Exhibit 10.1


 


	
  

  	
  7015 Albert Einstein Drive

  Columbia, Maryland 21046

  Phone:  443.545.1800

  Fax:  443.545.1701

  

  www.Osiris.com

  



 


October 5, 2007


 


Friedli Corporate Finance, Inc.


Freigutstrasse 5


8002 Zurich


Switzerland


Facsimile No.: +41 (1) 283 29 01


 


This letter of agreement (the “Agreement”) sets forth
the understanding and agreement by and between Friedli Corporate Finance, Inc.,
a Belize corporation (“FCF”), and Osiris Therapeutics, Inc., a Delaware
corporation (“Osiris”), with regard to the commitment on the part of FCF to
purchase or to cause others to purchase (FCF or such other purchasers,
individually, a “Purchaser” and collectively, the “Purchasers”), from time to
time, up to $30,000,000 in the aggregate (the “Commitment”) of shares of common
stock, par value $0.001 per share, of Osiris (“Common Stock”), or promissory
notes of Osiris (“Notes”).  To that end,
and with the intention on the part of each party hereto that the other rely on
undertakings, agreements and commitments of the other hereunder, FCF and Osiris
do agree as follows:


1.             Osiris shall have the right hereunder from time to time
to deliver written notice to FCF setting forth the portion of the Commitment
that Osiris requests (such notice herein referred to as an “Advance Notice” and
the portion of the Commitment requested thereunder an “Advance”).  Any Advance Notice shall be given pursuant to
the terms hereof within one year from and after the date hereof (the “Commitment
Period”).  In no event shall the
aggregate amount of all Advances actually made hereunder exceed the
Commitment.  FCF shall thereupon fulfill
the Commitment to the extent of the Advance Notice and purchase, or cause other
Purchasers to purchase, Common Stock or Notes corresponding thereto, subject to
and otherwise in accordance with the terms and conditions of this Agreement.


2.             An Advance Notice shall be deemed delivered on (i) the
date it is received by facsimile or otherwise by FCF if such notice is received
prior to 12:00 noon prevailing Eastern Time on any day during which the NASDAQ
Global Market shall be open for business (a “Trading Day”), or (ii) the
immediately succeeding Trading Day if it is received by facsimile or otherwise
after 12:00 noon prevailing Eastern Time on a Trading Day or any time on any
day which is not a Trading Day.  No
Advance Notice may be deemed delivered on a day that is not a Trading Day.  Within thirty (30) calendar days after the
receipt by FCF of an Advance Notice (or by 12:00 noon prevailing Eastern Time
on the immediately following Trading Day if such date is not otherwise a
Trading Day), FCF shall advise Osiris in a writing as to how much of the
Advance will be satisfied through the purchase by the Purchasers of Notes, with
the understanding and agreement that the remaining portion of the Advance shall
be satisfied through the purchase by the Purchasers of Common Stock (such
Notice being herein referred to as the “Allocation Notice”).  Anything herein to the contrary
notwithstanding, Osiris shall not have the right to request an Advance if the
issuance by Osiris of the full number of shares of 



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Friedli
Corporate Finance, Inc.


October
5, 2007


Page 2


Common Stock issuable in connection with such Advance
would, together with all shares of Common Stock previously issued under this
Agreement, likely exceed 2,893,750 shares (which is no more than 9.99% of the
total outstanding shares of Common Stock of Osiris as of the date of this
Agreement).


3.             The per share purchase price for each share of Common
Stock to be purchased by Purchasers hereunder shall be equal to the average of
the closing Bid price of the Common Stock on the NASDAQ Global Market over the
ten (10) Trading Days immediately preceding the Closing Date corresponding to a
particular Advance Notice, as reasonably determined by Osiris; provided,
however, that the purchase price applicable to shares of Common Stock
acquired by Peter Friedli, individually, or any of his affiliates (including
FCF), shall in any event be equal to an amount not less than the greater of:
(i) the most recent Consolidated Closing Bid Price (as defined by applicable
NASDAQ Rules) as of 4:00 p.m. prevailing Eastern Time prior to the time at
which a binding agreement is established in respect of the purchase of the
shares of Common Stock hereunder in response to a particular Advance Notice, as
reasonably determined by Osiris (the “NASDAQ Determination Date”); and (ii) the
book value per share of Osiris’s Common Stock as of the NASDAQ Determination
Date.  The parties hereto acknowledge
that the date hereof may be the date on which, for NASDAQ purposes, a binding
agreement is deemed to have been established under the NASDAQ Rules, and if
such is determined to be the case, then the 
NASDAQ Determination Date shall be the date of the most recent Consolidated
Closing Bid Price, prior to the date and time hereof.  Notes shall be purchased at par, that is, the
purchase price for each Note shall be equal to the principal amount reflected
on the face of each such Note.  In no
event shall there be more than thirty-five (35) different persons or entities
constituting Purchasers hereunder without the prior written consent of Osiris,
such consent not to be unreasonably withheld.


4.             The purchase and sale of the Common Stock and Notes as
contemplated by the Advance Notice and the Allocation Notice shall be
consummated at a closing which shall occur on the Trading Day after the
Allocation Notice is given (the “Closing Date”).  At the closing, which shall occur at a
location designated by Osiris, Osiris shall deliver to FCF (or provide for the
delivery of) shares of Common Stock, representing that portion of the Advance
to be applied to the purchase of Common Stock, and Notes representing that
portion of the Advance to be applied to the purchase of Notes, as contemplated
hereby and corresponding to the Allocation Notice and corresponding
Subscription Agreements (as defined below). 
In addition, at or prior to the Closing Date, each Purchaser shall
execute and deliver to Osiris, and FCF shall cause each Purchaser to execute
and deliver to Osiris, a Subscription Agreement in substantially the form
attached hereto as Exhibit A in the case of the Purchasers purchasing
Common Stock, or Exhibit B in the case of the Purchasers purchasing
Notes (each, a “Subscription Agreement”), upon which Osiris will rely in the
issuance to the corresponding Purchaser of Common Stock and/or Notes
hereunder.  In addition, on or prior to
the corresponding Closing Date, each of Osiris and FCF shall deliver, or in the
case of FCF shall cause the Purchasers to deliver, to the other all documents,
instruments and writings required or otherwise reasonably contemplated to be
delivered by either of them pursuant to this Agreement in order to implement
and affect the transactions contemplated hereby.  Payment of the Advance pursuant hereto shall
be by wire transfer to the account designated by Osiris in the Advance
Notice.  Physical delivery of
certificates evidencing the Common Stock or the Notes shall occur within ten
(10) calendar days 



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Friedli
Corporate Finance, Inc.


October
5, 2007


Page 3


after the Closing Date.  Certificates and Notes shall be issued in
such amounts and in the names of the Purchasers, corresponding to the
respective Subscription Agreements, and shall bear a restrictive legend and
otherwise correspond to the terms and provisions set forth in the Subscription
Agreement therefor.


5.             FCF acknowledges that, pursuant to each Subscription
Agreement, each investor will be required to make certain representations and
warranties to Osiris, and FCF further acknowledges that the securities to be
purchased pursuant hereto shall be purchased by each Purchaser for its own
account, for investment and without any view to the distribution, assignment or
resale to others or fractionalization in whole or in part thereof.


6.             FCF agrees and understands that the placement of the
Common Stock and Notes as contemplated hereby, to the Purchasers shall be
undertaken outside of the United States to non-U.S. Persons in compliance with
both Regulation S (“Regulation S”) under the United States Securities Act of
1933, as amended (the “Act”), and the requirements of Regulation D under the
Act.  To that end, FCF does hereby
represent, warrant, covenant and agree in connection with the transactions
contemplated hereby, as to the matters set forth on Exhibit C attached
hereto and incorporated herein by this reference.  Correspondingly, Osiris hereby represents,
warrants, covenants and agrees as to the matters set forth on Exhibit D
attached hereto and incorporated herein by this reference.


