Document:

Exhibit 10.30

Freigutstrasse
5

8002
Zurich

Switzerland

May 19, 2006

Osiris Therapeutics, Inc.

2001 Aliceanna Street

Baltimore, Maryland  21231-3043

Gentlemen:

Reference is made to the
letter (the “Termination Letter”) recently delivered and providing for termination
of the Consulting Agreement (the “Consulting Agreement”) previously entered
into between Friedli Corporate Finance AG, and or now Friedli Corporate
Finance, Inc. (individually and collectively, “FCF”), and Osiris Therapeutics,
Inc. (“Osiris”).  A copy of the
Termination Letter is attached hereto as Exhibit A.

Pursuant to the Termination
Letter, FCF agreed to certain indemnity obligations in respect of any claims at
any time existing or arising out of any instructions given or delivered to
Osiris by FCF or its representatives, as liaison between Friedli clients and
investors and Osiris, including, as regarding the delivery, ownership or
transfer of any shares of capital stock of Osiris, or any rights, options or
warrants in respect thereof.  By executing
this letter below, Peter Friedli does, in his individual capacity, hereby join
with FCF and does assume, jointly and severally with FCF, those indemnity
obligations, as provided for under the Termination Letter, as aforesaid and as
modified hereby.

In addition, by executing
this letter below, Peter Friedli, in his individual capacity, and FCF each
agree that, notwithstanding the Termination Letter, indemnification will be
provided for any instructions given or delivered to Osiris by FCF or its representatives
(including Peter Friedli), as well as in respect of any breach of any
representations or warranties given or made by or on behalf of FCF, or by Peter
Friedli, in connection therewith, regardless of the capacity in which given.  In addition, both FCF and Peter Friedli agree
that Osiris may satisfy any such indemnity claims through set-off against any
shares of capital stock or other securities of Osiris registered on the books
or records of Osiris in the name of FCF or Peter Friedli.

 

The undersigneds acknowledge
that each has received good and valuable consideration in exchange for
executing and delivering the Termination Letter and this letter, that the
Termination Letter and this letter have been executed and delivered with the
intention that Osiris rely upon both, and that the obligations of FCF under the
Termination Letter as originally executed and as modified by this letter are
legally valid, binding and enforceable against each of the undersigned, and are
hereby ratified and confirmed.

	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Friedli
  Corporate Finance, Inc.

  
	
   

  	
   

  	
  Friedli
  Corporate Finance AG

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Peter Friedli

  
	
   

  	
   

  	
  Name:

  	
  Peter Friedli

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accepted
  this 19th day of
  May, 2006.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Peter Friedli

  
	
  Osiris
  Therapeutics, Inc.

  	
   

  	
  Peter Friedli,
  Individually

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ C. Randal Mills

  	
   

  	
   

  
	
  Name:

  	
  C. Randal Mills

  	
   

  	
   

  
	
  Title:

  	
  President & CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

 

2Exhibit 10.31

 

THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON
EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”) AND THIS WARRANT MAY NOT BE EXERCISED
BY OR ON BEHALF OF ANY U.S. PERSON UNLESS REGISTERED UNDER THE SECURITIES ACT,
OR UNDER ANY STATE SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE. THESE SECURITIES HAVE BEEN ISSUED OFFSHORE IN ACCORDANCE WITH
REGULATION S, AS PROMULGATED UNDER THE SECURITIES ACT. THESE SECURITIES (OR ANY
BENEFICIAL INTEREST THEREIN) MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED
OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
SHARES UNDER THE SECURITIES ACT, OR IN ACCORDANCE WITH REGULATION S OR OTHER EXEMPTIVE
PROVISION UNDER THE SECURITIES ACT. HEDGING ACTIVITIES IN CONNECTION WITH THE
COMPANY’S SECURITIES ARE PROHIBITED EXCEPT IN ACCORDANCE WITH THE SECURITIES
ACT.

