (collectively, “Amendments”):

 

2

 

(A)  to provide that a holder of Series A
Preferred Stock and/or Warrants shall not be entitled to convert its shares of
Series A Preferred Stock and/or exercise its Warrants (i) to the extent that
such conversion and/or exercise would result in a Change of Control, or (ii) to
the extent that such conversion and/or exercise would result in the aggregate
issuance of more than the 19.9% Threshold; and

 

(B)  to provide that the holders of Series A
Preferred Stock shall not have the right to vote with the Common Stock to the extent
the number of votes cast would exceed the number of Voting Shares.

 

(2)                                  BioSphere
hereby agrees to seek the consent of its stockholders to the Certificate of
Amendment and the Amendments at its next annual meeting of stockholders (the “Annual
Meeting”).  BioSphere shall prepare
and file with the Securities and Exchange Commission a proxy statement meeting
the requirements of Section 14 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the “Proxy Statement”)
to solicit stockholder approval of the Certificate of Amendment and the
Amendments at the Annual Meeting.  At
least five business days before filing such Proxy Statement or any amendments
or supplements thereto, BioSphere shall furnish to each Investor copies of all
such documents proposed to be filed, including documents incorporated by
reference in the Proxy Statement, and, if requested by either Investor, the
exhibits incorporated by reference, and each Investor shall have the reasonable
opportunity to review and comment on such documents, and BioSphere will
incorporate into such documents the comments reasonably requested by each
Investor.  BioSphere shall use its
commercially reasonable efforts to cause the Proxy Statement to be cleared by the
Securities and Exchange Commission as promptly as reasonably practicable after
such filing, and shall thereafter promptly mail the Proxy Statement to the
stockholders of BioSphere.  BioSphere
shall keep the Investors apprised of the status of material matters relating to
the Proxy Statement and the Annual Meeting. 
BioSphere shall notify the Investors promptly upon the receipt of any
notices, comments or other communications from the Securities and Exchange
Commission or its staff, in connection with the filing of, or amendments or
supplements to, the Proxy Statement, or upon the receipt of any communications
with respect to the Proxy Statement, the Annual Meeting or the transactions
contemplated hereby from the Securities and Exchange Commission or The Nasdaq
National Market (“Nasdaq”) or their respective staffs.  BioSphere shall provide each Investor (and
its counsel) with a reasonable opportunity to review and comment on any
amendment or supplement to the Proxy Statement at least five business days before
filing such amendment or supplement with the Securities and Exchange
Commission, and will provide the Investor with a copy of all such filings made
with the Securities and Exchange Commission. 
If the BioSphere stockholders fail to approve the Certificate of
Amendment and the Amendments at the Annual Meeting , then, so long as this
Agreement remains in effect, BioSphere shall seek such approval at each and
every annual meeting (and special meeting) 
of its stockholders that takes place until the Certificate of Amendment
and the Amendments have been duly approved by the BioSphere stockholders, and
BioSphere shall comply with this Section 3.01(a)(2) regarding the
Proxy Statement (and all amendments and supplements thereto) with respect to
each such annual meeting (and special meeting).

 

(b)                                 Voting
in favor of Amendments.  Each
Investor hereby agrees to vote all shares of Common Stock acquired by the
Investor prior to or after (other than shares of Common Stock issued upon
conversion or exercise, as the case may be, of the Securities) the consummation
of the transactions contemplated by the Securities Purchase Agreement that the
Investor is entitled to vote at the time of any meeting or meetings of the
stockholders of BioSphere in favor of the Certificate of Amendment and the
Amendments.  In furtherance of, but
without limiting, the foregoing, Investors shall not be entitled to vote at any
such meeting or meetings any shares of Common Stock underlying the Series A
Preferred Stock or the Warrants.  Each
Investor hereby agrees that it will not vote any shares of Common Stock in
favor of

 

3

 

the approval of any
action the consummation of which would frustrate the purposes, or prevent or
delay the effectiveness of, the Certificate of Amendment or the Amendments.

 

(c)                                  Irrevocable
Proxy.  By entering into this
Agreement, each Investor hereby grants a proxy appointing the President and
Chief Executive Officer and the Vice President, Finance of BioSphere, and each
of them separately, as its attorney-in-fact and proxy, with full power of
substitution, for and in its name, to vote, express, consent or dissent, or
otherwise to utilize such voting power solely in the manner provided by Section 3.01(b)
above (i.e,. only with respect to the Certificate Amendment and the Amendments)
with respect to all of its shares of Common Stock (excluding shares of Common
Stock underlying the Preferred Shares and the Warrants).  The proxy granted by each Investor pursuant
to this Article III is irrevocable; provided, however,
that such proxy shall, automatically and without further action or deed, be
revoked upon termination of this Agreement in accordance with its terms.

