Document:

Investor Rights Agreement

 EXHIBIT 10.2 
  
 INVESTOR RIGHTS AGREEMENT 
  
 THIS INVESTOR RIGHTS AGREEMENT (this “Agreement”) is made as of this 10th day of November, 2004, by
and among BioSphere Medical, Inc., a Delaware corporation (the “Company”), and the investors identified on the signature pages hereto (each an “Investor” and collectively the “Investors”).

  
 RECITALS: 
  
 A. Pursuant to the terms of a certain Securities Purchase Agreement, of even
date herewith, by and among the Company and the Investors (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”), the Company is issuing to the Investors: (i) an aggregate of 8,000
shares (the “Shares”) of a newly created series of the Company’s preferred stock, par value $0.01 per share, designated as “Series A Convertible Preferred Stock” (the “Preferred Stock”); and (ii)
warrants (the “Warrants”) to acquire shares of the Company’s common stock, $0.01 par value (the “Common Stock”); and 
  
 B. The parties hereto desire to enter into this Agreement to, among other things, set forth the rights of the Investors with respect to: (i) the
registration of shares of Common Stock issuable to the Investors upon conversion of the Preferred Stock and the exercise of the Warrants; (ii) the receipt of certain information from the Company; and (iii) the participation in future issuances of
equity and debt securities of the Company. 
  
 NOW,
THEREFORE, in consideration of the foregoing and the respective covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each Investor,
severally and not jointly, hereby agree as follows: 
  
 Article I
Definitions. 
  
 1.1 General Definitions. All
capitalized terms not otherwise defined in this Agreement shall have the meanings ascribed thereto in the Purchase Agreement. As used in this Agreement, unless the context otherwise requires, the following terms shall have the respective meanings
set forth below: 
  
 “Additional Shares” shall
have the meaning ascribed to it in Section 2.1(a)(ii). 
  
 “Agreement” shall have the meaning ascribed to it in the preamble to this Agreement. 
  
 “Allowed Delay” shall have the meaning ascribed to it in Section 2.1(b)(ii). 
  
 “Availability Date” shall have the meaning ascribed to it in
Section 2.2(k). 
  
 “Blackout Period”
shall have the meaning ascribed to it in Section 2.1(b)(i). 

 “Board” means the Board of Directors of the Company. 
  
 “Cerberus” means Cerberus Capital Management, L.P., Cerberus
Partners, L.P. and/or one or more of their respective Affiliates. 
  
 “Common Stock” means the Common Stock and any other securities into which or for which such Common Stock may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, consolidation, sale of
assets or other similar transaction. 
  
 “Company” shall have the meaning ascribed to it in the preamble to this Agreement. 
  
 “Company Securities” shall have the meaning ascribed to it in Section 4.1. 
  
 “Effectiveness Deadline” has the meaning ascribed to it in
Section 2.1(b)(i). 
  
 “Exempt Issuances”
shall have the meaning ascribed to it in Section 4.3. 
  
 “Filing Deadline” shall have the meaning ascribed to it in Section 2.1(a). 
  
 “Investor(s)” shall have the meaning ascribed to it in the preamble to this Agreement. 
  
 “Liquidated Damages Amount” shall have the meaning ascribed
to it in Section 2.1(a). 
  
 “New
Issuance” shall have the meaning ascribed to it in Section 4.1. 
  
 “Offer Notice” shall have the meaning ascribed to it in Section 4.1. 
  
 “Preferred Shares” means the shares of Common Stock issuable upon conversion of the Preferred Stock. 
  
 “Preferred Stock” shall have the meaning ascribed to it in
the recitals to this Agreement. 
  
 “Prospectus”
shall mean the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement
and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus. 
  
 “Purchase Agreement” shall have the meaning ascribed to it in the recitals to this Agreement. 

 
 “Register,” “registered” and
“registration” refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such Registration Statement
or document. 
  

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 “Registrable Securities” means: (i) the Preferred Shares; (ii) the Warrant Shares; (iii)
any and all shares of Common Stock issued or issuable in respect of the Preferred Shares and in respect of the Warrant Shares upon any stock split, reverse stock split, stock dividend, recapitalization, reorganization, merger, consolidation, sale of
assets or similar event; (iv) the shares of Common Stock issuable as payment-in-kind dividends on the Preferred Stock in accordance with the terms thereof; and (v) any other shares of Common Stock acquired by the Investor at any time.
Notwithstanding the foregoing, the term Registrable Securities shall not include: (a) any such shares that have been registered under the Securities Act pursuant to an effective registration statement filed thereunder and disposed of in accordance
with such registration statement; or (b) any such shares which have been publicly sold pursuant to Rule 144 under the Securities Act. 
  
 “Registration Statement” shall have the meaning ascribed to it in Section 2.1(a). 
  
 “Representative” shall have the meaning ascribed to it in
Section 3.1. 
  
 “Requisite Investors” if
Cerberus and Sepracor Inc. are holders of the then outstanding shares of Series A Preferred Stock, then, Requisite Holders shall mean Cerberus and Sepracor Inc., otherwise, Requisite Holders shall mean the holders of a majority of the then
outstanding shares of Series A Preferred Stock. 
  
 “Shares” shall have the meaning ascribed to it in the recitals to this Agreement. 
  
 “Warrant” shall have the meaning ascribed thereto in the recitals of this Agreement. 
  
 “Warrant Shares” means the shares of Common Stock issuable
upon exercise of the Warrants. 
  
 Article II Registration Rights.

  
 2.1 Mandatory Registration. 
  
 (a) Registration Statements. 
  
 (i) Promptly, but in no event more than thirty (30) days, following the
Closing (the “Filing Deadline”), the Company shall prepare and file with the SEC a Registration Statement on Form S-3 (or, if Form S-3 is not then available to the Company, on such form of registration statement as is then available
to effect a registration for resale of the Registrable Securities, subject to the Investors’ consent) (a “Registration Statement”), covering the resale of all of the Registrable Securities without regard to any limitation on
the conversion of shares of Series A Preferred Stock or exercise of the Warrants. Such Registration Statement shall include the plan of distribution attached hereto as Exhibit A. Such Registration Statement also shall cover, to the extent
allowable under the Securities Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the
Registrable Securities. The Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance with 
  

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 Section 2.2(c) to the Investors and their respective counsel prior to its filing or other submission. If a
Registration Statement covering the Registrable Securities is not filed with the SEC on or prior to the Filing Deadline, the Company shall make pro rata payments to each Investor, as liquidated damages and not as a penalty, in an amount (the
“Liquidated Damages Amount”) equal to 1.5% of the aggregate amount invested by such Investor in respect of the Shares (which amount shall be equal to the sum of (i) the purchase price of the Shares and the Warrants acquired by such
Investor pursuant to the Purchase Agreement, plus (ii) any accrued and unpaid dividends on such Shares, as may be adjusted for anti-dilution, as well as any stock dividends, stock split, combination or other similar recapitalization affecting such
Shares) for each 30-day period or pro rata for any portion thereof following the Filing Deadline for which no Registration Statement with respect to the Registrable Securities is filed. Such payments shall be in partial compensation to the
Investors, and shall not constitute the Investors’ exclusive remedy for such events. Such payments shall be made to each Investor in cash. The amounts payable as liquidated damages pursuant to this paragraph shall be payable in lawful money of
the United States and shall be paid within five (5) Business Days of the last day of each such 30-day period during which the Registration Statement should have been filed for which no Registration Statement with respect to the Registrable
Securities was filed. 
  
 (ii) Upon the written demand of any
Investor and upon any change in the “Series A Conversion Price” (as such term is defined in the Certificate of Designations) or the number of “Warrant Shares” purchasable under the Warrants such that additional shares of Common
Stock become issuable upon conversion of the outstanding Series A Preferred Stock or exercise of such Warrants, the Company shall prepare and file with the SEC one or more Registration Statements to effect a registration for resale of such
additional shares of Common Stock (the “Additional Shares”), but only to the extent the Additional Shares are not at the time covered by an effective Registration Statement. Such Registration Statement shall include the plan of
distribution attached hereto as Exhibit A. Such Registration Statement also shall cover, to the extent allowable under the Securities Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional
shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Additional Shares. The Registration Statement (and each amendment or supplement thereto, and each request for acceleration of
effectiveness thereof) shall be provided in accordance with Section 2.2(c) to the Investors and their counsel prior to its filing or other submission. If a Registration Statement covering the Additional Shares is required to be filed under
this Section 2.1(a)(ii) and is not filed with the SEC within thirty (30) days of the request of any Investor, the Company will make pro rata payments to each Investor, as liquidated damages and not as a penalty, the Liquidated Damages
Amount for each 30-day period or pro rata for any portion thereof following the date by which such Registration Statement should have been filed for which no Registration Statement with respect to the Additional Shares is filed. Such payments
shall be in partial compensation to the Investors, and shall not constitute the Investors’ exclusive remedy for such events. Such payments shall be made to each Investor in cash. The amounts payable as liquidated damages pursuant to this
paragraph shall be payable in lawful money of the United States and shall be paid within five (5) Business Days of the last day of each such 30-day period during which the Registration Statement should have been filed for which no Registration
Statement with respect to the Additional Shares was filed. 
  