7.             Any Notes to be acquired pursuant hereto shall represent
the unsecured obligation of Osiris, shall bear interest, on the principal
balance outstanding thereunder from time to time, at the floating and
fluctuating per annum rate of interest equal at all times to the sum of the
LIBOR Index (as defined in the form of Note attached hereto as Exhibit B)
plus four percent (4%) per annum, adjusted monthly, with semi-annual payments
of accrued interest only.  The principal
balance of the Notes shall be due and payable in full on the third year
anniversary of the date thereof.  The
Notes shall be in substantially the form attached hereto as Exhibit E
and incorporated herein by this reference.


8.             There shall be no binding obligation on the part of
Osiris hereunder or under any Subscription Agreement unless and until FCF shall
have executed and delivered, or caused to be executed and delivered, to Osiris
or its designee at Closing in accordance with the terms hereof a corresponding
Subscription Agreement in all material respects in the form of Subscription
Agreement attached hereto.  In no event,
however, will Osiris have any obligation hereunder to accept a Subscription
Agreement if to do so would cause Osiris to violate or breach, or result in the
violation or breach by Osiris of, any statute, rule, regulation, executive
order, decree, ruling or injunction, binding upon or otherwise applicable to
Osiris, including without limitation any rule or regulation of the NASDAQ
Global Market or any market or exchange upon which the Common Stock or any
other securities of Osiris are then being traded, or if such acceptance would
otherwise result in a  violation or
breach by Osiris of any contract or agreement to which it is a party or bound,
or have a material adverse effect upon Osiris or its business, in each case as
reasonably determined by Osiris.


9.             The right of Osiris to deliver an Advance Notice and the
obligation of FCF hereunder to acquire, or to cause the Purchasers to acquire,
Common Stock or Notes hereunder is 



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Friedli
Corporate Finance, Inc.


October
5, 2007


Page 4


subject to the fulfillment by Osiris on the date of
delivery of such Advance Notice, and on the applicable Closing Date, of each of
the following conditions:


(i)            Osiris shall
perform, satisfy and comply in all material aspects with all covenants,
agreements and conditions required of it by this Agreement.


(ii)           No statute, rule,
regulation, executive order, decree, ruling or injunction shall be enacted,
entered, promulgated or endorsed by any court of governmental authority of
competent jurisdiction that prohibits or directly or adversely affects any of
the transactions contemplated by this Agreement, and no proceeding shall be
commenced that may have the affect of prohibiting or adversely affecting any of
the transactions contemplated by this Agreement.


(iii)          The trading of the
Common Stock shall not have been suspended by the SEC or the NASDAQ Global
Market.  The issuance of the shares of
Common Stock at the applicable closing, if any, shall not violate the
shareholder approval requirements of the NASDAQ Global Market or such other
market upon which the Common Stock is then traded; and Osiris shall not have
received any notice threatening the continued listing of the Common Stock on the
NASDAQ Global Market, which shall not have been withdrawn.


10.           This Agreement shall be governed and
interpreted in accordance with the laws of the State of Delaware, without
regard to principals of conflicts of laws. 
Neither this Agreement nor the rights of Osiris hereunder may be
assigned to any other person.  Osiris may
terminate this Agreement upon fifteen (15) days’ written notice to FCF.  Any notices, consents, waivers or other
communications required to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally, (ii) upon receipt when sent by facsimile, or (iii) two
days after deposit with an internationally recognized carrier service (e.g.
DHL), in each case properly addressed to the party to receive the same.  The addresses and facsimile numbers for such
communications are all as set forth hereinabove.


11.           If for any reason the transactions
contemplated by this Agreement are not consummated, each of the parties hereto
shall keep confidential any information obtained from any other party (except
information publicly available on such party’s demand prior to the date hereof,
and except as required by court order) and shall promptly return to the other
parties all schedules, documents, instruments, work papers or other written
information without retaining copies thereof, previously furnished by it as a
result of this Agreement or in connection herewith.


12.           Each of the parties hereto represents
and has had no dealings in connection with this transaction with any finder or
broker who will demand payment of any fee or commission from the other
party.  Osiris on the one hand, and FCF,
on the other hand agree to indemnify the other against and hold the other
harmless from any and all liabilities to any person claiming brokerage
commissions or finder’s fees on account of services purported to have been
rendered on behalf of the indemnifying party in connection with this Agreement
or the transactions contemplated hereby. 
Osiris agrees to reimburse FCF for any fees or expenses reasonably
incurred by FCF and directly related to its performance hereunder.



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Friedli
Corporate Finance, Inc.


October
5, 2007


Page 5


13.           The parties expressly acknowledge and
agree that this Agreement does not afford or provide to FCF or any other person
or entity any exclusive right in respect of financings to be undertaken by
Osiris, during the Commitment Period or otherwise.  Without limiting the generality of the
foregoing, Osiris expressly reserves the right to seek and obtain financing
from or through the efforts of others from time to time, notwithstanding the
execution, delivery or continued existence of this Agreement.


[SIGNATURE PAGE FOLLOWS]



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Friedli
Corporate Finance, Inc.


October
5, 2007


Page 6


Provided that the
foregoing terms are agreeable and acceptable to Osiris, please execute the
enclosed copy of this letter and return it to the undersigned, whereupon this
letter shall constitute the binding and enforceable agreement as amongst the
parties hereto.


	
  

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  OSIRIS THERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ C.
  RANDAL MILLS

  	
   

  
	
   

  	
   

  	
  Name: C. Randal Mills, Ph.D

  
	
   

  	
   

  	
  Title: President

  



 


AGREED AND ACCEPTED


as of this 5th day of
October, 2007


	
  FRIEDLI CORPORATE FINANCE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
    /s/ PETER
  FRIEDLI

  	
   

  
	
   

  	
   

  	
  Peter Friedli

  
	
   

  	
   

  	
  President

  



 



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EXHIBIT A


SUBSCRIPTION AGREEMENT - COMMON
STOCK



 1
 









OSIRIS THERAPEUTICS, INC.


COMMON STOCK


SUBSCRIPTION DOCUMENTS



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SUBSCRIPTION INSTRUCTIONS


To subscribe
for shares of Osiris Therapeutics, Inc., a prospective investor must complete
the Subscription Documents. 
Specifically, a prospective investor must:


1.                                       Read the
Subscription Agreement in its entirety and confirm that all of the
representations and warranties of the Subscriber are true, complete and
correct.


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


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


4.                                       Fax all of the
fully executed Subscription Documents to:


Osiris Therapeutics, Inc. 

Attention:  Chief Financial Officer


Fax:         011-443-545-1710


5.                                       Overnight
Courier all of the fully executed Subscription Documents to:


Osiris Therapeutics, Inc. 

7015 Albert Einstein Drive


Columbia, MD  USA  21046


Attention:  Chief Financial Officer


If you have
any questions concerning the completion of the Subscription Documents, please
contact (011-443-545-1819).



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THE SHARES OF COMMON STOCK TO
BE ACQUIRED BY THE SUBSCRIBER PURSUANT TO THIS SUBSCRIPTION AGREEMENT HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY
NOT BE OFFERED, SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF WITHIN 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 UNDER THE SECURITIES ACT (“REGULATION S”)), IN THE ABSENCE OF SUCH
REGISTRATION, UNLESS SUCH TRANSACTION IS EXEMPT FROM OR NOT SUBJECT TO
REGISTRATION UNDER THE SECURITIES ACT, AND THE SUBSCRIBER HAS, IF REQUIRED BY
THE COMPANY, DELIVERED AN OPINION OF COUNSEL TO THAT EFFECT.  BY ENTERING INTO THIS SUBSCRIPTION AGREEMENT,
SUBSCRIBER REPRESENTS, AMONG OTHER THINGS, THAT IT IS AN ACCREDITED INVESTOR
(AS DEFINED IN RULE 501(a) OF THE SECURITIES ACT) AND IS NOT A U.S. PERSON, AND
IS ACQUIRING THE COMMON STOCK PURSUANT HERETO OUTSIDE THE U.S. AND IN
ACCORDANCE WITH REGULATION S, AND WILL NOT ENGAGE IN ANY HEDGING TRANSACTIONS
WITH RESPECT TO THE COMMON STOCK OF THE COMPANY PRIOR TO THE EXPIRATION OF THE
DISTRIBUTION COMPLIANCE PERIOD (AS DEFINED IN REGULATION S) EXCEPT IN
COMPLIANCE WITH THE SECURITIES ACT.


