Exhibit
      10.4

     

    UNSECURED
      CONVERTIBLE PROMISSORY
      NOTE

     

    THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
      REGISTERED OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS AND THEREFORE
      THESE SECURITIES MAY NOT BE TRANSFERRED WITHOUT REGISTRATION THEREUNDER OR
      PURSUANT TO AN EXEMPTION FROM REGISTRATION.
      

     

    
      	$1,100,000 	
              Los
                Angeles,
                California

            


    

     

    FOR
      VALUE RECEIVED,
      Osage
      Exploration and Development, Inc.,
      a
      Delaware corporation (hereinafter called the "Borrower"),
      hereby
      promises to pay to the order
      of
      the Marie
      Baier Foundation, a
      California foundation,
      or its
      assigns
      (the
"Holder") at
      _____________, ____________, California ________ the principal
      amount
      of
One
      Million One Hundred Thousand Dollars ($1,100,000),
      together
      with
interest
      thereon as provided below. Subject to Section 1.6 hereof, all
      payments
      shall be in lawful currency of the United States of America. Holder acknowledges
      that this Unsecured
      Convertible Promissory Note (this “Note”)
      is an
      unsecured obligation of the Borrower.

     

    The
      following terms shall apply to this Note:

     

    ARTICLE
      I

    PAYMENT
      AND
      DEFAULT RELATED
      PROVISIONS

     

     

    1.1    Payment.
      On
      September 30, 2008 (the
      “Maturity Date”),
      unless
      previously paid, and except to the extent previously converted as provided
      herein, the entire principal amount of this Note shall be due and payable in
      full. Interest hereunder
      shall be
      due and payable quarterly
      on each September 30, December 31,
      March
31
      and
      June 30,
commencing
      September 30, 2007,
      each Conversion Date (as defined below) (as to the principal amount then being
      converted) and on the Maturity Date
      (collectively, the “Interest
      Payment Dates”).
      All
      payments to be made under this Note shall be made to Holder at its address
      stated
above
      in
      the
introductory
      paragraph
      of this
      Note, or at such other address or, if by wire, such other bank account, as
      may
      be designated in writing by Holder from time to time. 

     

    1.2    Interest
      Rate.
      Interest shall
      accrue on the outstanding principal balance of this Note
      at the
      annual rate of
      eight
      percent (8%);
      provided, however, that if, and for so long as, any payment of interest or
      principal is not received by the Holder when the same is due hereunder or other
      “Event of Default” (as hereinafter defined) shall have occurred and be
      continuing, interest hereunder shall be increased to the lesser of eighteen
      percent (18%) per annum or the maximum rate permitted by law.
      Interest
      under
      this Note shall be calculated on the basis of a 360-day year for the actual
      days
      elapsed.

     

    1.3    Order
      of Payments. All
      payments made by Borrower hereunder (including, without limitation, any
      prepayments) shall be applied, first, to the payment of costs or expenses
      payable by Borrower hereunder, second, to the payment of accrued but unpaid
      interest (including default interest), and last, to the reduction of the
      outstanding principal balance thereof.

     

    1.4    No
      Setoff or Counterclaim.
      All
      payments under
      this Note
      shall be
      made to the
      Holder
      without set-off, recoupment,
      counterclaim or other deduction whatsoever.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    1.5    Waiver
      of Presentment and Enforcement.  
      All
      parties now or subsequently liable with respect to this Note, whether maker,
      principal, surety, guarantor, endorser or otherwise, hereby waive presentation
      for payment, demand, notice of nonpayment or dishonor, protest and notice of
      protest and any and all lack of diligence or delay in collection or enforcement
      hereof.

     

