Document:

Exhibit 4.1

 

	
  NUMBER

  738

  	
   

  	
  SHARES

  0

  

 

 

Incorporated
under the laws of the State of Delaware

OSIRIS
THERAPEUTICS, INC.

Total
Authorized Shares

90,000,000
Shares, $.001 Par Value

Common
Stock

 

 

This
Certifies That
                     Specimen                      is the

registered holder of                         **
**                        
Shares

transferable only on the books of the Corporation by the holder hereof in

person or by Attorney upon surrendering of this Certificate properly endorsed.

In Witness Whereof, the said Corporation has caused this Certificate to be
signed

by its authorized officers and its Corporate Seal to be hereunto affixed.

 

	
  Dated:    July 14, 2006

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  President
  & CEO

  	
   

  	
  Secretary

  

 

 

NOTICE:  THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY
PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.

 

The
following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

	
  TEN COM

  	
  - as tenants in common

  	
   

  	
  UNIF GIFT MIN ACT - . . . . . .
  Custodian . . . . . . .

       
  (Cust)                     (Minor)

  
	
  TEN ENT

  	
  - as tenants by the entireties

  	
   

  	
  under Uniform gifts to Minors

  Act  . . . . . . . . . . . . . . . . 
                (State)

  
	
  JT TEN

  	
  - as joint tenants with right
  of survivorship and not as tenants in common

  	
   

  	
   

  

Additional
abbreviations may also be used though not in the above list

For value received                            
hereby sell, assign and transfer unto

 

PLEASE INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF ASSIGNEE

	
   

  	
   

  
	
   

  	
   

  
	
  (PLEASE PRINT OR TYPEWRITE NAME
  AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE)

  
	
   

  	
   

  

 

                                                                                                                                                                    
Shares

represented by the within Certificate, and do hereby irrevocably constitute and
appoint

                                                                                                                                                                 
Attorney

to transfer the said Shares on the books of the within named Corporation with
full power of substitution in the premises.

Dated                                                                                                     

In
presence of

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

The Corporation is authorized to
issue more than one class of stock.  The
Corporation will furnish without charge to each stockholder upon written
request the full text of the preferences, voting powers, qualifications and
special and relative rights of the shares of each class of stock (and any
series thereof) authorized to be issued by the Corporation as set forth in the
Certificate of Incorporation of the Corporation and amendments thereto filed
with the secretary of State of the State of Delaware.Exhibit
10.36

 

EMPLOYMENT AGREEMENT

 

                This
EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of the 31 day of July,
2006, (the “Effective Date”) by and between Osiris Therapeutics, Inc., a
Delaware corporation (the “Company”), and Lode Debrabandere, (the “Executive”).

 

WHEREAS, the Company desires to employ the
Executive, and the Executive desires to be employed by the Company, on the
terms and conditions set forth herein from
and after July 31, 2006; and

 

WHEREAS, the board of directors of the Company (the
“Board”) has approved and authorized the
entry into this Agreement with the Executive.

 

NOW, THEREFORE, in consideration of the mutual
covenants and agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged,
the parties hereto agree as follows:

 

1.         Employment
Agreement. On the terms and conditions set forth in this Agreement, the
Company agrees to employ the Executive and the Executive agrees to be employed
by the Company for the Employment Period set forth in Section 2 hereof and in
the position and with the duties set forth in Section 3 hereof.

 

2.         Term. The
initial term of employment under this Agreement shall be for a three-year
period commencing on the date hereof (the “Initial Term”). The term of
employment shall be automatically renewed for an additional consecutive
12-month period (the “Extended Term”) as of the third and every subsequent
anniversary of the date hereof, unless and until either party provides written
notice to the other party in accordance with Section 11 hereof not less than 90
days before such anniversary date that such party is terminating the term of
employment under this Agreement, which termination shall be effective as of the
end of such Initial Term or Extended Term, as the case may be, or until such
term of employment is otherwise terminated as hereinafter set forth. Such
Initial Term and all such Extended Terms are collectively referred to herein as
the “Employment Period.” The parties’ obligations under Sections 6, 8, 9, and
10 hereof shall survive the expiration or termination
of the Employment Period.

