**Exhibit 10.4**

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**OSIRIS THERAPEUTICS, INC.**

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**PROMISSORY NOTE**

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**SUBSCRIPTION DOCUMENTS**

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**SUBSCRIPTION INSTRUCTIONS**

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To subscribe for notes ofOsiris Therapeutics, Inc., a prospective investor must complete theSubscription Documents.  Specifically, aprospective investor must:

 

1.                                      Read theSubscription Agreement in its entirety and confirm that all of therepresentations and warranties of the Subscriber are true, complete andcorrect.

 

2.                                      Complete, signand date the Subscriber Signature Page to the Subscription Agreement on page 11of the Subscription Agreement.

 

3.                                      Complete theSubscriber Information requested on page 13 of the Subscription Agreement.

 

4.                                      Fax all of thefully executed Subscription Documents to:

 

OsirisTherapeutics, Inc.

Attention:  Chief Financial Officer

Fax:  011-443-378-8820

 

5.                                      OvernightCourier all of the fully executed Subscription Documents to:

 

OsirisTherapeutics, Inc.

7015 Albert Einstein Drive

Columbia, MD USA 21046

Attention:  Chief Financial Officer

 

If you have any questionsconcerning the completion of the Subscription Documents, please contact PhilipR. Jacoby, Jr., Interim Chief Financial Officer (011-443-545-1819).

 

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THE NOTE TO BE ACQUIRED BY THE SUBSCRIBER PURSUANT TO THIS SUBSCRIPTIONAGREEMENT HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, ASAMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OROTHER JURISDICTION, AND NEITHER THE NOTE NOR ANY CONVERSION SHARES MAY BEOFFERED, SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OFWITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S.PERSON, OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION S PROMULGATED UNDERTHE SECURITIES ACT (“REGULATION S”)), IN THE ABSENCE OF SUCH REGISTRATION,UNLESS SUCH TRANSACTION IS EXEMPT FROM OR NOT SUBJECT TO REGISTRATION UNDER THESECURITIES ACT, AND THE SUBSCRIBER HAS, IF REQUIRED BY THE COMPANY, DELIVEREDAN OPINION OF COUNSEL TO THAT EFFECT.  BYENTERING INTO THIS SUBSCRIPTION AGREEMENT, SUBSCRIBER REPRESENTS, AMONG OTHERTHINGS, THAT IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a) OFTHE SECURITIES ACT) AND IS NOT A U.S. PERSON, AND IS ACQUIRING THE NOTEPURSUANT HERETO OUTSIDE THE U.S. AND IN ACCORDANCE WITH REGULATION S, AND WILLNOT ENGAGE IN ANY HEDGING TRANSACTIONS WITH RESPECT TO THE COMMONSTOCK OR NOTES OF THE COMPANY PRIOR TO THE EXPIRATION OF THE DISTRIBUTIONCOMPLIANCE PERIOD (AS DEFINED IN REGULATION S) EXCEPT IN COMPLIANCE WITH THESECURITIES ACT.

 

**OSIRIS THERAPEUTICS, INC.**

 

**SUBSCRIPTION AGREEMENT**

 
| Name  of Subscriber:    |   |              |   |
|-------------------------|--------|-------------------|--------|
|                    |   |              |   |
| Address  of Subscriber: |   |              |   |
|                    |   |              |   |
|                    |   |              |   |
|                    |   |              |   |
| Purchase  Price:        |   | US  $1,500,000.00 |   |

 

TO:         Osiris Therapeutics, Inc., aDelaware corporation (the “**Company**”).

 

The Subscriber hereby agreesto loan and advance to Company, and to purchase from the Company at the Closingprovided for herein below, and the Company agrees to sell and deliver to theSubscriber, an unsecured promissory note of the Company (the “**Note**”) in the original principal sum of **$1,500,000.00**(the “**Principal Amount**”), in substantiallythe form of promissory note attached hereto as Exhibit A.

