Exhibit 10.63
 

 
SECURITIES PURCHASE AGREEMENT
 
This Securities Purchase Agreement (this “Agreement”) is dated as of May 7,
2009, by and among Cytori Therapeutics, Inc., a Delaware corporation (the
“Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “Purchaser” and collectively, the
“Purchasers”).
 
RECITALS
 
A.           The Company and each Purchaser is executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the
United States Securities and Exchange Commission (the “Commission”) under the
Securities Act.
 
B.           Each Purchaser, severally and not jointly, wishes to purchase, and
the Company wishes to sell, upon the terms and conditions stated in this
Agreement, that aggregate number of (i) shares of common stock, par value $0.001
per share (the “Common Stock”), of the Company, set forth below such Purchaser’s
name on the signature page of this Agreement (which aggregate amount for all
Purchasers together shall be 1,859,783 shares of Common Stock and shall be
collectively referred to herein as the “Shares”) and (ii) warrants, in
substantially the form attached hereto as Exhibit A (the “Warrants”), to acquire
up to that number of additional shares of Common Stock equal to 175% of the
number of Shares purchased by such Purchaser (rounded up to the nearest whole
share) (the shares of Common Stock issuable upon exercise of or otherwise
pursuant to the Warrants collectively are referred to herein as the “Warrant
Shares”).   The Shares, Warrants and Warrant Shares collectively are referred to
herein as the “Securities”.
 
                   C.           Contemporaneously with the execution and
delivery of this Agreement, the parties hereto are executing and delivering a
Registration Rights Agreement, substantially in the form attached hereto as
Exhibit B (the “Registration Rights Agreement”), pursuant to which, among other
things, the Company will agree to provide certain registration rights with
respect to the Shares and Warrant Shares under the Securities Act and the rules
and regulations promulgated thereunder and applicable state securities laws.
 
                NOW, THEREFORE, IN CONSIDERATION of the mutual covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Company and the
Purchasers hereby agree as follows:
 
 
ARTICLE I.
DEFINITIONS
 
                1.1           Definitions. In addition to the terms defined
elsewhere in this Agreement, for all purposes of this Agreement, the following
terms shall have the meanings indicated in this Section 1.1:
 
                     “Action” means any action, suit, inquiry, notice of
violation, proceeding (including any partial proceeding such as a deposition) or
investigation pending or, to the Company’s Knowledge, threatened in writing
against the Company, any Subsidiary or any of their respective properties or any
officer, director or employee of the Company or any Subsidiary acting in his or
her capacity as an officer, director or employee before or by any federal,
state, county, local or foreign court, arbitrator, governmental or
administrative agency, regulatory authority, stock market, stock exchange or
trading facility.
 
                     “Affiliate” means, with respect to any Person, any other
Person that, directly or indirectly through one or more intermediaries,
Controls, is controlled by or is under common control with such Person, as such
terms are used in and construed under Rule 405 under the Securities Act. With
respect to a Purchaser, any investment fund or managed account that is managed
on a discretionary basis by the same investment manager as such Purchaser will
be deemed to be an Affiliate of such Purchaser.
 
                     “Agreement” shall have the meaning ascribed to such term in
the Preamble.
 

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                     “Business Day” means a day, other than a Saturday or
Sunday, on which banks in New York City are open for the general transaction of
business.
 
                     “Buy-In” has the meaning set forth in Section 4.1(f).
 
                     “Buy-In Price” has the meaning set forth in Section 4.1(f).
 
                     “Closing” means the closing of the purchase and sale of the
Shares and Warrants pursuant to this Agreement.
 
                    “Closing Bid Price” means, for any security as of any date,
the last closing price for such security on the Principal Trading Market, as
reported by Bloomberg, or, if the Principal Trading Market begins to operate on
an extended hours basis and does not designate the closing bid price then the
last bid price of such security prior to 4:00:00 p.m., New York City Time, as
reported by Bloomberg, or, if the Principal Trading Market is not the principal
securities exchange or trading market for such security, the last closing price
of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg, or if the foregoing
do not apply, the last closing price of such security in the over-the-counter
market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price is reported for such security by
Bloomberg, the average of the bid prices of any market makers for such security
as reported in the “pink sheets” by Pink Sheets LLC (formerly the National
Quotation Bureau, Inc.). If the Closing Bid Price cannot be calculated for a
security on a particular date on any of the foregoing bases, the Closing Bid
Price of such security on such date shall be the fair market value as mutually
determined by the Company and the holder. If the Company and the holder are
unable to agree upon the fair market value of such security, then the Company
shall, within two Business Days submit via facsimile (a) the disputed
determination to an independent, reputable investment bank selected by the
Company and approved by the holder or (b) the disputed arithmetic calculation to
the Company’s independent, outside accountant. The Company shall cause at its
expense the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the holder of the
results no later than ten Business Days from the time it receives the disputed
determinations or calculations. Such investment bank’s or accountant’s
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error. All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during the applicable calculation period.
 
                     “Closing Date” means the Trading Day when all of the
Transaction Documents have been executed and delivered by the applicable parties
thereto, and all of the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2
hereof are satisfied, or such other date as the parties may agree.
 
                     “Commission” has the meaning set forth in the Recitals.
 
                     “Common Stock” has the meaning set forth in the Recitals,
and also includes any securities into which the Common Stock may hereafter be
reclassified or changed.
 
                     “Common Stock Equivalents” means any securities of the
Company or any Subsidiary which would entitle the holder thereof to acquire at
any time Common Stock, including, without limitation, any debt, preferred stock,
rights, options, warrants or other instrument that is at any time convertible
into or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock or other securities that entitle the holder to receive, directly or
indirectly, Common Stock.
 
                     “Company Counsel” means DLA Piper LLP (US).
 
                     “Company Deliverables” has the meaning set forth in
Section 2.2(a).
 
                     “Company’s Knowledge” means with respect to any statement
made to the knowledge of the Company, that the statement is based upon the
actual knowledge of the executive officers of the Company having responsibility
for the matter or matters that are the subject of the statement.
 
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                     “Control” (including the terms “controlling”, “controlled
by” or “under common control with”) means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
 
                     “Disclosure Materials” has the meaning set forth in
Section 3.1(h).
 
                     “Effective Date” means the date on which the initial
Registration Statement required by Section 2(a) of the Registration Rights
Agreement is first declared effective by the Commission.
 
                     “Effectiveness Deadline” means the date on which the
initial Registration Statement is required to be declared effective by the
Commission under the terms of the Registration Rights Agreement.
 
                     “Environmental Laws” has the meaning set forth in
Section 3.1(l).
 
                     “Exchange Act” means the Securities Exchange Act of 1934,
as amended, or any successor statute, and the rules and regulations promulgated
thereunder.
 
                     “GAAP” means U.S. generally accepted accounting principles,
as applied by the Company.
 
                     “Indemnified Person” has the meaning set forth in
Section 4.9(b).
 
                     “Intellectual Property” has the meaning set forth in
Section 3.1(r).
 
                     “Irrevocable Transfer Agent Instructions” means, with
respect to the Company, the Irrevocable Transfer Agent Instructions, in the form
of Exhibit E , executed by the Company and delivered to and acknowledged in
writing by the Transfer Agent.
 
                     “Lien” means any lien, charge, claim, encumbrance, security
interest, right of first refusal, preemptive right or other restrictions of any
kind.
 
                     “Material Adverse Effect” means any of (i) a material and
adverse effect on the legality, validity or enforceability of any Transaction
Document, (ii) a material and adverse effect on the results of operations,
assets, business or financial condition of the Company and the Subsidiaries,
taken as a whole, or (iii) any adverse impairment to the Company's ability to
perform in any material respect on a timely basis its obligations under any
Transaction Document, except that any of the following, either alone or in
combination, shall not be deemed a Material Adverse Effect: (A) effects caused
by changes or circumstances affecting general market conditions in the U.S.
economy or which are generally applicable to the industry in which the Company
operates, (B) effects resulting from or relating to the announcement or
disclosure of the sale of the Securities or other transactions contemplated by
this Agreement, or (C) effects caused by any event, occurrence or condition
resulting from or relating to the taking of any action in accordance with this
Agreement.
 
                     “Material Contract” means any contract of the Company that
was filed (or should have been filed) as an exhibit to the SEC Reports pursuant
to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.
 
                     “Material Permits” has the meaning set forth in
Section 3.1(p).
 
                     “New York Courts” means the state and federal courts
sitting in the City of New York, Borough of Manhattan.
 
                     “Outside Date” means the thirtieth day following the date
of this Agreement; provided that if such day is not a Business Day, the first
day following such day that is a Business Day.
 
                     “Person” means an individual, corporation, partnership,
limited liability company, trust, business trust, association, joint stock
company, joint venture, sole proprietorship, unincorporated organization,
governmental authority or any other form of entity not specifically listed
herein.
 
                     “Principal Trading Market” means the Trading Market on
which the Common Stock is primarily listed on and quoted for trading, which, as
of the date of this Agreement and the Closing Date, shall be the NASDAQ Global
Market.
 
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                     “Proceeding” means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
 
                     “Purchase Price” means $2.28 per unit.
 
                     “Purchaser Deliverables” has the meaning set forth in
Section 2.2(b).
 
                     “Purchaser Party” has the meaning set forth in
Section 4.9(a).
 
                     “Registration Rights Agreement” has the meaning set forth
in the Recitals.
 
                     “Registration Statement” means a registration statement
meeting the requirements set forth in the Registration Rights Agreement and
covering the resale by the Purchasers of the Registrable Securities (as defined
in the Registration Rights Agreement).
 
                     “Required Approvals” has the meaning set forth in
Section 3.1(e).
 
                     “Rule 144” means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
 
                     “SEC Reports” has the meaning set forth in Section 3.1(h).
 
                     “Secretary’s Certificate” has the meaning set forth in
Section 2.2(a)(vi).
 
                     “Securities Act” means the Securities Act of 1933, as
amended.
 
                     “Short Sales” include, without limitation, all “short
sales” as defined in Rule 200 promulgated under Regulation SHO under the
Exchange Act, whether or not against the box, and all types of direct and
indirect stock pledges, forward sale contracts, options, puts, calls, short
sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the
Exchange Act) and similar arrangements (including on a total return basis), and
sales and other transactions through non-U.S. broker dealers or foreign
regulated brokers.
 
                     “Subscription Amount” means with respect to each Purchaser,
the aggregate amount to be paid for the Shares and Warrants purchased hereunder
as indicated on such Purchaser’s signature page to this Agreement next to the
heading “Aggregate Purchase Price (Subscription Amount).”
 
                     “Subsidiary” means any entity in which the Company,
directly or indirectly, owns sufficient capital stock or holds a sufficient
equity or similar interest such that it is consolidated with the Company in the
financial statements of the Company.
 
                     “Trading Affiliate” has the meaning set forth in
Section 3.2(h).
 
                     “Trading Day” means (i) a day on which the Common Stock is
listed or quoted and traded on its Principal Trading Market (other than the OTC
Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market
(other than the OTC Bulletin Board), a day on which the Common Stock is traded
in the over-the-counter market, as reported by the OTC Bulletin Board, or
(iii) if the Common Stock is not quoted on any Trading Market, a day on which
the Common Stock is quoted in the over-the-counter market as reported in the
“pink sheets” by Pink Sheets LLC (or any similar organization or agency
succeeding to its functions of reporting prices); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i), (ii) and
(iii) hereof, then Trading Day shall mean a Business Day.
 
                     “Trading Market” means whichever of the New York Stock
Exchange, the American Stock Exchange, the NASDAQ Global Select Market, the
NASDAQ Global Market, the NASDAQ Capital Market or the OTC Bulletin Board on
which the Common Stock is listed or quoted for trading on the date in question.
 
                     “Transaction Documents” means this Agreement, the schedules
and exhibits attached hereto, the Warrants, the Registration Rights Agreement,
the Irrevocable Transfer Agent Instructions and any other documents or
agreements executed in connection with the transactions contemplated hereunder.
 
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                     “Transfer Agent” means Computershare Investor Services, or
any successor transfer agent for the Company.
 
“Warrants” has the meaning set forth in the Recitals to this Agreement.
 
“Warrant Shares” has the meaning set forth in the Recitals to this Agreement.
 
 
ARTICLE II.
PURCHASE AND SALE
 
2.1           Closing.
 
(a)           Amount.  Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to each Purchaser,
and each Purchaser shall, severally and not jointly, purchase from the Company,
such number of Shares equal to the quotient resulting from dividing (i) the
Subscription Amount for such Purchaser by (ii) the Purchase Price, rounded down
to the nearest whole Share.  In addition, each Purchaser shall receive a Warrant
to purchase that number of Warrant Shares equal to 175% of the number of Shares
purchased by such Purchaser, as indicated below such Purchaser’s name on the
signature page to this Agreement.  The Warrants shall have an exercise price
equal to $2.62 per Warrant Share.
 
(b)           Closing.  The Closing of the purchase and sale of the Shares and
Warrants shall take place at the offices of DLA Piper LLP (US), 4365 Executive
Drive, Suite 1100, San Diego, California, 92121, on the Closing Date or at such
other locations or remotely by facsimile transmission or other electronic means
as the parties may mutually agree.
 
(c)           Form of Payment.  On the Closing Date, each Purchaser shall wire
its Subscription Amount, in United States dollars and in immediately available
funds, to an account designated by the Company as set forth on Exhibit G
hereto.  On the Closing Date, (a) the Company shall irrevocably instruct the
Transfer Agent to deliver to each Purchaser one or more stock certificates, free
and clear of all restrictive and other legends (except as expressly provided in
Section 4.1(b) hereof), evidencing the number of Shares such Purchaser is
purchasing as is set forth on such Purchaser’s signature page to this Agreement
next to the heading “Number of Shares to be Acquired”, within three (3) Business
Days after the Closing and (b) the Company shall issue to each Purchaser a
Warrant pursuant to which such Purchaser shall have the right to acquire such
number of Warrant Shares as is set forth on such Purchaser’s signature page to
this Agreement next to the heading “Underlying Shares Subject to Warrant”, in
each case duly executed on behalf of the Company and registered in the name of
such Purchaser.
 
