ex4-2warrant.htm


    Exhibit
4.2

     

    
       

      CYTORI
THERAPEUTICS, INC.

       

      WARRANT
TO PURCHASE COMMON STOCK

       

      
        	 
      	 
      	 
      
	
                Warrant
      No. CSW-09-[●]

              	
                  

              	
                Original
      Issue Date: March [●], 2009

              
	 
      	 
      	 
      


      

       

      Cytori
Therapeutics, Inc., a Delaware corporation (the “Company”),
hereby certifies that, for value received, [●] or its permitted registered
assigns (the “Holder”),
is entitled to purchase from the Company up to a total of [●] ([●])shares1 of common
stock, $0.001 par value per share (the “Common
Stock”), of the Company (each such share, a “Warrant
Share” and all such shares, the “Warrant
Shares”) at an exercise price equal to $2.59 per share (as adjusted from
time to time as provided herein, the “Exercise
Price”), at any time and from time to time after the date that is six
months from the date hereof (the “Original
Exercisability Date”) and through and including 5:30 p.m., New York City
time on September [●], 2014 (the “Expiration
Date”), and subject to the following terms and conditions:

       

      This
Warrant is being issued pursuant to that certain Subscription Agreement, dated
March 9, 2009, by and between the Company and the purchaser identified therein
(the “Purchase
Agreement”).  The original issuance of this Warrant by the
Company pursuant to the Purchase Agreement has been registered pursuant to a
Registration Statement on Form S-3 (File No. 333-157023) (the “Registration
Statement”).

       

      1.  Definitions.
In addition to the terms defined elsewhere in this Warrant, capitalized terms
that are not otherwise defined herein have the meanings given to such terms in
the Purchase Agreement.

       

      2.  List of Warrant
Holders.  The Company shall register this Warrant, upon records
to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder (which shall include the
initial Holder or, as the case may be, any registered assignee to which this
Warrant is permissibly assigned hereunder from time to time).  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.

       

      3.  List of Transfers;
Restrictions on Transfer. Subject to applicable laws and Holder’s
compliance with any restriction on transfer set forth in the Purchase Agreement,
the Company shall register the transfer of all or any portion of this Warrant in
the Warrant Register, upon surrender of this Warrant, with
the Form of Assignment attached as Attachment 2 hereto
duly completed and signed, to the Company at its address specified
herein.  Upon any such registration or transfer, a new warrant to
purchase Common Stock in substantially the form of this Warrant (any such new
warrant, a “New
Warrant”) evidencing the portion of this Warrant so transferred shall be
issued to the transferee and a New Warrant evidencing the remaining portion of
this Warrant not so transferred, if any, shall be issued to the transferring
Holder. The 

      
         

         

          
            

          

        

        1
Number of warrant shares to equal 140% of the
number of shares of common stock purchased by the
investor.

         

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      acceptance
of the New Warrant by the transferee thereof shall be deemed the acceptance by
such transferee of
all of the rights and obligations in respect of the New Warrant that the Holder
has in respect of this Warrant.  Any purported transfer of all or any
portion of this Warrant in violation of the provisions of this Warrant shall be
null and void.

       

      4.  Exercise and Duration of
Warrant.

       

      (a) All or
any part of this Warrant shall be exercisable by the registered Holder in any
manner permitted by Section 10 of this Warrant at any time and from time to
time on or after the Original Exercisability Date and through and including 5:30
p.m., New York City time, on the Expiration Date.  At 5:31 p.m., New
York City time, on the Expiration Date, the portion of this Warrant not
exercised prior thereto shall be and become void and of no value and this
Warrant shall be terminated and no longer outstanding.

