Exhibit 10.2

THIS CONVERTIBLE PROMISSORY NOTE (THIS “NOTE”) AND THE SECURITIES THAT MAY BE ACQUIRED PURSUANT TO THIS NOTE 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), 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 AND WILL ACQUIRE ANY CONVERSION SHARES (AS DEFINED HEREIN) OUTSIDE THE U.S. AND IN ACCORDANCE WITH REGULATION S, 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.  ISSUANCE OF THE CONVERSION SHARES IS CONDITIONED UPON THE CONTINUED AVAILABILITY OF REGULATION S IN RESPECT OF HOLDER AT TIME OF CONVERSION, OR THE AVAILABILITY TO HOLDER OF ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT IN RESPECT OF SUCH ISSUANCE.

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, Osiris Therapeutics, Inc. , a Delaware corporation (the “ Company ”), having an address of 2001 Aliceanna Street, Baltimore, MD 21231, 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 April 30 , 2009 (the “ Maturity Date ”), unless this Note is earlier redeemed by the Company or converted into Common Stock (as hereinafter defined) of the Company, pursuant to Section 3 hereof, as applicable.  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 a rate of ten percent (10%) per annum .  All computations of interest shall be made on the basis of a 360-day year for actual days elapsed.  All accrued interest shall be due and payable

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in cash on each Payment Date (as hereinafter defined), the Maturity Date,  the Redemption Date (as hereinafter defined) or Conversion Date (as hereinafter defined), as the case may be, in each case in accordance with the terms and conditions of this Note.  “Payment Date” means each of April 30, 2007, October 30, 2007, April 30, 2008 and October 30, 2008. Any accrued but unpaid interest will be paid in cash at the time of conversion. If a Payment Date, the Maturity Date, the Redemption Date or the Conversion Date, be 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.             Conversion or Redemption of this Note .

(a)                                   Conversion .  If at any time after February 9, 2007, either (i) the Closing Price (as defined below) of the common stock, par value USD 0.001 per share (“ Common Stock ”) of the Company shall for 10 consecutive trading days following such date equal USD 25.00 (the “ Threshold Amount ”)or higher or (ii) the Holder shall make written request for conversion of this Note upon the Company (the first to occur of (i) or (ii) after February 9, 2007, the “ Conversion Date ”), this Note shall be converted in its entirety and not in part into shares of the Common Stock.  The number of shares of Common Stock to which Holder shall be entitled upon such conversion shall be equal to the sum of the total unpaid principal divided by USD $18.00 (the “ Note Conversion Rate ”). Any accrued but unpaid interest will be paid in cash at the time of conversion. For purposes of this paragraph 3(a), the term „Closing Price” shall mean, as reasonably determined by the Company, the reported closing price on the NASDAQ Global Market.

(b)                                  Redemption .  This Note may be redeemed by the Company at any time by payment to Holder in immediately available funds of the sum of the total unpaid principal plus any accrued but unpaid interest.  The Company must provide written notice to Holder not less than 30 days prior to the effective date of such redemption (the “ Redemption Date ”).

(c)                                   Mechanics of Automatic Conversion   Upon the occurrence of either of the events specified in Section 3(a) above, this Note shall be converted into Common Stock automatically without any further action by Holder; provided, however, that the Company shall not be obligated to issue a certificate or certificates evidencing the shares of Common Stock issuable upon such conversion of this Note (“ Conversion Shares ”) unless the original of this Note is delivered to the Company, or Holder notifies the Company in writing that such original of this Note has been lost, stolen or destroyed, and Holder executes an agreement satisfactory to the Company to, among other things, indemnify the Company from any loss incurred by the Company in connection with such original of this Note.  Upon surrender by Holder to the Company of the original of this Note at the office of the Company, there shall be issued and delivered to Holder promptly at such office and in Holder’s name as shown on the original of this Note, a certificate or certificates for the applicable number of Conversion Shares on the Conversion Date.  Any such certificate shall bear a conspicuous legend similar to that set forth on page 1 of this Note (insofar as applicable) and otherwise referring to reiterating the restrictions on transfer and other terms hereof applicable to the Conversion Shares upon issuance.

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(d)                                  No Fractional Shares .  The number of Common Shares resulting from a conversion of this Note pursuant to Section 3(a) above shall be rounded up to the next higher integral share of Common Stock, and no fractional shares shall be issuable by the Company upon conversion of this Note.  Conversion of this Note shall be deemed payment in full of this Note and this Note shall thereupon be cancelled.

4.               The indebtedness evidenced hereby ranks pari passu in right of payment to the indebtedness evidenced from time to time by the other of the Offered Notes (as defined below) and to any other convertible debt securities of the Company now or hereafter existing and so providing, and 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 in 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 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.

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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 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 successor form sufficiently demonstrating to the reasonable satisfaction of the Company that no such withholding is required.

10.           R epresentations, 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 and will acquire any Conversion Shares for his/her/its own account, not on behalf or for the account of any U.S. Person, and neither the purchase of this Note nor the acquisition of the Conversion Shares has been pre-arranged with a purchaser in the U.S.

(e)                                   The Holder will make all resales of this Note and any Conversion 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, Holder will not resell this Note or any Conversion Shares to any U.S.