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Exhibit 10.88

 
FIRST AMENDMENT TO LEASE
 
This FIRST AMENDMENT TO LEASE (this "First Amendment") is made and entered into
as of the 30th day of September, 2011, by and between HCP CALLAN ROAD, LLC, a
Delaware limited liability company ("Landlord"), and CYTORI THERAPEUTICS, INC.,
a Delaware corporation ("Tenant").
 
R E C I T A L S :
 
 
A.           Landlord and Tenant entered into that certain Lease dated February
26, 2010 (the "Lease"), whereby Landlord leased to Tenant and Tenant leased from
Landlord 60,118 rentable square feet of space located on the first (1st), second
(2nd) and third (3rd) floors (the "Existing Premises") of the building (the
"Building") located at 3020/3030 Callan Road, San Diego, California 92121.
 
B.            Landlord and Tenant desire (i) to extend the Lease Term of the
Lease, (ii) to expand the Existing Premises to include that certain space
consisting of approximately 17,467 rentable square feet of space located on the
first (1st), second (2nd) and third (3rd) floors of the Building (the "Expansion
Premises"), as delineated on Exhibit A attached hereto and made a part hereof,
and (iii) to make other modifications to the Lease, and in connection therewith,
Landlord and Tenant desire to amend the Lease as hereinafter provided.
 
A G R E E M E N T :
 
 
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
 
1.            Capitalized Terms.  All capitalized terms when used herein shall
have the same meaning as is given such terms in the Lease unless expressly
superseded by the terms of this First Amendment.
 
2.            Modification of Premises.  Effective as of the earlier to occur of
(i) the date upon which Tenant first commences to conduct business in the
Expansion Premises, and (ii) the later to occur of (a) February 1, 2012, and
(b) the date upon which the "Demising Work," as that term is defined in
Section 1 of the Tenant Work Letter attached to the Lease as Exhibit B, are
substantially complete (the "Expansion Commencement Date"), Tenant shall lease
from Landlord and Landlord shall lease to Tenant the Expansion
Premises.  Consequently, effective upon the Expansion Commencement Date, the
Existing Premises shall be increased to include the Expansion
Premises.  Landlord and Tenant hereby acknowledge that such addition of the
Expansion Premises to the Existing Premises shall, effective as of the Expansion
Commencement Date, increase the size of the Premises to approximately 77,585
rentable square feet.  The Existing Premises and the Expansion Premises may
hereinafter collectively be referred to as the "Premises."
 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
 
 

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3.           Lease Term.  Landlord and Tenant acknowledge that the Lease Term is
scheduled to expire on October 31, 2015, pursuant to the terms of the
Lease.  Notwithstanding anything to the contrary in the Lease, the Lease Term is
hereby extended for a period of two (2) years with respect to the entire
Premises (i.e., the Existing Premises and the Expansion Premises) and shall
expire on October 31, 2017 (the "Expansion Expiration Date"), unless sooner
terminated as provided in the Lease, as hereby amended.  The period of time
commencing on the Expansion Commencement Date and terminating on the Expansion
Expiration Date, shall be referred to herein as the "Expansion Term."
 
4.           Base Rent.
 
  4.1.           Existing Premises.  Notwithstanding anything to the contrary in
the Lease as hereby amended, prior to November 1, 2015, Tenant shall continue to
pay Base Rent for the Existing Premises in accordance with the terms of the
Lease.  Commencing on November 1, 2015, and continuing throughout the remainder
of the Expansion Term, Tenant shall pay to Landlord monthly installments of Base
Rent for the Existing Premises as follows:
 
Period During
Expansion Term
 
 
Annual
Base Rent
   
Monthly
Installment of
Base Rent
   
Monthly
Base Rent
per Rentable
Square Foot
 
November 1, 2015 – October 31, 2016
  $ 1,442,832.00     $ 120,236.00     $ 2.00  
November 1, 2016 – October 31, 2017
  $ 1,478,902.80     $ 123,241.90     $ 2.05  

 
  4.2.           Expansion Premises.  Commencing on the Expansion Commencement
Date and continuing throughout the Expansion Term, Tenant shall pay to Landlord
monthly installments of Base Rent, pursuant to the terms of the Lease, for the
Expansion Premises as follows:
 
Period During
Expansion Term
 
 
Annualized
Base Rent
   
Monthly
Installment of
Base Rent
   
Monthly
Base Rent
per Rentable
Square Foot
 
Expansion Commencement Date – October 31, 2012*
  $ 377,287.20     $ 31,440.60     $ 1.80  
November 1, 2012 – October 31, 2013*
  $ 387,767.40     $ 32,313.95     $ 1.85  
November 1, 2013 – October 31, 2014*
  $ 398,247.60     $ 33,187.30     $ 1.90  
November 1, 2014 – October 31, 2015
  $ 408,727.80     $ 34,060.65     $ 1.95  
November 1, 2015 – October 31, 2016
  $ 419,208.00     $ 34,934.00     $ 2.00  
November 1, 2016 – October 31, 2017
  $ 429,688.20     $ 35,807.35     $ 2.05  

 
* 
Tenant's obligation to pay the Monthly Installment of Base Rent otherwise
attributable to the Expansion Premises shall be subject to the terms and
conditions ofSection 4.3 of this First Amendment.