 

3.         Position and Duties.
The Executive shall initially serve as Vice President and General Manager for Inflammatory
Diseases during the Employment Period. As such, the Executive shall render
executive policy and other management

 

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services
to the Company of the type customarily performed by persons serving in a
similar, officer capacity, and shall perform the other duties and objectives as
the CEO may determine from time to time. The Executive shall report to the
CEO.  Objectives of the Executive may be
amended by the CEO from time to time. 
The Executive shall devote the sufficient efforts and working time to
the performance of the Executive’s duties and the advancement of the business and affairs of the Company.

 

4.         Compensation.

 

(a) Base
Salary. During the Employment Period, the Company
shall pay to the Executive an annual base salary (the “Base Salary”), which
initially shall be at the rate of USD 225,000 per year. The Base Salary shall
be reviewed no less frequently than annually and may be increased at the
discretion of the Board. When the Executive’s Base Salary is increased, the increased amount shall be the Base
Salary for the next 12-month period. Except as otherwise agreed in
writing by the Executive, the Base Salary shall not be reduced from the amount
previously in effect during the Employment
Period. The Base Salary shall be payable semimonthly or in such other
installments as shall be consistent with the Company’s payroll procedures.

 

(b) Bonus. At the discretion of the Board, the
Executive will be eligible to earn a bonus for 2006 in the amount of USD
40,000. The bonus amount will depend upon performance against mutually agreed
targets.

 

(c) Benefits. During the
Employment Period, the Executive will be entitled to such other benefits
approved by the Board and made available to employees generally. Nothing
contained in this Agreement shall prevent the Company from changing insurance
carriers or from effecting modifications in insurance coverage or other
employee benefits that impact Executive.

 

(d) Leave
Time: The Executive shall be entitled to all public
holidays observed by the Company and per Company policy as determined by the
Board, and twenty vacation days in accordance with the applicable vacation
policies for senior executives of the Company, which shall be taken at a
reasonable time or times so as not to negatively impact the operations of the
Company. A maximum of 10 unused vacation
days may be carried over for twelve months after the year in which they accrue.

 

(e) Withholding Taxes and
Other Deductions. To the extent required
by law, the Company shall withhold from any payments due Executive under this Agreement any applicable federal, state
or local taxes and such other deductions
as

 

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are prescribed by law or Company
policy.

 

(f)
Equity. Upon the effective date of the Agreement, the Executive shall be
granted non-qualified stock options to purchase 75,000 split-adjusted shares of
the Company common stock at the price of
$6.84 per split-adjusted share. The
options shall vest ratably, one-fourth on each anniversary of the Effective
Date for four consecutive years until fully vested.  Upon mutual agreement of the Board and the
Executive, stock grants or similar instruments may be substituted in place of
stock options.  In any event, all
unvested shares will vest immediately upon a “Change of Control”, of the
Company as defined below.

 

(g)
Relocation.  The Company will
reimburse or advance all reasonable and necessary costs and expenses associated
with the relocation of Executive and his family to the Baltimore, Maryland area
to include: extension of transition period, if needed, incurred closing costs,
real estate commissions, and packaging, moving, and temporary storage services
up to a total of USD 100,000.  The
Company will take into account the tax consequences of any non-deductible monies,
such that all reimbursements or items of imputed income will be “grossed up” to
cover the state and federal tax liabilities associated with such payments. All
reimbursements for actual expenses shall be made within thirty (30) days of the
presentment of invoices for same or advanced where appropriate.

 

During
the transition period of Executive’s move to Maryland, the Company shall also
provide, for a period of up to twelve (12) months, the following temporary
executive housing and travel reimbursements and advances: (i) temporary
executive housing in the Baltimore area; (ii) transportation costs to and from
Baltimore. Total reimbursement for this transition period shall not exceed USD
40,000.  As with the relocation expenses,
the temporary living expenses will be “grossed up” to cover any state and
federal tax liabilities associated with such payments.

 

5.         Expenses.  The
Executive’s expenses incurred in the performance of his duties hereunder,
including the costs of travel, and similar business expenses incurred shall be
reimbursed by the Company promptly in accordance with Company expense policies
upon periodic presentation by the Executive of an itemized account of such
expenses, with appropriate documentation, which shall be reviewed by the audit
committee from time to time at its discretion.