    1.6    Payment
      at Maturity.
      Borrower
      may elect
      to
      pay at the Maturity Date (and only at the Maturity Date) all or any portion
      of
      the outstanding principal balance of this Note either
      in
      cash or by
      the
      issuance of units of securities
      of Borrower,
      each
      unit (“Unit”)
      consisting of one share of common stock of
      Borrower (“Common
      Stock”) and
      one
      warrant to purchase one share
      of
      common stock of Borrower,
      exercisable for three years from the date of issuance, at an initial
      exercise
      price of
      $1.25
and
      otherwise in the form of the Warrant attached hereto as Exhibit 1 (“Warrant”),
      subject
      to adjustment as provided below, or by a combination of cash and Units. Each
      Unit shall be valued for this purpose at an initial value of $1.00, subject
      to
      adjustment as provided below in this Section 1.6 and in Article II. Thus, on
      the
      Maturity Date of this Note,
      1,100,000 Units may be used to pay principal amount outstanding if no principal
      payments shall
      have been
      made on
      the Note prior to Maturity
      and no
      adjustments shall have been made to the value of a Unit.
      If
      Borrower elects to repay
      the
      principal balance of this Note
      with
      Units, Borrower shall so
      notify
      the
      Holder
at
      least
      30
      days
      prior to the
      Maturity Date.
      If,
      at any time after the date hereof, Common stock is changed by reason of a stock
      split, reverse stock split, stock dividend, recapitalization, combination,
      reclassification, spin-off or similar event, in addition to the adjustments
      called for in Article II an appropriate adjustment shall be made in the value
      of
      the Units for purposes of this Section 1.6. The exercise price of the Warrants
      made part of the Units shall be subject to adjustment as provided in the
      Warrants.

     

    ARTICLE
      II

    CONVERSION
      RIGHTS

     

    


    2.1    Conversion
      into the Borrower's Common Stock.

     

    (a)    The
      Holder shall have the right, but not the obligation, upon
      delivery to
      the
      Borrower 
      of the
      Holder’s written request for conversion (a “Notice
      of
      Conversion”)
      at any
      time and from time to time until this Note is fully paid, to convert all or
      any
      portion of the outstanding
      principal
      balance
      and accrued and unpaid interest on
      this
      Note set forth in each such Notice of Conversion into
      Units at the Conversion Price (as
      defined in Section 2.1(b).
      The
      Borrower shall issue
      to the
      Holder within fifteen (15) business days from the date
      of
      delivery of a Conversion Notice (the “Conversion
      Date”)
      that
      number of Units
      determined by dividing that portion of the outstanding
      balance
      of
this
      Note to
      be converted by
      the
      Conversion Price.

     

    (b)    Subject
      to adjustment as set forth in this
      Section
      2.1,
the
      conversion
      price shall be equal to $1.00
      (the
“Conversion
      Price”).
      It
      is
      understood that the securities
      to be
      issued to Holder shall be restricted, and that there is little to no liquidity
      or resale market in the securities.
      The
      Holder shall be entitled to customary “piggy-back” registration rights
with
      respect to any and all Units and Common Stock, Warrants and other securities
      made part of such Units, and all Common Stock underlying such Warrants or other
      securities, issued to the Holder under this Note.

     

    (c)    If
      the
      Borrower at any time shall consolidate with or merge into or sell or convey
      all
      or substantially all its assets to any other person or entity, this Note, as
      to
      the unpaid principal portion thereof and accrued interest thereon, shall
      thereafter be deemed to evidence the right to purchase such number and kind
      of
      shares and warrants or other securities and property as would have been issuable
      or distributable on account of such consolidation, merger, sale or conveyance,
      upon or with respect to the securities subject to the conversion or purchase
      right immediately prior to such consolidation, merger, sale or conveyance.
      The
      foregoing provision shall similarly apply to successive transactions of a
      similar nature by any such successor or purchaser. Without limiting the
      generality of the foregoing, the anti-dilution provisions of this Section shall
      apply to such securities of such successor or purchaser after any such
      consolidation, merger, sale or conveyance. 

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (d)    If
      the
      Borrower at any time shall, by reclassification or otherwise, change the Common
      Stock into the same or a different number of securities of any class or classes,
      this Note, as to the unpaid principal portion thereof and accrued interest
      thereon, shall thereafter be deemed to evidence the right to purchase an
      adjusted number of such securities and kind of securities as would have been
      issuable as the result of such change with respect to the Common Stock and
      Warrants immediately prior to such reclassification or other
      change.

     

    (e)    If
      the
      shares of Common Stock are subdivided or combined into a greater number
      of
      shares of Common Stock, or if a dividend is paid on the Common Stock in shares
      of Common Stock, the Conversion Price shall be proportionately reduced in case
      of subdivision of shares or stock dividend or proportionately increased in
      the
      case of combination of shares, in each such case by the ratio which the total
      number of shares of Common Stock outstanding immediately after such event bears
      to the total number of shares of Common Stock outstanding immediately prior
      to
      such event. In the event that the number of shares is reduced to a smaller
      number of shares as in a stock reverse, the conversion price shall remain the
      same pursuant to the provisions of 2.1(b).