 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
 
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  On or before the Expansion Commencement Date, Tenant shall pay to Landlord the
Base Rent payable for the Expansion Premises for the first full month of the
Expansion Term.
 
  4.3.           Abated Base Rent.  Provided that Tenant is not then in default
of the Lease (as hereby amended), then during the first two (2) years of the
Expansion Term (the “Rent Abatement Period”), Tenant's obligation to pay monthly
installments of Base Rent otherwise attributable to the Expansion Premises shall
be modified as follows (the “Rent Abatement”): (i) during the first full six (6)
calendar months of the Expansion Term, one hundred percent (100%) of the Base
Rent otherwise attributable to the Expansion Premises shall be abated,
(ii) during the seventh (7th) through twelfth (12th) full calendar months of the
Expansion Term, fifty percent (50%) of the Base Rent otherwise attributable to
the Expansion Premises shall be abated, (iii) during the thirteenth (13th)
through twenty-fourth (24th) full calendar months of the Expansion Term,
twenty-five percent (25%) of the Base Rent otherwise attributable to the
Expansion Premises shall be abated.  Tenant acknowledges and agrees that the
foregoing Rent Abatement has been granted to Tenant as additional consideration
for entering into this First Amendment, and for agreeing to pay the Rent and
performing the terms and conditions otherwise required under the Lease (as
hereby amended).  If Tenant shall be in default under the Lease (as hereby
amended) and shall fail to cure such default within the notice and cure period,
if any, permitted for cure pursuant to the Lease (as hereby amended), or if the
Lease is terminated for any reason other than Landlord’s breach of the Lease, as
amended, then Landlord may at its option, by notice to Tenant, require  that (a)
the dollar amount of the unapplied portion of the Rent Abatement as of the date
of such default shall be converted to a credit to be applied to the Base Rent
applicable at the end of the Expansion Term, and (b) Tenant's right to abate all
or any portion of the Base Rent attributable to the Expansion Premises shall
immediately terminate and Tenant shall immediately be obligated to begin paying
Base Rent for the Expansion Premises in full.
 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
 
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5.           Tenant's Share of Direct Expenses.
 
  5.1.           Existing Premises.  Notwithstanding the extension of the Lease
Term as provided herein, Tenant shall continue to be obligated, prior to and
during the Expansion Term, to pay Tenant's Share of Direct Expenses in
connection with the Existing Premises.
 
  5.2.           Expansion Premises.  Except as specifically set forth in this
Section 5.2, commencing on the Expansion Commencement Date, and continuing
throughout the Expansion Term, Tenant shall pay Tenant's Share of Direct
Expenses in connection with the Expansion Premises in accordance with the terms
of Article 4 of the Lease, provided that with respect to the calculation of
Tenant's Share of Direct Expenses in connection with the Expansion Premises,
Tenant's Share shall equal 19.49%.
 
6.           Improvements.  Except as specifically set forth herein or in the
Tenant Work Letter attached hereto as Exhibit B and incorporated herein,
Landlord shall not be obligated to provide or pay for any improvement work or
services related to the improvement of the Expansion Premises, and Tenant shall
accept the Expansion Premises in its presently existing, "as-is" condition, and
neither Landlord nor any agent of Landlord has made any representation or
warranty to Tenant regarding the condition of the Expansion Premises, the
Building or the Project, or with respect to the suitability of any of the
foregoing for the conduct of Tenant's business.  In addition, Tenant hereby
acknowledges that Tenant is currently in possession of the Existing Premises,
and that neither Landlord nor any agent of Landlord has made any representation
or warranty regarding the condition of the Existing Premises, or with respect to
the suitability of the foregoing for the conduct of Tenant's business.  Except
as specifically set forth herein or in the Tenant Work Letter, Tenant shall
continue to accept the Existing Premises in its "as is" condition as of the date
of this Amendment.
 
7.           Brokers.  Landlord and Tenant hereby warrant to each other that
they have had no dealings with any real estate broker or agent in connection
with the negotiation of this First Amendment other than Hughes Marino
(representing Tenant) and CB Richard Ellis (representing Landlord)
(collectively, the "Brokers"), and that they know of no other real estate broker
or agent who is entitled to a commission in connection with this First
Amendment.  Each party agrees to indemnify and defend the other party against
and hold the other party harmless from any and all claims, demands, losses,
liabilities, lawsuits, judgments, and costs and expenses (including, without
limitation, reasonable attorneys' fees) with respect to any leasing commission
or equivalent compensation alleged to be owing on account of the indemnifying
party's dealings with any real estate broker or agent other than the
Brokers.  The terms of this Section 7 shall survive the expiration or earlier
termination of this First Amendment.
 
8.           No Further Modification.  Except as set forth in this First
Amendment, all of the terms and provisions of the Lease shall apply with respect
to the Premises and shall remain unmodified and in full force and effect.  In
the event of any conflict between the terms and conditions of the Lease, and the
terms and conditions of this First Amendment, the terms and conditions of this
First Amendment shall prevail.
 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
 
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IN WITNESS WHEREOF, this First Amendment has been executed as of the day and
year first above written.
 