 

6.                        Confidentiality: Work Product.

 

(a) Information. The
Executive acknowledges that the information,

 

3

 

observations
and data obtained by the Executive concerning the business and affairs of the
Company and its Subsidiaries during the course of the Executive’s performance
of services for, or employment with, any of the foregoing Persons (whether or
not compensated for such services) are the property
of the Company and its Subsidiaries, including information concerning acquisition
opportunities in or reasonably related to the business or industry of the Company or its Subsidiaries of which the
Executive becomes aware during such period. Therefore, the Executive
agrees that he will not at any time (whether during or after the Employment
Period) disclose to any unauthorized person or, directly or indirectly, use for
the Executive’s own account or the account of any other Person, any of such
information, observations or data without the Board’s consent, unless and to
the extent that the aforementioned matters become generally known to and
available for use by the public other than as a direct or indirect result of
the Executive’s acts or omissions to act or the acts or omissions to act of
other senior or junior management employees of the Company and its
Subsidiaries. The Executive agrees to deliver to the Company at the termination of the Executive’s employment, or at any
other time the Company may request in writing (whether during or after
the Employment Period), all memoranda, notes, plans, records, reports and other
documents, regardless of the format or media (and copies thereof), relating to
the business of the Company and its
Subsidiaries and their predecessors (including, without limitation, all
acquisition prospects, lists, customer and contact information) which the Executive may then possess or have under
the Executive’s control.

 

(b)
Inventions and Patents. The Executive acknowledges that all inventions, innovations, improvements,
developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether or not patentable)
that relate to the actual or anticipated business, research and development or
existing or future products or services of the Company or its Subsidiaries that
are conceived, developed, made or reduced to practice by the Executive while
employed by the Company or any of its predecessors (“Work Product”) belong to the Company and the Executive
hereby assigns, and agrees to assign,
all of the above to the Company. Any copyrightable work prepared in whole or in part by the Executive in the course of
the Executive’s work for any of the
foregoing entities shall be deemed a “work made for hire” under the copyright laws, and the Company shall own all rights
therein. To the extent that any such copyrightable work is not a “work made for
hire,” the Executive hereby assigns and agrees to assign to the Company
all right, title and interest, including without
limitation, copyright in and to such copyrightable work. The Executive shall promptly disclose such Work Product and
copyrightable work to the Board and perform all actions reasonably
requested by the Board (whether during or after
the Employment Period) to establish and confirm the Company’s ownership (including,
without limitation,

 

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assignments, consents,
powers of attorney and other instruments).

 

 

 

7.                        Termination of Employment. Either
party my terminate employment within the first 90 days of the effective date
for any reason.

 

(a) Permitted Terminations.
The Executive’s employment hereunder may be
terminated during the Employment Period without any breach of this Agreement only under the following circumstances:

 

(i)      Death. The Executive’s employment
hereunder shall terminate upon the executive’s death;

 

(ii)                    By the Company.   The Company may terminate the Executive’s employment:

 

(A) If the Executive shall have been unable to perform all of the Executive’s duties hereunder by reason of illness, physical
or mental disability or other similar incapacity, which inability shall continue for three or more consecutive months or four or more non-consecutive months; or

 

(B)            for
the failure of Executive to satisfactorily perform the duties and the tasks of
the office held by the Executive as reasonably determined by the Board, and
such failure is not cured within 30 days after the Executive receives specific
written notice thereof from the Board; or

 

(C) for Cause; or

 

(iii)    By the Executive.   The Executive may terminate employment for Good Reason.

 

(b) Termination. 
Any termination of the Executive’s employment by the Company or
the Executive (other than because of the Executive’s death) shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 11 hereof. Termination of the Executive’s employment
shall take effect on the Date of
Termination.

 

8.      Compensation
Upon Termination.

 

(a)  Death. If the Executive’s employment
is terminated during the

 

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Employment Period as a result of the Executive’s death, the Company
shall pay to the Executive’s estate, or as may be directed by the legal
representatives of such estate, the Executive’s Base Salary prorated through
the Date of Termination and all other accrued and unpaid amounts, if any, to
which the Executive is entitled as of the
Date of Termination, and the Company shall have no further obligations
to the Executive under this Agreement.