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 (iii) None of the Registration Statements contemplated by this Agreement shall include any securities
(including any securities initially issued by the Company for its own account) other than the Registrable Securities then held by the Investors or their respective permitted transferees, unless the Investors, in their sole discretion, shall have
consented thereto in writing. 
  
 (b) Effectiveness.

  
 (i) The Company shall use its commercially reasonable
efforts to have (i) the Registration Statement required by Section 2.1(a)(i) declared effective not later than the 120th day immediately after the Closing Date, and (ii) the Registration Statement required by Section 2.1(a)(ii), if
any, declared effective not later than the 120th day immediately after demand therefore (in each case, the “Effectiveness Deadline”); provided, however, that if a Registration Statement is not declared effective before
the applicable Effectiveness Deadline, the Company shall continue to use its commercially reasonable efforts to have the Registration Statement declared effective as soon as possible thereafter. If (A) a Registration Statement has not been declared
effective before the applicable Effectiveness Deadline or (B) after a Registration Statement has been declared effective by the SEC, sales cannot be made pursuant to such Registration Statement for any reason (including, without limitation, by
reason of a stop order, or the Company’s failure to update the Registration Statement), but except as excused pursuant to subsection (ii) below, then the Company will make pro rata payments to each Investor, as liquidated damages and not
as a penalty, in the Liquidated Damages Amount for each 30-day period or pro rata for any portion thereof following the date (1) by which such Registration Statement should have been effective as described in (A) above or (2) sales cannot be
made pursuant to such Registration Statement after it has been declared effective as described in (B) above (the “Blackout Period”). Such payments shall be in partial compensation to the Investors, and shall not constitute the
Investors’ exclusive remedy for such events. The Blackout Period shall terminate upon: (x) the effectiveness of the Registration Statement in the case of (A) above; and (y) the Registration Statement again being available for sales by the
Investors in the case of (B) above. The amounts payable as liquidated damages pursuant to this paragraph shall be payable in lawful money of the United States, and amounts payable as liquidated damages shall be paid within two (2) Business Days of
the last day of each 30-day period following the commencement of the Blackout Period until the termination of the Blackout Period. Such payments shall be in partial compensation to the Investors, and shall not constitute the Investors’
exclusive remedy for such events. Such payments shall be made to each Investor in cash. 
  
 (ii) For not more than fifteen (15) consecutive days or for a total of not more than thirty (30) days in any twelve (12) month period, the Company may delay the disclosure of material non-public information concerning
the Company, by terminating or suspending effectiveness of any registration contemplated by this Section 2.1, if the disclosure of such material non-public information at the time is not, in the good faith opinion of the Board, in the best
interests of the Company (an “Allowed Delay”); provided, that the Company shall promptly (a) notify the Investors in writing of the existence of (but in no event, without the prior written consent of an Investor, shall the
Company disclose to such Investor any of the facts or circumstances regarding) material non-public information giving rise to an Allowed Delay, and (b) advise the Investors in writing to cease all sales under the Registration Statement until the end
of the Allowed Delay. 
  

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 (c) Underwritten Offering. If any offering pursuant to a Registration Statement filed pursuant to
Section 2.1(a) involves an underwritten offering, the Company shall have the right to select an investment banker and manager to administer the offering, which investment banker or manager shall be reasonably satisfactory to the Investors.

  
 2.2 Company Obligations. The Company will use its
commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible: 
  
 (a) use its commercially reasonable efforts to cause the Registration
Statement with respect to the Registrable Securities to become effective and to remain continuously effective for the shorter of (i) a two-year period and (ii) a period that terminates upon the date on which all Registrable Securities covered by
such Registration Statement, as amended from time to time, have been sold; 
  
 (b) prepare and file with the SEC such amendments and post-effective amendments to the Registration Statement and the Prospectus as may be necessary to keep the Registration Statement effective for the period
specified in Section 2.2(a) and to comply with the provisions of the Securities Act and the Exchange Act with respect to the distribution of all Registrable Securities; 
  
 (c) provide copies to and permit counsel to the Investors to review each Registration Statement and all amendments and
supplements thereto no fewer than four (4) Business Days prior to their filing with the SEC and not file any document to which such counsel reasonably objects within three (3) Business Days following receipt by such counsel of such Registration
Statement and/or amendments and supplements thereto if such document is not in compliance with this Agreement or with any applicable Federal or state securities laws, rules or regulations; 
  
 (d) furnish to the Investors and their legal counsel (i) promptly after the
same is prepared and publicly distributed, filed with the SEC, or received by the Company (but not later than two (2) Business Days after the filing date, receipt date or sending date, as the case may be), at least five (5) copies of any
Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of
correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion thereof which contains information for which the Company has sought confidential treatment), and (ii) such number of
copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as each Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by
such Investor; 
  
 (e) in the event the Company selects an
underwriter for the offering contemplated by this Agreement, the Company shall enter into and perform its reasonable obligations under an underwriting agreement, in usual and customary form, including, without limitation, customary indemnification
and contribution obligations, with the underwriter of such offering; 
  

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 (f) if required by the underwriter, the Company shall furnish, on the effective date of the Registration
Statement (i) an opinion, dated as of such date, from independent legal counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed
to the underwriter and (ii) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriter and the Investors; 
  
 (g) use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness and, if such order is issued, obtain the withdrawal of any such order at the earliest possible moment; 
  
 (h) prior to any public offering of Registrable Securities, use its
reasonable best efforts to register or qualify or cooperate with the Investors and their counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or blue sky laws of such
jurisdictions reasonably requested by the Investors and do any and all other reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities covered by the Registration Statement;

  
 (i) cause all Registrable Securities covered by a Registration
Statement to be listed on each securities exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed; 
  
 (j) immediately notify the Investors, at any time when a Prospectus relating to the Registrable Securities is required to be
delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the Prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and at the request of any such Investor, promptly prepare and furnish to such Investor a
reasonable number of copies of a supplement to or an amendment of such Prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; and 
  
 (k) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC under the
Securities Act and the Exchange Act and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder; and make available to its security holders, as soon as reasonably practicable, but
not later than the Availability Date (as defined below), an earnings statement covering a period of at least twelve (12) months, beginning after the effective date of each Registration Statement, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act (for the purpose of this Section 2.2(k), “Availability Date” means the 45th day following the end of the fourth fiscal quarter that includes the effective date of such Registration
Statement, except that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal quarter). 
  

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 2.3 Expenses. The Company shall bear all expenses incurred in complying with Sections 2.1 and
2.2, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including counsel fees) incurred in connection with
complying with state securities or “blue sky” laws, reasonable fees and disbursements of Cerberus’ counsel fees, of transfer agents and registrars and costs of any insurance which might be obtained by the Company with respect to the
offering by the Company. 
  
 2.4 Indemnification and
Contribution. 
  
 (a) The Company shall indemnify and hold
harmless, each Investor and its Affiliates and the directors, officers, employees, investors, partners and agents of each Investor and its Affiliates, from and against any and all losses, claims, damages, liabilities and expenses (including without
limitation reasonable attorney fees and disbursements and other expenses incurred in connection with investigating, preparing or defending any action, claim or proceeding, pending or threatened and the costs of enforcement hereof) (collectively,
“Losses”) to which any such Person may become subject, arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement covering any Registrable Securities, any related
prospectus or preliminary prospectus, or any amendment or supplement thereto, or any omission or alleged omission to state in any thereof a material fact required to be stated therein or necessary to make the statements therein (in the case of a
prospectus or prospectus supplement, in light of the circumstances under which they were made) not misleading, except in each case insofar, but only insofar, as the same arises out of or is based upon an untrue statement or alleged untrue statement
of a material fact or an omission or alleged omission to state a material fact in such registration statement, prospectus, preliminary prospectus, amendment or supplement, as the case may be, made or omitted, as the case may be, in express reliance
upon and in strict conformity with written information furnished to the Company by the Investor expressly for use therein. This indemnity is in addition to any liability that the Company may otherwise have. The Company shall also indemnify any
underwriters of the Registrable Securities, selling brokers, dealer managers and similar securities industry professionals participating in the distribution and their officers and directors and each Person who controls such underwriters or other
Persons (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Investor and its Affiliates as described above. 
  