2.2           Closing Deliveries.   
 
                                (a)            On or prior to the Closing, the
Company shall issue, deliver or cause to be delivered to each Purchaser the
following (the “Company Deliverables”):
 
               
(i) 
this Agreement, duly executed by the Company;

 
               
(ii) 
facsimile copies of one or more stock certificates, free and clear of all
restrictive and other legends (except as provided in Section 4.1(b) hereof),
evidencing the Shares subscribed for by Purchaser hereunder, registered in the
name of such Purchaser as set forth on the Stock Certificate and Warrant
Questionnaire included as Exhibit C-2 hereto (the “ Stock Certificates”), with
the original Stock Certificates sent within three (3) Business Days of Closing;

 
               
(iii) 
the Registration Rights Agreement, duly executed by the Company;

 
               
(iv) 
duly executed Irrevocable Transfer Agent Instructions acknowledged in writing by
the Transfer Agent;

 
               
(v) 
a certificate of the Secretary of the Company (the “Secretary’s Certificate”),
dated as of the Closing Date, (a) certifying the resolutions adopted by the
Board of Directors of the Company or a duly authorized committee thereof
approving the transactions contemplated by this

 
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Agreement and the other Transaction Documents and the issuance of the
Securities, (b) certifying the current versions of the certificate or articles
of incorporation, as amended, and by-laws of the Company and (c) certifying as
to the signatures and authority of persons signing the Transaction Documents and
related documents on behalf of the Company, in the form attached hereto as
Exhibit E ;

 
               
(vi) 
the Compliance Certificate referred to in Section 5.1(g);

 
               
(vii) 
a Warrant, executed by the Company and registered in the name of such Purchaser
as set forth on the Stock Certificate and Warrant Questionnaire included as
Exhibit C-2 hereto, pursuant to which such Purchaser shall have the right to
acquire such number of Warrant Shares equal to 175% of the number of Shares
issuable to such Purchaser pursuant to this Agreement, rounded up to the nearest
whole share, on the terms set forth therein;

 
                                (b)            On or prior to the Closing, each
Purchaser shall deliver or cause to be delivered to the Company the following
(the “Purchaser Deliverables”):
 
               
(i) 
this Agreement, duly executed by such Purchaser;

 
               
(ii) 
its Subscription Amount, in United States dollars and in immediately available
funds, in the amount set forth as the “Purchase Price” indicated below such
Purchaser’s name on the applicable signature page hereto under the heading
“Aggregate Purchase Price (Subscription Amount)” by wire transfer to the escrow
account set forth on Exhibit G attached hereto;

 
               
(iii) 
the Registration Rights Agreement, duly executed by such Purchaser;

 
               
(iv) 
a fully completed and duly executed Selling Stockholder Questionnaire in the
form attached as Annex B to the Registration Rights Agreement; and

 
               
(v) 
a fully completed and duly executed Accredited Investor Questionnaire,
reasonably satisfactory to the Company, and Stock Certificate and Warrant
Questionnaire in the forms attached hereto as Exhibits C-1 and C-2 ,
respectively.

 
 
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
 
                3.1           Representations and Warranties of the Company. The
Company hereby represents and warrants as of the date hereof and the Closing
Date (except for the representations and warranties that speak as of a specific
date, which shall be made as of such date), to each of the Purchasers that,
except as set forth in the Schedules delivered herewith or disclosed in the SEC
Reports:
 
                                (a)           Subsidiaries. The Company has no
direct or indirect Subsidiaries other than those listed in Schedule 3.1(a)
hereto. Except as disclosed in Schedule 3.1(a) hereto, the Company owns,
directly or indirectly, all of the capital stock or comparable equity interests
of each Subsidiary free and clear of any and all Liens which could reasonably be
expected to have a Material Adverse Effect, and all the issued and outstanding
shares of capital stock or comparable equity interest of each Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive and
similar rights to subscribe for or purchase securities.
 
                                (b)           Organization and Qualification.
The Company and each of its Subsidiaries is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite corporate power and authority to own or lease and use its properties
and assets and to carry on its business as currently conducted. Neither the
Company nor any Subsidiary is in violation of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. The Company and each of its Subsidiaries is
duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such
 
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qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not have a Material Adverse Effect.
 
                                (c)           Authorization; Enforcement;
Validity. The Company has the requisite corporate power and authority to enter
into and to consummate the transactions contemplated by each of the Transaction
Documents to which it is a party and otherwise to carry out its obligations
hereunder and thereunder. The Company’s execution and delivery of each of the
Transaction Documents to which it is a party and the consummation by it of the
transactions contemplated hereby and thereby (including, but not limited to, the
sale and delivery of the Securities and the reservation for issuance and the
subsequent issuance of the Warrant Shares upon exercise of the Warrants) have
been duly authorized by all necessary corporate action on the part of the
Company, and no further corporate action is required by the Company, its Board
of Directors or its stockholders in connection therewith other than in
connection with the Required Approvals. Each of the Transaction Documents to
which it is a party has been (or upon delivery will have been) duly executed by
the Company and is, or when delivered in accordance with the terms hereof, will
constitute the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (i) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law. Except for Material Contracts, there are no
stockholder agreements, voting agreements, or other similar arrangements with
respect to the Company’s capital stock to which the Company is a party or, to
the Company’s Knowledge, between or among any of the Company’s stockholders.
 
                                (d)           No Conflicts. The execution,
delivery and performance by the Company of the Transaction Documents to which it
is a party and the consummation by the Company of the transactions contemplated
hereby or thereby (including, without limitation, the issuance of the Securities
and the reservation for issuance and issuance of the Warrant Shares) do not and
will not (i) conflict with or violate any provisions of the Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws or otherwise
result in a violation of the organizational documents of the Company, (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would result in a default) under, result in the creation of any
Lien upon any of the properties or assets of the Company or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any Material Contract, or (iii) subject to
the Required Approvals, conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations and the rules and regulations,
assuming the correctness of the representations and warranties made by the
Purchasers herein, of any self-regulatory organization to which the Company or
its securities are subject, including all applicable Trading Markets), or by
which any property or asset of the Company is bound or affected, except in the
case of clauses (ii) and (iii) such as would not, individually or in the
aggregate, have a Material Adverse Effect.
 
                                (e)           Filings, Consents and Approvals.
Neither the Company nor any of its Subsidiaries is required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents (including,
without limitation, the issuance of the Securities and the reservation for
issuance and issuance of the Warrant Shares), other than (i) the filing with the
Commission of one or more Registration Statements in accordance with the
requirements of the Registration Rights Agreement, (ii) filings required by
applicable state securities laws, (iii) the filing of a Notice of Sale of
Securities on Form D with the Commission under Regulation D of the Securities
Act, (iv) the filing of any requisite notices and/or application(s) to the
Principal Trading Market for the issuance and sale of the Common Stock and the
listing of the Common Stock for trading or quotation, as the case may be,
thereon in the time and manner required thereby, (v) the
 
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filings required in accordance with Section 4.6 of this Agreement and (vi) those
that have been made or obtained prior to the date of this Agreement
(collectively, the “Required Approvals”).
 
                                (f)           Issuance of the Securities. The
Shares have been duly authorized and, when issued and paid for in accordance
with the terms of the Transaction Documents, will be duly and validly issued,
fully paid and nonassessable and free and clear of all Liens, other than
restrictions on transfer provided for in the Transaction Documents or imposed by
applicable securities laws, and shall not be subject to preemptive or similar
rights.  The Warrants have been duly authorized and, when issued and paid for in
accordance with the terms of the Transaction Documents, will be duly and validly
issued, free and clear of all Liens, other than restrictions on transfer
provided for in the Transaction Documents or imposed by applicable securities
laws, and shall not be subject to preemptive or similar rights of stockholders.
The Warrant Shares issuable upon exercise of the Warrants have been duly
authorized and, when issued and paid for in accordance with the terms of the
Transaction Documents and the Warrants, will be duly and validly issued, fully
paid and nonassessable, free and clear of all Liens, other than restrictions on
transfer provided for in the Transaction Documents or imposed by applicable
securities laws, and shall not be subject to preemptive or similar rights of
stockholders.  Assuming the accuracy of the representations and warranties of
the Purchasers in this Agreement, the Securities will be issued in compliance
with all applicable federal and state securities laws.  As of the Closing Date,
the Company shall have reserved from its duly authorized capital stock the
number of shares of Common Stock issuable upon exercise of the Warrants (without
taking into account any limitations on the exercise of the Warrants set forth in
the Warrants).  The Company shall, so long as any of the Warrants are
outstanding, take all action necessary to reserve and keep available out of its
authorized and unissued capital stock, solely for the purpose of effecting the
exercise of the Warrants, 100% of the number of shares of Common Stock issuable
upon exercise of the outstanding Warrants (without taking into account any
limitations on the exercise of the outstanding Warrants set forth in the
Warrants).
 
                                (g)           Capitalization. The number of
shares and type of all authorized, issued and outstanding capital stock, options
and other securities of the Company (whether or not presently convertible into
or exercisable or exchangeable for shares of capital stock of the Company) has
been set forth in the SEC Reports and has changed since the date of such SEC
Reports only due to stock grants or other equity awards or stock option and
warrant exercises that do not, individually or in the aggregate, have a material
effect on the issued and outstanding capital stock, options and other
securities. All of the outstanding shares of capital stock of the Company are
duly authorized, validly issued, fully paid and non-assessable, have been issued
in compliance in all material respects with all applicable federal and state
securities laws, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase any capital
stock of the Company. Except as specified in the SEC Reports: (i) no shares of
the Company’s outstanding capital stock are subject to preemptive rights or any
other similar rights; (ii) there are no outstanding options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any shares of capital stock of the Company, or contracts,
commitments, understandings or arrangements by which the Company is or may
become bound to issue additional shares of capital stock of the Company or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any shares of capital stock of the Company,
other than those issued or granted pursuant to Material Contracts or equity or
incentive plans or arrangements described in the SEC Reports; (iii) there are no
material outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing indebtedness
of the Company or by which the Company is bound; (iv) to the Company’s
Knowledge, there are no financing statements securing obligations in any
material amounts, either singly or in the aggregate, filed in connection with
the Company; (v) except as identified in the Registration Rights Agreement,
there are no agreements or arrangements under which the Company is obligated to
register the sale of any of their securities under the Securities Act;
(vi) there are no outstanding securities or instruments of the Company or which
contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company is or may
become bound to redeem a security of the Company; (vii) there are no securities
or instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Securities; (viii) the Company does not have
any stock appreciation rights or “phantom stock” plans or
 
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agreements or any similar plan or agreement; and (ix) the Company has no
liabilities or obligations required to be disclosed in the SEC Reports but not
so disclosed in the SEC Reports, other than those incurred in the ordinary
course of the Company’s businesses and which, individually or in the aggregate,
do not or would not have a Material Adverse Effect.
 
                                (h)           SEC Reports; Disclosure Materials.
The Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it under the Exchange Act, including pursuant
to Section 13(a) or 15(d) thereof, for the twelve months preceding the date
hereof (or such shorter period as the Company was required by law or regulation
to file such material) (the foregoing materials, including the exhibits thereto
and documents incorporated by reference therein, being collectively referred to
herein as the “SEC Reports” and together with this Agreement and the Schedules
to this Agreement, and including the items set forth in Schedule 3.1(h)-2 and
Schedule 3.1(h)-3 hereto the “Disclosure Materials”), on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. As of their respective
filing dates, or to the extent corrected by a subsequent restatement or
subsequent filings, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and, except as corrected
by subsequent filings, none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.  The Company has
never been an issuer subject to Rule 144(i) under the Securities Act.
 
                                (i)           Financial Statements. The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing (or to the extent corrected by a subsequent restatement). Such financial
statements have been prepared in accordance with GAAP applied on a consistent
basis during the periods involved, except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company and its consolidated
subsidiaries taken as a whole as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments.
 
                                (j)           Tax Matters. The Company (i) has
prepared and filed all foreign, federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith, with
respect to which adequate reserves have been set aside on the books of the
Company and (iii) has set aside on its books provisions reasonably adequate for
the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply, except, in the case of clauses (i) and
(ii) above, where the failure to so pay or file any such tax, assessment, charge
or return would not have a Material Adverse Effect.
 
                                (k)           Material Changes. Since the date
of the latest financial statements included within the SEC Reports, except as
specifically disclosed in the SEC Reports or in the items identified in Schedule
3.1(h)-2 hereto, (i) there have been no events, occurrences or developments that
have had or would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, (ii) the Company has not incurred any
material liabilities (contingent or otherwise) other than (A) trade payables,
accrued expenses and other liabilities incurred in the ordinary course of
business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or required to
be disclosed in filings made with the Commission, (iii) the Company has not
altered materially its method of accounting or the manner in which it keeps its
accounting books and records, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock (other
 
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than in connection with repurchases of unvested stock issued to employees of the
Company), (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except Common Stock (A) issued in the ordinary course as
dividends on outstanding preferred stock or (B) issued pursuant to existing
Company stock option or stock purchase plans or executive and director corporate
arrangements disclosed in the SEC Reports or (C) issued pursuant to other
existing agreements disclosed in the SEC Reports and (vi) there has not been any
material change or amendment to, or any waiver of any material right by the
Company under, any Material Contract under which the Company or any of its
Subsidiaries is bound or subject. Except for the transactions contemplated by
this Agreement, no event, liability or development has occurred or exists with
respect to the Company or its Subsidiaries or their respective business,
properties, operations or financial condition that would be required to be
disclosed by the Company under applicable securities laws at the time this
representation is made that has not been publicly disclosed at least one Trading
Day prior to the date that this representation is made.
 
                                (l)           Environmental Matters. To the
Company’s Knowledge, neither the Company nor any of its Subsidiaries (i) is in
violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “Environmental Laws”), (ii) owns or operates any
real property contaminated with any substance that is in violation of any
Environmental Laws, (iii) is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or (iv) is subject to any claim relating to
any Environmental Laws; which violation, contamination, liability or claim has
had or would have, individually or in the aggregate, a Material Adverse Effect;
and, to the Company’s Knowledge, there is no pending or threatened investigation
that might lead to such a claim.
 
