Exhibit 10.53
 
AGREEMENT FOR ACCELERATION AND/OR SEVERANCE
 
This agreement (this “Agreement”) is entered into as of the date signed by the
last party to sign, as indicated below, between Cytori Therapeutics, Inc., a
Delaware corporation (the “Company”) and Marc H. Hedrick (“Executive”), setting
forth the following terms and conditions.
 
1.  
Stock Option Acceleration.

 
Notwithstanding anything to the contrary in any stock option agreement, all
then-unvested Company stock options held by Executive shall immediately and
fully vest if (a) an Early Separation Trigger occurs (provided, that Executive
may not exercise any such erstwhile-unvested options until the Acquisition is
consummated and thereby proves that the separation really was an Early
Separation Trigger), or (b) an Acquisition of the Company occurs and Executive
is at that time still in the service of the Company.
 
2.  
Severance Contingency; Definitions.

 
In the event of a Double Trigger, Executive (provided he timely executes and
delivers a counterpart of an Agreement and General Release as set forth in
Section 4 below) shall be entitled to the following severance, and no more: a
lump sum equal to (a) 12 times his monthly base salary as of the Acquisition
Agreement Date, plus (b) 12 times the indicated monthly COBRA premiums for
medical and dental benefits for Executive and his eligible dependents (together
the “Severance Payment”).  It is understood that the Severance Payment shall be
subject to tax withholding as required by law.
 
An “Acquisition” shall include any merger, stock sale, or asset sale by which
the Company (or all or substantially all of the Company’s assets or stock) is
acquired, or any other transaction by which any person acquires beneficial
ownership of more than 50% in interest of the Company’s voting securities, but
in no event shall an issuance of securities by the Company for financing
purposes be deemed an Acquisition by the issuee for purposes of this
Agreement.  If his employment is continued by a successor or affiliate company
after an Acquisition, Executive’s employment shall not be considered to have
been terminated solely because his employer is no longer the Company; and where
the context so suggests, the defined term “the Company” shall be deemed to
include such successor or affiliate company.
 
The “Acquisition Agreement Date” means the first day on which the Company and
the acquirer formally or informally agree on the terms of the
acquisition.  Informal agreement need not be legally binding, and can be
evidenced by such things as a letter of intent (even if legally non-binding) or
taking steps, in reliance on the existence of an informal agreement, in
contemplation of the consummation of the acquisition.
 
“Late Separation Trigger” means that a Forced Separation occurs during the first
12 months after an Acquisition of the Company.  “Early Separation Trigger” means
that a Forced Separation occurs during the period between the Acquisition
Agreement Date and the date of such Acquisition.  “Forced Separation” means the
Company’s termination of Executive’s employment other than for Cause (as defined
below) or Executive’s resignation due to (i.e., within 20 days after) Good
Reason (as defined below).  “Acquisition Trigger” means that an Acquisition of
the Company has been consummated.  “Double Trigger” means that both (a) a
“Separation Trigger” (i.e., either an Early Separation Trigger or a Late
Separation Trigger), and (b) the Acquisition Trigger, have occurred.
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“Cause” shall be defined to mean:
 
(a) Extended disability (defined as the inability to perform, with or without
reasonable accommodation, the essential functions of Executive’s position for
any 120 days within any continuous period of 150 days by reason of physical or
mental illness or incapacity);
 
(b) Executive’s repudiation of his employment or of this Agreement;
 
(c) Executive’s conviction of (or plea of no contest with respect to) a felony,
or of a misdemeanor involving moral turpitude, fraud, misappropriation or
embezzlement;
 
(d) Executive’s demonstrable and documented fraud, misappropriation or
embezzlement against the Company;
 
(e) Use of alcohol, drugs or any illegal substance in such a manner as to
materially interfere with the performance of employment duties;
 
(f) Intentional, reckless or grossly negligent action which causes material harm
to the Company, including any misappropriation or unauthorized use of the
Company’s property or improper use or disclosure of confidential information
(but excluding any good faith exercise of business judgment);
 
(g) Intentional failure to substantially perform material employment duties or
directives (other than following resignation for Good Reason as defined below)
if such failure has continued for 15 days after Executive has been notified in
writing by the Company of the nature of the failure to perform (it being
understood that the performance of material duties or directives is satisfied if
Executive has reasonable attendance and makes good faith business efforts to
perform his duties on behalf of the Company.  The Company may not terminate him
for Cause based solely upon the operating performance of the Company); or
 
(h) Chronic absence from work for reasons other than illness, permitted vacation
or resignation for Good Reason as defined below.
 