 

	
  Warrant No. CS-3

  	
  Number
  of Shares:  4,000,000

  

 

Date of Issuance:  May 24, 2006

 

OSIRIS THERAPEUTICS,
INC.

Common
Stock Purchase Warrant

1.             Exercise.

(a)           This Warrant certifies that Peter Friedli is the
registered holder of Warrants to purchase initially, at any time after the date
hereof until 5:30 p.m. New York time on May 24, 2011 (“Expiration Date”), up to 4,000,000 fully
paid and non-assessable shares of common stock, $.001 par value (“Common
Stock”), of OSIRIS THERAPEUTICS, INC., a Delaware corporation (the “Company”),
at the initial exercise price, subject to adjustment in certain events
described herein, equal to the price the shares are offered for sale in an
Initial Public Offering of the Company’s common stock of not less than USD $25
million (the “Exercise Price”), upon surrender of this Warrant, completion of Exhibit
A attached to this Warrant, and payment of the Exercise Price at an office
or agency of the Company, but subject to the conditions set forth herein.  Payment of the Exercise Price shall be made
by certified or official bank check in New York Clearing House funds payable to
the order of the company, or through the provisions of the “Right to Convert”
and “Method of Exercise” as defined herein.

No Warrant may be
exercised after 5:30 p.m., New York time, on the Expiration Date, which is
hereby defined as May 24, 2011, at which time the Warrant evidenced hereby,
unless exercised prior thereto, shall thereafter be void.  The shares of Common Stock issuable upon
exercise of the Warrant are referred to herein as “Warrant Stock.”

(b)           Delivery to Holder.  Upon the exercise for less than all of
the Warrant Stock evidenced by this Warrant the Company shall forthwith issue
to the holder hereof a new Warrant certificate representing such number
unexercised shares of Warrant Stock.

 

(c)           Right to Convert Warrant into Stock:  Non-Cash Net Exercise.  In addition to and without limiting the
rights of the Holder under the terms of this Warrant, the Holder shall have the
right to convert this Warrant or any portion thereof, (the “Net Exercise
Right”) into shares of Common Stock as provided in this Section 1 at any time
or from time to time during the term of this Warrant.  Upon exercise of the Net Exercise Right with
respect to a particular number of shares of Common Stock subject to this
Warrant (the “Converted Warrant Shares”), the Company shall deliver to the
Holder (without payment by the Holder of any exercise price or any cash or
other consideration) (X) that number of fully paid and nonassessable shares of
Common Stock equal to the (Y) Converted Warrant Shares multiplied by the
quotient obtained by dividing the result of (B) the fair market value of one
share of Common Stock less (A) the Warrant Price per share by (B) the fair
market value of one share of Common Stock all on the Conversion Date (as herein
defined).

Expressed as a formula such
conversion shall be computed as follows:

 

	
   

  	
  X = (B — A) Y

  	
   

  
	
   

  	
  B

  	
   

  

 

Where:                                                         X =          The number of shares of Common Stock
that may be issued to holder

                                                                                                Y =          The number of shares of Common Stock
being surrendered pursuant to this Net Exercise Right (i.e., the Converted
Warrant Shares).

                                                                                                A =         The Warrant Price per share.

                                                                                                B =          The fair market value of one share of
Common Stock (or if no shares of Common Stock are then outstanding, then Common
Stock).

No fractional shares shall
be issuable upon exercise of the Net Exercise Right, and, if the number of
Converted Warrant Shares to be issued determined n accordance with the
foregoing formula is other than a whole number, the Company shall pay to the
Holder an amount in cash equal to the fair market value of the resulting
fractional share on the Conversion Date. 
For purposes of this Section 1, shares issued pursuant to the Net
Exercise Right shall be treated as if they were issued upon the exercise of
this warrant.