 
"LANDLORD"
 
"TENANT"
HCP CALLAN ROAD, LLC
a Delaware limited liability company
 
CYTORI THERAPEUTICS, INC.
a Delaware corporation
     
By:
    /s/ Jonathan M. Bergschneider  
By:
    /s/ Mark E. Saad
Its:
    Executive Vice President  
Its:
    CFO
Date:
    11/4/11  
Date:
    11/4/2011          
By:
     
Its:
     
Date:
 

 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
 
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EXHIBIT A
 
OUTLINE OF EXPANSION PREMISES & DEPICTION OF THE REVISED PREMISES
 
 
[layout.jpg]
 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
EXHIBIT A
 
 
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EXHIBIT B
 
TENANT WORK LETTER
 
This Tenant Work Letter shall set forth the terms and conditions relating to the
initial improvement of the Premises (which for purposes of this Tenant Work
Letter shall include the Existing Premises and the Expansion Premises) for
Tenant following the date of the First Amendment.  This Tenant Work Letter is
essentially organized chronologically and addresses the issues of construction,
in sequence, as such issues will arise during construction in the Premises.
 
SECTION 1

 
CONDITION OF PREMISES
 
Landlord shall deliver possession of the Expansion Premises to Tenant promptly
following the full execution and delivery of the First Amendment.  Tenant
acknowledges that, except as provided in this Tenant Work Letter, Tenant shall
accept the Premises (or, with respect to the Existing Premises, continue to
accept the Premises) in their existing, "as-is" condition on the date of
delivery thereof to Tenant.  Notwithstanding anything set forth in the First
Amendment or this Tenant Work Letter to the contrary, Landlord shall complete
the work necessary to reasonably demise the Premises from the remaining vacant
space on the second floor of the Building, including the installation of the
requisite doors and access card readers, (the "Demising Work") at Landlord's
sole cost and expense.  Except for the payment of the First Amendment Tenant
Improvement Allowance as provided in Section 2, below, Landlord shall have no
obligation to make or pay for any improvements to the Premises.
 
SECTION 2

 
TENANT IMPROVEMENTS
 
2.1           First Amendment Tenant Improvement Allowance.  Tenant shall be
entitled to a one-time "First Amendment Tenant Improvement Allowance", in the
amount of (i) Five and 00/100 Dollars ($5.00) per rentable square foot of the
Expansion Premises (i.e., Eighty-Seven Thousand Three Hundred Thirty-Five and
00/100 Dollars ($87,335.00)), for the costs relating to the initial design and
construction of Tenant's improvements which are permanently affixed to the
Premises, and (ii) Two and 00/100 Dollars ($2.00) per rentable square foot of
the Existing Premises (i.e., One Hundred Twenty Thousand Two Hundred Thirty-Six
and 00/100 Dollars ($120,236.00)), for the costs relating to the initial design
and construction of Tenant's improvements, which are permanently affixed to the
Premises, and which are "First Amendment Tenant Improvement Allowance Items," as
that term is defined in Section 2.2.1, below (collectively, the "Tenant
Improvements").  In no event shall Landlord be obligated to make disbursements
pursuant to this Tenant Work Letter or otherwise in connection with Tenant's
construction of the Tenant Improvements or any First Amendment Tenant
Improvement Allowance Items, as defined below, in a total amount which exceeds
the sum of the First Amendment Tenant Improvement Allowance; provided, however,
to the extent all or any portion of the Tenant Improvement Allowance available
to pursuant to Exhibit B attached to the Lease has not been disburse nor
allocated, then the First Amendment Tenant Improvement Allowance shall be deemed
increased by such amount.  All Tenant Improvements for which the First Amendment
Tenant Improvement Allowance has been made available shall be deemed Landlord's
property under the terms of the Lease, as amended; provided, however, Landlord
may, by written notice to Tenant given concurrently with Landlord's approval of
the "Final Working Drawings", as that term is defined in Section 3.3, below,
require Tenant, prior to the end of the Lease Term, or given following any
earlier termination of the Lease, at Tenant's expense, to remove any Tenant
Improvements and to repair any damage to the Premises and Building caused by
such removal and return the affected portion of the Premises to a Building
standard condition.  Any portion of the First Amendment Tenant Improvement
Allowance that is not disbursed or allocated for disbursement by December 31,
2012, shall revert to Landlord and Tenant shall have no further rights with
respect thereto.
 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
EXHIBIT B
 
 
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2.2           Disbursement of the First Amendment Tenant Improvement Allowance.
 
2.2.1        First Amendment Tenant Improvement Allowance Items.  Except as
otherwise set forth in this Tenant Work Letter, the First Amendment Tenant
Improvement Allowance shall be disbursed by Landlord only for the following
items and costs (collectively the "First Amendment Tenant Improvement Allowance
Items"):
 
2.2.1.1  Payment of all reasonable fees of the "Architect" and the "Engineers,"
as those terms are defined in Section 3.1 of this Tenant Work Letter, project
management fees, and payment of the fees incurred by, and the cost of documents
and materials supplied by, Landlord and Landlord's consultants in connection
with the preparation and review of the "Construction Drawings," as that term is
defined in Section 3.2 of this Tenant Work Letter;
 