 

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# A.            Payment.  In connection with this SubscriptionAgreement and subject to acceptance by the Company, the Subscriber herebyagrees with the Company as follows:

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## (1)           The issuance of the Note offered or subscribed forpursuant hereto will occur at a Closing to be held on June 12, 2008 (the “**Closing Date**”).  Onthe Closing Date, the Subscriber will pay to the Company the Principal Amountin immediately available funds, by wire transfer as directed by theCompany.  Upon the Subscriber’s paymentin full of the Principal Amount as contemplated by this Part A(1), theCompany shall deliver to the Subscriber the Note, fully executed on behalf ofthe Company.

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# B.            Acknowledgments andCovenants.

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## (1)           The Subscriber hereby agrees to pay all costs and expensesincurred by or on behalf of the Company, including reasonable attorneys’ feesand disbursements, in connection with enforcing the Subscriber’s obligationsunder this Subscription Agreement in the event of any default in respect of itsobligations hereunder.

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## (2)           Under Section 1445(e) of the Internal RevenueCode of 1986, as amended (the “**Code**”), theCompany must withhold tax with respect to certain transfers of propertyinvolving a foreign person.  To informthe Company whether withholding is required, the Subscriber shall complete a Form W-9or applicable Form W-8.

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# C.            Representations andWarranties.

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*SubscriberRepresentations and Warranties.*

 

TheSubscriber warrants, represents and agrees with the Company as follows:

 

## (1)           Upon acceptance by the Company, this SubscriptionAgreement is irrevocable and shall constitute a binding commitment of theSubscriber.

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## (2)           The principal address of Subscriber is outside of theUnited States, and Subscriber is not a U.S. Person as such term is defined andused in Regulation S (“**Regulation S**”)promulgated under the Securities Act of 1933, as amended (the “**Securities****Act**”).

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## (3)           At the time the “buy” order was originated in respect ofSubscriber’s acquisition of the Note pursuant to this Subscription Agreement,Subscriber was outside of the U.S., and Subscriber is outside the U.S. as ofthe date of the execution and delivery of this Subscription Agreement by Subscriber.  No offer to acquire the Note pursuant to thisSubscription Agreement or otherwise to acquire the Note was made to Subscriberor its representatives inside the U.S.

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## (4)           Subscriber is acquiring the Note for his/her/its ownaccount, not on behalf or for the account of any U.S. Person, and the purchaseof the Note has not been pre-arranged with a purchaser in the U.S.

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## (5)           The Subscriber will make all resales of the Note onlyoutside of the U.S. in compliance with Regulation S, or pursuant to aregistration statement under the Securities Act, or pursuant to an availableexemption from registration under the Securities Act.  Specifically, Subscriber will not resell theNote to any U.S. Person or within the United States prior to the expiration ofone (1) year (the “**Distribution****Compliance Period**”), except pursuant to registration underthe Securities Act or an exemption from registration under the Securities Act.

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## (6)           Subscriber will not engage in any hedging transactionswith respect to this Note or any similar note of the Company, or with respectto the Common Stock of the Company, at any time prior to the expiration of theDistribution Compliance Period, except in compliance with the Securities Act.

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## (7)           The Company is and will be relying on the truth andaccuracy of Subscriber’s representations, warranties, agreements,acknowledgements and understandings as set forth herein, in order to determinethe applicability of such exemptions and the suitability of Subscriber andhis/her/its acquisition of the Note.

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## (8)           Subscriber has been furnished with, or has acquired,copies of all of the documents filed by the Company with the United StatesSecurities and Exchange Commission during the twelve (12) months prior to thedate hereof, as well as all other documents made available by the Company forpublic dissemination during the same period, including, but not limited to,press releases, and Subscriber has been provided all necessary and appropriateinformation about the Company to make an informed investment decision withrespect to the acquisition of this Shares. WITHOUT LIMITING THE FOREGOING, THE SUBSCRIBER ACKNOWLEDGES THAT THEACQUISITION OF THE NOTE INVOLVES SUBSTANTIAL RISK AND THE SUBSCRIBER MAY LOSEITS ENTIRE INVESTMENT.