OSIRIS
THERAPEUTICS, INC.


SUBSCRIPTION
AGREEMENT


Name of Subscriber:


Address of Subscriber:


Number of 

Shares of Common Stock:


Purchase Price:                     US$


TO:         Osiris
Therapeutics, Inc., a Delaware corporation (the “Company”).


The Subscriber
hereby subscribes for and agrees to purchase the number of shares (the “Shares”) of common stock of the Company, par value $0.001
per share (the “Common Stock”) specified above in
accordance with and subject to the terms, provisions and conditions set forth
herein.  The Subscriber agrees to pay to
the Company $             
per Share for a total purchase price (the “Purchase Price”)
equal to the amount set forth above.



 4
 









The Subscriber
understands that this Subscription Agreement may be rejected in whole or in
part prior to acceptance at any time for any reason whatsoever by the
Company.  The Subscriber further
understands that in the event this Subscription Agreement is rejected by the
Company, the subscription of the Subscriber herein shall become null and void
insofar as rejected.  Upon such
rejection, the Subscriber shall have no further obligations to the Company.


A.            Payment.  In connection with this Subscription
Agreement and subject to acceptance by the Company, the Subscriber hereby
agrees with the Company as follows:


(1)           The sale of the Shares
offered or subscribed for pursuant to this private placement will occur at a
Closing to be held at a date and time determined by the Company, which date
will not be later than the second business day immediately following the
acceptance by the Company of this Subscription Agreement (the “Closing Date”).  On the Closing Date, the Subscriber will pay
to the Company the Purchase Price in immediately available funds, by wire
transfer as directed by the Company. 
Upon the Subscriber’s payment in full of the Purchase Price as
contemplated by this Part A(1), the Company shall issue to the Subscriber that
number of whole shares of Common Stock subscribed for by Subscriber pursuant
hereto.  The shares of Common Stock
issued to the Subscriber in consideration for such payment shall be validly
issued and outstanding, and fully paid and non-assessable.


B.            Acknowledgments and
Covenants.


(1)           The Subscriber hereby
agrees to pay all costs and expenses incurred by or on behalf of the Company,
including reasonable attorneys’ fees and disbursements, in connection with
enforcing the Subscriber’s obligations under this Subscription Agreement in the
event of any default in respect of its obligations hereunder.


(2)           Under Section 1445(e)
of the Internal Revenue Code of 1986, as amended (the “Code”), the Company must withhold tax with
respect to certain transfers of property if a stockholder of the Company is a
foreign person.  To inform the Company
whether withholding is required with respect to the Subscriber’s interest in
the Company, the Subscriber shall complete a Form W-9 or applicable Form W-8.


(3)           The Subscriber
acknowledges and agrees that the Shares will be issued subject to the terms of
this Subscription Agreement and that any certificates evidencing the Shares
will bear appropriate legends to that effect, including a legend in
substantially the form set forth above 
and as otherwise provided pursuant hereto.


C.            Representations and
Warranties.


Subscriber
Representations and Warranties.


The Subscriber
warrants, represents and agrees with the Company as follows:


(1)           Upon acceptance by the
Company, this Subscription Agreement is irrevocable and shall constitute a
binding commitment of the Subscriber.



 5
 









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


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


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


(5)           The Subscriber will
make all resales of the Shares only outside of the United States in compliance
with Regulation S, or pursuant to a registration statement under the Securities
Act, or pursuant to an available exemption from registration under the
Securities Act.  Specifically, Subscriber
will not resell the Shares to any U.S. Person or within the United States prior
to the expiration of one year (the “Distribution
Compliance Period”), except
pursuant to registration under the Securities Act or an exemption from
registration under the Securities Act.


(6)           Subscriber will not
engage in any hedging transactions with respect to the Common Stock or the
Shares at any time prior to the expiration of the Distribution Compliance
Period, except in compliance with the Securities Act.


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


(8)           Subscriber has been
furnished with, or has acquired, copies of all of the documents filed by the
Company with the United States Securities and Exchange Commission during the
twelve (12) months prior to the date hereof, as well as all other documents
made available by the Company for public dissemination during the same period,
including, but not limited to, press releases, and Subscriber has been provided
all necessary and appropriate information about the Company to make an informed
investment decision with respect to the acquisition of this Shares.  WITHOUT LIMITING THE FOREGOING, THE
SUBSCRIBER ACKNOWLEDGES THAT AN INVESTMENT IN THE COMPANY INVOLVES SUBSTANTIAL
RISK AND THE SUBSCRIBER MAY LOSE ITS ENTIRE INVESTMENT.


(9)           Subscriber has
sufficient knowledge and experience in financial and business matters and is
capable of evaluating the risks and merits of Subscriber’s investment in the
Company; Subscriber has been provided the opportunity to make all 



 6
 









necessary and appropriate inquiries of the
Company regarding the Company’s business and associated risks, and the Company
has complied with all such requests; and Subscriber is able financially to bear
the risk of losing Subscriber’s full investment in the Shares.


(10)         The Shares are being
acquired in a transaction not involving a public offering within the United
States within the meaning of the Securities Act, and Subscriber understands
that the Shares have not been and may not be, registered under the Securities
Act or registered or qualified under any the securities laws of any state or
other jurisdiction, are and will be “restricted securities” and cannot be
resold or otherwise transferred unless they are registered under the Securities
Act, and registered or qualified under any other applicable securities laws, or
an exemption from such registration and qualification is available.  Prior to any proposed transfer of the Shares,
Subscriber shall, among other things, give written notice to the Company of
Subscriber’s intention to effect such transfer, identifying the transferee and
describing the manner of the proposed transfer and, if requested by the
Company, accompanied by (i) investment representations by the transferee
similar to those made by Subscriber in this Section 10 and (ii) an opinion of
counsel satisfactory to the Company to the effect that the proposed transfer
may be effected without registration under the Securities Act and without
registration or qualification under applicable state or other securities
laws.  Each certificate for the Shares
shall bear a legend similar to that set forth on the first page of this
Subscription Agreement (insofar as applicable) and otherwise referring to
reiterating the restrictions on transfer and other terms hereof applicable to
the Shares upon issuance, and containing such other information and imposing
such other restrictions as shall be reasonably required by the Company.


(11)         Subscriber understands
that no U.S. federal or state government or agency has passed on or made any
recommendation or endorsement of offering for sale or the sale of the Shares.


(12)         Subscriber acknowledges
that there is no restriction imposed hereby upon the Company in respect of the
incurring by the Company of additional debt or the issuance by the Company of
additional debt or equity securities, or otherwise.


(13)         The Shares will be
purchased for the account of the Subscriber for investment only and not with a
view to, or with any intention of, a distribution or resale thereof, in whole
or in part, or the grant of any participation therein.  The Subscriber has not been organized for the
specific purpose of acquiring the Shares. 
The Subscriber acknowledges that the Shares have not been registered under
the Securities Act, or the securities or real estate syndication laws of any
state or other jurisdiction and cannot be disposed of unless subsequently
registered under the Securities Act and any applicable laws of states or other
jurisdictions or an exemption from such registration is available.


(14)          The Subscriber is an “accredited
investor” as defined in Rule 501(a) of Securities and Exchange Commission
Regulation D, that is (i) if a natural person, Subscriber has an individual net
worth, or joint net worth with the Subscriber’s spouse, at the time of the
Subscriber’s purchase in excess of 
$1,000,000; (ii) if a corporation, 



 7
 









business trust or a partnership, Subscriber
was not formed for the specific purpose of acquiring the Shares, and has total
assets in excess of $5,000,000.


(15)         The Subscriber
acknowledges that at no time was the Subscriber presented with, or solicited
by, any leaflet, public promotional meeting, newspaper or magazine article,
radio or television advertisement or any other form of general advertising or
general solicitation with respect to the Company.