 

(b) Disability. If the
Company terminates the Executive’s employment
during the Employment Period because of the Executive’s disability pursuant to Section 7(a)(ii)(A) hereof, the Company shall pay to the
Executive, the Executive’s Base Salary prorated through the Date of Termination
and all other accrued and unpaid amounts, if any, to which the Executive is
entitled as of the Date of Termination, and the Company shall have no further
obligations to the Executive under this
Agreement; provided, that payments so made to the Executive
during any period that the Executive is unable to perform all of the
Executive’s duties hereunder by reason of illness, physical or mental illness
or other similar incapacity shall be reduced by the sum of the amounts, if any,
payable to the Executive at or prior to the time of any such payment under disability benefit plans of the Company and which
amounts were not previously applied to reduce any such payment.

 

(c) By the Company with Cause or by the Executive
without Good Reason. If the Company terminates the Executive’s employment during the Employment
Period for Cause pursuant to Section 7(a)(ii)(C) hereof or if the Executive voluntarily terminates the Executive’s
employment during the Employment Period other than for Good Reason, the
Company shall pay the Executive the
Executive’s Base Salary prorated through the Date of Termination and all other
accrued and unpaid amounts, if any, to which Executive is entitled as of the Date of Termination, and the Company
shall have no further obligations to
the Executive under this Agreement.

 

(d) By the Company due to Lack of Performance. If the Company terminates the
Executive’s employment during the Employment Period due to
Lack of Performance pursuant to Section 7(a)(ii)(B) hereof, the Company shall
pay the Executive in a lump sum (A) the Executive’s Base Salary prorated
through the Date of Termination and all other accrued and unpaid amounts, if
any, to which the Executive is entitled as of the Date of Termination, and (B)
an aggregate amount equal to three months of the Executive’s annual Base
Salary, payable in a lump sum within 30 days from the Date of Termination, plus
all medical, life, and disability

 

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benefits, if any, Executive
had been receiving immediately preceding the termination for the six-month
period following the Date of Termination (the “Severance Period”), provided
such medical, life, and disability benefits shall be subject to the mitigation
obligations in Section 8(e) below (the “Severance Payments”), and the Company
shall have no further obligations to the Executive under this Agreement.

 

(e) By the Company without Cause or by the
Executive for Good Reason. If the Company terminates the Executive’s
employment during the Employment
Period other than for Cause, Lack of Performance, disability or death pursuant
to Section 7(a)(i) or (ii) hereof, or the Executive terminates his
employment during the Employment Period for Good Reason pursuant to Section
7(a)(iii) hereof, the Company shall pay the
Executive in a lump sum (A) the Executive’s Base Salary prorated through
the Date of Termination and all other accrued and unpaid amounts, if any, to which the Executive is
entitled as of the Date of Termination, and (B) an aggregate amount equal to six months of the Executive’s Base
Salary, payable in a lump sum within 30 days from the Date of Termination, plus
all medical, life, and disability benefits, if any, Executive had been
receiving immediately preceding the termination for six months period following
the Date of Termination (the “Severance Period”), provided such medical, life,
and disability benefits shall be subject to the mitigation obligations in
Section 8(e) below (the “Severance Payments”), and the Company shall have no
further obligations to the Executive under this Agreement.

 

 

(f) Mitigation. The
Company’s obligation to continue to provide the
Executive with medical, life, and disability benefits pursuant to Section 8(d) and (f)
above shall cease if the Executive becomes eligible to participate in benefits similar to those provided under this Agreement
as a result of the Executive’s subsequent employment, whether as part of
an organization or as an independent consultant, during the period that the Executive is entitled to receive such benefits.

 

(g)
Release. The Executive agrees that, except for such other payments and benefits to which the Executive may
be entitled as expressly provided by the terms of this Agreement or any
applicable employee benefit plan, the Severance
Payments set forth above shall be in lieu of all other claims that the Executive may make by reason of termination of
his employment or any such breach of
this Agreement and that, as a condition to receiving the Severance Payments, the Executive will execute a
release of claims in a form
reasonably satisfactory to the Company.