       

      (b) The
Holder may exercise this Warrant by delivering to the Company (i) an exercise
notice, in the form attached as Attachment 1 hereto
(the “Exercise
Notice”), completed and duly signed, and (ii) (A) payment of an amount
equal to the applicable Exercise Price multiplied by the number of Warrant
Shares as to which this Warrant is being exercised (the “Aggregate
Exercise Price”) or (B) provided the conditions for cashless exercise set
forth in Section 10 hereof are satisfied, by indicating in the Exercise Notice
delivered to the Company that this Warrant is being exercised pursuant to a
Cashless Exercise (as defined in Section 10 hereof).  The date such
items specified in clauses (i) and (ii) of this subsection are delivered to the
Company (as determined in accordance with the notice provisions hereof) is an
“Exercise
Date.”  The Holder shall not be required to deliver the
original Warrant in order to effect an exercise hereunder, but if it is not so
delivered then such exercise shall constitute an agreement by the Holder to
deliver the original Warrant to the Company as soon as practicable
thereafter.  Execution and delivery of the Exercise Notice shall have
the same effect as cancellation of the original Warrant and issuance of a New
Warrant evidencing the right to purchase the remaining number of Warrant
Shares.

       

      5.  Delivery of Warrant
Shares.

       

      (a) Upon
exercise of this Warrant, the Company shall promptly (but in no event later than
three Trading Days (as defined in Section 10 hereof) after the Exercise Date)
issue or cause to be issued and cause to be delivered to or upon the written
order of the Holder and in such name or names as the Holder may designate, (i) a
certificate for the Warrant Shares issuable upon such exercise, free of
restrictive legends or (ii) an electronic delivery of the Warrant Shares
issuable upon such exercise to an account of the Holder or its designee (as
specified in the Exercise Notice) at the Depository Trust Company (the “DTC”) or
another established clearing corporation performing similar
functions.  The Holder, or any person or entity permissibly so
designated by the Holder to receive Warrant Shares, shall be deemed to have
become the holder of record of such Warrant Shares as of the Exercise
Date.  The Company shall, upon the written request of the Holder, use
its best efforts to deliver, or cause to be delivered, Warrant Shares hereunder
electronically through the DTC or another established clearing corporation
performing similar functions, if available; provided that the Company may, but
will not be required to, change its transfer agent if its current transfer agent
cannot deliver Warrant Shares electronically through such a clearing
corporation.  If as of the time of exercise 

       

      
        
          
          

        

        
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      the
Warrant Shares constitute restricted or control securities, the Holder, by
exercising, agrees not to resell them except in compliance with all applicable
securities laws.

       

      (b) If by the
close of the third Trading Day after delivery of an Exercise Notice and the
payment of the Aggregate Exercise Price in any manner permitted by Section 10 of
this Warrant, the Company fails to deliver to the Holder the required number of
Warrant Shares in the manner required pursuant to Section 5(a), and if after
such third Trading Day and prior to the receipt of such Warrant Shares, the
Holder purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares
which the Holder anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall, within three Trading Days after the Holder’s request and
in the Holder’s sole discretion, either (i) pay in cash to the Holder an amount
equal to the Holder’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 issue and deliver
such Warrant Shares) shall terminate or (ii) promptly honor its obligation to
issue and deliver to the Holder such Warrant Shares and pay cash to the Holder
in an amount equal to the excess (if any) of the Buy-In Price over the product
of (A) such number of Warrant Shares, times (B) the Closing Sale Price (as
defined in Section 10 hereof) of a share of Common Stock (as reported by
Bloomberg Financial Markets) on the Exercise Date.

       

      (c) To the
extent permitted by law, the Company’s obligations to issue and deliver Warrant
Shares in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the recovery of any
judgment against any person or entity or any action to enforce the same, or any
setoff, counterclaim, recoupment, limitation or termination, or any breach or
alleged breach by the Holder or any other person or entity of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other person or entity, and irrespective of any other circumstance that might
otherwise limit such obligation of the Company to the Holder in connection with
the issuance of Warrant Shares. Nothing herein shall limit the Holder’s right to
pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
Warrant Shares upon exercise of the Warrant as required pursuant to the terms
hereof.

       

      6.  Charges, Taxes and
Expenses. Issuance and delivery of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the Holder
for any issue or transfer tax, transfer agent fee or other incidental tax or
expense in respect of the issuance of such certificates, all of which taxes and
expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax that may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or the Warrants in a name other than that of the Holder. The Holder shall be
responsible for all other tax liability that may arise as a result of holding or
transferring this Warrant or receiving Warrant Shares upon exercise
hereof.

