Exhibit 10.3

SUBSCRIPTION AGREEMENT

Cytori Therapeutics, Inc.

3020 Callan Road

San Diego, California 92121

Ladies and Gentlemen:

The undersigned (the “Investor”) hereby confirms and agrees with you as follows:

1.             This Subscription Agreement (this “Agreement”) is made as of the
date set forth below between Cytori Therapeutics, Inc., a Delaware corporation
(the “Company”), and the Investor.

2.             The Company has authorized the sale and issuance of (i) up to
3,745,645 shares (the “Shares”) of the Company’s common stock, $0.001 par value
per share (the “Common Stock”), and (ii) warrants to purchase up to 1,872,823
shares of Common Stock (the “Warrants” and together with the Shares, the
“Securities”) for a purchase price of $5.74 per unit, with each unit consisting
of one Share and 0.5 Warrants (the “Offering”). The Offering and issuance of the
Securities have been registered under the Securities Act of 1933, as amended
(the “Securities Act”), pursuant to the Company’s Registration Statement on
Form S-3 (No. 333-134129), including all amendments thereto, the exhibits and
any schedules thereto, the documents otherwise deemed to be a part thereof or
included therein by the rules and regulations of the Commission (the “Rules and
Regulations”) and any registration statement relating to the Offering and filed
pursuant to Rule 462(b) under the Rules and Regulations (collectively, the
“Registration Statement”).  The Investor acknowledges that the Company intends
to enter into subscription agreements in substantially the same form as this
Agreement with certain other investors.

3.             As of the Closing (as defined below) and subject to the terms and
conditions hereof,  the Company and the Investor agree that the Investor will
purchase from the Company and the Company will issue and sell to the Investor
such number of Shares and Warrants as is set forth on the signature page hereto
(the “Signature Page”).  The Investor acknowledges that the Offering is not a
firm commitment underwriting and that there is no minimum offering amount.
 Certificates representing the Shares purchased by the Investor will not be
issued to the Investor; instead, such Shares will be credited to the Investor
using customary procedures for book-entry transfer through the facilities of The
Depository Trust Company (“DTC”).  The Warrants will be issued by the Company,
and delivered to the Investor, in physical form.  This Offering will not clear
directly through the Placement Agent (as defined below) acting in such capacity.
Consequently, the Investor must instruct their individual broker how to settle
the transaction.

4.             The completion of the purchase and sale of the Securities shall
occur at a closing (the “Closing”) which, in accordance with Rule 15c6-1
promulgated under the Securities Exchange Act of 1934, as amended, is expected
to occur on or about February 28, 2007.  At the Closing, (a) the Company shall
cause its transfer agent to release to the Investor the number of Shares being
purchased by the Investor, (b) the Company shall deliver to the Investor the
Warrants being purchased by the Investor and (c) the aggregate purchase price
for the Securities being purchased by the Investor will be delivered by or on
behalf of the Investor to the Company.  If the Investor chooses to settle via
Deposit/Withdrawal At Custodian (“DWAC”) (by checking the appropriate space on
the Signature Page hereto), the provisions set forth in Exhibit A hereto shall
be incorporated herein by reference as if set forth fully herein.

5.             The Company has filed with the Securities and Exchange Commission
(the “Commission”) a prospectus (the “Base Prospectus”) and will promptly file a
final prospectus supplement (collectively with the Base Prospectus, the
“Prospectus”) with respect to the Registration Statement in conformity with the
Securities Act,

 

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including Rule 424(b) thereunder.  The Investor hereby consents to the receipt
of the Company’s Prospectus in portable document format, or .pdf, via e-mail.

6.             The Company has entered into a Placement Agency Agreement (the
“Placement Agreement”), dated February 23, 2007 with Piper Jaffray & Co. (the
“Placement Agent”), which will act as the Company’s placement agent with respect
to the Offering and receive a fee in connection with the sale of the
Securities.  The Placement Agreement contains certain representations and
warranties of the Company.  The Company acknowledges and agrees that the
Investor may rely on the representations and warranties made by it to the
Placement Agent in Section 2 of the Placement Agreement to the same extent as if
such representations and warranties had been incorporated in full herein and
made directly to the Investor, which shall be a third party beneficiary
thereof.  Capitalized terms used, but not otherwise defined, herein shall have
the meanings ascribed to such terms in the Placement Agreement.

7.             The obligations of the Company and the Investor to complete the
transactions contemplated by this Agreement shall be subject to the following:

(a)           The Company’s obligation to issue and sell the Securities to the
Investor shall be subject to: (i) the receipt by the Company of the purchase
price for the Shares and Warrants being purchased hereunder as set forth on the
Signature Page and (ii) the accuracy of the representations and warranties made
by the Investor and the fulfillment of those undertakings of the Investor to be
fulfilled prior to the Closing Date.

(b)           The Investor’s obligation to purchase the Securities will be
subject to the condition that the Placement Agent shall not have: (i) terminated
the Placement Agreement pursuant to the terms thereof or (ii) determined that
the conditions to closing in the Placement Agreement have not been satisfied.