 

(h) Effect on other
Benefits. Except as specifically provided in this
Agreement, no compensation or other benefits are guaranteed beyond the Date of Termination or termination of this Agreement.

 

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9.    Noncompetition
and Nonsolicitation.

 

(a)
Noncompetition. The Executive acknowledges that in the course of his
employment with the Company and its Subsidiaries, he has and will continue to become familiar with the trade
secrets of, and other confidential information concerning, the Company
and its Subsidiaries, that the Executive’s services will be of special, unique
and extraordinary value to the Company and its
Subsidiaries and that the Company’s ability to accomplish its purposes and to successfully
pursue its business plan and compete in the marketplace depend substantially on
the skills and expertise of the Executive. Therefore, and in further consideration of the compensation being
paid to the Executive hereunder, the Executive agrees that, during the
Employment Period and any Severance Period, although in no event less than two
(2) years from the Date of Termination, so long as Severance Payments are made
or have been made in accordance with this
Agreement (the “Noncompete Period”), he shall not directly or indirectly
own, manage, control, participate in, consult with, render services for, or in
any manner engage in, any business competing with the Business of the Company
or its Subsidiaries in any country where the Company or its Subsidiaries
conducts business, or plans to conduct business, provided such plans have been
communicated to Executive. For purposes of this Section 11, the “Business” shall mean all commercial or
therapeutic use that involves mesenchymal stem cells (MSCs) or cells
substantially similar to mesenchymal stem cells, that is, a homogeneous
population of cells that can differentiate along more than one connective
tissue lineage as long, regardless of the source; all commercial efforts to
deliver or improve the delivery of MSCs for therapeutic purposes; all
commercial efforts that would seek to enhance the endogenous in vivo population
of MSCs in the body by pharmaceutical or chemical means; any other effort to commercially
compete with Osiris to which the Executive has confidential knowledge.  (to cover hiring, business partnerships,
vendor relationships, etc.).  Executive
acknowledges that this covenant has a
unique, very substantial and immeasurable value to Company, that
Executive has sufficient assets and skills to provide a livelihood for himself while such covenant remains in force.

 

(b)
Nonsolicitation. During the Employment Period and for two (2) years following the Date of Termination,
the Executive shall not directly or indirectly through another entity (i)
induce or attempt to induce any employee of the Company or any Subsidiary to leave the employ of the Company or
such Subsidiary, or in any way willfully interfere with the relationship
between the Company or any Subsidiary and any employee thereof or (ii) induce
or attempt to

 

8

 

induce any customer,
supplier, licensee or other business relation of the Company or any Subsidiary
to cease doing business with the Company or such Subsidiary, or in any way
interfere with the relationship between any such customer, supplier, licensee
or business relation and the Company or any Subsidiary.

 

(c) Revision of
Restrictions. If, at the time of enforcement of this Section 9, a court
holds that the restrictions stated herein are unreasonable under circumstances
then existing, the parties hereto agree that the maximum duration, scope or
geographical area reasonable under such circumstances shall be substituted for
the stated period, scope or area and that the court shall be allowed to revise
the restrictions contained herein to cover the maximum duration, scope and area permitted by law.

 

10. Enforcement. The
Executive acknowledges that the restrictions imposed on him by Section 6(a),
6(b) and 9 are reasonable and necessary, in view of the nature of the Company’s
business, the nature of the services to be provided by the Executive and the
Executive’s access to confidential information of the Company, to protect the
legitimate interests of the Company and that any breach or threatened breach of
any provision thereof will cause irreparable injury to the Company and that
money damages will not provide an adequate remedy therefore. Therefore, in the
event a breach or threatened breach by the Executive of any provision of
Section 6(a), 6(b) or 9, the Company shall be entitled to obtain from any court
of competent jurisdiction, in addition to any and all other rights and remedies
existing in its favor, an order of specific performance and/or preliminary or
permanent injunctive relief in order to enforce, or prevent any violations of,
such provision (without posting a bond or other security).