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## (9)           Subscriber has sufficient knowledge and experience infinancial and business matters and is capable of evaluating the risks andmerits of Subscriber’s acquisition of the Note; Subscriber has been providedthe opportunity to make all necessary and appropriate inquiries of the Companyregarding the Company’s business and associated risks, and the Company hascomplied with all such requests; and Subscriber is able financially to bear therisk of losing Subscriber’s full investment in the Note.

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## (10)         The Note is being acquired in a transaction not involving apublic offering within the United States within the meaning of the SecuritiesAct, and Subscriber understands that the Note has not been and may not be,registered under the Securities Act or registered or qualified under any thesecurities laws of any state or other jurisdiction, is and will be “restrictedsecurities” and cannot be resold or otherwise transferred unless registeredunder the Securities Act, and registered or qualified under any otherapplicable securities laws, or an exemption from such registration andqualification is available.  Prior to anyproposed transfer of the Note prior to any registration, Subscriber shall,among other things, give written notice to the Company of Subscriber’sintention to effect such transfer, identifying the transferee and describingthe 

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## manner of the proposed transfer and, ifrequested by the Company, accompanied by (i) investment representations bythe transferee similar to those made by Subscriber in this Section 10 and (ii) anopinion of counsel satisfactory to the Company to the effect that the proposedtransfer may be effected without registration under the Securities Act and withoutregistration or qualification under applicable state or other securitieslaws.  The Note shall bear a legendsimilar to that set forth on the first page of this Subscription Agreement(insofar as applicable) and otherwise referring to reiterating the restrictionson transfer and other terms hereof applicable to the Note upon issuance, andcontaining such other information and imposing such other restrictions as shallbe reasonably required by the Company.

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## (11)         Subscriber understands that no U.S. federal or stategovernment or agency has passed on or made any recommendation or endorsement ofthe acquisition by Subscriber of the Note.

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## (12)         Subscriber acknowledges that there is no restriction imposedhereby upon the Company in respect of the incurring by the Company ofadditional debt or the issuance by the Company of additional debt or equitysecurities, or otherwise.

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## (13)         The Note will be purchased for the account of the Subscriberfor investment only and not with a view to, or with any intention of, a distributionor resale thereof, in whole or in part, or the grant of any participationtherein.  The Subscriber has not beenorganized for the specific purpose of acquiring the Note.  The Subscriber acknowledges that the Note hasnot been registered under the Securities Act, or the securities laws of anystate or other jurisdiction and cannot be disposed of unless subsequentlyregistered under the Securities Act and any applicable laws of states or otherjurisdictions or an exemption from such registration is available.

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## (14)         The Subscriber is an “accredited investor” as defined in Rule 501(a) ofSecurities and Exchange Commission Regulation D, that is (i) if a naturalperson, Subscriber has an individual net worth, or joint net worth with theSubscriber’s spouse, at the time of the Subscriber’s purchase in excess of  $1,000,000; or (ii) if a corporation,business trust or a partnership, Subscriber was not formed for the specificpurpose of acquiring the Shares, and has total assets in excess of $5,000,000.

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## (15)         The Subscriber acknowledges that at no time was theSubscriber presented with, or solicited by, any leaflet, public promotionalmeeting, newspaper or magazine article, radio or television advertisement orany other form of general advertising or general solicitation with respect tothe Company.

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## (16)         If the Subscriber is an entity, the Subscriber is dulyorganized or, if a trust, duly established pursuant to a valid trustinstrument, validly existing and in good standing under the laws of thejurisdiction wherein it is organized and has the power and authority to carryon the activities in which it is engaged and to acquire the Note.  This Subscription Agreement and any otherdocuments executed and delivered by the Subscriber in connection therewith or herewithhave been duly authorized, executed and 

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## delivered by the Subscriber, and are thelegal, valid and binding obligations of the Subscriber enforceable inaccordance with their respective terms.