(16)         If the Subscriber is an
entity, the Subscriber is duly organized or, if a trust, duly established
pursuant to a valid trust instrument, validly existing and in good standing
under the laws of the jurisdiction wherein it is organized and has the power
and authority to carry on the activities in which it is engaged and to purchase
the Shares.  This Subscription Agreement
and any other documents executed and delivered by the Subscriber in connection
therewith or herewith have been duly authorized, executed and delivered by the
Subscriber, and are the legal, valid and binding obligations of the Subscriber
enforceable in accordance with their respective terms.


(17)         The execution and delivery
of this Subscription Agreement and any other documents executed and delivered
by the Subscriber in connection herewith do not, and the performance and
consummation of the terms and transactions set forth or contemplated therein or
herein will not, contravene or result in a default under any provision of
existing law or regulations to which the Subscriber is subject, the provisions
of the trust instrument, charter, bylaws or other governing documents of the
Subscriber (if the Subscriber is an entity) or any indenture, mortgage or other
agreement or instrument to which the Subscriber is a party or by which it is
bound and does not require on the part of the Subscriber any approval,
authorization, license, or filing from or with any foreign, federal, state or
municipal board or agency which has not been obtained.


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


(19)         The Subscriber represents
and warrants to, and agrees and covenants with, the Company, as of the date
hereof and as of the date of issuance of the Shares to the Subscriber, that, to
the best of its knowledge, none of (i) the Subscriber, (ii) any person
controlling or controlled by the Subscriber, (iii) if the Subscriber is a
privately held entity, any person having a beneficial interest in the Subscriber,
and (iv) any person for which the Subscriber is acting as agent or nominee in
connection with this Subscription Agreement, is a country, territory,
individual or entity named on the OFAC lists, nor is 



 8
 









any such person or entity prohibited from investing
in the Company under any OFAC administered sanctions or embargo programs.


(20)         The Subscriber agrees
promptly to notify the Company should the Subscriber become aware of any change
in the information set forth in Part (18) or Part (19) above.  The Subscriber acknowledges and agrees that,
if required by law, the Company may be obligated to “freeze the account” of the
Subscriber, either by prohibiting additional investments from the Subscriber
and/or segregating assets of the Subscriber in compliance with government
regulations and, if required by law, the Company may also be required to report
such action and to disclose the Subscriber’s identity to OFAC.  The Subscriber also understands and agrees
that the Company may release confidential information about the Subscriber and,
if applicable, any underlying beneficial owners of the Subscriber, to law
enforcement agencies to the extent necessary to ensure compliance with all
applicable laws, rules and regulations.


(21)         The Company reserves the right to request such
information as is necessary to verify the identity of the Subscriber, any
related party, any individual or entity having a beneficial interest in, or
signatory or other similar authority over, the Subscriber and any transferee of
the Shares, and may seek to verify such identity and the source of funds for
the Purchase Price.


(22)         If the Subscriber is
acting as nominee or custodian for another person, entity or organization in
connection with the acquisition of the Shares, the undersigned has so indicated
on the “Subscriber Information” page attached hereto.  The representations and warranties contained
in this Part C regarding the Subscriber are true and accurate with regard to
both the Subscriber and the person, entity or other organization for which the
undersigned is acting as nominee or custodian. 
The person, entity or organization for which the undersigned is acting
as nominee or custodian will not transfer or otherwise dispose of or distribute
any part of its economic or beneficial interest in (or any other rights with
respect to) the Shares without complying with all of the applicable provisions
of this Subscription Agreement and applicable law, as if such person, entity or
organization were a holder of the Shares. 
If the undersigned is acting as nominee or custodian for another person,
entity or organization, the undersigned agrees to provide such other
information as the Company may reasonably request regarding the undersigned and
the person, entity or organization for which the undersigned is acting as
nominee or custodian in order to determine the eligibility of the Subscriber to
purchase the Shares.


Company Representations and Warranties.


By accepting the Subscriber’s subscription, the Company warrants,
represents and agrees with the Subscriber as follows:


(a)           The Company is duly
organized, validly existing and in good standing as a corporation under the
Delaware General Corporation Law, with all requisite corporate power and
authority to conduct its business as currently conducted and to issue and sell
the Shares in accordance with the terms of this Subscription Agreement.  This 



 9
 









Subscription Agreement (when accepted) will
have been duly authorized, executed and delivered by the Company.


(b)           This Subscription
Agreement is a legally binding obligation of the Company, enforceable against
the Company in accordance with the terms hereof, except to the extent that (i)
such enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement of
creditors’ rights, and (ii) the availability of the remedy of specific
performance or in injunctive or other equitable relief is subject to the
discretion of the court before which any proceeding therefore may be brought.


D.            Assignment,
Survival, Effectiveness and Further Information.


(1)           This Subscription
Agreement is not assignable by either the Subscriber or the Company without the
prior written approval of the other party in its sole and absolute
discretion.  This Subscription Agreement
shall be binding upon the successors and any permitted assigns of the
Subscriber and, when accepted by the Company, shall be binding upon the
successors and any permitted assigns of the Company.


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


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


E.             Miscellaneous.  Unless otherwise indicated, the address on
the first page of this document is the legal residence of the Subscriber, and
all offers and communications in connection with the offering of the shares of
Common Stock subscribed to herein have been conducted at such address.  The Subscriber, if a foreign entity,
represents that it has complied with all of the laws, if any, of its country of
residence and incorporation applicable to the acquisition of the Shares
subscribed to herein.


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


G.            Communication.  Any notice, demand, request or other
communication which may be required or contemplated herein (including delivery
of this Subscription Agreement by and between the parties hereto) shall be
sufficiently given or delivered if (i) given either by 



 10
 









facsimile transmission (with confirmation of receipt),
by reputable overnight delivery service, postage prepaid, or by registered or
certified mail, postage prepaid and return receipt requested, to the address
indicated herein or to such other address as any party hereto may specify as
provided herein, or (ii) delivered personally at such address.


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


I.              Confirmation of
Representations; Additional Information. 
Upon request of the Company, the Subscriber shall confirm the accuracy
of the representations in this Subscription Agreement to the Company as of the
Closing Date and will use reasonable efforts to notify the Company and to do so
promptly if the Subscriber becomes aware that such representations are, at any
time, inaccurate in any respect.  In
addition, the Subscriber hereby agrees to respond reasonably to requests to
supply any additional written information concerning the representations in
this Subscription Agreement that the Company may reasonably request.


J.             Indemnification.  The Subscriber shall indemnify and hold
harmless 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 subject
arising out of or based upon any false representation or warranty, or any
breach of or failure to comply with any covenant or agreement, made by the
Subscriber in this Subscription Agreement or in any other document furnished to
the Company in connection with the Subscriber’s investment in the Company.  The Subscriber will reimburse each
Indemnified Person for his, her or its reasonable legal and other expenses
(including the cost of any investigation and preparation) as they are incurred
in connection with any action, proceeding or investigation arising out of or
based upon the foregoing.  The indemnity
and reimbursement obligations of the Subscriber under this Part K shall be in
addition to any liability which the Subscriber may otherwise have.


K.            General.  This Subscription Agreement may be executed
in counterparts with the same effect as if the parties executing the
counterparts had all executed one counterpart. 
This Subscription Agreement and the documents specifically referred to
herein constitute the entire agreement among the parties hereto pertaining to
the subject matter hereof and supersedes all prior and contemporaneous
agreements and understandings of the parties in connection therewith.  Neither this Subscription Agreement nor any
provision hereof may be waived, modified, discharged or terminated except by an
instrument in writing signed by the party against whom such waiver,
modification, discharge or termination is sought to be enforced.  Each provision of this Subscription Agreement
shall be considered separable and if for any reason any provision or provisions
hereof 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 of
this Subscription Agreement which are valid.


*                              *                              *                              *                              *



 11
 









IN WITNESS
WHEREOF, the Subscriber has executed this Subscription Agreement to OSIRIS
THERAPEUTICS, INC., Inc. this            
day of            , 200   .