       

      7.  Replacement of
Warrant.  If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon 

       

      
        
          
          

        

        
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      receipt
of evidence reasonably satisfactory to the Company of such loss, theft or
destruction and, in each such case, a customary and reasonable indemnity and
surety bond, if requested by the Company.  Applicants for a New
Warrant under such circumstances shall also comply with such other reasonable
regulations and procedures and pay such other reasonable third-party costs as
the Company may prescribe. If a New Warrant is requested as a result of a
mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant
to the Company as a condition precedent to the Company’s obligation to issue the
New Warrant.

       

      8.  Reservation of Warrant
Shares. The Company covenants that it will at all times reserve and keep
available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares that are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other contingent purchase rights of
persons other than the Holder (taking into account the adjustments and
restrictions of Section 9). The Company covenants that all Warrant Shares so
issuable and deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and nonassessable.

       

      9.  Certain Adjustments.
The Exercise Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in this Section
9.

       

      (a) Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding,
(i) pays a stock dividend on its Common Stock or otherwise makes a distribution
on any class of capital stock that is payable in shares of Common Stock,
(ii) subdivides its outstanding shares of Common Stock into a larger number
of shares, or (iii) combines its outstanding shares of Common Stock into a
smaller number of shares, then in each such case the Exercise Price shall be
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately before such event and the denominator of
which shall be the number of shares of Common Stock outstanding immediately
after such event. Any adjustment made pursuant to clause (i) of this paragraph
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.

       

      (b) Pro Rata
Distributions.  If the Company, at any time while this Warrant
is outstanding, distributes to all holders of Common Stock for no consideration
(i) evidences of its indebtedness, (ii) any security (other than a distribution
of Common Stock covered by the preceding paragraph), (iii) rights or warrants to
subscribe for or purchase any security, or (iv) any other asset including cash
(in each case, “Distributed
Property”), then, upon any exercise of this Warrant that occurs after the
record date fixed for determination of stockholders entitled to receive such
distribution, the Holder shall be entitled to receive, in addition to the
Warrant Shares otherwise issuable upon such exercise (if applicable), the
Distributed Property that such Holder would have been entitled to receive in
respect of such number of Warrant Shares had the Holder been the record holder
of such Warrant Shares immediately prior to such record date.

       

      
        
          
          

        

        
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      (c) Fundamental
Transactions. If, at any time while this Warrant is
outstanding  (i) the Company effects (A) any merger of the Company
with (but not into) another entity, in which the stockholders of the Company
immediately prior to such transaction own less than a majority of the
outstanding stock of the surviving entity, or (B) any merger or consolidation of
the Company into another entity, (ii) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions,
(iii) any tender offer or exchange offer approved or authorized by the Company’s
Board of Directors is completed pursuant to which holders of at least a majority
of the outstanding Common Stock tender or exchange their shares for other
securities, cash or property, (iv) the Company effects any reclassification of
the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or
property (other than as a result of a subdivision or combination of shares of
Common Stock covered by Section 9(a) hereof), (v) the Company consummates a
stock purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of
arrangement) with another Person (as defined below) whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock (not including
any shares of Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making or party to,
such stock purchase agreement or other business combination), or (vi) any
"person" or "group" (as these terms are used for purposes of Sections 13(d) and
14(d) of the Exchange Act), become the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate
ordinary voting power represented by issued and outstanding Common Stock. (each,
a “Fundamental
Transaction”), then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the same amount and kind of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant without regard to any limitations
on exercise contained herein (the “Alternate
Consideration”), and the Holder shall no longer have the right to receive
Warrant Shares upon exercise of this Warrant.  The Company shall not
effect any such Fundamental Transaction unless prior to or simultaneously with
the consummation thereof, any successor to the Company, surviving entity or the
corporation purchasing or otherwise acquiring such assets or other appropriate
corporation or entity shall assume the obligation to deliver to the Holder, such
Alternate Consideration as, in accordance with the foregoing provisions, the
Holder may be entitled to receive, and the other obligations under this
Warrant.  The provisions of this paragraph (c) shall similarly apply
to subsequent transactions of a Fundamental Transaction
type.  Notwithstanding the foregoing, in the event of a Fundamental
Transaction other than one in which a Successor Entity that is a publicly traded
corporation whose stock is quoted or listed for trading on an Eligible Market
assumes this Warrant such that the Warrant shall be exercisable for the publicly
traded Common Stock of such Successor Entity, at the request of the Holder
delivered before the 20th day after such Fundamental Transaction, the Company
(or the successor entity) shall purchase this Warrant from the Holder by paying
to the Holder, within five Business Days (as defined below) after such request
(or, if later, on the effective date of the Fundamental Transaction), cash in an
amount equal to the Black Scholes Value (as defined below) of the remaining
unexercised portion of this Warrant on the date of such Fundamental
Transaction.  For purposes hereof, “Black Scholes
Value” means the value of this Warrant based on the Black and Scholes
Option Pricing Model obtained from the “OV” function on Bloomberg 