                (d)           Method of Exercise.  The Net Exercise Right may be exercised by
the Holder by the surrender of this Warrant at the principal office of the
Company together with the Exercise Notice duly completed and executed,
specifying that the Holder thereby intends to exercise the New Exercise Right
and indicating the number of shares subject to this Warrant which are being
surrendered (referred to in Section 1(c) hereof as the Converted Warrant
Shares) in exercise of the Net Exercise Right. 
Such conversion shall be effective upon receipt by the Company of this
Warrant together with the aforesaid written statement, or on such later date as
is specified therein (the “Conversion Date”).

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2.             Adjustments.

(a)           Stock Splits and Dividends.  If outstanding shares of the Company’s Common
Stock shall be subdivided into a greater number of shares or a dividend in
Common Stock shall be paid in respect of Common Stock, the Exercise Price in
effect immediately prior to such subdivision or at the record date of such
dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately
reduced.  If outstanding shares of Common
Stock shall be combined into a smaller number of shares, the Exercise Price in
effect immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased.  When any adjustment is required to be made in
the Exercise Price, the number of shares of Warrant Stock purchasable upon the
exercise of this Warrant shall be changed to the number determined by dividing
(i) an amount equal to the number of shares issuable upon the exercise of
this Warrant immediately prior to such adjustment, multiplied by the Exercise
Price in effect immediately prior to such adjustment, by (ii) the Exercise
Price in effect immediately after such adjustment.

(b)           Reclassification, Etc.  In case of any reclassification or change
of the outstanding securities of the Company or of any reorganization of the Company
(or any other corporation the stock or securities of which are at the time
receivable upon the exercise of this Warrant) or any similar corporate
reorganization on or after the date hereof, then and in each such case the
holder of this Warrant, upon the exercise hereof at any time after the
consummation of such reclassification, change, reorganization, merger or
conveyance, shall be entitled to receive, in lieu of the stock or other
securities and property receivable upon the exercise hereof prior to such
consummation, the stock or other securities or property to which such holder
would have been entitled upon such consummation if such holder had exercised
this Warrant immediately prior thereto, all subject to further adjustment as
provided in Section 2(a); and in each such case, the terms of this
Section 2 shall be applicable to the shares of stock or other securities
properly receivable upon the exercise of this Warrant after such consummation.

(c)           Other Adjustments.  If the Company after the date hereof
shall issue (i) shares of Common Stock (or securities convertible or
exchangeable for Common Stock), or (ii) rights or warrants entitling the
holders thereof the subscribe for or purchase Common Stock (or securities
convertible into or exchangeable for Common Stock) at price per share of Common
Stock (or, in the case of a convertible or exchangeable security or a right or
warrant allowing the holder thereof to obtain securities convertible into or
exchangeable for Common Stock, having an effective exercise price per share of
Common Stock, computed on the basis of the maximum number of shares of Common
Stock issuable upon conversion or exchange of such convertible or exchangeable
securities, plus the additional consideration payable, if any to receive one
share of Common Stock upon conversion or exchange of such securities) less than
the Exercise Price per share on the date on which such issuance occurred, then
the Exercise Price shall immediately be adjusted to equal the price or the
exercise price or the conversion price of such newly issued security.  Such adjustment shall be made successfully
whenever such issuance occurs.  In
determining whether any convertible securities, rights or warrants entitle the
holders thereof to 

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obtain, subscribe for or
purchase shares of Common Stock at less than the Exercise Price, there shall be
taken into account any consideration received by the Company upon the issuance
and upon exercise of such rights or warrants, the value of
such consideration, if other than cash, to be determined by the Board of
Directors of the Company, in good faith. 
In case the conversion or exchange rate to this Section 2(c) shall
expire, or in case any rights or warrants referred to in this Section 2(c)
shall expire unexercised after the same have been distributed or issued by the
Company (or, in the case of rights or warrants to purchase securities
convertible into or exchangeable for Common Stock once exercised, the
conversion or exchange right of such securities shall expire), each Exercise
Price shall be readjusted at the time of such expiration to such Exercise Price
that would have been in effect if no adjustment had been made on account of the
distribution or issuance of such convertible or exchangeable securities, rights
or warrants.