                                (m)           Litigation. To the Company’s
Knowledge, there is no Action which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or the
Securities or (ii) except as specifically disclosed in the SEC Reports, is
reasonably likely to have a Material Adverse Effect, individually or in the
aggregate, if there were an unfavorable decision. The Commission has not issued
any stop order or other order suspending the effectiveness of any registration
statement filed by the Company or any of its Subsidiaries under the Exchange Act
or the Securities Act.
 
                                (n)           Employment Matters. No material
labor dispute exists or, to the Company’s Knowledge, is imminent with respect to
any of the employees of the Company which would have a Material Adverse Effect.
None of the Company’s employees is a member of a union that relates to such
employee’s relationship with the Company, and neither the Company nor any of its
Subsidiaries is a party to a collective bargaining agreement, and the Company
and each Subsidiary believes that its relationship with its employees is good.
No executive officer of the Company (as defined in Rule 501(f) of the 1933 Act)
has notified the Company that such officer intends to leave the Company or
otherwise terminate such officer’s employment with the Company. To the Company’s
Knowledge, it is in compliance with all U.S. federal, state, local and foreign
laws and regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in
compliance would not, individually or in the aggregate, have a Material Adverse
Effect.
 
                                (o)           Compliance. Neither the Company
nor any of its Subsidiaries (i) is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or lapse of time
or both, would result in a default by the Company or any of its Subsidiaries
under), nor has the Company or any of its Subsidiaries received written notice
of a claim that it is in default under or that it is in violation of, any
Material Contract (whether or not such default or violation has been waived),
(ii) is in violation of any order of which the Company has been made aware in
writing of any court, arbitrator or governmental body having jurisdiction over
the Company or its properties or assets, or (iii) is in violation of, or in
receipt of written notice that it is in violation of, any statute, rule or
regulation of any governmental authority applicable to the Company, except in
each case as would not, individually or in the aggregate, have a Material
Adverse Effect.
 
                                (p)           Regulatory Permits. The Company
possesses or has applied for all certificates, authorizations and permits issued
by the appropriate federal, state, local or foreign regulatory authorities
 
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necessary to conduct its business as currently conducted and as described in the
SEC Reports, except where the failure to possess such permits, individually or
in the aggregate, has not and would not have, individually or in the aggregate,
a Material Adverse Effect (“Material Permits”), and (i) neither the Company nor
any of its Subsidiaries has received any notice in writing of proceedings
relating to the revocation or material adverse modification of any such Material
Permits and (ii) the Company is unaware of any facts or circumstances that would
give rise to the revocation or material adverse modification of any Material
Permits.
 
                                (q)           Title to Assets. The Company and
its Subsidiaries do not own any real property. The Company and its Subsidiaries
have good and marketable title to all tangible personal property owned by them
which is material to the business of the Company and its Subsidiaries, taken as
whole, in each case free and clear of all Liens except such as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and any of its Subsidiaries.
Any real property and facilities held under lease by the Company and any of its
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
Subsidiaries.
 
                                (r)           Patents and Trademarks. To the
Company’s Knowledge, the Company and its Subsidiaries own, possess, license or
have other rights to use all foreign and domestic patents, patent applications,
trade and service marks, trade and service mark registrations, trade names,
copyrights, inventions, trade secrets, technology, Internet domain names,
know-how and other intellectual property (collectively, the “Intellectual
Property”) necessary for the conduct of their respective businesses as now
conducted or as proposed to be conducted in the SEC Reports. Except as set forth
in the SEC Reports and except where such violations or infringements would not
have, either individually or in the aggregate, a Material Adverse Effect, (a) to
the Company’s Knowledge, there are no rights of third parties to any such
Intellectual Property; (b) to the Company’s Knowledge, there is no infringement
by third parties of any such Intellectual Property; (c) to the Company’s
Knowledge, there is no pending or threatened action, suit, proceeding or claim
by others challenging the Company’s and its Subsidiaries’ rights in or to any
such Intellectual Property; (d) to the Company’s Knowledge, there is no pending
or threatened action, suit, proceeding or claim by others challenging the
validity or scope of any such Intellectual Property; and (e) to the Company’s
Knowledge, there is no pending or threatened action, suit, proceeding or claim
by others that the Company and/or any Subsidiary infringes or otherwise violates
any patent, trademark, copyright, trade secret or other proprietary rights of
others.
 
                                (s)           Insurance. The Company and each of
the Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as the Company believes to be
prudent and customary in the businesses and locations in which the Company and
the Subsidiaries are engaged. Neither the Company nor any of its Subsidiaries
has received any notice of cancellation of any such insurance, nor, to the
Company’s Knowledge, will it or any Subsidiary be unable to renew their
respective existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business.
 
                                (t)           Transactions With Affiliates and
Employees. Except as set forth in the SEC Reports and other than the grant of
stock options or other equity awards that are not individually or in the
aggregate material in amount, none of the officers or directors of the Company
and, to the Company’s Knowledge, none of the employees of the Company, is
presently a party to any transaction with the Company (other than in connection
to the presently contemplated transaction, or other than for services as
employees, officers and directors) that would be required to be disclosed
pursuant to Item 404 of Regulation S-K promulgated under the Securities Act.
 
                                (u)           Internal Accounting Controls. The
Company maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset and liability
 
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accountability, (iii) access to assets or incurrence of liabilities is permitted
only in accordance with management’s general or specific authorization, and
(iv) the recorded accountability for assets and liabilities is compared with the
existing assets and liabilities at reasonable intervals and in the Company’s
good faith judgment appropriate action is taken with respect to any differences.
 
                                (v)           Sarbanes-Oxley; Disclosure
Controls. To the Company’s Knowledge, the Company is in compliance in all
material respects with all of the provisions of the Sarbanes-Oxley Act of 2002
which are applicable to it, except where such noncompliance would not have,
individually or in the aggregate, a Material Adverse Effect. The Company
maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) and 15d-15(e) under the Exchange Act).
 
                                (w)           Certain Fees. To the Company’s
Knowledge, no person or entity will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or
upon the Company or a Purchaser for any commission, fee or other compensation
pursuant to any agreement, arrangement or understanding entered into by or on
behalf of the Company. The Company shall indemnify, pay, and hold each Purchaser
harmless against, any liability, loss or expense (including, without limitation,
attorneys’ fees and out-of-pocket expenses) arising in connection with any such
right, interest or claim.
 
                                (x)           Private Placement. Assuming the
accuracy of the Purchasers’ representations and warranties set forth in
Section 3.2 of this Agreement and the accuracy of the information disclosed in
the Accredited Investor Questionnaires, no registration under the Securities Act
is required for the offer and sale of the Securities by the Company to the
Purchasers under the Transaction Documents.
 
                                (y)           Registration Rights. Other than as
set forth in the SEC Reports, no Person has any right to cause the Company to
effect the registration under the Securities Act of any securities of the
Company other than those securities which are currently registered on an
effective registration statement on file with the Commission.
 
                                (z)           No Integrated Offering. Assuming
the accuracy of the Purchasers’ representations and warranties set forth in
Section 3.2, none of the Company, its Subsidiaries nor, to the Company’s
Knowledge, any of its Affiliates or any Person acting on its behalf has,
directly or indirectly, at any time within the past six months, made any offers
or sales of any Company security or solicited any offers to buy any security
under circumstances that would (i) eliminate the availability of the exemption
from registration under Regulation D under the Securities Act in connection with
the offer and sale by the Company of the Shares and Warrants as contemplated
hereby or (ii) cause the offering of the Shares and Warrants pursuant to the
Transaction Documents to be integrated with prior offerings by the Company for
purposes of any applicable law, regulation or stockholder approval provisions,
including, without limitation, under the rules and regulations of any Trading
Market on which any of the securities of the Company are listed or designated.
 
                                (aa)           Listing and Maintenance
Requirements. The Company’s Common Stock is registered pursuant to Section 12(b)
or 12(g) of the Exchange Act, and the Company has taken no action designed to
terminate the registration of the Common Stock under the Exchange Act nor has
the Company received any notification that the Commission is contemplating
terminating such registration. The Company has not, in the 12 months preceding
the date hereof, received written notice from any Trading Market on which the
Common Stock is listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such Trading Market.
The Company is in compliance in all material respects with the listing and
maintenance requirements for continued trading of the Common Stock on the
Principal Trading Market.
 
                                (bb)           Investment Company. Neither the
Company nor any of its Subsidiaries is required to be registered as, and is not
an Affiliate of, and immediately following the Closing will not be required to
register as, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.
 
                                (cc)           Questionable Payments. To the
Company’s Knowledge, neither the Company nor any of its Subsidiaries, nor any
directors, officers, employees, agents or other Persons acting at the direction
 
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of the Company has, in the course of its actions for, or on behalf of, the
Company: (a) directly or indirectly, used any material corporate funds for
unlawful contributions, gifts, entertainment or other unlawful expenses relating
to foreign or domestic political activity; (b) made any material direct or
indirect unlawful payments to any foreign or domestic governmental officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds; (c) violated in any material respect any provision of the
Foreign Corrupt Practices Act of 1977, as amended, or (d) made any other
material unlawful bribe, rebate, payoff, influence payment, kickback or other
material unlawful payment to any foreign or domestic government official or
employee.
 
                                (dd)           Application of Takeover
Protections; Rights Agreements. The Company and its board of directors have
taken all necessary action, if any, in order to render inapplicable any control
share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the
Company’s charter documents or the laws of its state of incorporation that is
applicable to any of the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including, without limitation, the Company’s issuance of
the Shares and Warrant Shares and the Purchasers’ ownership of the Shares and
Warrant Shares. Except as disclosed in the SEC Reports, the Company has not
adopted any other stockholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of Common Stock or a change in control of
the Company.
 
                                (ee)           Disclosure. To the Company’s
Knowledge, no event or circumstance has occurred or information exists with
respect to the Company or any of its Subsidiaries or its or their business,
properties, operations or financial conditions, which, under applicable law,
rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed (assuming for this
purpose that the Company’s reports filed under the Exchange Act are being
incorporated into an effective registration statement filed by the Company under
the Securities Act), except for the announcement of this Agreement and related
transactions and as may be disclosed on the Form 8-K filed pursuant to
Section 4.6.
 
                                (ff)           Off Balance Sheet Arrangements.
There is no transaction, arrangement, or other relationship between the Company
(or any Subsidiary) and an unconsolidated or other off balance sheet entity that
is required to be disclosed by the Company in its Exchange Act filings and is
not so disclosed and would have a Material Adverse Effect.
 
                                (gg)           Acknowledgment Regarding
Purchasers’ Purchase of Shares and Warrants.  The Company acknowledges and
agrees that each of the Purchasers is acting solely in the capacity of an arm’s
length purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby.  The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any Purchaser or any
of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Purchasers’ purchase of the Shares and Warrants. 
 
                                (hh)           Regulation M Compliance.  In the
last thirty days, the Company has not, and to the Company’s Knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the securities of the Company or (iii) paid or
agreed to pay to any Person any compensation for soliciting another to purchase
any other securities of the Company.
 
                                (ii)           OFAC. Neither the Company nor any
Subsidiary nor, to the Company’s Knowledge, any director, officer, agent,
employee, Affiliate or Person acting on behalf of the Company or any Subsidiary
is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will
not knowingly directly or indirectly use the proceeds of the sale of the
Securities, or lend, contribute or otherwise make available such proceeds to any
Subsidiary, joint venture partner or other Person or entity, towards any sales
or operations in Cuba, Iran, Syria, Sudan,
 
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Myanmar or any other country sanctioned by OFAC or for the purpose of financing
the activities of any Person currently subject to any U.S. sanctions
administered by OFAC.
 
                                (jj)           Money Laundering Laws. To the
Company’s Knowledge, the operations of each of the Company and any Subsidiary
are and have been conducted at all times in compliance with the money laundering
statutes of applicable jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued, administered or
enforced by any applicable governmental agency (collectively, the “Money
Laundering Laws”) and to the Company’s Knowledge, no action, suit or proceeding
by or before any court or governmental agency, authority or body or any
arbitrator involving the Company and/or any Subsidiary with respect to the Money
Laundering Laws is pending or threatened.
 
                                (kk)           FDA.   To the Company’s
Knowledge, there is no pending, completed or threatened, action (including any
lawsuit, arbitration, or legal or administrative or regulatory proceeding,
charge, complaint, or investigation) against the Company or any of its
Subsidiaries, and none of the Company or any of its Subsidiaries has received
any notice, warning letter or other communication from the U.S. Food and Drug
Administration Office of Compliance (“FDA”), which (i) contests the premarket
clearance, licensure, registration, or approval of, the uses of, the
distribution of, the manufacturing or packaging of, the testing of, the sale of,
or the labeling and promotion of any product subject to the jurisdiction of the
FDA under the Federal Food, Drug and Cosmetic Act, as amended, and the
regulations thereunder that is manufactured, packaged, labeled, tested,
distributed, sold, and/or marketed by the Company or any of its Subsidiaries
(each such product, a “Pharmaceutical Product”), (ii) imposes a clinical hold on
any clinical investigation by the Company or any of its Subsidiaries,
(iii) enjoins production at any facility of the Company or any of its
Subsidiaries, (iv) enters or proposes to enter into a consent decree of
permanent injunction with the Company or any of its Subsidiaries, or
(v) otherwise alleges any violation of any laws, rules or regulations by the
Company or any of its Subsidiaries, and which, either individually or in the
aggregate, would have a Material Adverse Effect.  The Company has not been
informed in writing by the FDA that the FDA will prohibit the marketing, sale,
license or use in the United States of any product proposed to be developed,
produced or marketed by the Company.
 
                                (ll)           No Additional Agreements. The
Company does not have any agreement or understanding with any Purchaser with
respect to the transactions contemplated by the Transaction Documents other than
as specified in the Transaction Documents.
 