       

      
        
          
          

        

        
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      Financial
Markets (“Bloomberg”)
determined as of the day immediately following the public announcement of the
applicable Fundamental Transaction and reflecting (i) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the remaining term
of this Warrant as of such date of request and (ii) an expected volatility equal
to the greater of 50% and the 100 day volatility obtained from the HVT function
on Bloomberg.  As used herein, (x) "Successor
Entity" means the Person (or, if so elected by the Holder, the Parent
Entity) formed by, resulting from or surviving any Fundamental Transaction or
the Person (or, if so elected by the Holder, the Parent Entity) with which such
Fundamental Transaction shall have been entered into, (y) "Eligible
Market" means The New York Stock Exchange, Inc., the NYSE Alternext, The
NASDAQ Global Market, The NASDAQ Global Select Market or The NASDAQ Capital
Market, (z) "Parent
Entity" of a Person means an entity that, directly or indirectly,
controls the applicable Person and whose common stock or equivalent equity
security is quoted or listed on an Eligible Market, or, if there is more than
one such Person or Parent Entity, the Person or Parent Entity with the largest
public market capitalization as of the date of consummation of the Fundamental
Transaction, (aa) “Person”
means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof, and (bb) “Business
Day” means any day other than Saturday, Sunday or other day on which
commercial banks in The City of New York are authorized or required by law to
remain closed.

       

      (d) Number of Warrant
Shares. Simultaneously with any adjustment to the Exercise Price pursuant
to paragraph (a) of this Section 9, the number of Warrant Shares that may be
purchased upon exercise of this Warrant shall be increased or decreased
proportionately, so that after such adjustment the aggregate Exercise Price
payable hereunder for the adjusted number of Warrant Shares shall be the same as
the aggregate Exercise Price in effect immediately prior to such
adjustment.

       

      (e) Purchase
Rights.  In addition to any adjustments pursuant to Section 9
above, if at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of shares of Common
Stock, other than any Options, Convertible Securities or rights to purchase
stock, warrants, securities or other property issued pursuant to the Rights
Agreement, dated as of May 19, 2003 and amended as of May 12, 2005 and August
28, 2007, between the Company and Computershare Trust Company, Inc. as Rights
Agent, (the "Purchase
Rights"), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of
shares of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.  As used herein, (x) "Options"
means any rights, warrants or options to subscribe for or purchase shares of
Common Stock or Convertible Securities and (y) "Convertible
Securities" means any stock or securities (other than Options) directly
or indirectly convertible into or exercisable or exchangeable for shares of
Common Stock.

       

      
        
          
          

        

        
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      (f) Calculations. All
calculations under this Section 9 shall be made to the nearest cent or the
nearest 1/100th of a
share, as applicable. The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the account of the
Company, and the disposition of any such shares shall be considered an issue or
sale of Common Stock.

       

      (g) Notice of
Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the Company at its expense will, at the written request of the
Holder, promptly compute such adjustment, in good faith, in accordance with the
terms of this Warrant and prepare a certificate setting forth such adjustment,
including a statement of the adjusted Exercise Price and adjusted number or type
of Warrant Shares or other securities issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and
showing in reasonable detail the facts upon which such adjustment is based. Upon
written request, the Company will promptly deliver a copy of each such
certificate to the Holder and to the Company’s transfer agent.