(d)           Adjustment Certificate.  When any adjustment is required to be
made in the Warrant Stock or the Exercise Price pursuant to this Section 2, the
Company shall promptly mail to the Holder a certificate setting forth (i) a
brief statement of the facts requiring such adjustment, (ii) the Exercise Price
after such adjustment and (iii) the kind and amount of stock or other
securities or property into which this Warrant shall be exercisable after such
adjustment.

3.                             Transfers.  This Warrant is not assignable or
transferable, other than in accordance with the provisions of this
Warrant.  Upon receipt by the company of
evidence  satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date.  Any such new Warrant executed and delivered
shall constitute an additional contractual obligation on the part of the
Company, whether or not this Warrant so lost, stolen, destroyed or mutilated
shall be at any time enforceable by anyone.

4.                             Lock-Up
Agreement.   The Holder
will not, directly or indirectly, offer, sell, pledge, contract to sell
(including any short sale), grant any option to purchase or otherwise dispose
of any shares of Common Stock which may be issued under this Warrant or enter
into any Hedging Transaction related to the Common Stock (each of the foregoing
referred to as a “Disposition”). During the period for one-year after the date
of the final prospectus relating to the Public Offering.  Hedging Transaction means any short sale
(whether or not against the box) or any purchase, sale or grant of any right
(including, without limitation, any put or call option) with respect to any
security (other than a broad-based market basket or index) that includes,
relates to or derives any significant part of its value from the Common Stock.

5.             Representations and
Warranties.

                (a) The Holder hereby represents and warrants
to the Company, as of the date hereof, that it is neither a U.S. person
(as defined in Rule 902(k) under Regulation S promulgated under the Securities
Act (“Regulation S”)) nor acquiring the Warrant for the account or for
the benefit of a U.S. person.

                (b)  The Holder
agrees that it may only sell, mortgage, hypothecate or otherwise transfer the
Warrant (including any beneficial interest therein) only in  accordance with the 

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provisions of Regulation S,
pursuant to registration under the Securities Act or pursuant to an available
exemption from registration.  In
addition, the Holder agrees not to engage in hedging transactions involving the
Warrant unless in compliance with the Securities Act.

                (c)  The Holder
understands that at the time of exercise of this Warrant, the Holder must  certify that such Holder is not a U.S. person
and that this Warrant is not being exercised on behalf of a U.S. person, or the
Holder must provide the Company with a written opinion of counsel to the effect
that the Warrant and the Warrant Stock have been registered under the
Securities Act or are exempt from registration under the Securities Act.  The Holder understands that the Warrant may
not be exercised within the United States, and that the Warrant Stock may not
be delivered within the United States upon such exercise, other than in an
offering deemed to meet the definition of an “offshore transaction” pursuant to
Rule 902(h) under the Securities Act, unless registered under the Securities
Act or an exemption from such registration is available.

                (d)  The
Company hereby represents and warrants, as of the date hereof, that the Company
did not employ any directed selling efforts, as such term is defined within
Rule 902(c) of Regulation S, in connection with the sale of the Warrant.

6.             No Impairment.  The Company will not, by amendment of its
charter or through reorganization, consolidation, merger, dissolution, sale of
assets or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights
of the holder of this Warrant against impairment.  The Company may deem and treat the registered
holder(s) hereof as the absolute owner(s) of this Warrant (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, and of any distribution to the holder(s) hereof, and
for all other purposes, and the company shall not be affected by any notice to
the contrary.