 


	
   

  	
  Name of Subscriber:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Hereunto duly authorized

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Purchase Price:

  	
  US$

  	
                                     

  	
   

  
									



 


[SUBSCRIBER SIGNATURE PAGE]



 12
 









ACCEPTANCE


Name of Subscriber:                                                          


Purchase Price:        US$                                           


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


 


	
  

  	
  OSIRIS THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:        ,
  200   

  	
   

  	
   

  




 13
 









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.:

  	
   

  	
                                                                                 

  
	
   

  	
   

  	
   

  
	
  Shares of Common
  Stock:

  	
   

  	
                                                                                 

  
	
   

  	
   

  	
   

  
	
  Purchase Price:

  	
   

  	
  US$                                                                               

  



 



 14















EXHIBIT B


SUBSCRIPTION AGREEMENT - NOTES



 1
 









OSIRIS THERAPEUTICS, INC.


PROMISSORY NOTE


SUBSCRIPTION DOCUMENTS



 2
 









SUBSCRIPTION INSTRUCTIONS


To subscribe
for notes of Osiris Therapeutics, Inc., a prospective investor must complete
the Subscription Documents.  Specifically,
a prospective investor must:


1.             Read the Subscription Agreement in its
entirety and confirm that all of the representations and warranties of the
Subscriber are true, complete and correct.


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


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


4.             Fax all of the fully executed Subscription
Documents to:


Osiris Therapeutics, Inc.


Attention:  Chief Financial
Officer


Fax:  011-443-545-1710


5.             Overnight Courier all of the fully
executed Subscription Documents to:


Osiris Therapeutics, Inc.


7015 Albert Einstein Drive


Columbia, MD  USA  21046


Attention:  Chief Financial Officer


If you have
any questions concerning the completion of the Subscription Documents, please
contact (011-443-545-1819).



 3
 









THE NOTE TO BE ACQUIRED BY THE
SUBSCRIBER PURSUANT TO THIS SUBSCRIPTION AGREEMENT HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE
OFFERED, SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
WITHIN 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 UNDER
THE SECURITIES ACT (“REGULATION S”)), IN THE ABSENCE OF SUCH REGISTRATION,
UNLESS SUCH TRANSACTION IS EXEMPT FROM OR NOT SUBJECT TO REGISTRATION UNDER THE
SECURITIES ACT, AND THE SUBSCRIBER HAS, IF REQUIRED BY THE COMPANY, DELIVERED
AN OPINION OF COUNSEL TO THAT EFFECT.  BY
ENTERING INTO THIS SUBSCRIPTION AGREEMENT, SUBSCRIBER REPRESENTS, AMONG OTHER
THINGS, THAT IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a) OF THE
SECURITIES ACT) AND IS NOT A U.S. PERSON, AND IS ACQUIRING THE NOTE PURSUANT
HERETO OUTSIDE THE U.S. AND IN ACCORDANCE WITH REGULATION S, AND WILL NOT
ENGAGE IN ANY HEDGING TRANSACTIONS WITH RESPECT TO THE COMMON STOCK OR NOTES OF
THE COMPANY PRIOR TO THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD (AS
DEFINED IN REGULATION S) EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT.


OSIRIS
THERAPEUTICS, INC.


SUBSCRIPTION
AGREEMENT


Name of Subscriber:


Address of Subscriber:


Number of 

Shares of Common Stock:


Purchase Price:                     US$


TO:         Osiris
Therapeutics, Inc., a Delaware corporation (the “Company”).


The Subscriber
hereby agrees to loan and advance to Company, and to purchase from the Company
at the Closing provided for hereinbelow, an unsecured promissory note of the
Company (the “Note”) in the original principal
sum of $           (the “Principal Amount”), in substantially the form of promissory
note attached hereto as Exhibit A.



 4
 









The Subscriber
understands that this Subscription Agreement may be rejected in whole or in
part prior to acceptance at any time for any reason whatsoever by the
Company.  The Subscriber further
understands that in the event this Subscription Agreement is rejected by the
Company, the subscription of the Subscriber herein shall become null and void
insofar as rejected.  Upon such
rejection, the Subscriber shall have no further obligations to the Company.


A.            Payment.  In connection with this Subscription
Agreement and subject to acceptance by the Company, the Subscriber hereby
agrees with the Company as follows:


(1)           The issuance of the
Note offered or subscribed for pursuant hereto will occur at a Closing to be
held at a date and time determined by the Company, which date will not be later
than the second business day immediately following the acceptance by the
Company of this Subscription Agreement (the “Closing
Date”), and which may, at the option of the Company, be concurrent
with the acceptance hereof by the Company. 
On the Closing Date, the Subscriber will pay to the Company the
Principal Amount in immediately available funds, by wire transfer as directed
by the Company.  Upon the Subscriber’s
payment in full of the Principal Amount as contemplated by this Part A(1), the
Company shall deliver to the Subscriber the Note, fully executed on behalf of
the Company.


B.            Acknowledgments and
Covenants.


(1)           The Subscriber hereby
agrees to pay all costs and expenses incurred by or on behalf of the Company,
including reasonable attorneys’ fees and disbursements, in connection with
enforcing the Subscriber’s obligations under this Subscription Agreement in the
event of any default in respect of its obligations hereunder.


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


C.            Representations and
Warranties.


Subscriber Representations and Warranties.


The Subscriber warrants, represents and agrees with the Company as
follows:


(1)           Upon acceptance by the
Company, this Subscription Agreement is irrevocable and shall constitute a
binding commitment of the Subscriber.


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


(3)           At the time the “buy”
order was originated in respect of Subscriber’s acquisition of the Note
pursuant to this Subscription Agreement, Subscriber was outside 



 5
 









of the U.S., and Subscriber is outside the
U.S. as of the date of the execution and delivery of this Subscription
Agreement by Subscriber.  No offer to
acquire the Note pursuant to this Subscription Agreement or otherwise to
acquire the Note was made to Subscriber or its representatives inside the U.S.


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


(5)           The Subscriber will
make all resales of the Note only outside of the U.S. in compliance with
Regulation S, or pursuant to a registration statement under the Securities Act,
or pursuant to an available exemption from registration under the Securities
Act.  Specifically, Subscriber will not
resell the Note to any U.S. Person or within the United States prior to the
expiration of one (1) year (the “Distribution
Compliance Period”), except
pursuant to registration under the Securities Act or an exemption from
registration under the Securities Act.


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


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


(8)           Subscriber has been
furnished with, or has acquired, copies of all of the documents filed by the
Company with the United States Securities and Exchange Commission during the
twelve (12) months prior to the date hereof, as well as all other documents made
available by the Company for public dissemination during the same period,
including, but not limited to, press releases, and Subscriber has been provided
all necessary and appropriate information about the Company to make an informed
investment decision with respect to the acquisition of this Shares.  WITHOUT LIMITING THE FOREGOING, THE
SUBSCRIBER ACKNOWLEDGES THAT THE ACQUISITION OF THE NOTE INVOLVES SUBSTANTIAL
RISK AND THE SUBSCRIBER MAY LOSE ITS ENTIRE INVESTMENT.


(9)           Subscriber has
sufficient knowledge and experience in financial and business matters and is
capable of evaluating the risks and merits of Subscriber’s acquisition of the
Note; Subscriber has been provided the opportunity to make all necessary and
appropriate inquiries of the Company regarding the Company’s business and
associated risks, and the Company has complied with all such requests; and
Subscriber is able financially to bear the risk of losing Subscriber’s full
investment in the Note.



 6
 









(10)         The Note is being
acquired in a transaction not involving a public offering within the United
States within the meaning of the Securities Act, and Subscriber understands
that the Note has not been and may not be, registered under the Securities Act
or registered or qualified under any the securities laws of any state or other
jurisdiction, is and will be “restricted securities” and cannot be resold or
otherwise transferred unless registered under the Securities Act, and
registered or qualified under any other applicable securities laws, or an exemption
from such registration and qualification is available.  Prior to any proposed transfer of the Note,
Subscriber shall, among other things, give written notice to the Company of
Subscriber’s intention to effect such transfer, identifying the transferee and
describing the manner of the proposed transfer and, if requested by the
Company, accompanied by (i) investment representations by the transferee
similar to those made by Subscriber in this Section 10 and (ii) an opinion of
counsel satisfactory to the Company to the effect that the proposed transfer
may be effected without registration under the Securities Act and without
registration or qualification under applicable state or other securities
laws.  The Note shall bear a legend
similar to that set forth on the first page of this Subscription Agreement
(insofar as applicable) and otherwise referring to reiterating the restrictions
on transfer and other terms hereof applicable to the Note upon issuance, and
containing such other information and imposing such other restrictions as shall
be reasonably required by the Company.


