Exhibit 10.5

 

DIRECTOR AGREEMENT

 

This DIRECTOR AGREEMENT is made as of June 23, 2016 (the “Agreement”), by and
between Osiris Therapeutics, Inc., a Maryland corporation (the “Company”), and
Thomas M. Brandt, Jr. (the “Director”).

 

WHEREAS, on March 3, 2016, the Company appointed the Director to its Board of
Directors, and desires to enter into an agreement with the Director with respect
to such appointment; and

 

WHEREAS, the Director is willing to accept such appointment and to serve the
Company on the terms set forth herein and in accordance with the provisions of
this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:

 

1.                                      Position. Subject to the terms and
provisions of this Agreement, the Company shall cause the Director to be
appointed a Director of the Company in the class of directors up for election at
the 2016 Annual Meeting of Stockholders (the “2016 Annual Meeting”) immediately
upon the execution of this Agreement, and the Director hereby agrees to serve
the Company in such position, upon the terms and conditions hereinafter set
forth, and in accordance with the duties imposed by Maryland law, the Company’s
Articles of Restatement, the Company’s By Laws (the “Bylaws”) and applicable
stock exchange regulations, provided, however, that the Director’s continued
service on the Board of Directors of the Company (the “Board”) for any period
following the 2016 Annual Meeting shall be subject to the nomination of the
Director for election by the Company’s stockholders by the Company’s Nominating
Committee for such period, and the election of the Director by the stockholders
of the Company.

 

2.                                      Duties.

 

(a)                                           During the Directorship Term (as
defined in Section 4 below), the Director shall make reasonable business efforts
to attend all Board meetings, serve on appropriate committees as reasonably
requested by the Board, make himself available to the Company at mutually
convenient times and places, attend external meetings and presentations, as
appropriate and convenient, and perform such duties, services and
responsibilities, and have the authority commensurate to such position.

 

(b)                                            The Director will use his
reasonable best efforts to promote the interests of the Company and devote such
time to the Company’s affairs as required to appropriately discharge his duties
and legal obligations as a Director. Other than as set forth above, the Director
will not, without the prior notification to the Board, engage in any other
business activity which could materially interfere with the performance of his
duties, services and responsibilities hereunder or which is in violation of the
reasonable policies established from time to time by the Company. At such time
as the Board receives such notification, the Board may require the resignation
of the Director if it determines that such business activity does in fact
materially interfere with the performance of the Director’s duties, services and
responsibilities hereunder.

 

3.                                      Compensation.

 

(a)                                             The Company agrees to pay
Director a fee of $60,000 per annum, pro-rated if the Directorship Term (as
defined in Section 4 below) is less than one year, which will be payable upon
the conclusion of the Directorship Term. The Company and the Director
acknowledge that under the Bylaws of the Company, the Board of Directors shall
have authority to fix the compensation of directors.

 

(b)                                             During the Directorship Term,
the Company shall reimburse the Director for all reasonable out-of-pocket
expenses incurred by the Director in attending any in-person meetings, provided
that the Director complies with the generally applicable policies, practices and
procedures of the Company for submission of expense reports, receipts or similar
documentation of such expenses. Any reimbursements for allocated expenses (as

 

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compared to out-of-pocket expenses of the Director) must be approved in advance
by the Company.

 

(c)                                              The Company will maintain a
customary director and officer liability insurance policy for all Board members
and such policy will cover Director to the same extent as other directors and
officers covered under the policy.

 

(d)                                             The Director’s status during the
Directorship Term shall be that of an independent contractor and not, for any
purpose, that of an employee or agent with authority to bind the Company in any
respect. All payments and other consideration made or provided to the Director
under this Section 3 shall be made or provided without withholding or deduction
of any kind, and the Director shall assume sole responsibility for discharging
all tax or other obligations associated therewith.

 

4.                                      Directorship Term. The “Directorship
Term,” as used in this Agreement, shall mean the period commencing on the date
hereof and terminating on the earlier of the date of the next annual
stockholders meeting and the earliest of the following to occur:

 

(a)                                             the death of the Director;

 

(b)                                             the termination of the Director
from his membership on the Board by the mutual written agreement of the Company
and the Director;

 

(c)                                              the removal of the Director
from the Board in accordance with the Bylaws and Maryland law; and

 

(d)                                             the resignation by the Director
from the Board.