8.             The Company hereby makes the following representations,
warranties and covenants to the Investor:

(a)           The Company has the requisite corporate power and authority to
enter into and to consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations hereunder.  The execution and delivery of
this Agreement by the Company and the consummation by it of the transactions
contemplated hereunder have been duly authorized by all necessary action on the
part of the Company.  This Agreement has been duly executed by the Company and,
when delivered in accordance with the terms hereof, will constitute the valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as may be limited by any bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws affecting the enforcement of creditors’ rights generally or by general
principles of equity.

(b)           The Company shall (i) before the opening of trading on The Nasdaq
Global Market on the next trading day after the date hereof, issue a press
release, disclosing all material aspects of the transactions contemplated hereby
and (ii) make such other filings and notices in the manner and time required by
the Commission with respect to the transactions contemplated hereby.  Upon the
issuance of the press release described in the immediately preceding sentence,
the Investor will not be in receipt of any material, non-public information
provided to it by the Company, its officers or directors.  The Company shall not
identify the Investor by name in any press release or public filing, or
otherwise publicly disclose the Investor’s name, without the Investor’s prior
written consent, unless required by law or the rules and regulations of any
self-regulatory organization or exchange to which the Company or its securities
are subject.

9.             The Investor hereby makes the following representations,
warranties and covenants to the Company:

(a)           The Investor represents that (i) it has received or had full
access to the Base Prospectus as well as the Company’s periodic reports and
other information incorporated by reference therein, prior to or in connection
with its receipt of this Agreement, (ii) it is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in securities representing an investment decision

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like that involved in the purchase of the Securities, and (iii) it does not have
any agreement or understanding, directly or indirectly, with any person or
entity to distribute any of the Securities.

(b)           The Investor has the requisite power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby.   The
execution and delivery of this Agreement by the Investor and the consummation by
it of the transactions contemplated hereunder have been duly authorized by all
necessary action on the part of the Investor.  This Agreement has been executed
by the Investor and, when delivered in accordance with the terms hereof, will
constitute a valid and binding obligation of the Investor enforceable against
the Investor in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ and contracting parties’ rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

(c)           The Investor understands that nothing in this Agreement or any
other materials presented to the Investor in connection with the purchase and
sale of the Securities constitutes legal, tax or investment advice.  The
Investor 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 Securities.

(d)           The making, execution and performance of this Agreement by the
Investor and the consummation of the transactions contemplated herein will not
conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (i) the charter, bylaws or other
organizational documents of such Investor, as applicable, or (ii) any law,
order, rule, regulation, writ, injunction, judgment or decree of any court,
administrative agency, regulatory body, government or governmental agency or
body, domestic or foreign, having jurisdiction over such Investor or its
properties, except for any conflict, breach, violation or default which is not
reasonably likely to have a material adverse effect on such Investor’s
performance of its obligations hereunder or the consummation of the transactions
contemplated hereby.

(e)           The Investor will maintain the confidentiality of all information
acquired as a result of the transactions contemplated herein prior to the public
disclosure of that information by the Company.

(f)            Neither the Investor nor any Person acting on behalf of, or
pursuant to any understanding with or based upon any information received from,
the Investor has, directly or indirectly, engaged in any transactions in the
securities of the Company (including, without limitation, any Short Sales
involving the Company’s securities) since the earlier to occur of (i) the time
that the Investor was first contacted by the Placement Agent or the Company with
respect to the transactions contemplated hereby and (ii) the date that is the
tenth (10th) trading day prior to the date of this Agreement.  “Short Sales”
include, without limitation, all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Securities Exchange Act of 1934, as
amended (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.  The Investor covenants that neither it, nor any
Person acting on behalf of, or pursuant to any understanding with or based upon
any information received from, the Investor will engage in any transactions in
the securities of the Company (including Short Sales) prior to the time that the
transactions contemplated by this Agreement are publicly disclosed.

(g)           The Investor represents that, except as set forth below, (i) it
has had no position, office or other material relationship within the past three
years with the Company or persons known to it to be affiliates of the Company,
(ii) it is not a, and it has no direct or indirect affiliation or association
with any, NASD member or an Associated Person (as such term is defined under the
NASD Membership and Registration Rules Section 1011) as of the date hereof, and
(iii) neither it nor any group of investors (as identified in a public filing
made with the Commission) of which it is a member, acquired, or obtained the
right to acquire, 20% or more of the Common

 

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Stock (or securities convertible or exercisable for Common Stock) or the voting
power of the Company on a post-transaction basis.    Exceptions:

(If no exceptions, write “none.” If left blank, response will be deemed to be
“none.”)

 

10.          Notwithstanding any investigation made by any party to this
Agreement, all covenants, agreements, representations and warranties made by the
Company and the Investor herein will survive the execution of this Agreement,
the delivery to the Investor of the Securities being purchased and the payment
therefor.

11.          This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Investor.

12.          The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.

13.          In case any provision contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein will not in any way
be affected or impaired thereby.