       

      (h) Notice of Corporate
Events. If, while this Warrant is outstanding, the Company (i) declares a
dividend or any other distribution of cash, securities or other property in
respect of its Common Stock, including, without limitation, any granting of
rights or warrants to subscribe for or purchase any capital stock of the Company
or any Subsidiary, (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Fundamental Transaction
or (iii) authorizes the voluntary dissolution, liquidation or winding up of the
affairs of the Company, then, except if such notice and the contents thereof
shall be deemed to constitute material non-public information, the Company shall
deliver to the Holder a notice describing the material terms and conditions of
such transaction at least 10 Trading Days prior to the applicable record or
effective date on which a person would need to hold Common Stock in order to
participate in or vote with respect to such transaction, and the Company will
take all reasonable steps to give Holder the practical opportunity to exercise
this Warrant prior to such time; provided, however, that the
failure to deliver such notice or any defect therein shall not affect the
validity of the corporate action required to be described in such
notice.

       

      10.  Payment of Exercise
Price. The Holder may pay the Aggregate Exercise Price in one of the
following manners:

       

      (a) Cash Exercise. If an
Exercise Notice is delivered at a time when the Registration Statement is
effective, then the Holder shall deliver the Aggregate Exercise Price in cash or
by wire transfer of immediately available funds; or

       

      (b) Cashless Exercise. If
an Exercise Notice is delivered at a time when the Registration Statement is not
then effective, then the Holder shall notify the Company in an Exercise Notice
of its election to utilize cashless exercise, in which event the Company shall
issue to the Holder the number of Warrant Shares determined as according to the
following formula (a “Cashless
Exercise”):

       

      
        
          
          

        

        
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      X = Y
[(A-B)/A]

       

      where:

       

      X = the
number of Warrant Shares to be issued to the Holder.

       

      Y = the
total number of Warrant Shares with respect to which this Warrant is being
exercised (which shall include both the number of Warrant Shares to be issued to
the Holder and the number of Warrant Shares subject to the portion of the
Warrant to be cancelled in payment of the Aggregate Exercise
Price).

       

      A = the
arithmetic average of the Closing Sale Prices of a share of Common Stock for the
five (5) consecutive Trading Days ending on the date immediately preceding the
date of the Exercise Notice (the “Fair Market
Value”).

       

      B = the
Exercise Price then in effect for the applicable Warrant Shares at the time of
such exercise.

       

       

      For
purposes of this Warrant, “Closing Sale
Price” means, for any security as of any date, the last trade price for
such security on the principal securities exchange or trading market for such
security, as reported by Bloomberg, or, if such exchange or trading market
begins to operate on an extended hours basis and does not designate the last
trade price, then the last trade price of such security prior to 4:00 p.m., New
York City time, as reported by Bloomberg, or if the foregoing do not apply, the
last trade price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg Financial
Markets, or, if no last trade price is reported for such security by Bloomberg,
the average of the bid prices, or the ask prices, respectively, of any market
makers for such security as reported in the "pink sheets" by Pink Sheets
LLC.  If the Closing Sale Price cannot be calculated for a security on
a particular date on any of the foregoing bases, the Closing Sale 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 (2) Business Days submit via facsimile the disputed determination of
the fair market value of such security to an independent, reputable investment
bank selected by the Company and approved by the Holder.  The Company
shall cause, at its expense, the investment bank, to perform the determinations
and notify the Company and the Holder of the results no later than ten (10)
Business Days from the time it receives the disputed
determinations.  Such investment bank's determination 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.

       

      For
purposes of this Warrant, “Trading
Day” means any day on which the Common Stock is traded on the principal
securities exchange or trading market on which the Common Stock is then traded;
provided that “Trading
Day” shall not include any day on which the Common Stock is scheduled to trade
on such exchange or market for less than 4.5 hours or any day that the Common
Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing 

       

      
        
          
          

        

        
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      time of
trading on such exchange or market, then during the hour ending at 4:00 p.m.,
New York time.