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## (17)         The execution and delivery of this Subscription Agreementand any other documents executed and delivered by the Subscriber in connectionherewith do not, and the performance and consummation of the terms andtransactions set forth or contemplated therein or herein will not, contraveneor result in a default under any provision of existing law or regulations towhich the Subscriber is subject, the provisions of the trust instrument,charter, bylaws or other governing documents of the Subscriber (if the Subscriberis an entity) or any indenture, mortgage or other agreement or instrument towhich the Subscriber is a party or by which it is bound and does not require onthe part of the Subscriber any approval, authorization, license, or filing fromor with any foreign, federal, state or municipal board or agency which has notbeen obtained.

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## (18)         The Subscriber represents and warrants that the amounts paidor to be paid by it to the Company in respect of this Subscription Agreementwere not and are not directly, or to the Subscriber’s knowledge indirectly,derived from activities that contravene federal, state or foreign laws andregulations, including anti-money laundering and terrorist financing laws andregulations.  Federal regulations and ExecutiveOrders administered by the U.S. Treasury Department’s Office of Foreign AssetsControl (“**OFAC**”) prohibit, among other things,the engagement in transactions with, and the provision of services to, certainforeign countries, territories, entities, and individuals.  The lists of OFAC prohibited countries,territories, persons and entities can be found on the OFAC website atwww.treas.gov/ofac.

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## (19)         The Subscriber represents and warrants to, and agrees andcovenants with, the Company, as of the date hereof, that, to the best of itsknowledge, none of (i) the Subscriber, (ii) any person controlling orcontrolled by the Subscriber, (iii) if the Subscriber is a privately heldentity, any person having beneficial interest in the Subscriber, and (iv) anyperson for which the Subscriber is acting as agent or nominee in connectionwith this Subscription Agreement, is a country, territory, individual or entitynamed on the OFAC lists, nor is any such person or entity prohibited frominvesting in the Company under any OFAC administered sanctions or embargoprograms.

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## (20)         The Subscriber agrees promptly to notify the Company shouldthe Subscriber become aware of any change in the information set forth in Part (18)or Part (19) above.  The Subscriberacknowledges and agrees that, if required by law, the Company may be obligatedto “freeze the account” of the Subscriber, either by prohibiting additionalinvestments from the Subscriber and/or segregating assets of the Subscriber incompliance with government regulations and, if required by law, the Company mayalso be required to report such action and to disclose the Subscriber’sidentity to OFAC.  The Subscriber alsounderstands and agrees that the Company may release confidential informationabout the Subscriber and, if applicable, any underlying beneficial owners ofthe Subscriber, to law enforcement agencies to the extent necessary to ensurecompliance with all applicable laws, rules and regulations.

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## (21)         The Company reserves theright to request such information as is necessary to verify the identity of theSubscriber, any related party, any individual or entity having a beneficialinterest in, or signatory or other similar authority over, the Subscriber andany transferee of the Note, and may seek to verify such identity and the sourceof funds for the acquisition of the Note by Subscriber.

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## (22)         If the Subscriber is acting as nominee or custodian foranother person, entity or organization in connection with the acquisition of theNote, the undersigned has so indicated on the “Subscriber Information” page attachedhereto.  The representations andwarranties contained in this Part C regarding the Subscriber are true andaccurate with regard to both the Subscriber and the person, entity or otherorganization for which the undersigned is acting as nominee or custodian.  The person, entity or organization for whichthe undersigned is acting as nominee or custodian will not transfer orotherwise dispose of or distribute any part of its economic or beneficialinterest in (or any other rights with respect to) the Note without complyingwith all of the applicable provisions of this Subscription Agreement andapplicable law, as if such person, entity or organization were a holder of theNote.  If the undersigned is acting asnominee or custodian for another person, entity or organization, theundersigned agrees to provide such other information as the Company mayreasonably request regarding the undersigned and the person, entity or organizationfor which the undersigned is acting as nominee or custodian in order todetermine the eligibility of the Subscriber to acquire the Note.