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


(12)         Subscriber acknowledges
that there is no restriction imposed hereby upon the Company in respect of the
incurring by the Company of additional debt or the issuance by the Company of
additional debt or equity securities, or otherwise.


(13)         The Note will be purchased
for the account of the Subscriber for investment only and not with a view to,
or with any intention of, a distribution or resale thereof, in whole or in
part, or the grant of any participation therein.  The Subscriber has not been organized for the
specific purpose of acquiring the Note. 
The Subscriber acknowledges that the Note has not been registered under
the Securities Act, or the securities or real estate syndication laws of any
state or other jurisdiction and cannot be disposed of unless subsequently
registered under the Securities Act and any applicable laws of states or other
jurisdictions or an exemption from such registration is available.


(14)          The Subscriber is an “accredited
investor” as defined in Rule 501(a) of Securities and Exchange Commission
Regulation D, that is (i) if a natural person, Subscriber has an individual net
worth, or joint net worth with the Subscriber’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 specific purpose of acquiring the Shares, and
has total assets in excess of $5,000,000.


(15)         The Subscriber
acknowledges that at no time was the Subscriber presented with, or solicited
by, any leaflet, public promotional meeting, newspaper or magazine 



 7
 









article, radio or television advertisement or
any other form of general advertising or general solicitation with respect to
the Company.


(16)         If the Subscriber is an
entity, the Subscriber is duly organized or, if a trust, duly established
pursuant to a valid trust instrument, validly existing and in good standing
under the laws of the jurisdiction wherein it is organized and has the power
and authority to carry on the activities in which it is engaged and to acquire
the Note.  This Subscription Agreement
and any other documents executed and delivered by the Subscriber in connection
therewith or herewith have been duly authorized, executed and delivered by the
Subscriber, and are the legal, valid and binding obligations of the Subscriber
enforceable in accordance with their respective terms.


(17)         The execution and
delivery of this Subscription Agreement and any other documents executed and
delivered by the Subscriber in connection herewith do not, and the performance
and consummation of the terms and transactions set forth or contemplated
therein or herein will not, contravene or result in a default under any
provision of existing law or regulations to which the Subscriber is subject,
the provisions of the trust instrument, charter, bylaws or other governing
documents of the Subscriber (if the Subscriber is an entity) or any indenture,
mortgage or other agreement or instrument to which the Subscriber is a party or
by which it is bound and does not require on the part of the Subscriber any
approval, authorization, license, or filing from or with any foreign, federal,
state or municipal board or agency which has not been obtained.


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


(19)         The Subscriber represents
and warrants to, and agrees and covenants with, the Company, as of the date
hereof, that, to the best of its knowledge, none of (i) the Subscriber, (ii)
any person controlling or controlled by the Subscriber, (iii) if the Subscriber
is a privately held entity, any person having beneficial interest in the
Subscriber, and (iv) any person for which the Subscriber is acting as agent or
nominee in connection with this Subscription Agreement, is a country,
territory, individual or entity named on the OFAC lists, nor is any such person
or entity prohibited from investing in the Company under any OFAC administered
sanctions or embargo programs.


(20)         The Subscriber agrees
promptly to notify the Company should the Subscriber become aware of any change
in the information set forth in Part (18) or Part (19) above.  The Subscriber acknowledges and agrees that,
if required by law, the Company may be obligated to “freeze the account” of the
Subscriber, either by 



 8
 









prohibiting additional investments from the
Subscriber and/or segregating assets of the Subscriber in compliance with
government regulations and, if required by law, the Company may also be
required to report such action and to disclose the Subscriber’s identity to
OFAC.  The Subscriber also understands
and agrees that the Company may release confidential information about the
Subscriber and, if applicable, any underlying beneficial owners of the
Subscriber, to law enforcement agencies to the extent necessary to ensure
compliance with all applicable laws, rules and regulations.


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


(22)         If the Subscriber is
acting as nominee or custodian for another person, entity or organization in connection
with the acquisition of the Note, the undersigned has so indicated on the “Subscriber
Information” page attached hereto.  The
representations and warranties contained in this Part C regarding the
Subscriber are true and accurate with regard to both the Subscriber and the
person, entity or other organization for which the undersigned is acting as
nominee or custodian.  The person, entity
or organization for which the undersigned is acting as nominee or custodian
will not transfer or otherwise dispose of or distribute any part of its
economic or beneficial interest in (or any other rights with respect to) the
Note without complying with all of the applicable provisions of this
Subscription Agreement and applicable law, as if such person, entity or organization
were a holder of the Note.  If the
undersigned is acting as nominee or custodian for another person, entity or
organization, the undersigned agrees to provide such other information as the
Company may reasonably request regarding the undersigned and the person, entity
or organization for which the undersigned is acting as nominee or custodian in
order to determine the eligibility of the Subscriber to acquire the Note.


Company Representations and Warranties.


By accepting the Subscriber’s subscription, the Company warrants,
represents and agrees with the Subscriber as follows:


(a)           The Company is duly
organized, validly existing and in good standing as a corporation under the
Delaware General Corporation Law, with all requisite corporate power and authority
to conduct its business as currently conducted and to issue the Note in
accordance with the terms of this Subscription Agreement.  This Subscription Agreement (when accepted)
will have been duly authorized, executed and delivered by the Company.


(b)           This Subscription
Agreement is a legally binding obligation of the Company, enforceable against
the Company in accordance with the terms hereof, except to the extent that (i)
such enforceability is limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting generally the enforcement of creditors’
rights, and (ii) the availability of the remedy of specific 



 9
 









performance or in injunctive or other
equitable relief is subject to the discretion of the court before which any
proceeding therefore may be brought.


D.            Assignment,
Survival, Effectiveness and Further Information.


(1)           This Subscription
Agreement is not assignable by either the Subscriber or the Company without the
prior written approval of the other party in its sole and absolute
discretion.  This Subscription Agreement
shall be binding upon the successors and any permitted assigns of the
Subscriber and, when accepted by the Company, shall be binding upon the
successors and any permitted assigns of the Company.


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


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


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


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


G.            Communication.  Any notice, demand, request or other
communication which may be required or contemplated herein (including delivery
of this Subscription Agreement by and between the parties hereto) shall be
sufficiently given or delivered if (i) given either by facsimile transmission
(with confirmation of receipt), by reputable overnight delivery service,
postage prepaid, or by registered or certified mail, postage prepaid and return
receipt requested, to the address indicated herein or to such other address as
any party hereto may specify as provided herein, or (ii) delivered personally
at such address.


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



 10
 









I.              Confirmation of
Representations; Additional Information. 
Upon request of the Company, the Subscriber shall confirm the accuracy
of the representations in this Subscription Agreement to the Company as of the
Closing Date and will use reasonable efforts to notify the Company and to do so
promptly if the Subscriber becomes aware that such representations are, at any
time, inaccurate in any respect.  In
addition, the Subscriber hereby agrees to respond reasonably to requests to supply
any additional written information concerning the representations in this
Subscription Agreement that the Company may reasonably request.


J.             Indemnification.  The Subscriber shall indemnify and hold
harmless 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 subject
arising out of or based upon any false representation or warranty, or any
breach of or failure to comply with any covenant or agreement, made by the
Subscriber in this Subscription Agreement or in any other document furnished to
the Company in connection with the Subscriber’s investment in the Company.  The Subscriber will reimburse each
Indemnified Person for his, her or its reasonable legal and other expenses
(including the cost of any investigation and preparation) as they are incurred
in connection with any action, proceeding or investigation arising out of or
based upon the foregoing.  The indemnity
and reimbursement obligations of the Subscriber under this Part K shall be in
addition to any liability which the Subscriber may otherwise have.