 (b) In connection with any Registration Statement covering Registrable Securities, the Investor shall furnish to the Company
in writing such information with respect to the Investor as the Company reasonably requests for use in connection with such Registration Statement, any related Prospectus or preliminary prospectus, or any amendment or supplement thereto, and shall
indemnify, to the fullest extent permitted by law, the Company, the Company’s directors, officers, employees and agents, each Person who controls the Company (within the meaning of the Securities Act), against all Losses arising out of or based
upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement covering any Registrable Securities, any related Prospectus or preliminary prospectus, or any amendment or 
  

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 supplement thereto, or any omission or alleged omission to state in any such prospectus, amendment or supplement, a
material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus or prospectus supplement, in light of the circumstances under which they were made) not misleading, in each case to the extent, and
only to the extent, that the same arises out of or is based upon an untrue statement of a material fact or an omission to state a material fact in such Registration Statement or in such related Prospectus, preliminary prospectus, amendment or
supplement, as the case may be, made or omitted, as the case may be, in express reliance upon and in strict conformity with written information furnished to the Company by the Investor expressly for use therein. Notwithstanding any other provision
of this Agreement, in no event shall the Investor’s indemnification obligation exceed the dollar amount of the proceeds received by the Investor upon the sale of the Registrable Securities giving rise to such obligation. 
  
 (c) Promptly after receipt by any Person (the “Indemnified
Person”) of notice of any demand, claim or circumstances which would or might give rise to a claim or the commencement of any action, proceeding or investigation in respect of which indemnity may be sought pursuant to Section 2.3,
such Indemnified Person shall promptly notify the party obligated to provide indemnification under this Section 2.3 in respect thereof (an “Indemnifying Party”) and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of all fees and expenses in connection with such defense and such counsel; provided, however, that the failure of any
Indemnified Person to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder except to the extent that the Indemnifying Party is actually and materially prejudiced by such failure to notify. In any
such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Indemnifying Party and the Indemnified Person shall
have mutually agreed to the retention of such counsel; or (ii) in the reasonable judgment of counsel to such Indemnified Person (x) representation of both parties by the same counsel would be inappropriate due to actual or potential differing
interests between them or (y) if there are one or more defenses available to such Indemnified Person that is/are not available to the Indemnifying Party. The Indemnifying Party shall not be liable for any settlement of any proceeding effected
without its written consent, which consent shall not be unreasonably withheld, delayed or conditioned, but if settled with such consent, or if there be a final judgment for the plaintiff therein, the Indemnifying Party shall indemnify and hold
harmless such Indemnified Person from and against any Losses by reason of such settlement or judgment. Without the prior written consent of the Indemnified Person, which consent shall not be unreasonably withheld, delayed or conditioned, the
Indemnifying Party shall not effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless
such settlement includes an unconditional release of such Indemnified Person from all liability arising out of such proceeding. 
  
 (d) (i) If the indemnification provided for in this Section 2.3 from the Indemnifying Party is unavailable to an Indemnified Person hereunder or is
inadequate in respect of any Losses for which indemnification is provided under this Section 2.3, then the Indemnifying Party, in lieu of indemnifying such Indemnified Person, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such Losses in such proportion 
  

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 as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Person(s) in connection with
the actions that resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Person shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Persons, and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the Losses referred to above shall be deemed to include, subject to the
limitations set forth in Section 2.3(c), any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. 
  
 (ii) The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section
2.3(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding any other provision hereof,
in no event shall the Investor’s contribution obligation exceed the excess of (A) the dollar amount of the proceeds received by the Investor upon the sale of the Registrable Securities giving rise to such contribution obligation over (B) the
dollar amount of any damages that the Investor has otherwise been required to pay by reason of the untrue or alleged untrue statement or omission or alleged omission giving rise to such obligation. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. 
  
 (iii) If indemnification is available under this Section 2.3, the Indemnifying Parties shall indemnify each
Indemnified Person to the fullest extent provided in Section 2.3(a) and Section2.3(b) without regard to the relative fault of said Indemnifying Party or Indemnified Person or any other equitable consideration provided for in this
Section 2.3(d). 
  
 (iv) If any provision of an
indemnification or contribution clause in an underwriting agreement or agency agreement executed by or on behalf of the Investor differs from a provision in this Section 2.3, such provision in the underwriting agreement shall determine the
Investor’s rights in respect thereof. 
  
 (e) Notwithstanding
anything in this Agreement to the contrary, the indemnities and obligations provided in this Section 2.3 shall survive the transfer of any Registrable Securities by the Investor. 
  
 2.5 Reporting. With a view to making available the benefits of certain rules and regulations of the SEC which may at
any time permit the sale of the Registrable Securities to the public without registration, so long as the Company is subject to the reporting requirements of the Exchange Act, the Company shall: 
  
 (a) make and keep public information available, as those terms are defined
in Rule 144 under the Securities Act (or any successor rule); and 
  

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 (b) use its best efforts to file with the Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act. 
  
 2.6 Furnishing Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Article II that each Investor furnish to the Company in writing such information regarding
such Investor, the Registrable Securities held by it and the intended method of disposition of such securities as shall be required to effect the registration thereof. 
  
 2.7 Additional Registration Rights. As of the date hereof, neither the Company nor any of its security holders (other
than the Investors in such capacity pursuant hereto or the parties to that certain Stock and Warrant Purchase Agreement dated February 2000 among the Company and the investors named therein) has any right to include securities of the Company in the
Registration Statement other than the Registrable Securities, and the Company shall not, after the date hereof, enter into any agreement providing any rights to be included with the Registration Statement to any of its security holders or potential
security holders, without the prior written consent of the Investors. Until after the effective date of the Registration Statement, the Company shall not file any registration statement other than the Registration Statement or a registration
statement solely with respect to shares to be offered by the Company, including, without limitation, a registration statement on Form S-1, S-3, S-4 or S-8 or any successor form to any of the foregoing. 
  
 Article III Corporate Governance. 
  
 3.1 Board Representative. If and so long as either Cerberus or
Sepracor Inc. does not have a designee or representative serving as a director on the Board, such Investor shall have the right to have one representative (each, a “Representative”) attend as an observer all meetings of the Board
(and each committee meeting thereof); provided, that, in the case of telephonic meetings conducted in accordance with the Company’s by-laws and applicable law, the Representative shall be given the opportunity to participate in
such telephonic meetings to the same extent other directors are permitted to participate. Each of Cerberus and Sepracor Inc. may replace their respective Representative from time to time, and each such replacement shall be deemed a
“Representative” for purposes of this Section 3.1. Each of Cerberus and Sepracor Inc. shall be required to furnish the name and address of its Representative (or any such replacement) to the Company upon request therefore. The
Company shall give each Representative written notice of every meeting of its Board (and any committee meeting thereof) at the same time and in the same manner as notice is given to the directors of the Company. The Company shall bear, and reimburse
upon demand each Representative for, the reasonable costs of each Representative associated with such Representative’s attendance at or participation in any meetings of the Board. Each Representative shall be entitled to receive all written
materials and other information given to the directors of the Company in connection with all meetings of the Board or otherwise at the same time and in the same manner such materials and information are given to the directors. Each Representative
shall agree to abide by the terms of a standard nondisclosure agreement restricting the use or disclosure of any confidential information received by such Representative pursuant to this Section 3.1. Each Representative shall be entitled to
consult with and advise the Board on business issues with respect to the Company and 
  

 - 11 - 

 its Subsidiaries, including management’s proposed annual operating plans for the Company and its Subsidiaries.
Notwithstanding the foregoing, the Company shall have the right to exclude any Representative from attending any portion of a meeting and shall have the right to withhold any written materials, if the Board determines that such exclusion or
withholding is necessary due to a potential or actual conflict of interest or determines, with the reasonable advise of counsel, which need not be in writing, that such exclusion or withholding is necessary to protect the attorney-client privilege
between the Company and such counsel. The Company shall take all reasonably necessary steps to implement this Section 3.1. 
  
 3.2 Meetings of the Board. The Board will meet at least four times each fiscal year and at least once each fiscal quarter. 
  
 Article IV Participation Rights. 
  
 4.1 Notice of Proposed Issuance. In the event that the Company
proposes to issue in a financing for the purpose of raising capital any (i) shares of Common Stock, (ii) warrants, options or other rights to purchase shares of Common Stock or (iii) any notes, debentures or other securities convertible into or
exercisable or exchangeable for shares of Common Stock (collectively, the “Company Securities”), the Company will deliver to each Investor a confidential written notice (the “Offer Notice”) prior to effecting any
such issuance (the “New Issuance”), offering to such Investor the right, for a period of ten (10) Business Days, to purchase for cash at an amount equal to the price or other consideration for which such Company Securities are to be
issued, a number of such Company Securities such that, after giving effect to such New Issuance (and the conversion, exercise and exchange into or for (whether directly or indirectly) shares of Common Stock of all such Company Securities, whether
issued by the Company or a Subsidiary of the Company), such Investor will continue to maintain its same proportionate equity ownership in the Company as of the date of the Offer Notice (treating such Investor, for the purpose of such computation, as
the holder of the number of shares of Common Stock which would be issuable to the Investor upon conversion, exercise and exchange of the Securities, without regard to any applicable conversion or exercise limitations). The Offer Notice shall
describe the securities proposed to be issued by the Company and specify the number, price and payment terms. Notwithstanding anything contained herein to the contrary, the provisions of this Article IV shall not apply with respect to Exempt
Issuances (as defined in Section 4.3). 
  