“Good Reason” shall be defined to mean:
 
(a) The Company’s material breach of its obligation to pay Executive the
compensation earned for any past service (at the rate which had been stated to
be in effect for such period of service); or
 
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(b) (A) a change in his position with the Company (or successor, affiliate,
parent or subsidiary of the Company employing him) which materially reduces his
duties and responsibilities as to the business conducted by the Company as of
the Acquisition Agreement Date, (B) a reduction in his level of compensation
(including base salary, fringe benefits (except as such reduction applies to all
employees generally) and target bonus, but excluding stock-based compensation)
by more than 15% or (C) a relocation of his place of employment by more than 30
miles, provided and only if such change, reduction or relocation is effected by
the Company without his consent.
 
(c) Executive’s right to terminate employment for Good Reason shall not be
affected by Executive’s incapacity due to physical or mental
illness.  Executive’s continued employment shall not constitute consent to, or a
waiver of rights with respect to, any circumstance constituting Good Reason
herein; provided, that the 20-day requirement imposed in the definition of
“Forced Separation” shall apply notwithstanding this sentence.
 
3.  
Other Termination.

 
For the avoidance of doubt, in the event Executive’s employment is terminated
for Cause or due to his death or disability or he resigns without Good Reason,
or in the event that in any period other than the 12 months following an
Acquisition of the Company (or between the Acquisition Agreement Date and the
date of such Acquisition), his employment terminates for any reason, he shall
not be entitled to receive the Severance Payment.
 
4.  
General Release.

 
Executive’s entitlement to the Severance Payment is further expressly
conditioned upon his execution and delivery to the Company, within 30 days after
the occurrence of the second to occur of the Acquisition Trigger and the
Separation Trigger, of a counterpart of an Agreement and General Release in the
form of the Attachment hereto.  The Company shall be required to pay the
Severance Payment within 10 business days after such execution and delivery.
 
5.  
At-Will Employment.

 
Executive expressly acknowledges that nothing in this Agreement gives him any
right to continue his employment with the Company for any period of time, nor
does this Agreement interfere in any way with his right or the Company's right
to terminate that employment at any time, for any reason, with or without cause.
 
6.  
Dispute Resolution.

 
Any and all controversies between the parties regarding the interpretation or
application of this Agreement, together with the Attachment hereto, shall be,
upon the written request of either party, served on the other, be submitted to
final and binding arbitration pursuant to the non-union employment arbitration
rules of the American Arbitration Association (AAA) then in effect.  Any such
arbitration shall be conducted before a single neutral arbitrator selected
either by agreement of the parties or through selection from a panel appointed
by AAA.  Neither side shall withhold their agreement to participate in said
arbitration and to the extent either side is required to file a petition to
compel, the prevailing party should be awarded their attorneys fees. The
arbitration shall be held in San Diego County, unless otherwise mutually agreed
by the parties.  The arbitrator shall issue an award in writing and state the
essential findings and conclusions on which the award is based.  The Company
shall bear the costs with respect to the payment of any filing fees or
arbitration costs.
 
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7.  
Miscellaneous.

 
This Agreement, together with the Attachment hereto, shall be governed by and
construed under the laws of the State of California (as it applies to agreements
between California residents, entered into and to be performed entirely within
California), and constitutes the entire agreement of the parties with respect to
the subject matter hereof, superseding all prior or contemporaneous written or
oral agreements with respect to such subject matter, and no amendment or
addition hereto shall be deemed effective unless agreed to in writing by the
parties hereto.  The parties acknowledge that each of them retains the right to
terminate their employment relationship, at any time and for any or no reason,
without liability except as provided by law and except as expressly provided
herein.
 
MARC H. HEDRICK
 
 
/s/ Marc H.
Hedrick                                                                
 
Dated:  January 31,
2008                                                                
       
CYTORI THERAPEUTICS, INC.
     