K.            General.  This Subscription Agreement may be executed
in counterparts with the same effect as if the parties executing the
counterparts had all executed one counterpart. 
This Subscription Agreement and the documents specifically referred to
herein constitute the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersedes all prior and contemporaneous agreements
and understandings of the parties in connection therewith.  Neither this Subscription Agreement nor any
provision hereof may be waived, modified, discharged or terminated except by an
instrument in writing signed by the party against whom such waiver,
modification, discharge or termination is sought to be enforced.  Each provision of this Subscription Agreement
shall be considered separable and if for any reason any provision or provisions
hereof 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 of
this Subscription Agreement which are valid.


*                              *                              *                              *                              *



 11
 









IN WITNESS
WHEREOF, the Subscriber has executed this Subscription Agreement to OSIRIS
THERAPEUTICS, INC., Inc. this             day
of               
200    .


	
   

  	
  Name of Subscriber:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Hereunto duly authorized

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Principal Amount:

  	
  US$

  	
                                     

  	
   

  
									



 


[SUBSCRIBER SIGNATURE PAGE]



 12
 









ACCEPTANCE


Name of Subscriber:
                                                          


Principal Amount:      US$                                           


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


	
  

  	
  OSIRIS THERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:                ,
  200   

  	
   

  	
   

  



 



 13
 









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$                                                                               

  



 



 14















THIS PROMISSORY NOTE
(THIS “NOTE”) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION, AND MAY NOT BE OFFERED, SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF WITHIN 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 UNDER THE SECURITIES ACT), IN THE ABSENCE OF SUCH REGISTRATION,
UNLESS SUCH TRANSACTION IS EXEMPT FROM OR NOT SUBJECT TO REGISTRATION UNDER THE
SECURITIES ACT, AND HOLDER HAS, IF REQUIRED BY THE COMPANY, DELIVERED AN
OPINION OF COUNSEL TO THAT EFFECT.  BY
ACCEPTING THIS NOTE, HOLDER REPRESENTS, AMONG OTHER THINGS, THAT IT IS AN
ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a) OF THE SECURITIES ACT) AND IS
NOT A U.S. PERSON, AND IS ACQUIRING THIS NOTE OUTSIDE THE U.S. AND IN
ACCORDANCE WITH REGULATIONS, AND WILL NOT ENGAGE IN ANY HEDGING TRANSACTIONS
WITH RESPECT TO THIS NOTE OR THE COMMON STOCK OF THE COMPANY PRIOR TO THE
EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD (AS DEFINED HEREIN) EXCEPT IN
COMPLIANCE WITH THE SECURITIES ACT.


PROMISSORY NOTE


US $                                                                                                                                                                                      , 200     


FOR VALUE
RECEIVED, Osiris Therapeutics, Inc.,
a Delaware corporation (the “Company”),
having an address of 7015 Albert Einstein Drive, Columbia, MD 20146, U.S.A.,
hereby promises to pay to the order of                                                       
(the “Holder”), at the offices of Holder at                                                     
or such other place as may be designated by Holder to the Company in writing,
the aggregate principal amount of                                       
U.S. Dollars  ($                           )
(the “Principal”) together with accrued and
unpaid interest, upon the terms and conditions hereinafter set forth.


1.             Payment Terms.  The Company promises to pay to Holder the
Final Payment Amount (as hereinafter defined) on                            ,
200   , the third anniversary of the date hereof (the
“Maturity Date”), unless this Note is
earlier redeemed by the Company.  All
accrued and unpaid interest shall be due and payable in accordance with Section
2 hereof.  All payments hereunder
shall be made in lawful money of the United States of America. Payment shall be
credited first to the accrued and unpaid interest then due and payable and the
remainder to Principal.  “Final Payment
Amount” means an amount equal to the sum of the total unpaid Principal plus any
accrued and unpaid interest.


2.             Interest.  Interest on the outstanding portion of
Principal of this Note shall accrue at the floating and fluctuating per annum
rate of interest equal at all times to the sum of the LIBOR Index plus four
percent (4.0%).  For purposes hereof,
LIBOR Index shall mean the one month LIBOR established by the British Bankers
Association as of 11:00 a.m. (London time) on the first business day of each
month as published by an on-line information service such as Bloomberg
Financial Markets Securities News, or a similar service.  All computations of interest shall be made on
the basis of a 360-day year for actual days elapsed.  All accrued and unpaid interest shall be due
and payable semi-annually, commencing on the six-month anniversity of the date
hereof and continuing semi-annually thereafter (each, a “Payment Date”),
until and including the Maturity Date. 
If a Payment Date or the Maturity



 15
 









Date is on a day that is
not a business day, payment of any amounts due and payable on such date shall
be effected on the immediately following business day.


3.             Redemption/Prepayment
of this Note.  This Note may be
redeemed or prepaid by the Company in whole or in part from time to time and at
any time by payment to Holder in immediately available funds of the sum of the
total or any portion of the unpaid Principal plus any accrued but unpaid
interest without penalty of any kind.


4.             Subordination.  The indebtedness evidenced hereby ranks
senior in right of payment to all classes and series of the Company’s capital
stock.  By accepting this Note, the
Holder does expressly consent to the aforesaid ranking in right of payment and
agrees to perform, from time to time,
such acts, and to execute, acknowledge and/or deliver such other instruments,
documents and agreements, as may from time to time be requested by the Company,
or as may from time to time otherwise be reasonably requested, necessary or
required, to so confirm or provide.


5.             Representations
and Warranties of the Company.  The
Company represents and warrants to Holder as follows:


(a)                                  The
execution and delivery by the Company of this Note (i) are within the Company’s
corporate power and authority, and (ii) have been duly authorized by all
necessary corporate action.


(b)                                 This
Note is a legally binding obligation of the Company, enforceable against the
Company in accordance with the terms hereof, except to the extent that (i) such
enforceability is limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting generally the enforcement of creditors’
rights, and (ii) the availability of the remedy of specific performance or
injunctive or other equitable relief is subject to the discretion of the court
before which any proceeding therefore may be brought.


6.             Use of Proceeds.  The proceeds received by the Company from the
sale of this Note shall be used by the Company for working capital, redemption
or repayment of debt and/or other general corporate purposes.


7.             No Waiver in
Certain Circumstances.  No course of
dealing of Holder nor any failure or delay by Holder to exercise any right,
power or privilege under this Note shall operate as a waiver hereunder and any
single or partial exercise of any such right, power or privilege shall not
preclude any later exercise thereof or any exercise of any other right, power
or privilege hereunder.


8.             Certain Waivers by
the Company.  Except as expressly
provided otherwise in this Note, the Company and every endorser or guarantor,
if any, of this Note waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note, and assent to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral available to Holder, if any,
and to the addition or release of any other party or person primarily or
secondarily liable.


9.             No Unlawful
Interest.  Notwithstanding anything
herein to the contrary, payment of any interest or other amount hereunder shall
not be required if such payment would be



 16
 









unlawful.  In any such event, this Note shall
automatically be deemed amended so that interest charges and all other payments
required hereunder, individually and in the aggregate, shall be equal to but
not greater than the maximum permitted by law. 
As a condition to its obligation to make any payment of interest
hereunder without withholding as may otherwise be required under applicable
U.S. tax laws, the Company may require that the Holder submit to the Company a
properly completed IRS Form W-8 or similar or sucessor form sufficiently
demonstrating to the reasonable satisfaction of the Company that no such
withholding is required.


10.           Representations,
Warranties and Covenants of Holder. 
By accepting this Note, Holder represents and warrants to the Company,
and agrees, as follows:


(a)                                  The
principal address of Holder is outside of the United States, and Holder is not
a U.S. Person as such term is defined and used in Regulation S.


(b)                                 At
the time the “buy” order was originated in respect of Holder’s acquisition of
this Note, Holder was outside of the U.S., and Holder is outside the U.S. as of
the date of the execution and delivery of this Note by Holder.  No offer to acquire this Note was made to
Holder or its representatives inside the United States.


(c)                                  Holder
is an accredited “investor” within the meaning of Rule 501(a) under the
Securities Act.