 4.2 Right to
Purchase Company Securities. 
  
 (a) Each Investor may accept
the Company’s offer as to the full number of securities offered to it in the Offer Notice or any lesser number, by written notice thereof (an “Exercise Notice”) given by it to the Company prior to the expiration of the
aforesaid 10-day period. A delivery of an Exercise Notice (which notice shall specify the number (or amount) of Company Securities to be purchased by the Investor as permitted under this Article IV) shall constitute a binding agreement of the
Investor to purchase, at the price and on the terms specified in the Offer Notice, the number (or amount) of Company Securities specified in the Investor’s Exercise Notice. If at the termination of such 10-day period the Investor shall not have
exercised its rights to purchase Company Securities pursuant to this Article IV, the Investor shall be deemed to have waived any and all of its rights under this Article IV with respect to that purchase of such Company Securities (such
waiver shall not apply to any subsequently offered Company Securities). 
  

 - 12 - 

 (b) The Company shall have one-hundred twenty (120) days from the date of the Offer Notice to consummate
the proposed New Issuance at the price (which may be a specified price or a specified formula for ascertaining such price) and upon terms substantially similar to those specified in the Offer Notice, provided that, if such issuance is subject to
regulatory approval, such one hundred twenty (120) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred eighty (180) days from the date of the
Offer Notice. At the consummation of such New Issuance, the Company shall issue certificates representing the Company Securities to be purchased by each Investor registered in the name of such Investor, against payment by such Investor of the
purchase price for such Company Securities specified in such Investor’s Exercise Notice. If the Company proposed to issue any class of Company Securities after such time period above, it shall again comply with the procedures set forth in this
Article IV. 
  
 (c) The value of any non-cash consideration
to be received by the Company in any New Issuance shall be determined by the Board in good faith, and shall be specified in the Offer Notice delivered in connection with any such New Issuance. If an Investor elects to exercise its rights under this
Article IV in connection with any New Issuance in which there is any such non-cash consideration, then, such Investor may elect in its Exercise Notice to tender, in lieu of tendering any such non-cash consideration, an amount in cash equal to
the reasonably determined good faith value of such non-cash consideration. 
  
 4.3 Exempt Issuances. The following shall constitute “Exempt Issuances” under this Article IV: any issuance in which Company Securities are issued (i) as a dividend, stock split or other
distribution payable pro rata to all holders of Common Stock, (ii) to employees, officers, directors or consultants of the Company pursuant to any employee benefit plans or programs, (iii) in connection with the conversion of the Preferred
Stock or the conversion or exercise of any options, warrants or other rights to purchase Common Stock (A) outstanding on the date hereof, (B) issued in accordance with the foregoing clause (ii) or (C) which constitute a prior New Issuance issued in
accordance with the provisions of this Article IV, (iv) solely in consideration for the acquisition (by merger or otherwise) by the Company or any Subsidiary of the Company of assets or equity interests of another entity approved by a
majority of the Board or (v) any other issuance in which securities of the Company are not issued in a financing for the purpose of raising capital. 
  
 Article V Information and Inspection Rights. 
  
 5.1 Delivery of Financial Statements. During any period and for so long as (i) the Company is not filing periodic reports with the SEC pursuant to
Section 13 or Section 15 of the Exchange Act, (ii) either Cerberus or Sepracor Inc. does not have a representative serving as a director of the Board or serving as an observer at meetings of the Board pursuant to Section 3.1, and (iii) at
least 50% of the Shares issued as of the date hereof are outstanding (as appropriately adjusted for any stock dividend, stock split, reverse stock split, reclassification, stock combination or other recapitalization occurring after the date hereof),
the Company shall deliver 
  

 - 13 - 

 to each Investor as soon as practicable, but in any event within forty-five (45) days, after the end of each fiscal
quarter of each fiscal year of the Company, on an unaudited basis (but prepared in accordance with Generally Accepted Accounting Principals consistently applied with prior practice), a balance sheet as of the last day of such quarter and a balance
sheet as of the comparable date one year earlier, an income statement and a statement of cash flows for such quarter and for the comparable quarter one year earlier, and an income statement and a statement of cash flows for the period from the first
day of the current fiscal year through the last day of such quarter and for the comparable period one year earlier, in each case certified by the Chief Financial Officer or Chief Executive Officer of the Company as being true, complete and correct.
With respect to such financial statements, if for any quarter, the Company shall have any subsidiary whose accounts are consolidated with those of the Company, then in respect of such period, the financial statements delivered pursuant to the
foregoing section shall be the consolidated and consolidating financial statements of the Company and all such consolidated subsidiaries. 
  
 5.2 Delivery of Operating Plan, Projections and Budgets. Subject to the immediately succeeding sentence, as soon as practicable, but in any event
at least thirty (30) days prior to the end of each fiscal year, the Company shall deliver to the Investors an operating plan and projections for the next fiscal year, prepared on a monthly and annual basis, including balance sheets and income
statements for such months and the full year, in form and substance previously approved by the Board (collectively, the “Operating Plan and Projections”), and, as soon as prepared, the Company shall deliver to the Investors any
other budgets or revised budgets prepared by it, each in form and substance previously approved by the Board (collectively, the “Budgets” and together with the Operating Plan and Projections, the “Operating Plan, Projections
and Budgets”). Notwithstanding anything contained herein to the contrary, in no event shall the Company deliver to any Investor any of the Operating Plan, Projections and Budgets with respect to any fiscal year, or any updates, supplements
or other modifications thereto unless and until the Company has received from such Investor a specific written request therefor. 
  
 5.3 Inspection. The Company shall permit each Investor, at the Company’s expense, to visit and inspect the Company’s properties, to
examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers for purposes of allowing such Investor to monitor its investment in the Company, all at such reasonable times and upon
reasonable notice as may be reasonably requested by such Investor. 
  
 Article
VI Miscellaneous. 
  
 6.1 Successors and
Assigns. This Agreement may not be assigned by a party hereto without the prior written consent of the Company or the Investors, as applicable; provided, however, that (a) an Investor may assign its rights and delegate its duties
hereunder in whole or in part, without the prior written consent of the Company, to an Affiliate and (b) an Investor may assign its rights and delegate its duties under Articles I, II and VI hereof, in whole or in part, without the prior written
consent of the Company, to any Person, provided, that, in the case of each of clause (a) and (b), no such assignment shall be effective or confer any right on any such assignee unless, prior to such assignment, the assignee agrees in writing that
such assignee will be bound by all provisions binding on such Investor. The provisions of this Agreement shall 
  

 - 14 - 

 inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Except for
any other provisions of this Agreement expressly to the contrary, nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement. 
  
 6.2 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. 
  
 6.3
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. 
  
 6.4 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 the Company: 
  
 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 
  
 If to any of the Investors: 
  
 to the addresses set forth on the signature pages attached hereto.

  
 or to such other address as any party hereto shall notify the other parties
hereto (as provided above) from time to time. 
  

 - 15 - 

 6.5 Expenses. The Company agrees to pay all reasonable out-of-pocket expenses relating to the
establishment, due diligence and monitoring of and the administration and exercise of any rights in, and enforcement of, the transactions contemplated by this Agreement and the other Transactions Documents, which arise after the date hereof, and
such expenses may include, but not be limited to legal, travel, accounting and Board of Directors attendance expenses. Such expenses shall be paid by the Company to the Investors as incurred and upon the request of each such Investor. 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 or the other Transaction Documents, 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. 
  
 6.6 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 the prior written consent of the Company and the Requisite Investors; 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 the Company and that
particular Investor. Any amendment or waiver effected in accordance with this Section 6.6 shall be binding upon each holder of any Securities purchased under the Purchase Agreement at the time outstanding, each future holder of all such
Securities, and the Company. 
  
 6.7 Publicity. No public
release or announcement concerning the transactions contemplated by this Agreement and the other Transaction Documents shall be issued by the Company or the Investors without the prior consent of the Company (in the case of a release or announcement
by the Investors) and the Investors (in the case of a release or announcement by the Company) (which consents shall not be unreasonably withheld), except as such release or announcement may be required by law or the applicable rules or regulations
of any securities exchange or securities market on which the Securities are then listed and trading, in which case, if such release or announcement names or otherwise identifies any Investor or its Affiliates, the Company shall allow such Investor
reasonable time to comment on such release or announcement in advance of such issuance. 
  
 6.8 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.

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

 - 16 - 

 6.10 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. 
  
 6.11 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. THE COMPANY 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. 
  

 - 17 - 

 [Company Signature Page] 
  
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed by their
duly authorized representatives, as of the date first written above. 
  

			
	THE COMPANY:
	
	BIOSPHERE MEDICAL, INC.
		
	By:	 	 /s/ Martin J. Joyce

	Name:	 	Martin J. Joyce
	Title:	 	Vice President and Chief Financial Officer

  

 - 18 - 

 [Investor Signature Page] 
  
 IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date first above written. 
  