     

    (f)    The
      Borrower
shall
      reserve
at
      all
      times out of
      its
      authorized and unissued Common Stock a sufficient number of shares to provide
      for the issuance of all
      Common
      Stock
      issuable
      upon the full conversion of this Note and upon the exercise, in full, of all
      Warrants issuable
      upon the
      full conversion of this Note. The Borrower represents that upon issuance,
all
      such
      Common
      Stock
      will be
      duly and validly issued, fully paid and non-assessable. The Borrower agrees
      that
      its issuance of this Note shall constitute full authority to its officers,
      agents, and transfer agents who are charged with the duty of executing and
      issuing stock certificates to execute and issue the necessary certificates
      for
      shares of Common Stock and Warrants upon the conversion of this
      Note.

     

    2.2    Method
      of
      Conversion. This Note may be converted by the Holder in whole or in part as
      described in Section 2.1.
      Upon
any
      partial
      conversion of this Note, the
      remaining balance outstanding
      of
      this
      Note
      will
      remain in full force and effect.

     

    ARTICLE
      III

    EVENT
      OF DEFAULT

     

    The
      occurrence of any of the following events of default ("Event
      of Default")
      shall
      make all
      sums of principal and interest then remaining unpaid hereon and all other
      amounts payable hereunder immediately due and payable, all without demand,
      presentment or notice, or grace period, all of which hereby are expressly
      waived:

     

    3.1    Failure
      to Pay Principal or Interest.
      The
      Borrower fails to pay when
      due
      any portion
      of the principal,
      interest or
      other
      amount under
      this Note.

     

    3.2    Breach
      of Covenant.
      The
      Borrower breaches any covenant or other term or provision
      of this
      Note in any material respect and such breach, if subject to cure, continues
      for
      a period of five (5) calendar days after written notice to the Borrower from
      the
      Holder.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    3.3    Breach
      of Representations and Warranties.
      Any
      representation or warranty of the Borrower made herein, or in any agreement,
      statement or certificate given in writing pursuant hereto or in connection
      therewith shall be false or misleading. 

     

    3.4    Receiver
      or Trustee.
      The
      Borrower shall make an assignment for the benefit of creditors, or apply for
      or
      consent to the appointment of a receiver or trustee for it or for a substantial
      part of its property or business; or such a receiver or trustee shall otherwise
      be appointed.

     

    3.5    Bankruptcy.
      Bankruptcy, insolvency, reorganization or liquidation proceedings or other
      proceedings or relief under any bankruptcy law or any law for the relief of
      debtors shall be instituted by or against the Borrower.

     

    3.6    Failure
      to Deliver Securities
      or Replacement Note.
      The
      Borrower's failure to timely deliver to
      the
      Holder Units,
      Common Stock, Warrants or other securities, or any replacement Note,
      pursuant
      to and in the form required by this Note.

     

    3.7    Remedies
      of Holder are Cumulative.
      The
      remedies of Holder as provided herein, and any one or more of them, whether
      in
      law or in equity, shall be cumulative and concurrent, and may be pursued
      singularly, successively or together at Holder’s sole discretion, and may be
      exercised as often as Holder may decide in its sole and absolute
      discretion.

     

    ARTICLE
      IV 

    MISCELLANEOUS

     

    4.1    Failure
      or Indulgence Not Waiver.
      No
      failure or delay on the part of the Holder hereof in the exercise of any power,
      right or privilege hereunder shall operate as a waiver thereof, nor shall any
      single or partial exercise of any such power, right or privilege preclude other
      or further exercise thereof or of any other right, power or privilege. All
      rights and remedies existing hereunder are cumulative to, and not exclusive
      of,
      any rights or remedies otherwise available.

     

    4.2    Notices.
      Any
      notice herein required or permitted to be given shall be in writing and shall
      be
      deemed effectively given: (a) upon personal delivery to the party notified,
      (b)
      when sent by confirmed telex or facsimile if sent during normal business hours
      of the recipient, if not, then on the next business day, (c) three days after
      having been sent by registered or certified mail, return receipt requested,
      postage prepaid, or (d) one day after deposit with a nationally recognized
      overnight courier, specifying next day delivery, with written verification
      of
      receipt. All communications shall be sent to the Borrower and Holder at the
      addresses on the first page of this Note or at such other address as the
      Borrower or the Holder may designate by ten days advance written notice to
      the
      other parties hereto. 