By: /s/ Christopher J.
Calhoun                                                                
Dated:  January 31,
2008                                                                

 
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ATTACHMENT I
 
Agreement and General Release

For good and valuable consideration, rendered to resolve and settle finally,
fully, and completely all matters that now or may exist between them, the
parties below enter this Agreement and General Release (“Agreement”).

1.           Parties.  The parties to this Agreement are Marc H. Hedrick, for
himself and his heirs, legatees, executors, representatives, administrators,
spouse, family and assigns (hereinafter referred to collectively as “Executive”)
and Cytori Therapeutics, Inc., for itself and its successors and assigns and its
and their subsidiaries, affiliates, parents, and related companies (hereinafter
referred to collectively as the “Company”).

2.           Separation from Employment.  Executive acknowledges and agrees that
his employment with the Company has ended and that a Double Trigger has occurred
pursuant to the Agreement for Acceleration and/or Severance dated ________, 2007
(the “Severance Agreement”).

3.           Severance Payment.  As consideration for the promises and covenants
of Executive set forth in this Agreement, the Company agrees to provide him with
the Severance Payment in the gross amount required by the Severance Agreement,
less applicable withholding taxes, in a lump sum.  This Severance Payment shall
be delivered to Executive within 10 business days following the Company's
receipt of a counterpart of this original Agreement signed and dated by
Executive.

4.           No Other Payments Due.  Executive acknowledges and agrees that he
has received all amounts due to him, and that the only further payment to which
he will be entitled from the Company, assuming he signs this Agreement, will be
(a) the Severance Payment to be provided under Paragraph 3 above, (b) any
expense reimbursements for pre-Separation-Trigger for which he has previously
submitted requests in accordance with the Company’s written policies and which
are validly reimbursable under the Company’s written policies, and (c) base
salary and vacation pay accrued before the Separation Trigger as reflected on
the Company’s books in accordance with the Company’s written policies.

5.           Release of Claims By Executive.   As consideration for the promises
and covenants of the Company set forth in this Agreement, Executive hereby fully
and forever releases and discharges the Company and its future current and
former owners, shareholders, agents, employee benefit plans, representatives,
employees, attorneys, officers, directors, business partners, successors,
predecessors, related companies, and assigns (hereinafter collectively called
the “Released Parties”), from all claims and causes of action, whether known or
unknown, including but not limited to those arising out of or relating in any
way to Executive’s employment with the Company, including the termination of his
employment, based on any acts or events occurring up until the date of
Executive’s signature below.  Executive understands and agrees that this Release
is a full and complete waiver of all claims, including, but not limited to, any
claims with respect to Executive’s entitlement to any wages, bonuses, or other
forms of compensation; any claims of wrongful discharge, breach of contract,
breach of the covenant of good faith and fair dealing, violation of public
policy, defamation, personal injury, emotional distress; any claims under Title
VII of the Civil Rights Act of 1964, as amended, the Fair Labor Standards Act,
the Age Discrimination in Employment Act of 1967, the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), as related to severance benefits,
the California Fair Employment and Housing Act, California Government Code
§ 12900 et seq., the California Labor Code, the California Business &
Professions Code, the Equal Pay Act of 1963, the Americans With Disabilities
Act, the Civil Rights Act of 1991; and any claims under any other federal,
state, and local laws and regulations.  This Agreement does not release claims
that cannot be released as a matter of law, including, but not limited to,
claims under Division 3, Article 2 of the California Labor Code (which includes
indemnification rights); any claims expressly preserved under Paragraph 3 above;
and any claims pursuant to any agreements expressly preserved under Paragraph 8
below.
 

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6.           Outstanding Claims.  As further consideration and inducement for
this Agreement, Executive represents that he has not filed or otherwise pursued
any charges, complaints or claims of any nature which are in any way pending
against the Company or any of the Released Parties with any court or arbitration
forum with respect to any matter covered by this Agreement and that, to the
extent permitted by law, he agrees he will not do so in the future.  Executive
further represents that, with respect to any charge, complaint or claim he has
filed or otherwise pursued or will file or otherwise pursue in the future with
any state or federal agency against the Company or any of the Released Parties,
he will forgo any monetary damages, including but not limited to compensatory
damages, punitive damages, and attorneys’ fees, to which he may otherwise be
entitled in connection with said charge, complaint or claim.  Nothing in this
Agreement shall limit Executive’s right to file a charge, complaint or claim
with any state or federal agency or to participate or cooperate in such matters.