2.2.1.2  The payment of plan check, permit and license fees relating to
construction of the Tenant Improvements;
 
2.2.1.3  The payment for all demolition and removal of existing improvements in
the Premises;
 
2.2.1.4  The cost of construction of the Tenant Improvements, including, without
limitation, testing and inspection costs, costs incurred for removal of existing
furniture, fixtures or equipment in the Premises, hoisting and trash removal
costs, costs to purchase and install in the Premises equipment customarily
incorporated into laboratory improvements or laboratory utility systems,
including, without limitation, UPS, DI Systems, boilers, air compressors,
glass/cage washers and autoclaves, painting, and contractors' fees and general
conditions;
 
2.2.1.5  The cost of any changes in the Base Building when such changes are
required by the Construction Drawings (including if such changes are due to the
fact that such work is prepared on an unoccupied basis), such cost to include
all direct architectural and/or engineering fees and expenses incurred in
connection therewith;
 
2.2.1.6  The cost of any changes to the Construction Drawings or Tenant
Improvements required by all applicable building codes (the "Code");
 
2.2.1.7  Sales and use taxes;
 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
EXHIBIT B
 
 
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2.2.1.8  The cost of installing Tenant's data, telecommunications and internet
cabling in the Premises;
 
2.2.1.9  All other actual out-of-pocket costs expended by Landlord in connection
with the construction of the Tenant Improvements.
 
2.2.2        Disbursement of First Amendment Tenant Improvement
Allowance.  During the construction of the Tenant Improvements, Landlord shall
make monthly disbursements of the First Amendment Tenant Improvement Allowance
for First Amendment Tenant Improvement Allowance Items for the benefit of Tenant
and shall authorize the release of monies for the benefit of Tenant as follows.
 
2.2.2.1   Monthly Disbursements.  On or before the fifth (5th) day of each
calendar month, during the design and construction of the Tenant Improvements
(or such other date as Landlord may designate), Tenant shall deliver to
Landlord:  (i) a request for reimbursement of amounts paid to the "Contractor,"
as that term is defined in Section 4.1.1 of this Tenant Work Letter, approved by
Tenant, in a form to be provided by Landlord, showing the schedule, by trade, of
percentage of completion of the Tenant Improvements in the Premises, detailing
the portion of the work completed and the portion not completed; (ii) invoices
from all of "Tenant's Agents," as that term is defined in Section 4.1.2 of this
Tenant Work Letter, for labor rendered and materials for the Premises;
(iii) executed mechanic's lien releases, as applicable, from all of Tenant's
Agents which shall comply with the appropriate provisions, as reasonably
determined by Landlord, of California Civil Code Section 3262(d); and (iv) all
other information reasonably requested by Landlord.  Tenant's request for
payment shall be deemed Tenant's acceptance and approval of the work furnished
and/or the materials supplied as set forth in Tenant's payment request.  Within
forty-five (45) days thereafter, Landlord shall deliver a check to Tenant made
payable to Tenant in payment of the lesser of:  (A) the amounts so requested by
Tenant as set forth in this Section 2.2.3.1, above (or, subject to the terms of
Section 4.2.1, below, a percentage thereof), and (B) the balance of any
remaining available portion of the First Amendment Tenant Improvement Allowance,
provided that Landlord does not dispute any request for payment based on
non-compliance of any work with the "Approved Working Drawings," as that term is
defined in Section 3.5 below, or due to any substandard work.  Landlord's
payment of such amounts shall not be deemed Landlord's approval or acceptance of
the work furnished or materials supplied as set forth in Tenant's payment
request.
 
2.2.2.2  Final Deliveries.  Following the completion of construction of the
Tenant Improvements, Tenant shall deliver to Landlord properly executed final
mechanic's lien releases in compliance with both California Civil Code Section
3262(d)(2) and either Section 3262(d)(3) or Section 3262(d)(4) from all of
Tenant's Agents, and a certificate certifying that the construction of the
Tenant Improvements in the Premises has been substantially completed.  Tenant
shall record a valid Notice of Completion in accordance with the requirements of
Section 4.3 of this Tenant Work Letter.
 
2.2.2.3  Other Terms.  Landlord shall only be obligated to make disbursements
from the First Amendment Tenant Improvement Allowance to the extent costs are
incurred by Tenant for First Amendment Tenant Improvement Allowance Items.  All
First Amendment Tenant Improvement Allowance Items for which the First Amendment
Tenant Improvement Allowance have been made available shall be deemed Landlord's
property under the terms of the Lease.
 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
EXHIBIT B
 
 
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2.4           Building Standards.  The quality of Tenant Improvements shall be
in keeping with the existing improvements in the Existing Premises.
 
SECTION 3
 
CONSTRUCTION DRAWINGS
 
3.1           Selection of Architect.  Tenant shall retain an architect/space
planner (the "Architect") approved in advance by Landlord (which approval shall
not be unreasonably withheld) to prepare the Final Space Plan and Final Working
Drawings as provided in Section 3.2 and 3.3, below.  Tenant shall retain the
engineering consultants or design/build subcontractors designated by Tenant and
reasonably approved in advance by Landlord (the "Engineers") to prepare all
plans and engineering working drawings relating to the structural, mechanical,
electrical, plumbing, HVAC, lifesafety, and sprinkler work in the Premises,
which work is not part of the Base Building.  All such plans and drawings shall
comply with the drawing format and specifications reasonably determined by
Landlord, and shall be subject to Landlord's reasonable approval.  Tenant and
Architect shall verify, in the field, the dimensions and conditions as shown on
the relevant portions of the Base Building plans, and Tenant and Architect shall
be solely responsible for the same, and Landlord shall have no responsibility in
connection therewith.  Landlord's review of any plans or drawings as set forth
in this Section 3, shall be for its sole purpose and shall not imply Landlord's
review of the same, or obligate Landlord to review the same, for quality,
design, Code compliance or other like matters.
 