       

      (c) Company-Elected
Conversion.

       

      (i) The
Company shall provide to the Holder prompt written notice of any time that the
Company is unable to issue the Warrant Shares via DTC transfer (or otherwise
without restrictive legend), because (A) the Securities and Exchange Commission
(the “Commission”)
has issued a stop order with respect to the Registration Statement, (B) the
Commission otherwise has suspended or withdrawn the effectiveness of the
Registration Statement, either temporarily or permanently, (C) the Company has
suspended or withdrawn the effectiveness of the Registration Statement, either
temporarily or permanently, or (D) otherwise (each a “Restrictive
Legend Event”).  To the extent that a Restrictive Legend Event
occurs after the Holder has exercised this Warrant in accordance with Section 4
hereof but prior to the delivery of the Warrant Shares, the Company shall (x) if
the Fair Market Value (as calculated above) of the Warrant Shares is greater
than the Exercise Price, provide written notice to the Holder that the Company
will deliver that number of Warrant Shares to the Holder as should be delivered
in a Cashless Exercise in accordance with this Section 10, and return to the
Holder all consideration paid to the Company in connection with the Holder’s
attempted exercise of this Warrant pursuant to Section 4 hereof (a “Company-Elected
Conversion”), or (y) at the election of the Holder to be given within
five (5) days of receipt of notice of a Company-Elected Conversion, the Holder
shall be entitled to rescind the previously submitted Exercise Notice and the
Company shall return all consideration paid by Holder for such shares upon such
rescission.

       

      (ii) If a
Restrictive Legend Event has occurred and no exemption from the registration
requirements is available (including, without limitation, under Section 3(a)(9)
of the Securities Act of 1933, as amended, by virtue of a Cashless Exercise),
this Warrant shall not be exercisable.  Notwithstanding anything
herein to the contrary, the Company shall not be required to make any cash
payments to the Holder in lieu of issuance of the Warrant Shares.  The
Company shall give prompt written notice to the Holder of any cessation of a
Restrictive Legend Event (the “Re-Effectiveness
Notice”).  Notwithstanding anything to the contrary contained
herein, the Expiration Date of this Warrant shall be extended for a period of
five (5) days following receipt by the Holder of the Re-Effectiveness
Notice.

       

      11.  Limitations on
Exercise.

       

      (a) Notwithstanding
anything to the contrary contained herein, in no event shall the Holder be
entitled to exercise this Warrant for a number of Warrant Shares in excess of
that number of Warrant Shares which, upon giving effect to such exercise, would
cause the aggregate number of shares of Common Stock beneficially owned by the
Holder and any other person or entity whose beneficial ownership of Common Stock
would be aggregated with the Holder’s for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), to exceed 19.99% of the voting power of the Company following such
exercise, unless the Company obtains the requisite stockholder approval required
under NASDAQ Marketplace Rule 4350(i)(1)(B) (the “Issuance
Limitation”), in which case, the Issuance Limitation under this Section
11 shall no longer apply to the Holder.  Each delivery of an Exercise
Notice hereunder will constitute a representation by the Holder that it has
evaluated 

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      the
limitation set forth in this Section and determined that issuance of the full
number of Warrant Shares requested in such Exercise Notice is permitted under
this Section.  For purposes of this Section 11, the aggregate number
of shares of Common Stock beneficially owned by the Holder and any other person
or entity whose beneficial ownership of Common Stock would be aggregated with
the Holder’s for purposes of Section 13(d) of the Exchange Act shall include the
shares of Common Stock issuable upon the exercise of this Warrant, subject in
all cases to the Issuance Limitation.  Beneficial ownership shall be
determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder.

       

      (b) Notwithstanding
anything to the contrary contained herein, if the exercise of this Warrant by
the Holder would trigger the Issuance Limitation, thus requiring the Company to
obtain stockholder approval of such exercise pursuant to NASDAQ Marketplace Rule
4350(i)(1)(B) prior to such issuance, and such stockholder approval has not been
obtained, (i) the number of Warrant Shares issuable upon exercise shall be
reduced to the maximum extent that would not require stockholder approval under
such Rule, and (ii) the Company shall use its commercially reasonable efforts to
obtain such stockholder approval as soon as reasonably practicable; provided, however, that the
Company shall not be required to call a special meeting of stockholders to
obtain such stockholder approval.