 

5.                                      Director’s Representations and
Acknowledgment.

 

(a)                                             The Director acknowledges and
agrees that his position as member of the Board will result in him being deemed
to be an “affiliate” of the Company for purposes of the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder (collectively, the “Securities Laws”).

 

(b)                                             The Director represents to the
Company that his execution and performance of this Agreement shall not be in
violation of any agreement or obligation (whether or not written) that he may
have with or to any person or entity, including without limitation, any prior or
current employer. The Director hereby acknowledges and agrees that this
Agreement (and any other agreement or obligation referred to herein) shall be an
obligation solely of the Company, and the Director shall have no recourse
whatsoever against any officer, director, employee, stockholder, representative
or agent of the Company or any of their respective affiliates with regard to
this Agreement.

 

6.                                      Director Covenants.

 

(a)                                             Unauthorized Disclosure. The
Director agrees and understands that in the Director’s position with the
Company, the Director has been and will be exposed to and receive information
relating to the confidential affairs of the Company, including, but not limited
to, technical information, business and marketing plans, strategies, customer
information, other information concerning the Company’s products, services,
promotions, development, financing, expansion plans, business policies and
practices, and other forms of information considered by the Company to be
confidential, and proprietary and in the nature of trade secrets. The Director
agrees that during the Directorship Term and thereafter, subject to his
fiduciary duties, the Director will keep such information confidential and will
not disclose such information, either directly or indirectly, to any third
person or entity without the prior written consent of the Company; provided,
however, that (i) the Director shall have no such obligation to the extent such
information (A) is or becomes publicly known or generally known in the Company’s
industry other than as a result of the Director’s breach of his obligations
hereunder, (B) is lawfully obtained from a source other than the Company that
was not under, and did not impose, an obligation of confidentiality with respect
to such information;

 

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(C) is independently developed by Director or his Affiliates without violating
any of his obligations under this Agreement; and (D) is or becomes known by the
Director other than through disclosure by the Company in the course of the
Directorship Term; and (ii) the Director may, after giving prior notice to the
Company to the extent practicable under the circumstances, disclose such
information to the extent required by applicable laws or governmental
regulations or judicial or regulatory process. This confidentiality covenant has
no geographical or territorial restriction. Upon termination of the Directorship
Term, the Director will promptly destroy all property, keys, notes, memoranda,
writings, lists, files, reports, customer lists, correspondence, tapes, disks,
cards, surveys, maps, logs, machines, technical data, other product or document,
and any summary or compilation of the foregoing, in whatever form, including,
without limitation, in electronic form, which has been produced by, received by
or otherwise submitted to the Director in the course or otherwise as a result of
the Director’s position with the Company during or prior to the Directorship
Term, provided that the Company shall retain such materials and make them
available to the Director if requested by him in connection with any litigation
against the Director under circumstances in which (i) the Director demonstrates
to the reasonable satisfaction of the Company that the materials are necessary
to his defense in the litigation and (ii) the confidentiality of the materials
is preserved to the reasonable satisfaction of the Company.

 

(b)                                              Company Policies. Director
acknowledges that he has received and reviewed a copy of the Company’s Code of
Business Conduct and Ethics, and its Supplemental Securities Trading Policy for
Officers, Directors and Key Employees (the “Policies”), and understands and
agrees that he will strictly comply with all the requirements of the Policies
during the Directorship Term and so for so long thereafter as specifically
required by the Policies, including without limitation the provisions thereof
concerning unauthorized communication of internal Company information to third
parties, including responses to inquiries by the financial press, investment
analysts, investors, or other members of the financial community.

 

(c)                                              Non-Solicitation. During the
Directorship Term and for a period of two (2) years thereafter, the Director
shall not interfere with the Company’s relationship with, or endeavor to entice
away from the Company, any person who, on the date of the termination of the
Directorship Term and/or at any time during the one year period prior to the
termination of the Directorship Term, was an employee or customer (including
those reasonably expected to be a customer) of the Company or otherwise had a
material business relationship with the Company.