 

SECTION 3.02. 
Warrants.  Simultaneously
with the execution and delivery of this Agreement, BioSphere and each Investor
shall enter into an amendment to such Investor’s Warrant, in the form attached
hereto as Exhibit A (each, a “Warrant Amendment”).

 

SECTION 3.03. 
Legends.  Each certificate
representing the Securities held by an Investor shall bear a legend
substantially in the following form:

 

“THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE LAWS OF ANY STATE OF THE UNITED STATES OR IN ANY OTHER
JURISDICTION.  THESE SECURITIES MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (I) SUCH SECURITIES
HAVE BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR
(II) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH
TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

 

THE SECURITIES ARE
SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN RESTRICTED COVENANTS
AGREEMENT (THE “AGREEMENT”) DATED DECEMBER 23, 2004 BY AND AMONG BIOSPHERE
MEDICAL, INC. (THE “COMPANY”) AND EACH OF THE OTHER PARTIES THERETO.  COPIES OF THE AGREEMENT MAY BE OBTAINED BY
WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.”

 

Following the execution
of this Agreement, each Investor will return to BioSphere any and all
certificates representing the Securities held by such Investor so that
BioSphere may place thereon the legend required by this Section 3.03,
and immediately upon receipt thereof, BioSphere shall deliver to each such
Investor replacement certificates containing such legend.  The legend required by this Section 3.03
shall be removed from certificates representing the Securities held by an
Investor at the request of such Investor, upon the termination of this
Agreement and the delivery to BioSphere of such certificates.

 

4

 

ARTICLE IV

 

TERM

 

SECTION 4.01. 
Term.  This Agreement shall
become effective on the Effective Date, and shall continue in effect until
terminated in accordance with this Section 4.01.  This Agreement shall terminate as to any
Investor on the soonest of: (i) upon receipt by BioSphere of written
notification from Nasdaq that the ownership and voting of the Preferred Shares
by the Investors does not conflict with Nasdaq Marketplace Rules 4350 and 4351
or any successor(s) thereto; (ii) upon receipt by BioSphere of stockholder
approval of the Certificate of Amendment and the Amendments; (iii) upon the
conversion of all Preferred Shares owned by such Investor into Common Stock
pursuant to the terms of the Preferred Shares; (iv) upon such Investor no
longer owning any Preferred Shares; or (v) at such time as no shares of Series
A Preferred Stock are issued and outstanding.

 

ARTICLE V

 

REPRESENTATIONS
AND WARRANTIES OF BIOSPHERE

 

SECTION 5.01. 
Representations and Warranties of BioSphere.  BioSphere hereby represents and warrants to
the Investors on and as of the date hereof, knowing and intending their
reliance hereon, that:

 

(a)                                  BioSphere
has all corporate right, power and authority to enter into this Agreement and
each Warrant Amendment and to consummate the transactions contemplated hereby
and thereby.  In furtherance of, but
without limiting, the foregoing, the Independent Committee of Directors of the
Board of Directors of BioSphere has approved this Agreement, each Warrant
Amendment and the preparation and filing with the secretary of State of the
State of Delaware of the Certificate of Amendment (collectively, the “Transaction
Documents”), the execution and delivery of this Agreement and each Warrant
Amendment and the performance of the transactions contemplated hereby and
thereby.

 

(b)                                 This
Agreement and each Warrant Amendment has been duly executed and delivered by
BioSphere and, assuming the authorization, execution and delivery of this
Agreement and each Warrant Amendment by the other parties hereto, constitutes
the legal, valid and binding obligation of BioSphere, enforceable against
BioSphere in accordance with its terms, subject to the effects of any
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or general laws of applicability affecting creditors’ rights
generally and to general equitable principles.

 

(c)                                  The
execution, delivery and performance by BioSphere of any of the Transaction
Documents (i) will not result in the violation by BioSphere of any provision of
the certificate of incorporation or by-laws of BioSphere, or any law, statute,
rule, regulation, order, writ, injunction, judgment or decree of any court or
governmental authority to or by which BioSphere is bound, (ii) will not
conflict with, or result in a breach or violation of, any of the terms or
provisions of, or constitute (with due notice or lapse of time or both) a
default under, any lease, loan agreement, mortgage, security agreement, trust
indenture or other agreement or instrument to which BioSphere is a party or by
which it is bound or to which any of its properties or assets is subject,
except for any conflict, breach, violation, default which would not, either
individually or in the aggregate, be reasonable determined to have a material
adverse effect on the results of operations, assets, prospects, business or
condition (financial or otherwise) of BioSphere (a “Material Adverse Effect”)_
nor (iii) result in the creation or imposition of any lien upon any of the
properties or assets of BioSphere, except for any lien which would not, either
individually or in the aggregate be reasonable determined to have a Material
Adverse Effect.