       

      12.  No Fractional Shares.
No fractional Warrant Shares will be issued in connection with any exercise of
this Warrant. In lieu of any fractional shares that would otherwise be issuable,
the number of Warrant Shares to be issued shall be rounded down to the nearest
whole number and the Company shall pay the Holder cash equal to the product of
such fraction multiplied by the Closing Sale Price of one share of Common Stock
on the Exercise Date.

       

      13.  Notices. Any and all
notices or other communications or deliveries hereunder (including, without
limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section at or prior to 5:30 p.m., New York City time, on a Trading Day,
(ii) 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 5:30 p.m. (New
York City time) on any Trading Day, (iii) the Trading Day following the date of
mailing, if sent by nationally recognized overnight courier service specifying
next business day delivery, or (iv) upon actual receipt by the party to whom
such notice is required to be given if by hand delivery.  The
addresses for such notices or communications shall be:  if to the
Company, to Cytori Therapeutics, Inc., 3020 Callan Road, San Diego, California
92121, Attention: Chief Executive Officer, (Facsimile No.: 858-450-4335) (or
such other address as the Company shall indicate in writing in accordance with
this Section) or (ii) if to the Holder, to the address or facsimile number
appearing on the Warrant Register (or such other address as the Holder shall
indicate in writing in accordance with this Section).

       

      14.  Warrant Agent. The
Company shall serve as warrant agent under this Warrant. Upon 30 days’ notice to
the Holder, the Company may appoint a new warrant agent. Any corporation into
which the Company or any new warrant agent may be merged or any corporation
resulting from any consolidation to which the Company or any new warrant agent
shall be a party or any corporation to which the Company or any new warrant
agent transfers 

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      substantially
all of its corporate trust or shareholders services business shall be a
successor warrant agent under this Warrant without any further act. Any such
successor warrant agent shall promptly cause notice of its succession as warrant
agent to be mailed (by first class mail, postage prepaid) to the Holder at the
Holder’s last address as shown on the Warrant Register.

       

      15.  Miscellaneous.

       

      (a) No Rights as a
Stockholder.  The Holder, solely in such person’s or entity’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive
dividends or be deemed the holder of share capital of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in such person’s or entity’s capacity as the Holder of
this Warrant, any of the rights of a stockholder of the Company or any right to
vote, give or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of stock, consolidation,
merger, amalgamation, conveyance or otherwise), receive notice of meetings,
receive dividends or subscription rights, or otherwise, prior to the issuance to
the Holder of the Warrant Shares which the Holder is then entitled to receive
upon the due exercise of this Warrant. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase
any securities, whether such liabilities are asserted by the Company or by
creditors of the Company.

       

      (b) Successors and
Assigns.  Subject to the restrictions on transfer set forth in
this Warrant and compliance with applicable securities laws, this Warrant may be
assigned by the Holder.  This Warrant may not be assigned by the
Company without written consent of the Holder except to a successor in the event
of a Fundamental Transaction.  This Warrant shall be binding on and
inure to the benefit of the parties hereto and their respective successors and
assigns. Subject to the preceding sentence, nothing in this Warrant shall be
construed to give to any person or entity other than the Company and the Holder
any legal or equitable right, remedy or cause of action under this
Warrant.

       

      (c) Governing Law;
Jurisdiction.  All questions concerning the construction,
validity, enforcement and interpretation of this Warrant 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 legal proceedings concerning the interpretations,
enforcement and defense of this Warrant and the transactions herein contemplated
(“Proceedings”)
(whether brought against a party hereto or its respective affiliates, employees
or agents) shall be commenced exclusively in state or federal courts sitting in
the city of New York, borough of Manhattan. Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the city of New York, borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, 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 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 Warrant 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 

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

      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 Warrant or the transactions contemplated hereby. If either party shall
commence a Proceeding to enforce any provisions of this Warrant, then the
prevailing party in such Proceeding shall be reimbursed by the other party for
its attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.