 

(d)                                             Remedies. The Director agrees
that any breach of the terms of this Section 6 could result in irreparable
injury and damage to the Company for which the Company could have no adequate
remedy at law. The Director therefore also agrees that in the event of said
breach or any threat of breach, the Company shall be entitled to seek an
immediate injunction and restraining order to prevent such breach and/or
threatened breach and/or continued breach by the Director and/or any and all of
his affiliates, without having to prove damages or paying a bond, in addition to
any other remedies to which the Company may be entitled at law or in equity. The
terms of this paragraph shall not prevent the Company from pursuing any other
available remedies for any breach or threatened breach hereof, including, but
not limited to, the recovery of damages from the Director. The Director
acknowledges that the Company would not have entered into this Agreement had the
Director not agreed to the provisions of this Section 7.

 

(e)                                              Survival. The provisions of
this Section 6 shall survive any termination of the Directorship Term, and the
existence of any claim or cause of action by the Director against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of the covenants and agreements of
this Section 6.

 

7.                                      Non-Waiver of Rights. The failure to
enforce at any time the provisions of this Agreement or to require at any time
performance by the other party hereto of any of the provisions hereof shall in
no way be construed to be a waiver of such provisions or to affect either the
validity of this Agreement or any part hereof, or the right of either party
hereto to enforce each and every provision in accordance with its terms. No
waiver by either party hereto of any breach by the other party hereto of any
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions at that time or at any prior or
subsequent time.

 

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8.                                      Notices. Every notice relating to this
Agreement shall be in writing and shall be given by personal delivery, overnight
delivery or by registered or certified mail, postage prepaid, return receipt
requested; to:

 

If to the Company:

 

Chairman of the Board

Osiris Therapeutics, Inc.

7015 Albert Einstein Drive Columbia, MD 21046

 

with a copy (which shall not constitute notice) to:

 

General Counsel

Osiris Therapeutics, Inc.

7015 Albert Einstein Drive Columbia, MD 21046

 

If to the Director:

 

Thomas M. Brandt, Jr. 474 Old Orchard Circle Millersville, MD 21108

 

with a copy (which shall not constitute notice) to:

 

Clifford Geiger

Kollman & Saucier, P.A.

1823 York Road

The Business Law Building Timonium, Maryland 21093

 

Either of the parties hereto may change their address for purposes of notice
hereunder by giving notice in writing to such other party pursuant to this
Section 10.

 

9.                                      Binding Effect/Assignment. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, personal representatives, estates,
successors (including, without limitation, by way of merger) and assigns, as
applicable. Notwithstanding the provisions of the immediately preceding
sentence, neither the Director nor the Company shall assign all or any portion
of this Agreement without the prior written consent of the other party.

 

10.                               Entire Agreement. This Agreement sets forth
the entire understanding of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements, written or oral, between them
as to such subject matter.

 

11.                               Severability. If any provision of this
Agreement, or any application thereof to any circumstances, is invalid, in whole
or in part, such provision or application shall to that extent be severable and
shall not affect other provisions or applications of this Agreement.

 

12.                               Governing Law. This Agreement shall be
governed by and construed m accordance with the laws of the State of Maryland,
without reference to the principles of conflict of laws. Neither party hereto
shall commence any action or proceeding arising out of or relating to this
Agreement unless prior thereto the parties have in good faith attempted to
resolve the claim, dispute or cause of action which is the subject of such
action or proceeding through mediation by an independent third party.

 

13.                               Modifications. Neither this Agreement nor any
provision hereof may be modified, altered, amended or waived except by an
instrument in writing duly signed by the party to be charged.

 

14.                               Tense and Headings. Whenever any words used
herein are in the singular form, they shall be construed as though they were
also used in the plural form in all cases where they would so apply. The
headings

 

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contained herein are solely for the purposes of reference, are not part of this
Agreement and shall not in any way affect the meaning or interpretation of this
Agreement.

 

15.                               Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed to be an original but
all of which together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the Company has caused this Director Agreement to be
executed by authority of its Board of Directors, and the Director has hereunto
set his hand, on the day and year first above written.

 

 

Osiris Therapeutics, Inc.

 

 

 

 

 

 

By:

/S/ ADRIAN MOLLO

 

 

 

 

 

DIRECTOR

 

 

 

 

 

/S/ Thomas M. Brandt, Jr.

 

Thomas M. Brandt, Jr

 

 

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