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*CompanyRepresentations and Warranties.*

 

Byaccepting the Subscriber’s subscription, the Company warrants, represents andagrees with the Subscriber as follows:

 

### (a)           The Company is duly organized, validly existing and ingood standing as a corporation under the Delaware General Corporation Law, withall requisite corporate power and authority to conduct its business ascurrently conducted and to issue the Note in accordance with the terms of thisSubscription Agreement.  ThisSubscription Agreement (when accepted) will have been duly authorized, executedand delivered by the Company.

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### (b)           This Subscription Agreement is a legally bindingobligation of the Company, enforceable against the Company in accordance withthe terms hereof, except to the extent that (i) such enforceability islimited by bankruptcy, insolvency, reorganization, moratorium or other lawsrelating to or affecting generally the enforcement of creditors’ rights, and (ii) theavailability of the remedy of specific performance or in injunctive or otherequitable relief is subject to the discretion of the court before which anyproceeding therefore may be brought.

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# D.            Assignment, Survival,Effectiveness and Further Information.

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## (1)           This Subscription Agreement is not assignable by eitherthe Subscriber or the Company without the prior written approval of the otherparty in its sole and absolute discretion.  This Subscription Agreement shall be bindingupon the successors and any 

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## permitted assigns of the Subscriber and, whenaccepted by the Company, shall be binding upon the successors and any permittedassigns of the Company.

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## (2)           All of the agreements, covenants, representations andwarranties made by the Subscriber in this Subscription Agreement shall survivethe execution and delivery hereof.  TheSubscriber shall use reasonable efforts to notify the Company and to do sopromptly upon discovering that any of the representations or warranties madeherein were false when made or has, as a result of changes in circumstances,become false.  Every provision of thisSubscription Agreement is intended to be severable, and if any term orprovision hereof is held to be illegal or invalid for any reason whatsoever,such illegality or invalidity shall not affect the validity of the remainderhereof.

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## (3)           The agreements of the Subscriber set forth herein shallbecome effective and binding upon the Subscriber, without right of revocation,upon the Company’s acceptance of this Subscription Agreement.

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# E.            Miscellaneous.  Unless otherwise indicated, the address onthe first page of this document is the legal residence of the Subscriber,and all offers and communications in connection herewith have been conducted atsuch address.  The Subscriber, if aforeign entity, represents that it has complied with all of the laws, if any,of its country of residence and incorporation applicable to the acquisition ofthe Note subscribed to herein.

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# F.             Remedies.  The Subscriber understands the meaning andlegal consequences of its covenants, representations and warranties containedherein, and hereby agrees that the Company may recover from the Subscriber, andthe Subscriber shall hold the Company harmless from, any and all loss, damageor liability due to or arising out of any breach of any such covenant,representation or warranty.

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# G.            Communication.  Any notice, demand, request or othercommunication which may be required or contemplated herein (including deliveryof this Subscription Agreement by and between the parties hereto) shall besufficiently given or delivered if (i) given either by facsimiletransmission (with confirmation of receipt), by reputable overnight deliveryservice, postage prepaid, or by registered or certified mail, postage prepaidand return receipt requested, to the address indicated herein or to such otheraddress as any party hereto may specify as provided herein, or (ii) deliveredpersonally at such address.

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# H.            Applicable Law.  This Subscription Agreement and all legalrelations, claims or obligations arising out of this transaction shall begoverned by and construed in accordance with the laws of the State of Delaware,without regard to conflicts of law provisions.

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# I.             Confirmation ofRepresentations; Additional Information.  Upon request of the Company, the Subscribershall confirm the accuracy of the representations in this SubscriptionAgreement to the Company as of the Closing Date and will use reasonable effortsto notify the Company and to do so promptly if the Subscriber becomes awarethat such representations are, at any time, inaccurate in any respect.  In addition, the Subscriber hereby agrees torespond reasonably to requests to supply any additional written informationconcerning the representations in this Subscription Agreement that the Companymay reasonably request.