     

    4.3    Amendment
      Provision.
      The
      term "Note" and all reference thereto, as used throughout
      this instrument, shall mean this instrument as originally executed, or if later
      amended or supplemented, then as so amended or supplemented.

     

    4.4    Assignability.
      This
      Note shall be binding upon the Borrower and its successors and assigns, and
      shall inure to the benefit of the Holder and its successors and assigns, and
      may
      be assigned by the Holder.

     

    4.5    Cost
      of Collection.
      If
      default is made in the payment of this Note, the Borrower shall pay the Holder
      hereof reasonable costs of collection, including reasonable attorneys'
      fees.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    4.6    Governing
      Law.
      This
      Note shall be governed by and construed in accordance with the laws of the
      State
      of California, without regard to principles of conflicts of laws. Any action
      brought by either party against the other concerning the transactions
      contemplated by this Agreement shall be brought only in the state courts of
      or
      in the federal courts located in the State of California.
      Both
      parties and the individual signing this Note on behalf of the Borrower agree
      to
      submit to the jurisdiction of such courts. The prevailing party shall be
      entitled to recover from the other party its reasonable attorney's fees and
      costs.  

     

    4.7    Maximum
      Payments.
      Nothing
      contained herein shall be deemed to establish or require the payment of a rate
      of interest or other charges in excess of the maximum permitted by applicable
      law. In the event that the rate of interest required to be paid or other charges
      hereunder exceed the maximum permitted by such law, any payments in excess
      of
      such maximum shall be credited against amounts owed by the Borrower to the
      Holder and thus refunded to the Borrower. 

     

    4.8    Prepayment.
      This
      Note may be paid (in whole or in part) prior to the Maturity Date, in cash,
      without the consent of the Holder upon
      not
      less than 30 days’ prior notice from the Borrower to the Holder. The Holder
      shall have the right at any time prior to the prepayment date to exercise the
      conversion rights under Article II.

     

    4.9    Time.
      Time is
      of the essence as to all matters in and related to this Note.

     

    4.10    Construction.
      Each
      party acknowledges that its legal counsel participated in the preparation of
      this Note and, therefore, stipulates that the rule of construction that
      ambiguities are to be resolved against the drafting party shall not be applied
      in the interpretation of this Note to favor any party against the
      other.

     

    4.11    Commission.
      The
      parties acknowledge that the Borrower will pay a placement agent’s fee of 5% of
      the principal amount of this
      Note to
      Viewpoint Securities, LLC and that no other placement fees, commissions,
      broker’s fees or finder’s fees, are owed to any other party. 

     

    IN
      WITNESS WHEREOF,
      the
      Borrower has caused this Note to be signed in its name by its Chief Executive
      Officer on this ___ day of July,
      2007.

     

    


    
      	 	
              OSAGE
                EXPLORATION AND DEVELOPMENT, INC.

            
	 	 
	 	 
	 	
              By:  ____________________________________

            
	 	
               Name: Kim
                Bradford

            
	 	
                  
                Title: President
                and Chief Executive
                Officer

            


    

    


    


    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    NOTICE
      OF CONVERSION

    


    (To
      be
      executed by the Holder in order to convert the Note)

    
 

    The
      undersigned hereby irrevocably elects, as of the Date of Conversion stated
      below, to convert $_______ of the principal and interest due on the $1,100,000
      Note issued by OSAGE
      EXPLORATION AND DEVELOPMENT, INC. on
      July
      __, 2007 into Units
      of
OSAGE
      EXPLORATION AND DEVELOPMENT, INC. (the
      "Company") according to the conditions set forth in such Note, as of the date
      written below.

     

    Date
      of
      Conversion: _______________

     

    Initial
      Conversion
      Price:
      $1.00 (One Dollar) per Unit
      (subject
      to adjustment as provided in the Note)

     

    Number
      of
Units To
      Be
      Delivered: ________

     

    


    Signature:______________________________________

     

    Print
      Name:_____________________________________

     

    Print
      Title:______________________________________

     

    Print
      Name of Current Note Holder:__________________

     

    
      	Address:	
              ________________________________________________________________________________________________

            


      	 	   
              ____________________________________________________________________________________


    

     

    Tax
      ID:
      ________________________________      

     

    
      
         

      

      
        6