 

(d)                                 No
consent, approval, authorization or other order of any governmental authority
or other third party is required to be obtained by BioSphere in connection with
the authorization,

 

5

 

execution and delivery of any Transaction Document, except, with
respect to the filing of the Certificate of Amendment, the approval of
BioSphere’s stockholders and except for any consent, approval, authorization or
order, the absence of which would not, either individually or in the aggregate
be reasonable determined to have a Material Adverse Effect.

 

ARTICLE VI

 

REPRESENTATIONS
AND WARRANTIES OF INVESTORS

 

SECTION 6.01. 
Representations and Warranties of Investors.  Each Investor, severally and not jointly,
represents and warrants to BioSphere that:

 

(a)                                  The
execution, delivery and performance by the Investor of this Agreement and the
consummation of the transactions contemplated hereby do not and will not (i)
violate any applicable law, rule, regulation, judgment, injunction, order or
decree, (ii) require any consent or other action by any Person under,
constitute a default under, or give rise to any right of termination,
cancellation or acceleration or to a loss of any benefit to which Investor is
entitled under any provision of any agreement or other instrument binding on
Investor, or (iii) result in the imposition of any lien on any assets of
Investor.

 

(b)                                 With
respect to the Securities set forth on Schedule I hereto, Investor
(x) is the record or beneficial owner of such Securities free and clear of any
lien and any other limitation or restriction (including any restriction on the
right to vote or otherwise dispose of the Securities, except as contemplated
herein and in the Transaction Documents) or (y) has and will have the full
power and authority to vote, express consent or dissent, or otherwise utilize
the voting power of such Securities.

 

ARTICLE VII

 

TRANSFER
RESTRICTIONS

 

SECTION 7.01. 
Transfer Restrictions.  So
long as this Agreement remains in effect as to an Investor, in addition to any
requirements of law, no transfer, sale, assignment, exchange, mortgage, pledge,
hypothecation or other disposition (a “Transfer”) of any of the
Securities by such Investor shall be made except to a transferee who shall agree
in writing to be bound by each and every obligation of such Investor pursuant
to this Agreement, which writing shall also contain notice to BioSphere of such
transfer and of the notice information for such transferee.  Any Transfer of Securities in violation of
this Article VII shall be void and of no effect and shall not be
recognized by BioSphere for any purpose.

 

ARTICLE VIII

 

MISCELLANEOUS

 

SECTION 8.01.  Successors and Assigns.  This Agreement shall inure to the benefit of
the successors and assigns of BioSphere and be binding upon the Investors and
each of their respective heirs, executors, administrators, successors and
assigns.

 

SECTION 8.02.  Counterparts; Faxes.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  This Agreement may also be executed via
facsimile, which shall be deemed an original.

 

6

 

SECTION 8.03.  Titles and Subtitles.  The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

 

SECTION 8.04.  Notices.  Unless otherwise provided, any notice
required or permitted under this Agreement shall be given in writing and shall
be deemed effectively given as hereinafter described: (i) if given by personal
delivery, then such notice shall be deemed given upon such delivery; (ii) if
given by telex or telecopier, then such notice shall be deemed given upon
receipt of confirmation of complete transmittal; (iii) if given by mail, then
such notice shall be deemed given upon the earlier of (A) receipt of such
notice by the recipient or (B) three (3) days after such notice is deposited in
first class mail, postage prepaid; and (iv) if given by an internationally
recognized overnight air courier, then such notice shall be deemed given one
(1) day after delivery to such carrier. 
All notices shall be addressed to the party to be notified at the
address as follows, or at such other address as such party may designate by ten
(10) days’ advance written notice to the other party:

 

If to BioSphere:

 

BioSphere Medical, Inc.

1050 Hingham Street

Rockland, Massachusetts
02370

Attn:  President

Fax:  (781) 681-5093

 

With a copy to:

 

Wilmer Cutler Pickering
Hale and Dorr LLP

60 State Street

Boston, Massachusetts
02109

Attn:  Susan W. Murley, Esq.