			
	NAME OF INVESTOR:
	
	Sepracor Inc.
	(Print Name of Investor)
		
	By:	 	 /s/ Timothy J. Barberich

	Name:	 	Timothy J. Barberich
	Title:	 	Chairman of the Board of Chief
	 	 	Executive Officer
		
	Address:	 	84 Waterford Drive
	 	 	Marlborough, MA 01752

  

 - 19 - 

 [Investor Signature Page] 
  
 IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date first above written. 
  

					
	CERBERUS PARTNERS, L.P.
		
	By:	 	Cerberus Associates, LLC,
	 	 	Its General Partner
			
	 	 	By:	 	 /s/ Seth Plattus

	 	 	 	 	Seth Plattus
	 	 	 	 	Managing Director
			
	Address:	 	 	 	299 Park Avenue
	 	 	22nd Floor
	 	 	New York, NY 10171

  

 - 20 - 

 EXHIBIT A 
  
 Plan of Distribution 
  
 The selling stockholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of
their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices
at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. 
  
 The selling stockholders may use any one or more of the following methods when disposing of shares or interests therein: 
  

	 	•	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; 

  

	 	•	block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;

  

	 	•	purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 

  

	 	•	an exchange distribution in accordance with the rules of the applicable exchange; 

  

	 	•	privately negotiated transactions; 

  

	 	•	short sales; 

  

	 	•	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; 

  

	 	•	broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share; 

  

	 	•	a combination of any such methods of sale; and 

  

	 	•	any other method permitted pursuant to applicable law. 

  
 The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer
the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus. 
  

 A-1 

 In connection with the sale of our common stock or interests therein, the selling stockholders may enter
into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of our
common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares
such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). 
  
 The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through
agents. We will not receive any of the proceeds from this offering. Upon any exercise of the warrants by payment of cash, however, we will receive the exercise price of the warrants. 
  
 The selling stockholders also may resell all or a portion of the shares in open market transactions in reliance upon Rule
144 under the Securities Act of 1933, provided that they meet the criteria and conform to the requirements of that rule. 
  
 The selling stockholders and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be
“underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act.
Selling stockholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act. 
  
 To the extent required, the shares of our common stock to be sold, the names
of the selling stockholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying
prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus. 
  
 In order to comply with the securities laws of some states, if applicable, the common stock may be sold in these jurisdictions only through registered or
licensed brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

  

 A-2 

 We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the
Exchange Act may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. In addition, we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to
the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities Act. 
  
 We have agreed to indemnify the selling stockholders against liabilities, including liabilities under the Securities Act and state securities laws, relating to the registration of the shares offered by this
prospectus. 
  
 We have agreed with the selling stockholders to
keep the registration statement of which this prospectus constitutes a part effective until the earlier of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration
statement or (2) the date on which the shares may be sold pursuant to Rule 144(k) of the Securities Act. 
  

 A-3Warrant No. 2004-1

 EXHIBIT 10.3 
  
 THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”), OR ANY OTHER SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (1) AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SECURITIES UNDER THE ACT AND ANY OTHER
APPLICABLE SECURITIES LAWS, OR (2) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. 
  
 BIOSPHERE MEDICAL, INC. 
  
 WARRANT TO PURCHASE 200,000 SHARES OF 
 COMMON STOCK, PAR VALUE $0.01 PER SHARE 
  

			
	 November 10, 2004
	 	Warrant No. 2004-1

  
 For value received,
BIOSPHERE MEDICAL, INC., a Delaware corporation (the “Company”), hereby certifies that Cerberus Partners, L.P., or its registered transferees, successors or assigns (each person or entity holding all or part of this Warrant
being referred to as a “Holder”), is the registered holder of warrants (the “Warrants”) to subscribe for and purchase two hundred thousand (200,000) shares (as adjusted pursuant to
Section 3 hereof, the “Warrant Shares”) of the fully paid and nonassessable common stock, par value $0.01 per share (the “Common Stock”), of the Company, at a purchase price per share initially
equal to FOUR and 00/100 DOLLARS ($4.00) (the “Warrant Price”) on or before, 5:00 P.M., Eastern Time, on November 10, 2009 (the “Expiration Date”), subject to the provisions and upon the terms and
conditions hereinafter set forth. As used in this Warrant, the term “Business Day” means any day other than a Saturday or Sunday on which commercial banks located in New York, New York are open for the general transaction of
business. 
  
 Section 1. Exercise. 
  
 (a) Method of Exercise; Payment; Issuance of New Warrant.

  
 (i) Subject to the provisions hereof, the Holder may
exercise this Warrant, in whole or in part and from time to time, by the surrender of this Warrant (with the Notice of Exercise attached hereto as Appendix A duly executed) at the principal office of the Company, or such other office
or agency of the Company as it may reasonably designate by written notice to the Holder, during normal business hours on any Business Day, and the payment by the Holder by cash, certified check payable to the Company or wire transfer of immediately
available funds to an account designated to the exercising Holder by the Company of an amount equal to the then applicable Warrant Price multiplied by the number of Warrant Shares then being purchased, or in the event of a cashless exercise pursuant
to Section 1(b) 

 below, with the Net Issue Election Notice attached hereto as Appendix B duly executed and completed. On the
date on which the Holder shall have satisfied in full the Holder’s obligations set forth herein regarding an exercise of this Warrant (provided such date is prior to the Expiration Date), the Holder (or such other person or persons as directed
by the Holder, subject to compliance with applicable securities laws) shall be treated for all purposes as the holder of record of such Warrant Shares as of the close of business on such date. 
  
 (ii) In the event of any exercise of the rights represented by this Warrant,
certificates for the whole number of shares of Common Stock so purchased shall be delivered to the Holder (or such other person or persons as directed by the Holder, subject to compliance with applicable securities laws) as promptly as is reasonably
practicable (but not later than five (5) Business Days) after such exercise at the Company’s expense, and, unless this Warrant has been fully exercised, a new Warrant representing the whole number of Warrant Shares, if any, with respect to
which this Warrant shall not then have been exercised shall also be issued to the Holder as soon as reasonably practicable thereafter (but not later than five (5) Business Days) after such exercise. 
  
 (b) Cashless Right to Convert Warrant into Common Stock. In
addition to and without limiting the rights of the Holder hereof under the terms of this Warrant, the Holder may elect to receive, without the payment by the Holder of the Warrant Price, Warrant Shares equal to the value of this Warrant or any
portion hereof by the surrender of this Warrant (or such portion of this Warrant being so exercised) together with the Net Issue Election Notice annexed hereto as Appendix B duly executed and completed, at the office of the Company, or
such other office or agency of the Company as it may reasonably designate by written notice to the Holder, during normal business hours on any Business Day. Thereupon, the Company shall issue to the Holder such number of fully paid, validly issued
and nonassessable Warrant Shares, as is computed using the following formula: 
  

	
	 X= Y(A-B)

	A

  
 where 
  
 X = the number of shares of Common Stock to be issued to the Holder (or
such other person or persons as directed by the Holder, subject to compliance with all applicable laws) upon such exercise of the rights under this Section 1(b) 
  

Y = the total number of shares of Common Stock covered by this Warrant which the Holder has surrendered for cashless exercise 
  
 A = the “Fair Market Value” of one share of Common Stock on the
date that the Holder delivers the Net Issue Election Notice to the Company as provided herein 
  
 B = the Warrant Price in effect under this Warrant on the date that the Holder delivers the Net Issue Election Notice to the Company as provided herein 
  

 - 2 - 

 The “Fair Market Value” of a share of Common Stock as of a particular date (the
“Valuation Date”) shall mean the following: 
  
 (i) if the Common Stock is then listed on a national securities exchange, the average closing sale price of one share of Common Stock on such exchange over the ten (10) trading days ending on the last trading day prior to the Valuation
Date; provided that if such stock has not traded in the ten (10) consecutive trading days prior to the Valuation Date, the Fair Market Value shall be the average closing price of one share of Common Stock in the most recent ten (10) trading days
during which the Common Stock has traded prior to the Valuation Date; 
  
 (ii) if the Common Stock is then included in The Nasdaq Stock Market, Inc. (“Nasdaq”), the average closing sale price of one share of Common Stock on Nasdaq over the ten (10) trading days ending on the last trading
day prior to the Valuation Date or, if no closing sale price is available for any of such ten (10) trading days, the closing sale price for such day shall be determined as the average of the high bid and the low ask price quoted on Nasdaq as of the
end of such trading day; provided that if the Common Stock has not traded in the ten (10) consecutive trading days prior to the Valuation Date, the Fair Market Value shall be the average closing price of one share of Common Stock in the most recent
ten (10) trading days during which the Common Stock has traded prior to the Valuation Date; 
  
 (iii) If the Common Stock is then included in the Over-the-Counter Bulletin Board, the average closing sale price of one share of Common Stock on the Over-the-Counter Bulletin Board over the ten (10) trading days
ending on the last trading day prior to the Valuation Date or, if no closing sale price is available for any of such ten (10) trading days, the closing sale price for such day shall be determined as the average of the high bid and the low ask price
quoted on the Over-the-Counter Bulletin Board as of the end of such trading day; provided that if the Common Stock has not traded in the ten (10) consecutive trading days prior to the Valuation Date, the Fair Market Value shall be the average
closing price of one share of Common Stock in the most recent ten (10) trading days during which the Common Stock has traded prior to the Valuation Date; 
  