3.2           Final Space Plan.  Tenant shall supply Landlord with four (4)
copies signed by Tenant of its final space plan for the Premises before any
architectural working drawings or engineering drawings have been commenced.  The
final space plan (the "Final Space Plan") shall include a layout and designation
of all offices, labs, rooms and other partitioning, their intended use, and
equipment to be contained therein.  Landlord may request clarification or more
specific drawings for special use items not included in the Final Space
Plan.  Landlord shall advise Tenant within five (5) business days after
Landlord's receipt of the Final Space Plan for the Premises if the same is
unsatisfactory or incomplete in any respect.  If Tenant is so advised, Tenant
shall promptly cause the Final Space Plan to be revised to correct any
deficiencies or other matters Landlord may reasonably require.
 
3.3           Final Working Drawings.  After the Final Space Plan has been
approved by Landlord, Tenant shall supply the Engineers with a complete listing
of standard and non-standard equipment and specifications, including, without
limitation, Title 24 calculations, electrical requirements and special
electrical receptacle requirements for the Premises, to enable the Engineers and
the Architect to complete the "Final Working Drawings" (as that term is defined
below) in the manner as set forth below.  Upon the approval of the Final Space
Plan by Landlord and Tenant, Tenant shall promptly cause the Architect and the
Engineers to complete the architectural and engineering drawings for the
Premises, and Architect shall compile a fully coordinated set of architectural,
structural, mechanical, electrical and plumbing working drawings in a form which
is sufficiently complete to allow all of Tenant's Agents to bid on the work and
to obtain all applicable permits (collectively, the "Final Working Drawings")
and shall submit the same to Landlord for Landlord's approval, which shall not
be unreasonably withheld, conditioned, or delayed.  Tenant shall supply Landlord
with four (4) copies signed by Tenant of such Final Working Drawings.  Landlord
shall advise Tenant within ten (10) business days after Landlord's receipt of
the Final Working Drawings for the Premises if the same is unsatisfactory or
incomplete in any respect.  If Tenant is so advised, Tenant shall promptly cause
the Final Working Drawings to be revised in accordance with such review and any
disapproval of Landlord in connection therewith.
 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
EXHIBIT B
 
 
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3.5           Approved Working Drawings.  The Final Working Drawings shall be
approved by Landlord (the "Approved Working Drawings") prior to the commencement
of construction of the Premises by Tenant.  Concurrently with Tenant's delivery
of the Final Working Drawings to Landlord for Landlord's approval, Tenant may
submit the same to the appropriate municipal authorities for all applicable
building permits.  Tenant hereby agrees that neither Landlord nor Landlord's
consultants shall be responsible for obtaining any building permit or
certificate of occupancy for the Premises and that obtaining the same shall be
Tenant's responsibility; provided, however, that Landlord shall cooperate with
Tenant in executing permit applications and performing other ministerial acts
reasonably necessary to enable Tenant to obtain any such permit or certificate
of occupancy.  No changes, modifications or alterations in the Approved Working
Drawings may be made without the prior written consent of Landlord, which shall
not be unreasonably withheld, conditioned, or delayed.
 
SECTION 4
 
CONSTRUCTION OF THE TENANT IMPROVEMENTS
 
4.1           Tenant's Selection of Contractors.
 
4.1.1           The Contractor; Landlord's Project Manager.  Tenant shall retain
a licensed general contractor, approved in advance by Landlord, to construct the
Tenant Improvements ("Contractor").  Landlord's approval of the Contractor shall
not be unreasonably withheld.  Landlord shall retain Project Management
Advisors, Inc. ("PMA") as a third party project manager for construction
oversight of the Tenant Improvements on behalf of Landlord, at Landlord's sole
cost and expense.
 
4.1.2           Tenant's Agents.  All subcontractors, laborers, materialmen, and
suppliers used by Tenant (such subcontractors, laborers, materialmen, and
suppliers, and the Contractor to be known collectively as "Tenant's
Agents").  The subcontractors used by Tenant, but not any laborers, materialmen,
and suppliers, must be approved in writing by Landlord, which approval shall not
be unreasonably withheld, conditioned, or delayed; provided, however, Landlord
may nevertheless designate and require the use of particular mechanical,
engineering, plumbing, fire life-safety and other Base Building
subcontractors.  If Landlord does not approve any of Tenant's proposed
subcontractors, Tenant shall submit other proposed subcontractors for Landlord's
written approval.
 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
EXHIBIT B
 
 
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4.2           Construction of Tenant Improvements by Tenant's Agents.
 