(d)                                 Holder
is acquiring this Note for his/her/its own account, not on behalf or for the
account of any U.S. Person, and the purchase of this Note has not been
pre-arranged with a purchaser in the U.S.


(e)                                  The
Holder will make all resales of this Note only outside of the United States in
compliance with Regulation S, or pursuant to a registration statement under the
Securities Act, or pursuant to an available exemption from registration under
the Securities Act.  Specifically, Holder
will not resell this Note to any U.S. Person or within the United States prior
to the expiration of one year (the “Distribution
Compliance Period”) after the
closing of the offering to which this Note relates, except pursuant to
registration under the Securities Act or an exemption from registration under
the Securities Act.


(f)                                    Holder
will not engage in any hedging transactions with respect to this Note or the
Common Stock of the Company at any time prior to the expiration of the
Distribution Compliance Period, except in compliance with the Securities Act.


(g)                                 The
Company is and will be relying on the truth and accuracy of Holder’s
representations, warranties, agreements, acknowledgements and understandings as
set forth herein, in order to determine the applicability of such exemptions
and the suitability of Holder and his/her/its acquisition of the Note.


(h)                                 Holder
has been furnished with, or has acquired, copies of all of the documents filed
by the Company with the United States Securities and Exchange Commission during
the twelve months prior to the date hereof, as well as all other documents made
available by the Company for public



 17
 









dissemination
during the same period, including, but not limited to, press releases, and
Holder has been provided all necessary and appropriate information about the
Company to make an informed investment decision with respect to the acquisition
of this Note.


(i)                                     Holder
has sufficient knowledge and experience in financial and business matters and
is capable of evaluating the risks and merits of Holder’s investment in the
Company; Holder has been provided the opportunity to make all necessary and
appropriate inquiries of the Company regarding Company’s business and
associated risks, and Company has complied with all such requests; and Holder
is able financially to bear the risk of losing Holder’s full investment in this
Note.


(j)                                     The
Note is being acquired in a transaction not involving a public offering within
the United States within the meaning of the Securities Act, and Holder
understands that this Note has not been and will not be registered under the
Securities Act or registered or qualified under any the securities laws of any
state or other jurisdiction and cannot be resold or otherwise transferred
unless it is registered under the Securities Act, and registered or qualified
under any other applicable securities laws, or an exemption from such
registration and qualification is available. 
Prior to any proposed transfer of this Note, Holder shall, among other
things, give written notice to the Company of Holder’s intention to effect such
transfer, identifying the transferee and describing the manner of the proposed
transfer and, if requested by the Company, accompanied by (i) investment
representations by the transferee similar to those made by Holder in this
Section 10 and (ii) an opinion of counsel satisfactory to the Company to the
effect that the proposed transfer may be effected without registration under
the Securities Act and without registration or qualification under applicable
state or other securities laws.


(k)                                  Holder
understands that no U.S. federal or state government or agency has passed on or
made any recommendation or endorsement of offering for sale or the sale of this
Note.


(l)                                     Holder
acknowledges that there is no restriction imposed hereby upon the Company in
respect of the incurring by the Company of additional debt or the issuance by
the Company of additional debt or equity securities, or otherwise.


11.           Obligations
Unsecured.  The Company’s obligations
under this Note are unsecured.


12.           Default.  In the event Company
fails to perform any of its repayment obligations under this Note, and such
default is continuing for a period of ten (10) business days after written
notice from Holder to the Company, Holder may accelerate repayment of the
Principal plus any accrued and unpaid interest and exercise, without further
notice, all rights and remedies under this Note or enforce any rights otherwise
available.



 18
 









13.           Miscellaneous.  No modification, rescission, waiver,
forbearance, release or amendment of any provision of this Note shall be made,
except by a written agreement duly executed by each of the Company and Holder.  This Note may not be conveyed, assigned or
transferred by Holder without the prior written consent of the Company.  Any permitted subsequent Holder of this Note
shall be deemed, by accepting this Note, to have made and reaffirmed to the
Company each and every of the acknowledements, consents, agreements, representations,
warranties and covenants of the original Holder hereof.  All notices hereunder shall be in writing and
be deemed given if personally delivered, sent by overnight courier (provided
proof of delivery is received) or sent by telecopy (provided a confirmation of
transmission is received) at the addresses of the respective parties set forth
in the initial paragraph of this Note or such other address as either party
shall notify the other of from time to time. 
The Company hereby submits to personal jurisdiction in the State of
Maryland, consents to the jurisdiction of any competent state or federal
district court sitting in the County of Howard County, Maryland, and waives any
and all rights to raise lack of personal jurisdiction as a defense in any
action, suit or proceeding in connection with this Note or any related
matter.  This Note shall be governed by,
and construed and interpreted in accordance with, the laws of the State of
Maryland, without reference to conflicts of law provisions of such state.


IN
WITNESS WHEREOF, the undersigned have caused this Note to be executed and
delivered by a duly authorized officer as of the date first above written.


	
  

  	
   

  	
  Osiris Therapeutics, Inc.:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


ACCEPTED as of the date first above written:


Holder:


	
  By: 

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  



 



 19















EXHIBIT C


FCF REPRESENTATIONS, COVENANTS AND
AGREEMENTS


1.             Neither FCF nor any of its affiliates, nor any person
acting on its behalf, have engaged or will engage in any “directed selling
efforts” (as such term is defined in Regulation S) in the United States with
respect to the offering of the Common Stock or Notes, and they have complied
with and will comply with the offering restriction requirements of Regulation S
in connection with the Offering.


2.             FCF acknowledges that neither the shares of Common Stock
nor the Notes have been, and may not be, registered under the Act, and that,
prior to the expiration of one year after each Closing Date (the “Distribution
Compliance Period”), may not be offered or sold within the United States, or
for the account or benefit of any U.S. Person (as defined in Regulation S),
except in accordance with the provisions of Rule 903 or 904 of Regulation S
under the Act, or pursuant to an exemption from the registration requirements
of the Act, or unless registered pursuant to the Act.


3.             At or prior to the confirmation of sale of any of the
shares of Common Stock or Notes, FCF will have sent to each distributor, dealer
or other person receiving any sort of selling concession, fee or other
remuneration in connection with the purchase or placement (if any), and to each
Purchaser, a confirmation or notice to substantially the effect as that which
is set forth as the legend on the cover page of the form of the corresponding
Subscription Agreement.


4.             FCF will not engage in hedging transactions with respect
to offers and sales of the shares of Common Stock purchased hereunder or with
respect to any shares of Common Stock of Osiris, generally, during the
Distribution Compliance Period, and any and all offering materials and
documents used by FCF in connection herewith shall disclose, in a legend or
legends prominently placed, that neither the shares of Common Stock nor the
Notes are registered under the Act, and cannot be sold in the United States or
to any U.S. Person during the Distribution Compliance Period, unless they are
registered or unless an exemption from registration is available in respect of
such sale.


5.             To the best of the knowledge of FCF, any and all
Purchasers will be individuals or entities resident of, and if an entity,
organized under the laws of, a jurisdiction other than the United States, and
which or whom are in each case “accredited investors” as defined in Rule 501(a)
of the Act, or qualified institutional investors within the meaning of Rule
144A of the Act.


6.             FCF will undertake and consummate the offering and
placement of the Common Stock and Notes in compliance with the applicable
securities and other laws, rules and regulations of the jurisdiction in which
such offers and sales occur, including without limitation, those of the country
of Switzerland.



 1


















EXHIBIT D


OSIRIS REPRESENTATIONS, COVENANTS
AND AGREEMENTS


1.             Assuming the accuracy of FCF’s statements as included in
Exhibit C above, neither Osiris nor any of its affiliates, nor any person
acting on its behalf, has engaged or will engage in any “directed selling
efforts” (as such term is defined in Regulation S) with respect hereto, and
Osiris has complied and will comply with the offering restrictions requirements
of Regulation S in connection with the Offering.


2.             Osiris will not consent to or otherwise permit or allow,
and will refuse, any transfer of the shares or Notes not made in compliance
with Regulation S, pursuant to registration under the Act, or pursuant to an
available exemption from such registration.



 1