 (iv) if the Common Stock is then included in the “pink sheets”, the average closing sale price of one share of Common Stock on the “pink
sheets” over the ten (10) trading days ending on the last trading day prior to the Valuation Date or, if no closing sale price is available for any of such ten (10) trading days, the closing sale price for such day shall be determined as the
average of the high bid and the low ask price quoted on the “pink sheets” as of the end of such trading day; provided that if the Common Stock has not traded in the ten (10) consecutive trading days prior to the Valuation Date, the Fair
Market Value shall be the average closing price of one share of Common Stock in the most recent ten (10) trading days during which the Common Stock has traded prior to the Valuation Date; or 
  
 (v) if the Common Stock is not then listed on a national securities exchange
or quoted on Nasdaq or the Over-the-Counter Bulletin Board or the “pink sheets”, the Fair Market Value of one share of Common Stock as of the Valuation Date shall be determined in good faith by mutual agreement of the Board of Directors of
the Company (the “Board”) and the Holder; provided that if, in such case, the Board and the Holder are unable to agree as to the Fair Market Value of a share of Common Stock, such Fair Market Value shall be determined by an
investment banker of national reputation selected by the Company and reasonably acceptable to the Holder, the fees and expenses of which shall be borne by the Company. The Board shall respond promptly in writing to a written inquiry by the Holder
prior to the exercise hereunder as to the Fair Market Value of a share of Common Stock. 
  

 - 3 - 

 (c) Extension of Expiration Date. If the Company fails to cause any Registration Statement
covering “Registrable Securities” (as that term is defined in the Investor Rights Agreement) to be declared effective prior to the applicable Effectiveness Deadline set forth in the Investor Rights Agreement, or if any of the events
specified in Section 2(b)(ii) of the Investor Rights Agreement occurs, and the “Allowed Delay” (as that term is defined in the Investor Rights Agreement) (whether alone, or in combination with any other Allowed Delay) continues for more
than 30 days in any 24 month period, or for more than a total of 60 days, then, notwithstanding anything herein to the contrary, the Expiration Date of this Warrant shall be extended one day for each day beyond, as applicable (x) the applicable
Effectiveness Deadline during which the applicable Registration Statement has not been declared effective, or (y) the 30-day or 60-day limits, as the case may be, that the Allowed Delay continues. 
  
 Section 2. Reservation of Shares; Stock Fully Paid;
Listing. The Company shall keep reserved a sufficient number of shares of the authorized and unissued shares of Common Stock to provide for the exercise of the rights of purchase represented by this Warrant in compliance with its terms. All
Warrant Shares issued upon exercise of this Warrant shall be, at the time of delivery of the certificates for such Warrant Shares upon payment in full of the Warrant Price therefor in accordance with the terms of this Warrant (or proper exercise of
the cashless exercise rights contained in Section 1(b) hereof), duly authorized, validly issued, fully paid and non-assessable shares of Common Stock of the Company. The Company shall during all times prior to the Expiration Date when the
shares of Common Stock issuable upon the exercise of this Warrant are authorized for listing or quotation on any national securities exchange, Nasdaq (or the Over-the-Counter Bulletin Board or the “pink sheets”, as the case may be), use
its best efforts to maintain the listing or quotation of the Common Stock on such national securities exchange, Nasdaq (or the Over-the-Counter Bulletin Board or the “pink sheets”, as the case may be). 
  
 Section 3. Adjustments and Distributions. The
number and kind of securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows: 
  
 (a) If the Company shall at any time or from time to time while this Warrant
is outstanding, pay a dividend or make a distribution on its Common Stock in shares of Common Stock, subdivide its outstanding shares of Common Stock into a greater number of shares or combine its outstanding shares of Common Stock into a smaller
number of shares, then the number of Warrant Shares purchasable upon exercise of this Warrant and the Warrant Price in effect immediately prior to the date upon which such change shall become effective shall be proportionally adjusted by the Company
so that the Holder thereafter exercising this Warrant shall be entitled to receive the number of shares of Common Stock or other capital stock which the Holder would have received if this Warrant had been fully exercised immediately prior to such
event upon payment of a Warrant Price that has been proportionally adjusted to reflect such event. Such adjustments shall be made successively whenever any event listed above shall occur. 
  

 - 4 - 

 (b) If any recapitalization, reclassification or reorganization of the capital stock of the Company
(other than a change in par value or a subdivision or combination as provided for in Section 3(a) above) shall be effected in such a manner (including, without limitation, in connection with a consolidation or merger in which the Company is
the continuing corporation), that holders of Common Stock shall be entitled to receive stock, securities, or other assets or property (a “Reorganization”), then, as a condition of such Reorganization, lawful and adequate
provisions shall be made by the Company whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the shares of the Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise
of the rights represented hereby) such shares of stock, securities or other assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such
Common Stock immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby. In the event of any Reorganization, appropriate provision shall be made by the Company with respect to the rights and interests of
the Holder of this Warrant to the end that the provisions hereof (including, without limitation, provisions for adjustments of the Warrant Price and of the number of Warrant Shares) shall thereafter be applicable, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise hereof. The provisions of this Section 3(b) shall similarly apply to successive Reorganizations. 
  
 (c) If any consolidation or merger of the Company with another entity in which the Company is not the survivor, or sale,
transfer or other disposition of all or substantially all of the Company’s assets to another entity shall be effected, then, as a condition of such consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall
be made whereby the Holder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of this Warrant,
such shares of stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable upon exercise of this Warrant, had
such consolidation, merger, sale, transfer or other disposition not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of the Holder to the end that the provisions hereof (including,
without limitation, provision for adjustment of the Warrant Price and of the number of Warrant Shares) shall thereafter be applicable, as nearly equivalent as may be practicable, in relation to any shares of stock, securities or properties
thereafter deliverable upon the exercise thereof. The Company shall not effect any such consolidation, merger, sale, transfer or other disposition unless prior to or simultaneously with the consummation thereof the successor entity (if other than
the Company) resulting from such consolidation or merger, or the entity purchasing or otherwise acquiring such assets or other appropriate entity shall assume the obligation to deliver to the Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such Holder may be entitled to purchase, and the other obligations under this Warrant. The provisions of this Section 3(c) shall similarly apply to successive consolidations, mergers, sales, transfers
or other dispositions. 
  
 (d) In case the Company shall fix a
payment date for the making of a distribution to all holders of Common Stock of evidences of indebtedness or assets (other than dividends or distributions referred to in Section 3(a) hereof), or subscription rights or warrants, 
  

 - 5 - 

 the Warrant Price to be in effect after such payment date shall be determined by multiplying the Warrant Price in effect
immediately prior to such payment date by a fraction, the numerator of which shall be the total number of shares of Common Stock outstanding multiplied by the Fair Market Value per share of Common Stock immediately prior to such payment date, less
the fair market value (as determined by the Board in good faith) of said assets or evidences of indebtedness so distributed, or of such subscription rights or warrants, and the denominator of which shall be the total number of shares of Common Stock
outstanding multiplied by such Fair Market Value per share of Common Stock immediately prior to such payment date. Such adjustment shall be made successively whenever such a payment date is fixed. 
  
 (i) In the event that any dividend or distribution for which this Section
3(d) would require an adjustment is not so paid or made, the Warrant Price shall be adjusted to be the Warrant Price which would then be in effect if such dividend or distribution had not been declared. 
  
 (ii) In the event that the Company implements a new shareholder rights plan,
such rights plan shall provide that upon exercise of this Warrant the Holder will receive, in addition to the Common Stock issuable upon such exercise, the rights issued under such rights plan (as if the Holder had exercised this Warrant prior to
implementing the rights plan and notwithstanding the occurrence of an event causing such rights to separate from the Common Stock at or prior to the time of exercise). Any distribution of rights or warrants pursuant to a shareholder rights plan
complying with the requirements set forth in the immediately preceding sentence of this paragraph shall not constitute a distribution of rights or warrants for the purposes of this Section 3(d). 
  
 (e) For the term of this Warrant, in addition to the provisions contained
above, the Warrant Price shall be subject to adjustment as provided below. An adjustment to the Warrant Price shall become effective immediately after the payment date in the case of each dividend or distribution and immediately after the effective
date of each other event which requires an adjustment. No adjustment to the Warrant Price shall be made in an amount less than $0.01, but any such lesser amount shall be carried forward and shall be given effect in the next Warrant Price adjustment,
if any. 
  
 (f) In the event that, as a result of an adjustment
made pursuant to this Section 3, the Holder shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock, the number of such other shares so receivable upon exercise of this Warrant shall be
subject thereafter to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Warrant Shares contained in this Warrant. 
  