4.2.1           Construction Contract; Cost Budget.  Tenant shall engage the
Contractor under a commercially reasonable and customary construction contract,
reasonably approved by Landlord (collectively, the "Contract").  Prior to the
commencement of the construction of the Tenant Improvements, and after Tenant
has accepted all bids for the Tenant Improvements, Tenant shall provide Landlord
with a detailed breakdown, by trade, of the final costs to be incurred or which
have been incurred, as set forth more particularly in Sections 2.2.1.1 through
2.2.1.9, above, in connection with the design and construction of the Tenant
Improvements to be performed by or at the direction of Tenant or the Contractor,
which costs form a basis for the estimated total costs of the work of the Tenant
Improvement project (the "Final Budget").  Prior to the commencement of
construction of the Tenant Improvements, Tenant shall supply Landlord with cash
in an amount (the "Over-Allowance Amount") equal to the difference between the
amount of the Final Costs and the amount of the First Amendment Tenant
Improvement Allowance (less any portion thereof already disbursed by Landlord,
or in the process of being disbursed by Landlord, on or before the commencement
of construction of the Tenant Improvements).  The Over-Allowance Amount shall be
disbursed by Landlord prior to the disbursement of any of the then remaining
portion of the First Amendment Tenant Improvement Allowance, and such
disbursement shall be pursuant to the same procedure as the First Amendment
Tenant Improvement Allowance.  In the event that, after the Final Costs have
been delivered by Tenant to Landlord, the costs relating to the design and
construction of the Tenant Improvements shall change, any additional costs
necessary to such design and construction in excess of the Final Costs, shall be
paid by Tenant to Landlord immediately as an addition to the Over-Allowance
Amount or at Landlord's option, Tenant shall make payments for such additional
costs out of its own funds, but Tenant shall continue to provide Landlord with
the documents described in Sections 2.2.2.1 (i), (ii), (iii) and (iv) of this
Tenant Work Letter, above, for Landlord's approval, prior to Tenant paying such
costs.  All Tenant Improvements paid for by the Over-Allowance Amount shall be
deemed Landlord's property under the terms of the Lease.
 
4.2.2           Tenant's Agents.
 
4.2.2.1  Compliance with Drawings and Schedule.  Tenant's and Tenant's Agent's
construction of the Tenant Improvements shall comply with the
following:  (i) the Tenant Improvements shall be constructed in strict
accordance with the Approved Working Drawings; and (ii) Tenant's Agents shall
submit schedules of all work relating to the Tenant's Improvements to Contractor
and Contractor shall, within five (5) business days of receipt thereof, inform
Tenant's Agents of any changes which are necessary thereto, and Tenant's Agents
shall adhere to such corrected schedule.
 
4.2.2.2  Indemnity.  Tenant's indemnity of Landlord as set forth in the Lease
shall also apply with respect to any and all costs, losses, damages, injuries
and liabilities related in any way to any act or omission of Tenant or Tenant's
Agents, or anyone directly or indirectly employed by any of them, or in
connection with Tenant's non-payment of any amount arising out of the Tenant
Improvements and/or Tenant's disapproval of all or any portion of any request
for payment.  Such indemnity by Tenant, as set forth in the Lease, shall also
apply with respect to any and all costs, losses, damages, injuries and
liabilities related in any way to Landlord's performance of any ministerial acts
reasonably necessary (i) to permit Tenant to complete the Tenant Improvements,
and (ii) to enable Tenant to obtain any building permit or certificate of
occupancy for the Premises.  The foregoing indemnity shall not apply to claims
caused by the gross negligence or willful misconduct of Landlord, its member
partners, shareholders, officers, directors, agents, employees, and/or
contractors.
 
4.2.2.2  Requirements of Tenant's Agents.  Each of Tenant's Agents shall
guarantee to Tenant and for the benefit of Landlord that the portion of the
Tenant Improvements for which it is responsible shall be free from any defects
in workmanship and materials for a period of not less than one (1) year from the
date of substantial completion of the work under the Contract ("Substantial
Completion").  Each of Tenant's Agents shall be responsible for the replacement
or repair, without additional charge, of all work done or furnished in
accordance with its contract that shall become defective within one (1) year
after Substantial Completion.  The correction of such work shall include,
without additional charge, all additional expenses and damages incurred in
connection with such removal or replacement of all or any part of the Tenant
Improvements, and/or the Building and/or common areas that may be damaged or
disturbed thereby.  All such warranties or guarantees as to materials or
workmanship of or with respect to the Tenant Improvements shall be contained in
the Contract or subcontract and shall be written such that such guarantees or
warranties shall inure to the benefit of both Landlord and Tenant, as their
respective interests may appear, and can be directly enforced by either.  Tenant
covenants to give to Landlord any assignment or other assurances which may be
necessary to effect such right of direct enforcement.
 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
EXHIBIT B
 
 
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4.2.2.4                      Insurance Requirements.
 
4.2.2.4.1  General Coverages.  All of Tenant's Agents shall carry worker's
compensation insurance covering all of their respective employees, and shall
also carry public liability insurance, including property damage, all with
limits, in form and with companies as are required to be carried by Tenant as
set forth in the Lease.
 