                3.2           Representations and Warranties of the Purchasers.
Each Purchaser hereby, for itself and for no other Purchaser, represents and
warrants as of the date hereof and as of the Closing Date to the Company as
follows:
 
                                (a)           Organization; Authority. Such
Purchaser is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with the requisite
corporate or partnership power and authority to enter into and to consummate the
transactions contemplated by the applicable Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder. The execution, delivery
and performance by such Purchaser of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate or, if such
Purchaser is not a corporation, such partnership, limited liability company or
other applicable like action, on the part of such Purchaser. Each of this
Agreement and the Registration Rights Agreement has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with the terms
hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.
 
                                (b)           No Conflicts. The execution,
delivery and performance by such Purchaser of this Agreement and the
Registration Rights Agreement and the consummation by such Purchaser of the
transactions contemplated hereby and thereby will not (i) result in a violation
of the organizational documents of such Purchaser, (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment,
 
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acceleration or cancellation of, any agreement, indenture or instrument to which
such Purchaser is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws) applicable to such Purchaser, except in the case of clauses (ii) and
(iii) above, for such conflicts, defaults, rights or violations which would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Purchaser to perform its obligations
hereunder.
 
                                (c)           Investment Intent. Such Purchaser
understands that the Shares and Warrants are “restricted securities” and have
not been registered under the Securities Act or any applicable state securities
law and is acquiring the Shares and Warrants as principal for its own account
and not with a view to, or for distributing or reselling such Shares or Warrants
or any part thereof in violation of the Securities Act or any applicable state
securities laws, provided, however, that by making the representations herein,
such Purchaser does not agree to hold any of the Shares or Warrants for any
minimum period of time and reserves the right, subject to the provisions of this
Agreement and the Registration Rights Agreement, at all times to sell or
otherwise dispose of all or any part of such Shares or Warrants pursuant to an
effective registration statement under the Securities Act or under an exemption
from such registration and in compliance with applicable federal and state
securities laws. Such Purchaser is acquiring the Shares and Warrants hereunder
in the ordinary course of its business. Such Purchaser does not presently have
any agreement, plan or understanding, directly or indirectly, with any Person to
distribute or effect any distribution of any of the Shares or Warrants (or any
securities which are derivatives thereof) to or through any person or entity.
Such Purchaser is not a registered broker-dealer under Section 15 of the
Exchange Act or an entity engaged in a business that would require it to be so
registered as a broker-dealer.
 
                                (d)           Purchaser Status. At the time such
Purchaser was offered the Shares and Warrants, it was, and at the date hereof it
is, an “accredited investor” as defined in Rule 501(a) under the Securities Act.
 
                                (e)           General Solicitation. Such
Purchaser is not purchasing the Shares and Warrants as a result of any
advertisement, article, notice or other communication regarding the Shares and
Warrants published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general
advertisement.
 
                                (f)           Experience of Such Purchaser. Such
Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating the merits and risks of the prospective investment
in the Shares and Warrants, and has so evaluated the merits and risks of such
investment. Such Purchaser is able to bear the economic risk of an investment in
the Shares and Warrants and, at the present time, is able to afford a complete
loss of such investment.
 
                                (g)           Access to Information. Such
Purchaser acknowledges that it has had the opportunity to review any Company
Information and business updates requested by Purchaser and has been afforded
(i) the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and
conditions of the offering of the Shares and Warrants and the merits and risks
of investing in the Shares and Warrants; (ii) access to information about the
Company and the Subsidiaries and their respective financial condition, results
of operations, business, properties, management and prospects sufficient to
enable it to evaluate its investment; and (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment. Neither such inquiries nor any other
investigation conducted by or on behalf of such Purchaser or its representatives
or counsel shall modify, amend or affect such Purchaser’s right to rely on the
truth, accuracy and completeness of the Company’s representations and warranties
contained in the Transaction Documents. Such Purchaser has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed decision with respect to its acquisition of the Shares and Warrants.
 
                                (h)           Certain Trading Activities. Other
than with respect to the transactions contemplated herein, since the time that
such Purchaser was first contacted by the Company or any other Person regarding
the transactions contemplated hereby, neither the Purchaser nor any Affiliate of
such Purchaser which
 
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(x) had knowledge of the transactions contemplated hereby, (y) has or shares
discretion relating to such Purchaser’s investments or trading or information
concerning such Purchaser’s investments, including in respect of the Shares and
Warrants, and (z) is subject to such Purchaser’s review or input concerning such
Affiliate’s investments or trading (collectively, “ Trading Affiliates”) has
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser or Trading Affiliate, effected or agreed
to effect any purchases or sales of the securities of the Company (including,
without limitation, any Short Sales involving the Company’s securities).
Notwithstanding the foregoing, in the case of a Purchaser and/or Trading
Affiliate that is, individually or collectively, a multi-managed investment bank
or vehicle whereby separate portfolio managers manage separate portions of such
Purchaser’s or Trading Affiliate’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s or Trading Affiliate’s assets, the
representation set forth above shall apply only with respect to the portion of
assets managed by the portfolio manager that have knowledge about the financing
transaction contemplated by this Agreement. Other than to other Persons party to
this Agreement, such Purchaser has maintained the confidentiality of all
disclosures made to it in connection with this transaction (including the
existence and terms of this transaction).
 
                                (i)           Brokers and Finders. No Person
will have, as a result of the transactions contemplated by this Agreement, any
valid right, interest or claim against or upon the Company or any Purchaser for
any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of the Purchaser.
 
                                (j)           Independent Investment Decision.
Such Purchaser has independently evaluated the merits of its decision to
purchase Shares and Warrants pursuant to the Transaction Documents, and such
Purchaser confirms that it has not relied on the advice of any other Purchaser’s
business and/or legal counsel in making such decision. Such Purchaser
understands that nothing in this Agreement or any other materials presented by
or on behalf of the Company to the Purchaser in connection with the purchase of
the Shares and Warrants constitutes legal, tax or investment advice. Such
Purchaser has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection with its
purchase of the Shares and Warrants.
 
                               (k)           Reliance on Exemptions. Such
Purchaser understands that the Shares and Warrants being offered and sold to it
in reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying in part
upon the truth and accuracy of, and such Purchaser’s compliance with, the
representations, warranties, agreements, acknowledgements and understandings of
such Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of such Purchaser to acquire the Shares and
Warrants.
 
                                (l)           No Governmental Review. Such
Purchaser understands that no United States federal or state agency or any other
government or governmental agency has passed on or made any recommendation or
endorsement of the Shares and Warrants or the fairness or suitability of the
investment in the Shares and Warrants nor have such authorities passed upon or
endorsed the merits of the offering of the Shares and Warrants.
 
                                (m)           Regulation M. Such Purchaser is
aware that the anti-manipulation rules of Regulation M under the Exchange Act
may apply to sales of Common Stock and other activities with respect to the
Common Stock by the Purchasers.
 
                                (n)           Residency. Such Purchaser’s
residence (if an individual) or office in which its investment decision with
respect to the Shares and Warrants was made (if an entity) are located at the
address immediately below such Purchaser’s name on its signature page hereto.
 
The Company and each of the Purchasers acknowledge and agree that no party to
this Agreement has made or makes any representations or warranties with respect
to the transactions contemplated hereby other than those specifically set forth
in this Article III and the Transaction Documents.
 
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ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
 
                4.1           Transfer Restrictions.
 
                                (a)           Compliance with Laws.
Notwithstanding any other provision of this Article IV, each Purchaser covenants
that the Securities may be disposed of only pursuant to an effective
registration statement under, and in compliance with the requirements of, the
Securities Act, or pursuant to an available exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act, and in
compliance with any applicable state, federal or foreign securities laws.  In
connection with any transfer of the Securities other than (i) pursuant to an
effective registration statement, (ii) to the Company, (iii) pursuant to Rule
144 (provided that the Purchaser provides the Company with reasonable assurances
(in the form of seller and broker representation letters) that the securities
may be sold pursuant to such rule) or Rule 144A or (iv) in connection with a
bona fide pledge as contemplated in Section 4.1(b), the Company may require the
transferor thereof to provide to the Company and the Transfer Agent, at the
transferor’s expense, an opinion of counsel selected by the transferor and
reasonably acceptable to the Company and the Transfer Agent, the form and
substance of which opinion shall be reasonably satisfactory to the Company and
the Transfer Agent, to the effect that such transfer does not require
registration of such transferred Securities under the Securities Act.  As a
condition of transfer (other than pursuant to clauses (i), (ii) or (iii) of the
preceding sentence), any such transferee shall agree in writing to be bound by
the terms of this Agreement and shall have the rights of a Purchaser under this
Agreement and the Registration Rights Agreement with respect to such transferred
Securities.
 
                                (b)           Legends. Certificates evidencing
the Shares, the Warrants and the Warrant Shares shall bear any legend as
required by the California Corporations Code (including the legend set forth in
Schedule 4.1(b) hereto), the “blue sky” laws of any state and a restrictive
legend in substantially the following form, until such time as they are not
required under Section 4.1(c) or applicable law:
 

[NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED]
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.  NO REPRESENTATION IS
MADE BY THE ISSUER AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT FOR RESALES OF THESE SECURITIES.
 
The Company acknowledges and agrees that a Purchaser may from time to time
pledge, and/or grant a security interest in, some or all of the legended
Securities in connection with applicable securities laws, pursuant to a bona
fide margin agreement in compliance with a bona fide margin loan.  Such a pledge
would not be subject to approval or consent of the Company and no legal opinion
of legal counsel
 
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to the pledgee, secured party or pledgor shall be required in connection with
the pledge, but such legal opinion shall be required in connection with a
subsequent transfer or foreclosure following default by the Purchaser transferee
of the pledge.  No notice shall be required of such pledge, but Purchaser’s
transferee shall promptly notify the Company of any such subsequent transfer or
foreclosure.  Each Purchaser acknowledges that the Company shall not be
responsible for any pledges relating to, or the grant of any security interest
in, any of the Securities or for any agreement, understanding or arrangement
between any Purchaser and its pledgee or secured party.  At the appropriate
Purchaser’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Shares may reasonably request in
connection with a pledge or a permissible transfer of the Shares, including the
preparation and filing of any required prospectus supplement under Rule
424(b)(ii) of the Securities Act or other applicable provision of the Securities
Act to appropriately amend the list of “Selling Stockholders” thereunder. Each
Purchaser acknowledges and agrees that, except as otherwise provided in Section
4.1(c), any Securities subject to a pledge or security interest as contemplated
by this Section 4.1(b) shall continue to bear the legend set forth in this
Section 4.1(b) and be subject to the restrictions on transfer set forth in
Section 4.1(a).
 
                                (c)           Removal of Legends. The
restrictive legend set forth in Section 4.1(b) above shall be removed and the
Company shall issue a certificate without such restrictive legend or any other
restrictive legend to the holder of the applicable Securities upon which it is
stamped or issue to such holder by electronic delivery at the applicable balance
account at the Depository Trust Company (“DTC”), if (i) such Securities are
registered for resale under the Securities Act (provided that, if the Purchaser
is selling pursuant to the effective registration statement registering the
Securities for resale, the Purchaser agrees to only sell such Securities during
such time that such registration statement is effective and not withdrawn or
suspended, and only as permitted by such registration statement), (ii) such
Securities are sold or transferred pursuant to Rule 144 (if the transferor is
not an Affiliate of the Company), or (iii) such Securities are eligible for sale
under Rule 144, without the requirement for the Company to be in compliance with
the current public information required under Rule 144 as to such securities and
without volume or manner-of-sale restrictions.  Following the earlier of (i) the
Effective Date or (ii) Rule 144 becoming available for the resale of Securities,
without the requirement for the Company to be in compliance with the current
public information required under Rule 144 as to such securities and without
volume or manner-of-sale restrictions, the Company shall cause Company Counsel
to issue to the Transfer Agent the legal opinion referred to in the Irrevocable
Transfer Agent Instructions.  Any fees (with respect to the Transfer Agent,
Company Counsel or otherwise) associated with the issuance of such opinion or
the removal of such legend shall be borne by the Company.  Following the
Effective Date, or at such earlier time as a restrictive legend is no longer
required for certain Securities, the Company will no later than three (3)
Trading Days following the delivery by a Purchaser to the Company or the
Transfer Agent (with notice to the Company) of a legended certificate
representing such Securities (endorsed or with stock powers attached, signatures
guaranteed, and otherwise in form necessary to affect the reissuance and/or
transfer) and an opinion of counsel to the extent required by Section 4.1(a),
(such third Trading Day, the “Legend Removal Date”) deliver or cause to be
delivered to such Purchaser a certificate representing such Securities that is
free from all restrictive legends.  The Company may not make any notation on its
records or give instructions to the Transfer Agent that enlarge the restrictions
on transfer set forth in this Section 4.1(c).  Certificates for Securities
subject to legend removal hereunder may be transmitted by the Transfer Agent to
the Purchasers by crediting the account of the Purchaser’s prime broker with DTC
as directed by such Purchaser.
 
                                (d)           Irrevocable Transfer Agent
Instructions. The Company shall issue irrevocable instructions to its Transfer
Agent, and any subsequent transfer agent in the form of Exhibit D attached
hereto (the “Irrevocable Transfer Agent Instructions”). The Company represents
and warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 4.1(d) or instructions that are not
contradictory therewith will be given by the Company to its transfer agent in
connection with this Agreement, and that the Securities shall otherwise be
freely transferable on the books and records of the Company as and to the extent
provided in this Agreement and the other Transaction Documents and applicable
law. The Company acknowledges that a breach by it of its obligations under this
Section 4.1(d) will cause irreparable harm to a Purchaser. Accordingly, the
Company acknowledges that the remedy at law
 
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for a breach of its obligations under this Section 4.1(d) will be inadequate and
agrees, in the event of a breach or threatened breach by the Company of the
provisions of this Section 4.1(d), that a Purchaser shall be entitled, in
addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without
the necessity of showing economic loss and without any bond or other security
being required.
 