 - 6 - 

 (g) Except as provided in Section 3(h) hereof, if and whenever the Company shall issue or sell, or
is, in accordance with any of Sections 3(g)(i) through 3(g)(vi) hereof, deemed to have issued or sold, any shares of Common Stock for a consideration per share less than the Warrant Price in effect immediately prior to the time of such issue
or sale, then and in each such case (a “Trigger Issuance”) the then-existing Warrant Price shall be reduced, as of the close of business on the effective date of the Trigger Issuance, to a Warrant Price determined as follows:

  

			
	Adjusted Warrant Price =	 	 (A x B) + D

	 	 	      A+C

  
 where 
  
 A = the number of shares of Common Stock outstanding (including any
Additional Shares of Common Stock (as defined below) immediately preceding such Trigger Issuance) 
  
 B = the Warrant Price in effect immediately preceding such Trigger Issuance 
  
 C = the number of Additional Shares of Common Stock (as adjusted for stock splits, stock combinations, recapitalizations,
and dividends and the like) outstanding or deemed outstanding hereunder as a result of such Trigger Issuance 
  
 D = the aggregate consideration, if any, received or deemed to be received by the Company upon such Trigger Issuance 
  
 For purposes of this subsection (g), “Additional Shares of Common
Stock” shall mean all shares of Common Stock issued by the Company or deemed to be issued pursuant to this Section 3(g), other than Excluded Issuances (as defined in Section 3(h) hereof). 
  
 For purposes of this Section 3(g), the following Sections 3(g)(i)
to 3(g)(vi) shall also be applicable (subject, in each such case, to the provisions of Section 3(h) hereof) and to each other subsection contained in this Section 3(g): 
  
 (i) Issuance of Rights or Options. If at any time the Company shall in any manner grant (directly and not by
assumption in a merger or otherwise) any warrants or other rights to subscribe for or to purchase, or any options for the purchase of, Common Stock or any stock or security convertible into or exchangeable for Common Stock (such warrants, rights or
options being called “Options” and such convertible or exchangeable stock or securities being called “Convertible Securities”), whether or not such Options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, and the price per share for which Common Stock is issuable upon the exercise of such Options or upon the conversion or exchange of such Convertible Securities (determined by dividing (A) the sum
(which sum shall constitute the applicable consideration) of (x) the total amount, if any, received or receivable by the Company as consideration for the granting of such Options, plus (y) the aggregate amount of additional consideration payable to
the Company upon the exercise of all such Options, plus (z) in the case of such Options which relate to Convertible Securities, the aggregate amount of additional consideration, if any, payable upon the issue or sale of such Convertible Securities
and upon the conversion or exchange thereof, by (B) the total maximum number of shares of Common Stock issuable upon the exercise of such Options or upon the conversion or exchange of all such Convertible Securities issuable upon the exercise of
such Options) shall be less than the Warrant Price in effect immediately prior to the time of the granting of such Options, then the total number of shares of Common Stock issuable upon the exercise of such Options or upon conversion or exchange of
the total amount of such Convertible Securities issuable upon the exercise of such Options shall be deemed to have been issued for 
  

 - 7 - 

 such price per share as of the date of granting of such Options or the issuance of such Convertible Securities and
thereafter shall be deemed to be outstanding for purposes of adjusting the Warrant Price. Except as otherwise provided in Section 3(g)(iii), no adjustment of the Warrant Price shall be made upon the actual issue of such Common Stock or of
such Convertible Securities upon exercise of such Options or upon the actual issue of such Common Stock upon conversion or exchange of such Convertible Securities.\ 
  
 (ii) Issuance of Convertible Securities. In case the Company shall in any manner issue (directly and not by
assumption in a merger or otherwise) or sell any Convertible Securities, whether or not the rights to exchange or convert any such Convertible Securities are immediately exercisable, and the price per share for which Common Stock is issuable upon
such conversion or exchange (determined by dividing (A) the sum (which sum shall constitute the applicable consideration) of (x) the total amount received or receivable by the Company as consideration for the issue or sale of such Convertible
Securities, plus (y) the aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof, by (B) the total number of shares of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the Warrant Price in effect immediately prior to the time of such issue or sale, then the total maximum number of shares of Common Stock issuable upon conversion or exchange of all such Convertible
Securities shall be deemed to have been issued for such price per share as of the date of the issue or sale of such Convertible Securities and thereafter shall be deemed to be outstanding for purposes of adjusting the Warrant Price; provided that,
except as otherwise provided in Section 3(g)(iii), no adjustment of the Warrant Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities and no further adjustment of the
Warrant Price shall be made by reason of the issue or sale of Convertible Securities upon exercise of any Options to purchase any such Convertible Securities for which adjustments of the Warrant Price have been made pursuant to the other provisions
of Section 3(g). 
  
 (iii) Change in Option Price or
Conversion Rate. If (A) the purchase price provided for in any Option referred to in Section 3(g)(i) hereof, (B) the additional consideration, if any, payable upon the conversion or exchange of any Convertible Securities referred to
in Sections 3(g)(i) or 3(g)(ii), or (C) the rate at which Convertible Securities referred to in Sections 3(g)(i) or 3(g)(ii) are convertible into or exchangeable for Common Stock shall increase or decrease at any time (including, but
not limited to, changes under or by reason of provisions designed to protect against dilution), the Warrant Price in effect at the time of such event shall forthwith be readjusted to the Warrant Price which would have been in effect at such time had
such Options or Convertible Securities still outstanding provided for such changed purchase price, additional consideration or conversion rate, as the case may be, at the time initially granted, issued or sold, but only if as a result of such
re-adjustment of the Warrant Price then in effect hereunder is thereby reduced. 
  
 (iv) Consideration for Stock. In case any shares of Common Stock, Options or Convertible Securities shall be issued or sold for cash, the consideration received therefor shall be deemed to be the amount
received by the Company therefor, without deduction therefrom of any expenses incurred or any underwriting commissions or concessions paid or allowed by the Company in connection therewith. In case any shares of Common Stock, Options 
  

 - 8 - 

 or Convertible Securities shall be issued or sold for a consideration other than cash or for a consideration including
cash and such other consideration, the amount of the consideration other than cash received by the Company shall be deemed to be the fair value of such consideration as determined in good faith by the Board, after deduction of any expenses incurred
or any underwriting commissions or concessions paid or allowed by the Company in connection therewith. In case any Options shall be issued in connection with the issue and sale of other securities of the Company, together comprising one integral
transaction in which no specific consideration is allocated to such Options by the parties thereto, such Options shall be deemed to have been issued for such consideration as determined in good faith by the Board. The determination of the fair value
of consideration (or the allocation thereof) for purposes of this Section 3(g) need not be the amount recorded in the books and records of the Company if the Board determines that the determination of different amounts for different contexts
is in the best interest of the Company and its stockholders and creditors as a whole. 
  
 (v) Record Date. In case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock,
Options or Convertible Securities or (B) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued
or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be. If the Company shall have taken a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or distribution or subscription or purchase rights and shall, thereafter and before the distribution to stockholders thereof, legally abandon its plan to pay or deliver such dividend,
distribution, subscription or purchase rights, then thereafter no adjustment shall be required by reason of the taking of such record and any such adjustment previously made in respect thereof shall be automatically rescinded and annulled.

  
 (vi) Treasury Shares. The number of shares of
Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company or any of its wholly-owned subsidiaries, and the disposition of any such shares (other than the cancellation or retirement
thereof) shall be considered an issue or sale of Common Stock for the purpose of this Section 3(g). 
  
 (h) Excluded Issuances. Anything herein to the contrary notwithstanding, the Company shall not be required to make any adjustment of the
Warrant Price: (x) where such an adjustment would be duplicative of another adjustment of the Warrant Price resulting from the same event that is made pursuant to other provisions of this Warrant; or (y) in the case of (i) issuances upon the
exercise of any Options or Convertible Securities granted, issued and outstanding on the date hereof, (ii) shares of Common Stock (or Options with respect thereto) issued or issuable to employees, officers or directors of, or consultants or advisors
to, the Company or any of its subsidiaries, pursuant to a plan, agreement or arrangement approved by the Board, (iii) issuances of securities as consideration for a merger or consolidation with, or purchase of assets from, a non-Affiliated third
party, (iv) issuances of Common Stock upon conversion of the Series A Preferred Stock, exercise of the this Warrant and the other warrant(s) issued in connection therewith, or as payment-in-kind dividends on the Series A Preferred Stock, and (v)
shares of Common Stock issued or issuable as a result of any stock split, combination, 
  

 - 9 - 

 dividend, distribution, reclassification, exchange or substitution for which an equitable adjustment has been made under
Sections 3(a), (b) or (c) (collectively, “Excluded Issuances”). As used herein, the term “Affiliate” means any person or entity that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act. 
  
 (i) Adjustment of Number of Shares. Upon each adjustment in the Warrant Price pursuant to this Section
3, the number of Warrant Shares purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying the number of Warrant Shares purchasable immediately prior to such adjustment by a fraction, (i) the
numerator of which shall be the Warrant Price immediately prior to such adjustment, and (ii) the denominator of which shall be the Warrant Price immediately thereafter. 
  