14.          This Agreement will be governed by, and construed in accordance
with, the internal laws of the State of New York, without giving effect to the
principles of conflicts of law that would require the application of the laws of
any other jurisdiction.

15.          This Agreement may be executed in counterparts, each of which will
constitute an original, but all of which, when taken together, will constitute
but one instrument, and will become effective when counterparts have been signed
by each party hereto and delivered to the other party.

16.          The Investor acknowledges and agrees that such Investor’s receipt
of the Company’s counterpart to this Agreement shall constitute written
confirmation of the Company’s sale of Securities to such Investor.

17.          In the event that before the Closing the Placement Agreement is
terminated by the Placement Agent pursuant to the terms thereof, this Agreement
shall terminate without any further action on the part of the parties hereto.

 

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INVESTOR SIGNATURE PAGE

Number of Shares:

 

 

Number of Warrants:

 

 

(such number to be equal to 50% of the number of Shares being purchased by the
Investor)

Purchase Price Per Unit:

$5.74

 

Aggregate Purchase Price:

$

 

 

 

Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.

 

Dated as of: February 23, 2007

 

 

 

INVESTOR

 

By:

 

 

Print Name:

 

 

Title:

 

 

Name in which Securities are to be registered:

 

 

Mailing Address:

 

 

 

 

 

 

 

 

Taxpayer Identification Number:

 

 

Manner of Settlement of the Shares (check one):

 

 

DVP (see Exhibit B for explanation and instructions)

 

 

DWAC (see Exhibit A for explanation and instructions)

 

 

Agreed and Accepted this       day of February, 2007:

 

CYTORI THERAPEUTICS, INC.

 

By:

 

 

Title:

 

 

 

Sales of the Securities purchased hereunder were made pursuant to a registration
statement or in a transaction in which a final prospectus would have been
required to have been delivered in the absence of Rule 172 promulgated under the
Securities Act.

 

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EXHIBIT A

TO BE COMPLETED BY INVESTOR

SETTLING VIA DWAC

Delivery by electronic book-entry at The Depository Trust Company (“DTC”),
registered in the Investor’s name and address as set forth on the Signature Page
of the Agreement to which this Exhibit A is attached, and released by
Computershare Investor Services, the Company’s transfer agent (the “Transfer
Agent”), to the Investor at the Closing.

Name of DTC Participant (broker-dealer atwhich the account or accounts to be
credited with the Shares are maintained)

 

DTC Participant Number

 

Name of Account at DTC Participant being credited with the Shares

 

Account Number at DTC Participant being credited with the Shares

 

 

NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THE AGREEMENT TO WHICH
THIS EXHIBIT A IS ATTACHED BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:

(I)            DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE
CREDITED WITH THE SHARES ARE MAINTAINED TO SET UP A DEPOSIT/WITHDRAWAL AT
CUSTODIAN (“DWAC”) INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR
ACCOUNTS WITH THE SHARES, AND

(II)        REMIT BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE
PURCHASE PRICE FOR THE SECURITIES BEING PURCHASED BY THE INVESTOR TO THE
FOLLOWING ACCOUNT:

XXXX

XXXX

Such funds shall be held in escrow pursuant to an escrow agreement entered into
between JPMorgan Chase Bank, NA (the “Escrow Agent”), the Placement Agent and
the Company (the “Escrow Agreement”) until the Closing and delivered by the
Escrow Agent on behalf of the Investor to the Company upon the satisfaction, in
the sole judgment of the Placement Agent, of the conditions set forth in Section
7(b) of the Agreement to which this Exhibit A is attached.

 

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EXHIBIT B

TO BE COMPLETED BY INVESTOR

SETTLING VIA DVP

Delivery versus payment (“DVP”) through DTC (i.e., the Company shall deliver
Shares registered in the Investor’s name and address as set forth on the
Signature Page of the Agreement to which this Exhibit B is attached and released
by the Transfer Agent to the Investor at the Closing directly to the account(s)
at the Placement Agent identified by the Investor and simultaneously therewith
payment shall be made from such account(s) to the Company through DTC).  NO
LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THE AGREEMENT TO WHICH
THIS EXHIBIT B IS ATTACHED BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:

(I)            NOTIFY THE PLACEMENT AGENT OF THE ACCOUNT OR ACCOUNTS AT THE
PLACEMENT AGENT TO BE CREDITED WITH THE SHARES BEING PURCHASED BY SUCH INVESTOR,
AND

(II)        CONFIRM THAT THE ACCOUNT OR ACCOUNTS AT THE PLACEMENT AGENT TO BE
CREDITED WITH THE SHARES BEING PURCHASED BY THE INVESTOR HAVE A MINIMUM BALANCE
EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE SECURITIES BEING PURCHASED BY THE
INVESTOR.

If the Shares are to be further credited to an account held elsewhere than at
the Placement Agent, please complete the information requested below in order to
facilitate such further credit:

Name of DTC Participant (broker-dealer atwhich the account or accounts to be
credited with the Shares are maintained)

 

DTC Participant Number

 

Name of Account at DTC Participant being credited with the Shares

 

Account Number at DTC Participant being credited with the Shares

 

 

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