                                (e)           Acknowledgement. Each Purchaser
hereunder acknowledges its primary responsibilities under the Securities Act and
accordingly will not sell or otherwise transfer the Securities or any interest
therein without complying with the requirements of the Securities Act. Except as
otherwise provided below, while the above-referenced registration statement
remains effective, each Purchaser hereunder may sell the Shares and Warrant
Shares in accordance with the plan of distribution contained in the registration
statement and if it does so it will comply therewith and with the related
prospectus delivery requirements unless an exemption therefrom is
available.  Each Purchaser, severally and not jointly with the other Purchasers,
agrees that if it is notified by the Company in writing at any time that the
registration statement registering the resale of the Shares and Warrant Shares
is not effective or that the prospectus included in such registration statement
no longer complies with the requirements of Section 10 of the Securities Act,
the Purchaser will refrain from selling such Shares and Warrant Shares until
such time as the Purchaser is notified by the Company that such registration
statement is effective or such prospectus is compliant with Section 10 of the
Exchange Act, unless such Purchaser is able to, and does, sell such Shares and
Warrant Shares pursuant to an available exemption from the registration
requirements of Section 5 of the Securities Act. Both the Company and its
Transfer Agent, and their respective directors, officers, employees and agents,
may rely on this subsection (e) and each Purchaser hereunder will indemnify and
hold harmless each of such persons from any breaches or violations of this
paragraph.
 
                                (f)           Buy-In. If the Company shall fail
for any reason or for no reason to issue to a Purchaser unlegended certificates
within three (3) Business Days of receipt of all documents necessary for the
removal of the legend set forth above (the “Deadline Date”), then, in addition
to all other remedies available to such Purchaser, if on or after the Business
Day immediately following such three (3) Business Day period, such Purchaser
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the holder of shares of Common Stock that
such Purchaser anticipated receiving from the Company without any restrictive
legend (a “Buy-In”), then the Company shall, within three (3) Business Days
after such Purchaser’s request and in such Purchaser’s sole discretion, either
(i) pay cash to the Purchaser in an amount equal to such Purchaser’s total
purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased (the “Buy-In Price”), at which point the Company’s
obligation to deliver such certificate (and to issue such shares of Common
Stock) shall terminate, or (ii) promptly honor its obligation to deliver to such
Purchaser a certificate or certificates representing such shares of Common Stock
and pay cash to the Purchaser in an amount equal to the excess (if any) of the
Buy-In Price over the product of (a) such number of shares of Common Stock,
times (b) the Closing Bid Price on the Deadline Date.
 
                4.2           Acknowledgment of Dilution.  The Company
acknowledges that the issuance of the Securities may result in dilution of the
outstanding shares of Common Stock.  The Company further acknowledges that its
obligations under the Transaction Documents, including without limitation its
obligation to issue the Securities pursuant to the Transaction Documents, are
unconditional and absolute and not subject to any right of set off,
counterclaim, delay or reduction, regardless of the effect of any such dilution
or any claim the Company may have against any Purchaser and regardless of the
dilutive effect that such issuance may have on the ownership of the other
stockholders of the Company.
 
                4.3           Furnishing of Information. In order to enable the
Purchasers to sell the Securities under Rule 144 of the Securities Act, for a
period of one year from the Closing, the Company shall use its commercially
reasonably efforts to maintain the registration of the Securities under Section
12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act.  During such one year period, if the Company is not required to
file reports pursuant to such laws, it will prepare and
 
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furnish to the Purchasers and make publicly available in accordance with Rule
144(c) such information as is required for the Purchasers to sell the Securities
under Rule 144.
 
                4.4           Form D and Blue Sky. The Company agrees to timely
file a Form D with respect to the Shares and Warrants as required under
Regulation D.  The Company, on or before the Closing Date, shall take such
action as the Company shall reasonably determine is necessary in order to obtain
an exemption for or to qualify the Shares and Warrants for sale to the
Purchasers at the Closing pursuant to this Agreement under applicable securities
or “Blue Sky” laws of the states of the United States (or to obtain an exemption
from such qualification). The Company shall make all filings and reports
relating to the offer and sale of the Shares and Warrants required under
applicable securities or “Blue Sky” laws of the states of the United States
following the Closing Date.
 
                4.5           No Integration. The Company shall not, and shall
use its commercially reasonable efforts to ensure that no Affiliate of the
Company shall, sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that will be integrated with the offer or sale of the Shares and Warrants
in a manner that would require the registration under the Securities Act of the
sale of the Shares and Warrants to the Purchasers, or that will be integrated
with the offer or sale of the Shares and Warrants for purposes of the rules and
regulations of any Trading Market such that it would require stockholder
approval prior to the closing of such other transaction unless stockholder
approval is obtained before the closing of such subsequent transaction.
 
                4.6           Securities Laws Disclosure; Publicity. By 9:00
a.m., New York City time, on the Trading Day immediately following the execution
of this Agreement, the Company shall issue one or more press releases (each, a
“Press Release”) disclosing all material terms of the transactions contemplated
hereby and the items identified on Schedule 3.1(h)-2.  On or before 9:00 a.m.,
New York City time, on the Trading Day immediately following the execution of
this Agreement, the Company will file a Current Report on Form 8-K with the
Commission describing the terms of the Transaction Documents (and including as
exhibits to such Current Report on Form 8-K the material Transaction Documents
(including, without limitation, this Agreement and the Registration Rights
Agreement)). Notwithstanding the foregoing, the Company shall not publicly
disclose the name of any Purchaser or an Affiliate of any Purchaser, or include
the name of any Purchaser or an Affiliate of any Purchaser in any press release
or filing with the Commission (other than the Registration Statement) or any
regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except (i) as required by federal securities law in connection with
(A) any registration statement contemplated by the Registration Rights Agreement
and (B) the filing of final Transaction Documents (including signature pages
thereto) with the Commission and (ii) to the extent such disclosure is required
by law, request of the Staff of the Commission or Trading Market regulations, in
which case the Company shall provide the Purchasers with prior written notice of
such disclosure permitted under this subclause (ii).  From and after the
issuance of the Press Release(s) (which shall include the items identified in
Schedule 3.1(h)-2 hereto), no Purchaser shall be in possession of any material,
non-public information received from the Company, any Subsidiary or any of their
respective officers, directors, employees or agents, that is not disclosed in
the Press Release(s) (which shall include the items identified in
Schedule 3.1(h)-2 hereto) unless a Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information.  Each
Purchaser, severally and not jointly with the other Purchasers, covenants that
until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in this Section 4.6 (which shall include
the items identified in Schedule 3.1(h)-2 hereto), such Purchaser will maintain
the confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction).
 
                4.7           Non-Public Information. Except with respect to the
material terms and conditions of the transactions contemplated by the
Transaction Documents, and except with the express written consent of such
Purchaser and unless prior thereto such Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information, the Company
shall not, and shall cause each Subsidiary and each of their respective
officers, directors, employees and agents, not to, and each Purchaser shall not
directly solicit the Company, any of its Subsidiaries or any of their respective
officers, directors, employees or agents to provide any Purchaser with any
material, non-public information regarding the Company or any of its
 
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Subsidiaries from and after the filing of the Press Release(s) (which shall
include the items identified in Schedule 3.1(h)-2 hereto).
 
                4.8           Indemnification.
 
                                (a)           Indemnification of Purchasers. In
addition to the indemnity provided in the Registration Rights Agreement, the
Company will indemnify and hold each Purchaser and its directors, officers,
stockholders, members, partners, employees and agents (and any other Persons
with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, stockholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling person (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction
Documents.  The Company will not be liable to any Purchaser Party under this
Agreement to the extent, but only to the extent that a loss, claim, damage or
liability is attributable to any Purchaser Party’s breach of any of the
representations, warranties, covenants or agreements made by such Purchaser
Party in this Agreement or in the other Transaction Documents; provided that
such a claim for indemnification relating to any breach of any of the
representations or warranties made by the Company in this Agreement is made
within one year from the Closing.
 
                                (b)           Conduct of Indemnification
Proceedings. Promptly after receipt by any Person (the "Indemnified Person”) of
notice of any demand, claim or circumstances which would or might give rise to a
claim or the commencement of any action, proceeding or investigation in respect
of which indemnity may be sought pursuant to Section 4.8(a), such Indemnified
Person shall promptly notify the Company in writing and the Company shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to such Indemnified Person, and shall assume the payment of all fees and
expenses; provided, however, that the failure of any Indemnified Person so to
notify the Company shall not relieve the Company of its obligations hereunder
except to the extent that the Company is actually and materially and adversely
prejudiced by such failure to notify. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless:
(i) the Company and the Indemnified Person shall have mutually agreed to the
retention of such counsel; (ii) the Company shall have failed promptly to assume
the defense of such proceeding and to employ counsel reasonably satisfactory to
such Indemnified Person in such proceeding; or (iii) in the reasonable judgment
of counsel to such Indemnified Person, representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. The Company shall not be liable for any settlement of
any proceeding effected without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Without the prior written consent
of the Indemnified Person, which consent shall not be unreasonably withheld,
delayed or conditioned, the Company shall not effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Person from all liability arising out of such proceeding.
 
                4.9           Listing of Common Stock. In the time and manner
required by the Principal Trading Market, the Company shall prepare and file
with such Trading Market an additional shares listing application covering all
of the Shares and Warrant Shares and shall use its commercially reasonable
efforts to take all steps necessary to cause the Shares and Warrant Shares to be
approved for listing on the Principal Trading Market as soon as possible
thereafter.
 
                4.10           Use of Proceeds. The Company intends to use the
net proceeds from the sale of the Shares and Warrants hereunder for working
capital and general corporate purposes.
 
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4.11           Short Sales After The Date Hereof.  Such Purchaser shall not, and
shall cause its Trading Affiliates not to, engage, directly or indirectly, in
any transactions in the Company’s securities (including, without limitation, any
Short Sales involving the Company’s securities) during the period from the date
hereof until the earlier of such time as (i) the transactions contemplated by
this Agreement are first required to be publicly announced as described in
Section 4.6 (which public announcement shall include the items identified in
Schedule 3.1(h)-2 hereto) or (ii) this Agreement is terminated in full pursuant
to Section 6.17 and the items identified in Schedule 3.1(h)-2 hereto have been
publicly announced as described in Section 4.6.  Each Purchaser severally and
not jointly with the other Purchasers covenants that until such time as the
transactions contemplated by this Agreement are publicly disclosed by the
Company as described in Section 4.6 (which public announcement shall include the
items identified in Schedule 3.1(h)-2 hereto), such Purchaser will maintain the
confidentiality of the existence and terms of this Agreement and the
transactions contemplated hereby and the non-public information contained in the
items identified in Schedule 3.1(h)-2 hereto.  Notwithstanding the foregoing, no
Purchaser makes any representation, warranty or covenant hereby that it will not
engage in Short Sales in the securities of the Company after the time that the
transactions contemplated by this Agreement are publicly disclosed by the
Company as described in Section 4.6 (which public announcement shall include the
items identified in Schedule 3.1(h)-2 hereto).  Notwithstanding the foregoing,
in the event that a Purchaser is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such Purchaser's assets
and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser's
assets, the representation set forth above shall apply only with respect to the
portion of assets managed by the portfolio manager that have knowledge about the
financing transaction contemplated by this Agreement.  Each Purchaser
understands and acknowledges, severally and not jointly with any other
Purchaser, that the Commission currently takes the position that covering a
short position established prior to effectiveness of a resale registration
statement with shares included in such registration statement would be a
violation of Section 5 of the Securities Act, as set forth in Item 65, Section 5
under Section A, of the Manual of Publicly Available Telephone Interpretations,
dated July 1997, compiled by the Office of Chief Counsel, Division of
Corporation Finance.
 
4.12           Reservation of Shares of Common Stock.  The Company shall take
all action necessary to at all times have authorized, and reserved for the
purpose of issuance from and after the Closing Date, the number of shares of
Common Stock issuable upon exercise of the Warrants issued at the Closing
(without taking into account any limitations on exercise of the Warrants set
forth in the Warrants).
 
ARTICLE V.
CONDITIONS PRECEDENT TO CLOSING
 
5.1           Conditions Precedent to the Obligations of the Purchasers to
Purchase Shares and Warrants. The obligation of each Purchaser to acquire Shares
and Warrants at the Closing is subject to the fulfillment to such Purchaser’s
satisfaction, on or prior to the Closing Date, of each of the following
conditions, any of which may be waived by such Purchaser (as to itself only):
 
                                (a)           Representations and Warranties.
The representations and warranties of the Company contained herein shall be true
and correct in all material respects (except for those representations and
warranties which are qualified as to materiality, in which case such
representations and warranties shall be true and correct in all respects) as of
the date when made and as of the Closing Date, as though made on and as of such
date, except for such representations and warranties that speak as of a specific
date.
 
                                (b)           Performance. The Company shall
have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by it at or prior to the Closing.
 
                                (c)           No Injunction. No statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or governmental authority
of competent jurisdiction that prohibits the consummation of any of the
transactions contemplated by the Transaction Documents.
 
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                                (d)           Consents. The Company shall have
obtained in a timely fashion any and all consents, permits, approvals,
registrations and waivers necessary for consummation of the purchase and sale of
the Shares and Warrants at the Closing (including all Required Approvals), all
of which shall be and remain so long as necessary in full force and effect.
 
                                (e)           No Suspensions of Trading in
Common Stock; Listing . The Common Stock (i) shall be designated for quotation
or listed on the Principal Trading Market and (ii) shall not have been
suspended, as of the Closing Date, by the Commission or the Principal Trading
Market from trading on the Principal Trading Market nor shall suspension by the
Commission or the Principal Trading Market have been threatened, as of the
Closing Date, either (A) in writing by the Commission or the Principal Trading
Market or (B) by falling below the minimum listing maintenance requirements of
the Principal Trading Market.
 
                                (f)           Company Deliverables . The Company
shall have delivered the Company Deliverables in accordance with Section 2.2(a).
 
                                (g)           Compliance Certificate . The
Company shall have delivered to each Purchaser a certificate, dated as of the
Closing Date and signed by its Chief Executive Officer or its Chief Financial
Officer, dated as of the Closing Date, certifying to the fulfillment of the
conditions specified in Sections 5.1(a) and (b) in the form attached hereto as
Exhibit F.
 
(h)           Adverse Changes. Since the date of execution of this Agreement, no
event or series of events shall have occurred that has had or would reasonably
be expected to have a Material Adverse Effect.
 