 (j) Notice of Adjustments. With each adjustment pursuant to this Section 3, the Company shall deliver a
certificate signed by its chief financial or executive officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price and the
number of Warrant Shares purchasable hereunder after giving effect to such adjustment, which shall be mailed by first class mail, postage prepaid to the Holder. 
  

Section 4. Transfer Taxes. The Company will pay any documentary stamp taxes attributable to the initial issuance of Warrant
Shares issuable upon the exercise of the Warrant; provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance or delivery of
any certificates for Warrant Shares in a name other than that of the registered holder of this Warrant in respect of which such shares are issued, and in such case, the Company shall not be required to issue or deliver any certificate for Warrant
Shares or any Warrant until the person requesting the same has paid to the Company the amount of such tax or has established to the Company’s reasonable satisfaction that such tax has been paid. 
  
 Section 5. Mutilated or Missing Warrants. In case
this Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and substitution of and upon cancellation of the mutilated Warrant, or in lieu of and substitution for the Warrant lost, stolen or destroyed, a new
Warrant of like tenor and for the purchase of a like number of Warrant Shares, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction of the Warrant, and with respect to a lost, stolen or
destroyed Warrant, reasonable indemnity or bond with respect thereto, if requested by the Company. 
  
 Section 6. Fractional Shares. No fractional shares of Common Stock shall be issued in connection with any exercise or cashless
exercise hereunder, and in lieu of any such fractional shares the Company shall make a cash payment therefor to the Holder (or such other person or persons as directed by the Holder, subject to compliance with all applicable laws) based on the Fair
Market Value of a share of Common Stock on the date of exercise or cashless exercise of this Warrant. 
  

 - 10 - 

 Section 7. Compliance with Securities Act and Legends. The Holder, by
acceptance hereof, agrees that it will not offer, sell or otherwise dispose of this Warrant, or any shares of Common Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the Securities Act of
1933, as amended, or the rules and regulations promulgated thereunder, as amended (the “Act”), or any state’s securities laws. All shares of Common Stock issued upon exercise of this Warrant (unless registered under the
Act) shall be stamped or imprinted with a legend as follows: 
  
 THIS SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY OTHER SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF (1) AN EFFECTIVE REGISTRATION STATEMENT COVERING THESE SECURITIES UNDER THE ACT AND ANY OTHER APPLICABLE SECURITIES LAWS, OR (2) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED. 
  
 Section 8. Rights as a
Stockholder. Except as expressly provided in this Warrant, no Holder, as such, shall be entitled to vote or receive dividends or be deemed the holder of Common Stock or any other securities of the Company which may at any time be issuable on
the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of the directors or upon any matter
submitted to stockholders at any meeting thereof, or to receive notice of meetings, or to receive dividends or subscription rights or otherwise, until this Warrant shall have been exercised and the Warrant Shares purchasable upon the exercise hereof
shall have become deliverable, as provided herein. 
  
 Section 9. Modification and Waiver. This Warrant and any provision hereof shall not be changed, waived, discharged or terminated except by an instrument in writing signed by the Company and the then current
Holder, and such change, waiver, discharge or termination shall be binding on any future Holder, and any and all such changes shall be applicable to the other warrants issued pursuant to the Purchase Agreement. 
  

 - 11 - 

 Section 10. Notices. Except as otherwise provided herein, all notices or other
communications required hereunder shall be in writing and shall be deemed to have been received: (a) upon hand delivery (receipt acknowledged) or delivery by telex (with correct answer back received) telecopy or facsimile (with transmission
confirmation report) at the address or number designated below (if received by 8:00 p.m. Eastern Time), or the first Business Day following such delivery (if received after 8:00 p.m. Eastern Time); or (b) on the second Business Day following the
date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur; and shall be regarded as properly addressed if sent to the parties or their representatives at
the addresses given below: 
  

			
	 To the Company:
	    	Biosphere Medical, Inc.
	 	    	1050 Hingham Street
	 	    	Rockland, MA 02370 USA
	 	    	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 Holder:	    	Cerberus Partners, L.P.
	 	    	299 Park Avenue, 22nd Floor
	 	    	New York, New York 10171
	 	    	Attn: Mr. Seth P. Plattus
	 	    	Fax: 212-891-1541
	 	    	and
	 	    	Cerberus Partners, L.P.
	 	    	299 Park Avenue, 22nd Floor
	 	    	New York, New York 10171
	 	    	Attn: Mr. Daniel Frank
	 	    	Fax: 212-284-7818
		
	With a copy to:	    	Lowenstein Sandler PC
	 	    	65 Livingston Avenue
	 	    	Roseland, NJ 07068
	 	    	Attn: Robert G. Minion, Esq.
	 	    	Fax: 973-597-2400

  
 Any party hereto may change its
address for purposes of this Section 10 by giving the other party written notice of the new address in the manner set forth herein. 
  
 Section 11. Descriptive Headings. The descriptive headings contained in this Warrant are inserted for convenience only and do not
constitute a part of this Warrant. 
  
 Section 12.
Governing Law. The validity, interpretation and performance of this Warrant shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and to be performed entirely within
such State, regardless of the law that might be applied under principles of conflicts of law. The Company and, by accepting this Warrant, the Holder, each irrevocably submits to the jurisdiction of the state and federal courts located in New York
for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Warrant 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 
  

 - 12 - 

 under this Warrant. The Company and, by accepting this Warrant, the Holder, each 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. The Company and, by accepting this Warrant, the Holder, each 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. 
  
 Section 13. Acceptance. Receipt and execution of this Warrant by the Holder hereof shall
constitute acceptance of and agreement to the foregoing terms and conditions. 
  
 Section 14. Identity of Transfer Agent. The Transfer Agent for the Common Stock is Mellon Investor Services. Upon the appointment of any subsequent transfer agent for the Common Stock or
other shares of the Company’s capital stock issuable upon the exercise of the rights of purchase represented by this Warrant, the Company will mail to the Holder a statement setting forth the name and address of such transfer agent. 

 
 Section 15. No Impairment of Rights. The
Company will not, by amendment of its Certificate of Incorporation or through any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against material impairment. 
  
 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. Upon surrender of this Warrant to the Company,
together with a properly endorsed notice of transfer, for transfer of this Warrant in its entirety by the Holder, the Company shall issue a new warrant of the same denomination to the designated transferee. Upon surrender of this Warrant to the
Company, together with a properly endorsed notice of transfer, by the Holder for transfer with respect to a portion of the Warrant Shares then purchasable hereunder, the Company shall issue a new warrant to the designated transferee, in such
denomination as shall be requested by the Holder hereof, and shall issue to such Holder a new warrant covering the number of Warrant Shares in respect of which this Warrant shall not have been transferred. In addition to, and not in limitation of,
the foregoing, a Holder that is a corporation, a partnership or a limited liability company, may distribute any portion of this Warrant to its respective shareholders, partners or members. Unless and until the provisions for assignment set forth
herein have been fully complied with, the Company may treat the last registered Holder as the absolute owner of this Warrant for all purposes, notwithstanding any notice to the contrary. 
  
 [Remainder of Page Left Intentionally Blank] 
  

 - 13 - 

 IN WITNESS WHEREOF, the Company and the Holder have caused this Warrant to be executed on their behalf by
one of their officers thereunto duly authorized. 
  

			
	BIOSPHERE MEDICAL, INC.
		
	By:	 	 /s/ Martin J. Joyce

	Name:	 	Martin J. Joyce
	Title:	 	Vice President and Chief Financial Officer

  

 - 14 - 

 APPENDIX A 
  
 NOTICE OF EXERCISE 
  
 To:    BIOSPHERE MEDICAL, INC.  
  
 1. The undersigned hereby irrevocably elects to purchase [            ] shares of Common Stock of
BIOSPHERE MEDICAL, INC. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full, by [cash, certified check/wire transfer, or surrender of the originally executed Warrant] [select
the applicable method of payment]. 
  
 2. Please issue a certificate or
certificates representing said shares in the name of the undersigned or in such other name or names as are specified below: 
  

	
	  

	  

	(Name)
	
	  

	(Address)
	
	 (Signature)

	                                 (Date)

  
 3. Please issue a new Warrant of
equivalent form and tenor for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below: 
  

			
	  

	 Date:

	 (Warrantholder)
	 	  

	 Name: (Print)
	 	  

	 By:

  

 A-1 

 APPENDIX B 
  

Net Issue Election Notice 
  
 To:    BIOSPHERE MEDICAL, INC. 
  
 Date:[                    ] 
  
 The undersigned hereby elects under Section 1(b) of this Warrant to surrender
the right to purchase [                    ] shares of Common Stock pursuant to this Warrant and hereby requests the issuance of
[                    ] shares of Common Stock. The certificate(s) for the shares issuable upon such net issue election shall be issued in the
name of the undersigned or as otherwise indicated below. 
  

	
	  

	 Signature

	  

	 Name for Registration

	  

	 Mailing Address

  

 B-1

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