7.           Civil Code 1542 Waiver.  As a further consideration and inducement
for this Agreement, Executive hereby waives any and all rights under Section
1542 of the California Civil Code or any other similar state, local, or federal
law, statute, rule, order or regulation or common-law principle he may have with
respect to the Company and any of the Released Parties.

Section 1542 provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.
 
Executive expressly agrees that this Agreement shall extend and apply to all
unknown, unsuspected and unanticipated injuries and damages as well as those
that are now disclosed.
 

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8.           Survival.  Any written stock option agreement, indemnification
agreement and any confidential information/proprietary information/and-or
invention assignment agreement between the Company and Executive shall survive
this Agreement in accordance with their express written terms.  Any such stock
option agreement shall be applied in accordance with its express written terms
as to the effects of the fact that Executive’s service has ceased.
 
9.           Company Property.  To the extent he has not already done so,
Executive agrees to forthwith return to the Company all of his keys and security
cards to Company premises, and his Company credit card, and all other property
in his possession which belongs to the Company.  Executive specifically promises
and agrees that he shall not retain copies of any Company (or Company customer
or patient) documents or files (either paper or electronic).

10.           No Rush Toward Agreement; Revocation Period.  Executive
understands that he has the right to consult with an attorney before signing
this Agreement.  Executive also understands that he is allowed 21 calendar days
after receipt of this Agreement within which to review and consider it and
decide to execute or not execute it.  Executive also understands that for a
period of 7 calendar days after signing this Agreement, he may revoke this
Agreement by delivering to the Company, within said 7 calendar days, a letter
stating that he is revoking it.

11.           No Admission of Liability.  By entering into this Agreement, the
Company and all Released Parties do not admit any liability whatsoever to
Executive or to any other person arising out of claims heretofore or hereafter
asserted by him, and the Company, for itself and all Released Parties, expressly
denies any and all such liability.

12.           Joint Participation In Preparation Of Agreement.  The parties
hereto participated jointly in the negotiation and preparation of this
Agreement, and each party has had the opportunity to obtain the advice of legal
counsel and to review, comment upon, and redraft this Agreement.  Accordingly,
it is agreed that no rule of construction shall apply against any party or in
favor of any party.  This Agreement shall be construed as if the parties jointly
prepared this Agreement, and any uncertainty or ambiguity shall not be
interpreted against any one party and in favor of the other.
 
13.           Choice of Law.  The parties agree that California law shall govern
the validity, effect, and interpretation of this Agreement.
 
14.           Entire Agreement.  This Agreement constitutes the complete
understanding between Executive and the Company and supersedes any and all prior
agreements, promises, representations, or inducements, no matter its or their
form, concerning its subject matter, but with the exception of any agreements
expressly preserved under Paragraph 8 above, which remain in full force and
effect to the extent not inconsistent with this Agreement.  No promises or
agreements made after the execution of this Agreement by these parties shall be
binding unless reduced to writing and signed by authorized representatives of
these parties.  Should any of the provisions of this Agreement be found
unenforceable or invalid by a court or government agency of competent
jurisdiction, the remainder of this Agreement shall, to the fullest extent
permitted by applicable law, remain in full force and effect.
 

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16.           Nondisparagement. The parties agree that each will use its
reasonable best efforts to not make any voluntary statements, written or verbal,
or cause or encourage others to make any such statements that defame, disparage
or in any way criticize the reputation, business practices or conduct of
Executive (in the case of the Company) or the Company or any of the other
Released Parties (in the case of Executive).

17.           Voluntary Decision.  Executive hereby acknowledges that he has
read and understands the foregoing Agreement and that he signs it voluntarily
and without coercion.

Dated: ___________________        MARC H. HEDRICK
 

 
______________________________________
 

Dated: ___________________         CYTORI THERAPEUTICS, INC.
 

By ___________________________________

 
 
 
 

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