                                (i)           Termination . This Agreement shall
not have been terminated as to such Purchaser in accordance with Section 6.17
herein.
 
 
                5.2           Conditions Precedent to the Obligations of the
Company to sell Shares and Warrants. The Company’s obligation to sell and issue
the Shares and Warrants at the Closing is subject to the fulfillment to the
satisfaction of the Company on or prior to the Closing Date of the following
conditions, any of which may be waived by the Company:
 
                                (a)           Representations and Warranties.
The representations and warranties made by the Purchaser in Section 3.2 hereof
shall be true and correct in all material respects as of the date when made, and
as of the Closing Date as though made on and as of such date, except for
representations and warranties that speak as of a specific date.
 
                                (b)           Performance. Such Purchaser shall
have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by such Purchaser at or prior to the
Closing Date.
 
                                (c)           No Injunction. No statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or governmental authority
of competent jurisdiction that prohibits the consummation of any of the
transactions contemplated by the Transaction Documents.
 
                                (d)           Consents. The Company shall have
obtained in a timely fashion any and all consents, permits, approvals,
registrations and waivers necessary for consummation of the purchase and sale of
the Shares and Warrants, all of which shall be and remain so long as necessary
in full force and effect.
 
                                (e)           Purchasers Deliverables. Such
Purchaser shall have delivered its Purchaser Deliverables in accordance with
Section 2.2(b).
 
                                (f)           Termination. This Agreement shall
not have been terminated as to such Purchaser in accordance with Section 6.17
herein.
 
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ARTICLE VI.
MISCELLANEOUS
 
6.1           Fees and Expenses.  The Company and the Purchasers shall each pay
the fees and expenses of their respective advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party in
connection with the negotiation, preparation, execution, delivery and
performance of this Agreement.  The Company shall pay all Transfer Agent fees,
stamp taxes and other taxes and duties levied in connection with the sale and
issuance of the Shares and Warrants to the Purchasers.
 
 
6.2           Entire Agreement. The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements,
understandings, discussions and representations, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules. At or after the Closing, and without further
consideration, the Company and the Purchasers will execute and deliver to the
other such further documents as may be reasonably requested in order to give
practical effect to the intention of the parties under the Transaction
Documents.
 
                6.3           Notices. Any and all notices or other
communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest of
(a) the date of transmission, if such notice or communication is delivered via
facsimile (provided the sender receives a machine-generated confirmation of
successful transmission) at the facsimile number specified in this Section prior
to 5:00 p.m., New York City time, on a Trading Day, (b) the next Trading Day
after the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section on a day that is not
a Trading Day or later than 5:00 p.m., New York City time, on any Trading Day,
(c) the Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service with next day delivery specified, or
(d) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be as follows:
 

If to the Company:               Cytori Therapeutics, Inc.
3020 Callan Road
San Diego, California 92121
Telephone No.:  (858) 458-0900
Facsimile No.:  (858) 450-4331
Attention:  Chief Executive Officer
 
 
With a copy to:
DLA Piper LLP (US)

 
4365 Executive Drive, Suite 1100

 
San Diego, California 92121-2133

 
Telephone No.:  (858) 677-1400

 
Facsimile No.:  (858) 677-1401

 
Attention:  Jeff Baglio, Esq.

 
If to a Purchaser:
To the address set forth under such Purchaser’s name on the signature page
hereof;

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
 
                6.4           Amendments; Waivers; No Additional Consideration.
No provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by the Company and each of the
Purchasers holding or having the right to acquire a majority of the Securities
on a fully-diluted basis at the time of such amendment or, in the case of a
waiver, by the party against whom enforcement of any such waiver is sought. No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any
 
24

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subsequent default or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of either party to exercise any right
hereunder in any manner impair the exercise of any such right. No consideration
shall be offered or paid to any Purchaser to amend or consent to a waiver or
modification of any provision of any Transaction Document unless the same
consideration is also offered to all Purchasers who then hold Securities.
 
                6.5           Construction. The headings herein are for
convenience only, do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof. The language used in
this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied
against any party. This Agreement shall be construed as if drafted jointly by
the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement or any of the Transaction Documents.
 
                6.6           Successors and Assigns. The provisions of this
Agreement shall inure to the benefit of and be binding upon the parties and
their successors and permitted assigns. This Agreement, or any rights or
obligations hereunder, may not be assigned by the Company without the prior
written consent of the Purchasers. Any Purchaser may assign its rights hereunder
in whole or in part to any Person to whom such Purchaser assigns or transfers
any Securities in compliance with the Transaction Documents and applicable law,
provided such transferee shall agree in writing to be bound, with respect to the
transferred Securities, by the terms and conditions of this Agreement that apply
to the “Purchasers”.
 
                6.7           No Third-Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person.
 
                6.8           Governing Law. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective Affiliates, employees or agents) shall be commenced exclusively in
the New York Courts. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any of
the Transaction Documents), and hereby irrevocably waives, and agrees not to
assert in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
 
                6.9           Survival. Subject to applicable statute of
limitations, the representations, warranties, agreements and covenants contained
herein shall survive the Closing and the delivery of the Shares and Warrants,
except that the representations and warranties contained herein shall terminate
upon the one-year anniversary of the Closing Date.
 
                6.10           Execution. This Agreement may be executed in two
or more counterparts, all of which when taken together shall be considered one
and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood that
both parties need not sign the same counterpart. In the event that any signature
is delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
 
25

--------------------------------------------------------------------------------

 
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original thereof.
 
                6.11           Severability. If any provision of this Agreement
is held to be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision that is a reasonable substitute therefor,
and upon so agreeing, shall incorporate such substitute provision in this
Agreement.
 
                6.12           Replacement of Securities.  If any certificate or
instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company and the Transfer Agent of such loss, theft or
destruction and the execution by the holder thereof of a customary lost
certificate affidavit of that fact and an agreement to indemnify and hold
harmless the Company and the Transfer Agent for any losses in connection
therewith or, if required by the Transfer Agent, a bond in such form and amount
as is required by the Transfer Agent. The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Securities. If a
replacement certificate or instrument evidencing any Securities is requested due
to a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.
 
                6.13           Remedies. In addition to being entitled to
exercise all rights provided herein or granted by law, including recovery of
damages, each of the Purchasers and the Company will be entitled to specific
performance under the Transaction Documents. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any
breach of obligations described in the foregoing sentence and hereby agree to
waive in any action for specific performance of any such obligation (other than
in connection with any action for a temporary restraining order) the defense
that a remedy at law would be adequate.
 
                6.14           Payment Set Aside. To the extent that the Company
makes a payment or payments to any Purchaser pursuant to any Transaction
Document or a Purchaser enforces or exercises its rights thereunder, and such
payment or payments or the proceeds of such enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside, recovered from, disgorged by or are required to be refunded, repaid
or otherwise restored to the Company, a trustee, receiver or any other person
under any law (including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the extent of any
such restoration the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
 
                6.15           Adjustments in Common Stock Numbers and Prices .
In the event of any stock split, subdivision, dividend or distribution payable
in shares of Common Stock (or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly shares of Common
Stock), combination or other similar recapitalization or event occurring after
the date hereof and prior to the Closing, each reference in any Transaction
Document to a number of shares or a price per share shall be deemed to be
amended to appropriately account for such event.
 
                6.16           Independent Nature of Purchasers’ Obligations and
Rights. The obligations of each Purchaser under any Transaction Document are
several and not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance of the obligations
of any other Purchaser under any Transaction Document.  The decision of each
Purchaser to purchase Securities pursuant to the Transaction Documents has been
made by such Purchaser independently of any other Purchaser and independently of
any information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company or any Subsidiary which may
have been made or given by any other Purchaser or by any agent or employee of
any other Purchaser, and no Purchaser and any of its agents or employees shall
have
 
26

--------------------------------------------------------------------------------

 
any liability to any other Purchaser (or any other Person) relating to or
arising from any such information, materials, statement or opinions.  Nothing
contained herein or in any Transaction Document, and no action taken by any
Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser acknowledges that no other Purchaser has
acted as agent for such Purchaser in connection with making its investment
hereunder and that no Purchaser will be acting as agent of such Purchaser in
connection with monitoring its investment in the Securities or enforcing its
rights under the Transaction Documents.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.  Each Purchaser has been
represented by its own separate legal counsel in its review and negotiation of
the Transaction Documents.  For reasons of administrative convenience only,
Purchasers and their respective counsels have chosen to communicate with the
Company through [_______].  The Company has elected to provide all Purchasers
with the same terms and Transaction Documents for the convenience of the Company
and not because it was required or requested to do so by any Purchaser.
 
                6.17           Termination. This Agreement may be terminated and
the sale and purchase of the Shares and Warrants abandoned at any time prior to
the Closing by either the Company or any Purchaser (with respect to itself only)
upon written notice to the other, if the Closing has not been consummated on or
prior to 5:00 p.m., New York City time, on the Outside Date; provided, however,
that the right to terminate this Agreement under this Section 6.17 shall not be
available to any Person whose failure to comply with its obligations under this
Agreement has been the cause of or resulted in the failure of the Closing to
occur on or before such time.  Nothing in this Section 6.17 shall be deemed to
release any party from any liability for any breach by such party of the terms
and provisions of this Agreement or the other Transaction Documents or to impair
the right of any party to compel specific performance by any other party of its
obligations under this Agreement or the other Transaction Documents. In the
event of a termination pursuant to this Section, the Company shall promptly
notify all non-terminating Purchasers and the Escrow Agent. Upon a termination
in accordance with this Section, the Company and the terminating Purchaser(s)
shall not have any further obligation or liability (including arising from such
termination) to the other, and no Purchaser will have any liability to any other
Purchaser under the Transaction Documents as a result therefrom.
 
                6.18           Waiver of Conflicts. Each party to this Agreement
acknowledges that Company Counsel, outside general counsel to the Company, has
in the past performed and is or may now or in the future represent one or more
Purchasers or their affiliates in matters unrelated to the transactions
contemplated by the Transaction Documents, including representation of such
Purchasers or their affiliates in matters of a similar nature to the
transactions contemplated by the Transaction Documents. The applicable rules of
professional conduct require that Company Counsel inform the parties hereunder
of this representation and obtain their consent. Company Counsel has served as
outside general counsel to the Company and has negotiated the terms of the
transactions contemplated by the Transaction Documents solely on behalf of the
Company. The Company and each Purchaser hereby (a) acknowledge that they have
had an opportunity to ask for and have obtained information relevant to such
representation, including disclosure of the reasonably foreseeable adverse
consequences of such representation; (b) acknowledge that with respect to the
transactions contemplated by the Transaction Documents, Company Counsel has
represented solely the Company, and not any Purchaser or any stockholder,
director or employee of the Company or any Purchaser; and (c) gives its informed
consent to Company Counsel’s representation of the Company in the transactions
contemplated by the Transaction Documents.
 
                6.19           Rescission and Withdrawal Right. Notwithstanding
anything to the contrary contained in (and without limiting any similar
provisions of) the Transaction Documents, whenever any Purchaser exercises a
right, election, demand or option under a Transaction Document and the Company
does not timely perform its related obligations within the periods therein
provided, then such Purchaser may rescind or withdraw, in its sole discretion
from time to time upon written notice to the Company, any relevant notice,
demand or election in whole or in part without prejudice to its future actions
and rights.

 
27

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
CYTORI THERAPEUTICS, INC.
 
 
By:
/s/ Mark E. Saad        
 

 
Name:  Mark E. Saad

 
Title:  Chief Financial Officer

 

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
[SIGNATURE PAGES FOR PURCHASERS FOLLOW]
 
 
 
 
 
 
 

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: Walter Cruttenden

By:   /s/ Walter
Cruttenden                                                                     
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $500,000
 
Number of Shares to be Acquired: 219,298
 
Underlying Shares Subject to Warrant: 383,772
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: Genet Family 2007 Opportunity Trust

By:   /s/ Benjamin
Genet                                                                     
Name:  Benjamin Genet
Title:  Trustee

 
Aggregate Purchase Price (Subscription Amount): $400,000
 
Number of Shares to be Acquired: 175,439
 
Underlying Shares Subject to Warrant: 307,019
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: Thomas R. Speno

By:   /s/ Thomas R.
Speno                                                                     
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $342,000
 
Number of Shares to be Acquired: 150,000
 
 
Underlying Shares Subject to Warrant: 262,500
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: Michael G. Masarek 2008 Grantor Retained Annuity Trust UAD
4/24/08

By:   /s/ Michael
Masarek                                                                 
Name:  Michael Masarek
Title:  Trustee

 
Aggregate Purchase Price (Subscription Amount): $300,000
 
Number of Shares to be Acquired: 131,579
 
 
Underlying Shares Subject to Warrant: 230,264
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: Robert M. Schneider

By:   /s/ Robert M.
Schneider                                                                 
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $250,800
 
Number of Shares to be Acquired: 110,000
 
 
Underlying Shares Subject to Warrant: 192,500
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: Gagnon Investment Associates Master Fund

By:     /s/ Neil
Gagnon                                                               
Name:  Neil Gagnon
Title:  Managing Member

 
Aggregate Purchase Price (Subscription Amount): $250,000
 
Number of Shares to be Acquired: 109,649
 
 
Underlying Shares Subject to Warrant: 191,886
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

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NAME OF PURCHASER: London Family Trust

By:   /s/ Robert
S. London                                                                 
Name:  Robert S. London
Title:  Trustee

 
Aggregate Purchase Price (Subscription Amount): $228,000
 
Number of Shares to be Acquired: 100,000
 
 
Underlying Shares Subject to Warrant: 175,000
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: M. Stephen Jackman Trust

By:   /s/ M. Stephen
Jackman                                                                     
Name:  M. Stephen Jackman
Title:  Trustee

 
Aggregate Purchase Price (Subscription Amount): $215,960
 
Number of Shares to be Acquired: 94,719
 
Underlying Shares Subject to Warrant: 165,759
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: David Sonenberg

By:   /s/ David
Sonenberg                                                                
Name: 
Title:

 
Aggregate Purchase Price (Subscription Amount): $200,000
 
Number of Shares to be Acquired: 87,719
 
 
Underlying Shares Subject to Warrant: 153,509
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: Neil Gagnon

By:    /s/ Neil
Gagnon                                                                
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $150,000
 
Number of Shares to be Acquired: 65,789
 
Underlying Shares Subject to Warrant: 115,131
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: David B. Schulman

By:   /s/ David B.
Schulman                                                                     
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $114,000
 
Number of Shares to be Acquired: 50,000
 
 
Underlying Shares Subject to Warrant: 87,500
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: Lois Gagnon

By:   /s/ Lois
Gagnon                                                                  
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $100,000
 
Number of Shares to be Acquired: 43,860
 
 
Underlying Shares Subject to Warrant: 76,755
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 
 
NAME OF PURCHASER: Manuel F. Mair

By:   /s/ Manuel
F. Mair                                                                  
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $100,000
 
Number of Shares to be Acquired: 43,860
 
 
Underlying Shares Subject to Warrant: 76,755
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 
 
NAME OF PURCHASER: Perry Isenberg

By:   /s/ Perry
Isenberg                                                                 
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $100,000
 
Number of Shares to be Acquired: 43,860
 
 
Underlying Shares Subject to Warrant: 76,755
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 
 
NAME OF PURCHASER: Peter E. Lacey

By:   /s/ Peter E.
Lacey                                                                  
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $100,000
 
Number of Shares to be Acquired: 43,860
 
 
Underlying Shares Subject to Warrant: 76,755
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: Alfred Sacks

By:   /s/ Alfred
Sacks                                                                         
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $75,000
 
Number of Shares to be Acquired: 32,895
 
 
Underlying Shares Subject to Warrant: 57,567
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: Evan J. Brody

By:   /s/ Evan J.
Brody                                                                         
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $75,000
 
Number of Shares to be Acquired: 32,895
 
 
Underlying Shares Subject to Warrant: 57,567
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: Darren and Tara Levine, JTWROS

By:    /s/ Darren Levine                                                     
 
By:    /s/ Tara
Levine                                                                    
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $68,400
 
Number of Shares to be Acquired: 30,000
 
 
Underlying Shares Subject to Warrant: 52,500
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: John Collins

By:   /s/ John
Collins                                                                         
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $57,000
 
Number of Shares to be Acquired: 25,000
 
 
Underlying Shares Subject to Warrant: 43,750
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: Ronald Henriksen

By:  /s/ Ronald
Henriksen                                                                      
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $50,160
 
Number of Shares to be Acquired: 22,000
 
Underlying Shares Subject to Warrant: 38,500
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: Alan Rutner

By:   /s/ Alan Rutner
                                                                     
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $50,000
 
Number of Shares to be Acquired: 21,930
 
 
Underlying Shares Subject to Warrant: 38,378
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

NAME OF PURCHASER: Lisa J. Burley Revocable Trust

By:   /s/ Lisa J.
Burley                                                                          
Name:  Lisa J. Burley
Title:  Trustee

 
Aggregate Purchase Price (Subscription Amount): $50,000
 
Number of Shares to be Acquired: 21,930
 
 
Underlying Shares Subject to Warrant: 38,378
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

 
NAME OF PURCHASER: Randy M. Bennis

By:   /s/ Randy M.
Bennis                                                                          
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $50,000
 
Number of Shares to be Acquired: 21,930
 
 
Underlying Shares Subject to Warrant: 38,378
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

 
NAME OF PURCHASER: Marc Hedrick

By:   /s/ Marc
Hedrick                                                                          
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $45,600
 
Number of Shares to be Acquired: 20,000
 
 
Underlying Shares Subject to Warrant: 35,000
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

 
NAME OF PURCHASER: Ronald Stricoff

By:   /s/ Ronald
Stricoff                                                                          
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $45,600
 
Number of Shares to be Acquired: 20,000
 
 
Underlying Shares Subject to Warrant: 35,000
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

 
NAME OF PURCHASER: Andrea Philippou

By:   /s/ Andrea
Philippou                                                                          
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $45,000
 
Number of Shares to be Acquired: 19,737
 
 
Underlying Shares Subject to Warrant: 34,540
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

 
NAME OF PURCHASER: Angel Martinez

By:   /s/ Angel
Martinez                                                                          
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $30,000
 
Number of Shares to be Acquired: 13,158
 
 
Underlying Shares Subject to Warrant: 23,027
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

 
NAME OF PURCHASER: Gregory J. Randazza

By:   /s/ Gregory J.
Randazza                                                                          
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $30,000
 
Number of Shares to be Acquired: 13,158
 
 
Underlying Shares Subject to Warrant: 23,027
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

 
NAME OF PURCHASER: Bob Friedman

By:   /s/ Bob
Friedman                                                                          
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $25,080
 
Number of Shares to be Acquired: 11,000
 
Underlying Shares Subject to Warrant: 19,250
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

 
NAME OF PURCHASER: 1999 Garfinkle Family Trust

By:   /s/ Marla
Garfinkle                                                                          
Name:  Marla Garfinkle
Title:  Trustee

 
Aggregate Purchase Price (Subscription Amount): $25,000
 
Number of Shares to be Acquired: 10,965
 
 
Underlying Shares Subject to Warrant: 19,189
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

 
NAME OF PURCHASER: Louis Berlin

By:   /s/ Louis
Berlin                                                                          
Name: 
Title: 

 
Aggregate Purchase Price (Subscription Amount): $25,000
 
Number of Shares to be Acquired: 10,965
 
 
Underlying Shares Subject to Warrant: 19,189
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

 
NAME OF PURCHASER: Sidney J. Workman

By:   /s/ Sidney J.
Workman                                                                          
Name: 
Title: 

 
Aggregate Purchase Price (Subscription Amount): $25,000
 
Number of Shares to be Acquired: 10,965
 
 
Underlying Shares Subject to Warrant: 19,189
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

 
NAME OF PURCHASER: James Garrett Schwendig M.D., Inc.

By:   /s/ James Garrett
Schwendig                                                                          
Name:  James Garrett Schwendig
Title:  President

 
Aggregate Purchase Price (Subscription Amount): $22,800
 
Number of Shares to be Acquired: 10,000
 
Underlying Shares Subject to Warrant: 17,500
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

 
NAME OF PURCHASER: Kenneth J. Sobel & Debra S. Sobel, Husband and Wife as
tenants by the entireties

By:   /s/ Kenneth J.
Sobel                                                                          
By:   /s/ Debra S. Sobel                 
                                                         
Name: 
Title: 

 
Aggregate Purchase Price (Subscription Amount): $20,000
 
Number of Shares to be Acquired: 8,772
 
Underlying Shares Subject to Warrant: 15,351
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

 
NAME OF PURCHASER: Mike Reuter
 

By:   /s/ Mike
Reuter                                                                                                                                  
Name: 
Title: 

 
Aggregate Purchase Price (Subscription Amount): $20,000
 
Number of Shares to be Acquired: 8,772
 
Underlying Shares Subject to Warrant: 15,351
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 

 
NAME OF PURCHASER: Seitlin & Company
 

 
By:   /s/ M. Stephen Jackman                             
Name:  M. Stephen Jackman
Title:  Chairman

 
Aggregate Purchase Price (Subscription Amount): $17,100
 
Number of Shares to be Acquired: 7,500
 
Underlying Shares Subject to Warrant: 13,125
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 
 
 
NAME OF PURCHASER: Stanley R. Brenner
 

By:   /s/ Stanley R. Brenner                
Name: 
Title: 
 
Aggregate Purchase Price (Subscription Amount): $11,400
 
Number of Shares to be Acquired: 5,000
 
Underlying Shares Subject to Warrant: 8,750
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 
 
NAME OF PURCHASER: Alan J. Brenner
 

By:   /s/ Alan J.
Brenner                                                                                                                                  
Name: 
Title: 
 
Aggregate Purchase Price (Subscription Amount): $11,400
 
Number of Shares to be Acquired: 5,000
 
Underlying Shares Subject to Warrant: 8,750
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 
 
NAME OF PURCHASER: Sam Katz

By:   /s/ Sam
Katz                                                                  
Name:
Title:

 
Aggregate Purchase Price (Subscription Amount): $11,400
 
Number of Shares to be Acquired: 5,000
 
Underlying Shares Subject to Warrant: 8,750
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

--------------------------------------------------------------------------------

 
 
 
NAME OF PURCHASER: Dave Rickey & Daughters Foundation
 

By:   /s/ David M. Rickey                              
Name: 
Title: 
 
Aggregate Purchase Price (Subscription Amount): $10,000
 
Number of Shares to be Acquired: 4,386
 
Underlying Shares Subject to Warrant: 7,676
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

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NAME OF PURCHASER: Solomon Genet
 

By:   /s/ Solomon
Genet                                                                                                                                  
Name: 
Title: 
 
Aggregate Purchase Price (Subscription Amount): $5,000
 
Number of Shares to be Acquired: 2,193
 
Underlying Shares Subject to Warrant: 3,838
 
(175% of the number of Shares to be acquired)
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

Telephone No.:   _______________________

Facsimile No.:   ________________________

E-mail Address:   ________________________

Attention:  _______________________

Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 
 

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EXHIBITS
 
A:   Form of Warrant
B:    Form of Registration Rights Agreement
C-1:       Accredited Investor Questionnaire
C-2:       Stock Certificate and Warrant Questionnaire
D:          Irrevocable Transfer Agent Instructions
E:           Form of Secretary’s Certificate
F:           Form of Officer’s Certificate
G:          Wire Instructions

 
SCHEDULES
 
3.1(h)-2 SEC Reports; Disclosure Materials
4.1(b) Legends

 
 

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EXHIBIT A
 
Form of Warrant
 
 
 
 
 
 

 
 

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EXHIBIT B
 
Form of Registration Rights Agreement
 
 
 
 
 

 
 

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Instruction Sheet
(to be read in conjunction with the entire
Securities Purchase Agreement and Registration Rights Agreement)

A.
Complete the following items in the Securities Purchase Agreement and/or
Registration Rights Agreement:

 
 
1.
Provide the information regarding the Purchaser requested on the signature
page.  The Securities Purchase Agreement and the Registration Rights Agreement
must be executed by an individual authorized to bind the Purchaser.

 
 
2.
Exhibit C-1 – Accredited Investor Questionnaire:

 
Provide the information requested by the Accredited Investor Questionnaire

 
3.
Exhibit C-2 Stock Certificate and Warrant Questionnaire:

 
Provide the information requested by the Stock Certificate and Warrant
Questionnaire

 
4.
Annex B to the Registration Rights Agreement -- Selling Securityholder Notice
and Questionnaire

 
Provide the information requested by the Selling Securityholder Notice and
Questionnaire

 
5.
Return the signed Securities Purchase Agreement and Registration Rights
Agreement to:

Cytori Therapeutics, Inc.
3020 Callan Road
San Diego, California 92121
Telephone No.:  (858) 458-0900
Facsimile No.:  (858) 450-4335
Attention:  Jon Soneff
 

B.
Instructions regarding the transfer of funds for the purchase of Securities is
set forth on Exhibit G to the Securities Purchase Agreement.

 
 

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EXHIBIT C-1

ACCREDITED INVESTOR QUESTIONNAIRE

(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)

To:           Cytori Therapeutics, Inc.

This Investor Questionnaire (“Questionnaire”) must be completed by each
potential investor in connection with the offer and sale of shares of common
stock, par value $0.001 per share, and warrants to purchase shares of common
stock (the “Securities”), of Cytori Therapeutics, Inc., a Delaware corporation
(the “Corporation”).  The Securities are being offered and sold by the
Corporation without registration under the Securities Act of 1933, as amended
(the “Act”), and the securities laws of certain states, in reliance on the
exemptions contained in Section 4(2) of the Act and on Regulation D promulgated
thereunder and in reliance on similar exemptions under applicable state
laws.  The Corporation must determine that a potential investor meets certain
suitability requirements before offering or selling Securities to such
investor.  The purpose of this Questionnaire is to assure the Corporation that
each investor will meet the applicable suitability requirements.  The
information supplied by you will be used in determining whether you meet such
criteria, and reliance upon the private offering exemptions from registration is
based in part on the information herein supplied.
 
This Questionnaire does not constitute an offer to sell or a solicitation of an
offer to buy any security.  Your answers will be kept strictly
confidential.  However, by signing this Questionnaire, you will be authorizing
the Corporation to provide a completed copy of this Questionnaire to such
parties as the Corporation deems appropriate in order to ensure that the offer
and sale of the Securities will not result in a violation of the Act or the
securities laws of any state and that you otherwise satisfy the suitability
standards applicable to purchasers of the Securities.  All potential investors
must answer all applicable questions and complete, date and sign this
Questionnaire.  Please print or type your responses and attach additional sheets
of paper if necessary to complete your answers to any item.
 
PART A.                      BACKGROUND INFORMATION

Name of Beneficial Owner of the
Securities:                                                                                                                                          

Business
Address:                                                                                                                                          
(Number and Street)
                                                    
(City)                                           (State)                                                                (Zip
Code)

Telephone Number:
(___)                                                                                                                                          

If a corporation, partnership, limited liability company, trust or other entity:

Type of
entity:                                                                                                                                          

State of
formation:______________________                                                                                     Approximate
Date of formation: ____________________

 
Were you formed for the purpose of investing in the securities being offered?

Yes ____                      No ____

 

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If an individual:

Residence
Address:                                                                                                                                          
(Number and Street)

                                                           
(City)                                           (State)                                                                (Zip
Code)

Telephone Number:
(___)                                                                                                                                          

Age:­­­­­­­­
­__________                                                      Citizenship:
____________                                                      Where
registered to vote: _______________

Set forth in the space provided below the state(s), if any, in the United States
in which you maintained your residence during the past two years and the dates
during which you resided in each state:

 
Are you a director or executive officer of the Corporation?

Yes ____                      No ____

Social Security or Taxpayer Identification
No.                                                                                                                                          

PART B.                      ACCREDITED INVESTOR QUESTIONNAIRE

 
In order for the Company to offer and sell the Securities in conformance with
state and federal securities laws, the following information must be obtained
regarding your investor status. Please initial each category applicable to you
as a Purchaser of Securities of the Company.