7.             Notices of Certain Transactions.  In case:

(a)           the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time deliverable upon the exercise of this Warrant) for
the purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase any shares
of stock of any class or any other securities, or to receive any other right,
to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or

(b)           of
any capital reorganization of the Company, any reclassification of the capital
stock of the Company, any consolidation or merger of the Company, any
consolidation or merger of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the surviving entity),
or any transfer of all or substantially all of the assets of the Company, or

(c)           of
the voluntary or involuntary dissolution, liquidation or winding-up of the
Company,

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then, and in each such case,
the Company will mail or cause to be mailed to the Holder of this Warrant a
notice specifying, as the case may be, (i) the date on which a record is to be
taken for the purpose of such dividend, distribution or right, and stating the
amount and character of such dividend, distribution or right, or (ii) the
effective date on which such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation or winding-up is to take place, and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such other stock or securities at the time deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up) are to be determined.  Such notice shall be mailed at least ten (10)
days prior to the record date or effective date for the event specified in such
notice.

8.             Reservation of Stock.  The Company will at all times reserve and
keep available, solely for the issuance and delivery upon the exercise of this
Warrant, such shares of Warrant Stock and other stock, securities and property,
as from time to time shall be issuable upon the exercise of this Warrant.

9.             Notices.  Any notice required or permitted by this
Warrant shall be in writing and shall be deemed sufficient upon receipt, when
delivered personally or by courier, overnight delivery service or confirmed
facsimile, or forty-eight (48) hours after being deposited in the regular mail
as certified or registered mail (airmail if sent internationally) with postage
prepaid, addressed (a) if to the Holder, to the address of the Holder most
recently furnished in writing to the Company and (b) if to the Company, to the
address set forth below or subsequently modified by written notice to the
Holder.

10.           No Rights as Stockholder.  Until the exercise of this Warrant, the
Holder of this Warrant shall not have or exercise any rights by virtue hereof
as a stockholder of the Company.

11.           Amendment or Waiver.  Any term of this Warrant may be
amended or waived upon written consent of the Company and the Holder.

12.           Governing
Law. This Warrant shall be governed, construed and interpreted
in accordance with the laws of the State of Delaware, without giving effect to
principles of conflicts of law.

 

[Signature Page Follows]

 

 

 

 

 

 

 

 

 

6

 

 

This
Warrant has been executed as of the date first written above.

 

 

	
   

  	
   

  	
  OSIRIS
  THERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  C. Randal Mills, Pres
  & CEO

  	 

	
   

  	
   

  	
   

  	
  Osiris Therapeutics, Inc.

  	 

	
   

  	
   

  	
  Address:

  	
  2001 Aliceanna Street

  	 

	
   

  	
   

  	
   

  	
  Baltimore, MD 21231

  	 

	
   

  	
   

  	
  Fax Number:

  	
  (410) 522-6999

  	 

							

 

 

 

	
  ACKNOWLEDGED
  AND AGREED TO:

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  
	
   

  
	
   

  
	
  Fax Number:

  	
   

  	
   

  
						

 

EXHIBIT A

PURCHASE/EXERCISE FORM

	
  To:

  	
   

  	
  Osiris Therapeutics, Inc.

  	
   

  	
  Dated:

  

 

The undersigned, pursuant to the provisions set
forth in the attached Warrant, hereby irrevocably elects to purchase            shares
of the Common Stock covered by such Warrant and herewith makes payment of $          ,
representing the full purchase price for such shares at the price per share
provided for in such Warrant.

The undersigned certifies that (a) the
undersigned is not a U.S. person (as defined under Regulation S (“Regulation
S”) promulgated under the Securities Act of 1933, as amended (the “Securities
Act”)) and that this Warrant is not being exercised on behalf of a U.S. person,
or (b) the undersigned has provided the Company a written opinion of counsel to
the effect that the Warrant and the securities issuable upon exercise thereof
have been registered under the Securities Act or are exempt from registration
under the Securities Act.  The
undersigned understands that the Warrant may not be exercised within the United
States, and that the securities issuable upon exercise of the Warrant may not
be delivered within the United States upon such exercise, other than in an
offering deemed to meet the definition of an “offshore transaction” pursuant to
Rule 902(h) under the Securities Act, unless registered under the Securities
Act or an exemption from such registration is available.

 

 

	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name (print):

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title (if applic.)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Company (if applic.):

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