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# J.             Indemnification.  The Subscriber shall indemnify and holdharmless the Company and its agents and affiliates (collectively, the “**Indemnified Persons**”) from and against any losses, claims,damages, liabilities, costs or expenses to which any of them may become subjectarising out of or based upon any false representation or warranty, or anybreach of or failure to comply with any covenant or agreement, made by theSubscriber in this Subscription Agreement or in any other document furnished tothe Company in connection with the Subscriber’s investment in the Company.  The Subscriber will reimburse eachIndemnified Person for his, her or its reasonable legal and other expenses(including the cost of any investigation and preparation) as they are incurredin connection with any action, proceeding or investigation arising out of orbased upon the foregoing.  The indemnityand reimbursement obligations of the Subscriber under this Part K shall bein addition to any liability which the Subscriber may otherwise have.

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# K.            General.  This Subscription Agreement may be executedin counterparts with the same effect as if the parties executing thecounterparts had all executed one counterpart. This Subscription Agreement and the documents specifically referred toherein constitute the entire agreement among the parties hereto pertaining tothe subject matter hereof and supersedes all prior and contemporaneousagreements and understandings of the parties in connection therewith.  Neither this Subscription Agreement nor anyprovision hereof may be waived, modified, discharged or terminated except by aninstrument in writing signed by the party against whom such waiver,modification, discharge or termination is sought to be enforced.  Each provision of this Subscription Agreementshall be considered separable and if for any reason any provision or provisionshereof are determined to be invalid and contrary to any existing or future law,such invalidity shall not impair the operation of or affect those portions ofthis Subscription Agreement which are valid.

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*                              *                              *                              *                              *

 

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IN WITNESS WHEREOF, theSubscriber has executed this Subscription Agreement to OSIRIS THERAPEUTICS,INC., Inc. this 10 day of June, 2008.

 

 
| Name  of Subscriber: |                      |
|----------------------|---------------------------|
|                 |                      |
|                 |                      |
| By:                  |                      |   |
|                 | Hereunto  duly authorized |   |
|                 |                      |
| Print Name:          |                      |   |
|                 |                      |   |
| Title:               |                      |   |
|                 |                      |
|                 |                      |
| Principal  Amount:   | US  $1,500,000.00         |   |
|                      |                           |  |  |  |

 

[SUBSCRIBER SIGNATURE PAGE]

 

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**ACCEPTANCE**

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| Name  of Subscriber: |              |   |
|----------------------|-------------------|--------|
|                 |              |   |
| Principal  Amount:   | US  $1,500,000.00 |   |

 

The foregoing SubscriptionAgreement is hereby accepted upon the terms and conditions set forth herein.

 

 
|   | OSIRIS  THERAPEUTICS, INC. |
|--------|----------------------------|
|   |                       |
|   |                       |
|   | By:                        |   |
|   |                       | Name: |   Philip  R. Jacoby, Jr. |
|   |                       | Title: |   Interim  Chief Financial Officer |

 

Dated:  June         ,2008

 

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**SUBSCRIBER INFORMATION**

 
| Name  of Subscriber:                                                   |   |                                 |
|------------------------------------------------------------------------|--------|--------------------------------------|
|                                                                   |   |                                 |
| Type  of Entity:                                                       |   |                                 |
|                                                                   |   |                                 |
| Subscriber’s  jurisdiction of organization:                       |   |                                 |
|                                                                   |   | (Country  and, if applicable, State) |
|                                                                   |   |                                 |
| Subscriber’s  principal place of business or principal residence: |   |                                 |
|                                                                   |   | (Country  and, if applicable, State) |
|                                                                   |   |                                 |
| Mailing  address for all written notices:                              |   |                                 |
|                                                                   |   |                                 |
|                                                                   |   |                                 |
| Telephone  No.:                                                        |   |                                 |
|                                                                   |   |                                 |
| Social  Security or Tax ID No.:                                        |   |                                 |
|                                                                   |   |                                 |
| Principal  Amount:                                                     |   | US  $1,500,000.00                    |

 

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