Fax:  (617) 526-5000

 

To the
holders of Series A Preferred Stock:

 

Cerberus Partners, L.P.

299
Park Avenue, 22nd Floor

New
York, New York 10171

Attn:  Mr. Seth P. Plattus

Fax:  (212) 891-1541

 

Cerberus Partners, L.P.

299
Park Avenue, 22nd Floor

New
York, New York 10171

Attn:  Mr. Daniel Frank

Fax:  (212) 284-7818

 

Sepracor Inc.

84 Waterford Drive

Marlborough, MA 01752

Attn:  President

Fax:  508-357-7495

 

7

 

With
copies to:

 

Lowenstein Sandler PC

65 Livingston Avenue

Roseland, NJ 07068-1791

Attn:  Robert G. Minion, Esq.

Fax:  (973) 597-2400

 

Wilmer Cutler Pickering
Hale and Dorr LLP

60 State Street

Boston, Massachusetts
02109

Attn:  Susan W. Murley, Esq.

Fax:  617-526-5000

 

SECTION 8.05.  Expenses.  BioSphere shall pay the reasonable fees and
expenses of Cerberus’ counsel in connection with the transactions contemplated
by this Agreement (the “Cerberus Counsel
Fees”), which Cerberus Counsel Fees shall include, without
limitation, the fees and expenses associated with the negotiation, preparation
and execution and delivery of this Agreement and any and all documents relating
thereto.  The Cerberus Counsel Fees shall
be paid to Cerberus’ counsel on the Effective Date by the wire transfer from
BioSphere to Cerberus’ counsel.  Except
as set forth above, BioSphere and the Investors shall each bear their own
expenses in connection with the negotiation, preparation, execution and
delivery of this Agreement.  In the event
that legal proceedings are commenced by any party to this Agreement against
another party to this Agreement in connection with this Agreement, the party or
parties which do not prevail in such proceedings shall severally, but not
jointly, pay their pro rata share of the reasonable attorneys’ fees and other
reasonable out-of-pocket costs and expenses incurred by the prevailing party in
such proceedings.

 

SECTION 8.06.  Amendments and Waivers.  This Agreement shall not be amended and the
observance of any term of this Agreement shall not be waived (either generally
or in a particular instance and either retroactively or prospectively) without
(x)  the prior written consent of
BioSphere and the Investors, and (y) advance written notice to Nasdaq; provided,
however, that any provision hereof which impairs the rights or increases
the obligations of a specific Investor disproportionately to other Investors
shall not be amended or waived without the prior written consent of BioSphere
and that particular Investor.  Any
amendment or waiver effected in accordance with this Section 8.06
shall be binding upon each holder of any Securities purchased under this
Agreement at the time outstanding, each future holder of all such Securities,
and BioSphere.

 

SECTION 8.07.  Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.  To the extent
permitted by applicable law, the parties hereby waive any provision of law
which renders any provision hereof prohibited or unenforceable in any respect.

 

SECTION 8.08.  Entire Agreement.  This Agreement, including the Schedules and
Exhibits hereto, and the other Transaction Documents, constitute the entire
agreement among the parties hereof

 

8

 

with respect to the
subject matter hereof and thereof and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter hereof and thereof.  Prior
drafts or versions of this Agreement shall not be used to interpret this
Agreement.

 

SECTION 8.09.  Conflicts.  If there is any conflict between the terms of
this Agreement and any or all of the Transaction Documents, the terms of this
Agreement shall control.

 

SECTION 8.10.  Further Assurances.  The parties shall execute and deliver all
such further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.

 

SECTION 8.11.  Governing Law; Consent to Jurisdiction.  This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York
without regard to the choice of law principles thereof.  Each of the parties hereto irrevocably
submits to the jurisdiction of the courts of the State of New York located in
New York County and the United States District Court for the Southern District
of New York for the purpose of any suit, action, proceeding or judgment
relating to or arising out of this Agreement and the transactions contemplated
hereby.  Service of process in connection
with any such suit, action or proceeding may be served on each party hereto
anywhere in the world by the same methods as are specified for the giving of
notices under this Agreement.  Each of
the parties hereto irrevocably consents to the jurisdiction of any such court
in any such suit, action or proceeding and to the laying of venue in such
court.  Each party hereto irrevocably
waives any objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in
an inconvenient forum.  BIOSPHERE AND EACH OF THE INVESTORS HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT
AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

9

 

IN
WITNESS WHEREOF, the undersigned has executed this Agreement
as of the date first above written.