       

      (d) Amendment and
Waiver.  Except as otherwise provided herein, the provisions of
this Warrant may be amended, and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company has obtained the written consent of the Holder.

       

      (e) Acceptance.  Receipt
of this Warrant by the Holder shall constitute acceptance of and agreement to
all of the terms and conditions contained herein.

       

      (f) Construction;
Headings.  This Warrant shall be deemed to be jointly drafted
by the Company and the Holder and shall not be construed against any party as
the drafter hereof. The headings herein are for convenience of reference only
and shall not constitute a part of, or affect the interpretation of, this
Warrant.

       

      (g) Severability.  In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

       

      


       

      [REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK.

       

      SIGNATURE
PAGE FOLLOWS]

       

       

    

    
      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      



      IN WITNESS WHEREOF, the Company has
caused this Warrant to be duly executed by its authorized officer as of the date
first indicated above.

       

      


      
      

       

      
        
          	
                   CYTORI
      THERAPEUTICS, INC. 

                   

                  By:           _____________________________

                  Name:      _____________________________

                  Title:        _____________________________

                


        

      

       

      


       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      



      ATTACHMENT
1

      


      EXERCISE
NOTICE

      


      CYTORI
THERAPEUTICS, INC.

      WARRANT
TO PURCHASER COMMON STOCK

      ORIGINALLY
ISSUED MARCH [●], 2009

       

      Ladies
and Gentlemen:

      


      The
undersigned hereby exercises the right to purchase ___________________ of the
shares of Common Stock of Cytori Therapeutics, Inc., a Delaware corporation (the
“Company”),
evidenced by the above-referenced and enclosed Warrant to Purchase Common Stock
(Warrant No. __________) (the “Warrant”).
Capitalized terms used herein and not otherwise defined herein have the
respective meanings set forth in the Warrant.

      


      (1)           Form of Exercise
Price.  The Holder intends that payment of the Exercise Price
shall be made as (check one):

      


                  Cash
Exercise under Section 10(a) of the Warrant

      


                  Cashless
Exercise under Section 10(b) of the Warrant

      


      (2)           Payment of Exercise
Price.  If the Holder has elected a Cash Exercise, the Holder
shall pay the sum of US$_____________ in cash or by wire transfer of immediately
available funds to the Company in accordance with the terms of the
Warrant.

      


      (3)           Delivery of Warrant
Shares.  Pursuant to this Exercise Notice, the Company shall
deliver to the Holder the number of Warrant Shares determined in accordance with
the terms of the Warrant.

       

      (4)           By
its delivery of this Exercise Notice, the undersigned represents and warrants to
the Company that in giving effect to the exercise evidenced hereby the Holder
will not beneficially own in excess of the number of shares of Common Stock
permitted to be owned under Section 11 of the Warrant to which this notice
relates.

      


      Dated:  ____________________

      


                              

      (Print
name of Holder)

      


      By:              ____________________________

       

      Name:         ____________________________

       

      Title:           ____________________________

       

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      



      ATTACHMENT
2

      


      FORM
OF ASSIGNMENT

      


      CYTORI
THERAPEUTICS, INC.

      WARRANT
TO PURCHASER COMMON STOCK

      ORIGINALLY
ISSUED MARCH [●], 2009

      


      [To be
completed and signed only upon transfer of the Warrant]

       

      FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto                                                             
(the “Transferee”)
the right represented by the enclosed Warrant to purchase                                     
shares of Common Stock of Cytori Therapeutics, Inc., a Delaware corporation (the
“Company”)
to which the enclosed Warrant relates and appoints                                  
attorney to transfer said right on the books of the Company with full power of
substitution in the premises.

       

      
      

       

      
        	
                Dated:
      _________________________         

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                                
      

                  
                    In
      the presence of:

                  

                   

                                          

                

              	
                 HOLDER:

                 

                 

                                    

                (Print
      Name)

                 

                By:                                                             

                 

                Title:               

                


                TRANSFEREE:


                 

                
                                      

                  (Print
      Name)

                

                 

                 

                
                                      

                  (Address
      of Transferee)