 

11. Notices. All notices, demands,
requests or other communications required or permitted to be given or made
hereunder shall be in writing and shall be delivered, telecopied or mailed by
first class registered or certified mail, postage prepaid, addressed as
follows:

 

	
   

  	
  (a)

  	
  If to the Company;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Osiris Therapeutics, Inc.

  
	
   

  	
   

  	
  2001 Aliceanna St.

  
	
   

  	
   

  	
  Baltimore, MD 21231

  
	
   

  	
   

  	
  ATTN: CEO

  
	
   

  	
   

  	
  Fax:
  410-563-0794

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  If
  to the Executive:

  

 

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  Lode
  Debrabandere

  
	
   

  	
   

  	
  12
  Glenwood Drive

  
	
   

  	
   

  	
  Pennington,
  NJ 08534

  

 

 

or to such other address as may be designated
by either party in a notice to the other.
Each notice, demand, request or other communication that shall be given or
made in the manner described above shall be deemed sufficiently given or made
for all purposes three days after it is deposited in the U.S. mail, postage
prepaid, or at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, the answer back or
the affidavit of messenger being deemed conclusive evidence of such
delivery) or at such time as delivery is refused
by the addressee upon presentation.

 

12. Severability. The
invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability of
the other provisions of this Agreement, which shall remain in full force and effect.

 

13. Survival.
It is the express intention and agreement of the parties hereto that the
provisions of Sections 6, 8, 9, and 10 hereof shall survive the termination of
employment of the Executive. In addition, all obligations of the Company to
make payments hereunder shall survive any termination of this Agreement on the terms and conditions set forth
herein.

 

14. Assignment. The
rights and obligations of the parties to this Agreement shall not be assignable
or delegable, except that (i) in the event of the Executive’s death, the
personal representative or legatees or distributes of the Executive’s estate,
as the case may be, shall have the right to receive any amount owing and unpaid
to the Executive hereunder and (ii) the rights and obligations of the Company
hereunder shall be assignable and delegable in connection with any subsequent
merger, consolidation, sale or other transfer of all or substantially all of the assets of the Company or similar
reorganization of a successor corporation.

 

15. Binding Effect.  Subject to any provisions hereof restricting
assignment, this Agreement shall be binding upon the parties hereto and shall
inure to the benefit of the parties and their respective heirs, devisees, executors, administrators, legal representatives,
successors and assigns.

 

16. Amendment: Waiver.
This Agreement shall not be amended, altered or modified except by an
instrument in writing duly executed by the parties
hereto. Neither the waiver by either of the parties hereto of a breach of or a
default under any of the provisions of this Agreement, nor the failure of either of the parties, on

 

10

 

one or more occasions,
to enforce any of the provisions of this Agreement or to
exercise any right or privilege hereunder, shall thereafter be construed as a
waiver of any subsequent breach- or default of a similar nature, or as a waiver of any such provisions,
rights or privileges hereunder.

 

17. Headings.
Section and subsection headings contained in this Agreement are inserted for
convenience of reference only, shall not be deemed to be a pan of this
Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the
provisions hereof

 

18. Governing
Law. This Agreement, the rights and obligations of the parties hereto, and
any claims or disputes relating thereto, shall be governed by and construed in
accordance with the laws of the State of Delaware (but not including the choice
of law rules thereof), and the parties irrevocably
consent to the personal jurisdiction of the state and federal courts in Delaware.

 

19. Entire Agreement: Agreement Replaced. This
Agreement constitutes the entire
agreement between the parties respecting the employment of Executive, there being no representations,
warranties or commitments except as set forth herein.

 

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

 

21. Attorney’s Fees. In the case of a formal
dispute hereunder brought in
any forum of competent jurisdiction, the prevailing party shall be entitled to recover from the non-prevailing party, all
reasonable legal fees, and expense and costs incurred in connection with such dispute, including
any appeal therefrom.

 

22. Furtherance of Agreement. Executive agrees to
execute any documents
or take any other actions reasonably necessary or otherwise requested by Company to effectuate the intent of all provisions
under this Agreement.

 

23.                    Definitions.

 

“Agreement” means this Employment Agreement. 

 

“Base Salary” is defined in Section
4(a) above.