 

	
   

  	
  BIOSPHERE
  MEDICAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Martin J. Joyce

  	
   

  
	
   

  	
   Martin
  Joyce

   Vice President and Chief Financial

   Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CERBERUS
  PARTNER, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Cerberus Associates,
  LLC,

  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Seth Plattus

  	
   

  
	
   

  	
   Seth
  Plattus

   Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SEPRACOR,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J.
  Barberich

  	
   

  
	
   

  	
   Timothy J.
  Barberich

   Chairman of the Board and Chief

   Executive Officer

  
								

 

10

 

Schedule I

 

	
  Name
  and Address of Investor

  	
   

  	
  Number of
  Shares of

  Preferred Stock

  	
   

  	
  Number of

  Warrants

  	
   

  
	
  Cerberus
  Partners, L.P.

  	
   

  	
  4,000

  	
   

  	
  200,000

  	
   

  
	
  Sepracor
  Inc.

  	
   

  	
  4,000

  	
   

  	
  200,000

  	
   

  
	
  Total

  	
   

  	
  8,000

  	
   

  	
  400,000

  	
   

  

 

11

 

Exhibit
A

 

AMENDMENT
NO. 1 TO

WARRANT NO. 2004-    TO PURCHASE

200,000 SHARES OF COMMON STOCK,

PAR VALUE $0.01 PER SHARE

 

This Amendment No. 1, dated December   , 2004 amends
that certain Warrant No. 2004-    dated November 10, 2004
to purchase 200,000 shares of Common Stock, par value $0.01 per share, of
BioSphere Medical, Inc., registered in the name of                                   
(the “Warrant”).  Terms that are
capitalized herein but not defined shall have the meanings ascribed to them in
the Warrant.

 

For good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, and acting in accordance with Section 9 of the
Warrant, the undersigned Company and Holder hereby agree as follows:

 

1.                                       The
Warrant is hereby amended such that a new legend is hereby added to the cover
page thereof which reads as follows:

 

“THIS WARRANT IS SUBJECT
TO THE TERMS AND CONDITIONS OF THAT CERTAIN RESTRICTED COVENANTS AGREEMENT (THE
“AGREEMENT”) DATED DECEMBER   , 2004 BY AND BETWEEN BIOSPHERE
MEDICAL, INC. (THE “COMPANY”) AND EACH OF THE OTHER PARTIES THERETO.  COPIES OF THE AGREEMENT MAY BE OBTAINED BY
WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.”

 

2.                                       A
new Section 1(d) is hereby added to the Warrant which reads as follows:

 

“(d)  Limitation
on Exercise.  Notwithstanding
anything in this Warrant to the contrary, including without limitation any
provisions of this Section 1, a Holder shall not be entitled to exercise
this Warrant (i) to the extent that such exercise, when aggregated with any
shares of Common Stock theretofore and simultaneously therewith issued to the
Holder upon conversion by the Holder of shares of the Company’s Series A
Preferred Stock, $.01 par value,  would
result in a change of control (within the meaning of Nasdaq Marketplace Rule
4350(i)(1)(B)), or (ii) to the extent that such exercise, when aggregated with
any shares of Common Stock theretofore or simultaneously therewith issued to
the Holder upon conversion of shares of the Company’s Series A Preferred Stock,
$.01 par value,  would result in the
issuance of more than 19.9% of the Company’s Common Stock outstanding as

 

12

 

of November 10,
2004, for purposes of Nasdaq Marketplace Rule 4350(i)(1)(D).”

 

3.                                       The
first sentence of Section 16 of the Warrant is hereby deleted in its
entirety and a new first sentence of Section 16 is hereby added in lieu
thereof which reads as follows:

 

“Section 16.  Assignment. 
Subject to the terms hereof and compliance with applicable federal and
state securities laws, this Warrant may be transferred by the Holder with
respect to any or all of the Warrant Shares then purchasable hereunder;
provided however, that notwithstanding anything herein to the contrary, so long
as that certain Restricted Covenants Agreement dated December   ,
2004 by and between the Company and the other parties thereto (the “Agreement”)
remains in effect, this Warrant may be transferred by the Holder only if the
designated transferee agrees in writing, as a condition to such transfer, to be
bound by all of the terms and conditions of such Agreement.”

 

4.                                       Except
as expressly set forth herein, the Warrant and all of the terms and conditions
set forth therein shall remain in full force and effect and such Warrant is
hereby ratified and confirmed.

 

	
   

  	
  BIOSPHERE MEDICAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed and acknowledged as

  of the date set forth above

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name
  of Holder

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
									

 

13

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