 
__ (1)
A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and
loan association or other institution as defined in Section 3(a)(5)(A) of the
Securities Act whether acting in its individual or fiduciary capacity;

 
__ (2)
A broker or dealer registered pursuant to Section 15 of the Securities Exchange
Act of 1934

 
 
__ (3)
An insurance company as defined in Section 2(13) of the Securities Act;

 
__ (4)
An investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of that Act;

 
__ (5)
A Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958;

 
__ (6)
A plan established and maintained by a state, its political subdivisions, or any
agency or instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of $5,000,000;

 

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__ (7)
An employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974, if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of such act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons that are
accredited investors;

 
__ (8)
A private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940;

 
__ (9)
An organization described in Section 501(c)(3) of the Internal Revenue Code, a
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the Securities, with total assets in
excess of $5,000,000;

 
 
__ (10)
A trust, with total assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the Securities, whose purchase is directed by a
sophisticated person who has such knowledge and experience in financial and
business matters that such person is capable of evaluating the merits and risks
of investing in the Company;

 
__ (11)
A natural person whose individual net worth, or joint net worth with that
person’sspouse, at the time of his purchase exceeds $1,000,000;

 

 
__ (12)
A natural person who had an individual income in excess of $200,000 in each of
thetwo most recent years, or joint income with that person’s spouse in excess
of$300,000, in each of those years, and has a reasonable expectation of reaching
the same income level in the current year;

 
 
___(13)
An executive officer or director of the Company;

 
 
___(14)
An entity in which all of the equity owners qualify under any of the above
subparagraphs. If the undersigned belongs to this investor category only, list
the equity owners of the undersigned, and the investor category which each such
equity owner satisfies.

 
 
A.           FOR EXECUTION BY AN INDIVIDUAL:
 
                          By                                       
Date
Print Name:                                                              

B.           FOR EXECUTION BY AN ENTITY:
 
                Entity Name:                                                              
 
 
                          By                                       
Date
Print Name:                                                              
 

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C.           ADDITIONAL SIGNATURES (if required by partnership, corporation or
trust document):
 
 
                Entity Name:                                                              
 
 
                          By                                       
Date
Print Name:                                                              
 
 
                Entity Name:                                                              
 
 
                          By                                       
Date
Print Name:                                                              
 
 

 
 

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EXHIBIT C-2
 
Stock Certificate and Warrant Questionnaire
 
Pursuant to Section 2.2(b) of the Agreement, please provide us with the
following information:
 
1.
The exact name that the Securities are to be registered in (this is the name
that will appear on the stock certificate(s) and warrant(s)).  You may use a
nominee name if appropriate:
 
2.
The relationship between the Purchaser of the Securities and the Registered
Holder listed in response to Item 1 above:
 
3.
The mailing address, telephone and telecopy number of the Registered Holder
listed in response to Item 1 above:
                         
4.
The Tax Identification Number (or, if an individual, the Social Security Number)
of the Registered Holder listed in response to Item 1 above:
 

 

 
 

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EXHIBIT D
 
Form of Irrevocable Transfer Agent Instructions
 
As of _________, 2009
 
Computershare Investor Services, LLC
[Address]
[Address]
Attn:  _________________
 
 
Ladies and Gentlemen:
 
                Reference is made to that certain Securities Purchase Agreement,
dated as of May 7, 2009 (the “Agreement”), by and among Cytori Therapeutics,
Inc., a Delaware corporation (the “Company”), and the purchasers named on the
signature pages thereto (collectively, and including permitted transferees, the
“Holders”), pursuant to which the Company is issuing to the Holders shares of
common stock (the “Shares”) of the Company, par value $0.001 per share (the
“Common Stock”) and warrants (the “Warrants”) which are exercisable into Common
Stock.
 
                This letter shall serve as our irrevocable authorization and
direction to you (provided that you are the transfer agent of the Company at
such time and the conditions set forth in this letter are satisfied), subject to
any stop transfer instructions that we may issue to you from time to time, if
any, to issue certificates representing shares of Common Stock to a Holder from
time to time upon delivery to you of instructions by the Company as indicated in
writing executed by a duly authorized officer of the Company together with
indication of receipt of the exercise price therefor.
 
You acknowledge and agree that so long as you have received (a) written
confirmation from the Company’s legal counsel that either (1) a registration
statement covering resales of the Shares and Warrant Shares has been declared
effective by the Securities and Exchange Commission (the “Commission”) under the
Securities Act of 1933, as amended (the “Securities Act”), or (2) the Shares and
Warrant Shares have been sold in conformity with Rule 144 under the Securities
Act (“Rule 144”) or are eligible for sale under Rule 144, without the
requirement for the Company to be in compliance with the current public
information required under Rule 144 as to such securities and without volume or
manner-of-sale restrictions and (b) if applicable, a copy of such registration
statement, then, unless otherwise required by law, within three (3) business
days of your receipt of written authorization from a duly authorized officer of
the Company that the Common Stock may be issued pursuant to the Exercise Notice,
you shall issue the certificates representing the Common Stock registered in the
names of such Holders or transferees, as the case may be, and such certificates
shall not bear any legend restricting transfer of the Shares or Warrant Shares
thereby and should not be subject to any stop-transfer restriction; provided,
however, that if such Shares or Warrant Shares are not registered for resale
under the Securities Act or able to be sold under Rule 144 without the
requirement for the Company to be in compliance with the current public
information required under Rule 144 as to such securities and without volume or
manner-of-sale restrictions, then the certificates for such Shares or Warrant
Shares shall bear the following restrictive legend:

 
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
 

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SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED
BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS
TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.  NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR
RESALES OF THESE SECURITIES.
 
 
                The Shares and the Warrant Shares shall continue to bear the
following informative legend:
 
THIS CERTIFICATE EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS
SET FORTH IN A RIGHTS AGREEMENT BETWEEN CYTORI THERAPEUTICS, INC. AND
COMPUTERSHARE TRUST COMPANY, INC., A COLORADO CORPORATION, AS RIGHTS AGENT,
DATED AS OF MAY 29, 2003, AS AMENDED (THE “RIGHTS AGREEMENT”), THE TERMS OF
WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE
AT THE PRINCIPAL EXECUTIVE OFFICES OF CYTORI THERAPEUTICS, INC. UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE
EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS
CERTIFICATE. CYTORI THERAPEUTICS, INC. WILL MAIL TO THE HOLDER OF THIS
CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER RECEIPT OF A
WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND CERTAIN RELATED PERSONS, WHETHER CURRENTLY HELD BY
OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND
VOID.
 
A form of written confirmation from the Company’s outside legal counsel that a
registration statement covering resales of the Shares and Warrant Shares has
been declared effective by the Commission under the Securities Act is attached
hereto as Annex I.
            

--------------------------------------------------------------------------------

 
                Please execute this letter in the space indicated to acknowledge
your agreement to act in accordance with these instructions.
 

Very truly yours,

CYTORI THERAPEUTICS, INC.

 
By:  __________________________________
                                Name: ________________________________
Title:  ________________________________

Acknowledged and Agreed:

COMPUTERSHARE INVESTOR SERVICES, LLC

By: __________________________________
Name: ________________________________
Title:  ________________________________

Date:  _________________, 2009

 
 

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Annex I
 
FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT

     
Computershare Investor Services
[Address]
[Address]
Attn:  _________________
         
Re: Cytori Therapeutics, Inc.

 
Ladies and Gentlemen:
 
                   We are counsel to Cytori Therapeutics, Inc., a Delaware
corporation (the “Company”), and have represented the Company in connection with
that certain Securities Purchase Agreement, dated as of May 7, 2009, entered
into by and among the Company and the buyers named therein (collectively, the
“Purchasers”) pursuant to which the Company issued to the Purchasers shares of
the Company’s common stock, $0.001 par value per share (the “Common Stock”) and
warrants to purchase additional shares of Common Stock.  Pursuant to that
certain Registration Rights Agreement of even date, the Company agreed to
register the resale of such shares and the shares issuable upon exercise of such
warrants (collectively, the “Registrable Securities”), under the Securities Act
of 1933, as amended (the “Securities Act”). In connection with the Company’s
obligations under the Registration Rights Agreement, on                     ,
2009, the Company filed a Registration Statement on Form S-3 (File
No. 333-                    ) (the “Registration Statement”) with the Securities
and Exchange Commission (the “Commission”) relating to the Registrable
Securities which names each of the Purchasers as a selling stockholder
thereunder.
 
                  In connection with the foregoing, we advise you that a member
of the Commission’s staff has advised us by telephone that the Commission has
entered an order declaring the Registration Statement effective under the
Securities Act at ____ [a.m.][p.m.] on __________, ____, and we have no
knowledge, after telephonic inquiry of a member of the staff, that any stop
order suspending its effectiveness has been issued or that any proceedings for
that purpose are pending before, or threatened by, the Commission and the
Registrable Securities are available for resale under the Securities Act
pursuant to the Registration Statement.
 
                Pursuant to the Agreement, the Purchasers have agreed to satisfy
the applicable prospectus delivery requirements and to sell pursuant to the
“Plan of Distribution” section in the Registration Statement.  On the basis of
the foregoing, this letter shall serve as our standing notice to you that the
Common Stock may be freely transferred by the Purchasers pursuant to the
Registration Statement. You need not require further letters from us to effect
any future legend-free issuance or reissuance of Common Stock to the Purchasers
or the transferees of the Purchasers, as the case may be, as contemplated by the
Company’s Irrevocable Transfer Agent Instructions dated __________, 2009,
provided at the time of such reissuance, the Company has not otherwise notified
you that the Registration Statement is unavailable for the resale of the
Registrable Securities. This letter shall serve as our standing instructions
with regard to this matter.

             
Very truly yours,
             
[DLA PIPER US LLP]
             
By:
             

 
CC:           Purchasers
 

 
 

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EXHIBIT E
 
Form of Secretary’s Certificate

The undersigned hereby certifies that he is the duly elected, qualified and
acting Secretary of Cytori Therapeutics, Inc., a Delaware corporation (the
"Company"), and that as such he is authorized to execute and deliver this
certificate in the name and on behalf of the Company and in connection with the
Securities Purchase Agreement, dated as of May 7, 2009, by and among the Company
and the investors party thereto (the "Securities Purchase Agreement"), and
further certifies in his official capacity, in the name and on behalf of the
Company, the items set forth below.  Capitalized terms used but not otherwise
defined herein shall have the meaning set forth in the Securities Purchase
Agreement.
 
1.  
Attached hereto as Exhibit A is a true, correct and complete copy of (a) the
resolutions duly adopted by the Board of Directors of the Company, in a meeting
of the Board held on February 26, 2009, and (b) the resolutions duly adopted by
the Special Pricing Committee of the Board of Directors of the Company at a
meeting of the Special Pricing Committee held on May 6, 2009.  Such resolutions
have not in any way been amended, modified, revoked or rescinded, have been in
full force and effect since their adoption to and including the date hereof and
are now in full force and effect.

 
2.  
Attached hereto as Exhibit B is a true, correct and complete copy of the
Certificate of Incorporation of the Company, together with any and all
amendments thereto currently in effect, and no action has been taken to further
amend, modify or repeal such Certificate of Incorporation, the same being in
full force and effect in the attached form as of the date hereof.

 
3.  
Attached hereto as Exhibit C is a true, correct and complete copy of the Bylaws
of the Company and any and all amendments thereto currently in effect, and no
action has been taken to further amend, modify or repeal such Bylaws, the same
being in full force and effect in the attached form as of the date hereof.

 
4.  
Each person listed below has been duly elected or appointed to the position(s)
indicated opposite his name and is duly authorized to sign the Securities
Purchase Agreement and each of the Transaction Documents on behalf of the
Company, and the signature appearing opposite such person’s name below is such
person’s genuine signature.

 

Name
Position
Signature
Christopher J. Calhoun
Chief Executive Officer
_________________________
Mark E. Saad
Chief Financial Officer
_________________________
     

 

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this ___ day
of May, 2009.
 
 
 
                        
  Jonathan E. Soneff   Secretary

I, Christopher J. Calhoun, Chief Executive Officer, hereby certify that Jonathan
E. Soneff is the duly elected, qualified and acting Secretary of the Company and
that the signature set forth above is his true signature.
 
 
                        
  Christopher J. Calhoun   Secretary

 
 
 

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EXHIBIT A
 
Resolutions
 

 
 

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EXHIBIT B
 
Certificate of Incorporation
 

 
 

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EXHIBIT C
 
Bylaws
 

 

 
 

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EXHIBIT F
 
Form of Officer’s Certificate
 

The undersigned, the Chief Executive Officer of Cytori Therapeutics, Inc., a
Delaware corporation (the "Company"), pursuant to Section 5.1(g) of the
Securities Purchase Agreement, dated as of May 7, 2009, by and among the Company
and the investors signatory thereto (the "Securities Purchase Agreement"),
hereby represents, warrants and certifies as follows (capitalized terms used but
not otherwise defined herein shall have the meaning set forth in the Securities
Purchase Agreement):

 
1.
The representations and warranties of the Company contained in the Securities
Purchase Agreement are true and correct in all material respects (except for
those representations and warranties which are qualified as to materiality, in
which case such representations and warranties shall be true and correct in all
respects) as of the date when made and as of the Closing Date, as though made on
and as of such date, except for such representations and warranties that speak
as of a specific date.

 
2.
The Company has performed, satisfied and complied in all material respects with
all covenants, agreements and conditions required by the Transaction Documents
to be performed, satisfied or complied with by it at or prior to the Closing.

IN WITNESS WHEREOF, the undersigned has executed this certificate this ___ day
of May, 2009.

___________________________
Christopher J. Calhoun
Chief Executive Officer

 

 
 

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EXHIBIT G
 
Wire Instructions
 

Wells Fargo Bank, N.A.

ABA #: XXXXXX
Account #: XXXXXXXX
Account Name: Cytori Therapeutics, Inc.
                                   
Account Officer: XXXXXXXXX
Phone Number: XXXXXXXXXX
 
 

 
 

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