 

“Beneficial Owner” means a beneficial owner within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934, as amended.

 

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“Board” means the board of directors of the Company. 

 

“Business” is defined in Section 9
above.

 

“Cause” means (i) the commission of a felony or a crime
involving moral turpitude or the commission of any other act or omission
involving dishonesty or fraud with respect to the Company or any of its Subsidiaries or any of their customers or
suppliers, (ii) conduct tending to bring the Company or any of its
Subsidiaries into substantial public disgrace or disrepute, (iii) gross negligence or willful misconduct with
respect to the Company or any of its Subsidiaries or (iv) any breach of a
material Section of this Agreement.

 

“Change of Control” means if Friedli Corporate
Finance and its affiliates control less than 33% of the Company.

 

“Code”   means  
the   Internal   Revenue  
Code   of 1986,   as amended,
and the regulations thereunder.

 

 

“Company” means
Osiris Therapeutics, Inc., its subsidiaries, affiliates,
and its successors and assigns.

 

“Date of Termination” means (i) if the Executive’s employment is
terminated by the Executive’s death, the date of the Executive’s death; (ii) if
the Executive’s employment is terminated because of the Executive’s
disability pursuant to Section 7(a)(ii)(A)
hereof, the effective date of Notice of Termination; (iii) if the
Executive’s employment is terminated by the Company for Lack of Performance
pursuant to section 7(a)(ii)(B), or for Cause pursuant with section 7(a)(ii)(C)
hereof or by the Executive for Good Reason pursuant to section 7(a)(iii)
hereof, the date specified in the Notice of Termination; or (iv) if the
executive’s employment is terminated during the Employment Period other than
pursuant to section 7(a), the date on which the notice of Termination is given.

 

“Effective Date” means
July 31, 2006.

 

“Employment Period” is defined in Section 2 above.

 

“Executive” means
Lode Debrabandere

 

“Extended Term” is
defined in Section 2 above.

 

12

 

“Good Reason” means
(i) the Company’s failure to perform or observe any of the material
terms or provisions of this Agreement, and the continued failure of the Company
to cure such default within 30 days after written demand for performance has
been given to the Company by the Executive, which demand shall describe
specifically the nature of such alleged failure to perform or observe such
material terms or provisions; (ii) a material reduction in the scope of the
Executive’s responsibilities and duties; or (iii) in the absence of a written
agreement between Company and Executive, a material
reduction in Executive’s base pay or incentive compensation.

 

“Initial Acquirer” means any individual, or
entity organized under the laws of any jurisdiction for the purpose of
investing in securities of entities engaged
in the Business.

 

“Initial Term” is
defined in Section 2 above.

 

“Lack of Performance” means the failure of Executive to satisfactorily perform the duties and
the tasks of the office held by the Executive as reasonably determined by the
Board, and such failure is not cured within 30 days after the executive
receives specific written notice thereof from the Board.

 

“Noncompete Period” is defined in Section 9(a)
above.

 

“Notice of Termination” is defined in Section 7(b) above.

 

“Person” means
an individual, a partnership, a limited liability company, a
corporation, an association, a joint stock company, a trust, a joint venture,
an unincorporated organization and a governmental entity or any department, agency or political subdivision
thereof.

 

“Severance Payments” is defined in Section 8(d)
and (e) above.

 

“Severance Period” is
defined in Section 8(d) and (e) above.

 

“Subsidiary” means any corporation of which the Company owns
securities having a majority of the ordinary voting power in electing the board of directors directly or through one or more
subsidiaries.

 

“Work Product” is
defined in Section 6(b) above.

 

13

 

IN WITNESS WHEREOF, the
undersigned have duly executed this Agreement, or have caused this Agreement to
be duly executed on their behalf, as of the
day and year first hereinabove written.

 

	
   

  	
  Osiris
  Therapeutics, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ C. Randal Mills

  
	
   

  	
   

  	
   

  
	
   

  	
  Name: C. Randal Mills

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: President & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  July
  25, 2006

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  The Executive:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Lode Debrabandere

  
	
   

  	
  Lode Debrabandere

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  July
  25, 2006

  
					

 

14

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