4.2.2.4.2  Special Coverages.  Tenant shall carry "Builder's All Risk" insurance
in an amount approved by Landlord covering the construction of the Tenant
Improvements, and such other insurance as Landlord may require, it being
understood and agreed that the Tenant Improvements shall be insured by Tenant
pursuant to the Lease immediately upon completion thereof.  Such insurance shall
be in amounts and shall include such extended coverage endorsements as may be
reasonably required by Landlord including, but not limited to, the requirement
that all of Tenant's Agents, including all contractors, shall carry general
liability, including Products and Completed Operation Coverage insurance, each
in amounts not less than $5,000,000 per incident, $5,000,000 in aggregate, as
well as workers compensation insurance and in form and with companies as are
required to be carried by Tenant as set forth in the Lease.
 
4.2.2.4.3  General Terms.  Certificates for all insurance carried pursuant to
this Section 4.2.2.4 shall be delivered to Landlord before the commencement of
construction of the Tenant Improvements and before any equipment of Tenant's
Agents is moved onto the site.  All such policies of insurance must contain a
provision that the company writing said policy will endeavor to give Landlord
thirty (30) days prior written notice of any cancellation or lapse of the
effective date or any reduction in the amounts of such insurance.  Tenant shall
provide Landlord notice of any cancellation or lapse of the effective date or
reduction in the amounts of such insurance promptly following Tenant's receipt
of such notice from its insurer.  In the event that the Tenant Improvements are
damaged by any cause during the course of the construction thereof, Tenant shall
immediately repair the same at Tenant's sole cost and expense.  Tenant's Agents
shall maintain all of the foregoing insurance coverage in force until the Tenant
Improvements are fully completed and accepted by Landlord, except for Products
and Completed Operations Coverage insurance required by Landlord, which is to be
maintained for a commercially reasonable period following completion of the
Tenant Improvements and acceptance by Landlord and Tenant.  The builders risk
policy carried under this Section 4.2.2.4 shall name Tenant's agents and
Landlord as Additional Insureds.  All insurance maintained by Tenant's Agents
shall preclude subrogation claims by the insurer against anyone insured
thereunder, and the public liability insurance shall name Landlord, HCP, Inc.,
Project Management Advisors, Inc., Cushman Wakefield, or other manager of the
Project, as an additional insured or loss payee, as applicable.  Such insurance
shall provide that it is primary insurance and that any other insurance
maintained by Landlord is excess and noncontributing with the insurance required
hereunder.  The requirements for the foregoing insurance shall not serve to
limit the indemnification of Landlord by Tenant under Section 4.2.2.2 of this
Tenant Work Letter.  If the Over-Allowance Amount is more than fifty percent of
the total amount of the First Amendment Tenant Improvement Allowance, then
Landlord may, in its reasonable discretion, require Tenant to obtain a lien and
completion bond or some alternate form of security satisfactory to Landlord in
an amount sufficient to ensure the lien-free completion of the Tenant
Improvements and naming Landlord as a co-obligee.
 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
EXHIBIT B
 
 
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4.2.2           Governmental Compliance.  The Tenant Improvements shall comply
in all respects with the following:  (i) all state, federal, city or
quasi-governmental laws, codes, ordinances and regulations, as each may apply
according to the rulings of the controlling public official, agent or other
person; (ii) applicable standards of the American Insurance Association
(formerly, the National Board of Fire Underwriters) and the National Electrical
Code; and (iii) building material manufacturer's specifications.
 
4.2.4           Inspection by Landlord.  Landlord shall have the right to
inspect the Tenant Improvements at all times, provided however, that Landlord's
failure to inspect the Tenant Improvements shall in no event constitute a waiver
of any of Landlord's rights hereunder nor shall Landlord's inspection of the
Tenant Improvements constitute Landlord's approval of the same.  Should Landlord
reasonably disapprove any portion of the Tenant Improvements, on the grounds
that the construction is defective or fails to comply with the Approved Working
Drawings, Landlord shall notify Tenant in writing of such disapproval and shall
specify the items disapproved.  Any such defects or deviations shall be
rectified by Tenant at no expense to Landlord, provided however, that in the
event Landlord determines that a defect or deviation exists that might adversely
affect the mechanical, electrical, plumbing, heating, ventilating and air
conditioning or life-safety systems of the Building, the structure or exterior
appearance of the Building or any other tenant's use of such other tenant's
leased premises, Landlord may, take such action as Landlord reasonably deems
necessary, at Tenant's expense and without incurring any liability on Landlord's
part, to correct any such defect, deviation and/or matter, including, without
limitation, causing the cessation of performance of the construction of the
Tenant Improvements until such time as the defect, deviation and/or matter is
corrected to Landlord's reasonable satisfaction.
 
4.2.5           Meetings.  Commencing upon the execution of the Lease, Tenant
shall hold weekly meetings at a reasonable time, with the Architect and the
Contractor regarding the progress of the preparation of Construction Drawings
and the construction of the Tenant Improvements, and Landlord and/or its agents
shall receive prior notice of, and shall have the right to attend, all such
meetings, and, upon Landlord's request, certain of Tenant's Agents shall attend
such meetings.  In addition, minutes shall be taken at all such meetings, a copy
of which minutes shall be promptly delivered to Landlord.  One such meeting each
month shall include the review of Contractor's current request for payment.
 
4.3           Notice of Completion; Copy of Record Set of Plans.  Within ten
(10) days after completion of construction of the Tenant Improvements, Tenant
shall cause a valid Notice of Completion to be recorded in the office of the
Recorder of the county in which the Building is located in accordance with
Section 3093 of the Civil Code of the State of California or any successor
statute, and shall furnish a copy thereof to Landlord upon such recordation.  If
Tenant fails to do so, Landlord may execute and file the same on behalf of
Tenant as Tenant's agent for such purpose, at Tenant's sole cost and
expense.  At the conclusion of construction, (i) Tenant shall cause the
Architect and Contractor (x) to update the Approved Working Drawings as
necessary to reflect all changes made to the Approved Working Drawings during
the course of construction, (y) to certify to the best of their knowledge that
the "record-set" of as-built drawings are true and correct, which certification
shall survive the expiration or termination of the Lease, and (z) to deliver to
Landlord two (2) sets of copies of such record set of drawings (hard copy and
CAD files) within ninety (90) days following issuance of a certificate of
occupancy for the Premises, and (ii) Tenant shall deliver to Landlord a copy of
all warranties, guaranties, and operating manuals and information relating to
the improvements, equipment, and systems in the Premises.  Within fifteen (15)
days after request by Tenant following the Substantial Completion of the Tenant
Improvements, Landlord will acknowledge its approval of the Tenant Improvements
(provided that such approval has been granted) by placing its signature on a
Contractor’s Certificate of Substantial Completion fully executed by the
Architect, Contractor and Tenant.  Landlord’s approval shall not create any
contingent liabilities for Landlord with respect to any latent quality, design,
Code compliance or other like matters that may arise subsequent to Landlord’s
approval.
 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
EXHIBIT B
 
 
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SECTION 5

 
MISCELLANEOUS
 
5.1           Tenant's Entry Into the Premises Prior to Substantial
Completion.  Provided that Tenant and its agents do not interfere with the
Demising Work, Tenant shall be allowed access to the Expansion Premises prior to
the Substantial Completion of the Expansion Premises for the purpose of Tenant
installing overstandard equipment or fixtures (including Tenant's data and
telephone equipment) in the Expansion Premises.  Prior to Tenant's entry into
the Expansion Premises as permitted by the terms of this Section 5.1, Tenant
shall submit a schedule to Landlord, for its approval, which schedule shall
detail the timing and purpose of Tenant's entry.  Tenant shall hold Landlord
harmless from and indemnify, protect and defend Landlord against any loss or
damage to the Building or Expansion Premises and against injury to any persons
caused by Tenant's actions pursuant to this Section 5.1
 
5.2           Tenant's Representative.  Tenant has designated Hughes Marino as
its sole representatives with respect to the matters set forth in this Tenant
Work Letter, who shall each have full authority and responsibility to act on
behalf of the Tenant as required in this Tenant Work Letter.
 
5.3           Landlord's Representative.  Landlord has designated Ken Richter
and/or Jeff Sobczyk with PMA, as its sole representatives with respect to the
matters set forth in this Tenant Work Letter, who, until further notice to
Tenant, shall have full authority and responsibility to act on behalf of the
Landlord as required in this Tenant Work Letter.
 
5.4           Time is of the Essence in This Tenant Work Letter.  Unless
otherwise indicated, all references herein to a "number of days" shall mean and
refer to calendar days.  If any item requiring approval is timely disapproved by
Landlord, the procedure for preparation of the document and approval thereof
shall be repeated until the document is approved by Landlord.
 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
EXHIBIT B
 
 
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5.5           Tenant's Lease Default.  Notwithstanding any provision to the
contrary contained in the Lease, the First Amendment, or this Tenant Work
Letter, if any default by Tenant under the Lease, as amended, or this Tenant
Work Letter (including, without limitation, any failure by Tenant to fund any
portion of the Over-Allowance Amount) occurs at any time on or before the
substantial completion of the Tenant Improvements and such default remains
uncured ten (10) days following Landlord's notice of such default to Tenant,
then in addition to all other rights and remedies granted to Landlord pursuant
to the Lease, Landlord shall have the right to withhold payment of all or any
portion of the First Amendment Tenant Improvement Allowance and/or Landlord may,
without any liability whatsoever, cause the cessation of construction of the
Tenant Improvements (in which case, Tenant shall be responsible for any delay in
the substantial completion of the Tenant Improvements and any costs occasioned
thereby).
 
5.6           Utilities.  During the construction of the Tenant Improvements,
Tenant shall pay to the Landlord the cost of all utilities and services provided
to the Expansion Premises.
 
5.7           No Constructive Eviction.  Tenant hereby acknowledges that,
notwithstanding Tenant's occupancy of the Existing Premises, pursuant to the
Lease, during the construction of the Demising Work, Tenant hereby agrees that
the performance of the Demising Work shall in no way constitute a constructive
eviction of Tenant nor entitle Tenant to any abatement of rent or damages of any
kind.  Furthermore, in no event shall Tenant be entitled to any compensation or
damages from Landlord for loss of the use of the whole or any part of the
Existing Premises or of Tenant's personal property or improvements resulting
from the Demising Work or Landlord's actions in connection with the Demising
Work, or for any inconvenience or annoyance occasioned by the construction of
the Demising Work.
 
TORREY PINES CORPORATE CENTER
[Expansion and Extension Amendment]
[Cytori Therapeutics, Inc.]
 
EXHIBIT B
 
 
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